PolyNovo (ASX:PNV) used its FY2026 first-half results call to outline continued sales growth across regions, progress toward a U.S. premarket approval (PMA) submission for NovoSorb BTM in full-thickness burns, and plans to expand into outpatient settings amid U.S. reimbursement changes. The company also discussed one-off factors that affected reported profitability in the half, while pointing to improving cash flow and expectations for stronger second-half results.
Leadership and organizational updates
Chairman Leon Hoare opened the call by introducing CEO Bruce Peatey, who joined in December and has spent roughly 10 weeks in the role, including a visit to the U.S. to meet clinicians and customers. Peatey said investors should expect “greater clarity, more consistent communication, and decisive execution.”
First-half sales growth led by the U.S.
Management reported group sales of AUD 68.2 million for the half, up 26% year-over-year. Peatey described the result as showing “clear momentum,” while also saying he believes there is room to accelerate growth through stronger execution, expanded adoption, and better leverage of the distribution footprint.
In the U.S., sales were AUD 51.7 million, up about 25% from the prior period. CFO Jan Gielen said the U.S. growth was driven by adding 95 new hospital accounts during the half and increased penetration of existing accounts. The company ended the period with more than 800 U.S. customer accounts and a commercial team of over 80 representatives, according to Peatey.
Rest-of-world sales were AUD 16.5 million, up 28.3%, with management calling out strong growth across a mix of established and newer markets. Gielen said rest of world now represents 24% of global sales and noted “significant opportunities,” particularly in Europe and the Middle East in the near term, with Japan and China cited as medium-term opportunities.
- Australia grew 52%, which management attributed in part to expanding adoption beyond traditional burns use.
- Canada grew 50.8% and Germany grew 28.3%.
- Turkey grew 91.3%; Gielen noted NovoSorb BTM is increasingly used outside burns even without government reimbursement.
- India grew 49.1%, with management describing a complex, slow tender environment but improving tender success and clinician adoption.
On the call, management discussed quarterly variability in U.S. burn cases. In response to an analyst question, Gielen said the second quarter included a softer November, driven by fewer large burn cases and typical holiday-related lower activity around Thanksgiving, but said performance “bounced back” in December.
Product adoption, indications, and outpatient strategy
PolyNovo discussed ongoing adoption of NovoSorb BTM and the expanding use of NovoSorb MTX. Gielen said U.S. MTX sales were AUD 6 million, up 193%, and that MTX is being used in more than 240 accounts in the U.S. He added that surgeon adoption is expected to continue to grow as more clinical evidence is generated and shared.
Management also emphasized that MTX is not cannibalizing BTM sales. In response to analyst questions, Gielen said MTX can enable use cases that previously were not accessible with BTM alone, including scenarios where surgeons want to “stack” layers of MTX or complete treatment in one step without needing to return to surgery to remove BTM’s temporizing film. Peatey added that beyond burns, the company is broadening into plastic and reconstructive surgery and trauma, describing those as higher-volume patient categories even if individual procedures may involve smaller treatment areas.
Peatey said the company’s clinical evidence base includes 348 peer-reviewed real-world evidence studies supporting NovoSorb, including 65 studies that “directly translate into outpatient use.” He also pointed to five published studies in diabetic limb salvage and said data are expected from a randomized controlled trial in diabetic limb salvage out of Adelaide in the next 6–12 months. Looking ahead, he said PolyNovo anticipates the need for a dedicated RCT to support CMS reimbursement in office settings, particularly for diabetic foot ulcers and venous leg ulcers, and that a protocol has been developed.
Addressing U.S. CMS policy changes affecting the outpatient market, management emphasized that the inpatient hospital market is unaffected and remains a key growth engine. PolyNovo said it is pursuing a “disciplined, strategic entry” into outpatient settings by prioritizing procedures where provider economics align with its portfolio. Peatey said the company developed a NovoSorb bilayer “Synpath” brand for the outpatient environment, which already has an existing HCPCS code, and expects a code for a monolayer matrix later in the year. The company said it is building inventory in new outpatient-appropriate product sizes, with availability expected within the half.
On the outlook for outpatient contributions, management said it is treating outpatient revenue as “upside” to current forecasts, while it continues planning work with sales and marketing teams. The company said it is strengthening market access capabilities and is recruiting a Market Access Director and a Senior Product Manager in the U.S.
PMA submission progress and BARDA partnership
Peatey said PolyNovo is in the “final stages” of its PMA submission for an on-label indication for NovoSorb BTM in full-thickness burns, describing the project as a significant undertaking in partnership with BARDA. Management said it remains on track to finalize the submission by financial year-end and believes PMA approval would strengthen its position in the U.S. burns market and help unlock access to other markets, including Japan and China.
In Q&A, management said it expects a standard FDA review process and did not indicate any expedited pathway due to BARDA involvement. Peatey described BARDA’s support as “excellent” and said the relationship remains positive as the submission is finalized.
Profitability, cash flow, and one-off items
Gielen reported ending cash of AUD 29.2 million and operating cash flow of AUD 9 million, improving from a prior-period operating cash outflow of AUD 12.5 million. He attributed part of the improvement to working capital progress, including reducing U.S. debtor days from “over 90 days” to 56 days.
Capital expenditure payments totaled AUD 10.8 million in the half related to construction of the new manufacturing facility in Port Melbourne, which management said is now complete, with AUD 2.2 million remaining to be paid in the second half. Gielen said that excluding the one-off capex, the business would have generated free cash flow in the half and that generating free cash flow in the second half would be an “important milestone.”
On profitability, Gielen said adjusted EBITDA was AUD 4.7 million, up 82% year-over-year, after adjusting for significant items including the R&D lab fire and unrealized foreign exchange impacts. He also outlined several factors affecting reported results:
- BARDA revenue declined as expected as the pivotal burns trial nears completion, with lower trial costs contributing to lower R&D expense.
- Other income included a AUD 4.6 million interim insurance claim related to the R&D lab fire, offsetting a AUD 4.4 million asset write-off.
- Employee costs rose 12.2%, including AUD 0.7 million of restructuring costs in Australia; headcount was 302 at period end.
- An unrealized forex loss of AUD 0.761 million was recorded versus an unrealized gain in the prior period, due to Australian dollar appreciation.
- Gross margin was 88.8% for the half due to a planned temporary reduction in manufacturing output tied to preparation activities for the PMA submission and an anticipated FDA audit, resulting in an unfavorable manufacturing variance of AUD 3.7 million.
Gielen said manufacturing output ramped up again in January and that the company expects gross margin to return to above 90% for the full FY2026 year. He also said management expects a “much improved profit result” in the second half as one-off items normalize.
Management said investigations into the R&D lab fire are ongoing and it was not in a position to comment on the cause, but added that R&D projects have continued and that rebuild costs are covered by insurance.
About PolyNovo (ASX:PNV)
PolyNovo Limited develops medical devices in the United States, Australia, New Zealand, the United Kingdom, Ireland, Singapore, and internationally. The company offers NovoSorb Biodegradable Temporising Matrix, which is used in a fully debrided clean surgical wound to physiologically close the wound. It is also developing hernia devices for hernia repair and solution for ventral hernia and complex abdominal wall reconstruction; NovoSorb Dermal Beta Cell Implant to host pancreatic islet cells in the skin; NovoSorb MTX for the treatment of varying complex wounds; and plastics and reconstructive device product.
