ANDOVER,
Mass., Nov. 6, 2023 /PRNewswire/ -- TransMedics
Group, Inc. ("TransMedics") (Nasdaq: TMDX), a medical technology
company that is transforming organ transplant therapy for patients
with end-stage lung, heart, and liver failure, today reported
financial results for the quarter ended September 30, 2023.
Recent Highlights
- Net revenue of $66.4 million in
the third quarter of 2023, a 159% increase compared to the third
quarter of 2022, including $1.6
million non-recurring charter revenue
- Closed acquisition of Summit Aviation, enabling the addition of
aviation service to NOP offering, driving $2.1 million incremental transplant related
revenue in the third quarter
"The third quarter was a critical execution period for TMDX as
we integrated a new business, expanded our NOP clinical support
capacity, and launched a first-of-its kind business to expand our
NOP product and service offering," said Waleed Hassanein, MD, President and Chief
Executive Officer. "We are pleased with our third quarter
performance and we firmly believe that we are building a great
foundation for further acceleration of our growth in 2024 and
beyond."
Third Quarter 2023 Financial Results
Total revenue for the third quarter of 2023 was $66.4 million, a 159% increase compared to
$25.7 million in the third quarter of
2022. The increase was due primarily to greater utilization of the
company's NOP across all three OCS products as well as the addition
of logistics and aviation revenue. Revenue from the new, transplant
related aviation and logistics offerings was $2.1 million. Additionally, total revenue
includes $1.6 million in
non-recurring revenue attributable to Summit Aviation's charter
business that TransMedics intends to exit in early 2024.
Gross margin for the third quarter of 2023 was 61%, compared to
71% in the third quarter of 2022, and compared to 70% in the
second quarter of 2023. Gross margin for the third quarter was
unfavorably impacted by transition initiatives following the Summit
Aviation acquisition, and the expected inefficiencies inherent in
the transition out of its legacy charter business and the launch of
the new transplant aviation business. Total cost of revenue
$2.3 million of non-transplant
related costs that reduced gross margin by 200 basis points.
Operating expenses for the third quarter of 2023 were
$69.0 million, compared to
$23.7 million in the third quarter of
2022, and compared to $37.6 million
in the second quarter of 2023. The increase in operating expense
was driven primarily by an acquired in-process research and
development charge of $27.2 million
and an additional $2.0 million in
non-recurring acquisition-related costs. In addition, TransMedics
continued investing in personnel, NOP support, and the development
of the company's digital platform and next generation OCS. Third
quarter operating expenses in 2023 also included $5.1 million of stock compensation expense
compared to $2.7 million of stock
compensation expense in the third quarter of 2022, and $4.9 million of stock compensation in the second
quarter of 2023.
Net loss for the third quarter of 2023 was $25.4 million, compared to $7.4 million in the third quarter of 2022. The
increase in net loss was driven primarily by $29.2 million in non-recurring
acquisition-related costs.
Cash was $427.1 million as of
September 30, 2023.
2023 Financial Outlook
TransMedics is
updating its full year 2023 revenue guidance to be in the
range of $222 million to $230 million, which represents 138% to 146%
growth compared to the company's prior year revenue. TransMedics'
prior 2023 revenue guidance was $180
million to $190 million.
Webcast and Conference Call Details
The TransMedics
management team will host a conference call beginning at
4:30 p.m. ET / 1:30 p.m. PT on
Monday, November 6, 2023. A live and
archived webcast of the event will be available on the "Investors"
section of the TransMedics website at www.transmedics.com.
About TransMedics Group, Inc.
TransMedics is the
world's leader in portable extracorporeal warm perfusion and
assessment of donor organs for transplantation. Headquartered in
Andover, Massachusetts, the
company was founded to address the unmet need for more and better
organs for transplantation and has developed technologies to
preserve organ quality, assess organ viability prior to transplant,
and potentially increase the utilization of donor organs for the
treatment of end-stage heart, lung, and liver failure.
Forward-Looking Statements
This press release contains
forward-looking statements with respect to, among other things, our
full-year guidance, and statements about our operations, financial
position, and business plans, including our plans to expand
our NOP offering, increase revenue opportunities, and exit Summit
Aviation's charter business. These forward-looking statements are
subject to a number of risks and uncertainties. Our Management
cannot predict all risks, nor can we assess the impact of all
factors on the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in or implied by any forward-looking statements we may
make. In light of these risks and uncertainties, the
forward-looking events and circumstances discussed in this press
release may not occur and actual results could differ materially
and adversely from those anticipated in or implied by the
forward-looking statements. Some of the key factors that could
cause actual results to differ include: that we continue to incur
losses; our ability to attract and retain key personnel; our
existing and any future indebtedness, including our ability to
comply with affirmative and negative covenants under our credit
agreement to which we will remain subject until maturity; the
fluctuation of our financial results from quarter to quarter; our
need to raise additional funding and our ability to obtain it on
favorable terms, or at all; our ability to use net operating losses
and research and development credit carryforwards; our dependence
on the success of the OCS; our ability to expand access to OCS
through the NOP; our ability to scale our manufacturing and
sterilization capabilities to meet increasing demand for our
products; the rate and degree of market acceptance of the OCS; our
ability to educate patients, surgeons, transplant centers and
private payors of benefits offered by the OCS; our ability to
improve the OCS platform and develop the next generation of the OCS
products; our dependence on a limited number of customers for a
significant portion of our net revenue; our ability to maintain
regulatory approvals or clearances for our OCS products in
the United States and the European
Union; our ability to adequately respond to FDA follow-up inquiries
in a timely manner; performance of our third-party suppliers and
manufacturers; our dependence on third parties to transport donor
organs and medical personnel for our NOP; price increases of the
components of our products; the timing or results of post-approval
studies and any clinical trials for the OCS; our manufacturing,
sales, marketing and clinical support capabilities and strategy;
attacks against our information technology infrastructure; the
economic, political and other risks associated with our
foreign operations; our ability to protect, defend, maintain and
enforce our intellectual property rights relating to the OCS and
avoid allegations that our products infringe, misappropriate or
otherwise violate the intellectual property rights of third
parties; the pricing of the OCS, as well as the reimbursement
coverage for the OCS in the United
States and internationally; regulatory developments in
the United States, European Union
and other jurisdictions; the extent and success of competing
products that are or may become available; the impact of any
product recalls or improper use of our products; risks related to
retaining key Summit employees and risks related to providing
aviation services and owning aircraft; our estimates regarding
revenues, expenses and needs for additional financing; and other
factors that may be described in our filings with the Securities
and Exchange Commission (the "SEC"). Additional information will be
made available in our annual and quarterly reports and other
filings that we make with the SEC. The forward-looking statements
in this press release speak only as of the date of this press
release. Factors or events that could cause our actual results to
differ may emerge from time to time, and we are not able to predict
all of them. We undertake no obligation to update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
applicable law.
Investor Contact:
Brian
Johnston
332-895-3222
Investors@transmedics.com
TransMedics Group,
Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue:
|
|
|
|
|
|
|
|
|
Net product
revenue
|
|
$
47,740
|
|
$
21,299
|
|
$
124,195
|
|
$
54,160
|
Service
revenue
|
|
18,690
|
|
4,384
|
|
36,254
|
|
7,924
|
Total
revenue
|
|
66,430
|
|
25,683
|
|
160,449
|
|
62,084
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
Cost of net product
revenue
|
|
11,086
|
|
4,231
|
|
26,950
|
|
11,689
|
Cost of service
revenue
|
|
14,682
|
|
3,337
|
|
27,330
|
|
5,826
|
Total cost of
revenue
|
|
25,768
|
|
7,568
|
|
54,280
|
|
17,515
|
Gross profit
|
|
40,662
|
|
18,115
|
|
106,169
|
|
44,569
|
|
|
|
|
|
|
|
|
|
Gross Margin
|
|
61 %
|
|
71 %
|
|
66 %
|
|
72 %
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research, development
and clinical trials
|
|
11,132
|
|
6,808
|
|
25,294
|
|
21,056
|
Acquired in-process
research and development expenses
|
|
27,212
|
|
—
|
|
27,212
|
|
—
|
Selling, general and
administrative
|
|
30,653
|
|
16,851
|
|
84,993
|
|
48,171
|
Total operating
expenses
|
|
68,997
|
|
23,659
|
|
137,499
|
|
69,227
|
Loss from
operations
|
|
(28,335)
|
|
(5,544)
|
|
(31,330)
|
|
(24,658)
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(3,590)
|
|
(787)
|
|
(7,186)
|
|
(2,719)
|
Other income (expense),
net
|
|
4,996
|
|
(1,076)
|
|
7,982
|
|
(2,087)
|
Total other income
(expense), net
|
|
1,406
|
|
(1,863)
|
|
796
|
|
(4,806)
|
Loss before income
taxes
|
|
(26,929)
|
|
(7,407)
|
|
(30,534)
|
|
(29,464)
|
(Provision) benefit for
income taxes
|
|
1,507
|
|
(19)
|
|
1,475
|
|
(47)
|
Net loss
|
|
$
(25,422)
|
|
$
(7,426)
|
|
$
(29,059)
|
|
$
(29,511)
|
Net loss per share
attributable to common
stockholders, basic and diluted
|
|
$
(0.78)
|
|
$
(0.25)
|
|
$
(0.89)
|
|
$
(1.03)
|
Weighted average common
shares outstanding,
basic and diluted
|
|
32,614,059
|
|
30,229,936
|
|
32,474,522
|
|
28,729,649
|
TransMedics Group,
Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
|
|
|
|
September 30,
2023
|
|
December 31,
2022
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash
|
|
$
427,110
|
|
$
201,182
|
Accounts
receivable
|
|
60,654
|
|
27,611
|
Inventory
|
|
39,365
|
|
20,605
|
Prepaid expenses and
other current assets
|
|
9,595
|
|
2,896
|
Total current assets
|
|
536,724
|
|
252,294
|
Property, plant and
equipment, net
|
|
131,004
|
|
19,223
|
Operating lease
right-of-use assets
|
|
6,861
|
|
5,130
|
Restricted
cash
|
|
500
|
|
500
|
Goodwill
|
|
11,673
|
|
—
|
Acquired intangible
assets, net
|
|
2,405
|
|
—
|
Other non-current
assets
|
|
60
|
|
—
|
Total
assets
|
|
$
689,227
|
|
$
277,147
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
12,836
|
|
$
3,341
|
Accrued expenses and
other current liabilities
|
|
31,651
|
|
18,635
|
Deferred
revenue
|
|
2,629
|
|
241
|
Operating lease
liabilities
|
|
1,985
|
|
1,444
|
Total current liabilities
|
|
49,101
|
|
23,661
|
Convertible senior
notes, net
|
|
446,448
|
|
—
|
Long-term debt,
net
|
|
58,986
|
|
58,696
|
Operating lease
liabilities, net of current portion
|
|
8,232
|
|
7,415
|
Total
liabilities
|
|
562,767
|
|
89,772
|
Total
stockholders' equity
|
|
126,460
|
|
187,375
|
Total
liabilities and stockholders' equity
|
|
$
689,227
|
|
$
277,147
|
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SOURCE TransMedics Group, Inc.