POLARITYTE, INC. (PTEIQ)·Q4 2021 Earnings Summary

Executive Summary

• PTE completed its transition to a clinical-stage biotech; FDA accepted the SkinTE IND in Q1’22 and the company expected first patient treated in April with up to 16 COVER DFU trial sites operational by end of May, creating the next fundamental catalyst .
• Q4’21 revenue fell to ~$1.04M as SkinTE sales ceased after May 31 and COVID testing rolled off; IBEX preclinical services partially offset but mix shift and scale-down drove lower gross profit and a larger operating loss in Q4 vs Q3 .
• FY’21 operating loss improved 27% YoY on deep cost cuts and sales wind-down; net loss improved 30% YoY aided by a $3.6M PPP forgiveness gain and warrant liability revaluation gains, partially offset by a $5.2M warrant inducement loss .
• Liquidity: $19.4M cash at year-end with “substantial doubt” as to going concern; runway not sufficient beyond Q4’22 absent additional financing—funding remains the primary overhang and stock-reaction driver near term .

What Went Well and What Went Wrong

• What Went Well
  • IND acceptance for SkinTE and imminent pivotal DFU study start (COVER DFUs) signposted a clear regulatory path and clinical catalyst roadmap. CEO: “We are pleased to have reached the significant milestone of IND acceptance… on track to see SkinTE used in the clinic once again” .
  • Positive RCT data in venous leg ulcers: 71% wound closure at 12 weeks with SkinTE+SOC vs 33% SOC (p=0.046); significant PAR improvement (p=0.000035) supports clinical rationale heading into pivotal DFU .
  • Operating discipline: FY’21 operating loss improved 27% YoY to $(33.7)M and cash used in operations fell to $22.6M from $37.8M in FY’20 as the company reduced G&A and S&M materially .
• What Went Wrong
  • Top-line reset: Q4 revenue compressed to ~$1.04M after the May wind-down of SkinTE sales and cessation of COVID testing; services revenue mix (IBEX) is lower margin vs prior COVID testing, pressuring gross profit .
  • Liquidity risk: Year-end cash of $19.4M and explicit going concern language; management does not expect cash to fund the plan “beyond the fourth calendar quarter of 2022” without new capital .
  • Non-cash noise and restructuring: FY results include warrant liability remeasurement gains, a $5.2M inducement loss (Jan’21), and a $0.6M goodwill/intangible impairment (IBEX) that complicate clarity on underlying burn/trajectory .

Financial Results

Quarterly performance (USD Millions, except margins)

Segment revenue breakdown (USD Millions)

FY results and YoY (USD Millions, per share where noted)

KPIs and liquidity

Note: Gross margin % and YoY deltas are calculated from reported figures .

Guidance Changes

Earnings Call Themes & Trends

Note: No transcript was available in our repository; themes compiled from quarterly earnings 8-Ks.

Management Commentary

• CEO (Q4’21 press): “We are pleased to have reached the significant milestone of IND acceptance… and being on track to see SkinTE used in the clinic once again in subjects who are suffering from hard-to-treat wounds.”
• CEO (Q2’21 press): “We have made great strides… with the submission of an IND… the second quarter includes the final two months of SkinTE sales… further solidifies our view that there is sizable market opportunity for SkinTE.”
• CEO (Q3’21 press): “We are encouraged by the feedback… on track to submit our complete response… prepared to commence a pivotal study under the IND in short order if FDA accepts the IND…”

Q&A Highlights

No Q4’21 earnings call transcript was available in our document set; therefore, Q&A themes and any verbal guidance clarifications could not be verified.

Estimates Context

• We attempted to retrieve S&P Global consensus (EPS and revenue) for Q4’21 and FY’21, but no CIQ mapping was available for PTEIQ; consensus data were unavailable via our SPGI integration at this time. As a result, no Street beat/miss assessment can be made for Q4’21 using S&P Global data.
  (GetEstimates error: Missing CIQ mapping for ticker ‘PTEIQ’.)

Key Takeaways for Investors

• Near-term catalyst path is clinical: IND accepted; pivotal DFU trial (COVER) patient enrollment/first treatment in April and site ramp to ~16 by end-May—monitor startup execution and early enrollment cadence .
• The commercial revenue base has reset post-May wind-down; IBEX services remains the primary revenue source but is lower margin than prior COVID testing, limiting gross profit leverage near term .
• Operating discipline improved losses materially YoY in FY’21; however, Q4 operating loss widened vs Q3 as revenue compressed and non-cash impairment hit, underscoring reliance on financing pre-clinical readouts .
• Liquidity and going concern disclosure frame risk/reward: ~$19.4M cash at YE’21 with runway not sufficient beyond Q4’22; financing outcomes and terms are key stock catalysts .
• Non-GAAP adjustments (warrant liability revaluation, inducement loss) materially affect GAAP net loss variability; focus on cash burn trajectory and operational runway as better indicators into 2022 .
• IP estate expanded in 2H’21, supporting potential future exclusivity assumptions if SkinTE achieves approval and reference product status—positive for medium-term pricing/payer dynamics .

Supporting citations:

• Q4/FY’21 press release and financials
• Q3’21 earnings 8-K and financials
• Q2’21 earnings 8-K and financials