Aroa Biosurgery March 2021 4C – Commentary


  • H2 FY21 product revenues (unaudited) grew 16% on H2FY20 to $13.8m on a constant currency basis (i.e. eliminating impact of exchange rate fluctuations).
  • FY21 full year product revenue was $21.5m, exceeding the Company’s forecast of $21.0m. Total revenue (unaudited) of $22.3m for FY21.
  • Based on H2 FY21, product revenues are already at a run rate of greater than $25.0m p.a – the Company expects to deliver growth in FY22 (from FY21) with continued improvement in access to hospitals, improving economic conditions and the benefit of the fast-paced US vaccine roll-out.
  • Cash outflow from operations was modest for the March quarter at NZ$0.7 million, in line with Aroa’s internal budget. Cash on hand of NZ$35.4 million as at 31 March 2021.
  • Successful transition from joint sales operation (Appulse) accompanied by expansion in the direct field sales team from 5 to 20 persons and growth in the inside sales team.
  • FDA clearance received for new Myriad Morcells™ product, immediately followed by commercial launch in the US.
  • Pilot study indicates benefits of Aroa’s Myriad Matrix™ in surgical reconstruction of chronic wounds.
  • Aroa added to the S&P/ASX All Ordinaries Index.
  • The Company will host a webinar to discuss the results this morning at 11.00am AEST, registration is available here.

Soft tissue regeneration company Aroa Biosurgery Limited (ASX:ARX, ‘Aroa’ or the ‘Company’) is pleased to provide an update on its activities for the quarter ended 31 March 2021.

Financial commentary

Aroa continued to see an improvement in product sales in the March quarter, realizing full year FY21 product revenues of $21.5m (unaudited), despite foreign exchange (FX) headwinds and a COVID-19 surge in the United States (“US”) in January. On a constant currency basis to FY20 (i.e. when eliminating the impact of USD vs NZD exchange rate fluctuations), H2 FY21 product revenues were $13.8m, representing growth 16% on H2 FY20. With product revenues now at a run rate of greater than $25.0m per annum (based on H2 FY21), FY22 is expected to deliver growth compared with FY21.

Cash receipts for Q4 FY21 (NZ$5.8 million) were higher than Q3 (NZ$5.2 million), reflecting the continued improvement in sales over the course of the December and March quarters.

Cash outflow from operations for the March quarter remained modest at NZ$0.7 million, in line with Aroa’s internal budget, ending the quarter with cash on hand of NZ$35.4 million.

In accordance with ASX Listing Rule 4.7C.3, Aroa advises that an aggregate amount of NZ$102k was paid during the quarter to Aroa’s five Non-Executive Directors in payment of their director fees.

Appendix A provides a summary of actual expenditure, compared to the estimated use of funds set out in Aroa’s IPO Prospectus, in accordance with ASX Listing Rule 4.7C. Cash expenditure is consistent with the use of funds set out in that Prospectus.

Aroa expands fully dedicated US field sales team

In February, Aroa announced it would expand its direct sales capability and capacity in the US market and dissolve its Appulse joint venture. Appulse, was an unincorporated joint venture arrangement which Aroa entered into with Hydrofera, LLC in April 2018, to transition sales and marketing activities away from Hollister Inc in the US and Canada. It had been Aroa’s primary channel for selling Endoform™ products to hospital-associated wound centres and home care in the US. Aroa’s arrangements with TELA Bio Inc. were unaffected by the Appulse dissolution.

Aroa now has 20 fully dedicated field sales representatives, as well as an inside sales team of 8. This is compared to a half share of the joint venture team of 21. Aroa has also expanded its digital marketing activities.

FDA clearance for Myriad Morcells™

Subsequent to the end of the period, Aroa announced it had received US FDA 510(k) clearance for Myriad Morcells™, a powder format of Myriad Matrix™ that easily conforms to optimize contact with irregular wound beds.

Myriad Morcells™ delivers a bolus of biologically important extracellular matrix (ECM) proteins known to ‘kick start’ healing in a format that conforms to the intricacies of a wound. The new product, which is not indicated for implantation, is provided in a tray for hydration, mixing, and pouring and can be combined with Myriad Matrix™ for rapid and sustained delivery of biological components important during tissue regeneration.

Myriad Matrix™ is a highly perforated, multi-layered ECM graft engineered to have a high volume and surface area with interstitial spaces that are easily and rapidly accessible to cells. It takes advantage of the Aroa ECM™ bioscaffold technology, including important secondary molecules and residual vascular channels to support new tissue growth. Myriad Matrix™ enables rapid vascularization and helps build new tissue, which may lead to faster healing, recovery and hospital discharge. Earlier pre-clinical studies have shown that the Aroa ECM™ technology includes over 150 different components known to aid wound repair, blood vessel formation and attract stems cells.

Aroa received FDA 510(k) clearance for Myriad Matrix™ in June 2017, which led to first sales in early 2020 with a total estimated market size for the product globally of US$350 million. In late July 2020, it was approved for commercial use in the European Union by European notified body DEKRA Certification B.V.

Positive pilot study results for Myriad Matrix™

In February, Aroa gained further validation for soft tissue reconstruction device Myriad Matrix™, with a new pilot study indicating that it may be used successfully under a tissue flap to reduce surgical complications in the reconstruction of challenging, non-healing chronic wounds.

The findings were published in journal Frontiers of Surgery, in an article titled “Case Report: Surgical Closure of Chronic Soft Tissue Defects Using Extracellular Matrix Graft Augmented Tissue Flaps”. It was based on a pilot study undertaken by plastic surgeon Dr Michael Desvigne (MD) and colleagues from Abrazo Arrowhead Hospital in Phoenix, Arizona.

The pilot study saw a total of nine non-healing wounds, including those caused by pressure injuries and surgical wounds, reconstructed using Aroa’s Myriad Matrix™ device as an implant under a soft tissue flap. Only one minor surgical complication was observed, and all wounds went on to fully heal, even when Myriad Matrix™ was used in a contaminated field. By contrast, a retrospective review of the flap reconstruction of chronic pressure injuries reported a complication rate of 58%.

The study can be found online at

The pilot study included the surgical closure of three pressure injuries, which are estimated to affect 1 to 3 million people in the USA, with prevalence estimates among hospitalized patients ranging from 5% to 15%.1

The positive findings follow recently announced studies demonstrating the efficacy of Myriad™ in the surgical treatment of the high-incidence inflammatory skin condition Hidradenitis Suppurativa (HS), and exposed vital structures. 

Quarterly Webinar

The Company will hold a webinar with CEO Brian Ward and CFO James Agnew today, Wednesday 28 April 2021 at 11:00am AEST, to discuss the March 2021 Quarterly Results released to the ASX this morning.

Investors can register for the webinar via the following link: Investors can submit questions prior to the webinar to or do so via the Q&A function on Zoom.