Positive net cash inflows from operations of NZ$300k, exceed Q4 breakeven expectations
Strong cash receipts from customers of NZ$18 million, reflect continued increase in Myriad and OviTex/OviTex PRS sales
ARX reduces quarterly cash burn by 71% to ~NZ$1 million, ending FY24 with cash balance of NZ$29.5 million
Special Report: Soft tissue repair company Aroa Biosurgery has reported strong cash receipts from customers of NZ$18m with positive net cash inflows from operations of NZ$300k, exceeding Q4 breakeven expectations.
Aroa Biosurgery (ASX:ARX) has reported its Q4 FY24 results with strong cash receipts from customers, reflecting a continuation of the prior quarter’s step-up in its Myriad and OviTex/OviTex PRS sales.
ARX says positive net cash inflows from operations of NZ$300k exceed Q4 breakeven expectations.
Net cash outflows from investing activities fell to NZ$700k, reflecting continuing planned investment into additional manufacturing plant and equipment capacity with completion expected by Q3 FY25.
The company achieved a 71% reduction in quarterly cash burn to ~NZ$1 million, ending FY24 with a strong closing cash balance of NZ$29.5m. ARX is due to release its FY24 results on May 21.
Strong Myriad and OviTex sales
ARX reported expansion in Myriad sales access during Q4 FY24, with Myriad active accounts increasing from 205 to 218 during the quarter.
The company is putting increased focus on opportunities in surgical trauma with its Myriad family of products as use in the segment grows following encouraging clinical performance and preliminary data from clinical studies.
ARX also reported strong CY23 OviTex PRS and OviTex sales, with its US distribution partner TELA Bio reporting a strong FY23 result including revenue of US$58.5 million, up 41% on pcp, which was in line with consensus and guidance of US$57-60m.
TELA provided FY24 revenue guidance of US$74-76m, with growth of 27-30%. ARX produces its patented OviTex products for TELA Bio, which boasts a team of 80 specialised sales representatives in the US focused on breast reconstruction and hernia surgery.
ARX says product shipments to TELA Bio continue to re-align with its sales trajectory, following a reduction in shipments during H1 FY24.
The company says H2 FY24 cash receipts from TELA Bio are up 20% compared to H1 FY24.
During the quarter, OviTex IHR was launched in the US. The new product is based on ARX’s proprietary tech using ovine forestomach tissue and specifically designed for use in laparoscopic and robotic-assisted inguinal hernia repair.
OivTex IHR was co-developed with TELA Bio under the parties’ existing license arrangement.
ARX trials progressing
During the quarter, ARX completed enrolments for two clinical studies. The studies include the pilot study assessing Enivo and the Myriad Augmented Soft Tissue Regeneration Registry (MASTRR).
The Enivo pilot is a New-Zealand based study assessing the efficacy of ARX’s new tissue apposition platform on patients undergoing a simple unilateral mastectomy.
MASTRR is ARX’s largest prospective study to date, evaluating Myriad Matrix and Myriad Morcells (including short and long-term healing outcomes) in a wide range of surgical specialties and procedures.
ARX expects to start publishing study results from Q3 FY25 based on sub-group analysis of specific procedures, including healing times and rates of complications.
ARX says its Symphony randomised control trial for treating diabetic foot ulcers continues to progress well, with a total of 90 patients enrolled by the end of the quarter.
Furthermore, a peer-reviewed publication of three case reports indicates that Myriad Matrix and Myriad Morcells may complement existing negative pressure wound therapy (NPWT) protocol in emergency open abdomen surgery.
The report reflects the first published use of ARX’s Myriad products in emergency open abdomen surgery, an area typically associated with high complication rates and poor outcomes.
Myriad Matrix and Myriad Morcells may reduce frequency of dressing changes associated with NPWT usage in abdominal soft tissue defects and decrease the overall healing time of complex abdominal defects.
Seasoned life sciences expert joins board
Also, during Q3 FY24, seasoned global commercial operations executive Darla Hutton joined the ARX board as an independent non-executive director following the retirement of long-standing director Steven Engle.
US-based Hutton brings more than 25 years of international leadership expertise in life sciences commercial strategy, operations, sales, marketing, and data analytics.
She is currently vice president of commercial operations and marketing-Asia at Intuitive Surgical, Inc., a global leader in minimally invasive surgery and a member of the NASDAQ-100 and S&P 500.
Following quarter end in April, ARX won the ‘Supreme Business Excellence’ and ‘Excellence in Innovation’ categories at the ‘Best of the Best 2023’ division of the 2Degrees Auckland Business Awards.
The latest awards follow ARX’s wins at the Auckland (South and East) regional awards in December 2023.
This article was developed in collaboration with Aroa Biosurgery, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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