Full Press Release Details
Elutia Announces Strong Third Quarter Results,
Accelerating Toward Full Launch of EluPro Antibiotic-Eluting BioEnvelope in 2025
Over 100 EluPro VAC Submissions and 19% SimpliDerm
Growth Drive Momentum into 2025
SILVER SPRING, Md., November 14, 2024 -
Elutia Inc. (Nasdaq: ELUT) ("Elutia" or the "Company"), a pioneer in drug-eluting biomatrix products, today provided
a business update and financial results for the third quarter ended September 30, 2024.
Business Highlights:
"We achieved several significant milestones
this quarter, including the first implant of EluPro, marking a pivotal advancement for our team and the patients we serve," said
Dr. Randy Mills, Elutia's Chief Executive Officer. "As we prepare for EluPro's full commercial launch in January 2025,
we are energized by the strong initial market interest and clinical adoption. With EluPro's promising start and the continued momentum
of SimpliDerm, we are redefining the BioEnvelope and reconstructive markets so that patients can thrive without compromise. I want to
thank our unstoppable CRU for their exceptional efforts."
Third Quarter 2024 Financial Results
For the three-month period ended September 30,
2024, as compared to the same period of 2023:
Elutia will host a conference call today at 4:30
p.m. Eastern Time / 1:30 p.m. Pacific Time to discuss its third quarter 2024 financial results and performance.
The conference call can be accessed using the
following information:
U.S. Investors: 877-407-8029
International Investors: 201-689-8029
Conference ID: 13749386
Elutia develops and commercializes drug-eluting
biomatrix products to improve compatibility between medical devices and the patients who need them. With a growing population in need
of implantable technologies, Elutia's mission is humanizing medicine so patients can thrive without compromise. For more information,
visit www.Elutia.com.
In addition to the Company's financial results
determined in accordance with U.S. GAAP, the Company provides non-GAAP measures that it determines to be useful in evaluating its operating
performance and liquidity. The Company presents in this press release the following non-GAAP financial measures: earnings before interest,
taxes, depreciation and amortization ("EBITDA"), adjusted earnings before interest, taxes, depreciation and amortization
("adjusted EBITDA"), adjusted gross margin and adjusted gross profit. The Company defines EBITDA as GAAP net loss excluding
interest expense, income tax expense, depreciation and amortization, and the Company defines adjusted EBITDA as EBITDA excluding income
from discontinued operations, stock-based compensation, FiberCel litigation costs, loss on extinguishment of debt, net of gain on debt
forgiveness, loss or gain on revaluation of warrant liability and gain on revaluation of revenue interest obligation. The Company defines
adjusted gross profit and adjusted gross margin as GAAP gross profit and GAAP gross margin, respectively, excluding amortization of acquired
intangible assets. The amortization of these intangible assets will recur in future periods until such intangible assets have been fully
amortized. Management believes that presentation of non-GAAP financial measures provides useful supplemental information to investors
and facilitates the analysis of the Company's core operating results and comparison of operating results across reporting periods. The
Company uses this non-GAAP financial information to establish budgets, manage the Company's business, and set incentive and compensation
arrangements. Non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and
comparability with past financial performance. However, non-GAAP financial information is presented for supplemental information purposes
only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented
in accordance with U.S. GAAP. For a reconciliation of these non-GAAP measures to GAAP, see below "Non-GAAP Reconciliations of EBITDA
and Adjusted EBITDA" and "Non-GAAP Reconciliations of Adjusted Gross Profit and Adjusted Gross Margin."
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 any statements and information concerning the launch of EluPro, including the timing and anticipated
success thereof. These forward-looking statements are based on our management's beliefs and assumptions and on information currently
available to us. Such beliefs and assumptions may or may not prove to be correct. Additionally, such forward-looking statements are subject
to a number of known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements
to be materially different from any future results, performance or achievements expressed or implied in the forward-looking statements,
including, but not limited to the following: our ability to successfully commercialize, marked and sell our newly approved EluPro product;
our ability to continue as a going concern; our ability to achieve or sustain profitability; the risk of product liability claims and
our ability to obtain or maintain adequate product liability insurance; our ability to defend against the various lawsuits and claims
related to our recalled FiberCel and other viable bone matrix products and avoid a material adverse financial consequence from those
lawsuits and claims; the continued and future acceptance of our products by the medical community; our ability to enhance our products,
expand our product indications and develop, acquire and commercialize additional product offerings; our dependence on our commercial
partners and independent sales agents to generate a substantial portion of our net sales; our dependence on a limited number of third-party
suppliers and manufacturers, which, in certain cases are exclusive suppliers for products essential to our business; our ability to successfully
realize the anticipated benefits of the November 2023 sale of our Orthobiologics business; physician awareness of the distinctive
characteristics, benefits, safety, clinical efficacy and cost-effectiveness of our products; our ability to compete against other companies,
most of which have longer operating histories, more established products and/or greater resources than we do; pricing pressure as a result
of cost-containment efforts of our customers, purchasing groups, third-party payors and governmental organizations could adversely affect
our sales and profitability; our ability to obtain regulatory approval or other marketing authorizations by the FDA and comparable foreign
authorities for our products and product candidates; and our ability to obtain, maintain and adequately protect our intellectual property
rights; and other important factors which can be found in the "Risk Factors" section of Elutia's public filings with
the Securities and Exchange Commission ("SEC"), including Elutia's Annual Report on Form 10-K for the year ended
December 31, 2023, as such factors may be updated from time to time in Elutia's other filings with the SEC, including Elutia's
Quarterly Reports on Form 10-Q, accessible on the SEC's website at www.sec.gov and the Investor Relations page of Elutia's
website at https://investors.elutia.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 Elutia 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, Elutia 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.
| September 30, 2024 | December 31, 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 25,741 | $ | 19,276 | ||||
| Accounts receivable, net | 2,931 | 3,263 | ||||||
| Inventory | 3,633 | 3,853 | ||||||
| Receivables of litigation costs | 4,582 | 2,696 | ||||||
| Prepaid expense and other current assets | 431 | 2,165 | ||||||
| Total current assets | 37,318 | 31,253 | ||||||
| Property and equipment, net | 693 | 172 | ||||||
| Intangible assets, net | 9,123 | 11,671 | ||||||
| Operating lease right-of-use assets, and other | 1,273 | 332 | ||||||
| Total assets | $ | 48,407 | $ | 43,428 | ||||
| Liabilities and Stockholders' Deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses and other current liabilities | $ | 10,498 | $ | 12,676 | ||||
| Current portion of long-term debt | - | 3,321 | ||||||
| Current portion of revenue interest obligation | 4,400 | 11,741 | ||||||
| Contingent liability for legal proceedings | 24,289 | 15,024 | ||||||
| Current operating lease liabilities | 491 | 275 | ||||||
| Total current liabilities | 39,678 | 43,037 | ||||||
| Long-term debt | 22,641 | 20,356 | ||||||
| Long-term revenue interest obligation | 6,244 | 5,360 | ||||||
| Warrant liability | 18,527 | 12,760 | ||||||
| Other long-term liabilities | 1,555 | 515 | ||||||
| Total liabilities | 88,645 | 82,028 | ||||||
| Stockholders' equity (deficit): | ||||||||
| Common stock | 34 | 23 | ||||||
| Additional paid-in capital | 180,260 | 137,021 | ||||||
| Accumulated deficit | (220,532 | ) | (175,644 | ) | ||||
| Total stockholders' deficit | (40,238 | ) | (38,600 | ) | ||||
| Total liabilities and stockholders' deficit | $ | 48,407 | $ | 43,428 |
STATEMENT OF OPERATIONS
in thousands, except share and per share data)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net sales | $ | 5,922 | $ | 6,127 | $ | 18,907 | $ | 18,870 | ||||||||
| Cost of goods sold | 3,181 | 3,286 | 10,524 | 9,943 | ||||||||||||
| Gross profit | 2,741 | 2,841 | 8,383 | 8,927 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | 2,989 | 2,802 | 9,628 | 10,514 | ||||||||||||
| General and administrative | 4,521 | 2,757 | 14,266 | 10,137 | ||||||||||||
| Research and development | 778 | 557 | 2,951 | 3,016 | ||||||||||||
| FiberCel litigation costs | 4,683 | 4,096 | 8,757 | 7,278 | ||||||||||||
| Total operating expenses | 12,971 | 10,212 | 35,602 | 30,945 | ||||||||||||
| Loss from operations | (10,230 | ) | (7,371 | ) | (27,219 | ) | (22,018 | ) | ||||||||
| Interest expense | 1,129 | 1,448 | 3,709 | 4,285 | ||||||||||||
| Other (income) expense, net | (12,653 | ) | (312 | ) | 14,135 | (312 | ) | |||||||||
| Income (loss) before provision of income taxes | 1,294 | (8,507 | ) | (45,063 | ) | (25,991 | ) | |||||||||
| Income tax expense | 8 | 12 | 5 | 36 | ||||||||||||
| Net income (loss) from continuing operations | 1,286 | (8,519 | ) | (45,068 | ) | (26,027 | ) | |||||||||
| Income (loss) from discontinued operations | - | (1,228 | ) | 180 | (2,315 | ) | ||||||||||
| Net income (loss) | 1,286 | (9,747 | ) | (44,888 | ) | (28,342 | ) | |||||||||
| stockholders per share - basic | $ | 0.03 | $ | (0.57 | ) | $ | (1.65 | ) | $ | (1.72 | ) | |||||
| Net income (loss) attributable to common | ||||||||||||||||
| stockholders per share - diluted | $ | (0.33 | ) | $ | (0.57 | ) | $ | (1.65 | ) | $ | (1.72 | ) | ||||
| Net income (loss) attributable to common | ||||||||||||||||
| Weighted average common shares outstanding - basic | 32,520,134 | 17,017,610 | 27,132,216 | 16,464,262 | ||||||||||||
| Weighted average common shares outstanding - diluted | 35,520,938 | 17,017,610 | 27,132,216 | 16,464,262 |
RECONCILIATIONS OF ADJUSTED GROSS PROFIT AND ADJUSTED GROSS MARGIN
in thousands, except share and per share data)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net sales | $ | 5,922 | $ | 6,127 | $ | 18,907 | $ | 18,870 | ||||||||
| Gross profit | 2,741 | 2,841 | 8,383 | 8,927 | ||||||||||||
| Intangible asset amortization expense | 849 | 849 | 2,547 | 2,547 | ||||||||||||
| Adjusted gross profit (Non-GAAP) | $ | 3,590 | $ | 3,690 | $ | 10,930 | $ | 11,474 | ||||||||
| Gross margin | 46.3 | % | 46.4 | % | 44.3 | % | 47.3 | % | ||||||||
| Adjusted gross margin percentage (Non-GAAP) | 60.6 | % | 60.2 | % | 57.8 | % | 60.8 | % |
RECONCILIATIONS OF EBITDA AND ADJUSTED EBITDA
in thousands, except share and per share data)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income (loss) | $ | 1,286 | $ | (9,747 | ) | $ | (44,888 | ) | $ | (28,342 | ) | |||||
| Interest expense (1) | 1,129 | 1,448 | 3,709 | 4,285 | ||||||||||||
| Income tax expense | 8 | 12 | 5 | 36 | ||||||||||||
| Depreciation and amortization | 862 | 942 | 2,588 | 2,854 | ||||||||||||
| Earnings before interest, taxes, depreciation and amortization ("EBITDA") (Non-GAAP) | 3,285 | (7,345 | ) | (38,586 | ) | (21,167 | ) | |||||||||
| Loss (income) from discontinued operations | - | 1,228 | (180 | ) | 2,315 | |||||||||||
| Stock-based compensation | 1,775 | 615 | 6,683 | 1,987 | ||||||||||||
| FiberCel litigation costs (2) | 4,683 | 4,096 | 8,757 | 7,278 | ||||||||||||
| (Gain) loss on revaluation of warrant liability (3) | (12,653 | ) | (1,070 | ) | 15,321 | (1,070 | ) | |||||||||
| Warrant issuance expenses | - | 758 | 257 | 758 | ||||||||||||
| Gain on revaluation of revenue interest obligation (4) | - | - | (1,443 | ) | - | |||||||||||
| Adjusted EBITDA (Non-GAAP) | $ | (2,910 | ) | $ | (1,718 | ) | $ | (9,191 | ) | $ | (9,899 | ) |
| (1) | Represents interest expense recorded on all outstanding long-term debt as well as the revenue interest obligation. |
| (2) | Represents FiberCel litigation costs consisting primarily of legal fees and the estimated and actual costs to resolve the outstanding FiberCel litigation cases offset by the estimated amounts recoverable and recovered under insurance, indemnity and contribution agreements for such costs. |
| (3) | Represents non-cash expense attributable to the revaluation of Common Warrants and Prefunded Warrants issued in connection with a private offering of Class A common stock on September 21, 2023. |
| (4) | Represents the gain on the revaluation of the revenue interest obligation. At each reporting period, the value of the revenue interest obligation is re-measured based on current estimates of future payments, with changes to be recorded in the consolidated statements of operations using the catch-up method. |