Thoughts on FY23 results:After a good run and a likely ~30% miss...

Thoughts on FY23 results:
After a good run and a likely ~30% miss for Q4 EPS approaching, I can see why some are taking profits or looking to trade. Historically, it looks like the right play:



With a P/S ratio of around 9 (the current average for an Australian biotech company is around 7.2) and the company in a better position than the average asx biotech company; institutional funds accumulating; the chance of a substantial BARDA procurement order with a contract renewal which would bring forward the profitability date; and the other expected updates (2025 profitability guidance, GO timing, PermeaDerm launch date, international expansion updates, VAC approvals, salesforce expansion details, etc) ~ I think this time the market's reaction may be more subdued than previous EPS misses and will look towards future growth. However, I've set aside some funds in the event that history repeats.

Thoughts on FY24:
Expected updates which will position the company for future growth on RECELL GO, international distribution partnerships, product portfolio expansion, vitiligo studies. EPS should improve as they move towards profitability in 2025, and revenue could look something like this if they come in at the midpoint of guidance:

		Mar-24	Jun-24	Sep-24	Sep-24	FY24
1	Revenue (USD)	$15,200,000	$17,600,000	$22,000,000	$26,700,000	$81,500,000
2	Growth (mrq)	8%	15%	25%	21%
3	Growth (pcp)	45%	51%	62%	89%	64%

JC's thoughts from the December 8, 2023 investor briefing:
“We’re even more excited where we think we’re going to be a year from now”
“I think what you can expect from us from a shareholder point of view, is to execute to our plan, to communicate as effectively as we possibly can”

Thoughts beyond 2024:
It's too early to count our chickens, but I find it hard to not imagine what could happen if/when they execute to their plan.

US Burns - With RECELL GO, they're expecting to achieve 40-50% market penetration of US$300-400M serviceable addressable market (SAM) = $120-200M p.a. (FY23 ~ $45M)

+

US FTSD - US$1-1.5B SAM. They haven't provided their market penetration expectations yet so for this exercise I'll say ~ 20% = $200-300M p.a. (FY23 ~ $2M)

= say 5-year ramp up from $47M to $320-500M p.a. (47-60% CAGR)



I think that's some very solid and achievable growth ~ that's just from US Burns & FTSD.

The growth curve is extended if we include other revenue sources such as:

+ BARDA - Procurement of the RECELL System under a vendor-managed inventory system to bolster emergency preparedness?

+ International Expansion (Japan, EU/UK, Australia) - Total combined market size is approximately the same size as the US (less partner's margin which could be 50-60%).

+ Additional products to sell in the US - Expectation from 2024. PermeaDerm could be launched during Q224. Other yet to be announced products are expected to follow.
“We think the portfolio expansion is going to end up driving revenue growth, perhaps further than we are currently guiding to” – JPMH Conference

+ US Vitiligo - Expected rolling launch (largest states first) from 2H2025.
“This is a couple of billion-dollar market. You take those 438,000 (vitiligo patients seeking treatment) and you multiply them by $6,000, you get $2.5 billion."
Depending on QoL cost savings/insurance coverage, the product price might be higher ~$6,500 if/when launched in 2H’25.

I know I got carried away again but, for entertainment purposes, here's what the total commercial revenue could look like if all goes smoothly:


Since the share price is linked to revenue and earnings, through my rosy glasses it looks like LTSH (and anyone hopping on for the ride) would do unbelievably well.