Aroa Biosurgery Limited (ARX) Earnings Call Transcript & Summary

Okay. Jim, I think we've given enough time for our online attendees to join. Please feel free to start the meeting.

Thank you, Tracy. Well, welcome, everybody. It's great to see we've got people here in-person after some time, it seems we haven't been able to do this. And welcome to all of those of you who are online. [Operator Instructions] I'm Jim McLean. I'm the Chair of Aroa. I'm delighted to have you all here today. We have a quorum for the meeting as it now passed 2:00 so I declare the meeting underway. Firstly, let me just introduce the Board here, who are all on the slide here. Present today are Brian Ward, Founder, Chief Executive and Managing Director; Philip McCaw, Independent Director; John Diddams, who is Independent Director as well and Chair of the Audit Committee. Online, we have John Pinion who is the Chair of the Risk Committee; Steve Engle, who is Chair of the Remuneration Committee; and [indiscernible] has another appointment Catherine Mohr who will introduce herself later in the meeting by way of video. We also have Joint Company Secretaries, James Agnew, Chief Financial Officer; and Tracy Weimar who is an Australian. In addition, we have Stanley from the auditors with us and I think [ Iain Laughland ] online who's our Corporate Counsel in Australia with Mills Oakley. Let me just take you through the agenda for today. I'll give a few brief words of introduction, and that will be followed by a report from Brian who will then receives the financial statements, which require to be adopted by the meetings that are available for any questions. Questions can be addressed to James Agnew and [indiscernible] first case. And then we'll -- from there, we'll go on to the resolutions. There's some questions now about the format of the meeting. So James, would you like to just explain to us how are those going to be managed?

Sure. Thanks Jim. Hi, everyone, James Agnew. So in terms of the instructions for questions, we will work for any personal questions before turning to questions submitted online. [Operator Instructions] If you're acting as a proxy for a shareholder, just please clearly state who you are appointed to represent. [Operator Instructions] Your question will be directed to us by Joint Company Secretary, Tracy Weimar, to read out the questions. I will now hand it back to Jim.

Thank you, James. I've just got a few points that I'd like to make about the company, which Brian will expand on in his presentation. So 2 things really I'd like to talk about. One is the performance from last year for the financial year ending in March, Aroa had a very good year. We -- revenues were up more than 50%, margins were up. We've seen increasing validation of the family of AROA ECM products. And in a sense, we've gone from being at a juvenile to a more grown-up company. And in this business, we've grown and with a very positive future. With it comes a lot of organizational complexity. We now have 270 people, quite a lot different from just a year ago as a consequence for the growth we've had. And that provides a lot of organizational challenges and performance issues that we have to drive in the company. We've handled those things very well over the current year, but they will remain [indiscernible] some attention to us over the next time, of course, people are going to be pushing to taking the company forward from here. The other thing I just wanted to draw a little attention to is our strategy that we've adopted. In the 15 years since the inception from Aroa, we've built a strong foundation on the ECM, the AROA ECM platform. That is the extracellular matrix that is derived from the forestomach of sheep. As a result of that, we now 4 substantial product families. And each of those product families are in significant margins. So the position we currently hold in those markets is really a very early stage of our commercialization. We could focus our time almost entirely on those 4 markets and the developing market we have in Enivo, which you'll hear more about from Brian. And that is really sufficient. That would be sufficient to cope with the growth that we could reasonably hope for, for this business. So we have a very positive outlook for this. In addition to the focus on those markets in the U.S., we will be looking at and continue to look at expanding outside of the U.S., either on our own or with other partners. And we're also on the lookout for complementary technologies to head to the product portfolio we currently have. Crucial to our success, of course, is our ability to attract and retain the best possible people. In the period, most recently, this has been challenging, it'd be fair to say, and we succeeded without a great deal of difficulty being out to attract really first-class people and keep the good people that we have. So although it's been a very tight market, the company now, I think, offers an optimistic environment for the finest, for all sorts of people. So we've been successful to date. We have every reason to believe that we can continue to attract the best possible people. We're increasingly confident about our strategy. The weight of clinical evidence is only helping us assure ourselves that the strategy that we've undertaken, focusing on AROA ECM is the right one. We have, in each of these product families, increasing clinical evidence and so increasing confidence. And Brian will talk a little bit about this and it makes the fundamental difference throughout certainty for the future. Just a couple of words. The last couple of words I make with respects about cash. We're in this position, the envying position perhaps of holding substantial cash sufficient for us to be able to feel the growth of physical assistance structure that we need for the business and also to pursue our developments with Enivo, in particular. And we can do this as we think of the foreseeable future without any cause on any additional shareholder capital. And we're doing this at a time where the company is trading positively at a normalized basis or trading with a positive EBITDA, I should say. So there's every reason to suppose the company is in very strong shape for its future, and we feel extremely confident in that regard. Just going to the Board, just very briefly. There are 2 Board members appointments for you to consider in the meeting. John Diddams, who's President here, he's an Australian-based Director, [indiscernible] and you'll vote on that later in the meeting. In addition to that, Catherine Mohr, who joined the company in November last year, I must say has made a terrific contribution already, is to be formally elected by the shareholders. She is unable to be here, as I think I mentioned, and has recorded a video for us to watch. So just to -- finally for me, just a vote of thanks to Brian, yourself and team of people here. A terrific job has been done at 2023, and we have every reason to suppose the next year will be equally as good if not better. Brian.

Thank you, Jim. Yes, that's good to be here another year and just talk about progress in [indiscernible] So I mean one of these -- I talk about those slides a lot, but what I really want to touch on today was just some highlights. So things that really happened in the last 12 months, I think we can be really pleased with. So as people know, we are soft tissue reconstruction company. We've got 4 [indiscernible] that we sell in the U.S. through 2 channels through our ingrowth sales team, but also through our partnership with TELA Bio. This year, we've now clocked over 6 million of our products being applied to patients to treat, which I think is a phenomenal number. What that means is that this is a technology that's been widely used in a lot of patients, very strongly clinically validated. So we are working up from a lot of experience around this [indiscernible] it's also backed up by clinical evidence. So a year ago, when I was talking to investors about the number of publications that sat behind our prices, it was 14, we were now at 71 publications that support the efficacy and the safety of these products. So we can be very confident in this technology and the difference that it makes for patients. The other big change this year is with Enivo our tissue apposition platform. So over the last 5 years, we've had a considerable investment into Enivo as a second platform to build value in the business, but to also complement our existing business. And in the last few months, we've had 2 of the key components of that platform approved for use in patients. We have one final component that needs to be approved, we'll talk a little bit about that further in the presentation. So across the board, I think we've made strong progress in a number of ways. So just briefly, in terms of the product portfolio, as you know, we isolate this tissue layer from forestomach of sheep, we purify that in a way that [indiscernible]. We now have 4 families of products that we're selling. So Endoform as a product we sold for a long time. Myriad is the product for soft tissue reconstruction, which is really the main focus for our sales team in the U.S. So that product family, which includes Morcells product, Matrix product and more recently, our Myriad Morcells Fine product is really what's driving growth for Aroa products that we're selling in the operating room is designed specifically for plastic reconstruction surgery. Symphony is a product that we've very recently launched. Again, we're selling that in the hospital, in the hospital outpatient setting. It includes our AROA ECM technology, but also a molecule called hyaluronic acid, which really augments the function of this. This product is designed for patients that have impaired healing and a very difficult to heal. So typically patients that have diabetic ulcers, venous ulcers or other sort of underlying clinical problems. And then the fourth family of products is our OviTex products sold through TELA Bio. So if you look across business range of 4 products, these sort of 3 things that really stand out for these products. They have this ability to restore functional tissue in patients. So when we implant this into patients, these products turn into tissue. And so it's unlike many of the synthetic products that just stay there, this actually turns into the patient's tissue and regenerate new tissue. Each of these products is designed specifically for a particular application. So while the core technology is the same, the needs for a patient in the early stages of healing of diabetic foot ulcer is quite different from the later stages. So we sort of change the products so that we meet the specific needs for patients. Another thing with these products is that they make the surgeon's job easier. So a lot of the procedures that we're involved and the surgeon is cutting tissue from one place in the patient and pasting into another part of the patient, and that's quite a complex procedure. Well, these products allow the surgeon to do is not do the cut and paste but take something out of a packet and rehydrate it and use that to fill that deficit in a patient. So it very much simplifies their job. But it also means that a surgeon who is less technically adept or less trained in a particular specialty is able to do more. And so it actually increases the capacity of a surgeon to do more complex procedures, which is obviously good for the patient, good for the surgeon. And then the third thing that we're doing is that we -- pricing for these products is very disruptive. And so typically, we're 20% to 30% less expensive of the competing products out there. So what that's doing is opening up access to these products to more patients, but it's also allowing surgeons to contemplate using these patients -- sorry using these products and procedures for many more patients as well. So we think that's a really exciting opportunity into potentially growing the market. So we -- our products -- no, these products are all designed for different stages of healing for different types of wounds and for use in different setting. So it's not a market where one product fits all of the needs. And so we've designed these products to fit particular needs in particular settings. I think if you sort of look at our product range now, we now have a very comprehensive portfolio. So we can sort of treat all of the different types of wounds that you typically see in a hospital. I think one of the big changes in last 24 months has been, I'm having our own sales team in the U.S. And so when we first designed these products, they will be sold by our partners, and we wouldn't intimately involve with the surgeons who were using the products. I think what's happened in the last 24 months is now that we've improved -- now that we have our own direct sales team, we have a much closer relationship with surgeons. I think that's allowing us to understand their needs and to be able to design specific products for specific needs as well. And I think that's been a huge improvement for them to stay. So this is -- these are the types of procedures [indiscernible] first of all its complex wounds that tend to be chronic wounds and soft tissue reconstruction which tends to happen in the operating room. And so I think one thing that we've understood on the Aroa side over the last 12 months is that the opportunity for Myriad is much more substantial than we thought 12 months ago. So when we listed the company, we thought the market opportunity for Myriad was probably about $200 million to $250 million. And what was foreseen 2 things this year have expanded that our perception of that market opportunity. The first thing is much better market data. So we can now see that volume of products that are being sold in these categories in hospitals in the U.S., it's about $730 million for the Myriad product range. It's much large than we thought. And then also, if we look at the types of procedures where these products are being used [indiscernible], okay, these procedures, this percentage of patients would use these procedures. It's a market at the moment that if you work it out that way, at least $850 million. That's a really large opportunity exists today. I think the other thing is what we see is that with these types of procedures, only some of the surgeons that could use these products are using them. So what that means is that there's quite a large latent opportunity for us to grow the market. So if you look at a specialty like orthopedics, you'll see that all orthopedic surgeons use plates and screws to fix fractures in patients. In soft tissue reconstruction, it's probably 25% to 30% of surgeons that use these types of products that fixes soft tissue injury. So there's a very large opportunity to grow that market, and we think we're very well placed to do that. So Jim talked briefly about the Enivo tissue apposition product. So this is a product that we've developed through 2 underlying technologies using our existing AROA ECM platform. So it's something we know a lot about in terms of implanted people. And what we're doing, we've coupled that with a single-use disposable pump. So that pump is connected to that implant by a catheter. As the idea with this product is that in many surgeries, surgeons separate tissue. And in separating that tissue, they might remove some tissue from a patient or they may be separating that tissue to gain access to a surgical site. And then when they finish this surgery, that cavity that's created is very hard to close. So you can put sutures in there or stitches in there, but you can't really get rid of what's called dead space. And so what this technology does is it delivers a vacuum to that area of tissue and that is like putting a plastic bag on a vacuum cleaner and turning the vacuum cleaner that draws all the air out of that bag and holds those surfaces together. So that's exactly what we're doing here. So we've now had 2 of the components first cleared. We still need to get the biological implant cleared by the FDA. We're working on that. There's a couple of pathways for that, that we're exploring. And depending on which path we're successful, that may be cleared within the next 12 months, what could be a further 24 months. It will really depend on whether we're able to do a further type of study. So that's something that we'll have much more clarity about by the end of September. Good news on the clinical pilot study. So we've now treated our first patient with Enivo and that was, I think, about 2 weeks ago. And so the patient has had a [indiscernible]. And we have had this device, the device functioned flawlessly, much better than we've seen in our development activities [indiscernible] The patients are still undergoing treatment. So we don't have the final outcome for this yet, but we're very pleased with how that's gone, how's it functioned and it's a testament to the work the team has done on developing this. So we see this as a huge opportunity for the company. So an opportunity in its own right, but also an opportunity in combination with our AROA ECM technology and plans. So when you sort of think about Enivo, the way to think about this is, it's a product that can be used on its own, but we think the combination of our existing implants plus this product when used together, there's an opportunity to really improve the rate and quality of healing for many patients. And those 2 technologies are designed to go together. It's designed so that it will fit very well with the existing procedures that were treated. And I think importantly, these 2 products can be sold by the same sales team that we have now. So it's an opportunity for us to increase the range of products that our sales team will go and sell. Just want to talk briefly about financial results. So last year, we did $60.5 million in product sales. That was up from $39 million in the previous year. So really strong growth, which we're really pleased with. Gross margin, 84%, up from 77% the year before. So we've made really strong progress there. For the first time since being listed, we were profitable on a normalized EBITDA basis. So we're now at the stage where we're able to fund the operating costs of the organization from our sales. We have -- we obviously have a strong cash balance, but we are committed now to maintain that profitability obviously and still building the company based on accelerating revenues. Cash balance at the end of the year was $45 million. So as Jim said, we're well funded and we're able to -- we're certainly able to feel like we can trade through profitably to keep on scaling the company. I think one thing that's really important to consider is that if you look at the normalized EBITDA here in this chart is the gray box, as you can see that we've been negative. And then FY '23, we transitioned to being positive. If you were to back out the expenses for developing Enivo, then we would have already been profitable back in FY '21. So what that means is that the underlying business is very profitable. But obviously, we've added into that investment in Enivo. And the reason we've done that is we just think there's a really strong opportunity there. So we're thinking more about the medium and long-term value that we can create, not about the short term -- being profitable in the short term. And we've been able to do that because we've been well funded. I just want to briefly talk through sales. So you can see strong growth between FY '22 and FY '23. From a split by product family, for Aroa, our Myriad sales have really been what's driven growth. So over 268% growth there, really strong growth between FY '22 and FY '23. So Myriad is where we're putting our focus. That's where our direct sales team is focused. And we think that is a really good opportunity for us to grow in that market. So to sort of think about the numbers, we're just over $10 million, $12 million in sales, but that's a market that's in excess of $730 million in the U.S. alone. So there's a lot of opportunity to grow. TELA Bio has continued to perform well. So that's 60% of our sales. We're focused on [indiscernible] and I'll talk a little bit in detail about that. So this is TELA's growth. Again, strong growth. Everything is coming together for them. They've got great sales force, excellent clinical data, and they're really powering up what they're doing from a marketing and promotional perspective. So we can see TELA continuing to grow strongly. They started in [indiscernible] they're now expanding into robotic procedures and they're getting into some of the less complex procedures as well. So there is a long way for TELA Bio to grow. I think what's been really interesting is the growth of OviTex PRS in first 3 columns. So we can see there just the rate at which that's growing, it's the bottom chart there over the last couple of years, so much faster take off than OviTex for hernia and a very strong growth rate, and we're still seeing that come through. So I just wanted to summarize where we've got through in clinical research. So we're very committed to building a strong body of clinical evidence that's critical in terms of the adoption of these products, 96 presentations or publications now in peer review journals or at conferences. 46 for Myriad, 37 for OviTex so good volume of clinical evidence. What we see with these individual products is that if you look at how they perform, there's a lot of things that you see in common across this product portfolio, which is not surprising because it's the same underlying technology. So the rate of tissue formation with OviTex is very, very fast, and that's quite distinct from what we see with other technologies. And not only is a fast, but it's very vascular and that's really important because blood supply to tissue is really what drives growth and what sustains life. So we get this very vascular tissue that forms. It's very tolerant to contaminated field. And so -- many of the surgeries were involved and are contaminated they're insights that are easily contaminated or things like trauma just naturally contaminated from the situation. So because the product resists infection and contaminant fields, and that's quite unique for these types of products. And we're still -- it's still something that we're kind of exploring at a more fundamental scientific level to understand why it really stands out as being quite different. We don't have any negative inflammatory responses for this material. So we're putting tissue into humans, sounds counterintuitive. But if you process this tissue in the right way, it's very well tolerated by humans, and we just don't see -- there's no kind of issues for rejection. And as I said earlier, using this highly effective products can allow the surgeon to do more and do more procedures in a simpler way. As I said, we're very invested in clinical research. We've got a whole range of studies that we're undertaking. The key ones are probably the Myriad registry. So this is where we're looking at different types of procedures for Myriad and building out evidence that Myriad can be used in a wide range of different procedures. And so with that registry, we're looking at it in 2 ways. The first way is across all of these procedures, do we see some common things that surgeons can see that there's a difference from this technology, but then also look at some specific types of procedures and about evidence around those that surprise [indiscernible] for hose type of procedures. Symphony, we have a randomized controlled trial underway for Symphony. So this is looking at Symphony in diabetic foot ulcers that's major use case for this type of product. So that's underway that will run for a couple of years. And then with Enivo, we started a pilot study, but we didn't expect to progress on to a much larger study to develop the evidence for that. Just briefly on manufacturing. Over the last 24 months or so, we've been focused on expansion of our manufacturing capabilities. And so we initially started with all of our production across the road where we're doing both that tissue processing and our fabrication. We've now taken on this site and built out a large fabrication facility here. So on this site, we now have sufficient capacity for $150 million in sales. When we built -- we originally built it could be about $100 million in sales. So what's happened is that we've been able to realize some process improvements. And so those process improvements have given us both additional capacity but also contributed to the increase in margins as well. And with our manufacturing processes although the manufacturing is well established [indiscernible] opportunities for automation and improvement, which will also lead to our margin expansion in the future. Talking about -- so I think the other thing to kind of keep in mind, I guess, is while we're improving margin, we're improving our capacity. It's -- the investment on this, we've done it now several times, we've scaled it several times. And to build extra capacity now is not particularly expensive route of believable sales you can create. So it's got -- I'm going to need huge capital investments or to realize those increases in capacity. I'll talk about the outlook. So our guidance for this year is $72 million to $75 million. So that's up 25% to 30% gross margin improving to 85% and again, will be EBITDA positive on a normalized basis. So this is quite a complex table, but a couple of takeaways from this is, if you look at the orange column there, that's our guidance for this year. If you look at the sort of slightly lighter shaded column that's our guidance based on subsidiary. So and putting our guidance together this year, we've budgeted for a higher exchange rate of $0.65. Now if we had the same exchange rate or $0.62 last year, obviously, the result will be a lot more positive. That may happen. We've been sort of conservative in the way we looked at exchange rate. So we sort of feel that we're very, very well placed in terms of being able to reach our guidance. I think the important column on this chart is the one on the left hand side on the far left. So I think if you look forward 2 or 3 years, we think the business has very strong ability to keep on growing. So from a revenue perspective, we can see ourselves 25% year-on-year for some time delivering growth, we can see gross margins tracking to the high 80s. We can see our research and development costs decreasing as a percentage of sales. So at the moment, they're around about the 20% mark that will track down to be more typical of a medical device company, which is around 10%. And from a normalized EBITDA perspective, our EBITDA margins should be 20% tracking towards 30%. So it's potentially a highly profitable business. So what's coming up that's really going to drive value for the company. And I think there's 4 things. There's the Aroa sales, the momentum that we're developing there, particularly around Myriad, TELA Bio sales so they continued growth. And I think we're certainly seeing strong guidance from them for the current year. The launch of Symphony. Now this year, we expect Symphony's sales to be relatively modest, but it's really setting us up for success over the next 2 to 3 years. And we expect Symphony sales to track very much like Myriad sales to grow strongly year [indiscernible]. And then Enivo, we think Enivo, as I said earlier, really strong catalyst for growth as well. So before I take questions. I mean the other thing I'd like to say is I think the team at Aroa has, as Jim said, had a fantastic year. We've achieved some really good things in the business, and we're very pleased with the quality of people we've got and the quality of people that we're able to attract to the business. Now as Jim said, we've had a strong group of people here for quite some time. It's been good to be able to have that stable journey and build on that. So I'm happy to take any questions.

Yes. On Aroa Morcell [indiscernible] got any benefits? What benefits [indiscernible] for your product?

What's the benefits of the [indiscernible] part of it?

The follicle with [indiscernible]

Yes. So in terms of the hair follicle?

Yes. Yes.

Yes. we're using different parts. We're using the internal lining of [indiscernible] of an organ, but one thing that [indiscernible] skin cells in the skin of [indiscernible] different part of the body, yes. Does that answer the question?

[indiscernible] was $0.90 [indiscernible] and their recommendation is that shares [indiscernible]

[indiscernible] Yes. Yes. Look, I think if you look at the consensus view, Aroa shares, it's a lot higher now. So that means it's a great buying opportunity. So [indiscernible] It's a tough life, at the moment. But I think we're pretty optimistic about the future. Sorry, one more question, Tracy, here.

[indiscernible] shareholder. You've got some pretty high gross margins here. I mean you're talking about achieving towards 80s. How do you think about the sustainability of it over the long term? In terms of how you determine your pricing and not make it too attractive for [indiscernible] how do you weigh those things up?

Yes. I think from a pricing perspective, we're really well placed in the market. So we're typically 20% to 30% less expensive. So there's no more pricing pressure on us. So we think our ability to hold price is pretty strong. From a production perspective, we think there's good opportunities to make gains there. So it's -- the product range that we make is quite interesting that the raw materials inputs are low, labor is relatively low as well. So we don't feel like we're squeezed too much. It's been interesting if you just look back over the last couple of years where there's been lots of increases in raw materials, obviously labor rates have gone up, and we're still being able to grow margins. I think we're getting some benefits from scale. We're definitely getting benefits from product mix as well. So as we sell more products than our own right. Some of the products we were selling those are in our own right, the margins are in excess of 95%. So kind of what's pulling us back is the partnership with TELA Bio and revenue-sharing arrangement. And that's a little bit of a drag up in terms of getting that higher. But I think in terms of sustainability, they sort of -- the margins seem to be more like what you tend to see in a pharma-type company compared to a device company. So I think they are sustainable. I think around that was mid- to high 80s probably a different position to sustain that.

Can I have 1 more question?

Sure. Yes.

Because the company is headquartered in Santiago, USA. And sorry, this month, this time, we were late because we have to attend another meeting today, [indiscernible] and I've been to Santiago in USA, there is Mission Bay as well, but not as pretty as the Mission Bay -- may I ask that whether you have business in Texas at the present moment?

Yes. Texas is really strong for us, yes. So Texas -- so where we're strong is in Texas, down in Florida, a little bit of that [indiscernible] area and California. So Texas, with this business, we tend to be strong in those areas where there's older populations or there's people with diabetes or obesity and Texas, Florida, California there's quite a bit of that in the concentrated populations as well. So we are, yes, Texas will be good for us.

Then what about the percentage of revenue from Texas from the whole $50 million flat on the percentage?

Yes, I couldn't give you that, to be honest, as a split. Yes, I might be able to find out some number, but I don't have off the top of my head, maybe it's -- let's take a wild guess, Jim?

Yes.

Yes, Jim is probably 10%. Yes. Yes. Yes.

[indiscernible] recently, I have read the economist magazine that stated 18 March to the 24 March issue. Then you have only 3 pages and then you have a very good description of Texas, it's different from Texas 30 years ago, yes, [indiscernible] offered me to Texas [indiscernible] Yes. Non-Texas, it had the money, revenue it earned is $486 million in exports is the #1, what I say, revenue earning sale of all 50 USA states. Yes. So because [indiscernible] already business spending and employees there do not get to pay any income tax and just a quick comment as well. Then I said just to, what I say, going to the 3 biggest state like Houston, Dallas and Austin as quickly as possible because this year is -- the temperature nearly 50 degrees centigrade and the people when they put their bare feet on the ground, it will be burned [indiscernible] and also they are so rich [indiscernible].

Okay. Yes. We have our Head of Sales in Dallas, Fort Worth. We've got a footprint there, and we've got several reps in the state of Texas as well.

Yes, subject to [indiscernible] our stock here, [indiscernible] on median stock to go to Texas.

Tracy, we've got some questions?

I do have a question from an online participant, and I'll just read that out. So noting Coloplast's $1.3 billion acquisition of Kerecis, what does that signal about the biologics industry and potential inbound interest by Global Wound Care in Aroa?

Yes. So yes, I'm sure who knows about that, but in the last month, there's been a large transaction. So a small [indiscernible] company called Kerecis based out of Iceland got acquired by a company called Coloplast, which is a multinational based out of Denmark. And so that was a $1.3 billion transaction. The company was doing -- it was on a run rate for over USD 100 million sales. So not too similar from Aroa. So I think there's a couple of things to note. Firstly, it's -- I think it's a very strong validation of what we're doing here in Aroa similar types of technology. We have a view that [indiscernible] so we certainly think that we're very, very -- in a very strong position to compete and outperform Kerecis products. I think it shows the interest from strategic investors and this sort of technology. And so in the soft tissue reconstruction, you often hear kind of questions about is this a market where synthetic technologies are going to overtake biologic technologies? Is there a place for biologic technologies? So think about that -- the answer is yes, both the technologies are important. They both have different use cases but seeing an acquisition like that for a company with this type of technology, I think it's a really strong validator for what we're doing. I think the other point is Coloplast is a relatively small player in the U.S. wound care market. So this is not one of the large strategic investors coming in and acquiring a small company, they are quite small in the U.S. So again, I think a good validator for a company like us. Any further questions there, Tracy?

No. Thank you, Brian. At the moment, I don't have anything further online.

Right. Any further questions...

[indiscernible] Myriad in a dual listing [indiscernible] ASX?

Yes. It's something that we have thought about. I think there's pros and cons. I think the pro is that it would give us more visibility in the New Zealand market because we're a New Zealand-based company, we're listed on the ASX, we don't really going to look a lot of local coverage. So I think would help in that sense. But I think the [indiscernible] that's quite important to us is what we'd really like to got to do is to get into some of the indexes on the ASX. And it may mean that, that becomes harder for us. And so [indiscernible] that we're probably best to just focus on being on the ASX. But it is something that we do continually go back and sort of reconsider. Okay. Any final questions? No. Okay. Right. So thank you.

Thank you, Brian. We're now into the formal piece of the business. And the first item of the business is to receive and consider financial statements and audit report for the year ended 31 March 2023. You've received those financial statements. We have -- we don't intend to go through them. But the floor is open for any questions of [indiscernible] auditor or James as a CFO. Are there any questions from the floor about financial statements? Tracy, if you have any questions?

No, I have no questions online.