BioStem Technologies (OTCMKTS:BSEM) used its fourth-quarter and full-year 2025 earnings call to outline a major shift in strategy following the January acquisition of BioTissue’s surgical and wound assets, while also acknowledging near-term pressure tied to Medicare reimbursement changes affecting its legacy physician office channel.
Business repositioning toward hospitals after BioTissue asset deal
Chairman and CEO Jason Matuszewski said the addition of BioTissue’s assets in January “meaningfully diversified” BioStem’s business, expanded its presence in hospital-based settings, and increased exposure to commercially insured patients. The company also reallocated internal commercial resources toward hospitals and related sites of care, which management said reduces exposure to CMS reimbursement changes impacting physician offices.
- Hospital setting: hospital inpatient, hospital outpatient departments (HOPDs), and ambulatory surgery centers (ASCs).
- Physician office setting: office-based and mobile wound care customers.
In the fourth quarter of 2025, BioStem’s revenue consisted only of physician office customer sales, before the acquisition contributed to results.
Clinical evidence updates and reimbursement transition impacts
Matuszewski highlighted publication of top-line results from a diabetic foot ulcer (DFU) clinical trial in the fourth quarter, saying the study showed “clear superiority” of BioStem’s BioREtain-processed product over standard of care. He said the company expects to publish additional DFU analyses in coming months and also expects to publish top-line results for its venous leg ulcer (VLU) study.
On the reimbursement environment, management said clinicians began adjusting protocols in early 2026 in response to CMS payment changes effective January 1, 2026, as well as higher documentation requirements and audit risk. Matuszewski said physician office revenue will be “significantly lower” in 2026 versus 2025, and later added the company is seeing significant declines in physician office business in the first quarter compared with the fourth quarter of 2025.
During Q&A, Matuszewski said the company intends to use DFU and VLU clinical data to support future coverage policy development, while noting the timing for any new CMS coverage policy would involve a full process that includes a commenting period.
Expanded product portfolio and commercial footprint
Management said the BioTissue acquisition added the Neox and Clarix allograft brands and introduced cryopreserved “wet tissue” allografts to complement BioStem’s existing dry tissue products in the VENDAJE family. Matuszewski said Neox is optimized for chronic wound care in complex hospital and surgical settings, while Clarix is primarily used in reconstructive and surgical applications.
BioStem also said it now has three proprietary platforms: BioREtain, CryoTek, and SteriTek.
Chief Commercial Officer Barry Hassett said BioStem is allocating “substantially all” internal commercial resources to hospital and related sites of care, while continuing to partner with Venture Medical to serve physician office and mobile settings impacted by Medicare payment changes.
Hassett outlined commercial initiatives that include:
- Expanding the sales force, starting from more than 25 direct representatives and managers plus more than 30 independent sales agents, with a goal of reaching at least 40 direct representatives as 2026 progresses.
- Launching medical education programs, including symposia, dinner programs, and webinars.
- Using clinical trial data to support hospital value analysis committee approvals and to pursue expanded commercial payer coverage.
- Advancing a product pipeline, including launching BioREtain preserved dry products through the new commercial team in the second quarter of 2026 and pursuing a new medical device product pending FDA clearance.
Hassett said the company views several specialty markets as opportunities, including orthopedics and sports medicine (particularly foot and ankle), urology and colorectal surgery, women’s health, and chronic wound care in hospital outpatient settings. Management described these segments as representing a combined market opportunity of approximately $23 billion.
Fourth-quarter results: revenue flat sequentially, expenses elevated by allowance
Chief Financial Officer Brandon Poe reported fourth-quarter revenue of $10.1 million, compared with $10.5 million in the prior period and $22.7 million in the fourth quarter of 2024. Poe said results were largely flat sequentially despite continued competition from higher-priced products under the ASP + 6% reimbursement model.
Gross profit was $9.8 million, representing gross margin of 97%, compared with $9.3 million and 88% in the prior period, and $19.1 million and 84% in the fourth quarter of 2024. Poe attributed the sequential gross margin increase to a mix shift toward products that do not carry a licensing fee.
Operating expenses rose to $17.3 million from $7.8 million in the prior period. Poe said the main driver was an $8.8 million charge for potential uncollectible accounts receivable due from distributor Venture Medical. He said Venture experienced slower payments from certain customers due to CMS delays or denials, which then slowed payments from Venture to BioStem. Poe noted that many of the amounts are under active appeal, and that the allowance was “one time in nature,” adding the company does not expect additional significant uncollectible accounts that would materially impact future results.
Cash totaled $29.5 million at quarter-end, up from $27.2 million at the end of the prior period. After the BioTissue asset acquisition closed on January 21, 2026, Poe said cash and cash equivalents were approximately $16 million.
Early 2026 outlook: lower Q1 revenue and cash use expected
With the hospital business performing in line with historical levels of the acquired assets and physician office revenue down significantly, Poe said BioStem anticipates first-quarter revenue in the range of $5 million to $6 million (adjusted for a January 21 acquisition start date).
Poe also said the company expects to consume cash for most of 2026, primarily due to the physician office decline. Excluding a potential $10 million payment tied to a 510(k) clearance milestone associated with the acquisition—which management expects in the second half of 2026—Poe said the company’s cash runway extends into late Q3 or longer. He added BioStem is actively looking for financing opportunities both to fund the milestone payment and to support commercial growth.
On manufacturing economics, management reiterated it entered into a manufacturing and supply agreement under which BioTissue will continue manufacturing Clarix and Neox for at least 12 months post-close. Matuszewski said gross margins on acquired products during this period are expected to be approximately 60%, reflecting a cost-plus markup from BioTissue. Poe said BioStem intends to bring manufacturing in-house after the one-year period and expects margins on those products to move back above 80% in 2027, even considering royalty payments discussed as part of the transaction.
Poe also provided an update on audits, noting KPMG—appointed in October 2025—has been working to complete independent audits for fiscal years 2024 and 2025, which the company expects to finalize “in the very near future” as part of progress toward a planned Nasdaq uplisting. He also noted the appointment of Jodi Ungrodt to the board, where she will serve as audit committee chair.
About BioStem Technologies (OTCMKTS:BSEM)
BioStem Technologies, Inc, a life sciences corporation, focuses on discovering, developing, and producing pharmaceutical and regenerative medicine products and services. It develops various biologic stem cell based alternative products, as a treatment for ailments, such as joint pain, tendon and ligament injuries, neurodegenerative, and autoimmune diseases. The company is also engages in the repackaging and distribution of active pharmaceutical ingredients and other pharmaceutical compounding supplies; and develops and markets nutraceutical products under the Dr.
