About Elutia

Aziyo Biologics, Inc., a commercial-stage regenerative medicine company, focuses on creating the next generation of differentiated products and improving outcomes in patients undergoing surgery. The company seeks to leverage its unique understanding of biologics to improve the interaction between medical devices and patients, with the intention of reducing complications and improving healing. From the company’s proprietary tissue processing platforms, the company has developed a portfolio of advanced regenerative medical products that are designed to mimic the healing response of natural biological material. The company’s proprietary products are designed to address the device protection, women’s health, orthobiologics and cardiovascular markets, which represent a combined $3 billion market opportunity in the United States. To expand the company’s commercial reach, the company has commercial relationships with major medical device companies, such as Boston Scientific, Biotronik and beginning in March 2023, Sientra, to promote and sell some of the company’s products. The company’s products are targeted to address unmet clinical needs with the goal of promoting healthy tissue formation and avoiding complications associated with medical device implants, such as infection, scar-tissue formation, capsular contraction, erosion, migration, non-union of implants and implant rejection. The company has products in each of its four priority markets: device protection, cardiovascular, orthobiologics and women’s health. In device protection, the company sells the only biological envelope, protected by a global patent portfolio, that forms a natural, systemically vascularized pocket for holding implanted electronic devices. In cardiovascular, the company sells its specialized porcine small intestine submucosa (‘SIS ECM’) for use as an intracardiac and vascular patch. In orthobiologics, the company has a proprietary processing technology for manufacturing a comprehensive portfolio of bone regenerative products designed to promote the body’s ability to regenerate healthy bone, osteogenesis, while decreasing cell apoptosis, or programmed cell death. In women’s health, the company has a patented cell removal technology that produces undamaged extracellular dermal matrices with superior handling, designed to promote faster healing and reduce inflammation. In pre-clinical and clinical studies, the company’s products have supported and, in some cases, accelerated tissue healing, which has contributed to improved patient outcomes. The company operates in four segments that align with the company’s major product groupings – Device Protection, Women’s Health, Orthobiologics and Cardiovascular. The company’s growth strategy is focused on increasing penetration in each of the device protection, women’s health, orthobiologics and cardiovascular markets. The company can grow its business by increasing the company’s commercial footprint, developing clinically exceptional products and, when possible and appropriate, through inorganic opportunities. The company’s go-to-market strategy includes a hybrid of a direct sales force, commercial partners and independent sales agents. As of December 31, 2022, the company had 24 direct sales representatives who focus on gaining additional market access and driving market penetration, not only by selling the company’s products, but also, where appropriate, by managing the company’s commercial partners and providing technical assistance for selling the company’s products. Through the company’s direct sales force and leveraging the company’s existing commercial partners, the company can expand its customer base and further strengthen the company’s existing customer relationships and increase penetration in the company’s priority markets. The company has a well-established and scalable manufacturing platform, consisting of two facilities that are supported by the company’s corporate headquarters and other administrative location. The company’s Silver Spring, Maryland location is the company’s headquarters and functions as a research and development and corporate support center. The company’s Roswell, Georgia location is its processing, production and distribution facility for all of the company’s implantable electronic device protection and cardiovascular products. The company’s Richmond, California location is its human tissue processing and distribution facility for the company’s orthobiologics and soft tissue reconstruction products. The company’s San Diego, California location provides additional administrative oversight and support. Growth Strategy The key elements of the company’s growth strategy are to increase penetration in the company’s target markets; robust pipeline of innovative core products from the company’s proven research and development capabilities; and additional growth through selective acquisitions. Proprietary Products/Solutions The company’s portfolio of regenerative medicine products has been developed to address the following specific markets: Device Protection and Cardiovascular Markets Solution CanGaroo was designed to mitigate complications deriving from implantable electronic devices and the shortcomings of synthetic envelopes. CanGaroo is the only biological product that forms a natural, systemically vascularized pocket that conforms to and securely holds implantable electronic devices. CanGaroo is cleared for use with pacemaker pulse generators, defibrillators and other cardiac implantable electronic devices, as well as vagus nerve stimulators, spinal cord neuromodulators, deep brain stimulators and sacral nerve stimulators. The CanGaroo Envelope is constructed from perforated, multi-laminate sheets of decellularized, non-crosslinked, lyophilized SIS ECM, derived from porcine small intestinal submucosa, a natural biomaterial, which is rich in natural growth factors, structural proteins and collagens. The ECM is sewn into the shape of a pouch, into which the device is placed. The company sells the biological envelope in a variety of sizes, which allows it to accommodate various sized electronic devices, and it has a shelf life of 30 months. CanGaroo is soft and pliable and is designed to conform to the implantable device for easy handling and implantation. The SIS ECM is designed to mitigate the biologic foreign body response that normally occurs around the electronic device. CanGaroo is remodeled into a surrounding layer of vital, vascularized tissue, potentially reducing the risk of capsular formation, migration and erosion of the implantable device through the skin, and complications associated with Twiddler’s syndrome. CanGaroo may also facilitate the process of implantation and of device removal during its replacement, as well as enhance patient comfort. Development Pipeline The company is developing a version of the CanGaroo Envelope, the CanGaroo RM, that combines the envelope with antibiotics and is designed to reduce the risk of infection following surgical implantation of an electronic device. Based on feedback from the FDA, CanGaroo RM will require clearance of a 510(k) submission to be marketed in the United States. The company submitted the required 510(k) in April 2022 and, in March 2023, received a Not Substantially Equivalent (‘NSE’) letter from FDA requiring the company to address questions relating to drug testing, primarily a request by FDA to modify an in vitro drug release assay employed as a manufacturing control. The company intends to address the questions raised in the NSE letter and continue to work with FDA for potential clearance via the 510(k) pathway. Commercial Approach The company sells CanGaroo in the United States and globally using the company’s direct sales force and its commercial partners, Boston Scientific and Biotronik, which act as sales agents and give the company access to approximately 1,200 sales representatives and clinical specialists to further expand the company’s footprint and accelerate its sales. The company’s primary customers are electrophysiologists, cardiac surgeons and neurosurgeons. The company’s direct sales force is focused on gaining additional market access and driving market penetration, not only by selling the company’s products, but also, where appropriate, by managing the company’s commercial partners and providing technical assistance for selling the company’s products. The company ships the product directly to hospitals. Cardiovascular Products Through the company’s direct sales force and independent sales agents, the company also sells additional cardiovascular products derived from the company’s specialized SIS ECM, all of which received 510(k) regulatory clearance as medical devices: ProxiCor is cleared for use as an intracardiac patch or pledget for tissue repair, i.e., atrial septal defect, ventricular septal defect and suture-line buttressing, as well as for the repair and reconstruction of the pericardium. ProxiCor enables cardiac and congenital heart surgeons to reestablish the essential native anatomical structures of the heart and pericardium by providing a natural bio-scaffold that allows the patient’s own cells to form a new pericardial layer. Typically, the absence of a pericardial barrier often leads to scarring and the formation of adhesions between the heart and sternum, impairing normal heart function. The use of ProxiCor for pericardial repair potentially avoids adverse events associated with the use of synthetic materials or highly processed biological materials, which can trigger an immune response, resulting in fibrotic or calcified scarring at the implant site. Tyke was developed based on a request by pediatric cardiovascular surgeons to deliver an ECM material that maintained the biomechanical properties found in the company’s existing products, but was thinner, more pliable and better suited for intracardiac and branch pulmonary artery use in neonates and infants. Tyke is cleared for use in neonates and infants for the repair of pericardial structures; as an epicardial covering for damaged or repaired cardiac structures; and as a patch material for intracardiac defects, septal defect and annulus repair, suture-line buttressing and cardiac repair. Tyke is the only extracellular material that has been specifically cleared for use in neonates and infants to repair pericardial structures. VasCure is cleared for use, and is used by, cardiovascular, vascular and general surgeons as, a patch material to repair or reconstruct the peripheral vasculature, including the carotid, renal, iliac, femoral and tibial blood vessels, by modeling into site-specific tissue and conforming to repair defects easily. VasCure is also cleared and is used for the closure of vessels, as a pledget, or for suture line buttressing when repairing vessels. It is designed to prevent and stop bleeding, resulting in minimal bleeding at suture lines. Unlike synthetic or cross-linked materials, VasCure approximates normal tissue and, is, therefore, less likely to provoke an immune response. Women’s Health Market Solution SimpliDerm was designed to offer improved biocompatibility and better functioning in the patient. It is marketed for use for the repair or replacement of damaged or insufficient integumental tissue or for the repair, reinforcement or supplemental support of soft tissue defects or any other homologous use of human integument. SimpliDerm is a pre-hydrated, HADM manufactured with the company’s patented cell removal technology, a process that maintains the biological and structural integrity of the tissue’s extracellular matrix components and is designed to allow for rapid integration, cellular repopulation and revascularization at the surgical site. Its structurally intact extracellular matrix is designed to closely resemble natural, healthy tissue. Development Pipeline Breast implants are generally placed below the pectoral muscle, known as subpectoral positioning. This approach has limitations, such as decreased arm strength, muscle spasms, animation deformities, implant movement and pain. Changes in mastectomy techniques, including the preservation of more sub-dermal tissue on skin flaps, as well as advances in fat grafting and the availability of acellular dermal matrix (‘ADM’), for augmenting the tissue pocket have all created the opportunity to place the implant above the pectoral muscle, known as prepectoral positioning, and, in doing so, address complications arising from subpectoral placement. While the use of ADM to support and reinforce the skin has a strong scientific rationale for these prepectoral procedures, the sizes of ADMs required may be three to four times the magnitude used for subpectoral reconstructions, exposing the patient to greater quantities of ADM and adding proportional additional expense to the procedure. The use of ADM for these prepectoral procedures requires optimization of larger size pieces with uniform thickness, pliability and elasticity. Given the market potential and current FDA guidance, the company would evaluate the anticipated regulatory and investment requirements for a specific indication for prepectoral procedures. Commercial Approach SimpliDerm is sold through independent sales agents to plastic and reconstructive surgeons, and the company ships this product directly to hospitals. Orthobiologics Market Solution The company’s bone regenerative products are processed by a proprietary method designed to protect and preserve the native bone cells (osteogenic) needed for bone formation and to decelerate cell apoptosis. The company’s products, besides being osteogenic, are also osteoinductive (ability to recruit cells and to signal the need for bone formation) and osteoconductive (provide a three-dimensional scaffold to promote bone formation). These products, which have beneficial handling properties, support integration with the patient’s bone, and are used to enhance the bone repair process. The inflammatory response and unintended bone formation observed with BMP-2 has not been observed with the company’s products. The company offers three viable cellular bone matrixes, including Fiber VBM, ViBone and OsteGro V. The company’s viable cellular bone matrixes are bone repair products made from human tissue and engineered to be like natural tissue. Each formulation is marketed for use in orthopedic or reconstructive bone grafting procedures in combination with autologous bone or other forms of allograft bone or alone as a bone graft. Each product is designed to provide superior handling properties that are critical for use as a bone void filler in various orthopedic and spinal procedures. The company has also developed a proprietary processing methodology, optimized to protect and preserve the critical bone elements required for regenerative bone formation. Development Pipeline The company is developing new bone fusion and repair product candidates that offer features that could improve upon available technologies or offer new features. These product candidates are in development, and these product candidates will be regulated by the FDA as HCT/Ps. Commercial Approach The company’s commercial approach to the orthopedic/spinal repair market has been to leverage commercial partners with existing sales and marketing infrastructure in these areas, while the company focuses on research and development and the manufacturing of products. The company has agreements in place with many spine and orthopedic companies for the distribution of the company’s viable bone matrix products. Under the terms of those agreements, these customers purchase products from the company at specified prices and resell such products in the United States to the primary customers, which are hospitals and other healthcare facilities. The company fulfills most orders from its commercial partners by shipping these products directly to these hospitals and other healthcare facilities. Additional Orthobiologics Products/Contract Manufacturing In addition to the company’s proprietary products, the company fulfills tissue processing contracts based on product specifications established by the company’s customers through contract manufacturing services at the company’s Richmond, California facility. The company provides these services in order to utilize as much as possible of the starting human biological material from which the company produces its proprietary orthobiologic products, leverage the company’s existing overhead and improve the company’s cash flow. The resulting processed materials, including particulate bone, precision milled bone, cellular bone matrix, acellular dermis and other soft tissue products, are sold to medical/surgical companies as finished products and as a subcomponent of their products. Additionally, the company processes amniotic membrane as finished product for select customers. Clinical Data The company has accumulated a substantial body of clinical and pre-clinical data for the company’s proprietary products. Device Protection Pre-clinical Studies Recently published pre-clinical data from a rabbit model showed that the CanGaroo Envelope was more successful in providing a barrier surrounding a CIED compared to a pacemaker canister alone. When implanted with a pacemaker, CanGaroo Envelopes were observed to promote significantly greater stabilization of the device and more vascularized tissue ingrowth within the pocket compared to implantation with only standard fixation methods, such as sutures through the CIED header or no fixation at all. These data were initially presented as a live podium presentation at the ASAIO 2022 annual conference and published in abstract form in ASAIO Journal. Clinical Studies To evaluate the company’s CanGaroo Envelope, the company has conducted multiple post-market studies and is conducting retrospective studies including over 2,000 patients in total. The results from the completed studies provide evidence supporting the safety of the CanGaroo Envelope when used for the implantation of CIEDs in humans. CARE Study and SECURE Study The CARE Study was a retrospective, post market study. Data from 96 consecutive patients who underwent simultaneous CIED and CanGaroo Envelope implantation at a single institution were retrospectively reviewed for the occurrence of CIED-related complications and infection. The SECURE Study was a prospective, single arm, observational, post-market study assessing 1,026 patients enrolled at 39 centers who underwent the implantation of a CIED in a CanGaroo Envelope. The endpoints of the studies were to evaluate: (a) the proportion of patients with CanGaroo-related adverse events and (b) the incidence of major infections observed in the pocket. Data from these two studies were combined to determine overall clinical outcomes and adverse events, and resulted in a large dataset from 40 centers throughout the United States of 1,102 total patients with an average number of 2.3 infection risk factors and mean follow up time of 223 days. The most common risk factors among enrolled patients included oral systemic anticoagulants, obesity, diabetes, congestive heart failure, device replacement/revision, and renal insufficiency. The low rates of CanGaroo Envelope complications observed in the CARE and SECURE Studies support the safety of the product when used clinically in human CIED implantation. CARE Plus Study The CARE Plus Study was a single-center, post-market, retrospective cohort study to evaluate outcomes in patients who received a biologic CanGaroo Envelope, Medtronic’s non-biologic TYRX envelope, or no envelope during CIED implantation. Adverse patient outcomes and any adverse events that occurred following implantation out to 12 months were analyzed. The results of 455 patients (165 CanGaroo, 219 TYRX and 71 no envelope) were published in Cureus in May 2022. These data support the use of antibiotic eluting CIED envelopes to limit infection risk in high-risk patients. A decision tree was proposed by the author based on their patient selection criteria for real world envelope usage and other supporting data that may aid clinical decision-making when considering CIED envelope usage. HEAL Study The HEAL Study is an ongoing retrospective cohort study of CIED patients who are presenting for their latest reoperation after a previous implantation that is designed to identify and compare the characteristics of soft tissue healing surrounding cardiovascular implantable electronic device implants. As of December 31, 2022 there were 45 patients enrolled. Patients evaluated in the study will be from one of three cohorts based on whether a biologic CanGaroo Envelope, Medtronic’s non-biologic TYRX Envelope, or no envelope was used during the prior implantation. At reoperation, the current implant pockets of the patients will be examined and compared by a blinded histological biopsy and visually using photographs. An interim analysis was performed in May 2022 on 21 patients that were enrolled at the time (9 CanGaroo and 12 no envelope) as of a cutoff date of April 25, 2022, and the results were presented as a poster at the American Heart Association (AHA) Conference in November 2022 and published in Circulation. Although the study is ongoing, these interim results suggest that use of a biologic CanGaroo Envelope at initial CIED implantation has the potential to prevent operative complications, facilitate reoperative procedures, and enhance clinical outcomes. CanGaroo S-ICD Pilot Study A retrospective, single-center, post-market pilot study was designed to evaluate whether low voltage lead impedance (LVZ), as routinely measured by subcutaneous implantable cardioverter defibrillators (S-ICDs), could be a clinically relevant assessment. These devices sense changes in impedance, which could be influenced by fibrotic tissue surrounding the S-ICD. Such encapsulation could complicate future procedures for patients. LVZ changes from 0 to 4 years post implantation of a S-ICD were analyzed in 24 patients, half of whom received CanGaroo Envelope and half received no envelope. LVZ measurements reliably detected changes in impedance over time and between groups. After an initial decrease in both groups in the first month, impedance changes appeared to increase more slowly in the CanGaroo cohort compared to patients in the no envelope cohort out to 30 months. The data, presented at the European Society of Cardiology 2022 Congress and published in European Heart Journal, suggest that LVZ may provide a non-invasive assessment of surrounding tissue quality. Further study is needed to determine whether use of a CanGaroo Envelope may stabilize impedance changes long-term. CanGaroo Registry Study The CanGaroo Registry Study is a prospective, multi-center registry with 500 patients enrolled (329 CanGaroo and 171 no envelope) as of December 31, 2022. The objective is to explore clinical profiles, procedural details, and post-implant outcomes of patients who received the CanGaroo Envelope or no envelope at time of initial (de novo) CIED implantation. All patients will be followed for three months postoperatively, and a subgroup of patients aged 65 years or younger at time of enrollment will undergo extended follow-up for up to five years. Soft Tissue Reconstruction Pre-clinical Studies In vitro studies were conducted to evaluate and compare SimpliDerm to native human dermis and two other commercially available HADMs, in terms of morphological structure, composition, physical characteristics and chemical and thermal stability. Histology slides of SimpliDerm and native dermal matrix were examined microscopically, using three different stains. Stained samples of SimpliDerm retained the collagen structure (density and orientation), elastin, blood vessels and basement membrane complex that was observed in the native dermal matrix. Transmission electron microscopy demonstrated intact collagen fibril structures in native dermis and SimpliDerm, supporting the conclusion that the decellularization process used to produce SimpliDerm did not damage the ultrastructural architecture of the collagen matrix. Additional testing was performed that compared the properties of SimpliDerm, AlloDerm RTU and DermACELL to native Dermis. These tests included glycosaminoglycan content, matrix protein stability and differential scanning calorimetry. The glycosaminoglycan content of SimpliDerm and Alloderm RTU was similar, with a substantial reduction in the amount of glycosaminoglycans observed in DermACELL. Matrix protein stability was evaluated by determining acid-soluble collagen content and by performing collagenase degradation on the product samples. SimpliDerm was closest to native dermal matrix in both acid-soluble collagen content and collagenase degradation. Differential scanning calorimetry was performed on the samples, and SimpliDerm and AlloDerm RTU were equivalently close to native dermis, while DermACELL showed the largest difference. The combined testing indicates that SimpliDerm had a structurally intact matrix that was closest overall to native human dermis among the HADMs evaluated. In addition, a non-human primate study was conducted evaluating the ability of SimpliDerm and AlloDerm RTU to regenerate host tissue two weeks, four weeks and three months after implantation. Explanted samples were subjected to analysis that included histology, growth factor analysis and gene expression characterization. H&E and VVG stains and staining for macrosialin (‘CD68’) were used to prepare tissue samples for microscopic observation. AlloDerm RTU samples demonstrated faster implant degradation and cell infiltration, and more inflammatory cells than SimpliDerm. Growth factor analysis of samples for tumor necrosis factor, an indicator for an inflammatory environment, was higher for AlloDerm RTU than SimpliDerm at three months. Gene expression analysis was performed for samples at all time points. Markers for evidence of an inflammatory response to the implants, including collagen synthesis, vascularization, fibrosis, myofibroblast presence and collagen crosslinking, were analyzed and compared. AlloDerm RTU was found to exhibit higher amounts of these inflammatory response markers. The histology, growth factor testing and gene expression data support the conclusion that compared to AlloDerm RTU, SimpliDerm showed less acute and chronic inflammation and less fibrosis, leading to a pro-remodeling microenvironment that promoted tissue repair and regeneration by three months post-implantation. Clinical Studies A retrospective, multi-center study evaluating patients who have undergone breast reconstruction post-mastectomy with SimpliDerm and patients receiving other HADMs was published. A total of 107 patients (181 breasts) who underwent immediate, 2-stage breast reconstruction with tissue expanders and either SimpliDerm (n=38) or AlloDerm RTU (n=69) after mastectomy, were followed to exchange to permanent implant(s) or tissue expander(s) explant. Reconstructions were predominantly prepectoral (82.3%). Patients were followed for a median of 134 days. A total of 35 adverse events (AEs) occurred in 27 (25.2%) patients, with no difference in AE type or rates between ADM groups, and no AEs deemed related. The observed AE profiles and rates were similar to those published for other ADMs in breast reconstruction. These results demonstrate comparable clinical outcomes of SimpliDerm and AlloDerm RTU following 2-stage breast reconstruction. Orthobiologics Pre-clinical Studies In vitro and in vivo characterization studies were conducted to compare whether the manufacturing processes for the company’s viable bone matrices improve certain product characteristics versus traditional viable bone matrix manufacturing processes. The characteristics evaluated addressed the three key elements for bone formation: osteogenesis, osteoconduction and osteoinduction. The assays included those for apoptosis, cell proliferation, osteogenic potential and osteoinduction, as well as for specific bone morphogenic proteins, bone formation factors, alkaline phosphatase and chemotaxis. Compared to viable bone matrices prepared with traditional processing methods, the company’s viable bone matrices were superior in all of the characteristics examined, including less cell death. For example, the company’s viable bone matrix formulations exhibited 58% less apoptosis and had a two-fold greater cell proliferation capability as compared to allografts processed by traditional methods, suggesting greater osteogenic potential. One particular viable bone matrix formulation was tested for osteoinductive properties and was observed to have at least four-fold higher levels of bone morphogenic protein-2 and bone morphogenic protein-7 than traditionally processed allografts. An alkaline phosphatase (‘ALP’) assay was used as an indicator to determine cellular activity after exposure to C2C12 cells, which are model cells used for evaluating differentiation to bone forming cells. The ALP activity of cells exposed to this viable bone matrix formulation was 6-fold greater than traditionally processed allografts. Clinical Studies A prospective, multi-center, post-market clinical study was conducted to evaluate outcomes in 95 patients undergoing 1 – 3 level cervical (n=48) or lumbar (n=47) interbody fusion surgery using ViBone. Patients were evaluated clinically and radiographically at baseline, 6- and 12-months. Clinical assessment included Visual Analog Scale for pain (VAS-pain), the Neck Disability Index (NDI) for patients with cervical pathologies, and the Oswestry Disability Index (ODI) for patients with lumbar pathologies. Fusion success defined by an independent radiologist was determined radiographically by plain films. All patients reached the minimum clinically significant mean reduction in subjective pain and disability scores at 12 months. Spinal fusion rates as measured by independent radiologic evaluation were found to be comparable to the published rates of iliac crest bone autograft and other viable bone matrix grafts: at 12 months, the fusion rate per patient averaged 88.1% in cervical and 97.6% in lumbar patients, while per-level fusion was 98.5% for cervical and 100% for lumbar segments. Competition The CanGaroo Envelope competes with the synthetic envelope TYRX from Medtronic. ProxiCor, Tyke and VasCure compete with bovine pericardium produced by numerous companies, including Gore’s Goretex and Terumo’s Vascutek. Fiber VBM, ViBone and OsteGro V compete with other viable bone matrices, such as Smith & Nephew’s Bio4, MTF’s Trinity ELITE, NuVasive’s OsteoCel, Vivex Biologics’ VIA Graft and LifeNet Health’s ViviGen. SimpliDerm competes primarily against human-derived acellular dermis matrix meshes, including AbbVie’s AlloDerm, Stryker’s DermACELL and MTF’s FlexHD. SimpliDerm also competes against animal-derived biological mesh products, such as AbbVie’s Strattice and Integra’s SurgiMend, as well as various synthetic mesh products. Sales and Marketing The company has dedicated substantial resources to establishing a multi-faceted sales and marketing organization in the United States. The company sells CanGaroo in the United States using the company’s direct sales force and its commercial partners, Boston Scientific and Biotronik, which act as sales agents, marketing CanGaroo and obtaining orders, and give the company access to approximately 1,200 sales representatives and clinical specialists to further expand the company’s footprint and accelerate the company’s sales. Under the terms of these agreements, Boston Scientific and Biotronik receive a commission equal to a specified dollar amount per unit sold. The company’s additional cardiovascular products, ProxiCor, Tyke and VasCure, are sold using the company’s direct sales force and other independent sales agents. The company’s commercial approach to the orthobiologics market has been to leverage commercial partners with existing sales and marketing infrastructure in these areas, while the company focuses on research and development and the manufacturing of products. The company has an agreement with many commercial partners for the sale of the company’s viable bone matrix products. Under the terms of those agreements, these commercial partners purchase products from the company at specified prices and resell such products in the United States to the primary customers, which are hospitals and other healthcare facilities. The company fulfills most orders from its commercial partners by shipping these products directly to these hospitals and other healthcare facilities. SimpliDerm, the company’s women’s health product, is sold using independent sales agents which beginning in March 2023, includes Sientra. The company may also explore additional distribution partnerships across the company’s other product categories. As of December 31, 2022, the company had 24 direct sales representatives who focus on gaining additional market access and driving market penetration, not only by selling the company’s products, but also, where appropriate, by managing the company’s commercial partners and providing technical assistance for selling the company’s products. These sales representatives are supported by teams of professionals focused on sales management, sales operations, ongoing training, analytics and marketing. The company has historically focused the company’s market development and commercial activities primarily in the United States. However, the company has obtained marketing registrations, developed commercial and distribution capabilities and are selling CanGaroo and cardiovascular products in several countries outside of the United States. Independent sales agents in Argentina, Australia, the European Economic Area, the European Union, Latin America and Mexico sell the company’s products. Sales generated in the United States represented greater than 98% of the company’s net sales in 2022. Manufacturing and Suppliers The company manufactures its orthobiologics and soft tissue reconstruction products in the company’s Richmond, California facility. The company manufactures CanGaroo and the company’s cardiovascular products in the company’s Roswell, Georgia facility and use Cook Biotech as the company’s sole porcine tissue supplier for these products. The company is also accredited by the American Association of Tissue Banks (‘AATB’) and is licensed with several states per their tissue bank regulations. Cook Biotech, the company’s sole porcine tissue supplier, is registered with the FDA and ISO 13485 certified. The company’s processing of these tissues is, and the company’s supplier sources are required to be, compliant with applicable FDA current Good Tissue Practice (‘cGTP’) regulations, AATB standards, international standards and U.S. Department of Agriculture (‘USDA’) requirements. Intellectual Property As of December 31, 2022, the company owned approximately 15 U.S. patents, seven U.S. patent applications, six foreign patents (in Australia, Germany, Spain, France, Great Britain and Italy), and four foreign patent applications (in Australia, Canada, and Europe, as well as applications with the World Intellectual Property Organization); and the company in-licensed three U.S. patents, 12 foreign patents (in Australia, Canada, Japan, Denmark, Germany, Great Britain, Ireland, Italy and the Netherlands), and two U.S. and five foreign patent applications (in Brazil China, Japan, as well as an application with the European Patent Office). The company’s owned patent portfolio includes 14 U.S. patents and six U.S. patent applications that relate to the company’s technology for CanGaroo, including issued claims covering biological envelopes and pending claims covering their use. In addition, the company owns one patent that relates to its technology for SimpliDerm that claims a method of preparing an acellular dermal matrix. Excluding any patent term extension, the company’s issued patents relating to its technology for CanGaroo are anticipated to expire starting in 2027, and the company’s issued patent that relates to its technology for SimpliDerm is anticipated to expire in 2033. As of December 31, 2022, the company had 17 registered trademarks and one pending trademark application worldwide, including trademark registrations for ‘Aziyo,’ ‘CanGaroo,’ ‘ProxiCor,’ ‘Tyke,’ ‘VasCure,’ ‘ViBone,’ ‘OsteGro’ and ‘SimpliDerm’ in the United States, and trademark registrations for CanGaroo in the European Union, the United Kingdom, and Japan. License Agreement with Cook Biotech On May 31, 2017, the company entered into a license agreement, which the company refers to as the Cook License Agreement, with Cook Biotech Incorporated (‘Cook Biotech’) under which Cook Biotech granted to the company an exclusive worldwide sublicensable license under certain licensed patents to make, have made, use, offer for sale, sell and import CorMatrix ECM for Pericardial Closure, CorMatrix ECM for Cardiac Tissue Repair, CorMatrix ECM for Carotid Repair, CorMatrix ECM for Vascular Repair, TYKE Patch, Pledget and Intracardiac, and CanGaroo ECM Envelope (into which implantable cardiac pacemaker or defibrillator devices are to be inserted). Cook Biotech retained certain co-exclusive rights to the CorMatrix ECM for Vascular Repair. The Cook License Agreement was amended on December 21, 2017 to expand the company’s field of use for SIS pouch devices to include other implantable electronic cardiac stimulation devices, electronic neurostimulation devices for deep brain stimulation, spinal nerve and sacral nerve stimulation to relieve chronic pain and nerve stimulation to control bladder, digestive, abdomen and bowel movements, and also add additional payment requirements. Under the Cook License Agreement and SIS Material Supply Agreement, Cook Biotech is the exclusive supplier of the SIS ECM used in the licensed products. Regulatory Matters Government Regulation The company’s products and its operations are subject to extensive regulation by the FDA and other federal and state authorities in the United States, as well as comparable authorities in any foreign jurisdictions in which the company markets its products. In the United States, the company’s products are subject to regulation as medical devices under the Federal Food, Drug, and Cosmetic Act (the ‘FDCA’) or as biological products or HCT/Ps under the Public Health Service Act (the ‘PHSA’), each as implemented and enforced by the FDA. Certain of the company’s ECM products are subject to premarket notification and clearance under section 510(k) of the FDCA. The Australian Therapeutic Goods Administration, Korean Ministry of Food and Drug Safety (‘KFDA’), and DEKRA Certification B.V. (the company’s EU notified body) perform periodic on-site inspections to review independently the company’s compliance with systems and regulatory requirements. Among others, the company is subject to the United States Foreign Corrupt Practices Act of 1977 (the ‘FCPA’), which prohibits the company, its officers, directors, employees, shareholders and agents acting on the company’s behalf from offering, promising, authorizing or making corrupt payments to foreign officials for the purpose of influencing official decisions or securing an improper advantage to obtain or retain business. Research and Development (R&D) The company’s R&D expenses were $8.9 million in the year ended December 31, 2022. History Aziyo Biologics, Inc. was founded in 2015. The company was incorporated in Delaware in 2015.