Auckland, NZ. Aroa Biosurgery has posted a modest profit for the FY18/19 year, a first for the Auckland-based, privately held tissue-regeneration company since its formation 10 years ago.
Chief Executive Brian Ward said the first-time push into profit would be welcome news for the company’s tight and supportive family of investors. It was achieved off the back of 118% revenue growth to $24.2 million.
“We are delighted that after a number of years of investment in product development, regulatory approvals, manufacturing capacity, and more recently in a direct sales team in the United States, we have demonstrated that we can be profitable,” Mr Ward says.
“While this is a major milestone for Aroa Biosurgery we will continue to prioritise growth over profitability to make sure that we capture the opportunity in front of us,” he says.
The company manufactures biomaterials for tissue regeneration marketed under brands such as EndoformTM and OvitexTM which are processed from sheep rumens and used in complex wounds and surgical soft tissue repair applications.
Aroa has invested around $50 million in the past decade. During this time, it has gained FDA approvals in the U.S. market, established a clean room manufacturing facility and grown a 110 strong R&D and manufacturing team.
It also recently bought back its global wound care rights and established a 50% share in a U.S. based sales joint venture that sells Aroa’s wound products into major hospitals across the U.S. The JV, known as Appulse, has recently hired five more people to increase geographic and channel reach which brings the total field sales team to thirty people. This month, Aroa opened a new office in San Diego adding a further five people in sales support.
“Our products have now been used in well over five million applications in the U.S. for complex wounds and soft tissue surgery. With a growing weight of supporting clinical evidence, we are very well placed to scale up in what is globally a $5 billion per annum, addressable market,” he says.
Aroa is beginning to pursue incremental growth from outside the United States. In the last year alone, the company has seen rapid growth off a low base in Germany, Austria, Thailand, Canada, Jordan, India and South America, and has further distribution agreements in the pipeline.
Mr Ward says the company is a passionate believer in ongoing product development. There is strong pipeline which will lead to new products in each of the next three years to leverage Aroa’s established market position.
“Aroa’s commitment to ongoing investment in R&D, quality, manufacturing and sales demonstrates our commitment to growth and to building a strong, long-term position in the regenerative tissue market,” Mr Ward says.