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Health & Biotech
Special Report: Soft-tissue repair company Aroa Biosurgery has reported product revenue up 27% to NZ$39.1m on a constant currency basis in H1 FY25 with Myriad sales surging.
Aroa Biosurgery (ASX:ARX) said its Myriad family of products – which can be used in a wide range of surgical procedures where tissue needs to be rebuilt – continue to be a strong performer, accounting for 38% of total sales and 72% of its direct sales mix in H1 FY25.
Myriad sales have ticked up to NZ$14.8m during the half year, a surge of 45% compared to the previous corresponding period (pcp).
Sales of its hernia and breast reconstruction products OviTex and OviTex PRS by Aroa’s US partner TELA Bio increased by 19% during H1 FY25 on pcp.
OviTex and OviTex PRS are manufactured by Aroa based on its extracellular matrix ECM technology and co-developed with TELA Bio.
Aroa said the increase in OviTex and OviTex PRS sales was primarily the result of TELA Bio actively managing down its inventory holding and ongoing strong growth in TELA Bio’s sales.
Sales of Endoform, used in acute and chronic wounds, of NZ$5.6m for H1 FY25 were down 5% on pcp.
Aroa said Symphony, which is a graft for complex non-healing diabetic and venous ulcers, contributed a modest amount to the balance of sales for H1 FY25.
In other financial highlights:
Aroa said it had adequate cash as the company advances towards positive cashflows.
It has maintained full-year FY25 guidance at NZ$80-87m total revenue, a 21-32% increase on FY24 on a cc basis.
Aroa expects to be operating cashflow positive in H2 FY25, with a full year normalised EBITDA profit of ~NZ$2-$6m.
Aroa said that momentum continues building behind its US commercial operations, with productivity gains seen across the whole sales organisation.
Four field sales representatives had an average run rate of at least US $1m, up from two in H1 FY24, the company reported.
Six field sales representatives had an average run rate of at least US$850,000.
Aroa ended H1 FY25 with 265 Myriad active accounts, up from 218 at the end of FY24.
To support ongoing growth and productivity, the US sales leadership was reorganised, including promotion of regional manager Mark Maerten to the new position of national sales director.
Aroa ended H1 FY25 with 55 direct and inside US sales representatives, down from 58 in H2 FY24, which it said was primarily a reflection of vacancies created by internal promotions.
Aroa continued to extend the body of clinical evidence for the AROA ECM platform to support sales growth, with eight peer-reviewed studies published during the reporting period.
During H2 FY25, the company expects to see publication of several studies examining the efficacy of Myriad across a range of procedures, including trauma, limb salvage and colorectal surgery.
The company’s Myriad Augmented Soft Tissue Regeneration Registry (MASTRR) has meanwhile extended to 15 sites and 800 patients. And the first peer-reviewed study associated with MASTRR has been accepted for publication, expected to publish by the beginning of Q4 FY25.
Aroa said it was progressing commercialisation of the Enivo platform and engaging with the US Food and Drug Administration to confirm design requirements of further clinical studies.
The company has also continued to focus on expanding Aroa’s profile across investment communities with an active investor relations schedule during H1 FY25.
Aroa anticipates Myriad, Ovitex and Ovitex PRS sales to continue performing well in H2 FY25, and it’s expecting H2 FY24 normalised EBITDA profit of ~NZ$2-6 million.
TELA Bio, meanwhile, has continued to experience strong growth, recently reporting Q3 CY24 as its best quarter on record and reiterating full year revenue guidance of US$74.5- $76.5m, equating to 27% to 31% year-over-year growth.
Aroa receives 27% of TELA Bio’s net product sales of licensed products.
Founder and CEO Brian Ward said the company was pleased to see increased sales productivity drive strong growth in the Myriad portfolio.
He said TELA Bio’s OviTex and OviTex PRS inventory reductions within FY24 were now well behind Aroa.
“Sales to TELA Bio continue to perform well, tracking in line with their sales to customers,” he said.
“We expect total revenue of ~NZ$43-$50 million in the second half of this year, and to be cashflow positive.”
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.
Health & Biotech
Health & Biotech
Health & Biotech
