Surmodics Reports $29.9 Million Revenue in Q1 Fiscal 2025, Faces Challenges in Medical Device Segment

Surmodics, Inc. reported a total revenue of $29.9 million for the first quarter of fiscal 2025, reflecting a decrease of 2% compared to $30.6 million in the same period last year. The decline was primarily driven by a 15% drop in product sales within the Medical Device segment, which fell to $10.1 million from $12.0 million. This decrease was attributed to reduced commercial revenue from the SurVeil drug-coated balloon (DCB) product, as the previous year benefited from initial stocking orders. In contrast, royalties and license fees increased by 14% to $9.4 million, bolstered by higher customer utilization of the Serene hydrophilic coating.

The company reported a net loss of $3.7 million, or $(0.26) per share, compared to a loss of $0.8 million, or $(0.06) per share, in the prior-year quarter. Operating expenses rose significantly, with selling, general, and administrative (SG&A) expenses increasing by 21% to $15.2 million, largely due to $2.3 million in merger-related charges. Research and development (R&D) expenses also saw a slight increase of 3%, totaling $8.9 million, as the company continued to invest in its medical device product platforms.

Surmodics is currently navigating a merger agreement with BCE Parent, LLC, which was announced on May 28, 2024. Under the terms of the agreement, Surmodics will be acquired for $43.00 per share in cash. The merger is subject to customary closing conditions, including regulatory approvals, and is expected to close in the second quarter of fiscal 2025, pending the satisfaction of these conditions. The company incurred $2.3 million in merger-related expenses during the quarter, which were included in SG&A expenses.

Operationally, Surmodics reported a decrease in cash and cash equivalents, which totaled $30.1 million as of December 31, 2024, down from $40.1 million at the end of the previous fiscal year. The company’s working capital also decreased to $58.7 million. Surmodics has access to a revolving credit facility of up to $25 million, with $5 million drawn as of the end of the quarter. The company anticipates that its existing cash, along with cash flow from operations and available credit, will be sufficient to meet its liquidity needs for fiscal 2025.

Looking ahead, Surmodics expects continued challenges in its Medical Device segment, particularly with anticipated declines in SurVeil DCB product revenue. The company forecasts a decrease of approximately $6 million in product revenue for SurVeil DCB in fiscal 2025 compared to the previous year. Despite these challenges, Surmodics remains focused on its growth strategy, which includes the commercialization of its vascular intervention products and ongoing investments in R&D to enhance its product offerings.