Full Press Release Details
Fourth Quarter and Full Year 2023 Financial Results: Anticipates CanGarooRM Clearance Decision in First Half of 2024
SILVER SPRING, Md., March 7, 2024 -
Elutia Inc. (Nasdaq: ELUT) ("Elutia" or the "Company") today provided a business update and reported financial
results for the fourth quarter and full year ended December 31, 2023.
Business Highlights:
"After years of pioneering development,
we are on the verge of introducing the drug-eluting biomatrix that promises to remove compromise from patient care," stated Dr. Randy
Mills, Elutia's Chief Executive Officer. "In 2023, we completed the groundwork for our flagship product, CanGarooRM, resulting
in a high-quality submission to FDA. Since then, our interactions with the Agency have been positive, and we look forward to a clearance
decision in the first half of this year."
Dr. Mills continued, "I'd like
to thank our dedicated commercial and operational teams, who, throughout this process, have stayed laser-focused, delivering robust sales
figures across our SimpliDerm and CanGaroo product lines. They are now focused on a coordinated and disciplined product rollout of CanGarooRM,
ensuring its full potential is realized."
In December 2023, Elutia submitted a 510(k) premarket
notification to the FDA for CanGarooRM following a successful pre-submission meeting with the FDA. The Company is in ongoing discussions
with FDA regarding the submission. To date, clarification requests from the Agency have been limited to items within the new submission,
and no additional data has been requested. Elutia expects the FDA's clearance decision in the first half of 2024 and is preparing for
CanGarooRM is uniquely positioned for success
in the drug-eluting envelope market, estimated at over $600 million annually in the United States. As the second market entrant and the
only product offering a combination of a biological envelope and potent antibiotics, CanGarooRM is poised to compete effectively. Surgeons
particularly appreciate the handling characteristics of a natural biological product. Elutia has developed a focused launch plan, leveraging
the Company's proprietary sales force and distribution network. The Company's commercial team, equipped with extensive product
knowledge and experience, is ready to engage healthcare professionals to drive adoption.
2023 Financial Results
For the year ended December 31, 2023, as
compared to 2022 (where applicable):
Fourth Quarter 2023 Financial Results
For the three-month period ended December 31,
2023, as compared to the same period of 2022:
Elutia will host a conference call today at 4:30
p.m. Eastern Time / 1:30 p.m. Pacific Time to discuss its fourth quarter and full year 2023 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: 13744499
Individuals interested in listening to the conference
call are required to register online. Participants are recommended to log in approximately 10 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 Elutia website at investors.elutia.com.
Elutia develops 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,
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 on revaluation of warranty 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 our results of operations, financial position, and business
strategy; expectations regarding our products and their targeted effects; plans for our sales and marketing growth; expectations regarding
our recently completed sale of our Orthobiologics Business to Berkeley Biologics, LLC ("Berkeley"), including potential payment
of post-closing earnout payments; our anticipated expansion of our product development and research activities; increases in expenses
and seasonality; expectations regarding our competitive advantages, and overall clinical and commercial success; expectations regarding
the pending lawsuits and claims related to our recall of a single lot of Fiber Viable Bone Matrix ("FiberCel"), amounts recoverable
under insurance, indemnity and contribution agreements and the impact of such lawsuits and claims on our future financial position; expectations
regarding the potential emergence of lawsuits, claims and regulatory findings related to our recall of a single lot of the viable bone
matrix ("VBM") products, amounts recoverable under insurance, indemnity and contribution agreements and the impact of such
lawsuits and claims on our future financial position; our expectations and plans regarding pursuit of any strategic transactions; and
our expectations relating to the U.S. Food and Drug Administration ("FDA") regulatory process for the CanGarooRM
Antibacterial Envelope, including our expectations with respect to the timing and outcome of any FDA approval decisions, 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,
2022, 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.
| December 31, 2023 | December 31, 2022 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 19,276 | $ | 16,989 | ||||
| Accounts receivable, net | 3,263 | 3,774 | ||||||
| Inventory | 3,853 | 4,240 | ||||||
| Receivables of FiberCel litigation costs | 2,696 | 13,813 | ||||||
| Prepaid expense and other assets | 2,165 | 2,387 | ||||||
| Current assets of discontinued operations | - | 9,496 | ||||||
| Total current assets | 31,253 | 50,699 | ||||||
| Property and equipment, net | 172 | 245 | ||||||
| Intangible assets, net | 11,671 | 15,069 | ||||||
| Operating lease right-of-use assets, and other | 332 | 320 | ||||||
| Noncurrent assets of discontinued operations | - | 2,508 | ||||||
| Total assets | $ | 43,428 | $ | 68,841 | ||||
| Liabilities and Stockholders' Deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses and other current liabilities | $ | 12,676 | $ | 11,104 | ||||
| Current portion of long-term debt and revenue interest obligation | 15,062 | 8,990 | ||||||
| Contingent liability for FiberCel litigation | 15,024 | 17,360 | ||||||
| Current operating lease liabilities | 275 | 232 | ||||||
| Current liabilities of discontinued operations | - | 4,929 | ||||||
| Total current liabilities | 39,796 | 42,615 | ||||||
| Long-term debt | 20,356 | 24,260 | ||||||
| Long-term revenue interest obligation | 5,360 | 5,916 | ||||||
| Warrant liability in connection with PIPE offering | 12,760 | - | ||||||
| Other long-term liabilities | 515 | 127 | ||||||
| Noncurrent liabilities of discontinued operations | - | 956 | ||||||
| Total liabilities | 82,028 | 73,874 | ||||||
| Stockholders' equity (deficit): | ||||||||
| Common stock | 23 | 16 | ||||||
| Additional paid-in capital | 137,021 | 132,939 | ||||||
| Accumulated deficit | (175,644 | ) | (137,988 | ) | ||||
| Total stockholders' equity (deficit) | (38,600 | ) | (5,033 | ) | ||||
| Total liabilities and stockholders' equity | $ | 43,428 | $ | 68,841 |
STATEMENT OF OPERATIONS
in thousands, except share and per share data)
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net sales | $ | 5,875 | $ | 6,592 | $ | 24,745 | $ | 23,849 | ||||||||
| Cost of goods sold | 3,751 | 3,526 | 13,692 | 12,210 | ||||||||||||
| Gross profit | 2,124 | 3,066 | 11,053 | 11,639 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | 2,572 | 4,178 | 13,087 | 17,850 | ||||||||||||
| General and administrative | 3,967 | 3,263 | 14,104 | 16,051 | ||||||||||||
| Research and development | 1,381 | 1,860 | 4,399 | 7,727 | ||||||||||||
| FiberCel litigation costs | 2,711 | 3,292 | 9,989 | 5,200 | ||||||||||||
| Total operating expenses | 10,631 | 12,593 | 41,579 | 46,828 | ||||||||||||
| Loss from continuing operations | (8,507 | ) | (9,527 | ) | (30,526 | ) | (35,189 | ) | ||||||||
| Interest expense | 1,511 | 1,452 | 5,796 | 5,118 | ||||||||||||
| Other (income) expense, net | 5,211 | (4,962 | ) | 4,899 | (4,159 | ) | ||||||||||
| Loss before provision for income taxes | (15,229 | ) | (6,017 | ) | (41,221 | ) | (36,148 | ) | ||||||||
| Provision for income taxes | (8 | ) | (2 | ) | 28 | 34 | ||||||||||
| Net loss from continuing operations | (15,221 | ) | (6,015 | ) | (41,249 | ) | (36,182 | ) | ||||||||
| Income from discontinued operations | 5,905 | 575 | 3,593 | 3,285 | ||||||||||||
| Net Loss | (9,316 | ) | (5,440 | ) | (37,656 | ) | (32,897 | ) | ||||||||
| Net loss from continuing operations per share basic and diluted | $ | (0.66 | ) | $ | (0.42 | ) | $ | (2.27 | ) | $ | (2.62 | ) | ||||
| Net income (loss) from discontinued operations per share basic and diluted | $ | 0.25 | $ | 0.04 | $ | 0.20 | $ | 0.24 | ||||||||
| Weighted average common shares outstanding - basic and diluted | 23,195,190 | 14,468,823 | 18,160,822 | 13,832,887 |
ReconciliationS of ADJUSTED GROSS PROFIT AND ADJUSTED
in thousands, except share and per share data)
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net sales | $ | 5,875 | $ | 6,592 | $ | 24,745 | $ | 23,849 | ||||||||
| Gross profit | 2,124 | 3,066 | 11,053 | 11,639 | ||||||||||||
| Intangible asset amortization expense | 851 | 850 | 3,398 | 3,398 | ||||||||||||
| Adjusted gross profit (Non-GAAP) | $ | 2,975 | $ | 3,916 | $ | 14,451 | $ | 15,037 | ||||||||
| Gross margin | 36.2 | % | 46.5 | % | 44.7 | % | 48.8 | % | ||||||||
| Adjusted gross margin percentage (Non-GAAP) | 50.6 | % | 59.4 | % | 58.4 | % | 63.1 | % |
ReconciliationS of EBITDA AND ADJUSTED EBITDA
in thousands, except share and per share data)