Surmodics(US:SRDX)2023-11-10 15:06Financial Performance - In Q4 2023, the company generated total revenue of $28 million, representing an 8% year-over-year growth, exceeding the high end of guidance which implied 5% growth [32][74] - Total revenue for fiscal 2023 reached $133 million, a 33% increase year-over-year, including $29.6 million from SurVeil DCB license fees [38][91] - Adjusted EBITDA for Q4 was $1.7 million, a $4.2 million improvement compared to the same quarter last year [36][89] - The company ended fiscal 2023 with over $45 million in cash and investments [39][90] Business Segment Performance - Revenue from the Medical Device segment grew 8% year-over-year to $21 million, with a 15% growth excluding SurVeil license fee revenue [33][81] - The IVD segment returned to growth in Q4, increasing 7% year-over-year to $6.9 million, as customers normalized purchasing patterns [35][60] - Pounce and Sublime sales exceeded $1 million in revenue for the third consecutive quarter, contributing to a 22% growth in Medical Device segment product sales for the year [57][70] Market Dynamics - The SurVeil DCB addresses a $1 billion market opportunity in peripheral artery disease, with approximately 500,000 procedures performed annually in the US [47] - The company expects the commercial launch of SurVeil DCB in the first half of calendar 2024, supported by Abbott's strong sales and marketing presence [44][49] - The FDA's updated view on paclitaxel-coated devices is expected to positively impact market adoption [48] Strategic Direction - The company aims to drive growth through the commercialization of SurVeil, Pounce, and Sublime products, while also enhancing its Medical Device Performance Coatings and IVD businesses [72] - R&D investments will focus on winning in identified market segments, particularly in the venous market [12][96] - The company plans to maintain cash efficiency while pursuing growth opportunities [73][104] Management Commentary - Management expressed confidence in the timeline for Abbott's commercialization of SurVeil, with potential for earlier or later launches [2][11] - The company is focused on disciplined expense management and optimizing working capital to support long-term growth [73][104] - Management highlighted the importance of follow-on products in the thrombectomy market to remain competitive [117] Other Important Information - The company received FDA clearance for its Preside coating technology, which is expected to enhance performance in various medical applications [62][64] - The company anticipates a decrease in R&D expenses to approximately $43 million to $44 million in fiscal 2024, reflecting a focus on key projects [96] Q&A Session Question: How should the market view the potential of SurVeil given the $100 million development fees from Abbott? - Management expressed confidence that SurVeil is within the expected performance limits and highlighted Abbott's strong sales footprint following their acquisition of CSI [108][110] Question: What is the strategy for going to market with high-potential products in the pipeline? - Management emphasized the need for follow-on products in the thrombectomy market and the importance of cash efficiency while expanding the product portfolio [117][119]