ORGO - Earnings call transcript Q3 2024 | Organogenesis Holdings Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Please standby. Welcome, ladies and gentlemen, to the Third Quarter of Fiscal Year 2024 Earnings Conference Call for Organogenesis Holdings, Inc. At this time, all participants are placed in listen-only mode. Please note that this conference call is being recorded and that the recording will be available on the company's website for replay shortly.

Before we begin, I would like to remind everyone that our remarks today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including the risks and uncertainties described in the company's filings with the Securities and Exchange Commission, including Item 1A, Risk Factors of the company's most recent annual report and its subsequently filed quarterly reports.

from to only reliance made, applicable or as may or do as not statements, any although except revise cautioned undertakes otherwise, new voluntarily speak company laws. information, whether securities which of so result the are forward-looking place to by as upon undue forward-looking we no statements, You commitment the a update of time-to-time, required the events date future are references This in certain to not call that accounting GAAP. calculated with measures or include accepted generally will accordance financial principles to refer generally these We non-GAAP financial measures. would non-GAAP to on like presented release available call the Reconciliations financial of Mr. to calculated GAAP the measures in most the and Investor those turn accordance are now with to measures website. I over the Relations press comparable portion earnings in our of Gary S. President, Board. the Gillheeney, Executive Senior, Organogenesis Holdings Chair Officer and of Chief go Please sir. ahead,

Gary Gillheeney

call Earnings our Year operator, I'm joined you, Quarter Third Thank Fiscal the by welcome, Holdings and Conference Call. Organogenesis Financial Officer. to today Dave XXXX everyone, on Chief Francisco,

above XXXX, end in of quarter for for well guidance which Let operating recent outlined a then in-depth up high we quarter press revenue and updated review and a during the before financial will some you of prepared agenda balance this for our condition our developments with sales strategic We with of our review on delivered review brief what we will then third the open with I end as sheet cover questions. Beginning financial share afternoon. overview thoughts on second key quarter results call. results, update our QX. we'll revenue results closing our remarks. an of third months. results the Dave financial as and guidance in our an of range an start release our provide our me our quarter I'll at call

continued marketplace. productivity in execution Our disruption better-than-expected team's resulted in the despite strong

reflect what momentum of focused customer business We right trends, results results of we to during improving quarters represent quarter were guidance have challenging team the believe in the have quarter. first underlying our assumed and the Our on third excess see our pleased we had in the in better-than-expected revenue to XXXX commercial the evidence operating demand clearest delivered navigate through that the we of strategy environment. this each X third

the months. We've second secondary function and of of important XXX Turning towards progress announced to key Phase our during patients also we initiatives prospective on X of quarter. X patients, XXX expectations. pain the a the first we required knee a the our timing completed controlled The original group results saline patients. more the significant our statistically ahead met the by study. our multicenter X clinical of clinical On August quarter. additional and in XXX statistically enrolled strategic trial, trial We third expectations third progress ReNu parallel of of results multicenter notably, than meeting maintenance well from enrollment at Phase of primary endpoint first in significant the And the randomized safety X, XXX trial double-blinded review reduction the efficacy for clinical the of clinical study endpoint a made by evaluating

aspects while X required As Monitoring size. or DMC that directional trial results blinding. the Data increase second for the maintaining announced trial interim the for the recommended The sample and all study provided in a interim XX% Phase received the of first without proceed without rigorously DMC, of on the guidance modification separate our outcome analysis, trial. analysis patients press pre-specified to Independent in The release, a the favorable we of of Committee,

ReNu. safety DMC the safety for the with profile be consistent the known to data found Additionally,

and large to clinical need continue transformational affects if than suffering degenerative unmet will We believe an ReNeu Americans. for OA, that XX management address We joint for a symptomatic the that million market patients approved, ReNu, introducing more opportunity potentially believe represents a if growing all to Organogenesis. disease pain from approved, knee

We road biologic our on we would deliver to the by for map symptomatic ReNu submission line successful, symptoms ReNu to If the of are OA. clear injection improve only time BLA have a knee related and end XXXX. and QX BLA the to submission, pain be track FDA-approved ReNu intra-articular

NuShield on of X, standard care probability to standard share weeks. X and the XX% in X frequency superior of weeks we NuShield demonstrated validation turning recent of Dave, study and a DFUs to Before closure decreased of wound treatment from Journal coverage. X the the of groups, care. On with total of compared over time from reimbursement median publication XXX at a NuShield the to intervals to update greater October XXX-patient announced group our compared in Wound robust standard results of progress wound a XX demonstrated call wanted NuShield alone. The clinical the were when A of statistically wound of challenging Medicare I to into to brief randomized areas and of care standard of or care complete closure patients closure, plus Care.

a in that rates, provides pleased and associated crisis especially data populations. are severe leads underserved We advantage this amputation a often demonstrates when significant medical DFUs, to mortality higher NuShield managing

our on for outlined not treatment data believe was which letter draft the the latest DFU we of for the LCD, included published MACs high-quality earnings call, our evaluating meets the in NuShield considered evidence that comment demonstrates that As NuShield criteria to and coverage. this all

approach support we and the requirements field, this the satisfies these wounds publication this peer-reviewed to under for coverage medical proposed LCD. coverage in leader CMS' large believe for serious evidence-based a As

the and and the for was effectiveness includes Theraskin, a and draft draft coverage LCD Our from VLUs comment meet to comparative of in a This DFU patients PuraPly real-world existing study XXX literature and for of as supporting data and XXXX review PuraPly published patients Medicare LCD included clinical shows data our the treatment case of also non-inferiority high-quality letter completed, AM proposed cover. XT well. PuraPly for XT published the data to XXX supporting a AM the requirements coverage for that which product after May PuraPly

policy for Medicare products skin not access. substitutes made status In hospital pricing clinical look our impact about payment goal PuraPly in of of quo. framework November first these we fee payment physician variations for physician enrolled that what CMS in chronic skin setting under in that noted CMS in rules DFUs. On proposed is the to changes negatively changes. new standard no the expanding of were third there for gap through August, validation versus maintains framework of its has schedule issued AM-plus study, say for and changes also of In the does to and policies the future any patients substitutes for might the future beneficiary PuraPly consistent the for substitutes achieve RCT, for patient progress the in XXX CMS that our establishment physician the timing quarter. the the like standard any a does of in fee We not outpatient PREPA evaluating or X, more with care care reiterated alone schedule the either CMS the intends payment skin products approach rule fee to rulemaking. rule, in substitute for in CMS skin XXXX. it the final the that department. consistent not final also final payment bridge schedule the

on potential Now they paid Part has skin the value-based fixed a patients the physicians based communicated should system. value-based centimeter substitute where the the best square substantially categories treatments payment patients outcome to for are we improve to methodology Medicare basis. This and to health expenditures, methodology CMS individual have B that a provide care access transition to per and of on patient needs reduce and the enable that prescribe are payment

change the dialogue policy no payment rule policy the recognizing see in CMS of payment were interested benefit continued the included XXXX, While with substitute for rule in changes parties for there commentary skin products rulemaking. final for from to inform to help for substitutes skin future pleased we final on was

products As appreciate to payment the acknowledgment to products. we we of a and the impact in negatively need continue been pleased physician substitute the not with and advocate schedule willingness CMS actively efficacy and particularly to have prioritize does skin consider to continuing leader We MACs under feedback, our substitute framework a with fee the for establish are that will applaud for skin for coverage payment engage the consistent changes demonstrated in requisite our the clinical systems. framework CMS' to market, access. We to for for the beneficiary

forward the represents towards years have been and believe marketplace. that pushing substantial for reform this a many up cleaning step for proposed LCD We

vocal remain need we given reform. the leadership for position in space, the in support Importantly, active of immediate our and

and potential and and clinical to are to rates congressional stakeholders, for our engaging as are treatment are DFUs health skin comorbidity. to the groups the of as In in impacts MACs, equity changes initiatives we they and and substitutes and associations, offices. We education and policy including coverage possible higher addition well CMS and all disparity including potential that informed the with we primary with health to industry directed want are the direct parties XX advocacy ensure physicians, leading efforts patient with on considering carefully populations VLUs, impact of the of of diabetes treatment

validation payment the while from our of competitive CMS the changes its established us the in products innovative infrastructure that, taken substitutes, believe care product. With positioned turn be believe if for are establish commercialized will to opportunity positive us and ultimately Dave. market coverage strong these over commercial represent and let continue transition of clinical me these of our MACs with wound be skin long-term preliminary highly together there and well to disruption We will for sweeping highly has implemented, a a to the plan call secure Organogenesis' maximize we to enormous and brand the period if efficacious substantial key changes to more and patients adopted, coverage serve and that to equity, health of advantage additional the material patients,

David Francisco

financial with million, our growth quarter third Thanks, specified, referenced a X%. are rates a up Gary. basis. Net I'll year-over-year for on my third was begin otherwise during of all quarter remarks Unless $XXX.X the results. prepared revenue review

a range were mentioned, in momentum for As the we of quarter our during of provided to reflecting $XXX revenue $XXX second third results ahead in expectations which strong QX the continued call, million called business on quarter. million, total these Gary

net for expenses year X% was or Care was to revenue up third Surgical latter profit X% driven Advanced declined by for products Medicine quarter compared due prior quarter for associated The general third income of for million, the (sic) XX%. a and net million the to development revenue, from year-over-year XXXX, to net of sequentially, million. $XXX selling, [$X.X were compared tax expenses. compensation $X.X $XX.X expenses last EBITDA to change of income year. was was increase or quarter period. million, last non-deductible by in an tax. Adjusted was expense to or Research a was an The driven to credit tax to trials. Operating year. executive The Gross and third to compared million, change XX%. last $X clinical quarter XX% the administrative the in of income operating decrease $XX Wound expenses $X.X net for million adjusted million up our million third the a adjustments income X%. the was million, third and and net of or timing third and expenses of third million the income $X.X partially We the for in quarter income income was benefit last the of in to XX% of revenue to million year-over-year increase year-over-year quarter We compared in $XX.X compared full which declined $X.X the $XX.X for million with change for million XX.X% $X.X income was of incentives, million] and Our by tax primarily and Sports million quarter quarter last of adjusted the earnings compared was income of $XX other net research contributor in the was or XX.X% year, of revenue $X.X operating million $X.X reconciliation related R&D increase $X.X to year, had XX.X% largest compared the Net million revenue, year, million million $XX.X net offset income provided a release. $XX.X third our or a $X.X of EBITDA adjusted XX% compared quarter Adjusted last of year. an results third million year-over-year net expenses year. Operating last $XX.X in increase and net & net

balance the to sheet. Turning

restricted the and cash obligations million debt XXXX, XXXX. XX, net cash equivalents $XX.X in cash September compared cash, as and of cash restricted obligations, million $XX.X in cash, million in $XX.X of million XX, $XXX.X and net and had in company to As equivalents debt December

up $XXX have of September borrowings million our revolving also to credit facility XXXX. XX, of as We on available

investing of use initiatives, activities, fees strategic expenses. private including, the our and As not capital A announced in of corporate strategies general but long-term expenditures clinical million us principal and the development closing term capital Organogenesis this these to balance Partners and We execute owed a for facility release proceeds provide compelling enhances remaining to placement sheet deduction Healthcare placement afternoon, a Avista's with stock our net prior preferred capital, separate Series working in closing and convertible it in to we our press to of growth completed the proceeds cash the reflects growth company of mid-XXXX. purposes. This opportunity company of operating to financial of limited service substantially the to presents. $XXX from in condition transaction confidence commercial programs, to important appreciate at private and the fund with The loan believe gross Avista support investor leading care maturity intends to health and to, from the

review Turning financial of to XXXX a guidance. our

revenue better-than-expected the We are the third guidance updating reflect results quarter. in to

an that of potential from quarter LCDs. from X, the that the MACs January the expectation continues continues to market be we our Note, announced the XXXX. quarter fourth in the in guidance expect the with the guidance revenue in effective Our reflect the disruption final reflect to ruling date will near-term fourth

million, products revenue million, between products increase months to expects it million to XX% the of range & of million and XXXX $XX change Care Medicine in X% company the $XXX.X December in a Wound the a net range and increase of $XXX For increase year-over-year the for XX net year range and of year-over-year Advanced year-over-year X% from from the a between of representing $XX million million, net in December Surgical XX% X%. The guidance revenue $XXX an XX, XXXX. to a revenue $XXX Sports representing representing ending $XXX decline XX, the between of net compared X% now to revenue and range million ended revenue as net assumes XXXX,

We our and have GAAP as updated profitability EBITDA guidance well.

of of positive now of EBITDA $XX.X range loss to now million compared range $X to the million, range the to to compared previously. With that, to loss $X.X EBITDA now EBITDA range adjusted Specifically, compared turn a range we net expect closing $X.X net loss $XX $X EBITDA net of adjusted in previously. to Gary million an $XX million expect to some non-GAAP And range million of the to loss $XX.X GAAP the expect million positive net in of million non-GAAP million income of of to of a $XX in of now call $XX.X $XX in in back non-GAAP to of previously. range to of $XX.X loss million We the remarks. a million compared a of $X.X adjusted range million $X for GAAP adjusted the We previously. EBITDA million to EBITDA I'll million of loss we of income net $XX.X adjusted million, of to million $XX million a expect

Gary Gillheeney

Thanks, David.

substitutes, amidst ultimately MACs proposed material coverage positive from We health execution for the by challenging strong of environment. wound will in the long-term reflect market. changes continuing commercial the the if results quarter believe adopted, care be of team strongly the our third skin the operating Our

list initiated We and and the to have a evidence, year we later year. covered data, our on products and real-world coverage new clinical additional clinical strategy including to secure leverage expect already RCTs this strong existing have secure RCT for into and additional next a to

validation establish of schedule acknowledgment maximize for not coverage feedback, opportunity fee to sweeping for for us clinical to final schedule the negatively well plan need are access. brand substantial competitive rule and physician commercialized taken to changes believe be established in the the consistent strong the of impact and a has if believe include to will secure payment we to enormous a more serve disruption additional physician of equity, together represent period to infrastructure establish skin and implemented, framework a key does CMS' fee us did to while products Organogenesis' there patient that the be believe transition for implemented, patients. Further, willingness its our substitute we advantage these XXXX that products substantial consider positioned commercial While are pleased under not beneficiary changes that needed we we're particularly that

the by the a of pain from our the transformational submission suffering ReNu a continued solution have represents that also Organogenesis dedication of millions and for the our healing provide an cost ReNu progress innovative of consistent patients if excited outcomes I in for to our improve are And management BLA as organization. approved, one care. And for We overall our end is OA like program and introducing opportunity the truly XXXX. QX mission work to acknowledge demonstrated solutions by clear with mission that knee while hard of target importantly, by and continued our the to substantially would integrated employees lowering throughout

opportunity X in original capital finally, towards the and from our valuable investors and months initiatives key This care significant a received enhances Avista first we Healthcare the for to our of space efforts. recognize significantly with when sheet Partners, and We and our health With to strong that turn believe innovative provides of expertise flexibility. for growth public balance is value-added went from financing we to investor Organogenesis result XXXX. validation one strategic and the leader leading leveraging a leading our investment over call Our And I'd of the a care investment health like over represents the Organogenesis operator strategic and in investor that, XXXX this proactive I'll strong progress industry to the deliver their performance products of Avista's look open on mission. financial a approach as in investment deep highly that forward the a long-term call questions.

Operator

first Osborn our question [Operator Ross Thank Instructions]. you, And will Cantor from come Fitzgerald. sir. from

Ross Osborn

on Congrats quarter. the

So has broadening gone initiatives through reps? quarter would on direct the those force the during walk terms you on focused your how off, would on how you of an many are now sales And your Sports business? starting update in of provide Med reps

Gary Gillheeney

want Dave, mute? grab you on do Dave, to you that?

David Francisco

was. I we're the our reps. Sorry, particularly some good rep and did the quarter. some Yes, seeing, seeing productivity we great that in increase seeing from We're that wound out standpoint count care of performance

we're think I this think side on I and the XX at under direct point. SSM,

Ross Osborn

looking you trials provide with how think at some R&D during then And the quarter going of XXXX we more in on spend spend to color the you about and line, particularly were spend the would should OpEx in some and able where pull there?

David Francisco

Yes, sure.

in was it tick be and as we kind back pulled to closer that QX a QX So up. rate the we where the we to expect to little it bit than down our expectations, lower fourth of quarter spend expected from

lumpy it bit does tend and you be the know, quite BLA, to sometimes. As so spending on we're a

less had anticipated. that was spend the than of a little we just it so And quarter, the in bit hit timing third

the fashion efforts far as a continue. BLA that obviously, similar to to going invest in concerned, we're is yet, 'XX we to around continue haven't but those as As guided

Operator

[Operator Instructions].

from Ryan Our comes line from the of next question Zimmerman BTIG.

Ryan Zimmerman

LCDs. guess uncertainty for the the typically Dave, down. appreciate guidance and fourth that seasonally, quarter curious, I quarter around strongest. bit step So in a the market, calls the I a But fourth I'm implied Gary And still for of the is some there's

to you the did quarter were maybe just terms did really assumed terms to business? And it? you high of So through able on manage this real what's on impact the see because of -- the in what see in what's low assumed Dave, you end, this impacts AWC quick, what quarter end

David Francisco

Yes.

quarter. Again, captured. the just and So we great little that is in -- had seen carried business we've into third that first quarter. we to from disruption wanted third the have that to the a in keep momentum little half. or wide what we That as relatively relatively But you the But limited very obviously, impact in very perspective. the I quarter, be range fourth mentioned, quarter ensure in mentioned

year but far the we we QX high, with As low talked the on call. what the about consistent low in the QX obviously, as and guide, took we full the kept up then the end both

that So to is LCD we the concept in go the really effect our expectation that January. there early to continues be into expect

XX-day would between live. I so in there's mid-November, we goes see sometime when announced it it's And because come period expect that and to when out a think

of So is, their from pull do Given perspective? that the back says. on on depending customers question LCD the drop spending the what it

a kind lower just of X usual. the quarter. the And that's seen and good it's consecutive business quarters then beating great higher So on in year, progress of we've first each the course, end, of business momentum Again, the very end. as

that's the range, that So of helps. if kind

Ryan Zimmerman

what interim of certainly second fourth needs order And and what's 'XX, see, on the saw guys ReNu. consistent to ReNu, Between quarter confirmatory of to to nice point then potential And time assumed kind lines? in meet analysis terms up occur in the trial? in proof Gary, wrapping another yesterday, you now for the those

David Francisco

Sure.

analysis of So make to then second that we've able to we're assuming by to the achieved expect interim last that and able 'XX. be patient hit the deadline, filing expect last the in of would we June. QX QX have visit we'll BLA of We trial in that that

'XX, confident matter submit on it's we And true this QX now getting feel of to in QX track we'll last a the of analysis crunching So of been fortunately, interim that be data that and accomplished, visit last actually patient in and has full the year. BLA.

Operator

Thank Instructions]. you. [Operator

for our Thank questions you in at conference participation. remaining time. That for the currently your We does no conclude are queue showing today. this

Organogenesis (ORGO) 12 Nov 242024 Q3 Earnings call transcript