Organogenesis Holdings Inc.

Please stand by. Welcome, ladies and gentlemen, to the second quarter 2025 earnings conference call for Organo Genesis Holdings Inc. At this time, all participants have been placed in listen only mode. Please note that this conference call is being recorded and that the recording will be available on the company's website for replay shortly. Before we begin, I would like to remind everyone that our remarks today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including the risk and uncertainties described in the company's filings with the Securities and Exchange Commission, including the item 1A, risk factors of the company's most recent annual report and its subsequently filed quarterly reports. You are cautioned not to place undue reliance upon any forward-looking statements which speak only as of the date made. Although it may voluntarily do so from time to time, the company undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. This call will also include references to certain financial measures that are not calculated in accordance with the Generally Accepted Accounting Principles, or GAAP. We generally refer to this as non-GAAP financial measures. Reconciliation of those non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in earnings press release on the investor relations portion of our website. I would now like to turn the call over to Mr. Gary S. Ohini, Senior, Organogenesis Holdings President, Chief Executive Officer,

and Chair of the Board. Please go ahead, sir.

Thank you, operator, and welcome everyone to Organogenesis Holdings Second Quarter 2025 earnings conference call. I am joined on the call today by Dave Francisco, our Chief Financial Officer. Let me start with a brief agenda of what we'll cover during our prepared remarks. I'll begin with an overview of our second quarter revenue results and provide an update on key operating and strategic developments in recent months. And then Dave will provide you with an in-depth review of our second quarter financial results, our balance sheet and financial condition at quarter end, as well as our financial guidance for 2025, which we updated in our press release this afternoon. Then we will open up the calls for questions. Beginning with the review of our revenue results in Q2, we delivered sales results within the guidance range outlined on our first quarter call, driven by better than expected growth in our surgical and sports medicine products and sales of advanced wound care products that came in at the lower end of our expectations. Our second quarter advanced wound care results reflect the expected disruption in customer demand and ordering patterns related to the delay and the effective date of the final LCD for skin substitute grafts and cellular tissue-based products for the treatment of DFUs and VLUs until January 1st, 2026. Our team's second quarter execution and focus on engagement, education and support helped our customers navigate a confusing and challenging environment. While the delay and the effective date for the final LCD fueled even more aggressive pricing strategies from our competitors, our team remains committed to building upon our deep customer relations and promoting access to existing and recently launched products. Last month, CMS announced the proposed Medicare physician fee schedule and outpatient perspective payment systems for calendar year 2026. This is a watershed moment for this industry and the most impactful development in more than a decade. We applaud the proposed new payment approach for skin substitutes as we have long advocated for an integrated coverage and payment policy to address rapid escalation of Medicare spending while ensuring patients have access to the products best suited to their care. Organogenesis has more than 40 years of experience and pioneered the use of cellular and tissue-based products for wound treatment and we have spent the past several years leading key stakeholders who share our patient-focused values to inform policymakers and advocate for reform that will increase access, improve outcomes, and curb the rampant waste and abuse in the space. We have long supported many of the points included in the proposed rules, notably a per square centimeter payment methodology based on FDA classification for skin substitutes covering all ASP sites of care as well as the hospital outpatient setting, bringing a much needed consistent payment approach. Exploitation of the current ASP-based payment system has resulted in excessive and unsustainable spending these past few years. Closing this loophole and shifting away from the ASP model will bring stability to the market and push spending on dehydrated placentals in line with appropriate utilization. And we are pleased that the proposed FDA classification categories ensures patients will have access to appropriate therapies and encourage innovation in the space. As the population ages and more people face the prospect of chronic wounds associated with diabetes and other comorbid conditions, it's imperative that the industry reignite its innovation engine to deliver advanced regenerative technologies that will speed healing and reduce the total cost of care. We believe the proposed rule, if finalized, will support these goals while bringing long-term stabilization to the skin substitute markets. Importantly, we are pleased that CMS has recognized the clinical differentiation of pre-market approval or PMA products that outline steps to expand access to these healing technologies. PMA products such as Aplegraph and Dermagraph have been proven to reduce life-threatening amputations and costly complications associated with DFUs and VLUs. The proposed rules will encourage the continued development of PMA products that will greatly benefit both clinicians and patients. As the public comment period opens, we remain committed to engage with CMS and other stakeholders to refine and enhance the proposed rules that will expand access to appropriate therapies for patients while reducing the overall cost to Medicare. With the payment and coverage changes expected to be implemented in 2026, we believe we are better positioned to continue to lead the space with highly innovative, highly efficacious products that deliver on our mission of advancing healing and recovery beyond our customers' expectations. Before turning the call over to David, I want to provide updates on key strategic focuses for our companies. We believe gathering robust and comprehensive clinical and real-world evidence is an essential component of developing a competitive product portfolio and driving further penetration in the markets where we compete. We expect to submit published clinical data supporting PureApply AM for DFU and Affinity for VLU to the max by the established deadline of November 1st, 2025. We have been preparing our organization to succeed in a new world that is coming to fruition by investing to optimize our industry-leading portfolio of healing technologies. In May, we mark the expansion of our bio-manufacturing capabilities at our new facility in Smithfield, Rhode Island, welcoming the governor and other state and civic leaders to share our plans for the site. When completed, the Smithfield facility will support the reintroduction of Dermagraph, a PMA-approved product for the treatment of DFUs, and Transite, a PMA-approved bioengineered cellular tissue scaffold for the treatment of deep second and third degree burns, as well as the introduction of FortiShield, a biosynthetic transitional wound matrix for the treatment of second degree burns and surgical wounds. We believe the added manufacturing capacity and portfolio expansion will further enhance our long-term growth and margin profile, create additional stakeholder value and positively impact more people's lives. With