Q2 2024 Summary
Published Feb 5, 2025, 2:18 AM UTC- Biote expects stronger second-half performance driven by growth in top-tier accounts, new customer growth, improving quick starts, and a return to year-over-year nutraceutical revenue growth, indicating positive momentum ahead.
- Biote has made significant progress in obtaining state licenses for Asteria Health, with approximately half of the targeted licenses obtained and more expected in the next quarter, enabling broader market expansion.
- Investments in practitioner training, education, and enhancements to the Biote method, including updates to clinical decision support software and BioteRx offerings, are expected to deliver a solid ROI and enhance differentiation from competitors, supporting long-term growth.
- BTMD is only halfway through obtaining state licenses for Asteria Health, which could delay full integration and expansion plans. This may impact the company's ability to meet future demand across all states.
- Delayed impact from Asteria's expansion into manufacturing GLP-1 products, as the company does not expect this to be operational until 2025, which could postpone anticipated growth benefits.
- Potential regulatory risks related to compounded GLP-1 products if branded versions come off the FDA's shortage list. This could affect BTMD's ability to offer these products and impact their revenue from therapeutic wellness offerings.
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GLP-1 Strategy Amid Drug Shortages
Q: How do GLP-1 shortages impact your strategy?
A: Teresa Weber explained that their BioteRx platform includes compounded GLP-1s like Tirzepatide and Semaglutide due to ongoing shortages. She is not concerned about shortages ending soon, as both Eli Lilly and Novo Nordisk anticipate continued supply disruptions, allowing compounders to manufacture these drugs. Their platform offers easy access and consistent supply to doctors, and it's working well. -
State Licensing Progress
Q: Where are you with obtaining state licenses?
A: Robert Peterson stated they've applied for nearly all states and are about halfway through approvals. The licenses obtained align well with their existing footprint, and they expect additional approvals in the next quarter and a half. -
Gross Margin Outlook
Q: Will production at Asteria boost gross margins?
A: Robert Peterson noted that as they operationally transition pellets into clinics, the financial impact is included in their 2024 adjusted EBITDA guidance. They anticipate gross margins in the second half to be at the high end of their historical range, in the upper 60s. -
SG&A Moderation
Q: Will SG&A expenses decline in the second half?
A: Robert Peterson indicated that while core expenses will remain flat, they won't have large expenses like the Sun, Sea event in Q2. This moderation is factored into their EBITDA guidance, implying better margins in the back half. -
Second-Half Outlook
Q: What gives confidence in second-half guidance?
A: Robert Peterson expects second-half performance to strengthen versus the first half. They're focusing on growth in top-tier accounts, new customer growth, improving quick starts, and positive momentum. -
Marketing Investments and ROI
Q: Should we expect similar marketing investments ahead?
A: Teresa Weber mentioned significant Q2 investments in their clinical decision support software and provider education. Robert Peterson said they will continue spending on revenue-generating activities but without large events like in Q2, expecting solid ROI from these investments. -
Doctor Adoption of Platform
Q: Are doctors more willing to use your platform now?
A: Teresa Weber noted meaningful improvements, with practitioners increasing orders and relying on BioteRx for supplies. New clinics depend on them for all BioteRx products, not just GLP-1s, which is working well. -
Asteria Production Capacity
Q: How much production runs through Asteria now?
A: Robert Peterson stated they've scaled up well, building inventory to meet future demand. They've installed additional machinery and are prepared to meet needs in the short and medium term. -
Quarter-to-Date Trends
Q: Any notable changes in trends quarter-to-date?
A: Robert Peterson reported that Q2 revenue improvement was consistent with their guidance. They anticipate stronger second-half performance, focusing on key trends and positive momentum. -
Future Investments
Q: How should we think about your investment plan?
A: Robert Peterson mentioned ongoing investments in practitioner engagement, data systems, and customer growth activities, all aimed at supporting ROI.