Surmodics(SRDX) - 2019 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q3 2019 was $24.3 million, a 9% increase from $22.2 million in Q3 2018 [31] - Diluted GAAP earnings were $0.11 per share, compared to a loss of $0.20 per share in the prior year [41] - Non-GAAP earnings per share were $0.15, down from $0.27 in the prior year [42] - The company raised its full-year revenue guidance to a range of $92 million to $94 million, up from $88.5 million to $91.5 million [43] Business Line Data and Key Metrics Changes - The medical device business unit generated $18.9 million in revenue, a 13% increase year-over-year [32] - In-vitro diagnostics (IVD) revenue totaled $5.4 million, down 2% compared to the prior year [34] - Royalty and license fee revenue in the medical device segment was $11.6 million, up $2 million from the prior year [32] - R&D services revenue increased by 31% to $2.9 million [33] Market Data and Key Metrics Changes - The medical device business grew 13% despite a tough comparison quarter [28] - IVD business is expected to see modest mid-single-digit growth, while the medical device business anticipates double-digit growth [29] Company Strategy and Development Direction - The company aims to ensure the success of the SurVeil program and complete patient enrollment in the TRANSCEND study [9] - Focus on advancing drug-coated balloon programs and non-drug delivery device portfolio [9] - Plans to commercialize up to 15 innovative technologies over the next five years [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustainable growth and the ability to navigate challenges [6] - The company is optimistic about completing the TRANSCEND trial enrollment by the end of Q4 fiscal 2019 [15] - Management noted the importance of quality-of-life impacts for patients in the context of regulatory discussions [50] Other Important Information - The company completed preclinical studies for the Sundance drug-coated balloon and is targeting regulatory approval for a first-in-human trial by the end of fiscal 2019 [20] - An agreement was signed with a leading multinational medical device partner for the Telemark coronary support catheter [26] Q&A Session Summary Question: What is the expected outcome from the FDA regarding paclitaxel devices? - Management believes the FDA will consider quality-of-life impacts and may provide recommendations that could help the market recover [57] Question: Can you provide details on the Telemark agreement? - The agreement is a distribution agreement where Surmodics will manufacture the product and receive a transfer price [61] Question: What is the expected revenue from SurVeil? - Revenue from SurVeil is expected to be between $7.5 million to $8 million for the year, with additional revenue recognized upon trial completion [78]