Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Artivion Inc (AORT, Financial) reported a robust revenue growth of 10% year-over-year on a constant currency basis, reaching $95.8 million in Q3 2024.
- Adjusted EBITDA grew by 28% year-over-year, showcasing strong operational leverage and financial performance.
- The On-X aortic valve product line saw a 15% increase in revenues, driven by market share gains and proven clinical benefits.
- BioGlue revenues grew 14% year-over-year, with recent regulatory approval in China expected to open a significant market opportunity.
- The company achieved significant progress in regulatory and clinical initiatives, including the filing of the first PMA module for AMDS with the FDA, and positive trial results for the NEXUS Aortic Arch Stent Graft System.
Negative Points
- Tissue processing revenues grew only 2% year-over-year, impacted by lower-than-anticipated donor allograft volumes.
- The company faces challenges in meeting demand for SynerGraft pulmonary valves due to fluctuating donor allograft volumes.
- Gross margins remained flat at 64% compared to the previous year, indicating limited improvement in cost efficiency.
- Interest expenses increased to $8 million from $6.3 million in the prior year, impacting net income.
- The PerClot manufacturing agreement with Baxter resulted in a 17% decline in other revenue, driven by inventory management issues.
Q & A Highlights
Q: Can you provide more details on the strong performance of the aortic stent graft business and any specific products driving this growth?
A: Pat Mackin, CEO: We don't break out specific product segment details, but we have a portfolio of about half a dozen products covering the entire span of the aorta, all growing in double digits. This growth is consistent across Europe, Asia, and Latin America, driven by our differentiated portfolio and global expansion.
Q: Regarding On-X, what extent of market share gains are you seeing, and what factors are contributing to this growth?
A: Pat Mackin, CEO: Globally, we have about 30% market share, with 55% in the U.S. The share gains are driven by the post-approval trial showing an 87% reduction in major bleeding. We expect continued market share growth in the U.S. and internationally, maintaining On-X as a double-digit growth product.
Q: Can you discuss the long-term growth potential for SynerGraft and any alternative assets that could complement growth rates?
A: Pat Mackin, CEO: The Ross procedure with SynerGraft has 25 years of outstanding data. Growth is constrained by donation volumes, but we are working on improving yields. We sell every unit produced and are continuously looking for ways to meet market demand.
Q: What is the expected timeline and launch strategy for AMDS in the U.S.?
A: Pat Mackin, CEO: We anticipate FDA approval in Q4 2025, with a soft launch expected in the same quarter. We will need to go through value analysis committees and train surgeons, but the strong clinical data should facilitate quicker adoption.
Q: How should we think about the revenue potential and ramp-up for BioGlue in China?
A: Pat Mackin, CEO: We expect to begin commercialization in the second half of 2025, following necessary regulatory and administrative steps. The market opportunity is significant, but revenue growth will be gradual over several years as we penetrate the market and train surgeons.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
