ASX BRIEFS
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ASX BRIEFS
AROA BIOSURGERY LTD (ARX) - Healing Revolution: How Aroa's ECM Technology is Transforming Tissue Regeneration
Ever wondered what powers cutting-edge wound healing technology that's transforming patient outcomes while delivering consistent financial growth? Our conversation with Brian Ward, CEO of Aroa Biosurgery, provides remarkable insights into this innovative ASX-listed company.
Aroa has emerged as a high-growth soft tissue reconstruction powerhouse leveraging proprietary ECM technology across four product families. With over 7 million patient treatments to date, they're targeting a $3 billion market opportunity primarily in the US. What makes their approach particularly compelling is the dual benefit they offer – superior clinical outcomes alongside significant cost reductions for healthcare providers.
The numbers tell a compelling story: three consecutive quarters of positive cash flow, NZD$22 million in the bank, and ambitious FY26 targets of up to $100 million in revenue. But it's the clinical evidence that truly sets Aroa apart. Their recent study involving 830 patients showed Endoform Natural heals venous leg ulcers up to eight weeks faster than leading competitors – a life-changing difference for patients at risk of amputation. With a 40% increase in healing probability for difficult cases, it's clear why healthcare professionals are taking notice.
As Brian explains, upcoming clinical studies, expanding sales productivity, and strategic market engagement through major industry conferences are positioning Aroa for continued growth. Whether you're an investor looking for healthcare innovation or a medical professional interested in next-generation healing technologies, this episode offers valuable insights into a company transforming soft tissue regeneration.
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Andrew Musgrave Host
Welcome back to ASX Briefs, where we speak with the leaders of some of Australia's most exciting companies. And today we're joined again by Brian Ward, the CEO of Aroa Biosurgery, a soft tissue regeneration company leveraging its proprietary Aroa ECM technology to improve healing in complex wounds and surgical reconstruction.
Brian, thanks for joining me again and welcome back to the ASX Briefs podcast.
Brian Ward Guest
Yeah, great, Andrew, good to be here.
Andrew Musgrave Host
Now, we did speak last year, but it might be worthwhile just for the listeners who may be unfamiliar with the company, if you just provide a brief overview.
Brian Ward Guest
Yeah, so Aroa is a high-growth soft tissue reconstruction company. We have four families of products that are based on our Aroa ECM technology, addressing a total adjustable market in excess of $3 billion, mainly focused on the US. So, two ways that we sell through our own direct sales team and through a partnership with TELA Bio. The technology is well established. We've treated over 7 million patient treatments, predominantly in diabetic ulcers, venous ulcers, soft tissue trauma, hernia and breast reconstruction. Companies based out of Auckland in the corporate office and manufacturing developments here, and then we have a sales organisation in the US.
Andrew Musgrave Host
Okay, and sales of the Myriad product family are growing strongly, so can you share more about the market response and what's next for this product line?
Brian Ward Guest
Yeah, so Myriad has gone very well for us. It's a product focused on trauma and podiatric surgery predominantly. What we're seeing there is that we've got a rapid formation of new tissue. Typically, we only need a single application to achieve very good results and we're not seeing complications, which is quite unusual for these sorts of procedures. So, some really nice clinical data coming out in a range of different procedures gives us a huge amount of confidence for this product. I think the other thing that stands out about Myriad is that it's very versatile and it's almost like a universal product that can be used across a wide range of soft tissue reconstruction procedures.
Andrew Musgrave Host
Okay, now just touching on the financials. This is the third quarter in a row of positive net cash flow, with NZD$1.7 million generated from operations and NZD$22 million in the bank. So, what's driving this consistent performance and how sustainable is it going forward?
Brian Ward Guest
Yeah, look, I think we're. You know, on both sides both on the Aroa direct sales side and on the TELA Bio side we've seen good sales growth and I think part of what's driving that is clinical evidence coming through that these products certainly are best in class. Also, you know, we have a very strong value proposition for hospitals. So not only are we getting better clinical outcomes, but we're also seeing that we can significantly reduce the costs for hospitals but also make some operational improvements as well. So, I think there's a whole bunch of stakeholders that get better outcomes with Myriad.
Andrew Musgrave Host
Okay, and you've also reaffirmed FY26 guidance for between NZD$92 and $100 million in revenue and between NZD$5 and $8 million in normalised EBITDA, representing up to 20% and 90% growth respectively on FY25. So, what are the key growth levers that give you confidence in hitting those targets?
Brian Ward Guest
Yeah, I think what we're seeing is improvement in sales productivity across the board. You know so, both on the TELA side, but also on the Aroa side as well. So, we have 50 or so direct sales reps selling Myriad. That'll go to the high 50s this year. So, an increase in headcount, but each of those reps selling more than they did last year and more than they did the year before that. So, we're beginning to see that leverage come through operating leverage come through with the sales team and, as I said previously, clinical data. Our story is a lot stronger. We've invested in training, the team's becoming more mature as well, so all of that's contributing to just a stronger sales impact.
Andrew Musgrave Host
Okay, and just looking at the clinical data, two new peer-reviewed studies were published this quarter, including a real-world study showing Endoform Natural healed venous leg ulcers up to eight weeks faster than the leading collagen dressing. So how important is the clinical data like this in driving adoption?
Brian Ward Guest
It's super important. You know it's one thing to make assertions or claims about your product, but then it's another thing to be able to back it up with strong data, and I think what really stands out with this venous leg ulcer study is the size of the study. So, this is a study with 830 patients, and what we showed was that in the patients, particularly those patients that are most difficult to heal there was an improvement in terms of healing by over eight weeks. That's a massive amount of time. Every week that wound remains open there's risk for the patient. Many of these patients progress onto amputation, so fantastic result there. The other thing I'd point out with it is probably for that same group an increase of up to 40% in terms of the probability of healing for that wound as well. So really significant changes that make a big difference for the patient and also for the healthcare provider.
Andrew Musgrave Host
Now looking at market engagement. Your teams attended eight major industry conferences this quarter, including the SAWC Spring 2025 event in Texas with over 2,500 healthcare professionals. So how do these events contribute to sales growth and brand positioning?
Brian Ward Guest
Yeah, they're really important. I mean, it gives us a chance to get out in front of healthcare providers and present our data in key forums. Also, we find these conferences are important in terms of lead generation. So, attending these conferences is absolutely critical to getting our name out there, being able to share our data and discuss with surgeons, healthcare providers how our products make a difference for them and their patients.
Andrew Musgrave Host
Okay, and in closing, with operations now consistently cash flow positive, what are the top strategic priorities investors can keep an eye out for over the next 12 months?
Brian Ward Guest
Yeah. So, I think what's really important is new data coming through. So, we have two or three important studies coming down the line. So, our Symphony product we have a randomized controlled trial that's underway and we expect to report that out towards the end of this year. We have a trauma study coming out of our master registry as well, which is a large study, and we expect to report that out later in the year as well. And I guess the two other things are just seeing those improvements in sales productivity come through in terms of the financials at the half year.
Andrew Musgrave Host
Okay, Brian. Well, it's been great to chat again and to get an update on where things are at with the company, and we look forward to further updates from Aroa Biosurgery in the upcoming months.
Brian Ward Guest
Great. Thank you very much. I appreciate it.
Andrew Musgrave Host
That concludes this episode of ASX Briefs. Don't forget to subscribe and we look forward to catching you on our next episode.