Artrya’s operatingcash flow of -$6 million was slightly more negative than expected due to around$0.8 million in on-offs. Costs are expected to stay at around -$6 million aquarter for the next two quarters as the company works towards the FDAsubmission for Salix Coronary Flow (SCF) and builds out its US resources. Duringthe quarter, AYA raised $80 million in an oversubscribed placement and share purchaseplan.
The SAPPHIRE study remains the most significant near-termcatalyst for another step change in Artrya’s business. AYA has announced two small-to-medium-sizedstudy participants, and we expect they will announce another soon. The studyremains on track to commence early next year, and management again reiterated thatit still expects some very large systems to join and that, combined, the studyparticipants complete ~400k scans a year (worth ~$510 million in annual revenueto AYA).
We were surprised that Artrya maintained its guidance ofachieving positive cash flow by FY27. With $80 million on balance sheet, and threecustomers worth $19 million in annual revenue close to signing commercialagreements we’d prefer the company focused on accelerating its US expansionrather than trying to hit a positive cash flow target.
We expect that, over the next 3-6 months, management willannounce a revision to this target, stating that it will instead capitalise onits first-mover advantage and accelerate the Salix rollout. AYA reported on thecall that it is already receiving more inbound enquiries than it can action,and building a team to support this demand is a far higher priority in ourminds.
Despite recent progress, we are maintaining our $3.06 pricetarget, with a positive outlook, but expect it will move (probably materially)once we have greater visibility into the SAPPHIRE study participants and theirlikelihood of signing commercial agreements.
Key catalysts we’rewatching are: announcement of large healthcare systems joining the SAPPHIRE study,FDA clearance of SCF, full commercial rollout with existing 3 US customers,visibility of meaningful US revenue, commencement of SAPPHIRE study, and commercialnegotiations with SAPPHIRE study partners.
