Good morning, and welcome to Aroa Biosurgery's half-yearly investor webinar. From the company today, we have CEO and Founder, Brian Ward, and the Chief Financial Officer, James Agnew. The guys will go through a short overview of the results before we pass on to Q&A, which you can submit via the Q&A button at the bottom of the screen. Brian, I'll now hand it over to you to get started. Thanks very much.
Great, Simon. Thank you to everybody for joining. Look, it's a real pleasure to be here today to present our half-year results. You know, we think we've had a really strong half. A lot of these results have been announced previously, and you know, what we're gonna talk about today is very consistent with what was said in previous announcements. Top line product revenue grew 110% on PCP, and quarter-on-quarter 39% over the last two quarters. Gross margins come up from 62%-75%. We're seeing a really nice trend there. You know, we upgraded our guidance a couple of months ago.
You know, we are, you know, still sort of reaffirming that guidance, to be, NZD 34 million-NZD 37 million. I feel very good about that. Just in terms of the business, Myriad's performed really well, over the first half of the year, and we're seeing really strong indications of potential growth for Myriad. We're now selling in 40 accounts, which is up 100%, on the previous half year. The sales team is focused on getting these accounts up and running, as well as managing a really strong pipeline of new evaluations, and value committee assessments. You know, we're seeing good indications of really good future revenue potential in a, you know, wide range of accounts.
We're actively adding to the sales team where we have good access to large hospital systems. These are typically in multi-hospital systems or IDNs. We currently have 26 sales representatives, that's up from 20 at the end of the first half. You know, we're continuing to add as we find good talent. You know, we're really finding that we're an attractive destination for people that are experienced in this business. You know, momentum has been also supported by some strong clinical outcomes both in evaluations and also in the clinical publications that we've put out. We're seeing, you know, success in trauma, success in inflammatory skin conditions, and success in the use of Myriad in contaminated sites as well.
Some, you know, some very positive signs there in terms of, you know, the mixed use of this product and its versatility. We recently announced that Myriad Matrix and Myriad Morcells has been added to the HealthTrust account. This is a large GPO in the U.S. It opens up over 1,500 new hospitals for our sales team. Really exciting new sales opportunity, and we're already seeing some success come from that. You know, Endoform's performed well. You know, we've always had very modest growth expectations for Endoform. I think, you know, we received good feedback, you know, clinical feedback from clinicians on the recent real-world study that we published on Endoform, comparative study.
You know, that showed two- to five-week reduction in healing. That's been very well received. I think that you know continues to support and underpin that business. On the OviTex side, which is sold through TELA Bio, you know, we continue to see strong quarter-on-quarter growth with TELA Bio. We had 29% in Q1 and 27% in the following quarter. Nice, you know, steady continued growth there. And that's you know in the COVID environment where some of these elective procedures are down. We feel you know very positive about that as well. Manufacturing. You know, our expansion is on track. We're adding you know a large area of new manufacturing space.
Construction is expected to be completed at the end of December, and that new facility will be commissioned at the end of March. That's, you know, progressing to plan. That's gonna take us to the potential to supply NZD 100 million in sales from our combined facilities. On the development side, you know, we continue to advance new line extensions for Aroa, new line extensions for TELA Bio, and our dead space management platform. We've got three quite strong concurrent levels of activity to bring some near-term revenue, but also longer-term, you know, significant growth opportunities as well. We've recently filed three new patents for our dead space management system.
We're continuing to not only, you know, advance that in the development process, but also put in place, you know, protection for unique characteristics or unique functionality of that system. I think all in all, a really strong first half of the year. I think that sets us up really well for the second half of the year. You know, I think the company and the employees have done a fantastic job in terms of keeping things on track, keeping us on plan, you know, despite the lockdowns that we've had here in New Zealand. Also, you know, given the environment in the U.S. where, you know, there's still obviously headwinds with COVID.
I think all in all, taking it all into account, you know, it's been a very good performance. I'm gonna pass it over to James now, and James is gonna provide a little bit more commentary around the financial results.
Please note that we make references in our commentary to constant currency. Constant currency removes the impact of any exchange rate movements, and really this approach is used to assess the underlying group's performance without, you know, the variation or variable exchange rate impact. The rate that we use for constant currency is $0.72 for the U.S. dollar. As Brian alluded to, product revenues on a constant currency basis were NZD 17.2 million, up 110% on the previous half year, FY 2021. On the second half of FY 2021 we're up 36%. On a reported basis, product sales of NZD 17.7 million. We're obviously up 96% compared to H1 FY 2021.
Other revenue represents project fees, income received from product development projects that we undertake, in collaboration with our partner, TELA Bio. Total revenue for the period, reported revenue of NZD 17.9 million. Gross margin on a constant currency basis was 75% for the half year. This was up 13% on the prior corresponding period and up 5% on the previous half. This increase is primarily supported by the increase in sales volume, particularly TELA Bio and the increase in sales in Myriad, in our product Myriad. It was also supported by efficiency gains we've made in manufacturing. In terms of expenses, on a constant currency basis, our selling and admin expenses were NZD 12.4 million for the half, up NZD 4.3 million on the previous corresponding period.
This is reflective of the investment we've made in that, in our direct U.S. sales operation. Research and development expenses of NZD 3.6 million, we're up NZD 0.8 million compared to the previous year. Just turning to cash flows. Net cash flow from our own operating activities of NZD 5.8 million outflow. This compared to NZD 3 million dollar outflow from the previous corresponding period. The increase, while our EBITDA was improved from the previous corresponding period. This increase in the outflow is reflective of our increasing working capital resulting from the higher sales this period. Purchases of property, plant and equipment of NZD 2 million still remain modest, although are up from NZD half a million dollars in the previous corresponding period.
This is reflective of the current expansion project that we're currently amidst of. Net cash flow from financing activities of $38 million, reflecting the net proceeds from our recent capital raise in August. Less $9.5 million repaid to Hollister. For the half year we've ended cash on hand including term deposits of $65 million. Putting us in a strong healthy cash position to be able to accelerate projects in R&D and continue to invest in our U.S. commercial operations. With that, I'll hand it back to Brian.
Great. Thanks, James. I guess, Simon, it's back to you for Q&A.
Great. Thanks, Brian. Thanks, James. Just a reminder, if you did want to ask a question, please do so via the Q&A button at the bottom of the screen. First question from Elyse Shapiro at Canaccord. What's the gross margin uplift attributable to more sales or something else in the mix?
Yeah. The gross margin uplift, I mean, comparing it to the previous period, I mean, I would prefer compare it to the last half year because this time last half was pretty much impacted by COVID. It's definitely a few things impacting. It's definitely efficiencies in manufacturing and productivity gains. You're right, it's also assisted by the increasing sales of Myriad Matrix and Myriad Morcells.
Great. Thanks, James. Just a continuation from Elyse. The SG&A outlook in the second half with the full year impact of the new sales force hires and some return to travel medical conferences. Can you talk to what that looks like?
Yeah, sure. I mean, we've obviously had the full year of an additional 20 persons. We've just recruited another six. I mean, we should see a small uplift but not a dramatic uplift in SG&A.
Great. Thanks, James. Next question. 26 sales people is a strong increase. Can you please provide color on where these people are being hired from?
Yeah. That's a good question. So look, they, you know, it's a mix of people. So there's, you know, we're lucky in the group that we've got in terms of we've got a group of people that have all worked in with these types of technologies in this sector before, in the territories, some of them in the territories that they're in. So we've got a group of people that are very well networked in this community and, you know, they're bringing to us, you know, talent. You know, the mix of companies would include, you know, companies like Integra, ACell, Biomedics, you know, Baxter BioSurgery. So just a mix of solid, experienced sales professionals.
We know we're finding the proposition that we have for clinicians and the proposition for salespeople is very attractive. We're getting, you know, good talent.
Thanks, Brian. Follow-up question: Where could the sales force number end in the year, and what is the caliber of salespeople you're adding?
I think they're a big shift compared to what we had in our previous sales organization, so we've really made a step change here. You know, in terms of what that number goes to, we're, you know, it could go to 30. Might, you know, might go beyond that. I mean, I think it's really depending on getting the right people. You know, actually, I should say, the other thing we are doing is we are, you know, where we've got a very good salesperson, we are also supporting them with some more junior salespeople to provide some of the service in those accounts as well. We are mixing it up a little bit depending on the particular account.
Great. Thanks, Brian. Gross margin guidance for the full year is 73%-75% versus the first half of 75%. I would've thought with higher Myriad sales, it would've been equal or higher than 75%. Can you provide comment on that, James?
Absolutely. I mean, one of the things we've factored into the second half is a slight step up in our indirect manufacturing overheads, and they come as a result of the sort of going into the expanded manufacturing facility. We have guided sort of you know 73%-75%. I expect I suspect it will be closer to the 75%. You know, look, we'll be pleased if it's higher.
Great. Thanks. Next question from John Hester at Bell Potter. Brian, can you give some insight into the growth in active accounts from 20 to 40? What is the concentration of revenues from the top five accounts?
Yeah, look, I you know it's hugely variable across those accounts because a lot of the accounts that we're in, we're only really just getting up and going. As I said earlier, a big focus of the sales team has been you know to get these accounts productive. We've been really fortunate. In some accounts we've had orders of over $100,000. You know, in others it's like $2,000. It's massively variable. You know the top five accounts are sort of you know less than $20,000 on average. I'd say less than $20,000 at the moment. You know, so they're just winding up.
Thanks, Brian. That concludes all of the Q&A. I'll hand it back to you for closing remarks.
Great. Well, look, thanks to everybody for joining. You know, as I say, I think we've. It's a great result. Some good sales momentum, great base to build on, and I think, you know, importantly for us, you know, really good, you know, feedback from clinicians and feedback from hospitals in terms of, you know, the value proposition that we offer. We feel, you know, pretty good about that. Also, you know, stellar performance from TELA as well. You know, it's great to see that, you know, continuing to develop momentum. Yeah. Good base to build on for the second half.
All right. Thanks, Brian. Thanks, James. Thanks, all.