TransMedics Reports First Quarter 2021 Financial Results

Rhea-AI Summary

TransMedics Group, Inc. (TMDX) reported a net revenue of $7.1 million for Q1 2021, marking a 6% decline from Q1 2020. However, U.S. net revenue rose by 11% year-over-year, totaling $5.8 million. The increase was attributed to strong sales in OCS Lung and OCS Heart, although these gains were partially offset by reduced OCS Liver activity. Gross margin improved to 68%, and operating expenses decreased to $11.3 million. The net loss narrowed to $7.9 million. The company remains optimistic about future FDA approvals for its OCS systems.

Positive

• U.S. net revenue grew 11% year-over-year.
• Gross margin increased to 68% compared to 65% in Q1 2020.
• Net loss reduced to $7.9 million from $8.9 million in Q1 2020.

Negative

• Overall net revenue decreased 6% compared to Q1 2020.
• Lower transplant activity outside the U.S. impacted growth.

ANDOVER, Mass., May 4, 2021 /PRNewswire/ -- TransMedics Group, Inc. ("TransMedics") (Nasdaq: TMDX), a medical technology company that is transforming organ transplant therapy for patients with end-stage lung, heart, and liver failure, today reported financial results for the quarter ended March 31, 2021.

Recent Highlights

• Net revenue of $7.1 million in the first quarter of 2021, representing a 6% decrease compared to the first quarter of 2020
• Reported U.S. net revenue growth of 11% year-over-year
• Announced positive FDA advisory committee vote for OCS Heart System
• Appointed Stephanie Lovell to Board of Directors
• Announced expectation for mid-July 2021 OCS Liver FDA advisory committee meeting

"We are pleased with our progress as we advance quickly toward several near term regulatory and commercial catalysts expected in 2021," said Waleed Hassanein, MD, President and Chief Executive Officer. "Following the favorable FDA advisory panel vote for OCS Heart, we are working with FDA to map out the process to a decision on our PMA. In addition, we are making significant progress towards our key 2021 catalysts and strategic initiatives, which gives us confidence in our long-term outlook."

First Quarter 2021 Financial Results 
Net revenue for the first quarter of 2021 was $7.1 million, a 6% decrease compared to $7.5 million in the first quarter of 2020. US net revenue was $5.8 million in the first quarter of 2021, an 11% increase from $5.2 million in the first quarter of 2020. The increase in US net revenue driven by strong OCS Lung and OCS Heart sales, was offset by the completion of the OCS Liver PROTECT CAP and lower transplant activity outside of the US.

Gross margin for the first quarter of 2021 was 68% as compared to 65% in the first quarter of 2020.

Operating expenses for the first quarter of 2021 were $11.3 million compared to $12.9 million in the first quarter of 2020. The decrease in operating expense was driven by limited travel and other spending due to COVID, which more than offset the increased investment in the National OCS Program.

Net loss for the first quarter of 2021 was $7.9 million compared to $8.9 million in the first quarter of 2020.

Cash, cash equivalents and marketable securities were $118.1 million as of March 31, 2021.

Webcast and Conference Call Details
The TransMedics management team will host a conference call beginning at 4:30 p.m. ET / 1:30 p.m. PT on Tuesday, May 4, 2021. Investors interested in listening to the conference call may do so by dialing (866) 393-4306 for domestic callers or (763) 488-9145 for international callers, followed by Conference ID: 1172894. A live and archived webcast of the event will be available on the "Investors" section of the TransMedics website at www.transmedics.com. 

About TransMedics Group, Inc.
TransMedics is the world's leader in portable extracorporeal warm perfusion and assessment of donor organs for transplantation. Headquartered in Andover, Massachusetts, the company was founded to address the unmet need for more and better organs for transplantation and has developed technologies to preserve organ quality, assess organ viability prior to transplant, and potentially increase the utilization of donor organs for the treatment of end-stage heart, lung and liver failure.

Forward-Looking Statements
This press release contains forward-looking statements with respect to, among other things, our operations and financial performance and expected timing of regulatory approvals for our OCS products. These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in or implied by any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Some of the key factors that could cause actual results to differ include: that we continue to incur losses; our need to raise additional funding; our existing and any future indebtedness, including our ability to comply with affirmative and negative covenants under our credit agreement to which we will remain subject to until maturity, and our ability to obtain additional financing on favorable terms or at all; the fluctuation of our financial results from quarter to quarter; our ability to use net operating losses and research and development credit carryforwards; our dependence on the success of the OCS; the rate and degree of market acceptance of the OCS; our ability to educate patients, surgeons, transplant centers and private payors of benefits offered by the OCS; the impact of the outbreak of the novel strain of coronavirus and associated containment and remediation efforts; our ability to improve the OCS platform; our dependence on a limited number of customers for a significant portion of our net revenue; the timing of and our ability to obtain and maintain regulatory approvals or clearances for our OCS products; our ability to adequately respond to FDA follow-up inquiries in a timely manner; the performance of our third-party suppliers and manufacturers; the timing or results of clinical trials for the OCS; our manufacturing, sales, marketing and clinical support capabilities and strategy; attacks against our information technology infrastructure; the economic, political and other risks associated with our foreign operations; our ability to attract and retain key personnel; our ability to protect, defend, maintain and enforce our intellectual property rights relating to the OCS and avoid allegations that our products infringe, misappropriate or otherwise violate the intellectual property rights of third parties; our ability to obtain and maintain regulatory approvals or clearance for our OCS products; the pricing of the OCS, as well as the reimbursement coverage for the OCS in the United States and internationally; and the risks identified under the heading "Risk Factors" and elsewhere in our annual report on Form 10-K for the year ended December 31, 2020, our quarterly reports on Form 10-Q, and in any subsequent filings with the Securities and Exchange Commission ("SEC"). Additional information will be made available by our annual and quarterly reports and other filings that we make from time to time with the SEC. These forward-looking statements (except as otherwise noted) speak only as of the date of this press release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable law.

TransMedics Group, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
		Three Months Ended March 31,
		2021		2020
Net revenue		$                 7,053		$                     7,530
Cost of revenue		2,242		2,670
Gross profit		4,811		4,860
Gross Margin		68%		65%
Operating expenses:
Research, development and clinical trials		4,532		6,225
Selling, general and administrative		6,786		6,652
Total operating expenses		11,318		12,877
Loss from operations		(6,507)		(8,017)
Other income (expense):
Interest expense		(952)		(1,042)
Other income (expense), net		(454)		217
Total other expense, net		(1,406)		(825)
Loss before income taxes		(7,913)		(8,842)
Provision for income taxes		(4)		(10)
Net loss		$              (7,917)		$                  (8,852)
Net loss per share attributable to common stockholders, basic   and diluted		$                (0.29)		$                    (0.42)
Weighted average common shares outstanding, basic and diluted		27,368,090		21,221,385

* Reconciliation of Gross to Net revenue for certain payments made to customers (in thousands)

		Three Months Ended March 31,
		2021		2020
Gross revenue from sales to customers		$               7,637		$                   8,243
Less: clinical trial payments reducing revenue		584		713
Total net revenue		7,053		7,530

 

TransMedics Group, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
		March 31, 2021		December 31, 2020
Current assets:
Cash and cash equivalents		$             26,727		$                 24,581
Marketable securities		91,386		101,061
Accounts receivable		7,395		6,864
Inventory		11,820		11,934
Prepaid expenses and other current assets		3,215		2,326
Total current assets		140,543		146,766
Property and equipment, net		4,734		4,754
Restricted cash and other long-term assets		506		506
Total assets		$           145,783		$               152,026
Current liabilities:
Accounts payable		$               1,289		$                   1,206
Accrued expenses and other current liabilities		9,931		10,317
Deferred revenue		432		263
Current portion of deferred rent		105		93
Total current liabilities		11,757		11,879
Long-term debt, net of discount		34,787		34,657
Deferred rent, net of current portion		1,564		1,599
Total liabilities		48,108		48,135
Total stockholders' equity		97,675		103,891
Total liabilities and stockholders' equity		$           145,783		$               152,026

 

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SOURCE TransMedics Group, Inc.

FAQ

What were TransMedics' financial results for Q1 2021?

TransMedics reported a net revenue of $7.1 million for Q1 2021, a 6% decrease compared to $7.5 million in Q1 2020.

How did U.S. net revenue perform in Q1 2021?

U.S. net revenue increased by 11% year-over-year, reaching $5.8 million in Q1 2021.

What is the gross margin reported by TransMedics for Q1 2021?

The gross margin for Q1 2021 was 68%, up from 65% in Q1 2020.

What was the net loss for TransMedics in the first quarter of 2021?

TransMedics reported a net loss of $7.9 million for Q1 2021, a decrease from $8.9 million in Q1 2020.

What regulatory updates did TransMedics announce?

TransMedics announced a positive FDA advisory committee vote for the OCS Heart System and plans for an OCS Liver advisory committee meeting in mid-July 2021.