BioStem Reveals Plans For New Products, Expanded Sales And Manufacturing Capabilities At Dawson James Small Cap Growth Conference

Jason Matuszewski, CEO and co-founder of BioStem Technologies, Inc. BSEM, presented at last year’s Dawson James Small Cap Growth Conference in October. BioStem is a biotech company developing tissue allografts from perinatal tissue — including umbilical cords, and placentas — for the regenerative medicine space. Here are some of the key takeaways from the presentation.

BioStem Says Its Proven Growth Strategy Is Still Generating Strong Results

Thanks to efficient manufacturing processes, BioStem is already achieving high gross profit margins above 80% which has helped it generate strong financial results, including trailing net sales in the last 12 months of $7.68 million and an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $2.14 million.

Those numbers already represent strong growth for the company. Trailing net sales increased by 356% while its adjusted EBITDA increased 1,488% year over year. 

With $1.3 million in cash on hand, BioStem says it's well positioned to continue achieving strong growth thanks to a multipronged growth strategy that includes scaling production, adding new products to its portfolio, and expanding its sales and marketing efforts. 

Four Proprietary Tissue Allograft Products Are Already On The Market

During the conference, Matuszewski gave a broad overview of BioStem’s current product portfolio and touched on why the biotech believes it’s well positioned for commercial success, especially in the $10 billion advanced wound care market and $14 billion surgical recovery market. 

The company’s products are all based on its proprietary BioRetain® platform which combines small molecules, cytokines, and growth factors derived from perinatal tissue to create sterile, shelf-stable dehydrated tissue allografts that are easy to store and easy to use. Once applied, that blend of small molecules, cytokines, and growth factors helps activate the local microenvironment at the site of the wound to stimulate the body’s natural tissue repair and regeneration processes.

“This is our key differentiator to our products and what will set us apart as we push forward with phase 4 clinical trials on diabetic foot ulcers next year,” Matuszewski said. The clinical trial is meant to help BioStem achieve commercial payer coverage for its products and potentially gain IDN [Integrated Delivery Networks] and GPO [Group Purchasing Organization] contracts.

“Our initial commercial strategy is heavily focused on product being sold and reimbursed within the Medicare system,” Matuszewski explained. Currently, BioStem’s products are covered in about half of U.S. states and the company is working on expanding into more states. 

That coverage is for the four products in BioStem’s existing product line. He continued, “Our first to market [product], Vendaje, is a dehydrated placental allograft that retains only the amnion layer, can be stored at room temperature and is used in both surgical and advanced wound care settings.”

In addition to Vendaje, the company also offers Vendaje AC, a thicker dehydrated allograft that retains all three placental layers; Vendaje AC Fenestrated which, in Matuszewski’s words, “is uniquely patented with a louver system to help maintain constant contact over the wound bed at the same time allowing exodus to weep from the wound site;” and Vendaje Optic, a variation on the flagship Vendaje product developed specifically for the eye.

“All of these products have been approved by the FDA’s tissue reference group, or TRG, and have been deemed a 361 product. We hold on file a TRG letter from the FDA for all of these products indicating the 361 designation and their approval for commercialization as a barrier in the wound care and surgical setting.”

BioStem Plans To Add New Products And Build Out Sales And Marketing Capabilities

“Our main goal as we depart 2022 and into 2023 is to accelerate commercial efforts of our product lines,” Matuszewski said. With those efforts, the company projects annual sales growth for its current product lines of 45%-50% in the advanced wound care space and 75% in the VA system thanks to an active federal supply contract. 

“We look to launch four new products in 2023 and 2024,” Matuszewski noted. That includes two new products in the advanced wound care space and two in the surgical recovery space. 

BioStem is also planning to expand its team of sales representatives from four to 100 over the next five years. In addition to expanding its team of direct sales representatives, BioStem also has plans to build out its marketing and customer support capabilities. Those plans include the launch of a Salesforce e-commerce platform by the end of this year to help clinicians order the product more easily as well as offer a central source of education and information about BioStem’s portfolio of tissue allograft products.

On the customer support side, BioStem launched its care partner program. “This support network helps our clinical partners answer any Medicare reimbursement questions as well as support their ability to have successful reimbursement of our products,” Matuszewski explained.

BioStem Has Lots Of Room To Scale Manufacturing To Meet Growing Sales Volume

Currently, BioStem manufactures all of its products at its 6,100-square-foot facility in Florida. While just 1,500 square feet meet the International Organization for Standardization’s (ISO) criteria for clean room space, BioStem plans to double that to 3,000 square feet. That added ISO clean space would allow BioStem to scale manufacturing from 50,000 square centimeters of tissue per month to 100,000 square centimeters.  

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