Elutia Inc. (Nasdaq: ELUT) (“Elutia” or the “Company”), a company
pioneering drug-eluting biomatrix products, today provided a
business update and financial results for the first quarter ended
March 31, 2024.
Business Highlights:
- Generated strong revenue growth for
proprietary product lines in the first quarter of 2024, led by
SimpliDerm net sales increasing 55% compared to the first quarter
of 2023
- FDA interactions regarding
CanGarooRM, Elutia’s antibiotic-eluting biologic envelope, continue
to be positive
- Addressing the final details for
CanGarooRM clearance; anticipate FDA decision in the second quarter
of 2024
- Preparing for launch of CanGarooRM
in the second half of 2024
“We are progressing through the regulatory
process for CanGarooRM with one goal: FDA clearance in the second
quarter for the world’s first antibiotic-eluting biologic
envelope,” stated Dr. Randy Mills, Elutia’s Chief Executive
Officer. “The pacemaker and implantable defibrillator protection
market is valued at $600 million and has only one legacy player
offering a fully synthetic envelope. We aim to disrupt this space
with our proprietary technology that is both antimicrobial and
regenerative, thereby setting a new standard for excellence in
patient outcomes.”
Dr. Mills continued, “Our Women’s Health team is
successfully executing a similar strategy with SimpliDerm,
achieving robust sales growth of 55%. This sharp sales increase
spotlights the crucial role SimpliDerm plays in supporting a
woman’s recovery following mastectomy. I offer my sincere thanks to
the entire Elutia CRU for delivering another spectacular
quarter.”
CanGarooRM Update
Following the successful submission of the
510(k) premarket notification to the FDA in December 2023, Elutia
has been in positive, ongoing discussions with the Agency and
expects to close out any remaining inquiries within the month. As a
result, the Company anticipates a positive FDA decision by the end
of June 2024.
With only one competitor in the $600 million
pacemaker and implantable defibrillator protection market,
CanGarooRM represents immense potential in the drug-eluting market.
In anticipation of the pending regulatory clearance, Elutia
continues to fortify its operational and commercial strength and
expects to initiate manufacturing and commercial introduction of
CanGarooRM in the second half of this year.
First Quarter 2024 Financial
Results
For the three-month period ended March 31, 2024,
as compared to the same period of 2023:
- Overall net
sales were $6.7 million, an increase of 5%.
- Net sales of
SimpliDerm were $3.6 million, compared to $2.3 million, an increase
of 55%, as customer awareness and acceptance accelerated within the
$1.6 billion market for use of the product in breast reconstruction
surgeries.
- Net sales of
CanGaroo were $2.4 million, consistent with the prior-year quarter,
as the Company prepares for the clearance and market introduction
of CanGarooRM.
- Net sales of
Cardiovascular products were $0.8 million, a decline of 56%,
reflecting the transition in the United States to indirect sales
through the Company’s exclusive distribution relationship with
LeMaitre Vascular.
- Gross margin on
a GAAP basis was 42%, compared to 53%. The year-over-year reduction
was primarily due to the transition to indirect sales within the
Cardiovascular product line associated with the LeMaitre Vascular
distribution relationship mentioned above.
- Adjusted gross
margin (a non-GAAP measure which excludes non-cash amortization of
intangibles) was 55%, compared to 66%.
- Total operating
expenses were $11.3 million, compared to $11.7 million. The overall
decline included reductions in sales and marketing, research and
development, and litigation costs, offset by an increase in general
and administrative resulting primarily from higher non-cash
stock-based compensation expense.
- Loss from
operations was $8.5 million, compared to $8.3 million.
- Net loss was
$18.0 million, compared to a net loss of $8.0 million. The
increased net loss was primarily due to a $9.6 million non-cash
charge in the first quarter of 2024 related to the revaluation of
the Company’s liability on its outstanding warrants.
- Adjusted EBITDA
(a non-GAAP measure that excludes from net loss certain
non-operating, non-cash and non-recurring items) was a loss of $3.6
million, compared to a loss of $4.8 million. A reconciliation of
net loss to adjusted EBITDA is included in the accompanying
financial tables.
- Cash balance as
of March 31, 2024 was $12.6 million.
Conference Call
Elutia will host a conference call today at 4:30
p.m. Eastern Time / 1:30 p.m. Pacific Time to discuss its first
quarter 2024 financial results and performance.
The conference call can be accessed using the following
information:
Webcast: Click here U.S.
Investors: 877-407-8029International
Investors: 201-689-8029Conference
ID: 13746000
Individuals interested in listening to the
conference call are required to register online. Participants are
recommended to log in approximately 10 minutes before the start of
the call. A live and archived webcast of the event and the
accompanying presentation materials will be available on the
“Investors” section of the Elutia website at
investors.elutia.com.
About Elutia
Elutia develops and commercializes biologic
products to improve compatibility between medical devices and the
patients who need them. With a growing population in need of
implantable technologies, Elutia’s mission is humanizing medicine
so patients can thrive without compromise. For more information,
visit www.Elutia.com.
Non-GAAP Disclosure
In addition to the Company's financial results
determined in accordance with U.S. GAAP, the Company provides
non-GAAP measures that it determines to be useful in evaluating its
operating performance and liquidity. The Company presents in this
press release the following non-GAAP financial measures: earnings
before interest, taxes, depreciation and amortization (“EBITDA”),
adjusted earnings before interest, taxes, depreciation and
amortization (“adjusted EBITDA”), adjusted gross margin and
adjusted gross profit. The Company defines EBITDA as GAAP net loss
excluding interest expense, income tax expense, depreciation and
amortization, and the Company defines adjusted EBITDA as EBITDA
excluding income from discontinued operations, stock-based
compensation, FiberCel litigation costs, loss on extinguishment of
debt, net of gain on debt forgiveness, loss on revaluation of
warranty liability and gain on revaluation of revenue interest
obligation. The Company defines adjusted gross profit and adjusted
gross margin as GAAP gross profit and GAAP gross margin,
respectively, excluding amortization of acquired intangible assets.
The amortization of these intangible assets will recur in future
periods until such intangible assets have been fully amortized.
Management believes that presentation of non-GAAP financial
measures provides useful supplemental information to investors and
facilitates the analysis of the Company's core operating results
and comparison of operating results across reporting periods. The
Company uses this non-GAAP financial information to establish
budgets, manage the Company's business, and set incentive and
compensation arrangements. Non-GAAP financial information, when
taken collectively, may be helpful to investors because it provides
consistency and comparability with past financial performance.
However, non-GAAP financial information is presented for
supplemental information purposes only, has limitations as an
analytical tool and should not be considered in isolation or as a
substitute for financial information presented in accordance with
U.S. GAAP. For a reconciliation of these non-GAAP measures to GAAP,
see below “Non-GAAP Reconciliations of EBITDA and Adjusted EBITDA”
and “Non-GAAP Reconciliations of Adjusted Gross Profit and Adjusted
Gross Margin.”
Forward-Looking Statements
This press release contains “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Forward-looking statements can be identified
by words such as “projects,” “may,” “will,” “could,” “would,”
“should,” “believes,” “expects,” “anticipates,” “estimates,”
“intends,” “plans,” “potential,” “promise” or similar references to
future periods. All statements contained in this press release that
do not relate to matters of historical fact should be considered
forward-looking statements, including any statements and
information concerning our future interactions with the U.S. Food
and Drug Administration (“FDA”) regarding CanGarooRM; expectations
for FDA clearance of CanGarooRM, including the timing and
anticipated success thereof; preparations for the launch of
CanGarooRM, including the timing and anticipated success thereof;
the size of the pacemaker and implantable defibrillator protection
market and the potential of CanGarooRM to compete in that market;
and our future strategy with respect to SimpliDerm. These
forward-looking statements are based on our management’s beliefs
and assumptions and on information currently available to us. Such
beliefs and assumptions may or may not prove to be correct.
Additionally, such forward-looking statements are subject to a
number of known and unknown risks, uncertainties and other
important factors that may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied in the
forward-looking statements, including, but not limited to the
following: our ability to obtain regulatory approval or other
marketing authorizations by the FDA and comparable foreign
authorities for our products and product candidates; our ability to
continue as a going concern; the risk of product liability claims
and our ability to obtain or maintain adequate product liability
insurance; our ability to defend against the various lawsuits
related to FiberCel and VBM and avoid a material adverse financial
consequence; our ability to achieve or sustain profitability; our
ability to enhance our products, expand our product indications and
develop, acquire and commercialize additional product offerings;
our dependence on our commercial partners and independent sales
agents to generate a substantial portion of our net sales; our
dependence on a limited number of third-party suppliers and
manufacturers, which, in certain cases are exclusive suppliers for
products essential to our business; our ability to successfully
realize the anticipated benefits of the sale of our Orthobiologics
Business; physician awareness of the distinctive characteristics,
benefits, safety, clinical efficacy and cost-effectiveness of our
products; the continued and future acceptance of our products by
the medical community; our ability to compete against other
companies, most of which have longer operating histories, more
established products and/or greater resources than we do; pricing
pressure as a result of cost-containment efforts of our customers,
purchasing groups, third-party payors and governmental
organizations could adversely affect our sales and profitability;
and our ability to obtain, maintain and adequately protect our
intellectual property rights; and other important factors which can
be found in the “Risk Factors” section of Elutia’s public filings
with the Securities and Exchange Commission (“SEC”), including
Elutia’s Annual Report on Form 10-K for the year ended December 31,
2023, as such factors may be updated from time to time in Elutia’s
other filings with the SEC, including Elutia’s Quarterly Reports on
Form 10-Q, accessible on the SEC’s website at www.sec.gov and the
Investor Relations page of Elutia’s website at
https://investors.elutia.com. Because forward-looking statements
are inherently subject to risks and uncertainties, you should not
rely on these forward-looking statements as predictions of future
events. Any forward-looking statement made by Elutia in this press
release is based only on information currently available and speaks
only as of the date on which it is made. Except as required by
applicable law, Elutia expressly disclaims any obligations to
publicly update any forward-looking statements, whether written or
oral, that may be made from time to time, whether as a result of
new information, future developments or otherwise.
Investors:Matt SteinbergFINN
Partnersmatt.steinberg@finnpartners.com
|
|
ELUTIA INC. |
CONSOLIDATED BALANCE SHEET DATA |
(Unaudited, in thousands) |
|
|
|
|
|
|
|
|
Assets |
March 31, 2024 |
|
|
December 31, 2023 |
|
Current assets: |
|
|
|
Cash |
$ |
12,551 |
|
|
$ |
19,276 |
|
Accounts receivable, net |
|
4,406 |
|
|
|
3,263 |
|
Inventory |
|
3,052 |
|
|
|
3,853 |
|
Receivables of litigation costs |
|
2,031 |
|
|
|
2,696 |
|
Prepaid expense and other assets |
|
1,946 |
|
|
|
2,165 |
|
Total current assets |
|
23,986 |
|
|
|
31,253 |
|
|
|
|
|
Property and equipment,
net |
|
171 |
|
|
|
172 |
|
Intangible assets, net |
|
10,822 |
|
|
|
11,671 |
|
Operating lease right-of-use
assets, and other |
|
383 |
|
|
|
332 |
|
Total assets |
$ |
35,362 |
|
|
$ |
43,428 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Deficit |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued expenses and other current
liabilities |
$ |
14,085 |
|
|
$ |
12,676 |
|
Current portion of long-term debt and revenue interest
obligation |
|
8,174 |
|
|
|
15,062 |
|
Contingent liability for FiberCel litigation |
|
15,591 |
|
|
|
15,024 |
|
Current operating lease liabilities |
|
217 |
|
|
|
275 |
|
Total current liabilities |
|
38,067 |
|
|
|
43,037 |
|
|
|
|
|
Long-term debt |
|
19,738 |
|
|
|
20,356 |
|
Long-term revenue interest
obligation |
|
7,659 |
|
|
|
5,360 |
|
Warrant liability |
|
19,503 |
|
|
|
12,760 |
|
Other long-term
liabilities |
|
694 |
|
|
|
515 |
|
Total liabilities |
|
85,661 |
|
|
|
82,028 |
|
|
|
|
|
Stockholders' equity
(deficit): |
|
|
|
Common stock |
|
24 |
|
|
|
23 |
|
Additional paid-in
capital |
|
143,315 |
|
|
|
137,021 |
|
Accumulated deficit |
|
(193,638 |
) |
|
|
(175,644 |
) |
Total stockholders' equity (deficit) |
|
(50,299 |
) |
|
|
(38,600 |
) |
Total liabilities and stockholders' equity |
$ |
35,362 |
|
|
$ |
43,428 |
|
|
|
|
|
ELUTIA INC. |
CONSOLIDATED STATEMENT OF OPERATIONS |
(Unaudited, in thousands, except share and per share
data) |
|
|
|
|
|
Three months ended March 31, |
|
2024 |
|
2023 |
|
|
|
|
Net sales |
$ |
6,694 |
|
|
$ |
6,392 |
|
Cost of goods sold |
|
3,851 |
|
|
|
3,018 |
|
Gross profit |
|
2,843 |
|
|
|
3,374 |
|
|
|
|
|
Operating expenses: |
|
|
|
Sales and marketing |
|
3,309 |
|
|
|
4,691 |
|
General and administrative |
|
5,056 |
|
|
|
3,520 |
|
Research and development |
|
1,172 |
|
|
|
1,591 |
|
FiberCel litigation costs |
|
1,785 |
|
|
|
1,911 |
|
Total operating expenses |
|
11,322 |
|
|
|
11,713 |
|
Loss from continuing operations |
|
(8,479 |
) |
|
|
(8,339 |
) |
|
|
|
|
Interest expense |
|
1,313 |
|
|
|
1,430 |
|
Other (income) expense,
net |
|
8,194 |
|
|
|
- |
|
Loss before provision for income taxes |
|
(17,986 |
) |
|
|
(9,769 |
) |
|
|
|
|
Provision for income
taxes |
|
8 |
|
|
|
12 |
|
Net loss from continuing
operations |
|
(17,994 |
) |
|
|
(9,781 |
) |
Income from discontinued
operations |
|
- |
|
|
|
1,807 |
|
Net Loss |
|
(17,994 |
) |
|
|
(7,974 |
) |
|
|
|
|
Net loss from continuing
operations per share |
|
|
|
basic and diluted |
$ |
(0.75 |
) |
|
$ |
(0.61 |
) |
Net income (loss) from
discontinued operations per share |
|
|
|
basic and diluted |
$ |
- |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding - |
|
|
|
basic and diluted |
|
23,912,326 |
|
|
|
16,149,567 |
|
|
ELUTIA INC. |
NON-GAAP RECONCILIATIONS OF ADJUSTED GROSS
PROFIT AND ADJUSTED GROSS MARGIN |
(Unaudited, in thousands, except share and per share
data) |
|
|
Three months ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
Net sales |
$ |
6,694 |
|
|
$ |
6,392 |
|
Gross profit |
|
2,843 |
|
|
|
3,374 |
|
Intangible asset amortization expense |
|
849 |
|
|
|
849 |
|
Adjusted gross profit
(non-GAAP) |
$ |
3,692 |
|
|
$ |
4,223 |
|
Gross margin |
|
42.5 |
% |
|
|
52.8 |
% |
Adjusted gross margin
percentage (non-GAAP) |
|
55.2 |
% |
|
|
66.1 |
% |
|
ELUTIA INC. |
NON-GAAP RECONCILIATIONS OF EBITDA AND
ADJUSTED EBITDA |
(Unaudited, in thousands, except share and per share
data) |
|
|
Three months ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
Net loss |
$ |
(17,994 |
) |
|
$ |
(7,974 |
) |
Interest expense
(1) |
|
1,313 |
|
|
|
1,430 |
|
Provision for
income taxes |
|
8 |
|
|
|
12 |
|
Depreciation and
amortization |
|
864 |
|
|
|
947 |
|
Earnings before
interest, taxes, depreciation and amortization (“EBITDA”)
(non-GAAP) |
|
(15,809 |
) |
|
|
(5,585 |
) |
Income from
discontinued operations |
|
- |
|
|
|
(1,807 |
) |
Stock-based
compensation |
|
2,197 |
|
|
|
684 |
|
FiberCel
litigation costs (2) |
|
1,785 |
|
|
|
1,911 |
|
Loss on
revaluation of warranty liability (3) |
|
9,637 |
|
|
|
- |
|
Gain on
revaluation of revenue interest obligation (4) |
|
(1,443 |
) |
|
|
- |
|
Adjusted EBITDA
(non-GAAP) |
$ |
(3,633 |
) |
|
$ |
(4,797 |
) |
|
(1) |
Represents interest expense recorded on all outstanding long-term
debt as well as the revenue interest obligation. |
(2) |
Represents FiberCel litigation costs consisting primarily of legal
fees and the estimated and actual costs to resolve the outstanding
FiberCel litigation cases offset by the estimated amounts
recoverable and recovered under insurance, indemnity and
contribution agreements for such costs. |
(3) |
Represents non-cash expense attributable to the revaluation of
Common Warrants and Prefunded Warrants issued in connection with a
private offering of Class A common stock on September 21,
2023. |
(4) |
Represents the gain on the revaluation of the revenue interest
obligation. At each reporting period, the value of the revenue
interest obligation is re-measured based on current estimates of
future payments, with changes to be recorded in the consolidated
statements of operations using the catch-up method. |
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