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Elutia(ELUT) - 2024 Q3 - Quarterly Results
ElutiaElutia(US:ELUT)2024-11-14 21:10

Executive Summary Elutia reported strong Q3 2024 results, with initial EluPro adoption and SimpliDerm growth contributing to $1.3 million net income from continuing operations Q3 2024 Performance Overview Elutia's Q3 2024 performance saw initial EluPro adoption and SimpliDerm growth, resulting in $1.3 million net income from continuing operations despite a slight sales decline - EluPro achieved its first patient implant and demonstrated strong initial adoption, now accounting for 25% of BioEnvelope sales2 - Over 100 EluPro VAC submissions have been made, with 36 accounts actively ordering3 - SimpliDerm net sales increased 19% to $3.1 million8 - CEO Dr. Randy Mills highlighted the first implant of EluPro as a pivotal advancement and expressed excitement for the full commercial launch in January 2025, driven by strong initial market interest and clinical adoption6 Business Highlights Elutia's business highlights include successful initial EluPro commercialization, strategic market expansion, and ongoing clinical development efforts EluPro Commercialization and Adoption EluPro achieved its first patient implant and strong initial adoption, now comprising 25% of BioEnvelope sales, with over 100 VAC submissions and 36 active ordering accounts - Announced the first patient implant of EluPro, the FDA-cleared antibiotic-eluting biologic envelope for pacemakers and neurostimulators2 - EluPro is being utilized across all major cardiac implantable electronic device (CIED) brands and in neurostimulation procedures, now accounting for 25% of BioEnvelope (CanGaroo and EluPro) sales2 - EluPro has been submitted to over 100 hospital system value analysis committees (VACs), with 36 accounts actively ordering3 Market Expansion and Clinical Development Elutia expanded its sales team, advanced GPO discussions for EluPro's national availability by early 2025, initiated a multi-center clinical study, and published supporting peer-reviewed data - Strengthened sales team in key markets, now including 12 direct reps, 34 independent reps, and 9 product consultants3 - Advanced discussions with major group purchasing organizations (GPOs), including private health systems and the Veterans Administration (VA), anticipating favorable coverage decisions by early 2025 to expand EluPro's national availability4 - Initiated a multi-center registry study to evaluate outcomes of patients receiving EluPro during cardiac implantable electronic device (CIED) implantation4 - Data published in Frontiers in Drug Delivery journal showcasing EluPro's effectiveness in eradicating bacteria linked to CIED infections, with additional manuscripts under review5 - Engaged in active discussions with multiple parties exploring opportunities for EluPro5 Third Quarter 2024 Financial Results Elutia's Q3 2024 financial results show a slight net sales decrease, stable gross margin, increased operating expenses, and a net income improvement driven by non-cash gains Net Sales Performance Overall net sales decreased 3.3% to $5.9 million in Q3 2024, with BioEnvelope sales down 12% to $2.3 million, offset by SimpliDerm's 19% growth to $3.1 million Overall Net Sales (Q3 2024 vs Q3 2023) | Metric | Q3 2024 ($M) | Q3 2023 ($M) | Change (%) | | :----- | :----------- | :----------- | :--------- | | Net Sales | 5.9 | 6.1 | -3.3% | Product Category Net Sales (Q3 2024 vs Q3 2023) | Product Category | Q3 2024 ($M) | Q3 2023 ($M) | Change (%) | | :--------------- | :----------- | :----------- | :--------- | | BioEnvelope | 2.3 | 2.6 | -12% | | SimpliDerm | 3.1 | 2.6 | +19% | | Cardiovascular | 0.6 | 1.0 | -40% | Gross Margin Analysis Elutia maintained a GAAP gross margin of 46% in Q3 2024, with the adjusted gross margin (non-GAAP) slightly increasing to 61% from 60% in Q3 2023 - GAAP gross margin was 46%, approximately the same from the prior year period8 - Adjusted gross margin (non-GAAP) was 61%, compared to 60% in Q3 20239 Operating Expenses and Profitability Operating expenses rose to $13.0 million in Q3 2024, yet net income from continuing operations improved to $1.3 million due to a $12.7 million non-cash warrant revaluation gain, while Adjusted EBITDA loss widened - Total operating expenses were $13.0 million, compared to $10.2 million in Q3 2023, primarily due to higher non-cash equity compensation charges9 - Net income from continuing operations was $1.3 million, compared to a loss of $8.5 million in Q3 2023, primarily due to a $12.7 million non-cash gain related to the revaluation of warrant liability10 - Adjusted EBITDA (non-GAAP) was a loss of $2.9 million, compared to a loss of $1.7 million in Q3 202311 - Loss from operations was $10.2 million, compared to $7.4 million in Q3 202314 Cash and Liquidity As of September 30, 2024, Elutia's cash balance was $25.7 million, including $13.8 million from warrant exercises at the quarter's start - Cash balance as of September 30, 2024, was $25.7 million11 - The cash balance includes approximately $13.8 million in proceeds received from the exercise of outstanding warrants at the start of the quarter11 Company Information This section provides an overview of Elutia's mission and details regarding the Q3 2024 financial results conference call About Elutia Elutia develops and commercializes drug-eluting biomatrix products to enhance medical device-patient compatibility, with a mission to humanize medicine - Elutia develops and commercializes drug-eluting biomatrix products to improve compatibility between medical devices and patients12 - Elutia's mission is humanizing medicine so patients can thrive without compromise12 Conference Call Details Elutia hosted a conference call on November 14, 2024, at 4:30 p.m. ET to discuss Q3 2024 financial results, with webcast and phone access - Elutia hosted a conference call on November 14, 2024, at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time12 - The conference call was to discuss its third quarter 2024 financial results and performance12 - Access was provided via webcast and phone12 Non-GAAP Financial Measures Elutia uses non-GAAP measures like EBITDA and Adjusted Gross Margin to provide supplemental insights into core operating performance, excluding non-cash and non-recurring items Non-GAAP Disclosure Explanation Elutia uses non-GAAP measures (EBITDA, Adjusted Gross Margin) to provide supplemental investor information and analyze core operating results, excluding non-operating, non-cash, and non-recurring items, not as a GAAP substitute - The Company provides non-GAAP measures (EBITDA, adjusted EBITDA, adjusted gross margin, adjusted gross profit) to evaluate operating performance and liquidity13 - Adjusted EBITDA excludes items such as income from discontinued operations, stock-based compensation, FiberCel litigation costs, gain/loss on revaluation of warrant liability, and gain on revaluation of revenue interest obligation13 - Adjusted gross profit and adjusted gross margin exclude amortization of acquired intangible assets13 - Non-GAAP financial information is presented for supplemental purposes only and should not be considered in isolation or as a substitute for GAAP financial information13 Forward-Looking Statements This section provides a standard disclaimer for forward-looking statements, noting they are based on management's beliefs and assumptions, subject to risks that could cause material differences in actual results - Forward-looking statements are identified by words such as "projects," "may," "will," "expects," and similar references to future periods15 - These statements are based on management's beliefs and assumptions and are subject to known and unknown risks, uncertainties, and other important factors15 - Key risks include the ability to successfully commercialize EluPro, achieve profitability, manage product liability claims and litigation, ensure product acceptance, compete effectively, obtain regulatory approval, and protect intellectual property rights15 - Elutia expressly disclaims any obligations to publicly update any forward-looking statements, except as required by applicable law15 Financial Statements This section presents Elutia's unaudited consolidated balance sheet, statement of operations, and non-GAAP reconciliations for gross profit and EBITDA Consolidated Balance Sheet Data As of September 30, 2024, total assets increased to $48.4 million, with cash at $25.7 million and contingent legal liability at $24.3 million, leading to total liabilities of $88.6 million and a $(40.2) million stockholders' deficit Consolidated Balance Sheet Data (Unaudited, in thousands) | Metric | Sep 30, 2024 ($K) | Dec 31, 2023 ($K) | | :------------------------------------------ | :----------- | :----------- | | Assets | | | | Cash | $25,741 | $19,276 | | Total current assets | $37,318 | $31,253 | | Total assets | $48,407 | $43,428 | | Liabilities and Stockholders' Deficit | | | | Total current liabilities | $39,678 | $43,037 | | Contingent liability for legal proceedings | $24,289 | $15,024 | | Warrant liability | $18,527 | $12,760 | | Total liabilities | $88,645 | $82,028 | | Total stockholders' deficit | $(40,238) | $(38,600) | Consolidated Statement of Operations In Q3 2024, Elutia reported $5.9 million net sales and $2.7 million gross profit, achieving $1.3 million net income due to a non-cash warrant revaluation gain, contrasting with a $44.9 million net loss for the nine months Consolidated Statement of Operations (Unaudited, in thousands, except share and per share data) | Metric | Three months ended Sep 30, 2024 ($K) | Three months ended Sep 30, 2023 ($K) | Nine months ended Sep 30, 2024 ($K) | Nine months ended Sep 30, 2023 ($K) | | :--------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net sales | $5,922 | $6,127 | $18,907 | $18,870 | | Gross profit | $2,741 | $2,841 | $8,383 | $8,927 | | Total operating expenses | $12,971 | $10,212 | $35,602 | $30,945 | | Loss from operations | $(10,230) | $(7,371) | $(27,219) | $(22,018) | | Net income (loss) from continuing operations | $1,286 | $(8,519) | $(45,068) | $(26,027) | | Net income (loss) | $1,286 | $(9,747) | $(44,888) | $(28,342) | | Net income (loss) attributable to common stockholders per share - basic | $0.03 | $(0.57) | $(1.65) | $(1.72) | | Weighted average common shares outstanding - basic | 32,520,134 | 17,017,610 | 27,132,216 | 16,464,262 | Non-GAAP Reconciliations of Adjusted Gross Profit and Adjusted Gross Margin For Q3 2024, Elutia's adjusted gross profit was $3.6 million, with an adjusted gross margin of 60.6%, slightly up from 60.2% in Q3 2023, primarily excluding intangible asset amortization Non-GAAP Reconciliations of Adjusted Gross Profit and Adjusted Gross Margin (Unaudited, in thousands) | Metric | Three months ended Sep 30, 2024 ($K) | Three months ended Sep 30, 2023 ($K) | Nine months ended Sep 30, 2024 ($K) | Nine months ended Sep 30, 2023 ($K) | | :------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net sales | $5,922 | $6,127 | $18,907 | $18,870 | | Gross profit | $2,741 | $2,841 | $8,383 | $8,927 | | Intangible asset amortization expense | $849 | $849 | $2,547 | $2,547 | | Adjusted gross profit (Non-GAAP) | $3,590 | $3,690 | $10,930 | $11,474 | | Gross margin | 46.3% | 46.4% | 44.3% | 47.3% | | Adjusted gross margin percentage (Non-GAAP) | 60.6% | 60.2% | 57.8% | 60.8% | Non-GAAP Reconciliations of EBITDA and Adjusted EBITDA Elutia reported an Adjusted EBITDA loss of $2.9 million for Q3 2024, compared to a $1.7 million loss in Q3 2023, after adjusting net income/loss for various non-cash and non-operating items Non-GAAP Reconciliations of EBITDA and Adjusted EBITDA (Unaudited, in thousands) | Metric | Three months ended Sep 30, 2024 ($K) | Three months ended Sep 30, 2023 ($K) | Nine months ended Sep 30, 2024 ($K) | Nine months ended Sep 30, 2023 ($K) | | :--------------------------------------------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income (loss) | $1,286 | $(9,747) | $(44,888) | $(28,342) | | EBITDA (Non-GAAP) | $3,285 | $(7,345) | $(38,586) | $(21,167) | | Adjusted EBITDA (Non-GAAP) | $(2,910) | $(1,718) | $(9,191) | $(9,899) |