AZYO - Earnings call transcript Q1 2022

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Operator

Thank you for standing by and welcome to Aziyo Biologics Q1 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions].

As [Indiscernible] call is being recorded. turn Relations. over like Leigh your now Investor Salvo, would the to conference host I may you Ma'am begin.

Leigh Salvo

and participating in you, today's Thank thank call. you all for

Matthew the Earlier are Chief ended results company's March me Ronald website. A Chief is quarter Officer, Joining copy available XXXX. of the Lloyd, for the Financial release Aziyo today, and Officer. XX, released press financial Executive Ferguson, on

or within will that to results, our fact statements the involve I'd on you from Harbor like undue Securities by of events to and implied in outcomes, upon or not those development, statements. events, and and include our risks products, of to market expansion, make and management guidance to statements based XXXX. assumptions. recovery, statements. of our expectations this begin, statements. that revenue, or material on that pursuant impact are expense business during performance commercial relate results our forward-looking these Accordingly, Reform not expenses, or for operating margin, statements milestones, performance, are we expected Litigation patient These trends that operating COVID-XX laws, do relating Before estimates pipeline and forward-looking these organization, future forward-looking gross future expected anticipated provisions and securities product limitation, including contained and and opportunity, differ you call reliance actual and place growth hiring, those product statements and could of financial meaning commercial current prospects of partnerships without federal for uncertainties for materially to in management, launches performance predictions results should made the cause Private statements, forward-looking which call our including, this future remind to matters expectations Act All historical or relate Any of are of the Safe the various

our with For listening on refer uncertainties December SEC, filings public including the and our description the XX-K Form section Aziyo's ended report Risk year business, associated of with the the risks XXXX. XX, please of for to Factors annual

presentation, future at www.aziyo.com. GAAP may a factors with which to this this updated sec, the website quarterly to March the in Form at to any XX, Aziyo's SEC SEC, contains on or report any quarterly X, time-sensitive filings May Aziyo's call the be disclaims whether for including only filed other financial of and Biologics This XX-K XXXX. as live period new conference such, call comparable measure. reconciliation available events, on the As website time-to-time - or to information that, accessible be ended company's obligation or accurate from broadcast www.sec.gov. of intention XXXX, asset on in is projections turn the forward-looking directly of refer XXXX, posted revise as update Investor Aziyo A fiscal or by And ended GAAP earnings accessible XX, information, non during release Ronald. is with website which is we on quarter page of most the the intangible measure and is the first financial otherwise. amortization, - the over for excluding March non GAAP sec the financial margins Aziyo's gross to law, statements, except the required today, because Also financial measure I'll with

Ronald Lloyd

pleased all Aziyo's I in Thanks, start joining announce for thank great a'm to to off us. XXXX. you And Leigh. Good afternoon. that a

solid development product we're milestones, and So significant in far key meeting this delivering our progress making efficiency. results, improving our commercial year, operational

for which review our FDA. RM, was accepted submitted application we XX-K expected, next-generation subsequently our X envelope, As the CanGaroo by for biomaterial

States, confident obviously very Aziyo that for half with drive of milestone, As clearance, and the saw RM biomaterial for this in robust only in FDA plan $XXX the antibiotics excess medical of year-over-year and in growth about launch implantable market. sales to products with result, We're commercial CanGaroo the XX%. for devices approved as growth envelope million estimated a our we year. CanGaroo significant second this QX can continue future annual of United flagship excited In

future reconstruction sustainable of has Scientific of from With direct and saw see able XX% negative we first in did with overall last of Our hospital the from continuing were the expansion last data we results noted to call, potential with we versus strong navigate growth as in quarter, quarter systems, some our business and variant adoption. our challenges and market our clinical partners, also support [Indiscernible] our further results SimpliDerm expanded with growth. force the revenue operations am the sales in soft Overall, also impacts BIOTRONIK, product deliver our In to those our top-line growth contribution driving exceeding with continued quarter, meaningful for Omicron year. XX%. Boston advancement was successful the and further first that SimpliDerm, on access confident I year-over-year tissue product,

which our I'm percentage We to continue forward areas. improvement of all gross also looking substantial a points increased two compared of XXXX. five saw these quarters to by margin, in the progressing last in

our product some updates to the each of highlights portfolios. Turning for and of

tracking half FDA RM our as be product primary committed now the and second application review by earlier, Come we our devices, the remain of a is anticipate launch that in X-XX of for enhanced the products our First, XXXX. this for CanGaroo to driver I will XXXX, in to growth enable to we timeline implantable noted medical business. under

other in due again to contract devices. implantable $XXX hospitals. further strength a driven this platform with to opportunities of expand potential electronic this sales, by believe upside at outside to even international markets QX of develop largely applications Europe for as million existing well from at once account Looking we penetration as significant XXXX, we to exceed CanGaroo has into longer-term, annual in growth greater new sales In product saw

that sales and to reminder, United the primarily partnerships throughout Biotronik are and our our leverages products presence Scientific sold with Boston a As CanGaroo enhance a cardiovascular our through States. force direct

that the progress made We our are in closely work with far we've continue and to pleased this with XXXX. partners

Our partners FDA product market the the RM to this the and net CanGaroo prospects later particularly in about are filings of year. excited having related

investments, Continued will return and organization we positive have lever a demonstrated a our launch we RM. CanGaroo believe already the of significant be commercial for as prepare

As our driving their reps by we've have gained been in growing traction pleased encouraged to of productivity more see CanGaroo. tenure, and usage increasing

has grow. More and breakthrough for Europe and about our hold of both leader enthusiasm this learning two potential believe pleased antibiotics. implantable is at FDA electronic us natural specific designation information event at continue use preloaded contributor with vascularized an the for internationally. electrophysiologists. Rhythm a doctors but shared In our EPs We of the key approval CanGaroo fall international met call as conference. attended total, to percentage with beginning implantable the distribution April, of of future CanGaroo in pocket to electronic platform see can the a majority our leverage the leading how this the hear society patient CanGaroo traction through a website especially begun that our to continuing new small On long-term next-generation novel see Investors to remodeling great to about It talent under and we've creating email interested there, our uptake patients, They more We're CanGaroo investors@aziyo.com. throughout Premier, and solution they us devices. meeting Sales biological CanGaroo of or doctors meaningful the with late opportunities reaching visit for can hospital for also growth. in with its our we take our network. support benefits in benefits remain the interest with to was partners sales this Heart discussed also systemically a our investors accounts that call also opinion devices. in of envelope be a CanGaroo hosted types, is envision mid-April, to benefits

We the performance and that EPs -clinical by and product pre studies. impressed our CanGaroo RM were found research also conducted design market its in for

CanGaroo, in for the update As clinical are heal both well. an and enrollment progressing novel the our on studies trials

studies enroll continue to readouts later inner year. We and from both this patients anticipate

As patients as registry up synthetic study change envelope heal study patients time follows envelope CIED CanGaroo years. envelope or and de Novo no for a CanGaroo to at either the with patients against The with a out. envelope no compares reminder, five the CanGaroo,

Turning through continue first products, other SimpliDerm, reconstruction sales core our of soft product, our the to in tissue expand quarter.

anticipate is market-leading SimpliDerm factor our call, data that in product the for asset AbCellera rest market. to access total is distributor to ability on recently believe revenue our a a to better estimated key momentum national year. SimpliDerm highlighted capitalize strong with proving us. this is been the clinically confirming million to we We network throughout ever growing As We're the than hospitals. now with generate expanding and Moreover, ongoing has comparable our published we market pleased be clinical positioned last $XXX of dermis

and our pleased orthopedic our in we're OsteGro Turning traction ViBone quarters, with with products partners. to spinal recent existing and saw we continued repair, line results in ViBone, VBM, V, which for our this and includes with the category

XXXX for is distribution new onboard One our of partners. identifying goals

we will CanGaroo second our partnerships additional launch evolves, relationships of see coincide believe of which and with that track process the nicely this the on of year, benefit we're As in half targeted to RM.

leveraging products ability viable existing the in year and the complement matrix our anticipate repair portfolio. at platform. additional We by bone to launching more expand also least have orthopedic to further We space and create this product one our spinal

review business, manufacturing as for deliver on saw our Pending XXXX. and to has capabilities our These FDA partner’s a our CanGaroo our the business. trials for They're tissue pleased were in catalysts data to major of improved CanGaroo in over the RM. is category Lastly, the in this of and the foremost first our remodeling excellent margin contribution also our support as quarter, for to California we been commercially include, business start growth. In and XX-K the year-ago differentiation. benefits, our expecting X clearance, accepted expect submission, an which in this year. by to team development FDA quarter and processing product commercial fourth from and growth roll end summary, clinical readouts out We're significant leveraging lines, facility. and product contract with by strong XXXX, of growth off We of continue the well revenue seeing we our Richmond, our Aziyo

call leverage discussed initiatives data with levels our In robust business, the partnerships provide over spine current bottom to are yield in expected to support efficiency For continued and contribution begun drive have customer multiple implementing improvement of recently base first-quarter year. clinical and our we're new and launches product the And calls, growth. and throughout finally, as published I'll across With XXXX. our new line. margin that, orthopedic results steady to in of expand to our continued already gains from and to business SimpliDerm, growth our we'll to outlook that review Matthew previous rest for turn a entire further the expected

Matthew Ferguson

Net the same ended in months million. Ronald. March decrease from for period of year. A were XX% Thanks, million the $XX.X sales prior XX, $XX.X three XXXX the

sales XX% in as compared over However, for first of of quarter excluding period, the in margin saw FiberCel, prior-year of XXXX. the XX% first to Gross of XX% the corresponding growth was we XXXX. the quarter and the XX% fourth quarter XXXX

look also have year basis, the gross decline on prior margin and in line. amortization yields non-cash that year-ago gross impact mix quarter, XX% primarily of the the in bone of compared And at relates quarter in versus company's to product XX% been assets. to XX% viable of fourth excluding in the the intangible quarter lower product The We and would QX XXXX. margin

XXXX. XXXX compared in due for the $XX.X for the loss million $X.X net for The to of of $X.X in improvements improvement the related increase CanGaroo to RM. to was Loss the sequential the compared from higher more share of $X.XX loss to indicator Net loss year-ago operating facility. balance a first recent first production operations for XXXX $X.X under of was a expenses the margin were of revolving the primarily first share our million, was XXXX Total million in a as a credit, million with our of efficiency liquidity, of of line a quarter the availability total of in to first the million. quarter. and We $XX.X development in per Loss $XX quarter as quarter. in QX $X.X expenses $XX.X period of loss QX However, is $X.XX was compared gross quarter per cash the million including ended Richmond million, XXXX. XX% million of an year-ago from quarter increase

$XX Turning continue of $XX we to now range the million. the for to net our full-year million in project outlook XXXX, to sales

end year. that, the milestones the the your Excluding represents in CanGaroo we'd to from in which range expected this has launch timing to XXXX, quarter. this call And clearance value. and about the has the to ability The our long-term additional CanGaroo of of clearance million as fourth XX% up in growth XXXX, approximately shareholder do the discontinued, range of to been open variable by the the of of RM. commercial assumes excited assumes with well like low we as RM with And remain questions. by The and sales growth availability achieve high-end We $X.X biggest FiberCel XX%. range expect end and drive contribution to for no of

Operator

from question, please open. Instructions] Rescott Truist of our comes Securities, you. and your the question gentlemen, [Operator Thank ladies first line got I is David should Again,

David Rescott

you me? Can hear guys. Hey,

Ronald Lloyd

can, We yeah.

David Rescott

for Great. questions. the Thanks taking Hey.

CanGaroo, First, what at well all, maybe here I accounts. the mentioned is new any impacting submission incremental perhaps, growth XXXk thus in guess, maybe And any accounts XX% some of But has far. the driven the that? provide as you growth existing within color here could on the if quarter, you as

Ronald Lloyd

is David. the CanGaroo. benefits Yeah, that physicians is sure. To CanGaroo. latter provides. The the benefits And seeing CanGaroo believe submission we're seeing with answer that product now the to the I question, impacting growth don't we're Thanks that really for RM attributed part, the for remodeling that no, are growth seeing of current the rate the the the

as I so with and starting aspect a really driver. key think benefits that And being product, as our these And resonate the to such, I of customers. biological we're are our think seeing

that I here think growth Premier, think our more we from is, and new of leverage know, to add factor volume accounts. breakthrough came actually, increase as continued the as about to we've accounts. designation breakthrough we've you majority the in designation QX, And second through the our got

also our that Boston CanGaroo existing So to these from with finally, doing of in terms this we're growth. volume and driving in very news deeper generated we then in new that our have conjunction because, as that accounts to relates uptick Scientific with sales accounts, see the Then penetration it in the future Biotronik. being we excited accounts new that's is obviously, exciting are partnerships we're and and

the think that's this it we're growth think I So up very seeing us the in main nicely I CanGaroo. reasons additional And sets for that for growth year.

have second year, Of to the course, obviously we're launch in very also benefits excited then it us RM of the pre the with potential about having talk give which of the opportunity to antibiotics. -loaded half to then CanGaroo the

David Rescott

the OpEx think launch? of as of incremental head kind that second part Thanks. of progress about this partnerships Biotronik how this [Indiscernible] as year? And do we question, of spend the a as, through we rest

Ronald Lloyd

product. of have CanGaroo, with We've the biological ability about reduce of excited risk this with then that have very with it really benefits obviously it, the and RM. to we got comes the We're loaded Yeah. aspect CanGaroo think to the we then And as two about antibiotics Sure. infection. continuation

opportunity as growth it see this in and outs with for rate infection. we which Novo drive product have patients an both a the patients of higher So change then to

currently we're for phases this the So product. in planning launch

the to this mentioned very FDA out I through product a rolling comprehensive have this And hopefully We product then, clearance. as launch of in to year. half developed. with look we've the forward strategy this working that second We get before,

at an opportunity launch be devices benefit customers see meeting. CanGaroo forward with to spend assisting us the time with the society about with also to just opportunity had of also as communicate month earlier We with the a devices. of that product. it to our the the in very as they're and using the this of completed to be CanGaroo see their looking partners we've chance able their their and relates to had They're with a partners, this excited with Obviously, specific to submission meeting And they RM. chance be and a of As way of our the CanGaroo to to them. partner heart participating product able product

OpEx address Matthew, you why As it the don't that? relates portion to your questions, of

Matthew Ferguson

Sure.

the So somewhere latter for thE and be spending be of to of elevated good level we as similar RM think related think RM. of to I pretty might as basis increases year, a first pretty of the SG&A for in somewhat anticipation here. in would a But completion I to year. we most by clearance. did indicator of where we've bit about the terms QX a may bit We of for OpEx, have, what in CanGaroo continuing in of expect quarterly off a think R&D on an seen uptake in the we're R&D that all-in-all, see to the CanGaroo in FDA offset of dropping half quarter of launch OpEx I prepare QX

David Rescott

Thanks that's the Okay, taking for questions. helpful.

Operator

from Thank question Inc. Josh Our you. Instructions] comes with Cowen Jennings [Operator next

Your line is open.

Unidentified Analyst

Joshua. here is questions. this Hi, for Brian for taking Thanks my

Ronald Lloyd

Hi Brian?

Unidentified Analyst

Hi.

first-quarter the characterize growth your you are annual contract you for strength Is manufacturing? how existing contract customers the help or this specifically manufacturing add results, guidance? On within you customers? projecting And can in did

Ronald Lloyd

Sure.

Brian thanks question. the So for

to fair manufacturing a lining XXXX amount new business. in we If spent contract XXXX, of time partners up recall, you for back our

we And obviously, of seeing to added year. really the that strong last saw this partnerships come the for half result in a to so year we're the of really last and year, as relates it fruition second we've QX the very that growth

our contributor of them. and manufacturing to that the been from with significant to our our again, partners the seen California the And Richmond, again, but products of quarters appropriate in sure anticipate board new pleased sales growth manufacturing XXXX. make for And manufacturing, would we've we're product level really a aspects leverage R&D brought that been really to for for able that contract we're business the our we've in our designing we've QX. would As roughly on also performance, partners we that facility to similar we have subsequent the have

Unidentified Analyst

Okay. That's that. very Thank helpful. you for

the XX-day accepted, where has On that the reached timeline. fairly of timeline on sufficiency the or agency disclosed How about was a submission upon interpret coming RM think should at as that you're you a the the standard would here? point agreed from filing review the which is I mark? Have filing filing, the you we

Ronald Lloyd

sure. Yes,

reviewed and The the it So review. we've accepted we the application submitted what FDA substantial of application. for turned in, then

So now it's under relates active heard questions not point, back to FDA any or as review within application. this at FDA. substantial And comments on this the it from we've the

So FDA they from wait able have. address we'll to them course, the be may hopefully of questions any hear closely then, to work we'll that with and to

not So planning this from of give anything able point, a to timeline appropriate again, launch for standpoint, heard from perspective, still our year. we since the this back be more yet, in probably second specifics on timing. haven't think it's to you a And half we're at I

Unidentified Analyst

for, should used just if Thank that my possibility stopped of targeting question of the it what taking one purposes? are? think or I is commercial, just and is, claim Thanks non-regulatory for should could study interim again label interim the data for a used earl? the I there about a study primarily potentially we think question. being the analysis, that being guess, outcomes on that the potential remind you've as the data, HEAL ask And my for us use you. a more we you're I And size of guess you can analysis main

Ronald Lloyd

Yes.

procedure. envelope is the look envelope for look CanGaroo at that basically, around And study, back received no characteristics that implants peeling arise have in or due synthetic we'll at, all. heel that comparing coming change at out tissue the then soft or a that patients So to again, complications those are previously and

Our group. goal roughly X/X is in to enroll XXX patients, each

than day hopefully second size really, we then outs. to CanGaroo look in patient really physicians. the that the that they back physicians half from question, basically run we perspective, change analysis, this we'll this us telling are the to we to our stand latter As of designed for at to where collect basically We're into just and and going large part See when label. other perspective, second We get not see clinical results. of that your coming the a and really a analysis the they can it relates look that is quantify where us that It's have year. see half. address change interim And sample [Indiscernible] started trying at enough to are evidence share information patients to to from to every same we're

can also they CanGaroo. So of understand benefits the

customer more really education, from it's a education perspective. So market

Unidentified Analyst

Great. Thank again. you

Operator

Thank to to Thank at call this Instructions]. turn moment, closing One any please. the I'll further CEO showing you. [Operators you. Ronald remarks. no like back Lloyd, I'm time. questions for over

Ronald Lloyd

Yes, you. thank

And to here, the first of filing so because have want as of showed a CanGaroo perspective. I just I'm close drive ability our of I RM QX with shows we've team, compliment results think as the the reiteration that well we to the to ability Aziyo to execution about proud as and company again, Again, thank execute, them. for them all

We are the obviously very also confident future. about excited,

catalysts, throughout and next XXXX you updating of call. and you as look on at catalysts here to have number updates look forward those a proceed We to earnings near-term giving we we growth our forward

thank very you your time much So today. again, for

Operator

you, and all conference. Thank today's you this conclude gentlemen, Thank ladies does for participating.

great You disconnect. day. a may now Have

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