Stockhead published an article on nerve repair business Orthocell ($OCC) a couple of weeks ago.

Stockhead Article

Pretty much all of the factual disclosures have been covered in the recent releases. What I found interesting was some of the management commentary around it. Clearly, everyone is pumped both by the reception they are getting in the US and also in the recent clinicals developments in prostate surgery.

With the SP at $1.45 (or c. 23x EV/Revenue forecast for FY26), there is a LOT of success being assumed in the share price. However, from my own research, there are plausible Bull Case scenarios which could make the business still look cheap today.

I've steadily built up to a 3% position, and provided the price doesn't run away, I'm looking to increase that if 1) costs continue to scale reasonably; 2) ANZ momentum is maintained and 3) there are further tangible leading in indicators in the US that experience there will follow ANZ.

Expect the next 4C in about 10 days.

Anyway, for those who prefer to read on here, I've included the full text of the article below.

Orthocell flags rapid ‘hockey stick’ revenue growth in US$1.6 billion US nerve repair market

Health & Biotech 26 Sep 2025 Tim Boreham

Orthocell is shooting early goals with its US Remplir rollout, with 'hockey stick' revenue growth to come. Pic: Getty Images

• Management “couldn’t be happier” with the early US rollout of its flagship device, Remplir
• Revenue should start steadily but then escalate rapidly in ‘hockey stick’ style
• Following Remplir’s surprise adoption in prostate surgery, Orthocell eyes broader indications

Orthocell (ASX:OCC) has flagged rapid “hockey stick” revenue growth as the nerve repair device innovator’s early US commercialisation efforts gain traction at a faster rate than expected.

“This is the calm before the storm,” head of US sales John Walker told an Australian investor forum this week.

In early April the US Food and Drug Administration (FDA) approved the company’s flagship device Remplir, a collagen membrane ‘wrap’ for peripheral nerve repair.

Since then, Orthocell has embarked on a spree of signing up distributors, wooing surgeons and engaging with the hospital system’s powerful gatekeepers.

“We are about to go from ‘zero’ to ‘100’ really really quickly,” Walker says.

Walker has 14 years’ experience in the nerve repair game, mainly with the US$800 million, Nasdaq-listed Axogen.

He played a key role in Axogen’s sales growing from US$3 million to more than US$150 million.

“My message is we have done this before,” Walker says of himself and several other hirings of senior Axogen sales folk.

“We did it by systematically attacking markets. You can’t eat all of the elephant at once.”

Covering the US

Orthocell may not be dining on pachyderm steaks yet, but in the first 120 days the company has established Remplir distribution coverage across 25 states and 40% of the US populace.

“That’s far beyond what we expected in year one – I thought we would do six in six states,” Walker says.

The company has also met more than 100 surgeons and trained them in Remplir usage.

“These include 14 world-class key opinion leaders, the influencers of the nerve world,” Walker says.

“If they say ‘this works’, others follow.”

The company has submitted to 51 hospital value analysis committees, or VACs, with 11 of its entreaties approved.

VACs are the crucial gateway to hospital sales, as they assess the clinical benefit and economics of a product.

Many VACs cover multiple hospitals.

The Cleveland Clinic, for instance, has 15 hospitals in Ohio alone.

Surgeon adoption speaks for itself

Most importantly, Remplir’s actual surgical use is ramping up.

“Over the last few weeks we have had dozens of procedures completed,” says chief operating officer Alex McHenry.

“We expect this sales ramp-up to continue in the December quarter and continue to grow into early 2026.”

While the US will drive Orthocell’s fortunes – a common refrain for a device company – Remplir earlier was approved in Australia, New Zealand and Singapore.

This year, Hong Kong, Thai and Canadian authorities approved the device.

Locally more than 200 surgeons use Remplir, across 165 hospitals.

Orthocell expects to appoint its first distributors in Hong Kong, Canada and Thailand “this quarter and next.”

The company is also preparing marketing applications in Europe and the UK, in view of winning approval next year.

What’s the fuss about?

Orthocell says Remplir is more effective than other nerve repair devices, or the suturing (stitching) method still used in 90% of nerve surgeries.

As a pure collagen product, Remplir ‘mimics’ the outer layer of nerve. The device wraps around the repair site, creating what McHenry dubs a “beautiful bioactive chamber” that enables the nerves to reconnect.

Eventually the wrap is absorbed, leaving the nerves in their natural state.

More than 700,000 nerve procedures are done in the US annually, 90% with suturing.

The success rate from these ‘needle and thread’ operations varies between 50-70%.

This month, a ‘real world’ analysis of 67 Remplir procedures across 49 local patients showed an average 81.1% efficacy.

“We know we can do better [than suturing] and we are showing that we are doing better,” McHenry says.

To date, other conduit devices have been too rigid and thus hard to use, especially for procures connecting a large nerve with a thin nerve.

Prostate surgery: a ‘sleeper’ application

Initially, plastic and orthopaedic surgeons used Remplir to join and protect damaged nerves.

“This is a very versatile product,” McHenry says. “When you put it in surgeons’ hands they say: ‘tell me more’.”

In this vein – or nerve, actually – Orthocell already has stumbled on the hitherto unknown application of prostate cancer surgery.

In Australia, surgeons have used Remplir in about 40 prostatectomies, to protect an underlying bundle of nerves responsible for continence and erectile function.

Despite best practice robotic tumour removal, 80% of patients still experience erectile dysfunction and 35% have incontinence issues.

“This is an exciting emerging treatment that does not require regulatory approval in the US,” McHenry says.

“We are gathering the evidence from the early procedures and will share it with the market shortly.”

Walker says Orthocell also is eyeing expansion into other areas, including oral maxillofacial and spine surgery.

“Anywhere where there’s scar on the nerve, [Remplir] we can be used.”

No royalties, right royal margins

Chairman John Van Der Wielen says Orthocell is in a “great structural position” that is conducive to high margins.

He notes Orthocell has no debt and is not subject to royalty payments, having acquired the royalties from the University of WA.

Royalty payments can be highly dilutive once companies move to profit.

The company also makes its own product at its Perth facility, from a low-cost, porcine-derived material.

Most life science companies outsource to a contract manufacturer, thus losing a large chunk of their margins.

Remplir is lightweight and thus easy to ship. It also does not need to be stored under temperature-controlled conditions and has a three-year shelf life.

Inflexion point

Orthocell reported record revenue of $9.23 million for the year to June 30, up 36%.

Sales derived mainly from non-US sales and Orthocell’s less prominent dental repair product, Striate.

The company also lost $8.5 million (net loss after tax attributable to members), compared with a previous $7.2 million deficit.

Van Der Wielen notes Orthocell’s revenue has grown at an average annual compound rate of 34% over the past three years.

The company is “not too far from heading to profit” as US revenues flow in.

“We are at an inflexion point,” Van Der Wielen says.

“We expect to see revenue rates sustainably increase.

“We are very much focused on the US and couldn’t be happier with the progress and the quality of people we already have employed."