Let's kick off. I'm Dennis Keller, Vice President with Morgan Stanley. Happy to be hosting BioStem Technologies with us today. Jason Matuszewski, CEO. Before we dive in, I just want to note for important disclosures, please see the Morgan Stanley Research Disclosure website, MorganStanley.com, Research Disclosures. If you have any questions, please reach out to your Morgan Stanley sales rep. With that, let's get started. Thanks for being here, Jason. With some investors maybe not up to speed on the company, can you spend the first minute or two just giving us a quick overview of the company and your core technology? Sure. First and foremost, thank you, Dennis, for having us here. I really appreciate the first opportunity to speak at the Morgan Stanley Global Healthcare Conference. Great opportunity. BioStem Technologies, we are a profitable medtech company focused in advanced wound care. Our core technology is BioREtain®. It's a proprietary technology that we process placental-based tissue allografts for the advanced wound care space, specifically looking at treating diabetic foot ulcers, pressure ulcers, and venous leg ulcers. This patient population is roughly about 7 million Medicare beneficiaries and a total market of about $11.3 billion in the advanced wound care space. Great. What is the BioREtain® process exactly, and how would you compare it to alternatives in the market? Yeah, I think, you know, it's definitely differentiated. We've published some real-world data so far on the BioREtain® process. We actually retain a large portion of the natural elements of the tissue, including the extracellular matrix, some of the growth factors and cytokines that are naturally found in placental-based tissue. As I mentioned earlier, our real-world data demonstrated that we, with the BioREtain® process, these allografts have supported a less number of applications to close a wound as well as less time to close a wound. Can you help us understand how you think about the addressable market today with the existing portfolio, and how that could expand over time as products get developed? Yeah, I think, you know, right now it's, call it the wound biologics TAM is roughly about $11.3 billion in the advanced wound care space. I think when we look at other areas of focus for BioStem, we're looking at areas like the hospital outpatient, surgical, OR suites, and things of that area where we could actually focus on leveraging our core technology of BioREtain® to those areas, as well as looking at synergistic M&A opportunities to target those areas as well. Help us understand the clinical data portfolio of the company, kind of key highlights from the clinical trial data set at this point. Yeah. Right now we're actively running three RCTs. We just finished enrollment in our first diabetic foot ulcer study, with roughly 72 patients enrolled across 10 sites. We're looking to report out data on that diabetic foot ulcer study later this year. We're also enrolling patients in two additional studies, one in the venous leg ulcer space, same number of sites, roughly about 10, and similar patient population size, about 60 patients. A secondary diabetic foot ulcer study on our AmnioWrap2™, our BRAM trial, is just solely focusing on the amnion layer of the placenta. Similar size trial, roughly 60 patients across 10 sites. The last two trials we're aiming to get readouts kind of the mid to beginning of mid to next year on those two trials. Great. I guess pivoting to the partnership with Venture Medical, it's been a key driver for the business. Can you help us understand kind of just at a high level what the partnership brings and how we should think about the partnership on a go-forward basis? Yeah, I think the partnership has been instrumental in our growth. Definitely a story from, you know, 2022 to 2024. 2023 was roughly about $16.9 million top line revenue, 2024 over $300 million. We entered into that partnership with Venture Medical in late 2023. The partnership really represented both their recognition of our BioREtain® process and the product portfolio, and they really realized that this is a differentiated product line for the advanced wound care market. What we saw in Venture Medical is they've developed a software platform called OneView, and we felt that that was a really amazing platform to support providers not only from a compliance perspective, but also from a cash flow management perspective on managing where claims are and how to appropriately process those claims and really help and support those providers, especially when we're talking about their core focus in the mobile wound care segment as well as physician office segment. Those are areas where they're smaller groups, right? They're not institutionalized hospitals, large organizations where they have the infrastructure to support that cash flow management side of the business as well as the compliance side. I think it was a really good synergistic opportunity between both groups. We kicked off with over 100 FTEs into the field on day one. The opportunity to really scale very quickly with the commercial team on day one was a great opportunity. They came over from an existing product line as well, a placental-based tissue product line. It was a quick study for their reps and their team to get out and go to work, and that's kind of what's led to the success of late 2023 and into 2024 and what it is today. Excellent. As you think about your commercial strategy on a go-forward basis, what are the puts and takes relative to going direct versus your distribution channel? Yeah, I mean, I think, you know, obviously, which we haven't really got to yet is some of the headwinds around reimbursement and some of those struggles, or opportunities, I should say, coming forward. I think when we look at the model with Venture Medical and the opportunity that we've had in an exclusive partnership to really capitalize on the mobile wound care segment, physician office segment, you know, as we go into 2026, I think some things may change in regards to how we look at commercializing the product. You know, we are looking to internalize some of the commercial team on the core focus in hospital, OR, and into the federal space, so VADOD. I think the hybrid model where Venture has really demonstrated their knowledge and success in the mobile wound care segment will continue to leverage that partnership and continue to hopefully flourish. Now, a good segue to reimbursement. You've got proposed changes to CMS or PPS fee schedule, which were published in mid-July for skin substitutes. Some uncertainty around the final pricing for the products. What will the competitive landscape kind of look like moving forward? Can you share your perspectives on what these changes mean for you short term and maybe medium term from a market opportunity perspective? Yeah, sadly, we only have 27 minutes left. It's a long topic for sure. It's somewhat contested. There's a lot of changes potentially coming up. I think ultimately, I think these are good changes, right? I think this administration, along with leadership at CMS and HHS and even, frankly, even in the medical community, KOLs in the space like Dr. Bill Pettibuck and others have really kind of called out and said, "Look, there needs to be reform here." I think we have a runaway spend specifically utilizing the ASP plus six methodology that products are being priced at in the physician office and mobile wound care space, which aren't really tied to the payment structure that we find in HOPD and ASC, where it's a bucketed rate, right? This new OPPS and PFS, physician fee schedule, and outpatient physician fee schedule, are trying to align those things. We have a kind of continuous payment methodology for product across all sites of service. Looking at where we end up with specific placement reimbursement outside of product, it kind of gleans towards more of the traditional pass-through methodology that you've probably seen in the past. I think it's going to hopefully normalize this industry. I know wound care has been a struggle on ever-changing dynamics around reimbursement. I'm hopeful that ultimately we see a normalization past 2026. I am a little concerned about the low initial price that they propose, about $125. I think that ends up being a challenge for mobile wound care providers to service patients that have an underserved community or rural areas where they don't have access to get into a clinic and need that mobile wound care provider to get out to them and treat their wound. I'm hopeful that we see a price increase from that $125 number. We'll be actively commenting through the comment process. I think it ends on the 12th, so near term here. Hopeful to see what the outcome is in November as well on the final price for effective January 2026. As that process kind of moves forward, can you help us think through milestones such as clinical data and where you could have kind of more visibility for reimbursement that could come into effect at that time? Yeah, I mean, I think for us, we're in a new position, right? Because we do have clinical data coming out back half of this year. I think that will help substantiate our differentiation in the marketplace and say to folks, "Hey, we are a leader in this space, right? We're committed to this space. We're committed to investing in the clinical trial to demonstrate the purity of our product." I'm hopeful that driving that clinical data along with other initiatives creates more of a long-term initiative for our organization. Great. I guess pivoting to the business in the first half of 2025, you reported $121.8 million in revenue, which is up 5% year on year. Can you break down kind of the growth drivers in terms of expanding accounts, driving higher utilization with your existing users? Yeah, a combination of both. I think we saw some good utilization within the existing accounts. Frankly, looking to expand into areas geographically, you know, Venture Medical is kind of core to the West Coast, west of the Mississippi. We're looking to target some of the east marketplace for these products. Really trying to partner with more sophisticated long-term partnership as we bridge from this ASP plus six methodology into the new methodology and really looking for mobile wound care providers, specifically on the Venture side, as well as physician office folks that want to be here long term. It would be great partners that really value the technology and value how BioREtain® supports their patients in closing wounds. We're looking forward to seeing where that growth goes and continues to grow. I think there's other opportunities for us, specifically from a growth driver perspective, that come where maybe M&A opportunities come along or other areas to diversify into other segments, like I alluded to earlier in the hospital outpatient and the OR space. If you think about your current product suite and some of the selling points that are most attractive to the clinical community, could you walk through some of those? Sorry, can you ask? Yeah, some of the selling points of the products that are most attractive to the clinical community. Yeah, I mean, obviously the BioREtain® process is definitely very attractive to them. I think what they've seen, at least initially on the real-world data, like I kind of alluded to earlier about less number of applications and quicker time to heal on very hard-to-heal wounds, that's very attractive to providers that really want to utilize a product that's going to get some of these hard-to-heal wounds. I think even frankly, you know, it's great to hear testimonials from providers that say, "Hey, I've been using a synthetic product or another competitor product. I've been trying to treat this patient. You know, we're going on 12 months, 18 months. We still have not gotten this wound closed. And we were able to use your product in three or four applications to get the wound closed, right?" It's extremely satisfying and gratifying in a way, right, to hear that. Yeah, it's kind of cool. Yeah, it seems like if you had those kind of referenceable proof points, you'd use those with the next center and kind of get the keeps giving. Yeah, and I think I hope, you know, going forward, at least, you know, with the readout of the RCT, that will also be more of a validating point, right? Some of these real-world data sets or real-world data patients aren't as compliant as when you're running a clinical trial, right? Getting a patient to be compliant is some of the biggest challenge in wound care, right? Getting a patient to come in, offload, do some of the things that are necessary for a proper blood flow and making sure that they're not continuing to propagate a wound. When you're in a more rigorous clinical trial, it's a lot easier to kind of hold some of those variables a little closer. even for the diabetic foot ulcer and the venous leg ulcers? Yeah, absolutely. Absolutely. Interesting. I guess stepping back, can you help us think through the growth trajectory over the next few years? Yeah. As a company? I think obviously going into 2026, we'll kind of have a reset based on the framework of reimbursement. I think that will also lend itself to really get some clarity around what does growth look like over the next four to six years. I think for us, we'll continue to kind of drive adoption of our existing BioREtain® platform in the mobile wound care space, hospital outpatient space, look to start getting involved onto GPO agreements, IDN agreements into the hospital setting, and look at other sites of service within, or frankly, call points within the hospital system, not so focused in chronic wound, but more gravitating to some of the acute wound space as well. I think there's a lot of M&A opportunities within this space as well. I think values are suppressed and some really nice targets that will kind of expand what I always say is the continuum of care, areas where we don't have a product that touches a patient across that value stream, and where we are currently kind of at the end of that continuum of care where all these other products didn't work on that patient and were a product of last resort. It'd be great to have an opportunity to expand our product portfolio and be able to service a patient on day one and hopefully on day wound closure. Really exciting. How would you evaluate where you are at from a market share perspective now, and then where you expect that to go over time? Yeah, no, it's a great question. I mean, as I kind of alluded to, it's $10.3 billion. It's a very large market. We delivered just over $300 million last year, so somewhat small and diminished, I guess, in the overall market opportunity. I think, like I said, we'll see how things suss out, you know, moving forward from 2026 and how that changes not only the TAM, but also, you know, who's left and who's interested in being a long-term player in this space. We'll continue to try to drive the BioREtain® message and, as I alluded to, getting into the hospital and things of that nature hopefully drives that as well. I guess if you look at it slightly differently, how many relevant accounts are out there, and how do you expect to kind of incrementally penetrate those accounts over time, recognizing the backdrop? I think ultimately, as I kind of alluded to, there's roughly about 7 million Medicare patients out there with a chronic wound. That number is growing exponentially as well. The problem isn't going away. I think when we look at how many patients we ultimately are not currently addressing right now just due to the market dynamics of high ASP products and other things, I think there's still a decent amount of market opportunity in the mobile wound care physician office segment, as well as kind of a green field for us because we're not in the hospital yet. We know that market is pretty sizable based on the success that some of our peers are having. I think there's a lot of upside for us in a lot of areas. Shifting to the financial profile, specifically gross margins, they're obviously very strong at 95%. Can you help us better understand the manufacturing process and the pricing strategy that helps you drive that type of margin? Yeah, I think it screams why BioREtain® is superior, right? Not only from a superior product of retaining a lot of the natural properties, but also the fact that it's a very efficient process to manufacture. We look at competitors and kind of evaluate how they actually process that material, and it's taking them anywhere between eight to 10 hours to process that material. We've been able to develop a process to manufacture that product within, you know, sub 3.5, 4 hours. Almost half the time. At the same time, we're using the method in which to retain a lot more of the natural property. Not only are we maximizing efficiencies on the manufacturing side, but also that lends itself to a better clinical product. Pretty cool. Really exciting. Moving down to operating margins, those are kind of in the low double digits. Can you talk about the path forward around the operating infrastructure in terms of investments you'll need to make to continue supporting, you know, on one hand, the clinical evidence integration, on the other hand, the commercial growth? Yeah, I think the operating margins continue to kind of be in these low double-digit numbers, at least kind of going forward as we invest in clinical infrastructure, manufacturing infrastructure for scale as we kind of go forward. Hopefully, as kind of those things kind of run their course, we can hopefully create some efficiencies there. I think when I look at also even a margin and some of the sales and marketing as a% of revenue, I think when we get past the end of 2025 and go into 2026, there'll be an opportunity to also improve some of the efficiencies there as well. That's kind of why we're really excited to see how things kind of pan out in 2026, as you know, I think there's some efficiencies there that we can pick up as well. Frankly, be a little bit more similar to our peers in some of those percentages and whatnot. That sounds like it translates into a fair bit of operating leverage to kind of pan out. I think you hit this earlier, but just to maybe double click on the types of M&A opportunities that are coming your way and how you might look to allocate company resources to achieve inorganic growth. Yeah, I think there's, like I kind of alluded to earlier, I think there's definitely some opportunities in areas that, you know, I think there's orgs and product portfolios out there that really aren't large enough for the larger folks like a Smith & Nephew or a Zimmer or a Mölnlycke to take on. They're also too close in synergy to the existing peers. Because we are lacking access into the hospital and the OR and things of that nature, I think there's some really good opportunities there where we can pick up products, frankly, people, other organizations that help us accelerate our opportunity, just like Venture did when they showed up and showed up with 100 FTEs in the field in 2023. We were able to kind of lock and load and go forward and commercialize very quickly. I think there's other opportunities in areas that we don't service now that we could do something very similar. How does it commercially look like if you're looking at targets and you're thinking about chronic versus acute wounds? Is that a different call? No, absolutely. I think it is. I think to also kind of expand on your question or point, when we look at things and we're looking at things that are positive revenue generation, positive EBITDA generation, not really a science project or anything like that, something that's more mature and definitely has a good footing that we can add capital to and resources to and really grow it from there. I guess as you look out, there's obviously some exciting readouts with diabetic foot ulcer and venous leg ulcer. Does that change your approach commercially as those kind of come on the market? Yeah, I believe so. I mean, I think we'll see where the coverage policy goes. We have this looming also local coverage determination that we'll see how that impacts what clinical data is going to be required to effectuate being on the covered versus non-covered list. When CMS ultimately pushed the LCD back to January 1, 2026, one of the things they mentioned was, "Hey, organizations, please submit data for your products in November, by November." We're actively going to work towards that. I think expanding on how do we get access in more commercial payers or frankly just better product adoption just due to the fact that providers see the clinical value of these products. I think the other side of that coin too is the fact that when we move away from ASP plus 6 methodology and get more into a normalized pricing structure, there'll be more on selling on efficacy and product adoption around efficacy and the science versus economics, hopefully. I guess on that note, the Journal of Wound Care had an interesting article recently kind of addressing the policy framework for skin substitutes. Just curious if you had a chance to kick it in and what the implications might be. I know you talked about the 125 earlier. Yeah, it's not sustainable. I think JWC and Dr. Tuttlebach and that group did a great job of really combing through the CMS data, right, and saying, "Okay, hey, are there things that we need to be looking at? Is there anomalies in the fact that are we, no pun intended, throwing the baby out with the bathwater here in the sense of are there a subset of providers that are overutilizing these products? How many other providers are utilizing these products? Are we getting better adoption, meaning more patients are getting treated? Or is there just overutilization by maybe bad actors and things of that nature?" I think that paper really highlighted the fact that there's a significant amount of adoption of these products by, you know, the top 100 providers that are utilizing these products. I think it was fascinating the fact that there is a significant delta between DFU and diabetic foot ulcers and venous leg ulcers on how much product is needed to treat those patients. One thing that is also fascinating that isn't really covered by the LCD is the fact that pressure ulcers were left out of the LCD. I kind of scratch my head and go, "Okay, why is that?" Right? I kind of look through some of these things and realize, "Wait a minute, there is no clinical data for treating pressure ulcers by these products." Maybe that was the driving factor around that, you know. Bill and his team, I think, did a great job on putting together a good summary around what does it take to be successful in utilizing skin substitutes in the mobile wound care space and the physician office space. What does that number really need to be from a reimbursement perspective? Do we need to normalize placement rates across all sites of service so that we don't have an artificial drive to one side of the service or the other if we're going to normalize pricing across all sites of service? It's a good read. I wish everybody would take the time to read it because it's a very easy one. I think it lays it out very nicely as to what are the hot buttons in this industry, but also what are the pretty, I feel like, tangible solutions that could solve a lot of the hopeful, you know, the fraud and abuse and some of the other issues. Great to have you here, Jason. Yeah, no problem. Thanks so much. Yeah.