Next Science Narrows Losses as Asset Sale Clears Path Forward
Next Science reports a 42% improvement in adjusted EBITDA loss for 1H FY25 despite a 7% dip in product sales, while shareholders approve a major asset sale to OSARTIS GmbH.
- Product sales decline 7% to US$10.5 million
- Direct sales of XPERIENCE surge 54%, offsetting other declines
- Adjusted EBITDA loss improves 42% to -US$2.8 million
- Shareholders approve sale of majority assets to OSARTIS GmbH
- Clinical trial recruitment for Periprosthetic Joint Infection study advances
Financial Performance Highlights
Next Science Limited (ASX, NXS) has released its half-year results for the six months ending June 30, 2025, revealing a mixed but cautiously optimistic financial picture. The company posted product sales of US$10.5 million, down 7% compared to the previous corresponding period. This decline was driven primarily by a 20% drop in direct product sales, which now represent 67% of total sales, down from 77% a year earlier.
Despite the overall sales dip, Next Science’s flagship surgical product, XPERIENCE, delivered a remarkable 54% increase in direct sales. This growth was attributed to supply constraints in the US saline market during late FY24, expanded clinical evidence supporting the product, and broader adoption from high-risk to prophylactic surgical use cases.
Cost Management and Profitability Improvements
The company’s gross profit declined slightly by 3% to US$8.7 million, but gross margin improved to 83%, up from 80% the prior year, reflecting a favorable shift in product mix towards higher-margin surgical offerings. Operating expenses fell by 17%, driven largely by a 26% reduction in selling and distribution costs and a 17% cut in research and development spending through cost optimization initiatives.
These efficiencies contributed to a significant 42% improvement in adjusted EBITDA loss, narrowing it to US$2.8 million from US$4.9 million in the prior period. This progress underscores Next Science’s efforts to reset its operating expense base while enhancing revenue quality.
Balance Sheet and Strategic Asset Sale
Next Science’s cash position declined to US$1.0 million as of June 30, 2025, down from US$3.6 million a year earlier, while debt stood at US$4.5 million following drawdowns on a US$5.0 million unsecured loan facility secured in July 2024. In a strategic move, shareholders approved the sale of the majority of the Group’s assets to German medical technology firm OSARTIS GmbH, with completion expected shortly after September 15, 2025. The transaction is cash-only and will not affect the company’s capital structure control.
Clinical Development Progress
On the clinical front, recruitment continues steadily for the large-scale Periprosthetic Joint Infection (PJI) study being conducted through the Ottawa Hospital Research Institute in Canada. The trial aims to enroll 7,600 patients to evaluate the efficacy of XPERIENCE Advanced Surgical Irrigation in reducing infection rates post-arthroplasty. As of the half-year, 2,191 patients have been enrolled across six sites, with an interim analysis planned after 3,800 participants.
Next Science’s proprietary XBIO technology remains at the core of its product portfolio, offering a unique approach to eradicating biofilm-based infections. The company’s ongoing R&D and clinical validation efforts are critical to sustaining long-term growth prospects amid evolving market dynamics.
Bottom Line?
Next Science’s improved cost discipline and strategic asset sale set the stage for a pivotal next phase, but questions remain on how the company will leverage its clinical progress and capital position moving forward.
Questions in the middle?
- How will the asset sale to OSARTIS GmbH impact Next Science’s future product offerings and revenue streams?
- What are the expected timelines and potential commercial implications of the interim results from the Periprosthetic Joint Infection study?
- How will Next Science manage its reduced cash reserves and existing debt while pursuing growth opportunities?
