BioStem Technologies Reports 133% Year-Over-Year Revenue Growth As It Expands Distribution of Patented Allograft Tech

BioStem Technologies Inc. BSEM is a regenerative medicine company that develops and manufactures tissue allografts for use in surgery and wound care. In August, the company reported growth exceeding even its own expectations as net revenue increased to $2.2 million for the second quarter. That represents year-over-year growth of 133% compared to the $926,000 net revenue in the second quarter of last year. 

BioStem attributes that growth to rapidly increasing sales of Vendaje®, its allograft product derived of the amniotic membrane from the human placenta.

BioStem Reports Second-Quarter Results

Gross profit margins for the quarter grew from 52% in the second quarter of 2021 to 82% in the second quarter of this year. The $2.2 million net revenue in the second quarter brings BioStem’s net revenue for the first half of 2022 to $4.9 million, a 173% increase over the first half of 2021. 

During a conference call on the results, BioStem CEO Jason Matuszewski credited the company’s commercial team, which has been expanding the company’s distribution network, transitioning its focus from indirect to direct sales and working on deploying a business-to-business (B2B) e-commerce platform to make both ordering products and getting the documentation needed for reimbursement easier for healthcare providers. 

Matuszewski also discussed plans to bring more of the processing in-house, which would further reduce overhead and decrease the time it takes to process a donor. Meanwhile, BioStem anticipates its newest products, Vendaje AC® and Vendaje Optic® will receive reimbursement approval from the Centers for Medicare and Medicaid Services (CMS) in early 2023, meaning the allografts will be covered by Medicare and Medicaid.

These new products combined with its expanded reach in new regions has BioStem optimistic that it can continue reporting record growth in coming quarters. 

BioStem Says Its Success Comes From Novel Amniotic Membrane Allograft Technology

Amniotic membranes derived from the innermost layer of the placenta, which acts as a protective barrier for the developing fetus, have shown a lot of promise in wound care and surgery. It’s packed with anti-inflammatory cytokines, growth factors and other components that support the fetus’s development. 

When used to treat wounds or aid in recovery from surgery, research has found that the membrane seems to “disappear” as it fully integrates with the patient’s own tissue. It also shows no risk of host reaction because the membrane is capable of modulating the immune system to prevent it from being rejected. 

Some companies in the allograft space get around the challenges of processing and storing donor tissue by developing synthetic alternatives, like Xtant Medical Holdings Inc.’s XTNT synthetic bone putty or Straumann Holding AG’s SAUHY 3D printed dental implants. These are sterile and easier to manufacture because they don’t rely on donor tissue. However, they typically aren’t as durable and don’t perform as well as actual human tissue.

Despite its promise, use of amniotic membranes in allografts has been limited by the challenges of storing fresh tissue without it getting contaminated or degrading. It’s difficult for manufacturers to develop shelf-stable and sterile allograft products using the beneficial amniotic membrane.

BioStem says that’s why it developed a way to process human amniotic membranes derived from placentas that preserve their strength and functionality while making them more sterile and shelf-stable. It does that with a six-step BioRetain® process that gently but thoroughly removes contaminants and debris before dehydrating and sterilizing the membranes to store them for up to five years.

The result is products like its patented Vendaje allografts, which can be used as a substitute for skin grafts or placed over open wounds to speed up and improve the healing process after surgery. Vendaje AC®, meanwhile, is a thicker, more robust multilayer allograft for major surgeries, severe burns or complex wounds, including ulcers or infected wounds. Vendaje Optic® offers those same benefits to repair wounds or heal surgery incisions on the eye. The single amnion layer is ideal for the more delicate surface of the eye.  

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