Aroa Biosurgery Ltd · ASX:ARX
Aroa Biosurgery — Investor Presentation (July 2021)
41 slides from Aroa Biosurgery's investor presentation, Jul 29, 2021
Slide 1: AROA Capital Raising Presentation
AROA CAPITAL RAISING PRESENTATION July 2021 | ASX: ARX Unlocking regenerative healing for everybody
Slide 2: Important Notice and Disclaimer
|2 Important Notice and Disclaimer This investor presentation (Presentation) is dated 26 July 2021 and has been prepared by Aroa Biosurgery Limited (NZ Company number 1980577 / ARBN 638 867 473) (AROA, ARX or the Company) in connection with a proposed capital raising and includes information regardi
Slide 3: Not financial or product advice
|3 Not financial or product advice This Presentation does not constitute financial product or investment advice or a recommendation to acquire securities in AROA. It has been prepared without taking into account the objectives, financial situation or needs of individuals. Each recipient is solely re
Slide 4: Disclaimer
|4 Disclaimer No party other than AROA has authorised or caused the issue, lodgement, submission, dispatch or provision of this Presentation, or takes any responsibility for, or makes or purports to make any statements, representations or undertakings in this Presentation. To the maximum extent perm
Slide 5: AROA at a Glance
|5 AROA at a Glance Well established high-growth soft tissue regeneration company NZ$30-33m 68% Gross Margin 4 million+ product sales forecast for FY21, impacted by lower sales Procedures with FY221 and FX AROA’s products 6 patented Regulatory AROA ECM™ product families Approvals platform Provides n
Slide 6: June Quarter and Outlook
|6 June Quarter and Outlook Product sales guidance reiterated of $30-33 million for FY22 (up 39-53% on FY21)4 and gross margin above 70% Continued improvement seen in US medical procedure numbers New Myriad Morcells™ product line extension launched at Society for Advanced Wound Care conference 10-14
Slide 7: Offer Details
|7 Offer Details
Slide 8: Offer Overview
|8 Offer Overview AROA is conducting a capital raising of up to approximately A$52 million via an institutional placement and share purchase plan at $1.165 per share • Placement to raise up to approximately A$47 million (“Placement”) Placement • Up to 40.5m New Shares under the Company’s existing pl
Slide 9: Use of Funds and Balance Sheet
|9 Use of Funds and Balance Sheet • Remaining Hollister debt of NZ$11m to be repaid Use of Funds Amount from existing cash reserves – company will be debt free Investment in US commercial operations A$15m • AROA will have pro-forma net cash of NZ$65m1 post offer (net of debt repayment) R&D and produ
Slide 10: Offer Timetable
| 10 Offer Timetable Event AEST Trading halt Tuesday, 27 July 2021 Record Date for SPP Wednesday, 28 July 2021 Placement announced & AROA shares resume trading on ASX Thursday, 29 July 2021 Settlement of Placement shares Tuesday, 3 August 2021 Allotment of Placement shares Wednesday, 4 August 2021 P
Slide 11: About AROA
About AROA Unlocking regenerative healing for everybody
Slide 12: Unlocking Regenerative Healing for Everybody
| 12 Unlocking Regenerative Healing for Everybody AROA ECM technology offers leading regenerative performance at a significantly lower cost than other biologics enabling more patients to have access to the benefits of regenerative healing Price Biologics ‘Regenerative but weak’ AROA Synthetics Produ
Slide 13: AROA ECM - An Ideal Foundation for Regenerative Healing
| 13 AROA ECM - An Ideal Foundation for Regenerative Healing AROA’s products utilise the proprietary AROA ECM, which is a unique Extracellular Matrix (ECM) platform technology derived from sheep forestomach Laminin Collagen IV Elastin Vascular channels Collagen I & III GAG’s, hyaluronic acid, hepari
Slide 14: Substantial Growth Opportunities
Substantial Growth Opportunities ~$2.5B1 TAM Wound Care Soft Tissue Reconstruction Total Addressable Market Total Addressable Market $1.4B1 USD $1.3B2 USD e.g. Diabetic Foot Ulcers, e.g. Trauma, tumour removal, e.g. Hernia repair, abdominal Venous Ulcers, Pressure Ulcers, general surgery, inflammato
Slide 15: Existing Commercial Products
| 15 AROA PRODUCT RANGE ADDRESSES A WIDE RANGE OF APPLICATIONS AND LARGE ADDRESSABLE MARKETS US TAM Sales Brand name Use case FY’18 FY‘19 FY’20 FY’21 FY’22 FY23 Launch (USD) Channel Endoform Stalled complex Natural & $78m1 AROA FY’13 wounds Antimicrobial Existing Commercial Products Ovitex Hernia $8
Slide 16: Endoform Natural and Antimicrobial
| 16 Endoform Natural and Antimicrobial A unique “Tissue Matrix” used to “short-cut” healing in complex wounds such as diabetic foot ulcers and venous ulcers
Slide 17: Ovitex & Ovitex PRS
| 17 Ovitex & Ovitex PRS “Reinforced Bioscaffold” which combines layers of the AROA ECM reinforced with polymers for abdominal wall repair (hernia) & soft tissue reinforcement Licensed to Tela Bio for Licensed to Tela Bio for Hernia Breast Surgery
Slide 18: Myriad Matrix
| 18 Myriad Matrix Engineered ECM containing layers of AROA ECM suitable for soft tissue reconstruction, both dermal repair and surgical implantation
Slide 19: Myriad Morcells
| 19 Myriad Morcells A ‘Morcellized Bioscaffold’ suitable for a wide range of dermal reconstruction and complex wound repair procedures • Deliver a bolus of the AROA ECM biology to help kick start & sustain healing • Conforms to optimise contact with irregular wound beds
Slide 20: Symphony
| 20 Symphony “Proliferative Bioscaffold” for use in patients with severely impaired healing such as Diabetic Foot Ulcers & Venous Leg Ulcers in the outpatient wound care center setting FDA Clearance: 30 July, 2020
Slide 21: AROA Product Portfolio
| 21 AROA Product Portfolio Products to match wound type, stage & site of care
Slide 22: Clinically effective wound products
| 22 Clinically effective wound products Endoform demonstrates increased wound closure rates at 12 weeks in complex wounds compared to market leading biologics which lowers the cost of treating patients AROA Competitors (Tissue Matrix) 100 Better clinical outcome at 90 % WOUNDS CLOSED AT 12 WEEKS a
Slide 23: BRAVO Clinical Study
| 23 BRAVO Clinical Study 91 patient multi-centre study with simple and complex ventral hernias in United States 1.The level of recurrence at 90 days, 12 & 24 months are key metrics and have major cost implications for surgeons, hospitals, payors and patients. 2. Hernia recurrence rate based on numb
Slide 24: Sales Channels
Sales Channels Channel AROA Description Products Target Specialties Call poi Sales force (FTE) US Commercial Endoform Physicians, WOCN’s/ RN’s Outpatient Wound 20 field, 8 Inside & 20 operations based in San Myriad Podiatric, Plastic Centres & Inpatient Independent Sales Diego, with sales Operating
Slide 25: Manufacturing and Production
| 25 Manufacturing and Production Well established commercial manufacturing facility Unique process produces a Scalable high-quality product • Raw materials readily available • 12 successful Quality in New Zealand inspections since 2014 • Modular manufacturing design • 83 staff in Manufacturing allo
Slide 26: Management team
| 26 Management team AROA is led by a highly experienced management team with long tenure Brian Ward James Agnew Brad Adams Simone Von Fircks Dr. Barnaby May CEO, Founder CFO VP – Commercial (USA), VP – Operations VP – Clinical Dev & BVSc MBA BCom LLB MHA, BA Research, PhD +11 years with AROA +6 yea
Slide 27: Financial
| 27 Financial
Slide 28: Product sales
| 28 Product sales Product sales (Reported) Product sales (Constant Currency1) FY20: $21.9m FY21: $21.6m FY20: $21.9m FY21: $23.1m up 17% YoY up 6% YoY $13.9m $12.6m $11.9m $11.9m $10.0m down 10% YoY $10.0m down 8% YoY $9.0m $9.2m H1 FY20 H2 FY20 H1 FY21 H2 FY21 H1 FY20 H2 FY20 H1 FY21 H2 FY21 • Pro
Slide 29: Financial Results
| 29 Financial Results Normalised Profit or Loss2 Commentary Reported Reported Reported CC3 CC3 2021 2020 YoY % 2021 YoY % • Product gross margin was impacted in H1 FY21 as a result of NZ$000 NZ$000 NZ$000 lower product sales but improved significantly in H2 FY21. Product sales 21,575 21,924 (2) 23,
Slide 30: Cash flows
| 30 Cash flows 2021 2020 Commentary $000 $000 Cash flows from operating activities Net cash (outflow)/inflow from operating activities (5,007) 1,660 • Net cash outflow from operating activities of $5.0 million for FY21 compared to a net cash inflow from operating activities of Cash flows from inves
Slide 31: Future
| 31 Future
Slide 32: Catalysts
| 32 Catalysts Post-COVID AROA Direct Sales TELA Bio® Product Momentum Synergies Vaccinations expected to Fully dedicated improve throughout CY2021 field sales team. Myriad™ Clinical outcomes & cost Complementary products for expected to drive growth. savings driving increasing every phase of healin
Slide 33: AROA FY22 Outlook
| 33 AROA FY22 Outlook NZ$30-$33m1 GM product sales FY22 39-53% higher than FY21 improvement • AROA is well placed for FY22 following an improved second half of FY21 and sales transition • Focused on building our US commercial operations over next 24 months to drive revenue growth to take advantage
Slide 34: Contacts
CONTACTS Simon Hinsley Matt Wright Investor Relations Media m +61 401 809 653 m +61 451 896 420 shinsley@aroabio.com matt@nwrcommunications.com.au Visit our website www.aroabio.com and find us on LinkedIn at www.linkedin.com/company/aroa-biosurgery-limited/ 64 Richard Pearse Drive, PO Box 107111, Au
Slide 35: Q&A
? Q&A Unlocking regenerative healing for everybody
Slide 36: Appendix
| 36 Appendix
Slide 37: Reconciliation of Normalised Profit or Loss to NZ GAAP
| 37 Reconciliation of Normalised Profit or Loss to NZ GAAP Reconciliation of Normalised Profit or Loss to NZ GAAP Profit or Loss Reported Reported 2021 2020 NZ$000 NZ$000 Normalised loss before income tax (7,472) (3,886) Share based payments (2,010) (418) Transaction costs (1,607) (850) Other losse
Slide 38: Risks
| 38 Risks1 Topic Summary Topic Summary A large portion of AROA’s revenue is reliant on its US sales and distribution partner, TELA Bio. The ovine (sheep) rumen used in the manufacturing of AROA products is currently sourced from TELA Bio is a US corporation listed on NASDAQ, whose business focuses
Slide 39: Board of Directors
| 39 Board of Directors AROA has a highly experienced Board with healthcare, operational and financial experience Jim Mclean Brian Ward Steve Engle Phil McCaw John John Pinion II Non-Executive Managing Non Executive Non Executive Diddams Non Executive Chairperson Director Director Director Non Execu
Slide 40: International offer restrictions
| 40 International offer restrictions This document does not constitute an offer of New Shares of Aroa in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in Australia or any country outs
Slide 41: International offer restrictions (continued)
| 41 International offer restrictions (continued) Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commis