Sydney-based MedTech company Next Science (ASX: NXS) has reported a bumper result with its annual sales, reaching $33.7 million, a 90% increase compared to the previous year. This surge is primarily attributed to the expansion in the Wound Care and Surgical segments, driven by a strategic focus on direct sales and the successful implementation of the DME (Durable Medical Equipment) structure throughout the year.
Direct channel product sales soared to $25.8 million, reflecting a 195% increase year-over-year and constituting 76% of total sales, an uptick from a 49% share in FY22. Moreover, in the latter half of FY23, direct product sales spiked to $14.8 million, marking a 176% surge compared to the previous corresponding period (PCP).
The Company also achieved record cash receipts of $30.7 million.
Despite these achievements, net operating cash outflows for FY23 amounted to $23.07 million, higher than the $18.03 million recorded in FY22. The Company also recorded an EBITDA loss of $22.6 million compared to $18.03 million in FY22 as strong revenue growth was offset by increased investment in the direct sales force to drive future revenue.
Next Science’s CEO and Managing Director, I.V. Hall, said, “In FY23, we saw an improved performance during the year as we refined our strategy around the DME business and prioritised the direct sales channel. Wound Care sales quadrupled reflecting the first full year of the DME structure and increased focus on wound care centres and our payor mix.
“Within Surgical, direct sales of XPERIENCE were 58% higher yoy due to an increase in the clinical evidence available and broader access to healthcare sites provided by our contract with a leading GPO.3 Gross margins in the second half were in line with FY22 as we targeted higher quality revenue and our purchasing power improved as the DME structure continues to scale.”
Next Science specialises in medical technology, with a focus on commercialising its proprietary XBIO™ suite of products aimed at mitigating the impact of biofilm-based infections on human health. Biofilms are bacteria communities with the potential to cause recurring infections. What XBIO does is break down the biofilm, making it more vulnerable to elimination.
During the period, the Company advanced its clinical research efforts. The Periprosthetic Joint Infection Study enrolled 302 patients in its initial site, with expansion plans. A pilot study published in the Journal of Orthopaedic Experience & Innovation highlighted XPERIENCE’s effectiveness in mitigating post-operative inflammation. Dr Robert Harris MD’s retrospective study found XPERIENCE efficacious in preventing post-operative infections in primary joint arthroplasties. Research on HS BlastXTM, presented by Dr. Hadar LevTov MD, is set for publication in 2024, furthering understanding of its effectiveness in treating Hidradenitis Suppurativa (i.e. lumps in armpits or groin).
Hall added, “Our focus in FY24 is to deliver significant topline growth by increasing the penetration and productivity of the DME structure and higher direct sales of BlastXTM and XPERIENCE. The publication of additional clinical research for both products is expected to lead to broader recognition in the medical community. The consolidation of our sales leadership and sales team restructure is also expected to deliver substantial improvements in productivity and efficiency.”
On 31 December 2023, Next Science had cash on hand of $14.06 million and no debt.
Alinda is a Business Reporter for The Sentiment
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