Elutia Inc. (ELUT) Earnings Call Transcript & Summary

Welcome back inside our proactive newsroom. And joining me now is Randy Mills. He's the CEO of Elutia. And Randy, it's good to see you. How are you?

Great to be here.

Yes, excited to learn a bit more about what's been going on in the company and more importantly, your lead product, which we'll talk about in just a minute. But first, maybe give me a little back story on a Elutia.

Well, as the company that friend of mine, Kevin Rakin and I -- Kevin was another sort of longtime biotech CEO. Kevin sold a company called Advanced BioHealing to Shire. I had just finished with a company called Osiris Therapeutics and had a pretty successful exit. And we were in New York one day, and we thought, you know what, we were already pretty commercially successful in the regenerative medicine space before we should get together and try to do it again. And so we started putting different pieces together of the company back in like 2014, 2015, and the company was born. And out of that, we've sort of grown and sharpened our focus a little bit. And right now, we are pioneering what is called the drug-eluting biologic, which is a biological implant that has all the regenerative properties of implants that are from biologic origins but infused with the power of local drug delivery. And so you get sort of the best of both worlds, local drug delivery and regenerative medicine in one, and there's no one else doing that, and we thought that would be a pretty good space for us to lead.

Yes. The working name right now is CanGarooRM and will -- it may change in the future, but sort of explain to us how it works at what sort of uses would you have for that?

Right. So CanGarooRM fits a really specific almost niche market, but that is people that are getting things like pacemakers and implantable defibrillators and neurostimulators and things like that. There's about 500,000 pacemakers implanted each year. And they have the propensity to where they can migrate, they can erode through the patient's skin. They can also cause infection. And the infections from these types of procedures, they're not trivial. They happen about 5% of the time. But when they happen, they're pretty devastating because it involves the heart and the vascular system. And so we make this product that we're introducing CanGarooRM, that will have the biologic ability to hold the pacemaker in place and prevent it from eroding through the skin, which is bad. But also allude the powerful antibiotics rifampin and minocycline, that's why we call it CanGarooRM and elute those antibiotics over a protracted period of time and prevent the patient from contracting a serious infection.

Now I know you had some big news on that back in the fall of 2023. So maybe highlight as to where the product is at as far as its development is concerned, what stages of that?

Right. So we have fully developed the product. And right now, we're at that stage when companies like ours are waiting for big news from the FDA. So in December, we did our complete filing with the FDA. We heard back from the FDA that they've accepted the filing, and it starts the review clock. And this is a product that undergoes actually 2 reviews at FDA, one from the center for devices, the other from the center for drugs because it's got both of those components. But we expect to hear back and we expect to hear back favorably in the second quarter of this year. And if we are fortunate, and we do get approval, we think this is a product that has a market potential of a couple of hundred million dollars. And from a value standpoint, we think is worth at least $500 million for the company. So it's a pretty important time for us.

Yes. So when you hear back from the FDA and it is favorable, do you then work on the commercialization part of it? Or is there more testing that needs to be done? Or are you already through all that? Sort of what's the stages after you hear from the FDA?

Yes. We've been developing the product actually for quite a long period of time and several years now. So fortunately, we're done with the development component of it. It's with FDA. We also have our own commercial team that is actually already out on the market with the predecessor to this product, we call it Cangaroo, there's a shock and Cangaroo without the antibiotic delivery. And so we'll be using that commercial team to go and directly launch the product. So our plan right now is to start producing commercial quantities of the product in the late second quarter, start our initial soft launch in the third quarter and be fully at it in the fourth quarter this coming year.

Well, it's exciting time for you and the team, Randy. Thanks so much for updating us on what you're doing, and we look forward to seeing the results from the FDA and then what you're able to do with that after that. So I really appreciate your time. Thank you.

Thank you so much, Steve. Thanks. There's a lot of time talking with you.

All right. Good stuff. Randy Mills, the CEO of Elutia.