TMDX - Earnings and News

I forgot to mention this in my last post, but TMDX refinanced their debt prior to reporting earnings and they took out a larger loan which increased their cash balance by ~ $23M. Since this happened after the quarter closed, it is not reflected in the current earnings that were reported on Monday.

Results from the last 5 quarters:

Rev…8,171…5,370*… 9,668… 15,880…20,521
YOY Rev change… +141%… -24%… +26.8%… +123%…+151%
Gross Margin… 68%… 70%… 72%…76%…70%

Since 2021Q3 was low on Revenue, if TMDX simply keeps 3Q2022 constant with Q2, it will yield a headline revenue increase of 282%. I know that’s artificially high, but it’s still going to get a lot of hype.

Gross margin was down sequentially. The reason given was that there is a higher percentage of Revenue coming from NOP support, which I assume is not as profitable as just selling the base OCS kits. They said that gross margin would improve slightly in the future as they get more efficient with NOP. I’m not so sure about that, but even if they trend toward 65% - 70% GM, that’s still pretty good.

The CEO was asked repeatedly about the conservative guidance. They are basically guiding for flat revenue (or less) for the rest of this year. I think the CEO is overly conservative based on what happened to them during the first year of COVID. He was extremely conservative last quarter also, and they easily beat estimates. The CEO did provide 3 or 4 areas of concern that are leading him to be cautious. I’m not going to record all of those here. They are legitimate, but similar to risks that any other fast-growing company encounters.

They are continuing to see good volume increase with transplant centers using the NOP (organ retrieval and delivery service). NOP accounted for 84% of revenue in the US market. They said Liver OCS is 99% using NOP. That’s pretty impressive.

There was not much new info. Just solid execution and results. They have a conference presentation with Canacord next week, so maybe there might be some additional points shared there.

A couple days after earnings, they announced a secondary offering. The day after that, TMDX announced that the offering was upsized and it was being priced close to the current stock price at that time. The stock ended trading Friday up about 20% for the week. I increased my shares by 25% Friday pre-market.

Great quarter. Could not ask for much more. They have a monopoly in a green-field market with a big need for more organs - in a country with an aging population. They have the rare product that is a “win” for all impacted parties.
Donors’ families win because more organs can actually be utilized – and not thrown away.
Patients win because they get a healthier organ and they have a shorter waiting time to receive a transplant.
Doctors win because they have better outcomes in surgery and can save more lives.
Hospitals win because they can make more money by doing more transplants.
Hospital staff wins because more surgeries can be done during the day – not as emergency surgeries during the night (better quality of life).
Insurance companies win because they actually save money with use of the OCS.
Organ Procurement Organizations win because they can make more money and help more people by utilizing more donated organs – and meet gov’t goals for more transplants.

TMDX is in the beginning part of their “S” curve for growth IMO.


FYI - I personally have a high % in cash currently. I won’t say how much for fear of being shunned. Of the 10 growth stocks I am invested in, TMDX is my highest %. Full disclosure, I still own some TDOC, so I’m obviously not the greatest investor… Make your own decisions. I’m just sharing the TMDX info in an attempt to try to give back a little to the board. Hope it is helpful in some small way.

FWIW - I agree with TMBs recent posts. Maybe this board is not the right place for discussing it, but it’s a topic worthy of discussion somewhere.