Aziyo Biologics, Inc. (NASDAQ:AZYO) Q4 2022 Earnings Call Transcript

So, we’re working that process in a very detailed bottoms-up way, but that’s our objective, and I’m quite confident that we can get there. We will also be working on growth initiatives that will actually bring more money to the bottom-line in a cost-efficient way. So, the Sientra deal is a great example of that where we’re generating a pretty healthy gross margin on that product line and this way we’ll gain access to a much bigger sales footprint in a — with a company, with a partner, where this is a really strategically important product for them to add to the bag. So, we’re actually quite optimistic about what can be done with that partnership and I know that Sientra, as a partner, is very eager to get that up and running as well. So that’s an example of something that we’re doing.

We actually have a number of other similar initiatives in the works and we’re looking forward to rolling that out over the coming weeks and months.

Ross Osborn: Okay, great. Thanks for taking my questions.

Operator: Thank you. Our next question comes from Josh Jennings with TD Cowen & Company. Please state your question.

Josh Jennings: Hi, good afternoon. Thanks for taking the questions. I was hoping to just ask about — it seems like CanGaroo momentum continued in the fourth quarter, pre CanGaroo RM approval. And was hoping to just better understand where — what is CanGaroo share today? And how should (ph) be thinking about continued momentum in front of CanGaroo RM approval? It sounds like it’s not going to really slow in 2023 and then RM could accelerate the share gains that you’re experiencing. But wanted to get a little bit more color just on share and the momentum it had in 2023 so far?

Randy Mills: Yes. So, Josh, thanks for the question. It would be difficult to sort of describe. I think, CanGaroo has, in a normal way that you would, market share in that — it really doesn’t share the market with anything else. It is not a direct. It is not a direct competitor to any other product and particularly it’s not a direct competitor to TYRX. The indications are actually explicitly different. So, in that case, it really is in a class by itself. We’ve seen really nice growth in the CanGaroo space absent the addition of RM, and we’re very pleased that we have this base business. We also have this partnership with Boston Scientific for the distribution of CanGaroo and that’s progressing nicely. Internally, we’ve also made some changes with our sales organization that we think will hopefully also focus and accelerate our sales force on the opportunities, particularly with RMs. So — or I’m sorry, with CanGaroo.

So, while we patiently or, if you’re like me, impatiently wait the launch of RM, we are seeing continued nice growth with CanGaroo at very healthy gross margins, and that is becoming a progressively more profitable business for us.

Josh Jennings: Understood. Thank you. And then, just on SimpliDerm, just wanted to ask about the Sientra partnership, and congratulations on that. And I don’t know if — I mean, our understanding is that Sientra has kind of mid-teen share in the augmentation segment and maybe stronger share in the recon segment. But just wanted to better understand how you view that opportunity? And does Sientra have any — just in terms of the Sientra salesperson capabilities to sell SimpliDerm, it sounds pretty straightforward, but any details you can share? And then, is Sientra currently selling an acellular dermal matrix product or partnered with anyone else? Thanks for taking the questions.