Big takes receipts here. I'm Kevin Denyeau. I'm the Healthcare Practice Leader at Century, and it's my great honor today to introduce one of our actual long-term clients and one of our top clients of the firm. This is Jason Matuszewski.
Excellent.
Thank you, Kevin.
We practice the best.
Yeah.
The CFO of the company is a good friend of mine. I think this is 1994, and he gave me the wrong pronunciation. I think he did it on purpose. I'm going to have to give him a call after this and see.
Good test. Good test.
Yeah. Jason's going to talk about BioStem Technologies, their kind of story, where they are, how they got here, and looking forward to it.
Awesome.
Thank you, Kevin.
All right. Thank you, everyone. Just a quick forward-looking statement. BioStem. BioStem is a commercial stage company focused on harnessing the natural properties of perinatal tissue for advanced wound care, specifically treating diabetic foot ulcers, pressure ulcers, and advanced leg ulcers. Our mission is to be a leader in regenerative medicine and focusing on innovating these products for this patient population. Just a little bit of history about BioStem. 2024 was a banner year for our organization. Record revenue, quarter- over- quarter, frankly, year- over- year. We finished the year just over $301 million in total revenue and had an amazing successful commercialization effort of multiple product lines, specifically AmnioWrap2 and VENDAJE AC. VENDAJE is actually a play on the Spanish word for bandage. Some of our original roots as an organization lend themselves to that Spanish name.
Our facility is in Pompano Beach, just north of Fort Lauderdale. It's about 6,000 sq ft. It's a CGTP facility or good tissue practices facility and also AATB accredited. We currently are traded on the over-the-counter under the stock symbol $BSEM, just around $200 million market cap. Huge delta between our commercial efforts and our success financially versus our market cap. Hopefully, we're near term to getting a Nasdaq listing here pretty soon. We have filed multiple Form 10 edits, hoping that our Form 10 goes effective near term and we'll have a successful movement from OTC onto Nasdaq. To talk about what is unique about BioStem, it's really about our proprietary processing methodology, which is called BioREtain. BioREtain retains, hence the name BioREtain, retains the natural properties of perinatal tissue.
When we looked at the processing methodology for tissue allografts in this space, we really said, "Hey, is there an opportunity in this processing methodology to really refine the process and minimally manipulate that tissue to yield the best concentration of natural properties?" I always use this analogy. It's like when you're going shopping for bread and you can build a sandwich in two ways. You can either build it with Wonder Bread, which is denatured, completely stripped out all the amazing attributes of good whole grain organic bread, but it serves its function as the two ends of the sandwich. You can also build a sandwich with, like I said, organic natural bread, right? It serves as a nutritional value, but it also serves as a structure.
When we look at our allografts, what you find is it retains all the natural properties, specifically anti-inflammatory cytokines like IL-1RA. IL-1RA is a pro-anti-inflammatory cytokine. Growth factors like PDGF beta, VEGF is another growth factor that exponentially is greater in concentrations because of the BioREtain processing methodology found in our products. The third attribute, which is really unique, is by the way we process our tissue, we ultimately have really nice long strands of collagen. Why is that important? These collagen strands aren't denatured through the process and end up being really nice roadways for fibroblast cells or the cells that ultimately work towards healing that recipient's chronic wound. What we found in other products as we looked at developing the BioREtain methodology is that these collagen strands in competitor products actually almost look like haystacks, they're very broken.
Those collagen strands are nice and long, allowing those cells to migrate or travel down the collagen strand structure. Three kind of unique attributes. There are significantly a lot more attributes, and we've actually published a peer-reviewed scientific journal about the BioREtain and all the attributes inside BioREtain. To talk a little bit about the IP portfolio. Currently, we have three issued patents around our placental tissue, two for BioREtain, and a multitude around a processing methodology technology called OxyCell. In total, we have just north of 60-plus patents, either in pending or issued, both in the method and comp, as well as different types of processing patents around our technology. To talk a little bit about the regulatory pathway, actually, somebody brought it up to me earlier when I was coming into the room. What is the regulatory pathway for your guys' products?
Uniquely, it's in this category called 1271/361. Typical drugs are manufactured in a BLA methodology or 351 pathway, or devices are 510(k), PMA, things of that nature. These human cellular tissue products actually sit in this 361 category, which is minimally manipulated for homologous use. The indication for homologous use for these products is a barrier or covering. They serve as a barrier covering over the wound environment. As I mentioned earlier, they're manufactured at GTPs or good tissue practices, which is very different than GMPs, which are good manufacturing practices. That's a kind of a step up in regulatory for manufacturing biological drug product. The tissues are all manufactured in this 361 environment and allows us to actually commercialize the product without having to go through rigorous phase one through phase three clinical trials. We get to work on commercializing the product right away.
To talk a little bit about the product portfolio. Awesome. We have a multitude of products across the wound care environment as well as the optic environment. AmnioWrap2 has been our leading flagship product throughout the beginning of 2024 into the late half of 2024. We launched VENDAJE AC, which stands for amnion chorion or the multitude of layers that are found in the placenta. The third product, which is a mysterious product, maybe anybody can guess it.
Cohen
No? Maybe? Maybe not? All right. It's called VENDAJE. It's actually the single-layer amnion product, which is the third product which only retains the amnion layer of the placenta. Last but not least is VENDAJE OPTIC. Clear picture here for your optic folks, right? No. It's actually placed anywhere in the orbital space, and it helps reduce inflammation in the eye. Patients that end up getting a chemical burn or something in their eye or, frankly, a scratch. We also see use cases in areas where after a LASIK procedure where they're trying to reduce inflammation in the eye and also keep actually moisture in that area. Think of it as using it instead of a steroid-based product, which ultimately reduces inflammation but also induces the dryness in your eye. This actually supports reduction of inflammation as well as increases hydration in that area.
To talk a little bit about product segments and kind of core areas where we're focused today, the majority of our commercialization effort is in the physician office segment. That is a combination of the private office, mobile healthcare, long-term care, and skilled nursing facilities. We currently do not have any sort of GPO or hospital contract agreements yet. Some of our goals as we kind of roll forward in 2025 and into 2026 is to focus on actually getting access into those facilities as well. Our core concentration, including our partnership with Venture Medical, is really focused on long-term care, skilled nursing, and mobile wound care environments. Areas where underserved patient populations, minority patient populations are prevalent and, frankly, do not have the means in which to actually get into the hospital. It actually is a really great environment for us to support patient outcomes.
To talk a little bit about how we actually recover tissue and then how it comes into our facility. Initially, we work with collection agencies throughout the United States. We currently work with five key agencies that communicate prospectively to mothers that are looking to seek donating their placental tissue. We utilize successful cesarean-based tissue, and that C-section actually has to be planned. The mother actually has to go through a rigorous social and medical history. For example, if the donor actually had a tattoo within the last year and a half, that donor would actually be ineligible, and we couldn't actually use that tissue. Some of the other challenges on the recovery side, if the donor actually looked and vacationed in an area of Zika, we actually couldn't use that tissue as well because there is no antigen to test for Zika in the donor.
We are very gracious of our donors and, frankly, very gracious of the ability to actually utilize this tissue and process it in a way and actually support a lot of the patients that, on the other side of the coin, which are typically Medicare beneficiaries 65 and up, that ultimately get a really good value from this tissue. The tissue is recovered within 24-48 hours. We receive it at our facility, and then we start the BioREtain process, which includes methods of specific medias that we use to wash the material and then ultimately create the end product. The product currently has a four-year shelf life. Part of the BioREtain methodology is actually we looked at a multitude of ways of actually sterilizing the product from e-beam to cryo-based sterilization, ETO, which is like a more chemical-based sterilization method.
The goal there and the reason why we looked at that is back to my point about collagen. We really wanted to focus on how do we keep those collagen structures intact. By using aggressive sterilization methods, it actually breaks that down. One of our big goals was to look at all of the processes throughout the steps and really maximize each process. Just a little bit about our facility. Like I said, fun fact, we're based in South Florida, and we're 18 feet above sea level. It doesn't sound like a lot, but when you're in Florida, it definitely is for hurricanes. It's about 6,100 sq ft. We've been a team of 30-plus years in allograft processing experience.
We just expanded the facility in the back half of the facility and look to have about an additional 40,000-50,000 square centimeters on a monthly basis expansion. We are looking to start getting into that expansion here in 2025. One of the unique attributes of our commercial effort is actually working with a key partner, Venture Medical. Venture Medical has been an amazing partner to work with throughout late 2023 and into 2024. If you got a chance to look at the P&L and some of the Form 10 as well, you can kind of see exactly how strategically we've placed our partnership with Venture Medical as the exclusive commercial arm for BioStem . They have developed an amazing platform called Venture OneView. We feel it's a very strong and compelling way to commercialize this product in the physician office segment.
To kind of talk a little bit more in detail about how we operate with Venture Medical, we utilize a process through what's called bona fide services. Those services essentially are services paid and remunerated to Venture Medical to commercialize the product on our behalf to the end user. The reason why we use this methodology is it allows us to commercialize the product into those sites of service and maintain our what's called ASP or average sales price. These products, specifically in the physician office segment, are reimbursed based on an ASP methodology. That ASP is updated on a quarterly basis. The manufacturer is the one that actually has to report the ASP. The ability to use Venture Medical through a bona fide services arrangement allows us to create continuity and stability in the pricing. Why? Because bona fide services are exempt from ASP price reporting.
It allows us to commercialize the product without having to have a disruption in our pricing. To talk a little bit about our clinical trial efforts. Currently, we have two DFU studies underway, one with the full-thickness product AC and a single-layer product amnion, as well as a venous leg ulcer study underway. We're looking to get some early readouts on the AC product for DFU later this year. Pretty excited about it. You might ask yourself, why are you guys doing clinical trials if you're commercializing your product? One of the goals here is to actually demonstrate through a rigorous RCT environment the efficacy of these products associated with the BioREtain methodology and really demonstrate that there is a superiority of BioREtain versus some of our competitors.
At the same time, it allows us to start dialogue with commercial payers and look at how can we utilize this product in the acute setting care, as well as hopefully get into some of the GPO and contracting vehicles within the hospital system as well. Be on the lookout for some exciting data on DFUs. Good thing I don't have any pictures on here for you guys, right? We did do an interim analysis of kind of some of the data because we are commercializing products. We have the ability to look at some of the wounds that we're treating on a daily basis. One of the papers that we published against a leading competitor is to demonstrate a BioREtain-based product versus a leading competitor and how that looked through a retrospective heads-up analysis.
What we found, ironically, is we reduced the number of applications that we had to use to get the wound closed. Ironically, the treatment days were less than our leading competitor. This is really good, indicating signs that hopefully when we look at our product within the RCT environment, we have a really good story to tell around BioREtain. When we're looking at real-world data, it's not a controlled manner. A lot of these patients, like I said earlier, are from minority and underserved patient populations. Real-world data is actually, sadly, much different than a very controlled RCT environment. To talk about the TAM, I know we get a lot of questions about how big is this market, right? Surprisingly and sadly, it is a very large market. Diabetes within the United States is, sadly, almost a parabolic curve.
Medicare beneficiaries over the next five to seven years also is a very aggressive curve. 20% of those folks have a chronic wound that's non-healing. When we look at the total addressable market, specifically around chronic wounds, we're looking at north of $7.2 billion. 18% of it is in advanced dressings. About 62% of that is in wound biologics. That's kind of the area that we play in. When you dissect that even further, we find that 65% of that wound biologics segment is specifically focused on amniotic tissue-based products or placental-based tissue products. That's kind of the area that we are currently playing in. Now, mind you, this is a dataset from 2023. As we roll forward in 2024, I think this dataset was actually going to grow even more. Why is that?
Getting access to these products in the mobile wound care setting as well as in the physician office setting, we're continuing to see growth in a lot of opportunities where patients that previously weren't getting treated and which led to amputations are now actually being seen. The mobile wound care segment is growing exponentially as well. It appears that more and more patients are actually getting product placed on them and more patients are getting treated, which hopefully, at the end of the day, when we look at the overall spend to the Medicare Health Trust Fund, that we see a reduction in cost because these patients are getting treated now versus leading to an amputation and, sadly, costing the Medicare Trust Fund exponentially more money.
As I mentioned, 2024 is a banner year for us, going from $16.7 million in 2023 to just north of $300 million in 2024. A lot of that has to do with our commercial effort and partnership with Venture Medical. When we started in 2023, we had the ability to only have access to two of the seven MAC regions. They had over 150 FTEs in the field. The real growth rate really came when we got access to all seven Medicare MACs in the beginning of 2024 and really started pushing forward with the platform, Venture OneView and the products. To dive a little bit deeper into the numbers, Q1, $41 million. Q2, $74 million. Q3, $82 million. We just recently announced our Q4 and annual earnings numbers.
Q4 was preliminary numbers as we're working through some comments back and forth on our Form 10 around revenue recognition. We hit $102.9 million in top-line revenue for Q4, leading to just over $300 million for the year in 2024. We're also an EBITDA positive company. I know that sounds odd for MedTech or Biotech, but it's an amazing success story. We built our cash position to just over $22 million by the end of 2024. We're continuing to grow that cash position today. What are our strategic initiatives? I know I only have four minutes, so I'm going to have to go fast. Strategic initiatives for going into 2025. Like I mentioned earlier, we have the ability to announce our results on some of our trials, specifically a DFU study.
Looking forward to the VLU study coming in early 2026, getting our access to GPO and IDN contracts into the hospital and getting our products deployed in possibly the acute setting. Looking at other sites of service in care settings like burns, ortho and other opportunities outside of the chronic wound market are strategic initiatives for us. At the same time, looking at potential M&A targets across the continuum of care. I say continuum of care because when we look at our product, our product is almost like a product of last resort, meaning a patient has to go through standard of care for 30-plus days and then ultimately has to qualify with specific A1C levels, offloading, smoking cessation classes, etc., before they can be eligible to use an advanced skin substitute.
What we're looking at is, is there accretive assets or technologies out there that we could ultimately consume and bring in that are accretive not only top and bottom line, but also give us access to more products across the continuum of care? As I mentioned, we're diligently working through the Nasdaq uplisting process. I wish it would go quicker. We've continued to kind of push forward on our Form 10. Our Nasdaq application actually is already approved. We're just waiting on the Form 10 to go effective. Hopefully we get through this last round of comments. We have one comment left to clear, which is focused on the revenue recognition part that I mentioned in our annual call just a few days ago. Hopefully, fingers crossed, we can get that pushed through in the next few weeks.
Those are the mugshots of the famous people that work at BioStem. This is the gentleman that's in trouble now from Kevin, for not pronouncing my last name correctly. My co-founding partner, Andrew Van Vurst , we started the organization back in 2014 on the passion of his dad's use of regenerative medicine. Excited to have these folks. Shawn is an amazing commercial officer. Shawn actually led the AxoGen team. If you're familiar with AxoGen, it's a great public company story using cadaveric tissue for nerve repair, tendon and nerve repair, and grew a commercial team from sub 10, 15 people to north of 100 folks. It had a great commercial success there. Board of directors, Tom Dugan, instrumental VP of Smith & Nephew's wound care division for a long time. Brandon, CFO at Midi and Genome Medical. And Dr.
Ken Warrington was one of the founders of Lacerta Therapeutics that ultimately had a great partnership with Sarepta Therapeutics on a viral vector technology platform. Last but not least, Pat Daly was the CEO of IQVIA, which is a medical glue technology that ultimately got purchased by KKR. Great team of guys to be a part of. We will continue to look at adding additional board members as we kind of work through the Nasdaq uplisting process.
Last but not least, our goals continue to look at expanding our product portfolio, looking forward to clinical significant data here at the end of this year and into next year, working to expand our payer coverage, focusing on GPO, IDN agreements into the hospital setting, as well as looking at Medicaid opportunities within the advanced wound care segment, and then continuing to deliver on top and bottom line for our organization. With that, I got 30 seconds. Thank you. Any questions? Yeah, go for it.
Congratulations on the distribution channel partner.
Yeah, thank you. Yeah.
Have you thought, if I understand the collagen connection, have you thought cosmetics?
Yeah. I mean, I think there's some unique opportunities for collagen. Cosmetic pathway is different. It's a whole nother regulatory pathway that can be challenging. Yeah, I think there's some opportunity there as well.
When you look at an acquisition, are you does it something already commercial, or would you consider something in development?
Right now, everything is going to have some commercial success to it. The targets are accretive top and bottom line, so they have to have top line and EBITDA positive revenue generation.