Release Date: May 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BioStem Technologies Inc (BSEM, Financial) reported a significant increase in first quarter revenue to $41.9 million, up from $600,000 in the same period last year.
- The company achieved a gross margin of 95% in Q1 2024, an improvement from 82% in Q1 2023, indicating enhanced sales strategies and beneficial partnerships.
- BioStem Technologies Inc (BSEM) reported positive net income for the first time on a US GAAP basis, marking a significant financial milestone.
- The company has prioritized examination for a critical patent with the USPTO, enhancing intellectual property protections and distinguishing its products in the market.
- BioStem Technologies Inc (BSEM) successfully completed a rigorous two-year audit, aligning with strategic goals for uplisting to a senior stock exchange, enhancing transparency and regulatory compliance.
Negative Points
- Operating expenses for Q1 2024 increased by $32 million compared to the same period in 2023, primarily due to team expansion and increased service fees.
- Proposed LCDs by Medicare could limit the number of covered products to 15 out of approximately 200, potentially restricting patient access to established products.
- 60% to 80% of the private office volume is currently on the non-covered list, posing challenges in reimbursement and market access.
- The company is still in the process of becoming a fully reporting company with the SEC and applying to a national exchange, indicating ongoing regulatory and administrative tasks.
- BioStem Technologies Inc (BSEM) faces a complex reimbursement landscape that could affect product adoption and market penetration.
Q & A Highlights
Q: Could you expand on how the margins were improved through the sales process? And can that continue?
A: (Mike Fortunato, CFO) The improvement in margins primarily resulted from a high average selling price (ASP) of the MBO Route 2 product. The cost structure related to inventory production remained relatively stable. The continuation of these margins depends on several factors, including the outcome of upcoming LCD changes.
Q: Can you address the status of any application on a national exchange?
A: (Mike Fortunato, CFO) The company plans to register with the SEC through a Form 10 registration statement this year. Concurrently, an application to a national exchange will be made, aiming for near-term completion.
Q: How soon do you think these proposed changes will take place? And do you have any products that don't qualify?
A: (Jason Matuszewski, CEO) The proposed LCD changes are expected to be finalized by October. Currently, over 180 products are in the non-covered category. The company is actively engaging in discussions and providing comments during the LCD commenting period.
Q: Where do you see the company on international distribution as the US market picks up?
A: (Jason Matuszewski, CEO) The company is evaluating international opportunities while focusing on expanding its presence in the U.S. hospital systems. This includes clinical trials to support commercial payer coverage and discussions with group purchasing organizations (GPOs).
Q: Are you currently using AI, or do you see how it might aid the company moving forward?
A: (Jason Matuszewski, CEO) AI could be utilized in various aspects of the industry, particularly in improving documentation and note-taking by physicians in the private office segment. This would ensure proper qualification of patients for advanced skin substitute use.
Q: What is the company doing to create buzz in the hospital market to encourage faster adoption?
A: (Jason Matuszewski, CEO) The company is engaging with key opinion leaders (KOLs) and participating in major wound care conferences to promote its products. Additionally, it is focusing on generating robust clinical data to demonstrate the unique benefits of its bio retain processing technology.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
