ELUTIA INC. Q1 FY2025 earnings call

Management Statement and Operational Highlights

• EluPro Launch: EluPro jumped 84% Q/Q, now 52% of BioEnvelope revenue. 25 hospitals are actively ordering EluPro, with 30 value analysis committees (VACs) in process and 10-12 VACs added monthly. Partnership with Boston Scientific provides 900 sales reps, with 52 hospitals already selling EluPro.
• Manufacturing Expansion: Opened a new facility in Gaithersburg, MD to manufacture antibiotic discs, removing bottlenecks and reducing costs. Expected to contribute by end of 2025 with favorable lease terms.
• Marketing and Clinical Efforts: Kicked off EluPro at Heart Rhythm Society meeting with an ad campaign. Won Edison Award for innovation in postsurgical recovery. Enrolled first patients in real-world clinical study and had a peer-reviewed publication confirming EluPro's antibacterial effect.
• Reacquisition of Cardiovascular Products: Reacquired cardiovascular products from LeMaitre with 26 sales reps, minimal customer disruption, and expected immediate positive financial contribution.

Segment Performance

• BioEnvelope: Generated $3.1 million in revenue, up 31% year over year and 16% sequentially. EluPro saw an 84% quarter-over-quarter jump and now accounts for 52% of BioEnvelope revenue. The BioEnvelope franchise had its best quarter ever, driven by EluPro with some cannibalization of Kangaroo.
• Simploderm: Q1 revenue was $2.6 million, down from the prior year but up 13% sequentially from Q4.
• Cardiovascular products: Q1 sales were approximately $300k through a distributor, but direct sales are underway with 26 sales reps, expected to grow significantly going forward.
• Total: Overall sales for Q1 were $6 million, down year over year but up 10% sequentially from Q4. Adjusted gross margin was 54.8%, expected to improve due to manufacturing efficiencies in EluPro and direct revenue capture in cardiovascular products.

Guidance

• Continue driving top-line growth of EluPro by expanding VAC and GPO coverage.
• Build on momentum from Boston Scientific partnership with 900 sales reps.
• Increase production capacity and lower costs for EluPro, targeting mid-70% gross margins.
• Explore strategic alternatives for Simploderm.
• Advance drug-eluting biologic pipeline for reconstructive surgery, with potential near-term FDA approvals.

Risks

• Forward-looking statements involve material risks and uncertainties. Refer to SEC filings, including the 10-K for the year ended 12/31/2024, for detailed risk factors associated with the business.

Question and Answer

• Q: About Boston Scientific sales and adoption patterns. A: Randy mentions adoption spreads through practices as physicians try and adopt EluPro, often carrying usage over to other cases beyond Boston Scientific pacemakers.
• Q: About manufacturing capacity. A: Current manufacturing capacity for EluPro is ~$140 million revenue, but without antibiotic disc expansion, annualized capacity is ~$25-30 million.
• Q: About cash burn and guidance. A: Matt mentions cash position at $17.4 million, with cash flow from operations expected to stay in a similar range and improve going forward.
• Q: About registry study and clinical adoption. A: Randy states the clinical study data supports VAC submissions and future OUS regulatory submissions, especially in the EU.
• Q: About mix shift to EluPro. A: Randy notes EluPro's share of BioEnvelope revenue is increasing from 32% to over 50% Q/Q, with continued market share gain expected.