Earnings call transcript Q4 2022

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Operator

Good day, ladies and gentlemen, and welcome to the Aziyo Biologics Fourth Quarter and Full Year 2022 Financial Results Call.

At this time, all participants are in a listen-only mode. A question-and-answer session will follow formal presentation. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference call over to Matt Steinberg, FINN Partners.

Matt Steinberg

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

the available today, for XX, ended of results released XXXX. release quarter copy Earlier financial year the Aziyo website. the on company's and full A press is December

like include the Any the XXXX. historical statements Before that in Private to laws, Securities that forward-looking of Litigation management this relate events, statements which federal Safe of securities Act within of the that statements. are remind will we to you to statements call Harbor matters make provision expectations future not are facts contained do begin, or of during the Reform this relate pursuant I'd performance forward-looking results or to call meaning predictions of or

to risks including trends or actual that our implied current results statements, without operating those anticipated statements. financial are These relating by assumptions. and materially events material various or these to those limitation, statements based forward-looking our performance forward-looking involve uncertainties estimates upon differ future from and cause All could and

place reliance should not undue you on these Accordingly, statements.

Aziyo's website in Factors for the SEC's time Such For www.sec.gov. of with at Form the and updated description XX, Risk SEC, uncertainties to XXXX time ended may public to accessible and the factors with with December our year on filings XX-K business, Aziyo's including be filed annual the the from the be list other please with report SEC. to the the risks SEC, our filings refer a associated of section on

new Aziyo except required projections future update revise events broadcast otherwise. the accurate is intention by law, of only statements or today, or information, financial obligation, call of as conference The and any information any forward-looking March because XXXX. XX, disclaims time-sensitive whether live to or or Biologics contains as

the which most gross non-GAAP is on Also, at fourth measure. released SEC's directly financial Investor amortization, to intangible measures and financial financial of XXXX, website financial A www.aziyo.com. is this for reconciliation accessible during is website GAAP available refer XX, the the December presentation, company's asset excluding the the we Aziyo a of on the results measure this page margin, to quarter ended which non-GAAP posted comparable

I call over to that, turn Randy will with Mills. And CEO, the Aziyo's

Randy Mills

afternoon, the you thank Good and call. for joining

will we recent and business, overview goals out and objectives key an Today, for XXXX. provide of including our our achievements, lay

additional and We and our by on led XXXX of in posting other annual very growth robust lines. of concluded a CanGaroo results note, $XX.X SimpliDerm strong financial later call. these record details sales on will provide on product revenues Matt million, the

receipt the equivalent, first, RM the Food on would antibacterial a But or Monday and made for substantially address regarding our I like NSE, determination the of envelope. we Administration to CanGaroo from announcement Drug not

product CanGaroo latest have RM in reminder, which a to CanGaroo As our advancement preclinical and is been shown contains of rifampin line prevent the antibiotics, colonization. the minocycline, bacterial testing and

a as As modify employed a noted the control drug vitro FDA items NSE to essentially to is announcement, testing and that in process drug manufacturing provide release to and manner. in in request with relate work an the in a Monday's the by used additional to is requested forward changes. support timely assess batch-to-batch path that to manufacturing variation expeditious most FDA believe primarily data the assay We

right human take not additional any timeline the generation request that a provide firm involve cannot of animal long data. the now, know we we does do how While this will or of

progress. updates work on Our and we our team already provide is will hard at

product work outstanding we the the lines. for diligently CanGaroo opportunities we expand RM, around resolve While continue questions other to FDA's to our

growth SimpliDerm. Sientra entered to into of profitably patient partnership our It acellular further accelerate rapid expanding agreement improve allows distribution As platforms proprietary to for overall outcomes. a SimpliDerm, with the biologic announced us This growth our of earlier our dermal strategy also have today, supports we matrix.

on is provide Aziyo a of overview Everyone our company. devices patient me let our at of quick Now, humanizing mission better medical outcomes. focused for

mitigate $X.X designed These and failures the indicated SimpliDerm XXX,XXX mechanisms key and implantable for address surgical Our marketed with complications. a with added medical to fibrosis, and devices. each commonly in and cost of products occur programs that use procedures are associated in include failure erosion CanGaroo pipeline are migration, year surgical infection. over staggering billion

and that any surrounding is questions to capture Consequently, filing. a to are to technology that data to believe the or decision, the to expect the address submitted to expeditious FDA's strongly the important and majority review appropriateness pathway designed we we path FDA provide positioned pacemaker failure, support we the portion that the is the we of the work additional not RM protection requested. mechanisms most additional infection, market. significant of appeal did forward data CanGaroo confident device with key of is $XXX It Our reiterate completed million mainly to raise are the not do of the

already SimpliDerm competitive market major reconstruction SimpliDerm an rapid providing acquired surgery. The this Regarding uptake by potential company, creating us pharma product an is breast to witnessed in we and surgeons reconstruction significant evolving landscape. a in leader share our $XXX market, breast growth a perform amongst take who of market with million opportunity line, was for us space have

about And the not has excited benefits SimpliDerm ones offer. to that we only the are

for have of a manufacturer United sales trajectory relationship on a silicone accelerate and of is implants. professionals we with today, an the earlier across focused Sientra SimpliDerm. of company already entered and XX trusted They extensive partnership network medical surgeon into believe impressive breast a announced plastic distributor will a progressing have the aesthetics sales leading and agreement As this SimpliDerm. is the surgery We States. art with Sientra sales dedicated

financial to turn now results. Matt a I'll our Matt? for the review call of over

Matt Ferguson

Okay. Thanks, Randy.

of driven SimpliDerm performance product XXXX million. which our growth We to fourth revenue strong fourth compared in $XX.X grew sales CanGaroo XX% revenue by prior-year growth our closing and in a and net record achieved was lines, continued year. quarter the within in out the solid aggregate generate This XX% We growth quarter to by period.

our as on the a points previous be in basis, from by in of tissue human GAAP to compared more operating operations. expanded margin non-GAAP On XX% the fourth margin performance, in considered to of is a up basis indicative our percentage which primarily XX%, period. The XX% to quarter year's to improvements gross increase XXXX. we XX% gross X grew to Our due efficiency processing

recall fourth operating The the Increased sales liabilities contributed contingent research and updated partially FiberCel increase Total related expenses XXXX product. to a legal the marketing XXXX quarter in to estimates to compared decrease due of our higher prior-year operating in primarily of excess in $XX.X million also of development. and period. $XX.X corresponding to were of million currently available expenses, insurance expenses coverage by for and the was offset

cardiovascular as period. in the company's other Our and these million results, sales a of the bottom-line the payments. of results lines which and the reduction related company's million and QX interest $X.X for the the loss is was to milestone revenue fourth associated our of $X.X of income also on extent for based included corresponding million and Combining to obligation, XXXX timing for quarter compared prior-year product CanGaroo net $X net revenue all XXXX of forecasted

year results. full to Turning our XXXX

achieved Randy mentioned, $XX.X million. we As of revenue record

year. year sales products in Excluding XXXX from increased current the full prior to FiberCel in net the sales compared of $X.X XX% million XXXX,

produced on transparency were $XX.X and Orthobiologics sales Women's Health which each these segments. XX%. million, To our of that generated Protection provide million million from $X.X FiberCel prior I'll grew now revenue was excluding XX% million, greater our and X% lastly, XX%. cardiovascular XXXX growing And business down results, $X.X produced the growth sales, of performance in representing down year. is. $X.X revenue perspective break four by Device in

this year-end significant approximately cash $X remained We our whereby in week, and This annualized In managing savings position million. that lowered our translates of million. XX%. burn. by of prudently regard, our As XXXX, we reducing a implemented expense headcount workforce, about on cash to focus reduction our we $XX expenses was earlier

will transactions also revenue anticipate continue on number reducing accelerate we forward, burn. while strategic growth cash work Going of we these to and deals a

However, this exact guidance specific implementation be to can't predict relationships, revenue it because would at these the or timing periods we time. difficult for provide

hold the being. chosen time So, to for we've that on off

to you on updating as and more milestones gain we on strategic CanGaroo later forward clarity progress. look this revisit other RM year to expect We our in the for We our business.

with to I'll it that, Randy. And back hand

Randy Mills

Thanks, Matt.

over in XX,XXX are We're opportunities million surgeries poised on for the in we almost a of in the transformational year and at revenue, of use XX% annually, Aziyo. to proprietary lie products multitude our that ahead. lines capitalize positioned well our With $XX growth

we to: forward, are our As priorities move

recent opportunities pickups business as effectively One, possible, units our as profitability. improve run margin four such gross to our in looking our for as

have want gain FDA's this CanGaroo to but to in Williams. quickly, done get to FDA by to now Chief Scientific this clearance importantly, more with Two, work team, And Officer, Michelle want our confidence We we Dr. RM. we our do of led satisfaction.

businesses to our manner. like And announced a three, profitably continue in one with Sientra by rapid that entering fuel partnerships today the into scale we cost-efficient strategic growth

of gratitude. note a Lastly,

for all without employees, to trust of ability our better and partners our physician and strategy to dedication patient be Our in the on Thank patient continue medical and executing humanizing would the products investors, support our possible ongoing you not mission. continued outcomes our of devices and for involved.

over turn the to for I'll back And with that, operator the call questions.

Operator

this time, be at your we Instructions] session. Fitzgerald. conducting Our with comes state a Please will you. [Operator Cantor from ladies Thank and And Osborn Ross first gentlemen, question-and-answer question question.

Ross Osborn

to in data, updated quality level need asking Congrats and FDA timeline I and for? a the as the on far Hi, detail, the the test, partnership. of data but this you want as Starting FDA and for control not notice, well the to perform walk the FDA is the test through us an as SimpliDerm providing requested as you strong and lab XQ bar provide of difficulty approval with with that understand do commercialization, you guys. can

Randy Mills

Great assay. this what is, is question. after vitro about -- And looking it that's on to what it's Ross, manufacturing I thank about can you is tell -- What do detect designed the lot. variability. It's can test each I FDA done what -- specific elution a Randy. batch-to-batch called is And test you. the so, to the we're in talking so, is can that I

get disc faster the where can the than into off naturally. is the manner FDA to solution otherwise off antibiotic and of a a is membrane CanGaroo happen eluting itself What for and of in method would looking the do us we develop

normally would into water saline, would time. over of basically we we we take allow elute instead and of -- the to a So, the antibiotic beaker or device would put it

and hours that of is that's conditions DMSO get of the they've to test including few normally a the take would what and What out developing. disc more of there days it get and device detergents solution. off to a instead and able into completely do us And done to using to within what and do it like. things acidic And asked that, are the few ways to a be accelerate and number R&D our do to team is antibiotic different like

would would becomes requires predictable. It's would say nail environment, in gather seems fairly more the what down. have require predictable when normally though outside less this send validation, little be we'll up it data a use to easier package and have then a straightforward. lot that pre-COVID a assay It I of something particularly it to like some back It this and vendors, to like will FDA. been

exact hesitant timeline we're why this. give to that's more any so on And

Ross, We don't obviously And long-term more studies we make where known. a sort do this like to know of about kind anything that protracted said, require, soon or think, we I going that. animal situation as as timeframe, it's like of will the though, is

Ross Osborn

not a understood. RM of And delayed, there. CanGaroo outside headcount the And your you runway is pushback. burn more how rate we color cash maybe additional just to the for provide on occur turning FDA color this think your for If does can year? little about following potential should reduction... thanks a this partnership the Okay, or then, And bit

Randy Mills

I'll a comment. quick Sure, just make

a of it delay this partnership a derail not still It are might CanGaroo that. setback it certainly RM. didn't actively And bit, derail that. involved but for in creation We little the did

changes, that that's So know. And let still we think in you if something is our future. we'll

you to guidance provide want Matt, on...

Matt Ferguson

Sure.

place savings took that with implement we continue reductions headcount some -- started involves also to that implement week. taken we'll mentioned, we to may more the we to million. be $XX have difficult to initiatives don't as and We're and they recently and about headcount. have we cash other this that burn reduce anything have actions our So, And reduce Ross, year at do though expenses cost generally, some ended

cut So, we back quarters, think million $X our the look last very if about our we've been in believe actually can million quarter couple a quarter that in in of that $X Historically, cash that we actually the over will range next so And material per quarters. course difference or averaging few in million a rate. you $X make the less over half, burn we more to end burn. of up the

working that but quite that's and that bottoms-up way, in objective, get very we we're I'm detailed there. So, confident process a can our

be working also that bring to way. will the money We growth in a will more on bottom-line initiatives actually cost-efficient

a to of strategically sales So, a product partner, really gain line Sientra the pretty margin footprint where to that and the much a generating with this to where example healthy way bag. on them we'll in -- is add that with a for is deal a we're important a great a bigger this access company, gross product

what So, and get and know very with is as that done I optimistic up well. partnership that be that as we're a actually eager about Sientra, can partner, running quite to

So over example something we're that's to actually out and weeks looking that coming that similar an the works a number other we're of months. forward have initiatives doing. and the in of rolling We

Ross Osborn

great. questions. for Thanks taking Okay, my

Operator

comes Thank next [Operator from your state Jennings you. Company. question Instructions] Please TD question. with Cowen & Our Josh

Josh Jennings

share momentum CanGaroo experiencing. color gains the better share But not going And XXXX what share momentum a more -- approval. to thinking RM in momentum It was hoping continued like on just so how pre to RM CanGaroo of today? -- Hi, Thanks [investors] is was really ask quarter, CanGaroo front little to that just the XXXX in RM should wanted then CanGaroo approval? the taking like fourth good had (ph) about continued accelerate in sounds it's bit And I where questions. it in be slow get just and for and the you're hoping understand far? about it afternoon. to could seems

Randy Mills

Yes.

Josh, thanks the question. of to describe. It for sort So, be would difficult

explicitly way product you It with I share is a that not normal it direct. TYRX. market particularly different. share direct doesn't would, really competitor anything direct it's actually not think, CanGaroo competitor has, market else. a in a a is It to -- other The are and that not to in the any indications

in by So, itself. a case, it in is that really class

space and growth pleased We've seen really base the very business. have absent this RM, nice in that CanGaroo the addition we're of we

also and with we of We force this on particularly sales accelerate for also have made the we've Scientific and Internally, our organization hopefully sales Boston think our partnership also changes distribution the CanGaroo with that's progressing opportunities, RMs. that will with nicely. focus some

CanGaroo. or I'm -- with sorry, So

wait So, nice is business impatiently or, at while a profitable CanGaroo continued progressively like patiently RM, seeing are and the we more for we gross that launch very me, if with growth margins, us. healthy of you're becoming

Josh Jennings

or Sientra you can understand opportunity? then, currently is sell and And understanding that I Sientra questions. recon mid-teen augmentation don't the sounds has congratulations just else? you in acellular maybe in any better share? Sientra to share Sientra segment. if mean, I for to just product any how partnership, an Sientra but -- our -- you. wanted to Thank is have partnered straightforward, terms on salesperson that. of and then, kind that anyone about taking the know on matrix does details pretty SimpliDerm, capabilities Understood. And share Thanks of wanted in dermal just SimpliDerm, And view just it But stronger segment the the selling ask the with And

Randy Mills

this is or actually selling approximately us, -- that reps, SimpliDerm are And reconstruction a has really, experts. for shooting XX segment reps a the have those Thanks, priority of for reconstruction Yes. specialize This in sales No, matrix. of not of them. dermal -- an acellular just out including us, force reconstruction become They a for they it's this what like actually cannon. currently Josh. is

so a in really these way the where a it. carrying reps that's be would product are in the day opens and States limited every these product own XX geography distributing this are have the us our -- But used. reps now that up it group where in United of exponentially does the We for sales cases

think product -- it very, year-over-year. we the think so, a we be acceleration that's very already us, for it's like, a XX% And of something in could of significant growing, order

And so bit. that's saying quite a

strategically Aziyo. it We important in for is product also partnership of the think as being it's as for a good Sientra terms

So, it. we're about excited super

Josh Jennings

That's Thanks great Appreciate to hear. it. again.

Randy Mills

Thanks, Josh.

Operator

you conclude Thank participation. Thank with no further your And for conference. disconnect. questions you. may today's And today. we all there parties All that, are

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