8-K: Biote Corp. Announces Preliminary 2023 Results, Initial 2024 Guidance, and Acquisition of Asteria Health

Biote Corp. reported preliminary 2023 financial results slightly below previous guidance and announced the acquisition of Asteria Health to vertically integrate hormone product manufacturing.

Summary

• Biote Corp. expects full year 2023 revenue to be between $185 and $187 million, slightly below the previously guided range of $190 to $200 million.
• Adjusted EBITDA for 2023 is now expected to be between $54 and $56 million, also slightly below the prior guidance of $56 to $60 million.
• The company's 2023 revenue growth is estimated at approximately 12% year-over-year, including a 9% increase in procedure revenue and a 17% increase in dietary supplement revenue.
• Fourth quarter 2023 revenue is projected to be between $45 and $47 million, with a 7% increase in procedure revenue but a 15% decline in dietary supplement revenue compared to the same period in 2022.
• The decline in dietary supplement revenue is attributed to a major distributor exiting the nutraceutical business.
• Biote plans to begin direct-to-patient distribution of these products in the second quarter of 2024.
• Fourth quarter Adjusted EBITDA is expected to be between $12 and $14 million.
• For 2024, Biote projects revenue to be greater than $200 million and Adjusted EBITDA to be greater than $60 million.
• First half 2024 revenue growth is expected to be in the low-single digits, with significant improvement anticipated in the second half of the year.
• Biote has entered into an agreement to acquire Asteria Health for $8.5 million, with a potential additional $500,000 based on production metrics.
• The acquisition of Asteria Health is expected to close in the first quarter of 2024 and will be funded with cash from Biote's balance sheet.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive due to the strategic acquisition and future growth projections, but tempered by the slightly lower than expected 2023 results and the challenges in the nutraceutical distribution channel.

Positives

• Biote's 2023 revenue is still expected to grow by approximately 12% year-over-year.
• The company anticipates a return to nutraceutical revenue growth in the second half of 2024.
• Biote is planning a phased launch of new therapeutic wellness products in 2024.
• The acquisition of Asteria Health is expected to improve Biote's margin profile and provide direct control over pharmacokinetic research.
• The acquisition of Asteria Health will enable vertical integration of manufacturing.

Negatives

• Biote's 2023 revenue and Adjusted EBITDA are expected to be slightly below prior guidance.
• Dietary supplement revenue declined by approximately 15% in the fourth quarter of 2023 compared to the same period in 2022.
• First half 2024 revenue growth is expected to be in the low-single digits.

Risks

• The acquisition of Asteria Health may not be consummated.
• The success of Biote's dietary supplements in the market is not guaranteed.
• Biote relies on third parties for the manufacturing of bio-identical hormones.
• The company is sensitive to regulatory, economic, environmental, and competitive conditions.
• Biote faces significant competition in its industry.
• The company's ability to grow its business and expand into new markets is not guaranteed.
• Changes in applicable laws or regulations could adversely impact the company.
• The company may be impacted by economic, business, and competitive factors, including bank failures and changes in exchange and interest rates.

Future Outlook

Biote projects fiscal 2024 revenue to be greater than $200 million and Adjusted EBITDA to be greater than $60 million, with improved growth expected in the second half of the year. The company also plans a phased launch of new therapeutic wellness products in 2024.

Management Comments

• Terry Weber, Biote Chief Executive Officer, stated, 'Biote remains well-positioned to capitalize on the growth opportunities within the hormone optimization and therapeutic wellness market, aided by an acceleration in the number of Biote-certified providers.'
• Terry Weber also commented, 'We are pleased to announce an agreement to acquire Asteria Health, and we welcome their talented and dedicated team to Biote. This strategic transaction expands and strengthens Biotes capabilities by enabling the vertical integration of our manufacturing and providing direct control over our pharmacokinetic research efforts.'
• Bill Fixler, PharmD, President of Asteria Health, said, 'Asteria Health is proud of our longstanding relationship with Biote, an established leader in hormone replacement education and training. Both Asteria Health and Biote share an unwavering commitment to promoting patient health and evidence-based therapeutic wellness, and we are delighted to join Biote to further this mission.'

Industry Context

The announcement reflects a trend in the healthcare industry towards vertical integration and greater control over supply chains, particularly in specialized areas like hormone optimization. The acquisition of Asteria Health allows Biote to secure its supply of bioidentical hormones and potentially improve margins, which is a common strategy among companies in this sector.

Comparison to Industry Standards

• While specific competitor data is not provided in the document, Biote's revenue growth of 12% in 2023 is a key metric to compare against other companies in the hormone optimization and therapeutic wellness space.
• The acquisition of a 503B manufacturer like Asteria Health is a strategic move that aligns with industry trends of companies seeking to control their supply chain and reduce reliance on third-party manufacturers, similar to moves by other pharmaceutical and healthcare companies.
• The projected 2024 revenue of greater than $200 million and Adjusted EBITDA of greater than $60 million will be important to benchmark against peers in the next reporting period.
• Companies like SottoPelle and Defy Medical are also in the hormone replacement therapy space, and their financial performance and strategic moves would be relevant for comparison.

Stakeholder Impact

• Shareholders may react to the slightly lower than expected 2023 results and the acquisition of Asteria Health.
• Employees of both Biote and Asteria Health will be impacted by the acquisition.
• Biote-certified practitioners will benefit from the vertical integration of manufacturing and the potential for new therapeutic wellness products.
• Patients may benefit from the direct-to-patient distribution of nutraceutical products and the development of new therapeutic wellness products.

Next Steps

• Biote will finalize its financial closing procedures and audited consolidated financial statements for the 2023 fiscal year end.
• The company will discuss its 2024 financial guidance in more detail during its fiscal 2023 fourth quarter results conference call.
• Biote plans a phased launch of new therapeutic wellness products on its proprietary technology platform commencing in the first quarter of 2024.
• The acquisition of Asteria Health is expected to close in the first quarter of 2024.
• Biote will begin direct-to-patient distribution of nutraceutical products in the second quarter of 2024.

Key Dates

Keywords

Biote, Hormone Optimization, Therapeutic Wellness, Adjusted EBITDA, Revenue, Asteria Health, Acquisition, Nutraceuticals, Manufacturing, Financial Guidance