Aroa Biosurgery Limited (ASX: ARX) is pleased to announce financial results for the December 2023 Quarter.
Highlights are listed below. To read the full announcement, click here.
Financial Highlights
•Strong ~20% increase in quarter-on-quarter cash receipts from customers to NZ$17.7 million.
•Continued quarter-on-quarter progress towards breakeven operational cashflows, with net cash outflows from operations decreasing to NZ$1.7 million from $3.2 million in the prior quarter.
•Net cash outflows from investing activities of NZ$1.1 million for the quarter, reflecting further investment into additional manufacturing plant & equipment capacity.
•Strong cash balance of NZ$30.5 million as at 31 December 2023, and the Company is debt-free.
Updated FY24 Full-Year Guidance
• Guidance reduced to NZ$67-70 million total revenue, NZ$66-69 million product revenue, 85% product gross margin and a normalised EBITDA[1] loss of NZ$1-3 million.[2]
• One-off (H2 FY24) decrease in expected revenue from TELA Bio, Inc. (‘TELA Bio’) due to a previous overestimation of AROA’s revenue share (non-cash) on inventory supplied to TELA Bio and a delay to a joint product development project. OviTex™[3] and OviTex PRS remain on a strong growth trajectory.[4]
• Robust Myriad™ sales performance, with 10% growth in Myriad active accounts from Q2 to Q3, comparable field sales productivity and a revised forecast of 70-85% year-on-year growth (full-year).
Operational Highlights
• US FDA (‘FDA’) 510(k) clearance received for a new product, a resorbable dental barrier developed and manufactured from the Company’s proprietary AROA ECM™ platform technology. The Company is actively pursuing a new partnership to commercialise this product.
• The FDA has reviewed AROA’s 510(k) application for Myriad Flow™, a new soft tissue regeneration product that could be commercialised in combination with Enivo™ and requested additional pre-clinical and clinical data to support a clearance. Both studies appear to be less complex than anticipated with regulatory clearances expected within 24 months.
• To date, six patients (n=10) enrolled in the pilot clinical study for Enivo, AROA’s new tissue apposition platform technology, have undergone a unilateral mastectomy and completed follow-up care, with no clinically relevant seroma or complications reported.
• 36 patients enrolled in AROA’s Myriad Augmented Soft Tissue Regeneration Registry (‘MASTRR’) during the quarter, taking the total number of participants to 268 (n=300).
• Enrolments in AROA’s multi-center Symphony™ randomised control trial approximately doubled during the quarter, with a total of 86 participants enrolled to date (n=120).
• 11 key industry conferences, including the American Society of Plastic Surgeon’s Annual Meeting and the American College of Surgeons’ 2023 Clinical Congress.
• Experienced US clinical executive, Dr Adam Young, appointed as inaugural VP, Medical Affairs. Dr Young brings deep academic and commercial expertise, with a focus on the use of extracellular matrices for wound healing and soft tissue reconstruction.
• Successful DEKRA audit of AROA’s San Diego (US) site.
• An active investor relations schedule during the quarter, including an informational presentation by Brian Ward (CEO) at the Jeffries Healthcare Conference in London (UK) and two well-attended AROA-hosted events.
• Winner of ‘Excellence in Innovation’ and ‘Supreme Business Excellence’ at the 2degrees Auckland Business Awards (South and East Region).
[1] Normalised EBITDA is non-conforming financial information, as defined by the NZ Financial Markets Authority, and has been provided to assist users of financial information to better understand and assess the AROA Group’s (“Group”) comparative financial performance without any distortion from NZ GAAP accounting treatment specific to one-off fair value adjustments, one-off transaction costs associated with capital raisings. The impact of non-cash share-based payments expense and unrealised foreign currency gains or losses have also been removed from the profit or loss. This approach is used by Management and the Board to assess the Group’s comparative financial performance. All references in this announcement to ‘normalised EBITDA’ are as set out in this footnote.
2 This guidance is presented on a reported basis, reflects an expected NZ$/US$ exchange rate of 0.62 for H2 FY24 and is subject to TELA Bio delivering on its CY23 revenue guidance of US$57-60 million (reflecting 38-45% growth over CY22).
3 OviTex and TELA Bio are trademarks of TELA Bio, Inc.
4 TELA Bio’s Q3 CY23 revenue represented its 11th consecutive quarter of at least 35% year-on-year growth (TELA Bio press release dated 9 November 2023).
