Elutia — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the three months ended September 30, 2026, were $1.1 million, representing a 20.4% year-over-year increase compared to $0.9 million in the same period of 2025.
• Net sales for the nine months ended September 30, 2026, were $3.3 million, a 65% increase from $2.0 million in the prior year period.
• GAAP gross margin was 61.7% for the third quarter of 2026, up from 52.8% in the third quarter of 2025.
• Adjusted gross margin (non-GAAP) was 85.5% for the third quarter of 2026, compared to 81.3% in the prior year period.
• Total operating expenses were $7.6 million for the quarter, an increase from $6.4 million in the prior year, driven by a $1.9 million rise in research and development expenses and partially offset by a $0.7 million reduction in net litigation costs.
• Loss from operations was $6.9 million for the quarter, compared to a loss of $5.9 million in the prior year.
• Net loss from continuing operations was $6.5 million for the quarter, compared to a loss of $1.0 million in the prior year.
• Income from discontinued operations was $5.2 million for the quarter, compared to a loss of $2.8 million in the prior year.
• Net loss for the quarter was $1.3 million, compared to a net loss of $3.9 million in the prior year.
• Adjusted EBITDA (non-GAAP) was a loss of $5.6 million for the quarter, compared to a loss of $3.4 million in the prior year.
• Cash and cash equivalents were $29.1 million as of September 30, 2026; an additional $8 million received on October 1, 2026, is not included in this balance.
• Long-term debt, net, was $8.1 million as of September 30, 2026, compared to zero in the prior year-end.

Guidance and Future Outlook:

• NXT-41x is scheduled for FDA submission in the fourth quarter of 2026.
• FDA clearance for NXT-41 is anticipated in the fourth quarter of 2026.
• NXT-41x FDA clearance is anticipated in the first half of 2027.
• A commercial soft launch for NXT-41x is expected in the second half of 2027.
• A full commercial launch for NXT-41x is targeted for 2028.
• The company believes it has sufficient funding through the anticipated clearance and first full year of NXT-41x commercialization in 2028 without an equity offering.
• Upside to the capital runway includes the potential draw of an additional $5 million tranche from Avenue Capital, up to $3 million in contingent milestone payments from the SimpliDerm sale, and potential proceeds from the sale of the Cardiovascular business.

Business Segments and Product Lines:

• The Cardiovascular business segment grew 20% year-over-year in the third quarter of 2026, reaching $1.1 million in revenue, and grew 65% for the first nine months of 2026.
• The Cardiovascular business achieved an adjusted gross margin of 85% in the third quarter.
• NXT-41x is a biologic matrix with an antibiotic coating designed to deliver localized therapy to the surgical site in reconstructive surgery.
• In a GLP rabbit study, NXT-41x achieved complete eradication of 8-log MRSA and 6-log E. coli challenges with no viable bacteria recovered.
• Elutia's automated drug-coating system is positioned for commercial production with a revenue capacity of at least $300 million and is designed to support gross margins above 80% at scale.
• The company sold its SimpliDerm business to Cellution Biologics Inc. in August 2026 for $8 million at closing, with eligibility for up to $3 million in contingent payments.
• The company received the full $8 million holdback from the 2025 sale of the BioEnvelope business to Boston Scientific in October 2026.
• The company closed a $15 million loan facility with Avenue Capital Group in August 2026, with $10 million funded at closing and $5 million available following NXT-41x FDA clearance.

Market and Competitive Landscape:

• Infection risk was cited in all 11 breast research sessions at the American Society of Plastic Surgeons' annual meeting, with serious infection rates reported as high as 23%.
• Studies presented at the meeting showed infection rates of 17.6% in women not receiving preoperative chemotherapy and 23.0% in those who did; another study found a 19.3% infection rate despite perioperative and postoperative antibiotics.
• Extending antibiotics past 24 hours did not reduce infection rates at 30, 60, or 90 days in a multicenter study of 4,647 patients.
• No commercially available product on the exhibit floor at the American Society of Plastic Surgeons' annual meeting addressed infection in breast surgery.
• The company faces competition from other companies with longer operating histories, more established products, and/or greater resources.

Risks and Challenges:

• Risks include the ability to obtain regulatory approval for NXT-41 and NXT-41x, the ability to comply with credit facility covenants, and the risk of product liability claims.
• The company faces risks related to the sale of the SimpliDerm business, including the potential reduction, delay, or failure to earn contingent payments.
• The company must defend against lawsuits related to former FiberCel and VBM products and avoid material adverse financial consequences.
• The company depends on independent sales agents and a limited number of third-party suppliers, including Cook Biotech as a sole supplier for Cardiovascular products.
• Risks include the ability to maintain Nasdaq listing compliance, specifically the minimum bid price requirement.
• The company faces risks related to pricing pressure from cost-containment efforts of customers and payors.

Management Commentary and Tone:

• CEO Dr. Randy Mills stated that patients and surgeons have been ignored for too long regarding infection risks.
• Management expressed astonishment at the disconnect between surgeon concerns and industry offerings, citing infection rates up to 23% as an "unacceptable problem."
• Management expressed confidence that the company has the technology, team, and capital to advance NXT-41x toward clearance and commercial launch.
• Surgeons on the NXT-41x Steering Committee provided very positive feedback, emphasizing the need for drugs to be in the "right place at the right time."
• Management indicated the strategic process for the Cardiovascular business remains on track for 2026 and that a transaction will only occur on terms reflecting the business's value.

Other Key Points:

• The company raised $26 million in 51 days without an equity offering through the Boston Scientific holdback, the SimpliDerm sale, and the Avenue Capital loan.
• The Cardiovascular business strategic process is expected to conclude in the fourth quarter of 2026.
• The company's current cash runway does not depend on a Cardiovascular transaction.
• The company has a revenue interest obligation to Ligand Pharmaceuticals Incorporated that expires May 31, 2027.
• The company received $8 million from the sale of SimpliDerm and is eligible for up to $3 million in contingent technology transfer and commercial milestone payments over 18 months.
• The company received the full $8 million held in escrow from the 2025 BioEnvelope sale to Boston Scientific with no claims.