BioStem Technologies OTCMKTS: BSEM outlined its strategy to expand in surgical applications, shift its revenue mix away from physician-office wound care and bring manufacturing of acquired products into its Florida facility.
Chairman and CEO Jason Matuszewski said the company uplisted to the Nasdaq Capital Market on Aug. 7 and now operates as a substantially different business than it did 18 months ago. BioStem develops perinatal tissue-based allografts derived from donated placental and umbilical cord tissue for surgical and advanced wound-care uses.
The company guided for fiscal 2026 revenue of $26 million to $29 million, raising the low end of its prior $25 million-to-$29 million outlook. Matuszewski said BioStem has more than 10 commercial products, more than 60 direct and independent sales representatives, four group purchasing organization contracts, and manufacturing capacity estimated at four times its current usage.
BioTissue Deal Changes Revenue Mix
Matuszewski characterized BioStem’s acquisition of BioTissue assets as a strategic transformation rather than a simple product addition. Before the transaction, BioStem was centered on wound care, physician offices and product-specific reimbursement from the Centers for Medicare & Medicaid Services. Following the acquisition, the company has expanded into hospitals and surgical settings, with exposure to commercial payers as well as CMS reimbursement.
According to Matuszewski, 87% of BioStem’s current revenue is tied to surgical procedural reimbursement under diagnosis-related groups, while 13% is product-based reimbursement. He said this reduces the company’s reliance on CMS wound-care pricing.
Hospital revenue reached $6.7 million in the second quarter, compared with $5.7 million in the first quarter. Physician-office revenue was $1.1 million, up from $800,000 sequentially. The acquired portfolio includes the Neox and Clarix product families, which Matuszewski said were the primary contributors to second-quarter revenue.
The company’s four GPO contracts cover roughly two-thirds of U.S. hospital beds, Matuszewski said, though he emphasized that contracts provide purchasing eligibility rather than guaranteed sales. Hospitals still require physician interest and value analysis committee approval.
Surgical Focus and Clinical Evidence
BioStem estimates its total addressable U.S. market at $26 billion, including approximately $11 billion across surgical specialties such as orthopedics, foot and ankle, spine, urology and colorectal procedures. The company’s product platforms include dry, hydrated and cryopreserved tissue formats.
Matuszewski highlighted urology as an initial specialty focus. He cited data involving Clarix 1K used as an adjunct in robot-assisted radical prostatectomies, saying continence rates were higher for patients receiving Clarix than control patients at measured intervals from one through 12 months.
In foot and ankle procedures, he cited data showing shorter healing times among patients treated with Clarix 1K following total ankle arthroplasty, including in older, obese and diabetic patient groups.
The company said its technologies and products have been associated with more than 400 publications and 1.2 million product applications. BioStem plans to publish additional diabetic foot ulcer and venous leg ulcer trial results in 2026, while also promoting more than 90 surgical publications and pursuing further real-world surgical evidence.
Regulatory and Manufacturing Plans
Matuszewski said BioTissue received FDA 510(k) clearance in June for Clarix Flo and Neox Flo. BioStem is working to complete a milestone payment related to that clearance and is targeting a Catalyze product launch by the end of 2026. He said the clearance could allow for additional marketing claims and more evidence-based commercial discussions with surgeons and hospital committees.
BioStem currently purchases Neox and Clarix products from BioTissue under a cost-plus manufacturing agreement. The company is targeting the first half of 2027 to transfer manufacturing of Neox and Clarix into its Pompano Beach, Florida, facility, with particulate products expected to follow later.
The facility includes 6,100 square feet of dedicated space and 3,000 square feet of ISO clean-room space, according to Matuszewski. He said it has the capacity to produce approximately 100,000 square centimeters per month and is accredited by the American Association of Tissue Banks.
The manufacturing arrangement contributed to a decline in gross margin to 61% in the second quarter from 94% in the second quarter of 2025, Matuszewski said. He described the planned transfer as a path toward margin recovery through vertical integration rather than a speculative expansion opportunity.
Second-Quarter Results and Commercial Expansion
BioStem reported second-quarter revenue of $7.9 million, up 29% from $6.1 million in the first quarter but below $11 million in the prior-year quarter. Matuszewski attributed the year-over-year decline to CMS pricing changes affecting the company’s legacy BioRetain wound-care business.
- Second-quarter gross margin: 61%, unchanged from the first quarter.
- Adjusted EBITDA loss: $4.6 million, compared with a $5.7 million loss in the first quarter.
- GAAP net loss: $9 million, or $0.52 per share.
- Cash at quarter-end: $7 million, compared with $13.7 million at the end of the first quarter.
- Cash used in operations: $5.5 million during the quarter.
Matuszewski said the company had 30 direct sales representatives and aimed to increase that number to 40 by year-end, while using independent agents and distributors to extend coverage. Expansion decisions will be based on GPO access, hospital density, procedural volume, payer mix and physician champions, he said.
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.
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