- Aroa Biosurgery maintains product revenue guidance for FY24, up 25-30% on FY23
- Company’s US commercial operations perform particularly well during Q2 FY24
- Myriad sales increase to 67% of company’s direct sales mix in Q2 from 50% in Q2 FY23
Soft tissue repair company Aroa Biosurgery has maintained its FY24 product revenue guidance at NZ$72-75 million, representing a 25-30% increase on FY23 on a constant currency basis after a solid Q2.
Aroa Biosurgery (ASX:ARX) reported cash receipts from customers for Q2 FY23 of NZ$14.8 million in line with expectations, while net cash outflows from operations reduced by NZ$1.6 million from the previous quarter to NZ$3.2 million.
ARX says net cash outflow from investing activities was NZ$1.2 million for Q2 FY24, with further investment into additional manufacturing plant and equipment capacity.
The company reported a strong cash balance of NZ$34 million as at September 30 with net cash outflow from operations expected to move towards breakeven for the balance of FY24.
Product gross margin guidance was also maintained at 85% and normalised EBITDA profit guidance maintained at NZ$1-2 million.
Myriad sales grow in strong US operations
ARX’s US commercial operations performed particularly well during Q2 FY24. The field sales team achieved higher average run rates, with 10 representatives reaching at least $750,000 annually, up from eight and five in the previous two quarters.
The company ended Q2 FY24 with 42 field sales representatives and eight inside sales representatives.
ARX’s sales and clinical teams participated in 12 major global industry conferences, collaborating with key opinion leaders, such as at the Wild on Wounds (US) and The American Association for the Surgery of Trauma 82nd Annual Meeting.
CEO Brian Ward says its high-margin Myriad product family continues to be a key driver for growth.
“Myriad sales continue to grow, increasing to 67% of AROA’s direct sales mix in Q2 compared to 50% in Q2 FY23,” he says.
“We are especially pleased to see that this growth is coming through increasing penetration within existing accounts.
“Looking forward, we see a real opportunity for Myriad to be a market leader in trauma surgery with recent clinical studies validating the efficacy of Myriad Matrix and Myriad Morcells in trauma procedures, which has a total addressable market of US$300 million.”
Growing clinical evidence
Clinical evidence supporting the efficacy of AROA ECM products continues to grow, with a peer-reviewed study published in the September issue of leading plastic surgery journal ePlasty.
The study involved a retrospective case series describing clinical effectiveness of Myriad Matrix and Myriad Morcells in complex traumatic wound reconstruction.
The study found the average time to soft tissue coverage and fill was 23.4±9.2 days, with a median product application of 1.0. No complications were reported from the study cohort.
The study adds to growing evidence demonstrating that AROA ECM products can be used to facilitate formation of well vascularized soft tissue in patients with traumatic injuries.
US FDA 510(k) submission for Myriad Flow
In August, ARX submitted a 510(k) application to the US Food & Drug Administration (FDA) for Myriad Flow.
The new product is based on its trademarked AROA ECM platform technology and has features that could be used in combination with its Enivo system.
An update on the application from the FDA is expected in early CY24.
Clinical studies progressing
ARX says enrolments in various studies continued to progress during Q2 FY23 with 42 participants now enrolled in its Symphony randomised clinical trial across eight sites.
The 18-month multi-centre study will assess the efficacy of Symphony in treating diabetic foot ulcers and is targeting 120 participants.
Three patients are now enrolled in the New Zealand-based Enivo pilot clinical study. The study is targeting 10 participants undergoing a simple unilateral mastectomy and will assess the efficacy of the Enivo system.
During the quarter, 41 patients were enrolled in ARX’s’s Myriad Augmented Soft Tissue Regeneration Registry (MASTRR) taking total enrolments to 225.
The study added five additional sites added during the quarter with now nine enrolled sites out of a target of 10.
Information from MASTRR will evaluate ARXs Myriad Matrix and Myriad Morcells products, including short and long-term healing outcomes and any observed post-surgical complications across a wide variety of procedures.
Other highlights of Q2 FY23
During the quarter ARX passed its annual audit by global certification organization DEKRA, which reaffirmed its compliance with ISO 13485, the globally recognized standard for medical device quality management, for another 3 years.
It received a three-year re-certification for the Medical Device Single Audit Program (MDSAP), ensuring compliance with specific regulatory requirements in the US, Canada, Brazil, and Australia.
Ward presented at the 2023 Macquarie Australia Conference and the Wilsons Drug & Device Conference, while CFO James Agnew also presented at the 2023 Morgans’ Conference in Noosa.
ARX was also named a finalist in the High Growth Exporter of the Year to the USA category at the AMCHAM New Zealand – DHL Express Success & Innovation Awards.
The company will release its H1 FY24 results to on November 28.
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.