Surmodics(US:SRDX)2021-11-10 18:59Financial 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]