Elutia's Q3 2025 Earnings Call: Contradictions Emerge on Commercial Infrastructure, Manufacturing Capacity, FDA Data Requirements, and SimpliDerm's Market Penetration

Date of Call: November 6, 2025

Financials Results

• Revenue: $3.3M total revenue, compared to $3.6M in the prior year quarter; SimpliDerm $2.4M (up ~18% sequentially), cardiovascular just under $1.9M (up 68% YOY, up 28% sequentially)
• Gross Margin: GAAP gross margin 55.8%, compared to ~49% in the prior year quarter; adjusted gross margin ~64% versus 56% a year ago

Business Commentary:

* Elutia's Strategic Sale and Financial Impact: - Elutia Inc. sold its bioennvelope business to Boston Scientific for $88 million in cash, streamlining operations and transforming its balance sheet. - This transaction validated the technology platform and allowed Elutia to focus on its core business, which includes the development of NXT-41 and NXT-41x.

• Revenue Growth and Product Control:
• Elutia's Overall sales were $3.3 million, down from $3.6 million a year ago, primarily due to sales from the discontinued Bioennvelope division.

• Despite this, revenue grew in SimpliDerm and cardiovascular products, reflecting a strategic move by the company to regain full operational control of these product lines.

• Cash Position and Financial Stability:

• Post-transaction, Elutia ended with $49 million in actual cash, providing a strong runway for development and approval of NXT-41 and NXT-41x.
• This financial stability was enhanced by the cash influx from the sale, allowing Elutia to fund product development and commercialization without dilution.

• Litigation Resolution:
• Elutia resolved 7 more cases related to the legacy FiberCel litigation, leaving only 6 cases remaining, with an estimated liability of less than $1 million.
• This progress brings resolution closer and reduces future financial liabilities, allowing Elutia to focus on its core growth initiatives.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted validation of the platform via the $88M EluPro sale to Boston Scientific and said the deal transformed the balance sheet; they reported improved margins (GAAP 55.8% vs ~49% prior year) and ~$49M cash after debt paydown, giving runway to complete NXT-41/41x development and commercialization.

Q&A:

• Question from Nelson Cox (Lake Street Capital Markets): Can you walk through learnings from EluPro development-to-approval-to-commercial rollout and which translate to NXT?
  Response: Primary takeaway: the team and regulatory/commercial playbook matter — hiring an expert CSO, building IP/validation methods and a VAC/commercial infrastructure de-risked EluPro and will accelerate NXT development and launch.

• Question from Nelson Cox (Lake Street Capital Markets): How will SimpliDerm be leveraged to support NXT commercialization and existing relationships?
  Response: SimpliDerm is sold into the same procedures and to the same surgeons, providing direct customer relationships and commercial infrastructure to seed and accelerate 41x adoption without changing surgeon practice.

• Question from Nelson Cox (Lake Street Capital Markets): How are you thinking about clinical evidence and data generation for NXT — will you need significant investment to drive education and adoption?
  Response: Core point: approval via the combination 510(k) does not require clinical data; the plan is to use robust preclinical PK/efficacy data and VAC marketing materials for early adoption while running clinical programs post-launch to generate conclusive evidence.

• Question from Junwoo Park (Cantor Fitzgerald & Co., Research Division): Are there manufacturing validation steps needed to ensure a smooth transition from SimpliDerm to 41 and then to 41x?
  Response: Key answer: 41/41x are produced in a separate GMP facility in Gaithersburg with tech-transfer, equipment and process qualification scheduled through 2026, and management does not expect manufacturing to be rate-limiting.

• Question from Junwoo Park (Cantor Fitzgerald & Co., Research Division): Now that cardiovascular is back in-house, how should we think about current run rate and sustainability of growth?
  Response: Takeaway: cardiovascular is back to roughly $1M per quarter with steady, not explosive, growth, very high gross margins (>80%) and a variable contract sales model so revenue largely drops to the bottom line.

Contradiction Point 1

Commercial Infrastructure and Contracting Teams

It involves the company's preparedness for commercial rollouts, particularly for new products, which is crucial for market penetration and revenue generation.

How does SimpliDerm's commercial presence support the rollout of NXT 41x? - Nelson Cox (Lake Street Capital Markets)

2025Q3: SimpliDerm is used in the same surgical procedures as NXT-41x, and its presence enables direct customer interaction with surgeons. The commercial infrastructure and contracting teams are already in place, which will support the commercialization of NXT-41x effectively. - C. Mills(CEO)

Are there bottlenecks in EluPro's growth being addressed? - Frank James Takkinen (Lake Street Capital Markets)

2025Q2: Initially, the commercial team put pressure on the operations team, who have since adapted to meet demand. They now maintain a 100% service level. - C. Randal Mills(CEO)

Contradiction Point 2

Manufacturing for NXT 41 and 41x

It affects the company's ability to produce and distribute new products, which could impact market penetration and revenue growth.

What are the manufacturing plans for NXT 41 and 41x, and what validation steps are required for a smooth transition? - Matt Park (Cantor Fitzgerald & Co., Research Division)

2025Q3: Manufacturing is separate from SimpliDerm, in a GMP facility. The transition will involve process qualification and tech transfer in our Gaithersburg, Maryland facility. Manufacturing is not expected to be a limiting factor. - C. Mills(CEO)

How has your time zone-based manufacturing facility strategy evolved over the past year? - Junwoo Park (Cantor Fitzgerald)

2025Q2: We now have a facility footprint that allows us to deliver product from our manufacturing operations in those same time zones as our customers. We've cut that delivery time to just a few hours. So we had to move the production to some other states to do that. - C. Randal Mills(CEO)

Contradiction Point 3

Clinical Data Requirements for FDA Approval

It concerns the regulatory pathway for new products and the level of clinical data required, which impacts product launch timelines and market access.

How do you plan to generate clinical evidence for NXT 41x? - Nelson Cox (Lake Street Capital Markets)

2025Q3: No clinical data is required for the 510(k) approval, but we are planning to generate conclusive data post-market. - C. Mills(CEO)

What clinical evidence or study design is required for FDA approval of NXT-41X's base matrix and drug-eluting versions? - Junwoo Park (Cantor Fitzgerald)

2025Q2: Both the base matrix and antibiotic delivery matrix will follow the same regulatory pathway as EluPro, with specific requirements for surgical meshes. - C. Randal Mills(CEO)

Contradiction Point 4

Manufacturing Capacity and Revenue Potential

It involves differing statements about the company's manufacturing capacity and its potential impact on revenue, which are crucial for investors to understand the company's growth trajectory.

What are the manufacturing plans for NXT 41 and 41x, and what validation steps are required for a smooth transition? - Matt Park(Cantor Fitzgerald & Co., Research Division)

2025Q3: Manufacturing is separate from SimpliDerm, in a GMP facility. The transition will involve process qualification and tech transfer in our Gaithersburg, Maryland facility. Manufacturing is not expected to be a limiting factor. - C. Mills(CEO)

How much capacity or revenue remains before capacity constraints become significant without the Gaithersburg facility? - Frank Takkinen(Lake Street Capital)

2025Q1: Current manufacturing capacity allows for about $140 million in EluPro revenue annually. Without expansion of the antibiotic disc, capacity is limited to $25 million to $30 million per year. - C. Mills(CEO)

Contradiction Point 5

Growth and Market Penetration for SimpliDerm

It highlights differing perspectives on the growth and market penetration of SimpliDerm, which impacts the company's financial outlook and market position.

How would you describe the commercial presence of SimpliDerm and how does it support the rollout of NXT 41x? - Nelson Cox (Lake Street Capital Markets)

2025Q3: SimpliDerm is used in the same surgical procedures as NXT-41x, and its presence enables direct customer interaction with surgeons. The commercial infrastructure and contracting teams are already in place, which will support the commercialization of NXT-41x effectively. - C. Mills(CEO)

Could you elaborate on the factors behind the Q4 growth deceleration and outline your 2025 plans for SimpliDerm? - Frank Takkinen (Lake Street Capital Markets)

2024Q4: SimpliDerm is distributed through independent distributors and through a partnership with Sientra, which was taken over by Tiger Aesthetics due to Sientra's bankruptcy. There was some disruption during this transition, but growth was achieved at 12% for the year. - C. Randal Mills(CEO)