Health Check: We’re a goer says Aroa, with US tariffs unlikely to be a ‘major headwind’

• Aroa says the real impact from the 10% US tariff imposed on New Zealand goods will be much less than that
• Quarter time scores show companies are kicking with the wind
• Dimerix shares enter trading halt ahead of licensing deal

 

Kiwi wounds management house Aroa Biosurgery (ASX:ARX) says it expects the US tariff imposed on its products will be “substantially less” than the 10% general duty imposed on New Zealand.

At Aroa’s fourth quarter results briefing this morning, CEO Brian Ward said that’s because of the company’s tie-up with its US distributor, the Nasdaq-listed Telabio.

Aroa makes its biologic products from the stomach foreskin of sheep – in NZ of course.

“Due to the commercial arrangement with Telabio – particularly in terms of how pricing and cost sharing works – we expect the net impact of this will be substantially lower than 10%,” he said.

“Don’t feel this is going to be a major headwind for us in the coming year.”

Selling mainly in the US, Aroa reported positive cash flow of NZ$1.1 million, on customer receipts of NZ$20 million (11% higher year-on-year).

This is the second consecutive quarter of positive cash flow, with Aroa reporting a $1.2 million surplus in the December stanza.

The company has reiterated revenue guidance of NZ$81-84 million for the full year to March 2025 – up 17-22% – with underlying earnings of NZ$2-4 million.

“We are finishing the year in a strong position,” Ward said.

Management highlights sales of its key product Myriad, with sales up 32% on a pcp basis for the quarter. Sales for the month of March were also a record NZ$2 million.

Myriad is used for general soft tissue reconstruction, and is utilised in a wide range of procedures, and increasingly for trauma.

Distributed via Telabio, sales of Ovitex (for hernia and breast reconstruction) gained 17% year-on-year.

This improvement comes despite difficult conditions for Telabio, which faces sales headwinds and stiff competition. This is reflected in the company’s share price decline over the last year.

Ward says Telabio has had up quarters and down quarters, which is not unusual.

“Over the last quarter we have seen good demand from Telabio.”

He says that if Telabio weren’t to remain viable, “Aroa is well placed to be part of whatever takes place there.”

Aroa will provide more detail on its performance when it releases its full-year numbers in May.

Quarter-time scores

Quarterly reports are flooding in like tardy voters to the polling booths just before Saturday’s 6pm close.

Artrya (ASX:AYA) says it is cashed up and ready to start selling its heart device Salix Coronary Anatomy, having recently won US Food and Drug Administration (FDA) clearance for the AI-enabled tool.

Locally, Artrya secured three-year commercial contracts with Sonic Healthcare’s local radiology arm, a well as Lumus Healthcare.

Following a $15 million two-tranche placement, Artrya has $17 million in the bank, having burnt $4.6 million for the quarter.

Salix Coronary Anatomy detects coronary artery disease. The company is also preparing a variant, Salix Coronary Plaque, for an FDA approval submission.

A maker of regenerative implants, the Singapore-based Osteopore (ASX:OSX) posted a 26% revenue increase $725,000, “despite the pressures from the South Korean medical crisis”.

This is a reference to thousands of doctors walking off the job over a government plan to increase medical student numbers – a measure the docs claim will not alleviate the nation’s health crisis.

The company had $780,000 of operating cash outflows.

Shares in Medical Developments International (ASX:MVP) rocketed by more than 30% this morning after the company reported a 7% revenue improvement to $8.9 million.

This was on the back of improved pricing and volumes for its key product Penthrox.

A.k.a. the ‘green whistle’, the long-standing Penthrox is a front-line analgesic for temporary pain relief.

The company recorded operating cash flow of $900,000, a turnaround on the big improvement on the deficit of $10.4 million a year ago.

 

That’s clever

Formerly LBT Innovations, Clever Culture Systems (ASX:CC5) yesterday recorded a more than 700% surge in March quarter receipts to $2.14 million.

The company has developed an automated plate assessment system (APAS) for labs – a welcome innovation at a time of acute pathologist shortages.

Clever Culture also recorded positive cash flow of a tad over $1.1 million, its second consecutive quarter in the black.

The company cites a sales pipeline of more than 40 “active and qualified customer opportunities”, amounting to about $75 million in potential upfront sales revenue and $15 million per annum of recurring revenue.

Bioxyne (ASX:BXN) recorded customer receipts of just under $8.5 million, 238% higher than previously.

Cash flow was a positive $1.86 million.

This revenue resulted from the manufacturing and wholesaling of medical pot and the psychedelic MDMA (a.k.a. Ecstasy), on the part of its subsidiary Breathe Life Sciences

Receipts for the nine months surged 202% to $21.8 million

Bioxyne’s cash rose to $6.5 million compared to $750,000 previously.

 

Bubs results are nothing to bleat about

A purveyor of goat’s milk-based infant formula, Bubs Australia (ASX:BUB) sneaks into the ‘life sciences’ category by a chin hair’s width.

The hitherto troubled Bubs showed a second consecutive positive cash flow of $500,000, compared worth a $10.9 million deficit a year ago.

Revenue surged 52% to $23.2 million, with sales in its traditional Chinese market and new US market growing 48% and 185% respectively.

In 2022, then US prez joe Biden praised Bubs for helping to fill a critical shortage of infant formula.

But the glowing endorsement from the Commander in Chief did little to help founder Kristy Carr, who was ousted in acrimonious circumstances in 2023

 

Dimerix in suspense over licensing deal

Dimerix (ASX:DXB) shares today entered trading halt pending news of a licensing agreement – presumably a geographic-based one.

The kidney drug developer’s shares soared in October 2023, after the company unveiled a tie-up covering Europe, Canada, Australia and New Zealand.

This compact, with the UK-based Advanz Pharma, delivered $10.8 million upfront, $219 million of potential milestones and royalties.

In May last year the company struck a deal with Taiba, for Iraq and the Gulf Countries.

They’re relatively small markets, but the deal delivers another $120 million of potential milestones.

In January this year a Japan deal with Fuso delivered another $7.2 million upfront and $100 million of potential milestones.

The missing link, of course, is the US and mainland China.

In early April management said the company was discussing coverage of these geographies with potential partners.

The shares are due to go off trading halt on Thursday, so presumably we will know more then.

 

At Stockhead, we tell it as it is. While Aroa, Clever Culture Systems and Dimerix are Stockhead advertisers, they did not sponsor this piece