Aroa generates most of its sales from the US, however, this is now expanding into Europe. Aroa's distributor for the Ovitex products (TELA Bio) is also growing sales in Europe, and has grown sales at the same rate as Aroa (26%) in the June quarter.
Investing in Confirming Product Superiority
An important long-term positioning strategy by Aroa is to continue to invest in clinical studies to highlight the benefit of its technology in numerous wound healing applications. In a study published last year that tested the Aroa Myriad ECM product in 120 patients with "complex and chronic defects" (where 71% had uncontrolled diabetes), no post operative infections, amputations or complications were recorded. The median time to 100% tissue healing was 30 days from just one application, with 62% incidence of healing at 180 days.
In real world data in diabetic foot ulcers (2,222 ulcers), the company's Endoform product increased the probability of healing by 38%. In venous leg ulcers (830 ulcers treated), the probability of wound healing was 40% greater than standard-of-care. In a previous study published in 2021 in ventral hernia repair, only two of the 75 patients experienced a hernia recurrence. In this study, patients were selected for the high chance of hernia recurrence (79%) and 34% had previous hernia repairs.
Summary
Aroa is capitalised at $242 million. The company's forecast for sales for FY2026 (ending 31 March) is between NZ$92–100 million, which equates to a growth rate of 10%–20%. EBITDA is forecast at NZ$5–8 million for this year. There is expected to be some impact from new US tariffs, however, the company expects growth in Europe by Aroa and TELA Bio will help offset the tariffs.
Bioshares recommendation: Speculative Buy Class A
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