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Organ Transplant Co.'s Q3 Revenues Rise 378%
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Shares of medical technology firm TransMedics Group Inc. traded 24% higher to a new 52-week high after the company reported Q3/22 financial results highlighting a 378% YoY increase in net revenue and raised its FY/22 revenue estimates to US$80-85 million.

Commercial-stage medical technology company TransMedics Group Inc. (TMDX:NASDAQ), which has developed a transformative organ transplant therapy platform built to provide life-saving donated organs to patients with end-stage lung, heart, and liver failure, today announced financial results for the third quarter of 2022 ended September 30, 2022.

The firm reported that net revenue in Q3/22 increased by 378% year-over-year to US$25.68 million, compared to US$5.37 million in Q3/21. The company mentioned that in Q3/22, it benefitted from a US$1.4 million favorable adjustment related to accrued revenues from a clinical trial.

The firm indicated that its gross margin improved to 71% in Q3/22, compared to 70% in Q3/21 but noted that it was due primarily to a 2% positive adjustment related to revenue from a clinical trial.



The company advised that excluding the adjustment, Q3/22 net revenues came in at US$24.3 million, which represented a 349% increase versus Q3/21 and an 18% sequential increase over Q2/22.

The firm explained that the revenue increase was primarily attributed to its OCS™ Heart and OCS™ Liver sales of which were driven by its National OCS Program (NOP). TransMedics stated that approximately 90% of its revenues generated in the U.S. originated from transplant centers utilizing the NOP.

TransMedics Group's President and CEO Waleed Hassanein, M.D., stated, "We are very pleased with our third quarter, and year-to-date performance and the strong clinical demand for our OCS technology and NOP integrated offering . . . We strongly believe that we are in the early stages of capitalizing on the significant greenfield opportunity that we have created in the transplant space. We now plan to leverage the solid foundation that we have established in 2022 to drive TransMedics into its next growth phase in 2023."

The firm indicated that its gross margin improved to 71% in Q3/22, compared to 70% in Q3/21 but noted that it was due primarily to a 2% positive adjustment related to revenue from a clinical trial.

The company stated that operating expenses in Q3/22 increased to US$23.7 million, compared to US$15.5 million during Q3/21 and US$24.1 million in Q2/22. The firm noted that these additional expenses were the result of increased investments associated with its next-generation TransMedics National OCS™ Program (NOP), commercial activities, and corporate infrastructure.

TransMedics reported that for Q3/22, it recorded a net loss of US$7.43 million, or a net loss of US$US0.25 per basic and diluted share, versus a net loss of US$12.96 million, or US$US0.47 per share in Q3/21.

The firm indicated that as of the end of Q3/22, it held US$204.5 million in cash on its balance sheet, which included proceeds received from its recent public offering and debt refinancing. TransMedics announced that during the latest quarter, it had completed a public offering of common stock, which raised approximately US$140 million in net proceeds.

The company offered some forward guidance and advised it is raising its FY/22 estimates and now expects revenue of US$80-85 million, which it said represents a 164-181% increase over the US$30.3 million it recorded in FY/21. The firm noted that previously it had projected FY/22 revenues of between US$67 million and US$75 million.

TransMedics is a medical technology firm based in Andover, Mass., that provides portable extracorporeal warm perfusion equipment and services used for organ transplant therapy for end-stage organ failure patients. The company is involved with assessing donor organs for transplantation and keeping them warm and functional through delivery and up until the moment they are implanted in the new recipient.

The firm is striving to fill the large unmet need for a greater number of high-quality donated organs for transplantation. The company mentioned that "it 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." The company states on its website that its Organ Care System (OCS™) platform is "the only FDA-approved technology for lung, heart, and liver transplantation indication in the U.S."

TransMedics started the day with a market cap of around US$1.43 billion, with approximately 31.76 million shares outstanding and a short interest of about 7.4%. TMDX shares opened 25% higher today at US$56.45 (+US$11.32, +25.08%) over yesterday's US$45.16 closing price and reached a new 52-week high price this morning of US$58.90. The stock traded today between US$53.44 and US$58.90 per share and closed for trading at US$55.96 (+US$10.83, +24.00%).

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