I'm in this morning. What is there to say that we didn't say a month ago when we did the unaudited results webinar? It turns out there's lots to say, not only to reinforce what happened in FY 2025, which is all very good news, but there's quite a number of other things happening in the business as well. I was going to make some editorial comments to start, but I think first things first, I'll pass it over to Robyn Elliott, our Acting CEO, and let her work through the deck that we've announced to the ASX. She'll pass the baton on to Jan, our CFO, by the way, who'll talk about the financials. Robyn will top and tail it with some outlooks going forward. I'd like to make some much more substantive editorial comments before we open it up to questions.
I'd hope we can get this, given we've already done one, that we can get this all done and dusted by 3:00 P.M. If we don't get your questions and we haven't already answered them by email, we'll certainly do that after the event. I think we're going to, just by the way I look at this going now, I think we're going to have plenty of time for questions. First things first, let me introduce Robyn Elliott. Robyn, I'll leave it in your hands.
Thank you, David, and thank you everyone for joining our webinar today. It's been around eight years since we launched our first product, NovoSorb BTM. In that time, we have treated over 60,000 patients. We've become the market leader in difficult burns in many of the world's major markets. We've grown revenue to over $129 million, and we've generated both profits and positive cash flows. This, in many words, is a success story. It's on the back of the dedication and the commitment of the PolyNovo team. [Audio distortion] patients consistently [audio distortion] surge in innovation, and they underpin the acceptance by many that the NovoSorb platform is the dermal regeneration solution of choice. Next slide, please, Chester. Why does the NovoSorb matrix work so well? Why does it generate such enthusiasm in our medical communities? The common component of NovoSorb BTM and MTX products is a polyurethane foam.
It's designed to have a porosity of greater than 90%, which allows for the cells to infiltrate the foam. The foam acts as a scaffold. It allows for vascularization and tissue regeneration. Simply put, it turns a large wound or burn into a series of smaller connected wounds so that the body can heal it more quickly. NovoSorb BTM has an additional sealing membrane. It provides benefits including temporary wound closure, which minimizes moisture loss, external contamination, and wound contracture. We found that these are particularly important for the treatment of larger burns and wounds and have really underpinned, again, some of the growth we've seen in that product. Next slide, please, Chester. Through real-world evidence and clinical publications, we can continue to collect data that demonstrates that our products are safe, effective, robust, and incredibly versatile.
Most importantly, they're simple for the surgeon to use, even in really complex wounds or in difficult surgical environments such as war zones. Move to the next slide, please. Every day we're listening to the voice of our customers from around the world. Surgeons and nurse practitioners have dedicated their lives to developing superior outcomes for their patients. Our new product portfolio and line extensions are designed to provide solutions for unmet needs for these medical professionals. That drives the use of the NovoSorb products in new indications, new applications, and new geographies. In FY 2025, we continued our strategy of investing for growth. I am really pleased to report that we achieved a record number of regulatory approvals during the year. This really helps add to our total addressable market potential. It is a credit to all of our teams that help deliver these approvals.
Just to be clear, line extensions, as represented in some of these products, represent an extremely cost-and-time-effective expansion strategy for PolyNovo. We can base our regulatory submissions off shared preclinical and laboratory data. We can use the same manufacturing facilities, the same quality systems, the same equipment and processes. We can garner our well-trained sales teams to penetrate the hospital systems more deeply, all aimed at achieving significant growth outcomes in new indications in a very cost-effective manner. As we launch multiple variants of NovoSorb MTX, we are confident of driving adoption of this matrix in soft tissue reconstruction and complex wound management, including chronic wounds such as diabetic foot ulcers. I have to say, after having the privilege of talking with surgeons and our sales teams over the last few months, I truly believe MTX is a game changer for PolyNovo and for our stakeholders. Next slide, please.
FY 2025 was a transformative year with significant milestones being achieved. Enrollment was complete for the BARDA epipital clinical trial that is designed to obtain an on-label claim supporting the use of NovoSorb BTM in full-thickness burns in the U.S. Additionally, the three-month data review for this trial was successfully completed for all eligible trial participants. After correspondence with the FDA, the optimal PMA submission strategy has been finalized, and this enables us to have the most efficient overall regulatory review process and approval timeline for the PMA product. During the year, we also progressed larger and smaller sizes of BTM and MTX portfolio products, moving them from the research phase into the design and development phase, a particularly important milestone as we move to commercialization and regulatory approval. Additionally, successful preclinical results were generated for our final hernia mesh prototype.
I have got an example here for those to see. This mesh is manufactured from a novel biocompatible resorbable polymer monofilament. You can see that it is a woven mesh product. It provides both strength and flexibility, and the initial results from the preclinical studies were really very impressive. The next steps will be to complete a comprehensive comparative clinical study for which the data can be used for applying for a 510(k) clearance from the FDA. In parallel, we will look to finalize the marketing strategy and the commercialization pathway for this product. A strategic review is currently underway by the team to optimize and prioritize the new product pipeline. We're looking to improve our processes, continue to deliver research and productivity, faster time to market, and improve value creation. That's a work in progress.
With that, I will thank you for your time, and I'll hand over to Jan, who will provide the financial results for FY 2025.
All right. Thanks, Robyn. Next slide, please, Chester. All right. Starting off with commercial sales, we achieved just over $180 million in NovoSorb sales, as Robyn mentioned, up 28.9% on last year, which is an increase of $26 million in dollars. A great result. BARDA revenue was $8.6 million. It was down 22.8%, but that's expected as the pivotal [audio distortion]. We achieved a net profit after tax of $13.2 million, up 151% on the prior year. EBITDA was $11.2 million, up 209% on the prior year. Operating leverage continues to improve, with operating expenses increasing by 19.4% compared to sales growth of 28.9%, which is really pleasing to see. Next slide, please. One more slide. Thanks. As mentioned, we achieved 28.9% commercial sales growth, and underpinning that result has been the strong momentum of record monthly sales. These are important milestones that we've achieved three times this year.
We achieved record sales in November at $10.1 million, March $11.9 million, and following in quick succession was June $12.8 million. Pleased to report for July, we've recorded sales at $12.2 million. A strong start to the year on the back of what was a record month already in July, which is fantastic. We'll move on to the U.S. results now. Next slide, please. Thank you. Over the U.S., we experienced strong growth in the U.S., achieving sales of $88.4 million, up 28.7%. We added 243 new customer accounts for the year. Following the launch of MTX, we experienced strong growth, recording sales of $2.1 million in the first half, followed by $4.6 million in the second half, resulting in MTX sales of $6.7 million for the full year, with recurring sales orders across many accounts, which was great to see.
Profitability in the U.S. continues to increase year on year, and the U.S. business is generating significant cash flows. The U.S. sales team continues to go from strength to strength, driving demand, servicing customers, and expanding the use of our products across many indications in addition to difficult burns. Next slide, please. For markets outside the U.S., they performed very well, where we achieved sales of $30.3 million, up 29.6% in the prior year. We had first sales with recurring orders in the Czech Republic, Malaysia, Malta, Macau, and Peru. The U.K. performance was very strong, recording sales of $7.5 million, up 51.9%, along with other key markets such as Canada, Turkey, and France. Pleasing to report that India had sales grew by 81%, and we've now [won 37] tenders, with MTX now registered in Australia, Canada, and India.
This will only further drive sales growth and expand the use of our products, not just across burns, but in trauma, plastics, and reconstruction. I'll move on to cash now. Next slide, please. Pleased to report, we ended the year with a strong balance sheet and cash on hand of $33.5 million. We fixed the issues with data collection in the U.S. by working on this in-house and with our 3PL partner. With these issues now overcome, we recorded positive cash flow from operations of $3.1 million for the year. As pre-announced recently, the remaining CapEx required to complete the new manufacturing facility is $8.5 million, and this will be paid by installments during FY 2026. The majority of this will actually be funded by collecting all the remaining overdue U.S. debtors, which are coming in.
We've also got access to a $7.5 million equipment finance facility should we continue to use it. Also, pleased to report the new R&D innovation center is complete and has been occupied by the R&D team. They're enjoying their new space and all the room. The new manufacturing facility is on track to be operational by December, and it's also on budget. Apart from the remaining CapEx for the new facility, future CapEx requirements will be minimal and incidental to our operations. In addition to our existing manufacturing facilities, the new manufacturing facility adds an additional capacity of equivalent to $500 million in annual sales. To conclude, with our strong financial performance and balance sheet, coupled with our new facilities, we are well placed to support and fund growth globally, particularly as we enter larger markets such as China and Japan in due course.
I'll now hand it back to Robyn, and we'll go from there. Thanks, Robyn.
Jan. Next slide, please, Chester. One more, please. Just to look at the outlook for this year, we're really focusing on disciplined execution. We have huge opportunities within looking at supplying for the increased demand for BTM across both burn and wound indications. We've got amazing excitement around NovoSorb MTX growth, enhanced by a full launch of the MTX 6 mm product, which is now approved in the U.S. As I've said, we're moving through our development pipelines with the ability to submit the BARDA epithelial clinical trial and PMA this year and generate additional clinical data to support growth in new indications and support our sales teams as they look to expand into new indications and new regions.
We're also looking to do this in a way where we are fiscally responsible, so continuing to focus both on growth and profitability to ensure that we align our expenditure with our revenue and continue to see the revenue increase fall to the bottom line. This enables us to continue to look to expand. As Jan said, our new facility is looking amazing. We're very excited to move into that in this financial year. We're also excited to see the fact that the plans that have been in place for the last couple of years are really coming to fruition. We will be going through the next stage of evolution as we move through to this continued growth plan for the organization. We have set ourselves up to have a very successful year in FY 2026. With that, I'll hand back to David.
All right. Thank you very much, Jan and Robyn. Just a few things to emphasize, I think, and perhaps slightly differently. First of all, let me just say something about cash flow. You can see in that presentation that we ended 30 June at $33.5 million cash at bank and cash equivalents. I just want to emphasize, because Jan didn't mention it, but that is after paying down debt of $4.8 million and after paying $13.8 million for the new factory. It's pretty impressive, and we expect operating cash flow to keep increasing this year. The second half of FY 2025, which we're now just referring to, we had operating cash flow from operations of $15.8 million, and we expect that profit to keep dropping to the bottom line. What's going forward? We ended 30 June at $33 million cash in the bank.
We've got only about $8.5 million still to spend on finalizing the new factory. The R&D side of that, by the way, is now complete, and the team's in there. We're getting close to that. As Robyn's optimistically thinking, we'll be finished this, certainly the lockup and commercial stage by the end of this calendar year. There's still $8.5 million to be spent, but we've got operating cash flow flowing through. As I said, it was $15+ million in the second half of this financial year. We see those profits still continuing to drop through to the bottom line. Pretty happy about the cash position we're in and the gearing position we're in. Everybody knows what my attitude to this is in terms of sales. Our margin is very high.
The engine room, which remains for us in the U.S., is very powerful in terms of its profitability, very powerful in terms of the quality of people there. As I said just recently, the U.S. was looking to put another eight people on. When we did the last webinar a month ago, I told you that there are 88 people on the road in the U.S. Guess what? The revenue was $88 million. It's a numbers game. The quality of people we're getting in the U.S. is second to none, driven not only by the leadership, but more particularly by the product itself and how successful that is with surgeons and so forth. I'm really happy about the cash situation in the company because we're just about out of our CapEx. We've got operating cash flow.
I said a month ago that we had, and we announced, a record month for June, which was $12.8 million for the month. You can do the extrapolation yourself. As you know, it's still a little bit lumpy, but that lumpiness is going to go over time as we get more products, as we get more geographies, as we get more people on the road, and so forth. I can see it myself, and you'll see it when you look at those record months in November, in March, and in June. I can tell you, we've just had a board meeting this morning, and we saw the July results, and there's been no cliff. I'm expecting that this year we'll have another, some other record months. You know, what does that mean for sales for the year? I don't know. We've never given guidance.
The people on the line, from the analysts, will give you a better sense of that than I'm prepared to do. I think that's really important. I think the other thing about the U.S. and Australia and the rest of the world, for example, is MTX, which you all know is roughly, to put it crudely, a BTM without the lemonade on the top. We've had tremendous growth from launch at the end of last year in the U.S., and we expect that to continue. As Jan just said, the interesting thing is when you look at the first half, we sold $2.1 million of product in the U.S. in MTX. In the second half, that was $4.6 million. I've seen some recent numbers that tell me that is not diminishing.
I've just come back from New York where I've had a meeting with one of the greatest KOLs there in plastics, and he is very excited about the prospects for MTX in the U.S., in the plastics area, and in the orthopedic and the podiatry area. This is a big opportunity for us. I noticed on social media that some of our shareholders who are doctors are also seeing this, even perhaps more bullish than I can be, if you like. I think that's a really important point that we've started July well, that we have got very optimistic views about where our operating cash flow is going to come from this year. We see not just the U.S.
The U.S. is an engine room, but the numbers that Jan just read out with respect to the growth in places like Canada, in places up 48%, cases like the U.K. up 51%, France 300%, but you know, off a very low base, but even places like Turkey 36% up. This is very, very heartening. Canada in particular, just let me reemphasize, I made the point about how many people we've got in the U.S. on the ground. We've got now about three people and a couple of support people in Canada. That is going to drive the Canadian numbers in the same way as we see in ours and the U.S. as well. That's really interesting. I think the other thing, just to emphasize on that, sales in the rest of the world is the first sales that we had into places like Malaysia, Czech Republic, Malta, Portugal, Peru, et c.
More interestingly, we've now had the second orders in those places. Not just an order, for example, out of Malaysia, but a second order. It just tells you, I think, something about how the surgeons see this. I was lucky enough on behalf of the Australian government to be in the Philippines just recently, and they introduced me to the Head of Surgery at the defense hospital and a number of surgeons that were in Manila. The interesting thing is how much these surgeons sort of travel around the world. There were a couple of people there who'd been working in Boston and really come home to Manila and desperate to have our product. There was one guy who'd been spending the last two years at the Alfred Hospital working with Heather Cleland out on the burns unit and again come back home and really keen.
It's not just that 400 now articles that we've got out in what people are using this for, but we're seeing that on the ground with surgeons that are sort of working around the world. You can imagine, for example, in places like India, how many surgeons are there that have been trained not only in the U.S., but more particularly in the U.K. There's a lot of sharing of information going around, and that's really fantastic not just from the company's point of view, but I think it's fantastic for our salespeople to see how good our product is. I saw an article overnight, which hasn't been published yet, but will be published shortly, coming out of Serbia, where a 14-year-old girl had had her whole head ripped off, and they'd reconstructed it using BTM.
That will be published in the next couple of weeks, I think. They also did two cleft palates. We could sit around here for months talking about how you could use this product, but surgeons are leading us as much as we're leading them in terms of uses for our product. That's just so, so exciting in my opinion. I think I've probably talked a little bit too much, but I just want to emphasize a couple of those things anyway. I haven't mentioned beta cell, which is the diabetic foot ulcers, about the cell therapy that the guys in Adelaide are doing. That paper in various forms has now been given four times around the world in major conferences and has elicited a lot of interest from cell companies and places that are working on stem cells in particular.
I think we've, you know, I'm very excited about where all that's going. The interesting thing, if you go back and look at one or two of those papers, they are on the ASX, but one, the first one that was given was in Copenhagen. If you go and look at that, there's some very great detail in it about why our foam is unique. I think when you're close to it like we are and you pick up a piece of foam, it's a piece of foam. What the guys in Adelaide articulate very well is not just the vascularization capabilities of the foam, but the size of the holes in the foam and the need for the exact size for cell delivery and so forth.
One of the things that makes me most excited is when I talk to Novo Nordisk, who have Ozempic, as you probably all know, and is now the largest market cap company in Europe, bigger than LVMH and so forth, even though its share price is off, it's still the biggest, is that their view is all of these cell therapy companies around the world, and we're not talking about just about diabetes, but we're talking about thyroid, we're talking about all any sorts of diseases really, they're all going to need a delivery platform. The delivery platform where in the past you might have been injecting into the liver is not something people want to do.
We're really well placed, I think, to have a separate silo for our business, one silo which is wound care in and out of the body, in the body being hernia and breast and so forth, but one silo being cell delivery and medicine delivery. I'm really excited about where Professor Toby Coates is heading and Professor John Greenwood is heading to with that. If you haven't seen it, then I think there's a beautiful webinar that Toby Coates has been interviewed, I think, by [John Hester at Bell's]. It's really enlightening. I think that's the other great thing for us. All right. We, as directors, are in a blackout period at the moment, but I think after this, we're going to be free to go. I might just, instead of keeping rambling on with no notes, open it up to Jan, who will direct some questions. Jan, please.
Thanks, David. We'll actually go to the analyst questions. We'll dial it in, and then we'll go to the written platform questions that have been typed in by viewers. If you could patch in the first caller, that'd be great. Thanks.
Jan, do you want to, I'm sure I might also make some comments.
Go ahead. Look, I guess once we complete paying for the manufacturing facility, like I mentioned, another $8.5 million, and the way things are going, you know, the business will be generating free cash flow in the second half. With that, obviously continue to build cash on hand, and we manage our deposits accordingly to maximize interest. It does then present, you know, I guess we've got, I guess, a bit of a war chest for other things. The important thing is to keep doing what we're doing and investing in that. That's line extensions and research and development for new products. You've seen the hernia product, which Robyn held up today, which is a lovely device if you get to hold it yourself. There'll be more work that needs to be done around that as we move to a larger preclinical study.
We're in a good position, and it's something we've been working really hard towards. It's something we said when we raised the $53 million back in 2022. What we said we would do, we've done pretty much on all fronts. It's a good position to be in. I hope that answers your question, Leanne.
Leanne, let me just add to that. I mean, look, we've got $33 million in the bank. You know what our operating cash flow dropping to the bottom line was for the second half. I've told you that we've started the year very positively as well. We're still not, you know, so even if we doubled our cash this year, we're not in a position where it makes any sense to say, we're going to be like Sam at Pro Medicus and buy back shares, you know. I think we'll get through this year and see where we end up. There's no discussion yet at the board table about share buybacks, dividends, or whatever. There are quite a number of interesting things on the near term horizon for us. I think we'll keep our powder dry, Leanne.
Okay, thank you. Can we talk about run rate? You mentioned June run rate in terms of revenue was over $12 million. July is looking the same. If we multiply that by, it was over $13 million. If we multiply that by 12, we get to like $156 million, which, when we look at consensus numbers, is really pushing up against consensus numbers. Is there any reason why you think we won't, or PolyNovo won't, be able to beat fiscal 2026 consensus estimates, particularly given how you're tracking in some of your key markets and where MTX is going?
Look, I'll answer that, Jan. I think, as you know, we've never given guidance, and it's pretty hard to keep up, to be honest, with the record months as they come. As you see in Jan's report just then, a record at the end of last year of 10, a record in March of 12, a record in June of 13. I posed the rhetorical question, can you just multiply that by 12? No. Will we have a record 14 or 15? We don't know. We're not going to give guidance on that. You know the maths as well as I do, Leanne. There's nothing, we don't see anything on the horizon that's going to prevent us from doing that. On the contrary, new countries, we've got some applications already to add to those countries, new indications, MTX in the U.S.
There's a lot of positives going before you even go into what the cell therapy guys are doing.
Okay. Can we focus in on the U.S.? You mentioned previously you had 88 salespeople on the road and delivered $88 million in terms of revenue. You've previously spoke about sales per salesperson or revenue per salesperson of about $1 million being the target. Has that target increased? Are you going to get more operating leverage out of those salespeople, or is growth likely to come from having to add more salespeople in those markets?
No, I think it's probably better answered by Ed Graubart, who runs the U.S. The $1 million was really not a target. It was just a, that's what I think a salesperson can add. We've got people in the U.S. who have gone to $3 million. We're not trying to necessarily constrain them, but that's probably in some markets an indication that we should have more people in the market rather than just continue to grow. We're continuing to expand what our expectations are, and the salespeople themselves are stepping up to the plate. Where's all that going to lead to? We're already number one in deep burns and so forth in the U.S. Even if we've got 50%, 60% of the market, there's still 30%, 40% to get. Let's put that aside. MTX is going to be a big growth engine for us.
Just bear in mind, not to get too excited about it, that when I buy a piece of two inches by two inches for my diabetic foot ulcer underneath my foot, it's very different than spending $15,000 on a burned arm. We'll sell a lot more pieces, and you can see already from the data in Robyn and Jan's reports that we're selling, the number of pieces we're selling is growing exponentially. That's because the sizes are coming down at the same time as we're growing burns and so forth. We don't see anything at the moment on the horizon, not to be too cavalier about it, that's going to stop us from continuing to grow at these sort of rates.
Okay. Just one last question before I leave it there. Is price increases in the U.S., you mentioned 10%. How should we think about price increases going forward?
I think the simple answer, if you'd asked me this question last year, Leanne, and you probably did, is that there's a lot of fat between us and some of our competitors like INTEGRA. It's a natural question to say, hang on a minute, if you're selling at $1,200 for a 10x10 and INTEGRA's at $1,800, why is there such a gap? Why don't you increase the price? We have increased the price, as you just said, by about 10% this year. I think one reading of that is that we have still got some scope to do that. However, there are regulatory changes afoot in the U.S. in terms of how people are going to get reimbursed and compensated. That means we just need to take a cautious approach to the way in which we go about price increases.
You'll know, like everybody does, that Trump is trying to drive costs out of the healthcare system. We are so competitive compared with just about everybody that it's not going to be a big issue for us, I don't think. Let's just have a healthy time to sit back and see how that plays out in the next couple of months, really.
Okay. Thank you very much. I'll leave it there and go back. Thank you.
Thank you. I should have said as well, Leanne, this issue of price increases also goes to the issue of tariffs because it's a sort of subset of the same issue. I think we've made it pretty clear in the past that the tariffs, whether it's a 10% or a 20%, is of, I won't say no consequence to us, but it's a small number when that tariff is placed on what our cost is as opposed to what our selling price is. We don't see that as an issue at all.
Okay, thank you.
Thank you. The next phone question comes from Shane Storey from Wilsons. Please go ahead.
Good afternoon, everyone. My first question is actually going to be for Robyn, please, specifically on MTX. I was hoping you could share some feedback around the indications and clinical situations where that product is developing a following. We've even heard of some cases where it's being used in conjunction with BTM, even in the same patient, but maybe some detail on that, please.
Look, you're entirely right. The reason that we're so excited about MTX is it's really versatile. It's going to be able to be used in a whole range of wound and plastic reconstruction trauma indications. We're seeing surgeons use it in very, very deep wounds that they're looking to be able to use a product in. At this case, this is a really novel way of dealing with those deep wounds. We are seeing it being used in wounds that are deep and BTM being put on top of that wound to provide that extra covering and protection as the wound heals. You're entirely right. That's something that's really of great interest to us. As I said, we're getting some really interesting results in diabetic foot ulcers and chronic conditions where, fundamentally, we've had vascular surgeons coming back and just saying, look, it's amazing.
We're also seeing really positive results in quite difficult trauma wounds. Overexposed bone, exposed tendons, over prosthetic materials, it really is proving to be incredibly versatile. That gives us a high degree of confidence in the fact that we're able to grow this in a whole variety of areas. As David says, we are often learning from the surgeons. We've had a few groups of vascular surgeons into the Port Melbourne site in the last couple of weeks. They are coming up with all sorts of ways that they've already started to utilize MTX in areas that we hadn't considered. It's a very interesting product. It's showing amazing outcomes, surprising to some of our surgeons that it's so good. We see it as enormous possibilities for the future in a whole range of areas.
Yeah. Shane, I think the thing I would say is that when you think about it and you think about it, let's say from a plastics perspective, there are many operations, probably the majority of operations that those reconstruction guys are doing where they don't want the plastic inside the body. For example, I had something cut out of my nose recently. The surgeon cuts the nose, peels the skin back, makes a flap, cuts it out, and then puts the skin back again. In order to bulk it up, they'll often put some MTX in there now in order to get that bulked up. As the MTX disappears, like the foams do, it integrates with the local tissue as well. You're not only losing the bulk up, but you're getting some strength that sort of comes out of it.
You don't want the plastic in there, is the point. There's a natural market for it in that. The second market, as Robyn said, is where they haven't had enough depth. If I do an amputation, and it could be a deep amputation, just putting BTM on there with the plastic, with the foam, at, say, 2 mm might not be enough. We're seeing some surgeons going, okay, I'm going to have one layer of MTX, 2 mm , another layer of MTX, 2 mm , and then BTM. That table that Robyn put in her presentation, which shows what approvals we've now got out of the FDA and TGA, where you're getting 4 mm, 6 mm , is just expanding that market for us as well. It's an interesting product.
I think what we're also going to see is the FDA, or more particularly the administration in the U.S., push a lot of these treatments into podiatrists and plastics outside of the hospital setting.
Thanks, Tim. Second question, I wanted to actually go back to something that Leanne was talking about with respect to run rates. When I sort of disaggregate the U.S. numbers and sort of noticed growth in BTM specifically, probably flattened over the second half, say, versus the second quarter. I was just wondering if you could, any reasons behind that? I wondered whether there was any cost of substitution of MTX going on in that, and then what the levers, other than price, which you've discussed, we should be looking forward to think about growth rates for BTM specifically in the North American market this year. Thanks.
I'll let Jan answer that. I think just following on from what I've just previously said, we don't see, and I certainly don't see yet, any cannibalization. At some levels of the BTM, it's complementary in the sense that it gives you more depth for some wounds, but not cannibalizing it.
That's right, David. The cannibalization hasn't really occurred, to be honest, and they're using it in conjunction, like Robyn said, we'll use BTM to sort of pack a wound and then MTX, and BTM, in some instances, will go over the top. Surgeons are doing that. In terms of, I guess you've called out, you may appear to be flattening out BTM, but in the U.S., if you look at the growth profile and how we started, we started out in big burns and we're in all the large burn centers now in the U.S. Naturally, there's going to be, not a plateauing, but a curve that will occur. At the same time, there's plenty of opportunity left in that market, particularly once we get our PMA approval and eventually reimbursement.
This is where MTX comes in and opens up a much bigger part of the market where surgeons need to use a device or a scaffold that doesn't have the film on it that our scaffold does. Therefore, it's a one-step procedure. These might be for smaller wounds, for wounds that surgeons want to get in and out of hospital in the same day. It grows a market in some instances for us, to be honest. There might have been choices around, let's just work a skin graft on and send them home, and they'll have a terrible finish. They'll have a concave surface on their skin because they won't have a dermis, but it's a small wound. Why put BTM on it? Now they can put MTX on it and send them home the same day and get a much better clinical outcome.
It's really just about broadening what we offer because we want to be there across the entire reconstruction ladder and have a solution. We're on our way. It's heading in the right direction and we're seeing the results, as you can see today in the presentation.
Thanks. While I've got you, Jan, just sort of my final question, just some assistance on some of the KPIs that I like to model. I heard you call out the 234 additional hospitals. I'd like to know just where that U.S. number, like an end of period.
Yeah, we've got [crosstalk] 748 hospitals in the U.S.
Would I be right in thinking you probably add 10- 15 people in the U.S. sales team over the course of FY 2026? Would that be reasonable?
That's right. About 15 sales team we're looking at hiring.
That's it for me. Thank you.
I'm not sure that they're all brand new, Shane or Jan. I know that Ed had a few backfills, but then there's quite a few new hires to be had as well. As we said in the past, that's great. Hopefully, they're going to do a million dollars worth of sales themselves. It takes a little bit of time, depending on where they are and who they are, to get up to that million dollar level.
Thanks, everyone.
Yeah.
Thank you. The next phone question is from Rachael Harwood from Macquarie. Please go ahead.
Hi, David, Jan, and Robyn. Congrats on a good result. Just first question for me, just around the PMA submission strategy. I think you mentioned submission expected by the end of this calendar year. Is this still correct? I guess how long do you expect the FDA process to take for approval of this?
Yeah, thanks, Rachael. We're working towards that end of the calendar year submission timeline. It's backed on the requirement, which was always a design of the clinical trial, to have a 12-month review process that includes safety and efficacy review. We'll be submitting as aligned with the FDA with that 12-month data. We expect to see the last patients through that 12-month review process around the September-October timeframe. That allows us for that to get to submission sometime around the end of this calendar year. The timeframe for review of a PMA is obviously in the hands of the FDA to some extent. The average timeframes are, for a complex PMA, and this is a complex clinical trial, it's around the 12-month mark. It really depends a little bit on the questions they ask and any times, how long they stop the clock during that review process.
We have, and we're working very hard working with the FDA to try and make sure that when we submit that document, it contains all of the information they need from both a clinical perspective, a preclinical perspective, and a facility and manufacturing perspective to try and minimize the number of questions we might get. On average, we would expect somewhere around that eight to 12-month timeframe for the review period. We'll be in the hands of the FDA as to the total time before approval.
That's great. That's really helpful. Just final question for me, just around on the outlook slide, you noted a focus on reimbursement opportunity. Could you maybe just talk to what you mean by this?
David, do you want to talk that or do you want me to take that?
I think in healthcare in the U.S., a very big cost is the cost of wound care out of the hospitals, in the outpatient setting and in the offices, in particular plastic surgery and in particular podiatry. There is a review going on at the moment about where that gets to. That is going to reset, I think, the reimbursement criteria for people operating in that area. What is the opportunity for us in podiatry and in plastics? We'll review that. This review that's going on with the federal government in the U.S. at the moment is going to happen very quickly, according to their timetable. By very quickly, I mean before the end of this calendar year. I think it's widely expected that that is going to change and change very significantly. There could be a big opportunity for us there.
That's really helpful. Thanks so much.
Thank you. At this time, we're showing no further questions via the phones.
Yes. We can jump to the platform questions if you like, David.
Yep, go ahead.
All right. We've got quite a few. The ones we don't get through, we will reply by email. First question, do you need anti-rejection drugs for your type 1 diabetes cure?
Yeah. The answer is probably, I mean, it's a patient-by-patient thing. If people go back and have a look at that paper that Toby Coates gave in Copenhagen, one of the big advantages he has of using our product just under the skin is because you can topically apply immunosuppressants. I've anticipated the answer is yes, in general, but it's a patient-by-patient thing. As I said, that's one of the big advantages of us at the base. Don't take my word, because I really want to encourage people to go back and have a look at that cell therapy paper. Immunosuppressant topically given on the skin is one of the big advantages of it. A second advantage of it, by the way, compared with injecting the cells into the liver, is if those cells go rogue, number one, it's hard to see. Number two, you can't do anything about it.
Whereas if it's just under the skin, then you can topically immunosuppress, but if it doesn't go right, you could actually cut it out. There's a couple of advantages apart from, I know I'm going further than what the question is, Jan, but that's as best as I can do.
Nice. Thanks, David. There are a lot of questions on the level of shorting in PolyNovo and questions around strategies to overcome that, including share buybacks and similar things. Do you have anything you want to comment on there, David?
No, I mean, I've commented on it before, and I commented on it earlier in response to Leanne that there's no discussion at the Board yet about share buybacks. I don't think we need to. We'll get more cash this year, and we are getting more cash from July even. Would we consider it at some time in the future? Maybe, but we're not talking check stations at the moment in terms of our cash reserve. My guess, speaking personally, rather than the Board, is probably not at the moment. How do you solve it? You solve it by performance. One's foot in front of the other. If we're here in December and the cash is $50 million, then people are going to be thinking, hang on a minute, what is the strategy if I'm a shorter?
It's probably one of two things: that we're going to need to raise money. Read my lips. The second one is, maybe we'll get pushed out of the ASX 200. Chances are probably yes, but it's a relative thing. I think almost certainly yes. I don't think in this case, especially given the movements that we've had in our shareholder base and the number of offshore people that are buying out of Europe and out of America, that it's going to have a bigger effect coming out of the indexes as it's had in the past. I think it'll solve itself, even though it's up at 13% or something.
No worries. Thanks, David. Just a question on the CEO recruitment and the current status of that.
We're down to, I'm not sure if we've got the short, short list, but we're certainly down to interviews, which will be taking place this week and next. That's about as much as I can tell you because I don't know any more.
No worries. A question here regarding AVITA's products, Cohealyx and PermeaDerm. How does BTM and MTX compare?
They don't compare. I mean, I suppose they do compare, but there was a webinar given about five, six days ago. People should go have a look at that, where Jim, the CEO, is talking to some, I don't know whose shares, some share trader. It's worth having a look at that because he compares them himself. He talks about his product versus our product. We don't see them as a real risk. AVITA 's got its own issues to deal with in terms of its own funding and so forth, which I don't need to comment on, but it's obvious for everybody to see.
No worries. Thanks, David. Just another question here. How many people do we have on the ground in India?
Robyn, I was going to say 30, but you'll know better than me.
Yeah. We have just over 25, I think, at the moment on the ground servicing India. We are seeing real movement in the Indian market. We've been creating a market there for our dermal substitutes. They're doing an amazing job. We just actually had one of the largest Asian conferences in India. It just completed for burns. We were prime and center of that conference. I have to say our product caused a lot of interest. The feedback I received was that PolyNovo should be incredibly proud of what's happening in that Indian market, that the number of patients that we've treated in India, the benefit that we're bringing to those patients in terms of positive outcomes is fabulous. We see it as an ongoing opportunity. It's growing. It's delivering real results for patients.
There's a huge opportunity, obviously, in terms of the number of burns in India and also for our MTX products in terms of wounds and trauma. It's a market where we've got to make sure that the prices are right and that the healthcare system can support our products going forward. That's what we're working on.
I think we've said in the past that this is also a tender market. This is a tender by state, sometimes by hospital. I forget what the numbers are now because I don't see it every day, but it's more like 36 tenders we've won. There's probably a couple of hundred to get. I know we've got many, many tenders that have been submitted. There is a view from the Indian team that we're going to win most of those on the basis that it's just cost-driven and we're very cost-effective compared with our competitors. As Robyn said, there was a three-day conference, I think Friday, Saturday, Sunday last week. We had our Head of Sales in APAC, Valerie Young, over there and attended that conference, and so did Ed Graubart, our Head of the U.S., and he had a surgeon with him.
They spent some time not only at the conference, but I know they'll report to me about quite a number of hospital visits that she did. I think her comments, first of all, about the conference were that there were four or five pages on BTM itself. There was another five or six where BTM was part of the presentation. It's getting good traction. Everywhere she went, the surgeons were excited about the possibility of using it. Everywhere she went, there 's still some cost issues in terms of the way in which the hospitals themselves are equipped and funded. We're optimistic that we're still going to get a good market because of the tender process we're going through with government.
I think the last time I looked, we're up at about $1.5 million sales for the last year, $1.3 million, $1.4 million sales, which is nothing. It was that three years ago in the U.K. It will take off sooner or later. We're all pretty optimistic about it.
Thanks, David. There's quite a few questions on hernia and breast sling. Maybe it's worth just commenting on next steps and then pathway to market, whether it be direct or with a partner.
I think Robyn's already covered off a little bit on this, but Robyn, is there anything you want to embellish on that?
We're working through the programs. As I said, it is a novel polymer monofilament. It's a mesh for both the hernia and the breast sling. We do need to go through those preclinical studies. We need to generate the data required to get the approvals that include biocompatibility and resorption data that are required. As we work through that, we'll continue to update the market. They're great opportunities for us as we move forward. We'll continue to review the road to commercialization. It's likely that we will be looking to partner for those commercialization opportunities. We are focused on moving through that in the coming year.
Yeah, yeah. I mean, I think the other thing I would emphasize, Robyn and Jan, is that we've got a lot on our plate. Hernia and breast are very important, and we're not dropping the ball on it. We've got a big R&D team working on it. There are so many good opportunities coming out of MTX, out of new indications, out of new geographies, etc . You can see by what's happening with our cash that we've got lots to keep us busy. We don't need to cut corners on breast and hernia. We'll do it in the right way, one step in front of the other. As with everything, we'd like it to move faster, but it's got to be done in the appropriate way.
Right. Thanks, David. There's a question here. We haven't talked about our home market, Australia and New Zealand. We always tend to talk about the rest of the world and that fits into that. How is the Australian market going?
Robyn, do you want to?
I think if you talk to Val and the sales team, and I had the pleasure of joining their sales conference quite recently, they're really excited about the Australian market. They continue, obviously, to be the leader in the burns. We have incredibly loyal surgeons and hospitals that utilize our product if there is a need from a deep dermal burns perspective. They have now the ability to look at growing the markets through smaller burns, through the data that we're generating that supports BTM and other indications. Of course, MTX coming along. I think they're generally excited, particularly with the MTX opportunity. They're putting a lot of effort and time into learning around how we have built that market in the U.S. and applying that in the Australian context. It's an exciting time to be a salesperson for PolyNovo in Australia.
Yeah. I mean, the only thing I'd add to that, Jan, is that I'm aware, because I've been involved in a couple of them, discussions between the team and Valerie Young in particular and some quite well-thought-of plastic surgeons in Melbourne and Sydney in particular. There's real excitement building in that market itself. The other thing I'd say is don't underestimate the influence of Australia on the rest of the world. A lot of the stuff that's been going on in humanitarian areas, but also just in training, a lot of that has been coming out of Adelaide with Professor [Marcus Wavestove], who's not only running his own practice, but will run training courses for 30 surgeons in Serbia or Israel or somewhere. There's a fair bit of training and influence.
Australia is punching above its weight in terms of its influence on the rest of the world and surgeons in the rest of the world as to what can be done. Like us, people like Marcus are flabbergasted at what some of these surgeons are coming up with. I mentioned to you the 14-year-old girl who had her scalp ripped off. Marcus and I got sent that paper yesterday, and I know what his reaction was. It was something that he was involved in, in any case, in terms of advising. We're using Australia, and I know Ed uses this as well for the U.S., but we're using that experience to try and seed the rest of the world anyway.
All right. Thanks, David. A question on R&D expenditure, which has gone backwards in the past year. That was, I can tell you now, that was due to the BARDA trial, the activity dropping off in patient, in hospital costs decreasing. I guess the question is, is there an overall multi-year R&D program, and how do you anticipate R&D investment evolving over the next few years?
There clearly is a multi-year R&D program. We are actually just going through a strategic review of that, as you know, at this time, ensuring that we can really focus on value creation and have a clear understanding of the prioritization of that program. There are expenditures that you need if you're going to bring a product to market, particularly in our areas where you do have to go through appropriate preclinical studies, compatibility studies, and stability studies, all of which are required by the regulators. We build that into our R&D budgets each year and into the programs that we're developing and will continue to increase in those areas. I'd say the other thing that we're doing more and more of as we grow as an organization is focusing on clinical data and supporting some of our surgeons who are looking to have clinical trials run.
We're really trying to increase the amount of clinical data that we have to support our products, particularly in areas, new indications, because that really helps support our commercial drivers as we look to grow in those areas as well.
Got a couple of questions if you're happy to take some more before we wrap up. It's just gone over top of the hour. There's a question here on leverage and margin and how we see that, whether we see that expanding in the next, you know, over the short term, medium term. I guess I can answer that, but the answer is yes. We expect to grow top line and bottom line at the same time. It's evident we're starting to do that. We're relaxed about the analytical reports and what they've got in them. I guess we've proven our ability to run the business in a well efficient manner, but utilize our gross margin effectively. You've seen that come through with year after year of really good solid growth. The EBITDA margin now is starting to expand and expect that to continue to do so.
As you said, or as I said, the cash flow from operations the second half of FY 2025 was $15 million. July has not dropped off a cliff. We expect that operating cash is going to increase this year, so it's all good news as far as I'm concerned.
I finish up one last question just on China and Japan and timing and an update on partners and sort of market entry and what's required for market entry.
Yeah, yeah, so we've been certainly, you know, we have regulatory consultants both in the Japanese market and in the Chinese market that we've contracted with, that we're working with closely to ensure that we have a clear understanding of the regulatory pathway in both of those markets. We do know with the conversations that we've had with the regulatory consultants and with the regulators that we need clinical data to support registration in both Japan and China. We're ensuring that the clinical data and the other preclinical information we have is aligned with the requirements of those markets, and we continue to move through that regulatory process.
We are planning to have conversations with the Japan regulators, in, you know, around the next quarter, the third quarter of this financial year to finalize those, you know, the checklist that's required to be utilized in the Japanese market prior to submission. We're moving through those processes for both Japan and China. In these cases, the registration approvals, we can do everything we can to have the right data in the right format for those particular regions. It does take time to get registration approval. That is in the hands of the regulators at that point of time. At the moment, we're just working through that process.
Yeah, I've got a handful of questions left, but I think they can be probably addressed by email, and to some extent we've touched on most of them anyway.
All right, let's do that. Let's thank everybody for attending. I've got a feeling we'll be having another meeting shortly in any case. Thank you very much for coming. I hope it wasn't too much of the same from the one we had a month ago. As you can see, there's plenty to talk about, and we're pretty excited about it. Hold on to the reins.
Thank you, everyone.