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EI

ELUTIA INC. (ELUT)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue from continuing operations was $3.32m, down 9% y/y as SimpliDerm declined y/y but Cardiovascular grew; GAAP gross margin expanded to 55.8% and adjusted gross margin to 63.9%. Operating expenses fell to $7.1m, improving loss from operations to $(5.2)m and adjusted EBITDA to $(2.7)m, roughly flat y/y .
  • Elutia closed the $88m sale of the BioEnvelope (EluPro/CanGaroo) business to Boston Scientific on Oct 1, using proceeds to eliminate SWK debt; $80.3m cash was received at close, $27.8m debt repaid, $8m escrowed, leaving ~$49m net cash inflow to fund NXT-41/41x through approval and launch, per management .
  • Consensus revenue for Q3 was $6.65m*, implying a large miss versus continuing operations actual of $3.32m; comparability is impacted by the discontinued BioEnvelope business. Consensus EPS was -$0.155* versus reported GAAP diluted EPS of -$0.19 (includes discontinued ops) . Values marked with * retrieved from S&P Global.
  • Strategic pivot sharpened: management is “fully resourced” to advance NXT-41 base matrix (FDA clearance targeted 2H26) and NXT-41x drug‑eluting version (1H27), while leveraging SimpliDerm and direct Cardiovascular sales to build commercial channels and evidence .

What Went Well and What Went Wrong

  • What Went Well

    • Balance sheet reset: $80.3m cash received at closing, ~$27.8m SWK loan repaid, $8m in escrow; CFO said net ~$49m in cash inflow provides runway through NXT-41/41x approvals and launch .
    • Margin and cost discipline: GAAP gross margin rose to 55.8% (48.9% y/y), adjusted gross margin to 63.9% (56.3% y/y); operating expenses dropped to $7.1m from $11.0m y/y, improving loss from operations to $(5.2)m from $(9.2)m y/y .
    • Commercial traction in continuing ops: SimpliDerm revenue was $2.4m (up ~18% q/q per CFO) and Cardiovascular $0.9m (up 28% q/q; +68% y/y) as the company took back full control from distributors .
    • Quote: “The company is now fully resourced… we have the cash to fund… through product approval [and] commercialization” — CEO .

  • What Went Wrong

    • Headline revenue vs consensus miss: Q3 revenue of $3.32m significantly trailed consensus $6.65m*, reflecting discontinued BioEnvelope operations; optics likely negative despite sequential growth in continuing lines . Values marked with * retrieved from S&P Global.
    • SimpliDerm y/y decline and overall sales down y/y: SimpliDerm $2.4m vs $3.1m y/y; overall net sales down from $3.66m y/y (both periods exclude BioEnvelope), highlighting the rebuild in breast reconstruction ahead of NXT-41x .
    • Litigation still a cost line (though improving): Litigation costs remained a P&L item; however, legacy FiberCel cases fell by seven to only six remaining, with estimated liability ~$0.7m .

Financial Results

Overall P&L and margins (USD, $m unless noted)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue (Net sales)$3.66 $6.03 $6.26 $3.32
GAAP Gross Margin %48.9% 40.7% 48.8% 55.8%
Adjusted Gross Margin %56.3% 54.8% 62.4% 63.9%
Total Operating Expenses$11.0 $10.38 $12.93 $7.06
Loss from Operations$(9.18) $(7.92) $(9.88) $(5.21)
Adjusted EBITDA$(2.68) $(3.27) $(3.83) $(2.74)
GAAP Diluted EPS (total)$(0.33) $(0.21) $(0.26) $(0.19)

Notes: Q2 2025 revenue includes BioEnvelope; Q3 2025 excludes BioEnvelope (discontinued operations). Adjusted metrics per company definitions and reconciliations .

Segment/Line breakdown (continuing operations, USD, $m)

SegmentQ3 2024Q2 2025Q3 2025
SimpliDerm$3.10 $2.00 $2.40
Cardiovascular (ProxiCor/Tyke/VasCure)$0.60 $0.70 $0.90
Total Continuing Ops Revenue$3.70 $2.70 $3.32

KPI highlights

KPIQ3 2024Q2 2025Q3 2025
Adjusted Gross Margin %56.3% 62.4% 63.9%
Adjusted EBITDA ($m)$(2.68) $(3.83) $(2.74)
Cash & Equivalents (quarter-end, $m)—$8.50 $4.72
Post-close cash inflow (Oct 1)——$80.3m received; $27.8m debt repaid; $8m escrow

Guidance Changes

MetricPeriodPrevious Guidance (Q2 2025)Current Guidance (Q3 2025)Change
NXT-41 base matrix FDA clearance2H 20262H 2026 2H 2026 Maintained
NXT-41x (drug‑eluting) FDA clearance1H 20271H 2027 1H 2027 Maintained
Commercialization funding runwayThrough approvals/launchNot explicitly stated“Runway to get… through development and approval… and… launch” (via $88m asset sale proceeds) Raised/clarified
Revenue/EPS/OpEx2025/2026Not providedNot provided—

No formal quantitative revenue/EPS guidance provided in Q3. Timelines for NXT-41/41x were reiterated.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Portfolio focus and asset strategyQ1: Boston Scientific distribution partnership for EluPro; capital raised; amended debt; litigation progress . Q2: EluPro adoption (VAC >160), evaluating transactions; regained direct control of Cardiovascular .Closed $88m sale of BioEnvelope (EluPro/CanGaroo) to Boston Scientific; streamlined ops; focus on NXT-41/41x .From expand EluPro to monetize/exit and refocus on breast reconstruction platform.
Breast reconstruction thesisBuilding towards NXT-41/41x; timelines set in Q2 .Deep-dive on unmet need (15–20% infection), local antibiotic rationale, plan to clear base matrix first, then drug-eluting .Narrative strengthened; execution path and manufacturing readiness emphasized.
Commercial infrastructureQ1/Q2: Rebuilding direct channels; Cardiovascular transitioned to direct sales; SimpliDerm in place .SimpliDerm up ~18% q/q; Cardiovascular up 28% q/q; regained full control, building channel ahead of NXT-41x .Sequential improvement; platform for 41/41x launch.
Margins/Cost disciplineQ1–Q2: Adj. GM 55–62%; opex elevated by litigation, but trending .GAAP GM 55.8%, Adj. GM 63.9%; opex fell to $7.1m .Positive mix/opex trend.
LitigationQ1–Q2: 97 of 110 FiberCel cases settled .Seven more settled; six remaining; liability ~ $0.7m .Residual tail risk diminishing.
Manufacturing readinessLimited prior detail.Separate GMP facility in Gaithersburg; validation underway; no expected manufacturing bottleneck for 41/41x .Risk addressed; execution plan in place.

Management Commentary

  • CEO framing of mission and need: “Our antibiotic‑eluting technology is designed to prevent infection from occurring in the first place… [we are] fully resourced, and moving fast to deliver a game‑changing solution” .
  • Clinical rationale and approach: “Post‑operative infection rates between 15%–20%… systemic antibiotics can’t reach the avascular pocket… deliver them locally” .
  • Product timeline strategy: “First step is approval of NXT‑41 [base]… then… approval of NXT‑41x” .
  • CFO on transaction and runway: “$80m coming in at closing… ~$49m of actual cash… gives us the runway to get… through… NXT‑41 and NXT‑41x… and… commercial launch” .
  • CFO on operating lines: “SimpliDerm… $2.4m… up about 18% from Q2… Cardiovascular… $0.9m… up 28% sequentially; 68% y/y… high gross margins” .

Q&A Highlights

  • Translating EluPro learnings to 41x: Team, FDA engagement, VAC/contracting muscle, and pre‑launch commercial build‑out cited as key learnings to accelerate 41x adoption .
  • Clinical evidence plans: No clinical requirement for 510(k) path; company will pursue preclinical PK/efficacy and real‑world clinical programs to “flip the entire market” in reconstruction .
  • Manufacturing readiness: Separate GMP facility (Gaithersburg) for 41/41x; validation/qualification underway; manufacturing not expected to be rate‑limiting .
  • Cardiovascular trajectory: Back to ~$1m/quarter run‑rate with >80% gross margins; steady growth with variable cost model .

Estimates Context

Consensus vs actual (S&P Global unless noted)

MetricPeriodConsensusActual/Reported
Revenue ($m)Q3 2025$6.65*$3.32 (continuing ops)
Primary EPSQ3 2025-$0.155*GAAP diluted EPS (total): -$0.19
EBITDA ($m)Q3 2025-$3.20*-$3.63*
  • The large revenue delta likely reflects analysts’ inclusion of BioEnvelope in prior quarters and timing of discontinued operations presentation; Q3 reported net sales exclude BioEnvelope, which was sold effective Oct 1 (closed in Q4) . Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • The portfolio reset and $88m divestiture de‑risk funding for NXT‑41/41x through launch, materially improving balance sheet flexibility and eliminating SWK debt .
  • Q3 optics show a headline revenue miss vs consensus, but continuing operations grew sequentially (SimpliDerm +~18% q/q; Cardiovascular +28% q/q), and margins/opex trended favorably, setting a cleaner base ahead of 41/41x .
  • The 41x thesis is compelling: large $1.5bn market with high infection‑driven failures; local antibiotic delivery is supported by published data and preclinical rationale; timelines (41: 2H26; 41x: 1H27) unchanged .
  • Watch near‑term catalysts: regulatory interactions for 41, manufacturing milestones, SimpliDerm/Cardiovascular growth durability, and any early clinical/real‑world data shareouts for 41/41x .
  • Residual litigation overhang continues to diminish (six cases remaining; ~$0.7m liability), reducing volatility from non‑operating items in the P&L .
  • Estimate models likely need to reset to continuing‑ops revenue and margin structure; as mix shifts to higher‑margin products and opex falls, EBITDA trajectory could improve ahead of 41/41x inflection .
  • Trading setup: narrative pivots from EluPro growth to breast reconstruction platform execution; stock likely reacts to clarity on development/mfg milestones and demonstration of sustained gross margin/opex discipline while SimpliDerm and Cardiovascular bridge to 41/41x .

S&P Global disclaimer: Values marked with * in tables are retrieved from S&P Global.