Soft tissue regeneration company Aroa Biosurgery Limited (ASX: ARX) is pleased to announce financial results for the March 2023 Quarter.

Highlights are listed below. To read the full announcement, click here

Financial Highlights

  • Increased cash receipts from customers of NZ$15.2 million during the quarter, compared to receipts of NZ$12.3 million for the prior quarter.
  • In line with expectations, net cash outflow from operations of NZ$4.8 million for the quarter, compared to the prior quarter outflow of NZ$1.9 million. This primarily reflected typical post-financial year payments and a planned operating loss for the quarter. Net cash outflow from investing activities was NZ$1.3 million for the quarter, reflecting further investment into additional manufacturing plant & equipment capacity.
  • Strong cash balance of NZ$38.5 million as at 30 June 2023.
  • FY24 product revenue guidance maintained at NZ$72-75 million[1] (25-30% increase on FY23 on a constant currency basis[2]).
  • FY24 product gross margin guidance maintained at 85%.1
  • FY24 normalised[3] EBITDA profit guidance maintained at NZ$1-2 million.1

Operational Highlights

  • US commercial operations continued to build momentum, delivering wins in key hospitals and health systems; the prestigious Cleveland Clinic, Case Western, and Ohio State University, as well as Banner Health system and Valleywise Burns Center (previously known as Arizona Burn Center). AROA ended the quarter with eight field sales representatives at a current average run rate of at least US$750,000 per annum (up from five in the previous quarter).
  • The Symphony™ launch, which is focused on the hospital outpatient department, is progressing to plan, remaining well-positioned for success. The US Centers for Medicare & Medicaid Services (‘CMS’) reimbursement proposal for CY24 was released on 13th Payments in the hospital outpatient department and physician office setting remain essentially unchanged. However, additional regulatory measures which are being imposed in relation to physician offices, are progressively expected to potentially favour products with high efficacy at a reasonable price.
  • First patient enrolment in the Enivo™ pilot (n=10) study in June.
  • Four peer-reviewed studies published, including a study assessing the use of Myriad Matrix™ as a non-invasive treatment for anal fistula in 14 patients, in which 78% of patients were reported to be fully healed within the study period. A publication by an interprofessional working group convened by AROA, proposing a surgical algorithm for pressure injuries with adjunctive use of bioscaffolds such as Myriad Matrix, was selected as a finalist for ‘Best Advance in Original Research’ at the 2023 Advances in Skin and Wound Care awards.

Enrolments into MASTRR continue tracking well, with a total of 183 patients as at June 30, 2023

  • (increase by 24), with five study sites confirmed (increase by one site).
  • AROA has taken delivery of an additional freeze dryer to at least double its freeze-drying capacity.
  • Appointment of pharmaceutical executive Scott Sherriff as Chief Operating Officer, effective July 3.
  • Hosted a well-attended investor meeting in Sydney, including presentations by a key opinion leader and members of AROA’s sales leadership. Presentations by Brian Ward, CEO at the 2023 Macquarie Australia Conference and the inaugural Wilsons & Craigs Investment Partners Rapid Insights Conference in Queenstown, New Zealand. James Agnew, CFO, presented at the 2023 Bioshares Biotech Summit in Hobart, Australia.
  • AROA published its 2023 Annual Report during the quarter, and its Annual General Meeting of shareholders is scheduled for 2 p.m. (NZST), 12 p.m. (AEST) on Thursday, 3 August 2023.

[1] This guidance is subject to there being no material decline in US medical procedure numbers or sustained disruption to AROA’s manufacturing or transportation activities and TELA Bio delivering on its CY23 revenue guidance of US$60-65 million.  It also assumes an average NZ$/US$ exchange rate of 0.65 (compared to the average exchange rate of 0.62 in FY23).

[2] Constant currency removes the impact of exchange rate movements.  This approach is used to assess the AROA group’s (‘Group’) underlying comparative financial performance without any distortion from changes in foreign exchange rates, specifically the USD.  The exchange rate of US$0.62/NZ$1.00 has been used in the constant currency analysis. All references in this announcement to ‘constant currency’ or ‘CC’ are as set out in this footnote.

[3] 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 Group’s comparative financial performance without any distortion from the one-off transactions. The impact of non-cash share-based payments expense and unrealised foreign currency gains or losses has 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 to normalized EBITDA in this announcement are as set out in this footnote.