Release Date: August 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BioStem Technologies Inc (BSEM, Financial) achieved a second consecutive record quarter with the highest revenue and profitability in the company's history.
- Revenue for Q2 2024 grew to $74.5 million, a significant increase from $1.6 million in the same period last year.
- Gross margin remains strong in the mid-90 percentile, reflecting enhanced operational efficiencies.
- The company ended the quarter with a healthy cash position of $6.6 million, an increase of $6 million from the previous quarter.
- BioStem Technologies Inc (BSEM) is making notable progress in clinical trials and peer-reviewed publications, which are expected to support future product efficacy and reimbursement updates.
Negative Points
- Operating expenses for Q2 2024 totaled $61.9 million, a significant increase from $3.6 million in the same period in 2023.
- The rise in operating expenses is attributed to workforce expansion, service fees, and higher share-based compensation.
- There are potential short-term disruptions in the marketplace due to proposed changes in Medicare Local Coverage Determinations (LCDs).
- The company may face challenges in scaling up manufacturing capacity to meet increasing demand.
- BioStem Technologies Inc (BSEM) is still in the early phases of clinical trials, which may take 12 to 18 months to complete, potentially delaying market expansion and product coverage.
Q & A Highlights
Q: Is there any concern about supply chain issues given the increasing demand for your products?
A: (Jason Matuszewski, CEO) We have been working diligently with our recovery partners to ensure a steady supply of raw materials. We are also expanding our manufacturing capacity by adding additional clean rooms to our facility. We feel confident in our ability to meet the growing demand.
Q: Can you explain the reasons behind the rapid growth of AmnioWrap2?
A: (Jason Matuszewski, CEO) Our partnership with Venture Medical has been instrumental in communicating the benefits of our BioREtain technology to providers. The success of our products in clinical settings, particularly in wound care, has driven demand. We are also focusing on regions with high patient needs, such as the West Coast.
Q: What are your plans for M&A over the next 12 months?
A: (Jason Matuszewski, CEO) We are looking for opportunities that fit into our continuum of care, particularly products that complement our current offerings. While we haven't identified specific targets yet, we are actively exploring options that could enhance our growth and diversification.
Q: Can you provide an update on the Form-10 and Nasdaq uplisting process?
A: (Mike Fortunato, CFO) We are updating our registration statement with Q2 numbers and have filed our Nasdaq application. Pending SEC review, we expect to complete the process in the next 60 to 90 days.
Q: What is the status of your patents and IP portfolio?
A: (Jason Matuszewski, CEO) We have over 65 patents in various stages, covering the use of our products in wound care and other applications. We are continuously expanding our IP portfolio to include new technologies and use cases.
Q: How do you view the clinical trial initiative and its impact on revenue and market expansion?
A: (Jason Matuszewski, CEO) Our clinical trials, particularly for diabetic foot ulcers, are in early phases but progressing well. We expect these trials to provide data that supports product efficacy and helps us navigate potential changes in reimbursement policies. This will ultimately aid in market expansion and revenue growth.
Q: How does the proposed 2025 physician fee schedule impact Biostem?
A: (Jason Matuszewski, CEO) The proposed fee schedule does not include changes to the pricing methodology for skin substitutes, which is positive for us. However, we are prepared for potential changes in coverage policies and believe our clinical data will support continued coverage for our products.
Q: Can you manufacture AmnioWrap material artificially, or does it have to come from live tissue?
A: (Jason Matuszewski, CEO) Currently, we use perinatal tissue as our source material. Manufacturing this material artificially would require a different regulatory framework. We are always exploring new opportunities, but for now, we focus on using live tissue.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
