Financial Data and Key Metrics Changes - For Q2 2023, the company generated net sales of $10.3 million, a decrease from $12.6 million in the same period last year, impacted by a $3 million revenue reversal due to the viable bone matrix recall [30][31] - Gross profit for Q2 2023 was $1 million, with a gross margin of 9.5%, significantly down due to the recall, which decreased gross profit by $5 million and gross margin by 35 percentage points [31][32] - The net loss for Q2 2023 was $10.6 million, compared to a net loss of $9.4 million in the prior year [39] Business Line Data and Key Metrics Changes - The SimpliDerm product line saw a 32% increase in sales compared to Q2 2022, while sales of the CanGaroo product line remained consistent despite a reduction in sales headcount [36] - The Cardiovascular product line, now under LeMaitre Vascular, experienced a significant increase in volume, although this was primarily due to distributor transfer pricing rather than end-user pricing [37] Market Data and Key Metrics Changes - The company expects cash burn to increase in the current quarter due to the loss of revenue from viable bone matrix products, but anticipates moderating this impact through optimization efforts and growth in SimpliDerm and CanGaroo [33] Company Strategy and Development Direction - Aziyo is transforming into a drug-eluting biomatrix company, focusing on high-value assets like CanGaroo and SimpliDerm [14][16] - The company has signed an exclusive distribution partnership with LeMaitre Vascular for its Cardiovascular product lines, which is off to a strong start [14] - Aziyo is in the process of divesting its Orthopedics business, having received strong interest and negotiating multiple letters of intent [15] Management's Comments on Operating Environment and Future Outlook - Management emphasized patient safety as a priority following the recall of viable bone matrix products and is cooperating with health authorities for further investigation [10][11] - The approval of CanGaroo RM is seen as a significant opportunity, potentially creating several hundred million dollars of value for the company [20][28] - The company is optimistic about the partnerships with LeMaitre and Sientra, expecting them to enhance sales and market coverage [42][43] Other Important Information - The company is working on obtaining FDA clearance for CanGaroo RM, with expectations to submit updated information by the end of the year [28] Q&A Session Summary Question: Does the $3 million revenue reversal reflect an entire quarter's worth of revenue for the viable bone matrix? - Yes, the recall reflected the outstanding viable bone matrix product for the quarter, and this is a good assumption for ongoing revenue reduction [41] Question: How are the sales teams of LeMaitre and Sientra performing? - LeMaitre is further ahead in the transition process and performing well, while Sientra is just starting to launch products [42] Question: What is the status of the relationship with Boston Scientific regarding CanGaroo? - There has been positive interaction and recognition of CanGaroo's clinical benefits, leading to further collaboration between Aziyo and Boston Scientific [46]
Elutia(ELUT) - 2023 Q2 - Earnings Call Transcript