ELUTIA INC. Q3 FY2024 earnings call

• EluPro product launch: First implant in September, first neurostimulator device in October. EluPro is used across major CIED brands and accounts for 25% of ongoing bio envelope sales.
• Sales and commercial expansion: Expanded commercial footprint with 12 direct reps, 34 independent reps, and 9 product consultants. Completed sales training for field professionals. Submitted to over 100 VACs, with 36 accounts actively ordering.
• Clinical and scientific support: Kicked off registry study for real-world outcomes data. Peer-reviewed publication in Frontiers in Drug Delivery showcasing elimination of key hospital bacteria.
• SimpliDerm performance: Grew 19% this quarter with $3.1 million in sales.

For the third quarter ended September 30, 2024, SimpliDerm grew 19% this quarter, with $3.1 million in sales. BioEnvelope sales, which include EluPro and CanGaroo, had EluPro accounting for 25% of ongoing bio envelope sales. The gross margin for the BioEnvelope business (comprised of EluPro and CanGaroo) was 68%, while SimpliDerm had a gross margin of 56%. Adjusted gross margin ticked up slightly to 61% compared to 60% a year ago. Operating expenses increased to $13 million, mostly due to non-cash stock-based compensation. The loss from operations was $10.2 million for the quarter, but net income was positive at $1.3 million, largely due to a non-cash gain from warrant revaluation. Adjusted EBITDA was a loss of $2.9 million for the quarter, and the company ended the quarter with $25.7 million in cash.

No specific forward-looking guidance with upward/downward revision, but noted positive net income due to non-cash items and adjusted EBITDA in a manageable range. Ended the quarter with $25.7 million in cash, reflecting exercise of warrants early in Q3.

Risks and uncertainties associated with the business are detailed in Elutia's public filings with the SEC, including the annual report on Form 10-K for the year ended December 31, 2023, accessible on the SEC's website.

Q: Could you provide the mix of EluPro implants between Abbott, Boston, and Medtronic?

A: It's very early, but currently, there's no bias towards any one brand; EluPro is used across all major CIED brands.

Q: How many CanGaroo accounts are there and what's the activation rate?

A: There are about 400 CanGaroo accounts, and around 10% (37 accounts) are actively ordering.

Q: Is the existing sales team fully staffed or will there be more hiring?

A: The team is felt to be good, but there's still opportunity to grow in some areas, particularly in the West, while maintaining standards for team members.

Q: How to think about short-term noise in numbers between CanGaroo and EluPro transition?

A: Noise is expected, but orders for EluPro are on average 20% larger than CanGaroo, with enthusiastic adoption from physicians.

Q: Is EluPro being marketed for neurostim use and future opportunities?

A: EluPro was requested for neurostim use, seeing it as a rapid opportunity to grow, with potential strategic relationships in neurostim, sleep apnea, pain, etc.

Q: Top initiatives for SimpliDerm in 2025?

A: Expand proprietary commercial distribution efforts, focus on breast reconstruction within reconstructive biosurgery, and leverage own commercial infrastructure with partnerships like Sientra.