3Q2025 Earnings Call C. Randal Mills PhD Chief Executive Officer 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 ...

Core Viewpoint - Elutia Inc. has successfully sold its BioEnvelope business to Boston Scientific for $88 million, allowing the company to focus on its NXT-41x biomatrix aimed at improving breast reconstruction outcomes [1][2][3] Company Overview - Elutia specializes in drug-eluting biomatrix technologies, aiming to enhance compatibility between medical devices and patients [4] - The company is committed to humanizing medicine, enabling patients to thrive without compromise [4] Financial Position - The sale of the BioEnvelope business has significantly strengthened Elutia's financial position, providing the necessary funds to develop and launch the NXT-41x platform [3][6] - Elutia plans to bring NXT-41x to market in the first half of 2027, with expectations of reshaping the breast reconstruction treatment paradigm [3] Market Opportunity - The U.S. market for breast reconstruction procedures is substantial, with over 150,000 procedures performed annually and a total addressable market of approximately $1.5 billion [3][6] - Biologics account for 65% of implant-based costs, indicating a significant opportunity for improved treatment options [3]

Financial Data and Key Metrics Changes - The company reported a total revenue of $6 million for Q1 2025, down from $7 million in the previous year but up 10% sequentially from Q4 2024 [33][34][38] - The adjusted gross margin was 54.8%, slightly down from 55.2% year-over-year, but expected to improve with operational efficiencies [36][37] - Adjusted EBITDA for the quarter was $3.3 million, an improvement from $4.5 million in the previous year [37] Business Line Data and Key Metrics Changes - The BioEnvelope division generated $3.1 million in revenue, representing a 31% year-over-year growth and a 16% sequential increase [33][34] - Simploderm revenue was $2.6 million, down from $3.6 million year-over-year but up 13% from Q4 2024 [34] - The cardiovascular products division reported $300,000 in sales, with expectations for significant growth as the company takes back control of sales efforts [35] Market Data and Key Metrics Changes - The company has secured contracts with 125 hospitals actively ordering Elupro, with an additional 130 Value Analysis Committees (VACs) in process [11][12] - The partnership with Boston Scientific has expanded the sales force to 900 representatives, enhancing market penetration [18][20] Company Strategy and Development Direction - The primary focus is on driving top-line growth for Elupro through expanding VAC and Group Purchasing Organization (GPO) coverage [41] - The company plans to explore strategic alternatives for its Simploderm product line and advance its drug-eluting biologic pipeline [42][43] - A new facility in Gaithersburg, Maryland, is expected to alleviate production bottlenecks and reduce costs [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a strong second half of 2025, driven by the successful launch of Elupro and the partnership with Boston Scientific [13][41] - The company is focused on increasing production capacity and lowering costs to achieve gross margins in the mid-70% range [42] Other Important Information - The company received an Edison Award for innovation in post-surgical recovery for Elupro [27] - A real-world clinical study has begun, with the first patients enrolled at UCSD, aimed at gathering clinical outcome data [27][61] Q&A Session Summary Question: How have relationships with physicians gone in accounts selling with Boston Scientific? - Management noted that adoption patterns for Elupro are positive, with initial orders often leading to higher subsequent orders as physicians experience the product [49][50] Question: What is the current manufacturing capacity without the Gaithersburg facility? - Current manufacturing capacity allows for approximately $140 million in Elupro revenue, but without the antibiotic disc expansion, it is constrained to $25 million to $30 million [54] Question: What is the expected cash burn profile going forward? - The cash flow statement is expected to show operational cash flow around $4 million to $5 million after Q2, following the settlement of litigation costs [56][57] Question: How will the registry study support commercial conversions? - The registry study is anticipated to be more impactful in the second half of next year, aiding in regulatory submissions and enhancing the VAC process [60][61] Question: What is the expected revenue growth for Elupro compared to Kangaroo? - Elupro is projected to reach approximately $200 million in U.S. revenue at maturity, significantly surpassing Kangaroo's $10 million at maturity [63][64]

Financial Data and Key Metrics Changes - The company reported a total revenue of $6 million for the first quarter, down from $7 million a year ago but up 10% sequentially from the previous quarter [33][34][38] - The adjusted gross margin was 54.8%, slightly down from 55.2% year over year, but expected to improve as efficiencies in manufacturing are realized [36][37] - Adjusted EBITDA for the quarter was $3.3 million, an improvement from $4.5 million in the previous year [37] Business Line Data and Key Metrics Changes - The BioEnvelope division generated $3.1 million in revenue, representing a 31% year-over-year growth and a 16% sequential increase [33][34] - Simploderm revenue was $2.6 million, down from $3.6 million a year ago but up 13% from the previous quarter [34] - The cardiovascular products division reported $300,000 in sales, with expectations for significant growth as the company takes back control of sales efforts [35] Market Data and Key Metrics Changes - The company has secured Value Analysis Committee (VAC) approvals from 125 hospitals, with an additional 130 VACs in process [11][12] - The partnership with Boston Scientific has expanded the sales force to over 900 representatives, enhancing market reach [18][20] Company Strategy and Development Direction - The primary focus is on driving top-line growth for Elupro through expanding VAC and Group Purchasing Organization (GPO) coverage [41] - The company plans to explore strategic alternatives for its Simploderm product line [42] - There is an ongoing effort to advance the drug-eluting biologic pipeline for reconstructive surgery [44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a strong second half of 2025, driven by the successful launch of Elupro and the partnership with Boston Scientific [13][41] - The company is focused on increasing production capacity and lowering costs for Elupro, targeting gross margins in the mid-70% range [42][43] Other Important Information - The company opened a new facility in Gaithersburg, Maryland, to enhance manufacturing capacity for critical components, which is expected to reduce costs [22][23] - The company received an Edison Award for innovation in post-surgical recovery for Elupro [27] Q&A Session Summary Question: How have relationships with physicians gone in those cases with Boston Scientific? - Management noted that adoption patterns for Elupro are positive, with initial orders often leading to higher subsequent orders as more physicians in practices begin to use the product [49][50] Question: What is the current manufacturing capacity without the Gaithersburg facility? - Current manufacturing capacity allows for approximately $140 million in Elupro revenue, but without the new facility, capacity would be constrained to $25 million to $30 million [54] Question: What should be expected regarding cash burn going forward? - Cash flow from operations is expected to stabilize around $4 million to $5 million after Q2, following the settlement of litigation costs [56][57] Question: How will the registry study data support commercial conversions? - The data from the registry study is anticipated to be more impactful in the second half of next year, aiding in regulatory submissions and enhancing the VAC process [60][61] Question: What is the expected revenue for Elupro as it matures? - Elupro is projected to reach approximately $200 million in U.S. revenue at maturity, significantly surpassing the previous product, Kangaroo [63][64]

Financial Data and Key Metrics Changes - The company reported Q1 2025 revenue of $6,000,000, down from $7,000,000 in Q1 2024 but up 10% sequentially from Q4 2024 [33][34][36] - Adjusted gross margin for Q1 2025 was 54.8%, slightly down from 55.2% in the previous year, with expectations for improvement as efficiencies are realized [35][36] - Adjusted EBITDA for Q1 2025 was $3,300,000, an improvement from $4,500,000 in the previous year [37] Business Line Data and Key Metrics Changes - The BioEnvelope division generated $3,100,000 in revenue, representing a 31% year-over-year growth and a 16% sequential increase [10][33] - Simploderm revenue was $2,600,000, down from $3,600,000 year-over-year but up 13% from Q4 2024 [34] - Cardiovascular products division reported $300,000 in sales, with expectations for significant growth as the company takes back control of sales [35][36] Market Data and Key Metrics Changes - The company has secured contracts with 125 hospitals actively ordering Elupro, with an additional 130 Value Analysis Committees (VACs) in process [12][13] - The partnership with Boston Scientific has expanded the sales force to 900 representatives, enhancing market penetration [18][20] Company Strategy and Development Direction - The primary focus is on driving top-line growth for Elupro through expanding VAC and Group Purchasing Organization (GPO) coverage [41] - The company plans to explore strategic alternatives for its Simploderm product line and advance its drug-eluting biologic pipeline for reconstructive surgery [42][44] - The new Gaithersburg facility will enhance production capacity and reduce costs by manufacturing critical components in-house [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a strong second half of 2025, driven by the successful launch of Elupro and the partnership with Boston Scientific [14][41] - The company is focused on increasing production capacity and lowering costs to achieve gross margins in the mid-seventy percent range [42] Other Important Information - The company received an Edison Award for innovation in post-surgical recovery for Elupro [27] - A real-world clinical study has commenced, with the first patients enrolled at UCSD, aimed at gathering clinical outcome data [27][60] Q&A Session Summary Question: How have relationships with physicians gone in those cases with Boston Scientific? - Adoption patterns for Elupro show that initial orders are often followed by higher subsequent orders, indicating strong physician interest and usage [48][50] Question: What is the current manufacturing capacity without the Gaithersburg facility? - Current manufacturing capacity allows for approximately $140,000,000 in Elupro revenue, but without the antibiotic disc expansion, it is limited to $25,000,000 to $30,000,000 [53] Question: What should be expected regarding cash burn going forward? - Cash flow from operations is expected to stabilize around $4,000,000 to $5,000,000 as litigation settlements conclude [55][56]

Financial Performance - EluPro sales experienced significant sequential growth of 84%, now representing 52% of BioEnvelope revenue[8, 11] - BioEnvelope revenue increased by 31% year-over-year, reaching $3.1 million[11] - The company's cash balance as of March 31, 2025, was $17.4 million[29] - A registered direct offering generated gross proceeds of $15.0 million on February 4, 2025[29] Strategic Initiatives - A strategic partnership with Boston Scientific aims to accelerate EluPro adoption, leveraging a combined commercial footprint of over 900 sales professionals[8, 15, 16] - The company reacquired distribution rights for its cardiovascular portfolio from LeMaitre, expecting it to contribute to cash flow with approximately 80% gross margin[8, 24, 27] Operational Improvements - The company is focused on increasing production capacity and reducing COGS for EluPro[17, 33] - The Roswell, GA facility has scalable capacity to support approximately $140 million in EluPro sales at over 70% gross margin[20] Market Expansion - Elutia is targeting approximately 1,000 hospitals with Cardiac Implantable Electronic Devices (CIED) volumes exceeding 100 cases per year[14] - Elutia is actively engaging with hospitals, with 125 institutions actively ordering and 130 Value Analysis Committees (VACs) in process, adding 10-12 institutions per month[11, 14]