AROA reports 80% increase in sales of high-margin Myriad in H1 FY24
\nTELA Bio\u2019s sales of OviTex and OviTex PRS increase 37% during H1 FY24 on pcp
\nFull-year FY24 guidance has been updated <\/p>\n
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Special Report:<\/em><\/strong>\u00a0Aroa Biosurgery released strong H1 FY24 results with top-line growth led by sales of its Myriad product family which grew by 80% on H1 FY23 to NZ$10.2 million. <\/strong><\/p>\n Soft tissue regeneration company Aroa Biosurgery (ASX:ARX)<\/strong><\/a> says Myriad accounted for 33% of H1 FY24 total product sales, up from 19% in H1 FY23 and 67% of its direct sales mix in Q2 FY24.<\/p>\n The Myriad family of products supports soft tissue reconstruction in a wide range of surgical specialties and procedures, including for complex wounds such as trauma.<\/p>\n ARX says continued growth reflects its targeted investment into its US commercial operations, including building momentum of its direct field sales team which continues to deliver results.<\/p>\n ARX ended the half year with 187 Myriad active accounts, up from 166 at the end of FY23 and key wins with the prestigious Cleveland Clinic, Case Western and Ohio State University.<\/p>\n \u201cWe are pleased to report that the team\u2019s focused efforts also delivered deeper penetration within existing accounts,\u201d ARX says.<\/p>\n Further financial highlights of H1 FY24 include:<\/p>\n Product sales up 8% to NZ$31.2 million compared to H1 FY23 Cash balance of NZ$34 million as of September 30, 2023 with ARX debt-free.<\/p>\n ARX say the H1 FY24 results also reflect the field sales team\u2019s accelerating productivity, with 10 field sales representatives at an average run rate of at least US$750k per annum and more than half (23) at an average run rate of at least US$250k.<\/p>\n \u00a0<\/p>\n ARX says full-year FY24 guidance has been updated to NZ$73-76 million total revenue with NZ$72-75 million product revenue, representing a 19-24% increase on FY23.<\/p>\n The company anticipates an 85% product gross margin and normalised EBITDA profit of NZ$1-2 million for FY24.<\/p>\n ARX forecasts H2 FY24 product revenue of ~NZ$41-$44 million, representing a ~30-40% increase on H1 FY24. \u00a0H2 FY24 normalised EBITDA profit is expected to be ~NZ$4-5 million.<\/p>\n \u00a0<\/p>\n ARX reported several operational highlights for H1 FY24.<\/p>\n In August, ARX submitted a US FDA 510(k) application for Myriad Flow, a new Myriad product that could be commercialised in combination with the previously US FDA-cleared components of its Enivo system.<\/strong><\/p>\n The company says five participants in its Enivo pilot clinical study have completed treatment and follow-up care, with no clinically relevant seroma reported. Seromas, an accumulation of clear fluid under the skin, are a common post-surgical complication which can disrupt healing, increase pain, oedema (swelling) and result in poor cosmetic outcomes. \u00a0They can also lead to more severe complications.<\/p>\n ARX says seven peer-reviewed clinical studies were published in H1 FY24, including a retrospective case series<\/a> published in leading plastic surgery journal, ePlasty. <\/em>The case series indicated that complex traumatic wounds may heal faster, with less complications and require fewer applications, when treated with Myriad than current standard of care.<\/p>\n An article by interprofessional working group convened by ARX on surgical reconstruction of stage three and four pressure injuries was selected as a finalist for \u2018Best Advance in Original Research\u2019 at the 2023 Advances in Skin Wound Care awards. The awards are jointly sponsored by the American Professional Wound Care Association and highly regarded peer-reviewed Advances in Skin & Wound Care journal.<\/p>\n Enrolments into ARX\u2019s Myriad Augmented Soft Tissue Regeneration Registry (MASTRR) saw 225 participants out of a target of 300 and nine out of 10 sites recruited in H1 FY24.<\/p>\n Furthermore, 42 participants out of a target of 120 were enrolled across eight study sites for ARX\u2019s Symphony randomised clinical trial, which kicked off in June.<\/p>\n Symphony is a combination cellular and tissue product, combining multiple layers of AROA ECM with hyaluronic acid, which act synergistically to drive wound closure, particularly in patients whose healing is severely impaired or compromised due to disease.<\/p>\n During H1 FY24, experienced pharmaceutical executive Scott Sherriff started as Chief Operating Officer from July.<\/p>\n The company also continued investment into expanding its tissue manufacturing capacity, including taking delivery of an additional freeze dryer to at least double freeze-drying capacity.<\/p>\n \u00a0<\/p>\n Founder and CEO Brian Ward says he is pleased with the team\u2019s efforts in what was expected to be a transitional year of relatively modest overall revenue growth.<\/p>\n \u201cMyriad had to lead our growth and our people delivered,\u201d Mr. Ward says.<\/p>\n He says the strong ARX performance validates the strategic importance of Myriad and building momentum of the company\u2019s US commercial operations.<\/p>\n \u201cWe expect revenue to increase by ~30-40% in the second half, with continued strong Myriad performance bolstered by an anticipated re-alignment in demand from TELA Bio.<\/p>\n \u201cThat revenue uplift will significantly improve our bottom-line,\u201d he says.<\/p>\n He says TELA Bio recently delivered its 11th consecutive quarter of at least 35% year-on-year growth, with their operations continuing to mature and a focus on lowering inventory levels and improving inventory management.<\/p>\n \u201cThese improvements will benefit AROA going forward by smoothing demand and bringing both parties\u2019 sales into closer alignment,\u201d he says.<\/p>\n \u201cWe are confident that AROA is well-placed to deliver compelling top-line growth and increasing profitability beyond FY24.<\/p>\n Mr. Ward says ARX has experienced robust portfolio growth, improved productivity, and a strong momentum in its US commercial operations.<\/p>\n \u201cWith an estimated H2 FY24 normalized EBITDA profit of around NZ$4-$5 million, net operations to approach breakeven in the second half and a healthy cash balance of NZ$34 million, we have the fundamentals for success in place,\u201d he says.<\/p>\n \u00a0<\/p>\n\n \ufeff<\/span>\u00a0<\/p>\n This article was developed in collaboration with Aroa Biosurgery,a Stockhead advertiser at the time of publishing. <\/em><\/p>\n \u00a0<\/em><\/p>\n This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.<\/em><\/p>\n <\/span><\/p>\n The post \u2018Fundamentals for success in place\u2019: Myriad drives growth as AROA reports strong first half<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"
\n37% increase in partner TELA Bio\u2019s sales of OviTex and OviTex PRS during H1 FY24 compared to H1 FY23
\nTotal reported H1 FY24 revenue inclusive of project fees grew 9% to NZ$31.9 million
\nProduct gross margin of 84%, constant with H1 FY23<\/p>\nUpdated profit guidance <\/strong><\/h2>\n
US FDA application for Myriad Flow<\/strong><\/strong>\u00a0<\/strong><\/h2>\n
\u2018Fundamentals for success in place\u2019<\/strong><\/h2>\n