Cuộc họp công bố kết quả kinh doanh Q2 2026 của ELUT: Tiến độ NXT 41X, Nguồn vốn và Mở rộng biên lợi nhuận

Điểm tin chính

• ELUT đã báo cáo doanh thu thuần quý 2 năm 2026 đạt 2,4 triệu USD, giảm so với 2,7 triệu USD cùng kỳ năm trước. Mức giảm 0,7 triệu USD trong doanh thu SimpliDerm đã được bù đắp một phần nhờ mức tăng 0,4 triệu USD từ mảng tim mạch.
• Biên lợi nhuận gộp theo GAAP tăng từ 52,9% lên 59,6%, trong khi biên lợi nhuận gộp điều chỉnh tăng 8 điểm phần trăm lên 70,7%.
• Lỗ ròng thu hẹp từ 9,6 triệu USD xuống còn 7,6 triệu USD. Lỗ EBITDA điều chỉnh mở rộng từ 3,0 triệu USD lên 4,6 triệu USD, chủ yếu do chi phí nghiên cứu và phát triển (R&D) cho NXT 41 và NXT 41X tăng cao.
• Công ty kết thúc quý 2 với 19,9 triệu USD tiền mặt. Ban lãnh đạo đã xác định thêm tối đa 34 triệu USD nguồn vốn hiện tại và dự kiến từ các giao dịch đã ký, nâng tổng nguồn tiền mặt lên khoảng 54 triệu USD, qua đó giúp duy trì hoạt động đến ít nhất là năm 2028.
• Ban lãnh đạo tiếp tục kỳ vọng FDA sẽ đưa ra quyết định phê duyệt cho NXT 41 trong quý 4 năm 2026 và dự kiến NXT 41X sẽ được phê duyệt trong nửa đầu năm 2027, tiếp theo là đợt ra mắt thử nghiệm vào nửa cuối năm 2027 và ra mắt thương mại toàn diện vào năm 2028.
• Trong một khảo sát mù đối với 50 bác sĩ phẫu thuật tạo hình và tái tạo có chứng nhận chuyên khoa, 96% bày tỏ sự quan tâm đến việc đưa NXT 41X vào hoạt động khám chữa bệnh của họ và 92% cho biết sẵn sàng ủng hộ sản phẩm này thông qua hội đồng đánh giá giá trị của bệnh viện.

Dữ liệu tài chính chính

Hiệu quả kinh doanh và hoạt động

Công ty đang tập trung nguồn vốn và nguồn lực quản lý vào NXT 41X cùng thị trường phẫu thuật tạo hình và tái tạo tại Mỹ với quy mô khoảng 1,5 tỷ USD theo ước tính của ban lãnh đạo.

Công ty đã ký thỏa thuận chính thức để bán SimpliDerm với giá lên tới 11 triệu USD. Giá trị thanh toán bao gồm 8 triệu USD tiền mặt tại thời điểm hoàn tất và tối đa 3 triệu USD gắn liền với các cột mốc chuyển giao công nghệ và thương mại. Giao dịch dự kiến hoàn tất trong quý 3 năm 2026. Tiến trình chiến lược được công bố trước đó đối với mảng tim mạch cũng tiếp tục diễn ra, trong đó ban lãnh đạo đề cập đến một giao dịch tiềm năng trong năm 2026.

Khảo sát ý kiến các bác sĩ phẫu thuật về NXT 41X cho thấy mức độ quan tâm rộng rãi. Tất cả 50 người tham gia khảo sát đều cho biết họ sẽ sử dụng sản phẩm này cho các bệnh nhân có rủi ro cao, bao gồm bệnh nhân mắc bệnh tiểu đường hoặc có chỉ số BMI cao. Ngoài ra, 98% đánh giá NXT 41X là sản phẩm mới và khác biệt so với các sản phẩm hiện có, trong khi 96% nhận định sự kết hợp giữa rifampin và minocycline của sản phẩm có hiệu quả trong việc giảm nhiễm trùng vết mổ.

Công tác chuẩn bị sản xuất đã tiến triển trong quý. Công ty đã hoàn tất việc lắp đặt và kiểm định vận hành hệ thống phủ thuốc tự động, vốn đã sản xuất ra NXT 41X. Ban lãnh đạo cho biết cơ sở nội bộ này được thiết kế để đáp ứng công suất doanh thu hàng năm ít nhất 300 triệu USD khi ra mắt, đồng thời việc mở rộng thêm trong tương lai dự kiến chỉ cần tăng thêm nhân sự và ca làm việc chứ không cần thêm diện tích hay dây chuyền sản xuất.

Dự báo của ban lãnh đạo

• Ban lãnh đạo tiếp tục kỳ vọng quyết định phê duyệt thuận lợi từ FDA đối với NXT 41 trong quý 4 năm 2026.
• Công ty dự kiến NXT 41X sẽ được phê duyệt trong nửa đầu năm 2027, tùy thuộc vào kết quả xét duyệt của FDA.
• Kế hoạch ra mắt thương mại hạn chế được ấn định vào nửa cuối năm 2027, tập trung chủ yếu vào việc xin phê duyệt từ hội đồng đánh giá giá trị của các bệnh viện.
• Kế hoạch ra mắt thương mại toàn diện cho NXT 41X dự kiến vào năm 2028 nếu tiến trình pháp lý và chuẩn bị ra mắt diễn ra đúng kế hoạch.
• Ban lãnh đạo tiếp tục đặt mục tiêu biên lợi nhuận gộp trên 80% cho NXT 41X khi đạt quy mô lớn, mặc dù thời điểm đạt được sẽ phụ thuộc một phần vào mức giá chính thức.
• Ban lãnh đạo tin tưởng rằng nguồn vốn hiện có và dự kiến sẽ đủ tài trợ cho các hoạt động cho đến các mốc phê duyệt dự kiến cũng như năm đầu tiên ra mắt thương mại toàn diện vào năm 2028 và sau đó.

Rủi ro và các điểm cần theo dõi

NXT 41 và NXT 41X vẫn đang chờ xét duyệt từ FDA, và các mốc thời gian phê duyệt được đưa ra là kỳ vọng của ban lãnh đạo chứ chưa phải là các cột mốc đã hoàn thành.

Hội đồng đánh giá giá trị của các bệnh viện được dự báo sẽ là rào cản chính đối với tốc độ tiếp nhận NXT 41X. Ban lãnh đạo lưu ý rằng đợt ra mắt thử nghiệm năm 2027 nhằm mục đích mở rộng khả năng tiếp cận các bệnh viện hơn là tạo ra doanh thu đáng kể ngay lập tức.

Doanh thu SimpliDerm bị ảnh hưởng bởi sự gián đoạn sản xuất tại nhà sản xuất hợp đồng. Việc thoái vốn SimpliDerm theo kế hoạch cũng vẫn cần chờ hoàn tất giao dịch, trong khi tiến trình chiến lược mảng tim mạch có thể có hoặc không dẫn đến một giao dịch chính thức.

Khoản đầu tư cao hơn vào NXT 41 và NXT 41X đã làm tăng chi phí R&D thêm 1,5 triệu USD so với cùng kỳ năm trước và góp phần khiến khoản lỗ EBITDA điều chỉnh mở rộng.

Tóm tắt phiên hỏi đáp với chuyên gia phân tích

Ban lãnh đạo cho biết cuộc họp gần đây với FDA liên quan đến các câu hỏi dự kiến về NXT 41 và nhằm đảm bảo câu trả lời của công ty sẽ phản hồi đầy đủ. Công ty cho biết họ rời cuộc họp với sự tự tin về hướng đi tiếp theo của chương trình nhưng không tiết lộ chi tiết các thảo luận với cơ quan quản lý.

Về sản xuất, ban lãnh đạo cho biết công suất khi ra mắt có thể hỗ trợ doanh thu ít nhất 300 triệu USD. Việc mở rộng vượt mức đó chủ yếu bao gồm bổ sung nhân sự và ca sản xuất.

Đợt ra mắt hạn chế năm 2027 sẽ ưu tiên nộp hồ sơ cho các hội đồng đánh giá giá trị. Ban lãnh đạo kế hoạch sử dụng dữ liệu về biến chứng, số lượng ca phẫu thuật và hiệu quả kinh tế riêng của từng bệnh viện để hỗ trợ quá trình tiếp nhận trước khi mở rộng thương mại vào năm 2028.

Sau khi bán SimpliDerm, chi phí bán hàng và tiếp thị dự kiến sẽ giảm tương ứng với phần doanh thu bị loại bỏ khỏi báo cáo kết quả hoạt động kinh doanh. Một giao dịch đối với mảng tim mạch có thể tạo thêm cơ hội tinh gọn bộ máy, nhưng ban lãnh đạo không đưa ra mức chi phí hoạt động dự kiến cụ thể cho tương lai.

Toàn văn biên bản cuộc họp báo cáo kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Thank you. Good day and thank you for standing by. Welcome to the ILLUSIA Q2 2026 Financial Results Conference Call. At this time all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again.

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Bernadine Cherniak. Please go ahead.

Unknown Speaker

Thank you, Operator, and thank you all for participating in today's call. Earlier today, Alusha released financial results for the second quarter and June 30, 2026. A copy of the press release is available on the company's website. Before we begin, I would like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the Federal Securities Laws which are pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that do not relate to matters of historical facts or relate to expectations predictions of future events, results, or performance are forward-looking statements. All forward-looking statements, including without limitation those relating to our operating trends and future financial performance, are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements.

Accordingly, you should not place undue reliance on these statements. For lists and descriptions of the risks and uncertainties associated with our business, please refer to the risk factors section of our public filings with the SEC, including Alusha's annual report on Form 10-K for the year ended December 31st, 2025, and in our subsequent periodic reports on Form 10-Q and 10-K, accessible on the SEC's website at www.sec.gov. Such factors may be updated from time to time in Alusha's other filings with the SEC. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, August 13, 2026. Allushia displays any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements because of new information, future events or otherwise. Also, during this presentation, we refer to gross margins, excluding intangible asset amortization, which is a non-GAAP financial measure. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure is available on the company's financial results released for the second quarter and on June 30, 2026. which is accessible on the SEC's website and posted on the investors' page of the Alusha website at www.alusha.com.

And with that, I will turn the call over to Alusha's CEO, Randy Mills.

Unknown Speaker

Thank you, Bernadine, and thank you, everyone, for joining us today. The second quarter was another solid quarter of execution for Alusha, so let's get right into it. Here's how we'll spend our time today. I'll start with why we are concentrating the company's efforts on the reconstruction opportunity. I'll walk through the highlights. of the quarter, including our strength and balance sheet and some exciting new survey data. Matt will take you through the financials and capital position, then we'll open the line up for questions. Four things defined this quarter. were funded up to 26 million of additional capital with no equity offering we believe that carries us through the NXT 41 X clearance decision in the first full year of commercial launch in 2028 and beyond Second, the company is becoming more focused as our strategic divestitures are being completed.

We signed a definitive agreement to sell Simpliderm for up to $11 million, and the cardiovascular process is progressing well. The purpose of this activity is to align the company's capital on the one thing that will drive the greatest value for patients and shareholders, the commercialization of NXT 41X. Third, we now have real data on surgeon demand for NXT 41X. In an independent, blinded survey of 50 Borg-certified plastic and reconstructive surgeons, 96% expressed interest in adopting NXT 41X. and 92% said that they would champion it at their hospital's value analysis committee. I'm going to spend some time on this study today because it's important. Thank you. And fourth, our regulatory and manufacturing teams continue to advance towards launch on schedule. This quarter, we had a productive meeting with FDA and the NXT 41 program remains on track for what we believe will be a favorable clearance decision in the fourth quarter.

Perhaps more importantly, we believe NXT 41X, the ultimate THE ULTIMATE GOAL IS WELL-POSITIONED FOR CLEARANCE IN THE FIRST HALF OF 2027. In preparation, our automated manufacturing process has been qualified for commercial production of NXT 41X at scale. For those newer to the Ilusia story, here are some of the is a short version of what we are uniquely great at. We combine a biological matrix with sustained local antibiotic delivery at the surgical sites. The objective is straightforward. Create a surgical implant that can prevent bacterial colonization before it has the chance to become an infection. And importantly, we have done this before. Our first generation drug eluting product, LU Pro, was the first FDA cleared antibiotic eluting bio envelope.

We developed it, we cleared it, we commercialized it, and last October we sold that business to Boston Scientific for $88 million. We are now applying that same technology to solving the very real problems that exist in plastic and reconstructive surgery. The United States market for breast cancer surgery is valued at $1.5 billion, and importantly, it is an established market. Surgeons already use biological matrices in breast procedures today. We do not have to create a new category. At the same time, the clinical problem is substantial. Published data show postoperative infection rates remain between 15% to 20% following mastectomy.

So the opportunity for us comes from the combination of three things, a large existing market, a significant unresolved clinical problem, and a technology platform that directly addresses it, a platform we created. And the magnitude of the problem is hard to ignore. These are published data, not ELUSHA estimates. Approximately one in three women experiences a serious complication following reconstruction. 15 to 20 percent experience postoperative infection. Up to 21% experience an implant loss. And the average hospital cost of a reconstruction with an infection is more than $48,000. That is a patient problem, a hospital problem, and it is a surgeon problem.

Now, we've shown you infection statistics before. What this slide shows are the consequences. Let's start with the patient. She's fighting cancer. That's why she's in the operating room. When an infection takes hold, chemotherapy stops, radiation stops, because she is looking at pain, fear, and more trips to the operating room. And if she loses the implant, more than half of the women in that situation never go back and finish the reconstruction process. It ends. The hospital incurs an added cost, mostly without reimbursement.

It gives up revenue generating operating room time slot and hospital beds, and it takes the reputational hit regarding its infection rate. But the surgeon pays a unique price, and they pay it over and over again. Keep this in mind because they are the ultimate decision makers regarding what gets used in the operating room. Let's look at a surgeon who does 140 cases a year and has the average infection rate of 17%. That means they are getting called back into the hospital every 15 days, irrespective of the time of day, day of the week, or whether it's a holiday, that significantly impacts their quality of life. If you don't think so think about this. The reconstructive specialty in plastic surgery is by itself an independent risk factor for burnout among plastic surgeons and when those surgeons walk away women lose access to reconstruction So now that you understand what we are doing and why, let me turn to how we funded the plan.

This quarter, we secured up to $26 million of additional capital without an equity offering. It comes from two places. First, a $15 million credit facility with Avenue Capital Group, $10 million of which is already in the bank. and another $5 million that is available to us upon NXT 41X clearance. That is not only a substantial infusion of cash, also an unequivocal endorsement of our plan by a sophisticated healthcare lender who conducted extensive due diligence. The second is the Simplet Earn transaction, which provides for up to $11 million in consideration. That includes $8 million in cash at closing and up to $3 million in tech transfer and commercial milestone payments. On top of that, at the start of the fourth quarter, we anticipate receiving the full $8 million in escrow from Boston Scientific. Now look at the bottom of the slide, because the timing is the point.

We believe this capital will take us through the NXT 41 clearance decision in the fourth quarter of this year. the anticipated NXT 41X clearance in the first half of 2027, and the full year launch in 2028 and beyond. We are now fully funded. The divestitures are a key part of the strategy. We made a deliberate decision to stop spreading capital and management attention across multiple businesses and concentrate Elluci where we believe we can create the greatest value. The SimpliDerm transaction is now signed with closing expected in the third quarter. previously announced strategic process for cardiovascular continues to advance with a potential transaction in the 2026 WHEN THAT WORK IS COMPLETE, ALUSHA WILL BE SOLELY FOCUSED ON ONE PRIMARY OPPORTUNITY, NXT 41X and the approximately $1.5 billion plastic and reconstructive surgery market. That was intentional and we are nearly done. Now to the part of the quarter I'm most excited about. For two years, we've been telling you the demand for NXT 41X is out there.

This quarter, we quantified it. We hired an independent market research firm to run a blinded survey. board-certified plastic and reconstructive surgeons states, averaging 11.6 years in practice and about 140 implant-based reconstructions a year. 42% practice in academic hospitals, and the group is split about evenly between east and west of the Mississippi. These are exactly the surgeons who will decide whether NXT 41X is ultimately adopted. A quick word about method. It was blinded. These are not our friends. We did not pick the respondents. Alusha was never named. Nobody was being nice to a sponsor because nobody knew who the sponsor was. Interest was measured using the standard with Wilson 95% confidence intervals. The first question was whether surgeons themselves see infection as a significant unresolved problem.

They estimated the surgical site infection rate at 17%. And that's right in the range of what the published literature says it is. The more striking result is on the right side. 86% of surgeons surveyed said the matrices they use today actually increase the risk of surgical site infection. And I want to be precise about that. That is not Alusha making a comparative claim about another company's product. It is the surgeons describing the product they currently use as an infection risk factor. Taken together, postoperative infection is a real problem that needs a better solution.

The next topic was whether the NXT 41X concept made sense to them. 96% rated the combination of rifampin and minocyclin effective at reducing surgical site infection. 64% said it was extremely effective, and not a single surgeon rated the antibiotic combination as ineffective. 98% view NXT 41X as new and different from products on the market today. The specific product characteristics they found most compelling were also telling. local antibiotic concentrations above the minimum inhibitory concentration for 30 days a bactericidal antibiotic combination directed against known surgical site pathogens. and prevention of bacterial colonization ranked one, two, and three, respectively. Those are not branding attributes. They are fundamental mechanisms of how our product works. And remember, there was no Aleutia brand attached to any of the survey. They were reacting to the actual product specifications. The third question is the one that matters commercially. Would you use it? For high-risk patients, including diabetic patients and those with high BMI, 100%, all 50 surgeons indicated they would use NXT41X.

Those two groups together represent approximately one-third of reconstruction patients, an enormous amount. opportunity in itself. But a full 96% said they were interested in incorporating NXT 41X into their general practice. And then there's the number on the right. 92% indicated a willingness to approach their hospital's value analysis committee in support of NXT 41X. I think that number deserves particular attention. Hospital adoption is not simply a matter of a surgeon liking a product or a product getting approved. Someone has to be willing to make the case internally and move the product through the hospital's VAC process. 46 out of 50 surgeons indicated they were willing to do that for this product. So let me put the whole study on one slide.

We asked if the problem was real. 86% said the matrix they use today increased risk infection. We asked if our approach would work. 96% rate the antibiotic combination is effective. We asked if they would use it. 96% expressed interest in incorporating it into their practice. We asked if they would fight for it. And 92% said they would champion it at their own hospital's vac. 50 surgeons, blinded and independent. Demand for NXT 41X is no longer theoretical. Turning to regulatory, I am very happy to say that for both programs, they remain on track and on schedule.

NXT 41, the underlying biologic surgical matrix without drug, is currently under FDA review. We recently had a productive meeting with the agency. And we continue to expect a favorable FDA clearance decision for NXT 41. the fourth quarter of 2026. That dialogue has also increased our confidence in our preparation of the NXT 41X submission. We expect FDA clearance for NXT 41X in the first half of 2027. Those remain the key regulatory milestones in front of us. Manufacturing readiness is advancing in parallel with the regulatory work.

This quarter we completed installation and operational qualification of the automated drug coding system. That system has already produced NXT-41X. For NXT 41X, we deliberately chose to own the manufacturing process ourselves. There is no contract manufacturer, license, or sole source supplier. The product is ours end to end. We also developed proprietary quality control assays and test methods to meet the FDA's very specific release criteria. The process is designed for scale, consistency, and efficiency, and we continue to target gross margins greater than 80% at scale. and it is now up and running at our GMP facility in Gaithersburg, Maryland.

All in all, a very solid quarter for the Ellucian crew, and I thank each and every one of them for their remarkable efforts. And with that, let me turn the call over to Matt.

Matthew Ferguson

Okay, thank you, Randy. Great to be here. I'll be hitting the highlights of our second quarter results and financial position. As a reminder, the impact of our bioenvelope business, which we divested in October 2025, shows up as discontinued operations in prior periods. However, the contribution of our simpliderm business in the second quarter still shows up in continuing operations, even though we entered into a definitive agreement to sell that business on July 11th. Assuming the closing of that transaction proceeds as expected, Simpliderm will also move to discontinued operations in future reports. Now, moving to our actual results. Total net sales for the second quarter were $2.4 million compared to $2.7 million in the prior year period.

There were two offsetting drivers. Simpliderm was down $0.7 million due to a production disruption at the product's contract manufacturer, but that was largely offset by an increase in cardiovascular, which was up $0.4 million on our transition back to direct sales. compared to $5.7 million in the comparable prior year period. Margins expanded meaningfully in Q2. Gap gross margin was 59.6% compared to 52.9% a year ago. Adjusted gross margin, which excludes non-cash amortization of intangibles, was 70.7 percent compared to 62.7 percent, an improvement of eight percentage points year over year. Total operating expenses were $9.4 million, down from $9.8 million. Within that number, we continued to shift spend towards the future. Net litigation costs came down $1.9 million, while research and development increased $1.5 million in support of the continued progress in NXT 41. and 41X. Loss from operations improved to $8 million even from $8.4 million a year ago.

Net loss was $7.6 million compared to $9.6 million in the prior year period, an improvement of $2 million that primarily reflects the absence of losses from the divested bioenvelope business. Net loss from continuing operations was $7.6 million compared to $7.1 million, and adjusted EBITDA was a loss of $4.6 million compared to a loss of $3.0 million a year ago. The change was driven primarily by the increase in R&D expense. Thank you. On the balance sheet, we ended the quarter with $19.9 million in cash. but we expect that position to be augmented by up to an additional $34 million from signed transactions. Going through those in a bit more detail, we received the initial $10 million this week from our deal with Avenue Capital. And in the fourth quarter, we expect to receive the full $8 million escrow from the last year's bioenvelope deal. The new Simpliderm deal adds up to $11 million, with $8 million of that $11 million coming at closing.

And next year, upon FDA clearance of NXT 41X, another $5 million becomes available under the Avenue Capital facility following the NXT 41X clearance. So, putting this all together, between our cash balance at the end of last quarter and the deals I just walked through. Total cash sources, both current and projected for the company, add up to $54 million. This This puts Alusha in its best financial position in a very long time. As Randy mentioned, this provides runway through at least 2028. And between now and then, this funding covers multiple expected catalysts. First, the closing of the Simpliderm sale this quarter.

Second, a potential cardiovascular transaction. Third, the $8 million escrow release. Fourth, the FDA clearance decisions for NXT 41 in the fourth quarter of this year and for 41X in the first half of 2027. In addition, the soft launch of NXT 41X in the second half of 2027. And finally, the full commercial launch of NXT 41X in 2028. So, stepping back, we believe the investment case for Alusha rests on three things. First, we have a validated platform. We have developed, cleared, and commercialized this technology once already in the form of Ellupro and sold that business.

Second, a blockbuster pipeline comprised of a $1.5 billion U.S. reconstruction market, an unmet medical need based on exceedingly high infection rates, and the now measured surge in demand behind our product. Third and finally, we now have a fully resourced company with a proven team, a built out GMP production facility, cash to fund the company through anticipated clearance and full commercial launch. The demand is real, the capital is secured, the regulatory path is on track, and the entire company is focused on success. And with that, operator, I'll turn it back to you.

Operator

and we can open the line for questions. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. standby while we compile the Q&A roster. Our first question comes from Frank Takinen with Lake Street Capital Markets. Your line is open.

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Frank Takkinen

Great. Thank you for taking the questions and congratulations on all the progress. I wanted to start with one on FDA interactions. talk a little bit more about some of the conversations you've had, obviously, that you're comfortable sharing in a public setting, and then maybe detail what part of the process you're in with that clearance on 41. So with respect to 41, I...

Unknown Speaker

I won't talk about too much of the inner workings of what we do, Frank. but I will say, um, that, uh, Michelle and her team, um, expected questions on 41. They received questions on 41. And they wanted to meet with FDA to discuss before submitting those responses to FDA to make sure that their answers to them would be what we hope are fully responsive. And so that was the nature and the reason of the meeting and we came out of that meeting feeling very good about where we are going forward with NXT 41.

Frank Takkinen

Okay, very helpful. And then on the concept of manufacturing, appreciate the new color today. I'm curious if you could outline some capacity goals that you're thinking about as you prepare for launch. Maybe what level of capacity would you hope to have secured for the first full year of commercialization? And then what level of capacity might be required to achieve that 80% gross margin goal.

Unknown Speaker

LATO? Yes, so we expect to have at least 300 million dollars of revenue capacity at launch of the product. Being able to expand it from there will not be a particularly significant challenge It will mostly involve additional personnel and additional shift adding, not additional space. not additional equipment or production lines.

Unknown Speaker

So right out of the gate we expect to be able to meet.

Unknown Speaker

a very a very sizable amount of demand and frankly we hope to be in a race uh keep up with it. With regards to gross margin, I The process for producing NXT 41X, Michelle and her team had the ability of designing 41X with the experience of LU Pro under their belts. they were able to look at the process and parts of the process and things that were inherent to the design of the product. that made that product more expensive and more challenging to make and drill up cost of goods of that product. And so when they designed 41X, they did that with that in mind and really have come up with a very elegant product process for manufacturing NX T41X. Some of that will depend ultimately on pricing decision when we talk about gross margins. One of the reasons, you know, we're just giving a rough estimate on range. But I think we would expect gross gross margins to be in an acceptable rate. you know, not too long into the commercial cycle. It wouldn't be something that, you know, we would be measuring in years before we got there.

Frank Takkinen

Got it. Very helpful. Maybe on the commercial launch, maybe talk to what the limited launch might look like in the second half of 27, and then some of the most important items you'll be looking to check the box off, so to speak, before flipping to the full commercial launch.

Unknown Speaker

to launch in 28. This is one of the great things, Frank, about getting older and having experience. This isn't our first rodeo. And so as we prepare to launch NXT 41X, we get to look back at the LU Pro launch, which was a drug eluding biologic going into a surgical procedure in modern times, today where we had to face value analysis committees. And value analysis committees, Frank, as you know, are the gating item on how fast the product has the potential to get adopted. And so, with regards to what we're thinking about soft launch activities, in the second half of 2027. It is Value Analysis Committee, Value Analysis Committee, Value Analysis Committee. We know that the more seeds that we plant early on with the VACs, the more... more revenue opportunity we will have as the year continues throughout 2028. With LU Pro, we developed a pretty sophisticated process for being able to go after those VACs.

And I would say Pete Ligotti and the work his team has done more recently with some more sophisticated targeting data, complication data, procedure volume data, will actually allow us to take, I think, what was some pretty sophisticated machinery and target it even further. further. What I mean by that is being able to go into a value analysis committee and literally show them their own hospital's data and their own hospital's problem. how much we would be able to help them, not just from a patient standpoint, from an economic standpoint as well. So that's what the soft launch for us is all about, is getting that done. We don't... We don't expect to be blowing the doors off of anything with regards to revenue because we still need to get through the front door of the vacuum before anything happens. So that's what we would expect to happen there. And then Frank, into 2028, I think come January 1st, if everything goes according to schedule, we'll be ready to cut it loose.

Frank Takkinen

Very helpful. Maybe the last one, if I may, for Matt. Once the simpliderm divestiture is complete, how should we think about a OPEX run rate if you're excluding the litigation costs?.

Matthew Ferguson

Yes, you know, I think you could look at the various components of our operating expense, and certainly sales and marketing will come down significantly, really in proportion, I would say, to the revenue that we're taking out of the P&L. And it is not, potentially, not for the P&L. we could also be looking at something for the CV transaction. And that would be something that we could look at. That would actually put us for a short period into a situation where we would not be commercial. That would potentially allow for greater opportunities for streamlining and savings. Until then, we need to really maintain all the capability that we have. that we generally have now from an overhead perspective, but we're working hard on that and stay tuned. we're hoping to have something done there before too long. Got it. Very helpful. Thanks for taking the questions.

Appreciate it.

Operator

Okay. Thank you, Frank. Thank you. I'm showing no further questions at this time. This concludes the question and answer session and today's conference call. Thank you for participating. You may now disconnect.

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