TransMedics(TMDX) - 2022 Q3 - Quarterly Report

Financial Performance - The company generated net revenue of $62.1 million and incurred a net loss of $29.5 million for the nine months ended September 30, 2022[106]. - As of September 30, 2022, the company had an accumulated deficit of $472.0 million[106]. - Net revenue for the three months ended September 30, 2022, was $25.7 million, a significant increase of $20.3 million compared to $5.4 million in the same period of 2021[131]. - For the nine months ended September 30, 2022, net revenue was $62.1 million, an increase of $41.5 million from $20.6 million in 2021[144]. - OCS Liver net revenue for the nine months ended September 30, 2022, was $30.0 million, a substantial increase of $29.6 million compared to $0.4 million in 2021[145]. - Net revenue from customers in the United States was $55.0 million for the nine months ended September 30, 2022, an increase of $40.4 million compared to the same period in 2021, driven by higher sales volumes of OCS Liver and OCS Heart disposable sets following FDA approvals[146]. - Net revenue from customers outside the United States was $7.1 million for the nine months ended September 30, 2022, up from $6.0 million in the same period in 2021, primarily due to a return to pre-COVID-19 transplant procedure volumes in Europe[147]. Expenses and Costs - Research, development, and clinical trials expenses are expected to increase over the long term due to ongoing product development efforts[126]. - Selling, general, and administrative expenses are projected to rise as the company increases headcount to support sales growth[128]. - Total operating expenses for the three months ended September 30, 2022, were $23.7 million, an increase of $8.2 million from $15.5 million in 2021[131]. - Research, development, and clinical trials expenses increased by $1.6 million to $6.8 million for the three months ended September 30, 2022, compared to $5.2 million in 2021[139]. - Selling, general, and administrative expenses rose by $6.5 million to $16.9 million for the three months ended September 30, 2022, compared to $10.3 million in 2021, mainly due to increased personnel costs[140]. - Total research, development, and clinical trials expenses rose by $5.1 million to $21.1 million for the nine months ended September 30, 2022, mainly due to increased personnel costs and consulting expenses[149]. - Total selling, general, and administrative expenses increased by $21.9 million to $48.2 million for the nine months ended September 30, 2022, driven by higher personnel costs and increased activities related to the National OCS Program[150]. Cash Flow and Financing - The company had cash and cash equivalents of $204.5 million, expected to fund operations for at least 12 months[109]. - Net cash used in operating activities was $41.8 million for the nine months ended September 30, 2022, compared to $22.2 million in the same period in 2021, primarily due to a net loss of $29.5 million[158]. - Net cash provided by investing activities was $57.3 million for the nine months ended September 30, 2022, consisting mainly of proceeds from sales and maturities of marketable securities[160]. - Net cash provided by financing activities was $164.9 million for the nine months ended September 30, 2022, primarily from a public offering that generated net proceeds of approximately $140.0 million[162]. - The company entered into a credit agreement in July 2022, borrowing $60.0 million and repaying $35.0 million under a prior agreement[129]. - The company entered into a credit agreement in July 2022, borrowing $60.0 million, with obligations secured by substantially all assets, including intellectual property[164]. - Existing cash and cash equivalents are projected to fund operating expenses and capital expenditures for at least 12 months[170]. - The company may need to raise additional funding, which might not be available on favorable terms[170]. Product Development and Market Outlook - The company has developed three OCS products for lung, heart, and liver transplantations, all receiving Pre-Market Approval from the FDA[104]. - The company expects long-term net revenue growth due to anticipated increases in non-U.S. sales and reimbursement for OCS use by healthcare systems[120]. - The company expects costs and expenses to increase as it expands its commercial team, manufacturing, and regulatory efforts for new products[168]. - The ability to fulfill orders may be limited if demand for OCS products exceeds existing manufacturing capacity[168]. - The success of OCS products in the transplant community will significantly impact revenue generation[169]. - The company is focused on obtaining adequate reimbursement from third-party payors for procedures using OCS products[169]. Financial Risks and Accounting - The company is exposed to interest rate and foreign currency exchange rate changes, which may affect future cash flow and earnings[174]. - There have been no material changes to critical accounting policies and estimates from previous disclosures[172]. - The company continues to evaluate its estimates, which may differ from actual results under different conditions[171]. - The costs associated with building commercial operations and developing next-generation OCS products are significant factors for future performance[173]. - The company anticipates that gross margin will moderately increase over the long term as sales and production volumes rise[123]. - Gross profit increased by $30.4 million to $43.5 million for the nine months ended September 30, 2022, with a gross margin of 72%, up from 69% in 2021, attributed to economies of scale from higher sales volumes[148].