Financial Data and Key Metrics Changes - For fiscal year 2021, the company generated $105.1 million in revenue, an increase of 11% from $94.9 million in fiscal 2020, driven by growth in both medical device and in vitro diagnostic businesses, which grew 10% and 15% respectively [8][9] - The company reported GAAP diluted earnings per share of $0.30 for the full year, benefiting from a $3.6 million reimbursement associated with the CARES Act, which positively impacted earnings per share by $0.19 [10] - In Q4 fiscal 2021, revenues grew 6% to $24 million compared to $22.5 million in the prior year quarter, with the Medical Device business revenue growing 1% to $17.4 million and the In Vitro Diagnostics business growing 23% to $6.6 million [39] Business Line Data and Key Metrics Changes - The Medical Device business reported product revenue of $6.3 million in Q4, an 18% increase from $5.4 million in the prior year quarter, driven by strong coating reagent sales and new product launches [42] - The In Vitro Diagnostics business reported product revenue of $6.2 million, up 19% compared to the same prior year period, benefiting from increased demand for antigen products [43] - R&D services revenue increased by 24% to $2.6 million, reflecting increased customer development programs leveraging medical coatings [44] Market Data and Key Metrics Changes - The IVD business is expected to outperform the immunoassay market growth of 3%, while medical device coatings revenue is expected to grow low to mid-single digits, in line with the endovascular device market [38] Company Strategy and Development Direction - The company aims to achieve PMA approval for SurVeil and support Abbott's commercialization efforts, while also focusing on becoming the first-line treatment for patients with the Sublime radial platform and Pounce thrombectomy systems [27][28] - The company plans to build a small commercial team to drive customer adoption and demonstrate the commercial viability of its products, with an investment of approximately $10 million to support initial commercialization efforts [35][36] - The company is strategically holding off on deep negotiations with larger companies to maximize shareholder value from its innovative products [81] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the FDA's evolving requirements for long-term mortality data, which have shifted the approval process for SurVeil [60][62] - The company remains optimistic about its product pipeline and the potential for significant value creation, emphasizing the importance of demonstrating commercial viability in the market [69][92] - The outlook for fiscal 2022 anticipates revenue between $97 million and $101 million, with expectations for growth in legacy businesses and new product introductions [54][90] Other Important Information - The company faced ongoing supply chain issues affecting key components required for validation devices, which could delay timelines [25] - The company reported a loss per share of $0.02 in Q4 fiscal 2021, compared to a loss of $0.22 in the prior year quarter, with non-GAAP EPS showing a similar trend [52] Q&A Session Summary Question: Can you comment on the competitive landscape for SurVeil? - Management noted that the FDA's requirements have shifted, creating a more challenging environment compared to competitors with less stringent data requirements [60][63] Question: Is the company confident in its ability to go it alone in commercialization? - Management expressed confidence in their capabilities to demonstrate commercial value and maximize shareholder returns by building a small sales team [68][81] Question: What is the rationale behind building a direct sales force? - The decision to build a sales force is based on the desire to capture the full value of their products and respond to physician demand for continued use of their devices [83][84] Question: How does the revenue guidance for 2022 compare to 2021? - Management clarified that the guidance reflects a normalization of revenue, excluding one-time items from 2021, indicating solid growth in legacy businesses [89][90]

| --- | --- | --- | |--------------------------------------------------------|-------|-------| | | | | | | | | | | | | | Gary Maharaj President and CEO | | | | Tim Arens Senior Vice President of Finance, IT and CFO | | | | AUGUST 2021 | | | © 2021 Surmodics, Inc. CONFIDENTIAL All rights reserved. SAFE HARBOR Some of the statements made during this presentation may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not hist ...

Financial Performance - The company generated $23.9 million in revenue for Q3 2021, a decline of 11% compared to $26.9 million in the same period last year, which included a $6.7 million milestone payment from Abbott [5][24][32] - Excluding the milestone payment, revenue grew by 17% year-over-year, driven by record IVD revenue and significant royalty revenue growth [6][24] - The GAAP loss per share was $0.24, including $0.03 related to acquisition costs, while the non-GAAP loss per share was $0.17 [6][32] Business Line Performance - Medical Device revenue decreased by 18% to $16.8 million, while IVD revenue reached a record $7.1 million, growing 12% year-over-year [24][30] - Royalty revenue increased by 63% to $7.8 million, benefiting from an easier comparison to the prior year, which was impacted by COVID-19 [26][27] - Product revenue was flat at $12.1 million, with Medical Device product revenue down 5% due to softness in legacy balloon catheter sales [27][28] Market Data - The IVD business experienced strong growth, driven by favorable order timing for distributed antigen products and microarray slide development projects [24][30] - The company reported broad-based growth in its royalties portfolio, with serene hydrophilic coatings doubling compared to the prior year [22][27] Company Strategy and Industry Competition - The company completed the acquisition of Vetex Medical, which strengthens its thrombectomy portfolio and provides opportunities to expand into other vascular beds [19][20] - The company is focused on advancing its product pipeline, including the SurVeil drug-coated balloon and the Pounce thrombectomy platform, while optimizing cash flow from its IVD and Medical Device businesses [8][19] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the potential for significant long-term shareholder value creation through a robust product portfolio [23][38] - The company expects to generate product revenue from the Vetex acquisition in the second half of calendar 2022, with a low to mid-single-digit U.S. market share necessary for the acquisition to be accretive to non-GAAP earnings [37][38] Other Important Information - The company has a strong cash position, with $72 million in cash and investments as of June 30, 2021, and no debt [33][34] - The updated fiscal 2021 revenue guidance is between $103.5 million and $105.5 million, reflecting growth in royalty revenue and including $16 to $17 million of license fee revenue from the Abbott agreement [38][39] Q&A Session Summary Question: Timing for SurVeil revenue post-PMA approval - Management indicated that while they are targeting a PMA approval by December 2021, it is more likely to occur in the second fiscal quarter of 2022, with order fulfillment taking an additional 3 to 4 months [43][44] Question: Commercialization of Vetex products - Management confirmed that Vetex's ReVene system has received both U.S. 510(k) clearance and CE Mark, allowing for commercialization in Europe and the U.S. [45] Question: Paclitaxel sentiment and FDA outlook - Management expressed optimism regarding the clinical use of paclitaxel, citing overwhelming evidence in its favor and a potential positive shift in FDA regulations [48][50] Question: Impact of patent expirations on core business - Management reported that the unfavorable impact from patent expirations has diminished, with a broad-based growth in the royalty portfolio across all patent families [51] Question: Future acquisitions and product distribution strategy - Management confirmed an active corporate development program, indicating a willingness to pursue complementary high-value technologies while evaluating distribution strategies for their products [67][68]

Revenue Performance - Revenue for Q3 fiscal 2021 was $23.9 million, a decrease of 11.2% compared to Q3 fiscal 2020, while revenue for the first nine months of fiscal 2021 was $81.2 million, an increase of 12.2% year-over-year [92]. - Medical Device revenue in Q3 fiscal 2021 was $16.8 million, down 18.3% from $20.5 million in Q3 fiscal 2020, but increased by 12.2% to $60.9 million for the first nine months of fiscal 2021 compared to the prior year [92]. - Medical Device royalties and license fee revenue was $8.8 million for Q3 FY2021, a decline of 29.1% or $3.6 million, while for the first nine months, it was $38.2 million, an increase of 24.1% or $7.4 million compared to the prior year [93]. - Medical Device product sales declined 4.7% to $5.5 million for Q3 FY2021, and 4.8% to $15.5 million for the first nine months, impacted by softness in legacy balloon catheter sales [94]. - In Vitro Diagnostics revenue increased 11.8% to $7.1 million for Q3 FY2021 and 12.2% to $20.3 million for the first nine months, driven by broad-based demand across all IVD product offerings [95]. Acquisitions and Product Development - Surmodics completed the acquisition of Vetex Medical Limited for $39.9 million, expanding its thrombectomy portfolio with a second FDA 510(k)-cleared device [75][76]. - The Vetex venous thrombectomy catheter is designed to remove large, mixed-morphology blood clots and has received CE Mark approval for commercialization in the EU [76]. - Surmodics' drug-coated balloons (DCBs) include the SurVeil™ DCB, which met primary safety and efficacy endpoints in the TRANSCEND clinical trial, leading to a $15 million milestone payment from Abbott [79][80]. - The company expects to receive PMA from the FDA for the SurVeil DCB in Q2 fiscal 2022, which would trigger a $30 million milestone payment under the Abbott Agreement [81]. - Clinical product evaluations for the Sublime™ radial access devices began in Q2 fiscal 2021 and are expected to continue through the second half of fiscal 2021 [84]. - The company is focused on developing devices for a range of care settings to improve patient outcomes and address unmet needs in vascular disease treatment [77]. Financial Performance and Expenses - Medical Device operating loss was $(2.5) million for Q3 FY2021, compared to operating income of $0.5 million in Q3 FY2020, while operating income for the first nine months was $5.5 million compared to a loss of $(1.3) million in the prior year [105]. - In Vitro Diagnostics operating income was $3.4 million for Q3 FY2021, representing 47.5% of revenue, and $10.4 million for the first nine months, representing 51.2% of revenue [107]. - R&D expense declined 8% to $12.2 million for Q3 FY2021, and 4% to $36.0 million for the first nine months, with R&D as a percentage of revenue at 51% for Q3 FY2021 [98]. - SG&A expense increased 6% to $7.9 million for Q3 FY2021, and 8% to $22.8 million for the first nine months, with SG&A as a percentage of revenue at 33% for Q3 FY2021 [99]. Cash Flow and Liquidity - As of June 30, 2021, working capital totaled $76.5 million, an increase of $8.7 million from September 30, 2020, with cash and cash equivalents totaling $72.0 million [109]. - Cash provided by operating activities for the first nine months of fiscal 2021 was $14.5 million, an increase from $12.7 million in the same prior-year period [113]. - Cash provided by investing activities totaled $16.6 million for the first nine months of fiscal 2021, compared to cash used of $(1.9) million in the same prior-year period [117]. - The company plans to fund operations, the Vetex acquisition, and capital expenditures through existing cash, cash equivalents, and available credit [112]. - As of June 30, 2021, the company had cash and cash equivalents totaling $72.0 million, which, along with cash flow from operations and a revolving line of credit, is expected to support liquidity for the next twelve months [112]. Stock and Investment - The company has authorized the repurchase of up to an additional $25.3 million of its outstanding common stock, with no shares repurchased in the nine months ended June 30, 2021 [120]. - The company filed a universal shelf registration statement with the SEC, allowing it to offer up to $200 million in various securities [110]. - The company’s investment portfolio, reported at fair value, totaled $9.8 million as of June 30, 2021, primarily consisting of money market and corporate bond securities [111]. - As of June 30, 2021, the company held $9.8 million in available-for-sale debt securities, with $5.7 million maturing in less than one year [126]. Currency and Risk Management - The company is exposed to increasing Euro currency risk related to manufacturing operations in Ireland, affecting revenue and expenses denominated in Euro [128]. - All sales transactions are conducted in U.S. dollars or Euros, with royalties from foreign jurisdictions converted to U.S. dollars [128]. - Substantially all purchasing transactions are also denominated in U.S. dollars or Euros [128]. - The company has not entered into foreign currency forward exchange contracts or other derivatives to hedge against currency fluctuations [128]. - Management believes that reasonable changes in raw material prices would not materially impact future earnings or cash flows due to minimal inventory exposure [127].

Financial Data and Key Metrics Changes - Total revenue for Q2 2021 increased by 53% to $35 million compared to $22.8 million in the prior year quarter, benefiting from a $10.8 million revenue recognition from the SurVeil clinical report milestone [7][25][24] - Excluding the milestone payment, total revenue grew by 6% year-over-year [8][25] - Diluted GAAP earnings per share were $0.58, up from $0.11 in the prior year quarter, while non-GAAP earnings per share were $0.62 compared to $0.04 in the prior year [37][8] Business Line Data and Key Metrics Changes - Medical Device revenue increased by 71% to $27.9 million, including the milestone revenue; excluding this, it grew by 5% year-over-year [25] - In Vitro Diagnostics (IVD) revenue reached a record $7.1 million, up 9% year-over-year, driven by demand for diagnostic test components [21][25] - Royalty and license fee revenue totaled $20.1 million, up from $11.8 million in the prior year, primarily due to the milestone payment [26] Market Data and Key Metrics Changes - The IVD business unit generated operating income of $3.8 million, with an operating margin of 54%, up from 53% in the prior year [35] - The Medical Device business reported operating income of $8.6 million, compared to an operating loss of $1.5 million in the prior year [34] Company Strategy and Development Direction - The company aims to complete the final PMA submission to the FDA for the SurVeil drug-coated balloon and continue advancing its product pipeline [9][12] - The focus is on optimizing cash flow from IVD and Medical Device businesses to support strategic growth initiatives [9][22] - The company is excited about the potential of the Sundance drug-coated balloon and the Avess AV fistula DCB, with expectations for significant market opportunities [14][15][77] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, believing that better times lie ahead following a challenging year [23] - The company expects fiscal year 2021 revenue to range from $101 million to $105 million, with growth in royalty revenue anticipated [39] - Management highlighted the importance of strategic partnerships, particularly with Abbott, to overcome market inertia and drive product adoption [60][69] Other Important Information - The company reported a strong cash position with $70 million in cash and investments, providing capacity to support strategic growth initiatives [38][106] - R&D expenses increased by 8% to $12.9 million, reflecting ongoing clinical and regulatory activities [32] Q&A Session Summary Question: Interest from potential partners regarding pipeline projects - Management acknowledged external interest but emphasized the importance of understanding clinical feedback before engaging in discussions [46][47] Question: R&D spending expectations - R&D spending is expected to remain flat in dollar terms, but as revenue grows, the percentage of revenue spent on R&D is likely to decline [48][50] Question: Manufacturing capabilities after management changes - Management reassured that the new executive manager in Ireland is well-prepared and has been training for the role [52][53] Question: Timing for SurVeil PMA submission and approval - Management confirmed the expectation to submit the PMA in Q4 and receive approval by the end of calendar 2021 [57] Question: Clinician feedback on TRANSCEND results - Management noted that initial clinician feedback has been lukewarm but expressed confidence in Abbott's marketing capabilities to address this [58][60] Question: Opportunities and timelines for pipeline products - Management highlighted optimism for the Avess and Sundance products, with expectations for significant contributions to revenue by fiscal 2023 or 2024 [78][83] Question: IVD business performance and revenue sources - Management clarified that the IVD revenue growth was primarily driven by COVID-related testing, with core business growth being modest [89] Question: Valuation of the IVD business as a standalone asset - Management indicated that the IVD business has shown remarkable growth and could be valued positively based on its EBITDA performance [93][95] Question: Capital allocation strategy with increased cash reserves - Management stated that the strong cash position allows for dynamic capital allocation to support growth initiatives and potential acquisitions [106][109]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-23837 Surmodics, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Ident ...

Financial Data and Key Metrics Changes - Revenue for Q1 fiscal 2021 declined 1% to $22.3 million compared to $22.6 million in the prior year [28] - Medical device revenue decreased 7% to $16.2 million, while In Vitro Diagnostics (IVD) business grew 17% to $6.1 million [28] - Royalty and license fee revenue totaled $9.3 million, down 8% from the prior year, primarily due to patent expirations and lower procedure volumes [29][30] - On a GAAP basis, diluted earnings per share was a loss of $0.02 compared to earnings of $0.01 in the prior year [38] Business Line Data and Key Metrics Changes - Medical device product revenue decreased 9% to $4.6 million, while IVD product revenue grew 12% to $5.5 million [32][33] - R&D services revenue increased 15% to $2.9 million, benefiting from increased customer development project opportunities [34] - Medical device operating results reported a loss of $600,000, while IVD business grew operating income by 24% to $3.2 million [34][35] Market Data and Key Metrics Changes - The IVD business experienced strong demand for distributed antigen products, leading to a 17% year-over-year revenue growth [24] - The medical device business faced challenges due to COVID-19, impacting elective procedures and overall revenue [23] Company Strategy and Development Direction - The company aims to build traction with SurVeil and advance its product pipeline through development and regulatory clearances [7] - Focus on optimizing cash flow from IVD and medical device coatings to support strategic growth initiatives [7] - The company is well-positioned to deliver sustained growth and shareholder value over the long term despite the pandemic [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving PMA approval for SurVeil by the end of calendar 2021 [13] - The company is optimistic about the long-term safety data required by the FDA and believes it will support their product's market entry [12][76] - Management noted that while the pandemic creates uncertainty, they continue to execute their strategic plan [25] Other Important Information - The company has a strong cash position with no debt, starting the quarter with $61.1 million in cash and short-term investments [39] - The SurVeil distribution and development agreement with Abbott Vascular is expected to generate significant revenue, including a $15 million milestone payment [40][41] Q&A Session Summary Question: Will Abbott launch SurVeil immediately upon approval? - Management has not discussed launch timing in detail yet, but competitive reasons may influence the timing [45] Question: Will Pounce thrombectomy product be in clinical use before the end of the fiscal year? - Clinical use is expected to occur before the end of the fiscal year, with a focus on gathering data to support distribution agreements [46][48] Question: Will royalty headwinds continue after fiscal 2021? - The impact from the Gen 4 patent expiration is expected to diminish throughout fiscal 2021, becoming a tailwind in 2022 [51] Question: What are the long-term opportunities beyond SurVeil? - Management highlighted the potential of the AV Fistula and Sundance products, emphasizing their large addressable markets [60][62] Question: Will R&D spending levels change as revenue grows? - R&D spending as a percentage of revenue is expected to decrease as revenue ramps up, but funding will continue for promising opportunities [67][70] Question: Is there any anecdotal data on the recovery of procedures post-vaccine? - Management noted that there hasn't been significant change in procedure volumes yet, but they are monitoring the situation closely [78] Question: Will SG&A expenses increase in the back half of fiscal 2021? - SG&A expenses are expected to ramp up in Q3 and Q4, with low-double-digit growth anticipated [79] Question: Is the strong performance of the IVD business sustainable? - The IVD business is expected to continue mid-to-high single-digit revenue growth, independent of COVID testing [80] Question: What is the total addressable market for radial access and thrombectomy? - The total addressable market for thrombectomy is estimated at $400 million globally, while radial access has significant growth potential due to low current penetration [85][88]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-23837 Surmodics, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Id ...

| --- | --- | |--------------------------------------------------------|-------| | | | | Gary Maharaj President and CEO | | | Tim Arens Senior Vice President of Finance, IT and CFO | | | NOVEMBER 2020 | | 2 SAFE HARBOR Some of the statements made during this presentation may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical or current facts, including statements about our vision and its impact to investors, ...

Surmodics, Inc. (NASDAQ:SRDX) Q4 2020 Earnings Conference Call November 4, 2020 5:00 PM ET Company Participants Timothy Arens - Chief Financial Officer Gary Maharaj - President and Chief Executive Officer Thomas Greaney - Chief Operating Officer of Medical Devices Conference Call Participants Brooks OÂ'Neil - Lake Street Capital Markets David Saxon - Needham & Company Operator Good day and welcome to the Surmodics Fourth Quarter Fiscal 2020 Earnings Conference Call. TodayÂ's conference is being recorded. At ...