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Revenue up, profits down as Ellex embarks on FY20

04/09/2019By Myles Hume
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Ellex Medical Lasers remains buoyed by strong performances in its glaucoma portfolio and Retinal Rejuvenation Therapy (2RT) laser treatment, despite posting an after tax net loss of $5.8 million.

Following the release of its full-year FY19 results on 29 August, the Adelaide-based ophthalmic device manufacturer recorded net revenue of $81.6 million, up 3% on the year prior.

Global revenue for the company’s iTrack surgical system increased 29% to $14.3 million. The results were driven by a particularly strong performance in the US, where unit sales were up 30% to 8,314. China, where iTrack is the only approved minimally invasive glaucoma surgical device, saw unit sales rise 42% compared with FY18.

“We remain excited by the opportunities for iTrack in the US,” Ellex interim CEO Ms Maria Maieli told Yahoo Finance.

“When we overlay the accounts by ophthalmology specialty and by ambulatory surgical center (ASC), we note our user penetration is approximately 6% of the available specialists who could use iTrack in their practices, while at the ASC level, which are the majority of our accounts, it's approximately 17% penetrated.”

The company’s lasers and ultrasound segment continues to be the strongest overall earner. It generated $65.5 million of the total revenue, however this was 3% down on FY18 due to a weaker than expected second half sales performance.

Ms Maria Maieli interim CEO
Ms Maria Maieli interim CEO
“As the company exits a period of significant investment in our glaucoma franchise particularly, a focus on costs and working capital improvements remain an objective for the current financial year”
Maria Maieli, Ellex

Within the segment, revenue for the Selective Laser Trabeculoplasty (SLT), a first-line glaucoma therapy, increased 10% to $32.4 million, accounting for 49% of the segment revenue, following positive results from the LiGHT clinical trial.

“With this solid growth, there has been a significant increase in our glaucoma product mix from 36% in FY16 to 57% of group revenues in FY19, justifying our investment and focus into this high-growth underpenetrated market,” Maieli said.

“As the company exits a period of significant investment in our glaucoma franchise particularly, a focus on costs and working capital improvements remain an objective for the current financial year. We expect group earnings before interest, tax, depreciation and amortisation (EBITDA) to show an improvement in FY20.”

Ellex’s 2RT laser treatment recorded a 260% revenue increase to $1.8 million, following the release of favourable results from the LEAD clinical study in patients with intermediate age-related macular degeneration (iAMD). The company is now establishing a regulatory pathway to obtain US regulatory approval for iAMD during 2019.

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Sales of Ellex’s cataract and vitreous opacities lasers were down 23% to $12.6 million. The same was true for its diagnostic ultrasound equipment, which was down 37% to $4.3 million.

Overall, the company reported an EBITDA loss of $1 million. This was driven by a 6% increase in lasers and ultrasound segment EBITDA to $9.5 million, which was offset by a $5.1 million loss for iTrack and $600,000 loss for 2RT. The net loss after tax was $5.8 million.

Looking ahead, the company expects to show an improvement versus FY19, particularly in its iTrack segment, which is anticipated to generate positive earnings in the second half of FY20.

Geographically, North America remained Ellex’s largest market, accounting for $38.3 million in revenue, followed by Europe, Middle East and Africa ($15.8 m), Japan ($12.1 m), Australia and New Zealand ($9.7 m), Asia ($4.9 m) and Latin America ($800,000).

 

More reading:

Ellex’s 2RT therapy slows AMD progression in long term
Ellex announces strong half-year financial results
Ellex reports positive results in first-line glaucoma treatment
den departure prompts leadership change at Ellex
Ellex unveils Eye Prime diagnostic ultrasound
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