The Numbers Behind the Numbers and the List of 10 Updated

As we head into the final month of Q2 (hard to believe!) it is a good time to review the numbers behind the numbers.  Early in Q1 we identified key metrics in the business beyond the normal revenue and EBITDA numbers that we track.  This “List of 10” is important to not only meet our short term goals but the medium term objectives of our business.  Ultimately helping us reach our goals of helping 600,000 patients this year with our medical devices and possibly beyond!  Here is an update on the list of 10 and not in any particular order.  Like our Scorecard nearly everyone in our business has some impact on the positive movement of the objectives below.

  1. Surgical Solutions Synergy – We are seeing good anecdotal evidence that the opportunity with BGS and BoneScalpel sold together and leveraging our much larger commercial channel will pay dividends increasing our 5% market share in both markets.  While we had a slow start to the year due to elective surgical procedure headwinds and hospital staffing shortages things continue to pick up through Q1 and into Q2.  We have several large accounts that are in the process of being converted to our BGS products that we have not had access to before.  This is a good sign and expect to see significant synergies as we progress through the second half of this year with both BGS and BoneScalpel sales synergies.
  2. Theraskin Reimbursement – Gaining Aetna coverage which we announced in April was a big victory.  We are starting to see solid growth numbers from the Wound business approaching consistent double digit growth and Theraskin represents a critical dynamic of continued growth and market penetration.  Today Theraskin is a $30M product line for us but with growth in reimbursement leveraging the RCT recently published this revenue number could double in the coming couple of years.
  3. L360 Go in Ortho – The momentum is building with this product in orthopedics as we have had very good results from our pilot and are now expanding the pilot to include more geographies and territories within our Pain Treatments (HA reps) vertical.  We will be measuring success closely in Q3 and Q4 in anticipation of a broader rollout by late this year or early next year.
  4. Exogen Order Fulfillment Timing and Conversion Rate – Conversion rate for Exogen is up to 86% and the pilot with the 72 hour order turnaround with United (which is 30% of our orders) has been a big success.  We will now be expanding the United pilot to include other commercial carriers as we build on providing Exogen in 3 days or less to as many patients as possible.  We feel this improvement in service will drive a competitive advantage and help get Exogen back to growth!
  5. Gross Margin – Our AOP goal is 76.2% and we are at 76.5% so we are trending well.  Average selling price maintenance and areas like cost of Quality are essential to maintaining and improving our gross margins.  As we build our strength in Operations we expect to see greater synergies and opportunities for savings in the cost of manufacturing and supply chain that will drive up our gross margins over time.
  6. HA – Growth in Durolane and Gelsyn is critical to our success in the short and medium term remembering that we are early in the product life cycle for both products with Durolane launched in 2018 and Gelsyn in 2016 in the US market.  Today we are at 98% to plan and 35% growth in Durolane and 103% to plan and 27% growth for Gelsyn.  We are gaining market share and expect that to continue as we shift to ASP pricing most likely in early Q3 and our new Cigna coverage goes into effect July 1st.
  7. PNS – We are off to a slower start than we wanted due to slowness in elective procedures early in Q1 and some supply chain headwinds.  We are now in a position to drive considerable growth as we head into the end of Q2 and Q3 and now have a sales team in place to make this happen.
  8. International – About 9% growth for the year and not a bad start considering some headwinds we have had with Supply Chain and the conversion to MDR.  We will be further identifying our growth levers as we work into H2 and look for our International business to growth faster than our overall business in the quarters and years to come!
  9. Vector Units – Solving the Vector Supply Chain has been the critical task in the first half of this year.  Going into July this should be resolved and we should be back in business with Vector!  The potential is significant as we look to have Vector be a growth lever in the short and medium term.
  10. Public Company Costs – We are shifting our SEC counsel in July to a local NC based firm that is highly recommended which will have significant savings on our costs and EBITDA.  By next year we also expect to see significant savings on our insurance as we enter our second year of being a public company.

As we enter the last part of Q2 the business has significant momentum thanks to the amazing work of our team.  Every 50 seconds a patient benefits from a Bioventus medical device!  Your Caring efforts and our culture of Learning based on consistent continuous improvement our keys to success!