Okay, I think we can begin. Welcome to Aroa Biosurgery's Investor Webinar and Q&A following the company's March 2025 quarter results announcement released this morning. Please note participants are in a listen-only mode. There will be a presentation lasting approximately 20 minutes, followed by a Q&A session. The webinar will conclude at approximately 9:30 A.M. Australian Standard Time. If you have a question you would like to submit, please type it in using the Q&A function. We will also be opening the floor to live questions. If you would like to do that, when the Q&A session commences, please use the raise hand function on the Zoom app. Please note that this session is being recorded. On behalf of Aroa today, we have Brian Ward, Founder and CEO, and James Agnew, CFO. I will now hand over to Brian and James. Please go ahead.
Thank you, Sarah, and good morning, and thank you for joining today's webinar. It's going to be a relatively short call. I'm just going to go through key financial results. We have our full year results that we'll present at the end of May. You know, the information today will be relatively limited, as there'll be a much more fulsome update at the full year results. I'm just going to jump straight into it. I've got a little bit of a background on the company for those that are new to the company, and then I'll talk about the highlights from the March quarter. We're a well-established high-growth soft tissue regeneration company. We sell four families of products, predominantly into hospitals in the U.S.
All of our products are based on our Aroa ECM platform, and this is a soft tissue regeneration technology from which we're building a wide range of products. The total addressable market for the products that are already commercial in the U.S. is in excess of $3 billion. We sell through our own direct sales team. They're responsible for more than half of our sales. The balance of our sales is sold through a commercial partner, TELA Bio, who have licensed from us the rights to sell hernia and soft tissue reconstruction products, predominantly for breast reconstruction. We've treated over 7 million patient treatments with our technology, so it's well established and demonstrated both great efficacy, but also very good safety as well. We've now published over 100 peer-reviewed publications, and I'll talk a little bit about that shortly. Regulatory approvals throughout the world. We're predominantly focused on the U.S.
That's where more than 95% of our sales are. We also have regulatory approvals in other countries, and we're selling in 15 or so other countries through local distributors. We also have a program of work based on a new technology platform. This is our Enivo platform. Two of the components from that platform are cleared by the FDA. We have a third component that we're working on a clinical study for for full approval. All up, we're about 270 people, with 100 or so of those based in the U.S. and then the balance based here in New Zealand. In terms of our technology, we isolate a very particular layer of tissue from the fores tomach of sheep. We purify that in a way that it can be implanted into people and cause the remodeling and regeneration of tissue.
This material has been demonstrated to have great biology and structure, promote the formation of your blood vessels, and also orchestrate the process of soft tissue regeneration. From this, we've developed four families of products. Our Endoform product, predominantly for venous leg ulcers and diabetic foot ulcers, Myriad for soft tissue reconstruction in the operating room and hospitals, Symphony as a product also for diabetic ulcers and venous ulcers, typically used at a later phase in healing compared to Endoform, and then our OviTex products, which are used for hernia repair and breast reconstruction, sold through TELA Bio. If you look at the split between our two sales channels, Aroa, we have about a $1.8 billion opportunity in front of us in the complex wound market and acute soft tissue reconstruction. On the TELA Bio side, this is an opportunity in excess of $1.3 billion.
I'm talking really about the opportunity in the U.S. market with these products. You know, we're really, as a company, focused on making this technology much more accessible for patients. There are three things that underpin our strategy. World-leading outcomes, we're demonstrating through the clinical research that we're running, particularly the master registry, now outcomes that are above and beyond what's previously been seen for this type of technology, particularly in terms of the rate of healing, the lack of complications, and being able to achieve very good outcomes with a single application of our product. We've also been able to demonstrate that we can deliver unmatched value to hospitals.
This comes through the fact that our products are more affordable, they're competing products, but also we get less complications, and therefore there's less cost associated for the hospital in terms of treating those complications and the fact that we have a single application, they're not needing to take the patient back to the operating theatre so frequently. There are big cost savings for them there as well. We're also seeing that our technology can have widespread impact. What I mean by that is it's not a product, but these are not products that only work in particular procedures. We're seeing that they tend to work very successfully across a wide range of different procedures.
That's important because it means that they're very flexible for the hospitals, but also that they can standardize on a single product and be able to use them in a wide range of different specialties. It is very helpful for both surgeons and hospitals in order to be able to standardize and have a single product. Let me just quickly talk through the financial highlights. Importantly, we're reaffirming our guidance for the full year. Total revenue guidance of $81 million-$84 million is maintained, and a normalized EBITDA of $2 million-$4 million. That's on a reported basis. On a constant currency basis, that's $76 million-$79 million on a constant currency for revenue and up to $2 million on a constant currency for EBITDA profit.
You know, really pleased that we've come in, we were going to come in, and, you know, that we can be able to maintain that guidance. You know, great news on cash flow. This is the second quarter of positive cash flow. The second half of the year has been positive for cash flow, which is great. For this last quarter, $1.1 million. So pleased that we've been able to deliver that. You know, there was an outflow from investing in terms of CapEx, routing CapEx, $0.6 million to that. Cash receipts for the quarter, $20 million. We ended up with a cash balance of $22 million at the end of the quarter.
You know, we're finishing the year in a strong position, you know, having a strong cash balance, but then also, you know, having demonstrated two quarters of positive cash flow, which we're very pleased about. Operational highlights. Myriad sales are up 11% against the previous quarter, 32% against the previous corresponding period. We had the highest reported sales for Myriad in March at $2 million. Great to see the strength of Myriad sales and the progress that we're making there. On the TELA Bio side, they reported their full year revenue, which was $69.3 million, up 19% on the previous year. Demand for TELA Bio still remains very strong, and it was up 17% compared to the previous corresponding period. That's important because typically the first quarter of the calendar year tends to be soft. Nice to see a nice little bump there on TELA demand.
In terms of Aroa ECM evidence, you know, a big milestone for us in the last quarter. We now have 100 peer-reviewed studies that have been published that validate the efficacy and safety of the Aroa ECM platform. Really nice to see that body of evidence growing. We're certainly very hopeful from a sales perspective now that we've got, you know, a strong body of evidence there. There were three peer-reviewed case studies published in the last quarter, and we have a pipeline of publications coming down the line over the next six months, most notably in trauma, burns, and pilonidal sinus disease. You know, we're continuing to build that evidence, and that's important for engaging our surgeons. Just a quick note on tariffs.
As listeners will be aware, the U.S. government has imposed 10% tariffs on New Zealand goods, you know, due to the commercial arrangements that we have at TELA Bio, and particularly how pricing works, but also how our cost-sharing works. We expect that the net impact of this will be substantially lower than 10%. You know, do not feel this is going to be a major headwind for us in the coming year. I am going to conclude there and pass it back to you, Sarah, for questions.
Thank you, Brian. We will now move on to the Q&A session. As I mentioned at the start, please use the raise hand function if you would like to ask your question live. You can also submit a written question using the Q&A function on the Zoom app. Okay, we will start with some live questions. We have Elise Shapiro here. Elise, if you could unmute yourself and ask your question.
Great. Good morning. Thanks for taking the questions. I guess just kind of looking at that CMS reimbursement code, does that, you know, does that impact pricing at all for you? Are you getting any sort of improvements in ASP or, you know, or is it more of a streamlined the actual process kind of tool?
Yeah, so there's no change in pricing. The pricing's controlled through contracts for the GPOs, but it does mean that our product will be tracked better through use in hospitals, but also gives a code to claim against in the outpatient setting, particularly in ambulatory surgical centers. It does, in some of those centers where pricing is capped, you know, provide a good opportunity for us in terms of sales. Getting that Myriad code is helpful in that particular context.
Got it. Just looking at that new set of marketing that you've put in from Integra, you know, it's probably early days, but are you anticipating any sort of changes in terms of the sales team, the pitch, the structure? What sort of new initiatives will come in through there on the commercial side?
Yeah, look, I think we're, you know, we've added some more resource into the U.S. sales and marketing operation. So, you know, we've added, you know, Ruthie's come on board as the Marketing Director there. I think that's going to help in terms of, you know, directly supporting the U.S. sales team in their own time zone, a little bit of more cohesiveness around what we're doing there as well, more alignment, you know, to the strategies. I think that's going to help. We've also added a Director of Training to the U.S. team as well. You know, I think it's important that our teams are well trained, that we can get them up and running quickly, and that they really understand all of the materials and information that we have. I think those two things are going to make quite a big difference.
Certainly up till now, you know, that, you know, that hasn't been happening in as structured a way as we would have liked. I think we'll get some momentum from that.
Got it. That's helpful. Thanks. I'll pop back in the queue.
Okay. We have got a written comment here. At the TELA Bio quarterly held on the 21st of March, management reported significant sales headwinds with loss of sales staff and fierce competition. Has there been any recent softening of OviTex sales to TELA? And if so, what is the size of this change? It's a fairly complex question.
Yeah, look, I think, you know, I wouldn't kind of cast it quite so dramatically as that. I mean, they've certainly had a couple of, they've had some quarters that have been up, some quarters that have been down. I think that, you know, that is not unusual. What we have seen over the last quarter is, you know, good demand from TELA Bio. You know, I think they've, you know, their guidance is out this year, you know, and, you know, there's good growth on the previous year. We're expecting, you know, TELA Bio to continue to grow strongly over the next 12 months. Obviously, if they're at a higher baseline, it gets harder to grow at the same rate. You know, in absolute dollar terms, you know, it's sort of a good strong growth there.
All right. Okay. Let's have a look and see. Don't have any further questions at this stage to answer live. There is another written question from Jesse Livermore. If TELA Bio enter Chapter 10 at some point, would you take distribution of OviTex in-house or appoint another distributor?
Yeah, so, you know, there's some change of control provisions within the contract that, you know, we obviously need to take into account. So if TELA was not to remain viable, I think, you know, Aroa is well placed to be part of whatever process takes place there. So, you know, I think where we're at, you know, it's quite different from where we were when we put the original arrangements in place for TELA Bio. We now have our own sales team in the U.S. And so I think we're in a very different position. You know, the TELA products are complementary with our own products. But look, I think, you know, there's a lot of things that can happen from where we are now.
I mean, I think, you know, TELA's, you know, in a position where, you know, they could trade through successfully and, you know, continue to grow strongly. If that doesn't happen, then, you know, you'd expect that there would, you know, it's a valuable product franchise in its own right. And so there will be other acquirers interested in that technology. You know, that may be, you know, major companies. It may be smaller companies as well. I think Aroa would certainly have an interest in that process.
Right. We've just got another question from Elise. Elise, if you can just unmute yourself.
Great. Thanks. Yep. Just kind of pressing into TELA Bio a little bit. You know, are there any additional kind of safeguards or kind of forecasting measures in place to help you better be able to understand some of the ebbs and flows that are coming through on their side?
Yeah, no, absolutely, Elise. You know, obviously the key indicator for us is demand plans. As you're aware, TELA Bio provides us a rolling 12-month demand plan. The first three months of that demand plan are always sort of binding. Okay. That's always, you know, that's the immediate sort of, you know, indicator to sort of, you know, track how sales are happening at TELA Bio on a monthly basis. I mean, that being said, we're also in close, you know, we have a very close relationship with TELA Bio. We're also in very good conversations with TELA. I think as Brian mentioned earlier, we sort of pointed out in the quarterly is that, you know, whilst TELA Bio had a soft December quarter, what would typically happen is we'd see a drop-off in demand in, you know, the, you know, the first quarter of this calendar year.
You know, we've actually seen the opposite, which is a good indicator that, you know, sales for the March quarter have actually gone really well for TELA. It's definitely indicative on the demand plan. If we look out to the next quarter, things are going well.
Got it. Maybe just thinking a bit more broadly around hospital ordering patterns and demand, you know, there have been some pretty material Medicare changes that have come through. We've seen the insurers also get hit pretty hard. You know, how does that affect the demand profile both on the kind of Myriad side and the OviTex side? Thanks.
Yeah, I think on our side, you know, with Myriad, you know, we're not really seeing any changes there. We think the downward pressure on, you know, hospitals for cost constraints actually is helpful for us. You know, we have been having conversations at hospital level and IDN level and, you know, sort of electing to go with our Myriad portfolio certainly provides some substantial savings for hospitals. We see a great opportunity there. I think if you look at TELA Bio, you know, their pricing is, you know, certainly considerably less expensive than other biologics and very similar or maybe even at a slight discount to some of the resorbable synthetics. You know, suddenly I think they're well placed. Probably better placed now because they also have a fuller portfolio.
They're able to be, you know, not just the products for the complex surgery, but also in those more routine surgeries as well. I think both companies are well placed in that changing environment.
Got it. That's helpful. Thank you.
Is there any more questions there, Sarah?
No, there are no more questions at this stage. I think we can close out. Did you have any concluding remarks to add?
Yeah, look, you know, we feel like we've finished the year strongly. As I said, we're going to report the results at the end of May. You know, we're certainly pleased that we've been able to deliver on this transition from burning cash to now being cash flow positive and profitable. You know, as we go into next year, then we expect to have both, you know, growth at the top line, but also, you know, improvement in that cash flow and, you know, increasing profitability. You know, having come through the end of the year, through those last two quarters, you know, very happy with how that's tracked.
Great. Thanks. Thank you, Brian and James, for presenting the results. Thank you, everyone, for attending. This concludes the webinar for today.