PolyNovo Limited (PNV) Earnings Call Transcript

Good morning, good afternoon, everybody, and welcome to the webinar for FY '25 results. I thought when I came in this morning, what is there to say that we didn't say a month ago when we did the unaudited results webinar. It turns out there's lots to say, not only to reinforce what happened in FY '25, which is all very good news, but there's quite a number of other things happening in the business as well. I was going to make some editorial comments to start, but I think first things first, I'll pass over to Robyn Elliott, our acting CEO and let her work through the deck that we've announced to the ASX. She will pass the baton on to Jan, who will talk about -- our CFO, by the way, who will talk about the financials. Robyn will top and tail it with some outlooks going forward. And then I'd like to make some much more substantive editorial comments before we open it up to questions. So I hope we can get this -- given we've already done one that we can get this all done and dusted by 3. But -- and so if we don't get your questions and we haven't already answered them by e-mail, we'll certainly do that after the event. But I think we're going to -- just by the way, I look at this going now, I think we're going to have plenty of time for questions. So first things first, let me introduce Robyn Elliott. And Robbie, I'll leave it in your hands.

Thank you, David, and thank you, everyone, for joining our webinar today. It's been around 8 years since we launched our first product, NovoSorb BTM. In that time, we have treated over 60,000 patients. We've become the market leader in difficult burns in many of the world's major markets. We've grown revenue to over $129 million, and we've generated both profits and positive cash flows. This, in any words, is a success story. It's on the back of the dedication and the commitment of the PolyNovo team. But more importantly, it's on the back of positive patient outcomes seen by our surgeons. Outcomes that actually surpass expectations consistently. They drive surge in innovation, and they underpin the acceptance by many that the NovoSorb platform is the dermal regeneration solution of choice. Next slide, please, Chester. Why does the NovoSorb matrix work so well? And why does it generate such enthusiasm in our medical communities? The common component of NovoSorb BTM and MTX products is a polyurethane foam. It's designed to have a porosity of greater than 90%, which allows for the cells to infiltrate the foam. The [ MAX ] is a scaffold. It allows for vascularization and tissue regeneration. Simply put, it turns a large wound or burn into a series of smaller connected wounds so that the body can heal it more quickly. NovoSorb BTM has an additional sealing membrane. It provides benefits, including temporary wound closure, which minimizes moisture loss, external contamination and wound contracture. And we found that these are particularly important for the treatment of larger burns and wounds and have really underpinned again some of the growth we've seen in that product. Next slide, please, Chester. Through real-world evidence and clinical publications, we can continue to collect data that demonstrates that our products are safe. effective, robust, incredibly versatile. But most importantly, they're simple for the surgeon to use even in really complex wounds or in difficult surgical environments such as war zones. Move to the next slide, please. So every day, we're listening to the voice of our customers from around the world. Surgeons and nurse practitioners have dedicated their lives to delivering superior outcomes for their patients. Our new product portfolio and line extensions are designed to provide solutions for unmet needs for these medical professionals. And that drives the use of the NovoSorb products in new indications, new applications and new geographies. In FY '25, we continued our strategy of investing for growth, and I'm really pleased to report that we achieved a record number of regulatory approvals during the year. And this really helps add to our total addressable market potential, and it's a credit to all of our teams that help deliver these approvals. And just to be clear, line extensions as represented in some of these products represent an extremely cost and time-effective expansion strategy for PolyNovo. We can base our regulatory submissions of shared preclinical and laboratory data. We can use the same manufacturing facilities, the same quality systems, the same equipment and processes. And we can garner our well-trained sales teams to penetrate the hospital systems more deeply. So all aimed at achieving significant growth outcomes in new indications in a very cost-effective manner. As we launch multiple variants of NovoSorb MTX, we are confident of driving adoption of this matrix in soft tissue reconstruction and complex wound management, including chronic wounds such as diabetic foot ulcers. And I have to say, after having the privilege of talking with surgeons and our sales teams over the last few months, I truly believe MTX is a game changer for PolyNovo and for our stakeholders. Next slide, please. FY '25 was a transformative year with significant milestones being achieved. Enrollment was complete for the BARDA pivotal clinical trial that's designed to obtain an on-label claim supporting the use of NovoSorb BTM in full-thickness burns in the U.S. And additionally, the 3-month data review for this trial was successfully completed for all eligible trial participants. After correspondence with the FDA, the optimal PMA submission strategy has been finalized, and this enables us to have the most efficient overall regulatory review process and approval time line for the PMA product. During the year, we also progressed larger and smaller sizes of BTM and MTX portfolio products, moving them from the research phase into the design and development phase, a particularly important milestone as we move to commercialization and regulatory approval. Additionally, successful preclinical results were generated for our final hernia mesh prototype. And a good example here for those to see. This mesh is manufactured from a novel biocompatible resorbable polymer monofilament. So you can see that it's a woven mesh product. It provides both strength and flexibility. And the initial results from the preclinical studies were really very impressive. So the next steps will be to complete a comprehensive comparative clinical study for which the data can be used for applying for a 510(k) clearance from the FDA. In parallel, we will look to finalize the marketing strategy and the commercialization pathway for this product. A strategic review is currently underway by the team to optimize and prioritize the new product pipeline. We're looking to improve our processes, continue to deliver research and productivity, faster time to market and improved value creation. And so that's a work in progress. And with that, I will thank you for your time, and I'll hand over to Jan, who will provide the financial results for FY '25.

Great. Thanks, Robyn. Next slide, please, Justin. Starting off with commercial sales. We achieved just over $119 million in NovoSorb sales, as Robyn mentioned, up 28.9% on last year, which is an increase of $26 million, so a great result. BARDA revenue was $8.6 million, was down 22.8%, but that's expected as the pivotal burn trial nears completion. Total revenue for the period was $129 million, up 23.3%. We achieved a net profit after tax of $13.2 million, up 151% on the prior year, and EBITDA was $11.2 million, up 209% on the prior year. Operating leverage continues to improve with operating expenses increasing by 19.4% compared to sales growth of 28.9%, which is really pleasing to see. Next slide, please. And again, one more slide. Thanks. As mentioned, we achieved 28.9% commercial sales growth and underpinning that result has been the strong momentum of record monthly sales. These important milestones that we've achieved 3 times this year. So we achieved record sales in November at $10.1 million, March $11.9 million and following in quick succession was June, $12.8 million. And pleased to report for July, we've recorded sales of $12.2 million, so a strong start to the year on the back of what was a record month already in July, which is fantastic. We'll move on to the U.S. results now. So next slide, please. Thank you. So over to the U.S. We experienced strong growth in the U.S., achieving sales of $88.4 million, up 28.7%, and we added 243 new customer accounts for the year. Following the launch of MTX, we experienced strong growth, recording sales of $2.1 million in the first half, followed by $4.6 million in the second half, resulting in MTX sales of $6.7 million for the full year and with recurring sales orders across many accounts, which was great to see. Profitability in the U.S. continues to increase year-on-year, and the U.S. business is generating significant cash flows. The U.S. sales team continues to go from strength to strength, driving demand, servicing customers and expanding the use of our products across many indications in addition to difficult burns. Next slide, please. So for markets outside the U.S., they performed very well, where we achieved sales of $30.3 million, up 29.6% in the prior year. We had first sales with recurring orders in the Czech Republic, Malaysia, Malta, Macau and Peru. The U.K. performance was very strong, recording sales of $7.5 million, up 51.9%, along with other key markets such as Canada, Turkey and France. Pleasing to report that India had sales grew by 81%, and we've now won 37 tenders. With MTX now registered in Australia, Canada and India, this will only further drive sales growth and expand the use of our products, not just across burns, but in trauma, plastics and reconstruction. I'll move on to cash now. Next slide, please. So pleased to report we ended the year with a strong balance sheet and cash on hand of $33.5 million. We fixed the issues with debt collection in the U.S. by working on this in-house and with our 3PL partner. With these issues now overcome, we recorded positive cash flow from operations of $3.1 million for the year. As preannounced recently, the remaining CapEx required to complete the new manufacturing facility is $8.5 million, and this will be paid by installments during FY '26. The majority of this will actually be funded by collecting on remaining overdue U.S. debtors, which are coming in. We've also got access to a $7.5 million equipment finance facility should we continue to use it. Also pleased to report the new R&D innovation center is complete and has been occupied by the R&D team. They're enjoying their new space and all the room. And the new manufacturing facility is on track to be operational by December and it's also on budget. So apart from the remaining CapEx for the new facility, future CapEx requirements will be minimal and incidental to our operations. In addition to our existing manufacturing facilities, the new manufacturing facility adds an additional capacity of equivalent to $500 million in annual sales. So to conclude, with our strong financial performance and balance sheet, coupled with our new facilities, we are well placed to support and fund growth globally, particularly as we enter larger markets such as China and Japan in due course. So I'll now hand it back to Robyn, and we'll go from there. Thanks, Robyn.

So next slide, please, Chester. One more, please. So just to look at the outlook for this year, we're really focusing on disciplined execution. We have huge opportunities within looking at supplying for the increased demand for BTM across both burn and wound indications. We've got amazing excitement around NovoSorb MTX growth enhanced by a full launch of the MTX 6-millimeter product, which is now approved in the U.S. And as I've said, we're moving through our development pipelines with the ability to submit the BARDA pivotal clinical trial and PMA in this year and generate additional clinical data to support growth in new indications and support our sales teams as they look to expand into new indications and new regions. We're really also looking to do this in a way where we are fiscally responsible. So continuing to focus both on growth and profitability to ensure that we align our expenditure with our revenue and continue to see the revenue increase fall to the bottom line. This enables us to continue to look to expand. As Jan said, our new facility is looking amazing. We're very excited to move into that in this financial year. And we're also excited to see the fact that the plans that have been in place for the last couple of years are really coming to fruition. We will be going through the next stage of evolution as we move through to this continued growth plan for the organization. And we have set ourselves up to have a very successful year in FY '26. So with that, I'll hand back to David.

Great. Thank you very much, Jan and Robyn. Just a few things to emphasize, I think, and perhaps slightly differently. First of all, let me just say something about cash flow. You can see in that presentation that we ended 30 June at $33.5 million cash at bank and cash equivalents. I just want to emphasize because Jan didn't mention it, but that is after paying down debt of $4.8 million and after paying $13.8 million for the new factory. So it's pretty impressive, and we expect operating cash flow to keep increasing this year. The second half of FY '25, which we're now just referring to, we had operating cash flow from operations of $15.8 million, and we expect that profit to keep dropping to the bottom line. So what's going forward? We ended 30 June at $33 million cash in the bank. We've got only about $8.5 million still to spend on finalizing the new factory. The R&D side of that, by the way, is now complete and the team is in there. So we're getting close to that. And as Robyn is optimistically thinking, we will be finished this, certainly the lockup and commercial stage by the end of this calendar year. So there's still $8.5 million to be spent, but we've got operating cash flow flowing through. As I said, it was $15 million plus in the second half of this financial year. And we see those profits still continuing to drop through to the bottom line. So pretty happy about the cash position we're in and the gearing position we're in. Everybody knows what my attitude to this is in terms of sales. Our margin is very high. And so the engine room, which remains for us in the U.S. is very powerful in terms of its profitability, very powerful in terms of the quality of people there. As I said just recently, the U.S. was looking to put another 8 people on. And when we did the last webinar a month ago, I told you that there are 88 people on the road in the U.S. And guess what, the revenue was $88 million. So it's a numbers game. The quality of people we're getting in the U.S. is second to none and driven not only by the leadership, but more particularly by the product itself and how successful that is with surgeons and so forth. So I'm really happy about the cash situation in the company because we're just about out of our CapEx. We've got operating cash flow. I said a month ago that we had and we announced a record month for June, which was $12.8 million for the month, and you can do the extrapolation yourself. As you know, it's still a little bit lumpy, but that lumpiness is going to go over time as we get more products, as we get more geographies, as we get more people on the road and so forth. And I can see it myself, and you'll see it when you look at those record months in November, in March and in June. And I can tell you, we've just had a Board meeting this morning, and we saw the July results, and there's been no cliff. So I'm expecting that this year, we'll have another some other record months. And so what does that mean for sales for the year? I don't know. We've never given guidance. The people who are on the line from the analysts will give you a better sense of that than I'm prepared to do. So I think that's really important. I think the other thing about the U.S. and Australia and the rest of world, for example, is MTX, which you all know is roughly, to put it crudely, a BTM without the laminate on the top. And we've had tremendous growth from launch at the end of last year in the U.S., and we expect that to continue. As Jan just said, the interesting thing is when you look at the first half, we sold $2.1 million of product in the U.S. in MTX. In the second half, that was $4.6 million. And I've seen some recent numbers that tell me that is not diminishing. I've just come back from New York, where I've had a meeting with one of the greatest KOLs there in plastics. And he is very excited about the prospects for MTX in the U.S. in the Plastics area and in the Orthopedic and podiatry area. So this is a big opportunity for us, and I noticed on social media that some of our shareholders or doctors are also seeing this even perhaps more bullish than I can be, if you like. So I think that's a really important point that we've started July well, that we have got very optimistic views about where our operating cash flow is going to come from this year. And we see not just the U.S. The U.S. is an engine room, but the numbers that Jan just read out with respect to the growth in places like Canada, in places up 48%, cases like the U.K., up 51%; France, 300%, but off a very low base. But even places like Turkey, 36% up. This is very, very heartening. And Canada, in particular, just let me reemphasize, I made the point about how many people we've got in the U.S. on the ground. We've got -- now got 3 people and a couple of support people in Canada. So that is going to drive the Canadian numbers in the same way as we see in Australia and the U.S. as well. So that's really interesting. I think the other thing, just to emphasize on that sales in the rest of the world is the first sales that we had into places like Malaysia, Czech Republic, Malta, Portugal, Peru, et cetera. But more interestingly, that we've now had the second orders in those places. So not just an order, for example, out of Malaysia, but a second order and just tells you, I think, something about how the surgeons see this. I was lucky enough on behalf of the Australian Government to be in the Philippines just recently, and they introduced me to the Head of Surgery at the Defense Hospital and a number of surgeons that were in Manila. And the interesting thing is how much these surgeons sort of travel around the world. So there are a couple of people there who've been working in Boston and really -- and come home to Manila and desperate to have our product. There was one guy who had been spending the last 2 years at the Oxford Hospital, working with Heather Cleveland on the burns unit and again, come back home and really keen. So it's not just that 400 now articles that we've got out in what people are using us for, but we're seeing that on the ground with surgeons that are sort of working around the world. And you can imagine, for example, in places like India, how many surgeons are there that have been trained not only in the U.S., but more particularly in the U.K. So there's a lot of sharing of information going around, and that's really fantastic from, not just for the company's point of view, but I think it's fantastic for our salespeople to see how that -- how good our product is. I saw an article overnight, which hasn't been published yet, but will be published shortly coming out of Serbia, where a 14-year-old girl had, had a whole head ripped off and they've reconstructed it using BTM. That will be published in the next couple of weeks, I think. But they also did 2 cleft palates. Now we could sit around here for months talking about how you could use this product. But surgeons are leading us as much as we're leading them in terms of uses for our product. That's just so, so exciting in my opinion. I think I've probably talked a little bit too much about -- but I just want to emphasize a couple of those things anyway. I haven't mentioned beta cell, which is the diabetic foot ulcers about the cell therapy that the guys in Adelaide are doing. And that paper in various forms has now been given 4 times around the world in major conferences and has elicited a lot of interest from cell companies and places that are working on stem cells in particular. And so I think we've -- I'm very excited about where all that's going. And the interesting thing, if you go back and look at one or two of those papers, they are on the ASX, but one -- the first one that was given was in Copenhagen. And if you go and look at that, there's some very great detail in it about why our foam is unique. And I think when you're close to it like we are and you pick up a piece of foam, it's a piece of foam. But what the guys in Adelaide articulate very well is not just the vascularization capabilities of the foam, but the size of the holes in the foam and the need for the exact size for cell delivery and so forth. And so one of the things that makes me most excited is when I talk to Novo Nordisk who have Ozempic, as you probably all know, and is now the largest market cap company in Europe, bigger than LVMH and so forth, even though its share price is off, it's still the biggest, is that their view is all of these cell therapy companies around the world, and we're not talking just about diabetes, but we're talking about thyroid, we're talking about any sorts of diseases really. They're all going to need a delivery platform. And the delivery platform where in the past, you might have been injecting into the liver is not something people want to do. And so we're really well placed, I think, to have a separate silo for our business, one silo, which is wound care in and out of the body in the body being hernia and breast and so forth. But one silo being cell delivery and medicine delivery. And I'm really excited about where Professor Toby Coates is heading and Professor John Greenwood is heading to with that. And if you haven't seen it, then I think there's a beautiful webinar that Toby Coates is being interviewed, I think, by John Hester at Bells. It's really enlightening. So I think that's the other great thing for us. All right. We as directors are in a blackout period at the moment. But I think after this, we're going to be free to go. So I might just instead of keeping randling on with no notes. I might open it up to Jan, who will direct some questions. Jan, please.

Thanks, David. Rex will go to the analyst questions who have dialed in, and then we'll go to the written platform questions have been typed in by viewers. So if you could patch in the first call, that would be great.

The first phone question comes from Lyanne Harrison from BofA.

I might start with the cash position. Obviously, very good cash flow, a good net cash for the June '25 year. You're continuing to generate operating cash flow as you go into '26. Can you talk about capital management and what your plans are for the excess cash that you're likely to generate in the coming year?

Jan, do you want to might also make some comments.

Go ahead. Look, I guess once we complete paying for the manufacturing facility, like I mentioned, is another $8.5 million and the way things are going, the business will be generating free cash flow in the second half. So with that, we obviously continue to build cash on hand, and we manage our deposits accordingly to maximize interest, but it does then present, I guess, we've got, I guess, a bit of a war chest for other things. But the important thing is to keep doing what we're doing, investing in that. And that's line extensions and research and development for new products. And you've seen the hernia product, which Robyn held up today, which is a lovely device if you get to hold it yourself. So there will be more work that gets need to be done around that as we move to a larger preclinical study. So we're in a good position and it's something we've been working really hard towards. And it's something we said when we raised the $53 million back in 2022. What we said we would do, we've done pretty much on all fronts. So -- but yes, it's a good position to be in, but I hope that answers your question, Lyanne.

Lyanne, let me just add to that. I mean, look, we've got $33 million in the bank. You know what our operating cash flow dropping to the bottom line was for the second half. I've told you that we've started the year very positively as well. But we're still not -- so even if we doubled our cash this year, we're not in a position where it makes any sense to say, well, we're going to be like Sam at ProMedicus and buy back shares. But -- so I think we'll get through this year and see where we end up. But there's no discussion yet at the Board table about share buybacks, dividends or whatever. And there are quite a number of interesting things on the near-term horizon for us. So I think we'll keep our powder dry, Lyanne.

Okay. And then can we talk about run rate? So you mentioned June run rate in terms of revenue was over $12 million, July is looking the same. And if we multiply that by -- sorry, it was over $13 million. If we multiply that by 12, we get to like $156 million, which when we look at consensus numbers is really pushing up against consensus numbers. Is there any reason why you think we won or PolyNovo won't be able to beat fiscal '26 consensus estimates, particularly given how you're tracking in some of your key markets and where MTX is going?

Look, I'll answer that, Jan. I think as you know, we've never given guidance, and it's pretty hard to keep up, to be honest, with the record months as they come. As you see in the Jan's report just then a record at the end of last year of 10, a record in March of 12, a record in June of 13. And I pose the rhetorical question, well, can you just multiply that by 12. Well, no. But will we have a record 14 or 15? We don't know. We're not going to give guidance on that. But you know the math as well as I do, Lyanne. So -- but there's nothing -- we don't see anything on the horizon that's going to prevent us from doing that. On the contrary, new countries, we've got some applications already to add to those countries, new indications, MTX in the U.S. There's a lot of positives going before we even go into what the cell therapy guys are doing.

Okay. Can we focus it on the U.S.? You mentioned previously -- you mentioned previously, you had 88 salespeople on the road and delivered $88 million in terms of revenue. You previously spoke about sales per salesperson or revenue per salesperson of about $1 million being the target. Has that target increased? Are you going to get more operating leverage out of those salespeople? Or is growth likely to come from having to add more salespeople in those markets?

No. I think -- well, it's probably better answered by Ed Graubart, who runs the U.S. But -- and the $1 million was really not a target. It was just -- that's what I think a salesperson can add. And we've got people in the U.S. who have gone to $3 million. We're not trying to necessarily constrain them, but that's probably in some markets, an indication that we should have more people in the market rather than just continue to grow. So we're continuing to expand what our expectations are. And the salespeople themselves are stepping up to the plate. So where is all that going to lead to? Well, we're already #1 in deep burns and so forth in the U.S. So -- but even if we've got 50%, 60% of the market, there's still 30%, 40% to get. So all right, that's put that aside. But MTX is going to be a big growth engine for us. But just bear in mind, not to get too excited about it, that when I buy a piece of 2 inches by 2 inches for my diabetic foot ulcer underneath my foot, it's very different than spending $15,000 on a burned arm. So we'll sell a lot more pieces, and you can see already from the data in Robyn and Jan's reports that we're selling -- the number of pieces we're selling is growing exponentially. And that's because the sizes are coming down at the same time as we're growing burns and so forth. But look, we don't see anything at the moment on the horizon, not to be too cavalier about it, that's going to stop us from continuing to grow at these sort of rates.

Okay. And just one last question before I leave it there is price increases in the United States. You mentioned 10%. How should we think about price increases going forward?

Well, I think the simple answer -- if you'd asked me this question last year, Lyanne, and you probably did, is that there's a lot of fat between us and some of our competitors like an Integra. And so it's a natural question to say, well, hang on a minute, if you're selling at USD 1,200 for 10 x10 and Integra is at USD 1,800, why are you -- why is there such a gap? Why don't you increase the price? We have increased the price, as you just said, by about 10% this year. But -- and I think one reading of that is that we have got still some scope to do that. However, there are regulatory changes a foot in the U.S. in terms of how people are going to get reimbursed and compensated. And that means we just need to take a cautious approach to the way in which we go about price increases. You'll know like everybody does that Trump is trying to drive costs out of the health care system. Okay, we are so competitive compared with just about everybody that it's not going to be a big issue for us, I don't think. But let's just have a healthy time to sit back and see how that plays out in the next couple of months, really. I should have said as well, Lyanne, this issue of price increases also goes to the issue of tariffs because it's a sort of subset of the same issue. And I think we've made it pretty clear in the past that the tariffs, whether it's a 10% or a 20% is, I won't say no consequence to us, but it's a small number when that tariff is placed on what our cost is as opposed to what our selling price is. So we don't see that as an issue at all.

The next phone question comes from Shane Storey from Wilsons.

My first question is actually going to be for Robyn, please, specifically on MTX. I was hoping you could share some feedback around the indications and clinical situations where that product is developing following. We've even heard of some cases where it's being used in conjunction with BTM even in the same patient, but maybe some detail on that, please.

Look, you're entirely right. The reason that we're so excited about MTX is it's really versatile. So it's going to be able to be used in a whole range of wound and plastic reconstruction trauma indications. We're seeing surgeons use it in very, very deep wounds that they're looking to be able to use a product in. And in this case, this is a really novel way of dealing with those deep wounds. We are seeing it being used in wounds that are deep and then BTM being put on top of that wound to provide that extra covering and protection as the wound heals. So you're entirely right. And that's something that's really of great interest to us. As I said, we're getting some really interesting results in diabetic foot ulcers and chronic conditions where fundamentally, we've had vascular surgeons coming back and just saying, look, it's amazing. We're also seeing really positive results in quite difficult trauma wounds. So overexposed bone, exposed tendons, over prosthetic materials. It really is proving to be incredibly versatile. So that gives us a high degree of confidence in the fact that we're able to grow this in a whole variety of areas. And as David says, we are often learning from the surgeons that we've had a few groups of vascular surgeons into the Port Melbourne site in the last couple of weeks. And they are coming up with all sorts of ways that they've already started to utilize MTX in areas that we hadn't considered. But yes, so very -- it's a very interesting product. It's showing amazing outcomes, surprising to some of our surgeons that it's so good. And so we see it as an enormous possibilities for the future in a whole range of areas.

Yes. Shane, I think the thing I would say is that when you think about it and you think about it, let's say, from a plastics perspective, there are many operations, probably the majority of operations that those reconstruction guys are doing where they don't want the plastic inside the body. So for example, I had something cut out of my nose recently. The surgeon cuts the nose, peels the skin back, makes a flat, cuts it out and then put the skin back again. But in order to bulk it up, they'll often put some MTX in there now in order to get that bulked up. And as the MTX disappears, like the foams do, it integrates with the local tissue as well. So you're not only losing the bulk up that you're getting some strength that sort of comes out of it. But you don't want the plastic in there is the point. And so there's a natural market for it in that. The second market, as Robyn said, is where they haven't had enough depth. So if I do an amputation, and it could be a deep amputation. Just putting BTM on there with the plastic with the foam at, say, 2 millimeters might not be enough. And so we're seeing some surgeons going, okay, well, I'm going to have one layer of MTX 2 mls, another layer of MTX2 mls and then BTM. So that table that Robyn put in her presentation, which shows what approvals we've now got out of the FDA and TGA where you're getting 4 mls, 6 mls is just expanding that market for us as well. So it's an interesting product. And I think what we're also going to see is that the FDA or more particularly the administration in the U.S. push a lot of these treatments into podiatrist and plastics outside of the hospital setting.

Second question, I wanted to actually go back to something that Lyanne was talking about with respect to run rates. When I sort of disaggregate the U.S. numbers and sort of noticed growth in BTM specifically, probably flattened over the second half, say, versus the second quarter. I was just wondering if you could -- any reasons behind that? I wondered whether there was any cost of substitution of MTX going on in that? And then what the levers other than price, which you've discussed, we should be looking for to think about growth rates for BTM specifically in the North American market this year?

Yes. Well, I'll let Jan answer that. But I think just following on from what I just previously said, we don't see and I certainly don't see yet any cannibalization. At some levels of the BTM, it's complementary in the sense that it gives you more depth for some wounds, but not cannibalizing it.

That's right, David. The cannibalization hasn't really occurred, to be honest, and they're using it in conjunction, like what Robyn said, we'll use BTM to sort of pack a wound and then MTX and then BTM, some instances, will go over the top. So surgeons are doing that. In terms of -- I guess, you called out, you may appear to be flattening out BTM in the U.S., if you look at the growth profile, how we started, we started out in big burns and all the -- and we're in all the large -- all the burn centers now in the U.S. And naturally, there's going to be plateauing, but a curve that will occur. But at the same time, there's plenty of lots of opportunity left in that market, particularly once we get our PMA approval and eventually reimbursement. So this is where MTX comes in and it opens up, I guess, a much bigger part of the market where surgeons need to use a device or a scaffold that doesn't have the film on it that our scaffold does. Therefore, it's a one-step procedure. So these might be for smaller wounds for wounds that surgeons want to get in and out of hospital in the same day. So it kind of grows the market in some instance for us, to be honest. So there might have been choices around it's like a skin graft on and send them home and they'll have a terrible finish. They'll have a concave surface on their skin because they won't have a dermis, but it's a small wound, why put BTM on it. Now they can put MTX on it and send them home the same day and get a much better clinical outcome. So it's really just about I guess, broadening what we offer because we want to be there across the entire reconstruction ladder and have a solution. So we're on our way. So it's, I guess, heading in the right direction, and we're seeing the results, as you can see today in the presentation.

And while I've got you, Jan, just my final question, just some assistance on sort of the KPIs that I like to model. So I heard you call out the 234 additional hospitals. I'd like to know just where that U.S. number like an end of period.

748. Yes, we've got 748 hospitals in the U.S.

And then finally, would I be right in thinking you probably add 10 to 15 people in the U.S. sales team over the course of FY '26. Would that be reasonable?

That's right, about 15 sales team we're looking at hiring.

I'm not sure that they're all brand new, Shane or Jan. I know that Ed had a few backfills, but then there's quite a few new hires to be had as well. So -- and as we've said in the past, that's great. And hopefully, they're going to do $1 million worth of sales themselves. But it takes a little bit of time depending on where they are and who they are to get up to that $1 million level.

The next phone question is from Rachael Harwood from Macquarie.

Just first question for me, just around the PMA submission strategy. I think you mentioned submission expected by the end of this calendar year. Is this still correct? And I guess, how long do you expect the FDA process to take for approval of this?

Yes. Thanks, Rachael. So yes, we're working towards that end of the calendar year submission time line. It's backed on the requirement, which was always a design of the clinical trial to have a 12-month review process that includes sort of safety and efficacy review. And so we'll be submitting as aligned with the FDA with that 12-month data. And we expect to see the sort of last patients through that 12-month review process around the sort of September, October time frame. And that allows us for that to get to submission sometime around the end of this calendar year. The time frame for review of the PMA, obviously, in the hands of the FDA to some extent. The average time frames for a complex PMA, and this is a complex clinical trial. It's around the 12-month mark, but it really depends a little bit on the questions they ask and any times how long they stop the clock during that review process. We have and we're working very hard working with the FDA to try and make sure that when we submit that document, it contains all of the information they need from both clinical perspective, a preclinical perspective and a facility and manufacturing perspective to try and minimize the number of questions we might get. But on average, we would expect somewhere around that sort of 8- to 12-month time frame for the review period, and we'll be in the hands of the FDA as to the total time before approval.

That's great. That's really helpful. Just final question for me. Just around -- on the outlook slide, you noted a focus on reimbursement opportunity. Could you maybe just talk to what you mean by this?

So David, do you want to talk that? Would you want me to take that?