10-K: Biote Corp. Reports Fiscal Year 2024 Results, Navigates Leadership Transition and Strategic Acquisitions

Biote Corp. announces its FY2024 financial results, highlighting revenue growth, a leadership transition, and strategic acquisitions aimed at strengthening its position in the hormone optimization market.

Summary

• Biote Corp. reported revenue of $197.2 million for the year ended December 31, 2024, compared to $185.4 million in 2023.
• The company achieved net income of $0.05 million in 2024, a turnaround from a net loss of $2.8 million in 2023.
• Adjusted EBITDA for 2024 was $58.2 million, up from $55.3 million in the previous year.
• Bret Christensen was appointed as Chief Executive Officer on February 1, 2025, succeeding Teresa S. Weber, who transitioned to a strategic advisor role.
• Biote completed the acquisition of Asteria Health, a 503B manufacturer of compounded bioidentical hormones, on March 18, 2024.
• The company also executed asset purchase agreements with BioSana ID LLC and Simpatra, LLC in January 2024 to acquire certain assets and intellectual property.
• As of December 31, 2024, Biote had contracts with over 8,600 practitioners in more than 4,700 partnered clinics.
• The company's commercial footprint is concentrated in 10 core states, generating approximately 55% of its revenue.
• Biote's four-year procedure revenue compound annual growth rate (CAGR) from 2019-2024 was 8.9%.

Sentiment

Score: 7

Explanation: The document presents a mixed sentiment. While revenue growth and a return to profitability are positive, ongoing litigation, a material weakness in internal controls, and reliance on third-party suppliers introduce risks and uncertainties.

Positives

• Revenue increased by 6.4% year-over-year, indicating continued growth in the hormone optimization market.
• The company achieved profitability in 2024, demonstrating improved financial performance.
• High practitioner retention rate suggests satisfaction with the Biote Method and support platform.
• Strategic acquisitions, such as Asteria Health, aim to strengthen the supply chain and reduce production costs.
• The company is expanding its commercial footprint, adding over 900 new partnered clinics in 2024.
• The company's four-year procedure revenue compound annual growth rate (CAGR) from 2019-2024 was 8.9%.

Negatives

• The company identified a material weakness in its internal control over financial reporting, which has not yet been remediated.
• The company is involved in several legal proceedings, which could result in unexpected expenses and divert management's attention.
• The company is reliant on a limited number of outsourcing facilities for the manufacturing of bioidentical hormones.
• AnazaoHealth provided notice that it was exercising its right to terminate the AnazaoHealth Pharmacy Services Agreement, with such termination to be effective as of May 1, 2025.
• The company recently restated its financial statements for certain prior periods, which resulted in unanticipated costs.

Risks

• The company's success depends on the market acceptance of the Biote Method and its dietary supplements.
• Reliance on third-party outsourcing facilities and contract manufacturers poses risks to product supply and quality.
• The company faces significant competition in the hormone replacement therapy and dietary supplement markets.
• The healthcare industry is highly regulated, and failure to comply with applicable laws could result in penalties.
• The company's international expansion plans involve operational challenges and regulatory risks.
• The market price of the company's common stock is volatile and may fluctuate substantially.
• The company is subject to stringent and evolving U.S. and foreign laws, regulations, and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security.

Future Outlook

Biote plans to expand its field sales and support staff, add new geographies, and increase training capacity in 2025 to meet the increased rate of new Biote-partnered clinics. The company also intends to evaluate international expansion opportunities on a market-by-market basis.

Industry Context

The document provides insight into Biote's position within the hormone optimization space, highlighting its growth relative to competitors and the increasing demand for HRT products and services driven by aging demographics and consumer interest in addressing hormonal imbalances. The company is approximately five times larger than its nearest competitor.

Comparison to Industry Standards

• The document mentions QY Research's market research publication, 'South & North America Hormone Replacement Therapy Market Insights and Forecast to 2026,' indicating awareness of industry analysis.
• The document references Mater Data Forecasts Global Hormone Replacement Therapy Market Size, Share, Trends, COVID-19 Impact & Growth Analysis Report-Segmented By Type, Route of Administration & Region-Industry Forecast (2022 to 2027), as of April 2021, 57% of the current global market for hormone products exists outside of North America.
• The document references a 2015 study entitled Use of Compounded Hormone Therapy in the United States: Report of The North American Menopause Society Survey, by Margery L.S. Gass, Cynthia A. Stuenkel, Wulf H. Utian, Andrea LaCroix, James H. Liu and Jan L. Shifren, it is estimated that as many as 200 million Americans are affected by hormonal imbalance and approximately 80% are untreated.
• The document references a 2014 study entitled Systematic Literature Review of the Epidemiology of Nongenetic Forms of Hypogonadism in Adult Males by Victoria Zarotsky, et al. The corresponding treatment market for hormone replacement therapies is large and diverse, both in terms of the number of products, the number of suppliers, the type of administration and regulatory requirements for producing and distributing these products.
• The document references a 2014 study published in the Journal of Sexual Medicine, pellet therapy was chosen by 17% of 382 male patients when presented with the choice of the following methods of hormone therapy: gels, injections and implantable subcutaneous pellets.
• The document references a 2013 study published in the same journal, of 113 men who underwent subcutaneous testosterone pellet therapy, 52.2% had switched to pellet therapy from topical gel therapy and 35.4% had switched from injection therapy.
• The document references a 2018 article by Jennifer Wolff, entitled What Doctors Dont Know About Menopause, among newer doctors surveyed in 2015, 80% of medical residents reported feeling barely comfortable discussing or treating menopause.

Management Changes

Legal Proceedings

• The company is involved in several legal proceedings, including the Right Value Litigation, Yosaki and Mioko Trusts, Dr. Gary S. Donovitz Litigation, Marci M. Donovitz, Cindy Latch, and Gary S. Donovitz / NIL Litigation.
• On February 26, 2025, BioTE Medical entered into a Settlement Agreement (the Settlement Agreement) with Right Value. Pursuant to the Settlement Agreement, BioTE Medical agreed to pay Right Value an aggregate amount of $5.0 million according to the following schedule: (i) $3.5 million within three (3) business days upon execution of the Settlement Agreement and (ii) $1.5 million within one (1) business day following February 17, 2026.
• On June 28, 2024, the Company executed a settlement agreement with Ms. Donovitz to resolve the June 5, 2024 Litigation. Pursuant to the settlement agreement, the Company agreed to repurchase all of the Paired Interests and shares of Class A common stock of the Company beneficially owned by Ms. Donovitz for $60.0 million in the aggregate.

Related Party Transactions

• The company purchases dietary supplements inventories from a vendor in which the company's founder holds a minority interest.
• The company engages the services of its Chief Executive Officer's brother-in-law, Mr. Andy Thacker, through a consulting firm that is wholly owned by Mr. Thacker.

Stakeholder Impact

• The company's performance and strategic decisions impact shareholders, employees, customers (practitioners and clinics), and suppliers.
• The leadership transition and strategic acquisitions may influence investor confidence and the company's future growth trajectory.
• Legal proceedings and regulatory compliance affect the company's reputation and ability to operate effectively.

Next Steps

• Expand field sales and support staff to add liaisons in critical locations.
• Add new geographies and expand training capacity to meet the increased rate of new Biote-partnered clinics.
• Continue to evaluate selective business development opportunities.
• Continue to hire personnel with public company experience and provide additional training for our personnel on internal controls as our company continues to grow.
• Engage external consultants to assist in the development and improvement of methodologies, policies and procedures designed to ensure adequate internal control over financial reporting, including the technical application of U.S. GAAP and evaluating segregation of duties.

Key Dates

Keywords

Biote, hormone optimization, bioidentical hormones, dietary supplements, financial results, leadership transition, strategic acquisitions, healthcare, practitioners, clinics