AORT Q1 2025: AMDS Launch Hits 100% at 150 Sites; On-X +11% YoY
- AMDS Launch Momentum: The strong early engagement—with 150 U.S. facilities in the IRB/value analysis process achieving a 100% hit rate for those targeted—indicates robust near-term uptake of the device.
- On-X Supply Recovery and Growth: Normalized On-X supply led to 11% year-over-year growth in Q1, and management’s comments suggest that alleviating previous constraints could drive further double-digit growth.
- Promising NEXUS Data and Acquisition Upside: Extremely positive 30‑day results showing a significant reduction in major adverse events support a high likelihood of PMA approval, which would activate an option to acquire the product and tap into an estimated $150 million opportunity, reinforcing long‑term growth prospects.
- Tissue Backlog Recovery Risk: The tissue processing business saw a 23% decline YoY due to the cybersecurity incident, and while management has cleared about 1/3 of the backlog in Q1 with expectations to resolve it by Q3, any delays in clearing the backlog could further pressure revenue and margins.
- Regulatory and Onboarding Delays for AMDS: The AMDS launch relies on overcoming complex hospital IRB and value analysis committee processes at 150 targeted facilities. Variability in approval timing could delay revenue realization from this product, impacting overall growth expectations.
- FDA Approval Dependency for NEXUS and Related Acquisitions: The success of NEXUS, which showed promising 30-day results, hinges on achieving FDA PMA approval in the second half of 2026. Any delays in this regulatory process, or issues with the associated acquisition option for Endospan, could negatively impact the anticipated future market opportunities.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +1.6% (from $97.43M in Q1 2024 to $98.98M in Q1 2025) | Modest revenue growth reflects only a slight increase in overall sales. While Medical Devices helped drive gains, the limited increase signals that other segments did not perform as robustly as they did in previous periods. |
Medical Devices revenue | +10.8% (from $71.11M to $78.80M) | Strong device sales contributed to a significant increase, consistent with prior periods where higher demand and improved product performance, particularly in aortic stent grafts and On‑X products, boosted Medical Devices revenue. |
Preservation Services revenue | -23.4% (from $26.32M to $20.18M) | A sharp decline occurred due to a backlog of tissue shipments related to a cybersecurity incident, contrasting with previous periods where increases in average sales prices had driven revenue growth. |
North America Revenue | -6.2% (from $50.93M to $47.79M) | Declines in North America revenue were primarily due to the underperformance of Preservation Services in the region, even though previous periods had shown growth driven by On‑X products and market share gains. |
EMEA Revenue | +10.3% (to $37.05M) | Robust growth in EMEA is maintained by continued strength in selling higher-priced products and favorable pricing, echoing earlier constraints that drove strong performance in FY 2024. |
APAC Revenue | +7.9% (to $8.21M) | Moderate growth in APAC continues from FY 2024 trends, supported by market expansion and improved distributor buying patterns, albeit at a lesser pace compared to regions like LATAM or EMEA. |
LATAM Revenue | +11.6% (to $5.93M) | Notable improvement in LATAM revenue is driven by increased unit sales in indirect markets, a continuation of the strong performance observed in previous periods. |
Operating Income | -91% (from $25.31M to $2.15M) | Severe margin compression occurred as a 63% jump in operating expenses, driven by higher administrative costs (including cybersecurity incident expenses and increased stock compensation), outpaced the modest revenue gains compared to the previous period. |
Net Income | Swing to a loss of $0.505M (from a profit of $7.533M) | A dramatic reversal in net income resulted from significantly increased operating costs and expense pressures—such as the cybersecurity incident—that overwhelmed the modest revenue increase, unlike the more positive margins seen in Q1 2024. |
Total Operating Expenses | +63% (from $37.64M to $61.43M) | Operating expenses surged mainly due to a significant increase in general, administrative, and marketing expenses (including $4.5M related to the cybersecurity incident and higher non‑cash stock compensation), contrasting sharply with the more controlled expenses in the prior period. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue Growth | FY 2025 | 10% to 14% | 11% to 14% | raised |
Reported Revenues | FY 2025 | $420 million to $435 million | $423 million to $435 million | raised |
Adjusted EBITDA | FY 2025 | $84 million to $91 million | $84 million to $91 million | no change |
Adjusted EBITDA Margin Expansion | FY 2025 | 200 basis points | over 200 basis points | raised |
Gross Margin Expansion | FY 2025 | improvement by about 100 basis points | 1 point of gross margin expansion | no change |
R&D Expenses | FY 2025 | closer to 8% of sales | at the higher end of the 7% to 8% range | no change |
Free Cash Flow | FY 2025 | expected to be positive | free cash flow positive | no change |
Quarterly Revenue Guidance | Q2 2025 | no prior guidance | $107.5 million to $109.5 million (13% growth) | no prior guidance |
Tissue Processing Revenue Recovery | Q3 2025 | no prior guidance | unfavorable impact fully caught up by end of Q3 2025 | no prior guidance |
AMDS Sales Growth | Each quarter of 2025 | no prior guidance | expected sequential growth each quarter | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Revenue | Q1 2025 | $94 million to $96 million | $98.98 million | Beat |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
AMDS device launch momentum | In Q4 2024, Q3 2024, and Q2 2024 the AMDS launch was described as progressing with HDE approval, early commercial shipments, and a “soft launch” with plans for gradual ramp-up. | Q1 2025 updates show strong momentum following HDE approval, with positive surgeon feedback, active training sessions, and about 150 facilities pursuing approvals. | Improved momentum with accelerated clinical engagement and training. |
Regulatory approval challenges | Previous periods detailed regulatory hurdles (e.g. PMA delays, IRB and value committee approvals) with anticipated approval timelines and submission milestones. | Q1 2025 acknowledged the complex process—with hospitals needing IRB, committee approvals, and training—but noted a 100% success rate with targeted facilities. | Consistent challenges with clear progress and facility onboarding success. |
On‑X valve market growth and strong clinical performance improvements | Q4 2024, Q3 2024, and Q2 2024 highlighted On‑X revenue growth (10–15% YoY), strong clinical data (significant mortality and bleeding reductions), and expanding market share globally. | Q1 2025 reported 11% YoY growth and reiterated positive clinical data (improved mortality outcomes via low INR regimen) despite some supply constraints. | Stable, strong performance with minor supply constraints noted. |
NEXUS aortic arch stent graft progress with FDA approval dependency | In Q4 2024, Q3 2024, and Q2 2024, NEXUS progress was discussed with completed enrollment/data milestones and an anticipated FDA approval in the second half of 2026. | Q1 2025 presented new 30‑day clinical data showing a significant reduction in major adverse events and reaffirmed the FDA timeline with acquisition option details. | Consistent progress with promising clinical data and clear acquisition contingency. |
Regulatory process complexities and variability in hospital approval timing | Q4 2024 explained the multi‐step approval (IRB, value analysis, training) and PMA delay, while Q3 2024 touched on complex hospital processes (in China for BioGlue), with no mention in Q2 2024. | Q1 2025 reiterated the need for individualized hospital approvals—with variable timing—but emphasized a 100% success rate among the 150 targeted facilities. | Ongoing complexities persist with consistent progress. |
Cybersecurity incident impacts leading to tissue backlog and revenue recovery challenges | Q4 2024 detailed a significant negative revenue impact (≈$4.5M), extended tissue processing lead times, and shipment delays due to the cybersecurity incident; Q3 and Q2 2024 did not mention this topic. | Q1 2025 noted a 23% decline in tissue processing revenue due to backlog, but about one‑third of the backlog was cleared and recovery is expected by Q3 2025. | Recovery is underway with improvements from the previous significant impact. |
Convertible debt risks and potential shareholder dilution concerns | Q4 2024 described plans to convert debt to common stock to lower net leverage and noted shareholder views, while Q3 2024 discussed cash/stock flexibility; Q2 2024 did not mention these issues. | No mention of convertible debt risks or dilution concerns in Q1 2025. | Not discussed in current period, suggesting a deprioritization or resolution. |
Global market expansion and increased geographic revenue segmentation | Q4 2024, Q3 2024, and Q2 2024 described international growth through regulatory approvals, footprint expansion in Latin America, Asia Pacific, and steady gains in EMEA and North America. | Q1 2025 provided a detailed geographic revenue breakdown: Latin America up 26%, Asia Pacific up 8%, EMEA up 14%, and North America down 6%. | Consistent global expansion with healthy growth outside North America despite regional disparities. |
Evolving clinical data on mortality reduction and reduced major bleeding outcomes | Prior periods (Q4 2024, Q3 2024, Q2 2024) showcased evolving evidence from AMDS and On‑X trials with strong results—showing significant reductions in mortality and bleeding events. | Q1 2025 reinforced these findings with new STS data demonstrating statistically significant mortality benefits for mechanical valves and low–INR On‑X advantages. | Continued robust clinical improvements reinforcing product superiority. |
Emerging concerns over declining mechanical valve usage trends | Q4 2024 included commentary addressing declining usage trends but countered them with strong clinical data and potential market expansion; Q3 and Q2 2024 did not mention declines. | Q1 2025 did not mention any emerging concerns, focusing instead on positive clinical data and market expansion for On‑X. | Shift from concern to optimism as robust data supports mechanical valve adoption. |
Transparency issues in detailed product performance and revenue breakdown | Q2 2024 offered limited product‐level details; Q3 2024 discussed higher‐level performance without granularity; Q4 2024 provided detailed breakdowns (including impacts of cybersecurity). | Q1 2025 delivered a comprehensive overview of product performance across stent graft, On‑X, BioGlue, and tissue processing with detailed geographical and financial metrics. | Increasing transparency with more granular and comprehensive disclosures. |
Pipeline expansion and acquisition upside opportunities | Q4 2024 and Q2 2024 discussed AMDS progress, NEXUS timelines, BioGlue strides in China, and strategic acquisition options (e.g. Endospan) with detailed terms; Q3 2024 focused on pipeline progress without acquisition comments. | Q1 2025 emphasized active pipeline expansion with robust AMDS launch, promising NEXUS trial results, and reiterated Endospan acquisition option details as part of long-term strategy. | Robust and consistent pipeline expansion with maintained acquisition upside opportunities. |
New market challenges from delayed revenue streams (e.g., BioGlue in China, reduced PerClot orders) | Q4 2024, Q3 2024, and Q2 2024 highlighted delays: BioGlue faced administrative and reimbursement hurdles delaying commercialization, and PerClot orders declined due to inventory management issues. | Q1 2025 did not mention these specific challenges. | Not a focus in Q1 2025, suggesting either resolution or reduced impact from previous delays. |
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Acquisition Timing
Q: When is Endospan buy option decision due?
A: Management indicated the option is triggered upon FDA approval—likely in 2H 2026—with a $135 million upfront payment plus an earn-out, and they are confident in funding this from robust free cash flow [doc12]. -
Growth & NEXUS
Q: What are FY ’25 On‑X/stent graft growth rates?
A: They expect stent grafts to grow at a mid‑teens pace and On‑X to achieve double‑digit growth, with very positive NEXUS 30‑day data setting a strong foundation for future expansion [doc10][doc12]. -
EBITDA Outlook
Q: What drives future EBITDA margin expansion?
A: Management expects roughly a 200 basis point improvement from operational leverage, mix benefits, and controlled higher R&D spend, supporting sustainable margin growth [doc16]. -
Tissue Recovery
Q: How is the tissue backlog recovery going?
A: They have already cleared about one‑third of the backlog in Q1 and expect to be fully caught up by the end of Q3, aiming for mid‑single digit annual growth in tissue sales [doc0][doc4]. -
AMDS Launch
Q: How effective are the initial AMDS training sessions?
A: The training sessions have exceeded expectations, with strong clinician engagement driving rapid progress through IRB and committee approvals for the $150 million market opportunity in the U.S. [doc8]. -
AMDS Expansion
Q: Will all 150 AMDS sites be onboarded by year‑end?
A: While individual hospital timelines vary, management is very encouraged by a 100% hit rate among pursued sites, though they refrain from precise timing forecasts [doc11]. -
On‑X Constraint
Q: Was On‑X growth hindered by the cyber incident?
A: Yes—the incident initially constrained supply, but operations have returned to normal, allowing On‑X to deliver strong double‑digit growth moving forward [doc14]. -
FX Impact
Q: How is foreign exchange affecting revenue?
A: Current FX rates are nearly neutral—if rates hold, they may add upside to reported numbers, though guidance remains focused on constant currency metrics [doc15]. -
AMDS U.S. vs OUS
Q: What is the regional split for AMDS contribution?
A: Management did not detail a separate breakdown, noting that AMDS is part of the overall 19% stent graft growth without isolating U.S. versus overseas figures [doc6]. -
Regional Highlights
Q: Any key developments in APAC or LATAM?
A: The company reported strong regional performance with LATAM growing 26% and APAC 8%, fueled by new approvals and expanded commercial presence [doc3][doc17]. -
NEXUS HDE
Q: Could NEXUS be launched via an HDE pathway?
A: No; management confirmed they are not pursuing an HDE for NEXUS and will seek FDA approval through the traditional PMA process [doc13].
Research analysts covering ARTIVION.