Full Press Release Details
Aziyo Biologics Reports Record Full Year 2022
SPRING, Md., March 22, 2023 - Aziyo Biologics, Inc. (Nasdaq: AZYO) ("Aziyo"), a
company that develops and commercializes biologic products to improve compatibility between medical devices and the patients who need
them, today provided a business update and reported financial results for the fourth quarter and full year ended December 31,
Business Highlights:
"We are pleased to have closed the year
with record revenues and thrilled to have helped more than 50,000 patients with our products in 2022," said Dr. Randy Mills,
President and Chief Executive Officer of Aziyo Biologics. "We believe we are on a path for continued growth in key markets where
there remains significant unmet need. We are excited about our long-term potential and the opportunity to accelerate growth and enhance
efficiency through strategic partnerships, as evidenced by the distribution agreement with Sientra for SimpliDerm announced earlier today.
"At the same time, following the recent
feedback from the FDA delaying the market clearance of our CanGaroo RM Antibacterial Envelope, we recognize the need to extend our cash
runway and have implemented significant measures to eliminate or defer expenses as we transition to a more capital efficient business
model," continued Dr. Mills. "Nevertheless, we remain committed to our CanGaroo RM development program and are confident
we will be able to address the FDA's outstanding questions."
Fourth Quarter 2022 Financial Results
Net sales for the fourth quarter of 2022 were
$12.7 million, an increase of 17% compared to the fourth quarter of 2021. This growth was led by CanGaroo and SimpliDerm, which on an
aggregate basis, grew by 30% in the fourth quarter of 2022, compared to the fourth quarter of 2021.
Gross profit for the fourth quarter of 2022 was
$5.0 million and gross margin was 39%, as compared to $3.4 million and 31%, respectively, in the corresponding prior-year period. Gross
margin, excluding intangible asset amortization (a measure not presented in accordance with U.S. generally accepted accounting principles
("GAAP")) was 46% for the fourth quarter of 2022, as compared to 39% in the fourth quarter of 2021. The increase in gross
margin was primarily due to efficiency improvements in the Company's Orthobiologics and Women's Health business units.
Total operating expenses were $13.8 million for the fourth quarter
of 2022, as compared to $11.2 million in the corresponding prior-year period, representing an increase of 24%. The increase was primarily
due to legal expenses and updated estimates of contingent liabilities in excess of currently available insurance coverage related to the
2021 recall of a single donor lot of the Company's FiberCel Viable Bone Matrix ("FiberCel"). Increased sales and marketing
also contributed to higher operating expenses, partially offset by a decrease in research and development.
Operating results for the fourth quarter of 2022
included $5.0 million of other income related to a reduction of the Company's revenue interest obligation, which is based on the
forecasted timing and extent of net sales for the Company's CanGaroo and cardiovascular product lines and the associated royalty
and milestone payments. The Company's revenue interest obligation terminates in May 2027.
Net loss was $5.4 million in the fourth quarter
of 2022, as compared to $9.1 million in the corresponding period of the prior year. Net loss per share in the fourth quarter of 2022 was
$0.38 per share, compared to a loss of $0.82 per share in the fourth quarter of 2021.
Aziyo's cash balance as of December 31,
2022 was $17.0 million, which included $10.2 million in net proceeds from the follow-on public offering completed in December 2022
and additional borrowings of $4.0 million under an existing term loan facility.
Full Year 2022 Financial Results
Net sales for the full year 2022 were $49.2 million,
an increase of 4% compared to the full year 2021 net sales of $47.4 million. Excluding 2021 sales of $4.9 million from the discontinued
product, FiberCel, net sales from current products increased 16% in the full year 2022 compared to the prior year.
Gross profit for the full year 2022 was $19.2
million and gross margin was 39%, as compared to $19.0 million and 40%, respectively, in the prior year. Gross margin, excluding intangible
asset amortization (a non-GAAP financial measure) was 46% for the full year 2022, as compared to 47% in the full year 2021.
Total operating expenses were $51.0 million for
the full year 2022, as compared to $42.1 million in the prior year, representing an increase of 21%. The increase was primarily due to
higher expenses related to litigation, general and administrative and sales and marketing expenses.
Net loss was $32.9 million in the full year 2022,
as compared to $24.8 million in the prior year. Loss per share in the full year 2022 was $2.38 per share, unchanged from the prior year.
Aziyo will host a conference call today at 4:30
p.m. Eastern Time / 1:30 p.m. Pacific Time to discuss its fourth quarter 2022 and full year 2022 financial results, performance
and vision for the future.
Individuals interested in listening to the conference
call are required to register online. Participants are recommended to register at least 15 minutes before the start of the call. A live
and archived webcast of the event and the accompanying presentation materials will be available on the "Investors" section
of the Aziyo website at https://investors.aziyo.com/.
About Aziyo Biologics
and commercializes biologic products to improve compatibility between medical devices and the patients who need them. With a growing
population in need of implantable technologies, Aziyo's mission is to humanize medical devices to improve patient outcomes. For
more information, visit www.Aziyo.com.
Forward-Looking Statements
This press release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Forward-looking statements can be identified by words such as "projects," "may," "will,"
"could," "would," "should," "believes," "expects," "anticipates,"
"estimates," "intends," "plans," "potential," "promise" or similar references
to future periods. All statements contained in this press release that do not relate to matters of historical fact should be considered
forward-looking statements, including statements and information concerning the Company's anticipated financial performance; possible
or assumed future results of operations, including descriptions of the Company's revenues, profitability, outlook, and overall business
strategy and expected success; expectations regarding the Company's operational position, opportunities and deliverables, goals,
strategies, priorities and initiatives; and our expectations relating to the FDA regulatory process for the CanGaroo RM Antibacterial
Envelope. Forward-looking statements are based on management's current assumptions and expectations of future events and trends,
which affect or may affect the Company's business, strategy, operations or financial performance, and actual results may differ
materially from those expressed or implied in such statements due to numerous risks and uncertainties. Forward-looking statements are
inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, and other important factors that may cause
actual results, performance or achievements to differ materially from those contemplated or implied in this press release. These include,
but are not limited to, risks relating to: the Company's inability to generate sufficient revenue to achieve or sustain profitability;
adverse changes in economic conditions and instability and disruption of credit markets; the Company's ability to continue as a
going concern; the Company's products and its ability to enhance, expand, develop and commercialize its product offerings; the impact
on the Company's business of the recall of a single lot of its FiberCel product and the discontinuation of its sales by its distribution
partner; the Company's dependence on its commercial partners; physician awareness of the distinctive characteristics, and acceptance
by the medical community, of the Company's products; the ability to obtain regulatory approval or other marketing authorizations;
and the Company's intellectual property rights, and other important factors, which can be found in the "Risk Factors"
section of Aziyo's public filings with the Securities and Exchange Commission ("SEC"), including Aziyo's Annual
Report on Form 10-K for the year ended December 31, 2021, as such factors have been updated by Aziyo's Quarterly Report
on Form 10-Q for the quarterly period ended September 30, 2022 and may be updated from time to time in Aziyo's other filings
with the SEC, including without limitation, Aziyo's Annual Report on Form 10-K for the year ended December 31, 2022 to
be filed with the SEC, accessible on the SEC's website at www.sec.gov and the Investor Relations page of Aziyo's website
at https://investors.aziyo.com. Because forward-looking statements are inherently subject to risks and uncertainties, you should not rely
on these forward-looking statements as predictions of future events. Any forward-looking statement made by Aziyo in this press release
is based only on information currently available and speaks only as of the date on which it is made. Except as required by applicable
law, Aziyo expressly disclaims any obligations to publicly update any forward-looking statements, whether written or oral, that may be
made from time to time, whether as a result of new information, future developments or otherwise.
Aziyo Biologics, Inc.
AZIYO BIOLOGICS, INC.
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