TELA - Earnings call transcript Q3 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, ladies and gentlemen, and welcome to the TELA Bio Third Quarter 2021 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to Hannah Jeffrey from the Gilmartin Group.

Hannah Jeffrey

Thank you, Suzanne, and good afternoon, everyone. released for Bio XXXX. Third TELA today, Financial the Results Quarter Earlier copy is release the on A press website. available of the company's

on Officer. Tony are Officer; Chief today's and Officer me Operating Financial Executive Cuca, and Koblish, Chief and Chief Roberto Joining President call

that I'd events. remind you without potential, begin, in past to or the We call, turn events encourage this the that regulatory forward-looking and Tony. and marketing strategies, to environment, factors XXXX regarding make or include, Form to described These Form cause subsequent identify company's to statements. statements those may with sales performance. the company's including, will now factors you limitation, and from company projections like the future specific I'll actual statements resources With that, forward-looking without the we during conference capital and Before may product the differ operating over regarding development, SEC, which filings future results review call limitation, XX-K XX-Q, the materially product

Tony Koblish

Hannah, hernia Thanks our us product third in Throughout the share tissue and focus for our gaining OviTex good everyone. main Thanks, today. quarter, with was line joining on afternoon, reconstruction. procedures and market

foundation months, have XX growth. last drive the Over our line strategies built through a we and stable diversified top that pathways

success. we future market remains for in put have place structure slowdown, periodic our provides the company the As and believe unpredictable and experience continues we stability positions to

market. give Before brief turning to our the quarter, like for results a would the overview of I to

the micro which increased across quarter, and strength pressure were and decline from a the shortages the to X encouraged the of in constraints. volumes While in Delta the caused surges supply first varying rise. began slight the surgical there by Throughout in underwent hospitals globe, chain experienced variant on quarter, are labor the fluctuations we September as we market months

mind, term these TELA to third PRS an relatively grow building XXXX Driven on an trends regardless organic of focus result, a results believe normalcy. lines the market A quarter, on continued We a growth our and growth increase trends. OviTex a procedures. in by up underlying short we to continue strategy in our will quarter expect of market position in of As representing impact designed million to nature product to revenue represent to $X.X U.S., third elective third the and sequentially. foundation be began growth. outside to the in to cultivate and that quarter fundamentals return to see increased and XX% compared strong was and With the

In OviTex product saw we strategies, achieving OviTex continue to key increased clinical in PRS awareness addition, awareness We internal including our cultivate believe and PRS OviTex broader is awareness increasing our data; brand as customers. to the We and line brand essential commercial increased demand education. and third business think adoption. quarter having execution product about components: and X brand new of lines as for

clinical adoption abundant of clinical data, a robust data. team on First, new having current development clinical of development contingent working strength industry-leading, supporting therefore, of is the is clinical technology data starting and XX, Currently, any upon with support a focus of with Physician all of a have critical. library stages to we medical data. clinical product

overall ongoing overall months below hernia remaining demonstrated recurrence For data of treated in an in rates -- XX-month completed from the XX-month study hernia patients. example, moderate OviTex recurrence to announced Yesterday, also XX XX BRAVO with of X.X%. been hernia complex follow-up X%. our rate the we analysis XX-month follow-up patients eventual has publication of with

Dr. of XXX a and permanent inguinal on peritoneal reserve at These following: data alternative a natural hernia and with study repair in The and repair Gastrointestinal assist authors presented American hernias OviTex Dr. Surgeons Endoscopic synthetic viable Paul meshes. recent represents research clinical typically the included transabdominal and inguinal was Banaschak ReBAR more presented by of for the positive approach robotic Additionally, meeting. that minimally OviTex concluded titled Szotek. Cory Society invasive robotic surgery

DeNoto, repair, from abdominal the recently hernia at abdominal porcine and in repairs repair. overall matrix in complicated repair, of a and possible. rates Francis In is primary New of which published, reinforcement just when this analyzed which rate mesh hernias York patient a the General wall a also Surgery that Dr. in SAGE, the incisional ReBAR the X.X%. invasive with study This recurrence Clinical bridge and hernia rate he implants an rate, of of minimally St. recurrence study reconstruction Director require Hospital of reinforced Medical most approximately of recurrence hernia population. this a the Journal reported absence is the in Another recurrence series, repairs of abdominal in in And same Research, XX% at in technique tissue OviTex with typically of seen use was for authors prospective patients bridge the using XXX of inguinal ovine products had similar variety George the published using repaired half open treatment

LIVE, educate engaged and held XX using the during data. step believe In which We and clinical Over efforts captured virtual we portfolio will allowed events slowdown. surgeons them the few physician brings Each point an the in of the clinical OviTex medical natural the more solutions, current the areas in These the surgeon for continue me experienced of mesh potential the over of educating use opportunity delta-related we both third to as continue held product have business. These events applications past a to micro education. next the including surgeons, regardless to surges. and including with reach quarter, to our education sales touch new initiatives, benefits new data programs. we quarters, opens us process, succeeded a TELA programs to over events market we about demonstrates valuable surgeons produced have have and XXX priority of surgeons, employing marketing by for remain and that

educating an surgeons We adoption. manager to direct have second additional invest grow Brand about virtual initiatives seen our sales the strength. sales as between serves our and Armed excellent products and and and as basis utilization force, in been initiative, marketing and efforts multiple execution. of means brand and driving commercial data Combining avenues vital is commercial contracts. execution strength supporting the securing have clinical sales our data, foundation surgeon we and increased our scaling correlation with account productivity sales robust needed

new accounts, funnel. sales localized existing have We hotspots reps at those in sales promoting are building a is limit reps accounts XX surgeries business producing capacity, and generally exceeding We withstand COVID-XX territories, our XX expectations. continue diversity not growing enabling our to to cohesive although the team in geographic areas. now our Currently, sign sales that while sales sales

XBIO continue proprietary To our market. plastic gives market reconstructive our recently distribution technology antimicrobial with accelerate our into sell We exclusive surgical to desired further growth strategic to agreement the our U.S. across these rights agreement line to initiatives, us build sales to we and expect Sciences, Science. further. Next team top next wash goal and This additions entered with a

right EU negotiation have successful for the approval. of We first upon the market also CE

defenses. traditional by more immune Next its resistant the biofilms potential that hours delivery agents, of make addressing antimicrobial infection against bacteria Science's proprietary to provide protection and to biotechnology it controls, no-rinse most Also, bacterial biofilms. over disinfectants surgical X ongoing allows

PRS not best-in-class tissue the surgical We portfolio. OviTex our and States, one customers wash, to supplier are portfolio transitions of Next this company with diversifies anti-biofilm soft matrix preservation reconstruction only that in novel offer combining base, United Science's thrilled also to innovative our our infection-control but reinforced tissue an solution to offers advanced

In to appointment the new Chief as in announced Financial Operating and initiatives Cuca Officer. our strategic addition Chief Roberto Officer of the we company's September,

lead relevant positions will manage As plan in TELA COO experience and company's Roberto the team operational finance company's XX of over within the business healthcare the years and and the of the execution CFO, joins finances. with industry. Roberto

quickly only the a an company, the has to has discuss team. turn contributing integral now just Roberto he will with Although to financials. is to been that, part Roberto the I call month, over With TELA of become our already over

Roberto Cuca

on commenting full year our guidance XXXX. the review results, I'll for quarter After financial third Tony. Thanks, financial our

mentioned, of XX% Tony quarter organization, increased our of existing performance penetration year-over-year continued revenue the to for customer sales. XXXX the commercial stronger-than-anticipated within third due international to As and $X.X increased million accounts

in in of the million course was quarter third the and inventory of in million million $X.X of and consulting equivalents. inventory XXXX Our period of same XXXX same $XX.X basis. in the increase quarter, of decrease same from was the XXXX. XXXX. revenue in product XXXX and due to the to points $X.X increase XXXX. the the reserve fees. G&A expenses R&D to and quarter as was for as $X.X same in higher This period a compared basis excess of in compared testing growth to in increase marketing an $X.X cash expenses, company's development expense We $X.X XXXX was Gross the period. in the the This revenue million obsolete XXXX. third over quarter third percentage year due quarter. operations in sequential of third in was increased quarter third in XXX compared of mainly the was increased XX% the quarter approximately the third travel $X.X recruiting $X.X in loss million $X.X to third the expenses. compared This a of and Loss expenses due due Net were with grew third $X.X mainly compared increase margin of in was million were insurance quarter the expenses. to and were XXXX million million period in and ended period to of million Sales consulting to compared higher quarter third to in $X.X in professional cash for million legal decrease greater result the XXXX a to million prior the The XXXX. primarily a slightly quarter third primarily expenses on

the turning XXXX. for outlook Now to

reflects the uncertainty questions. $XX maintaining growth XX% $XX please million Suzanne, COVID-XX up to call be of for over range the prior evolving This current pandemic. impact most continuing environment open We our the year period. recent to are guidance of assessment for relating the million, With in revenues of and to representing to the the our that, XX% of

Operator

[Operator Instructions].

first Matt Piper of Our Sandler. comes the question from line O'Brien from

Andrew Stafford

it is congrats and out the grew really sequentially was nice little area on wanted like I new congrats more quarter Robert bit difficult stood that off well. was Drew because the start on what of to a on that me. environment. as despite a Matt. a the This role PRS for And It on to looks business

maybe quickly thoughts what kind can account penetration that could just transitioning perspective? just less from on an we're environment a to there it you ramp to? how COVID-impacted in So talk of you're any seeing And

Tony Koblish

surgeons a and others think I Yes, And activities. with it's saw really an did no being work impact. interesting. saw some of they due had meeting lot cases last delayed for indicated We or to definitely various planning quarter impact surgeons COVID out, with of plastic the pushed

I that. a these bit interested think immune, a I impact. be So a more was bit do little little in of there an but was would I thought

is us is continue product we're working the finding they of release heavy early right that users. where now in the for forward. phase then and They're how PRS evaluating So the still

but it's little we're PRS. for of value we're of out figuring of and the up the what So then to the algorithm use assess our most how proposition down quite out product. and But and we're our progressing still surely. continue. wait, with part, terms different And versions figuring slowly starting, well in when And is a bit

the us products of is tremendous out One of figuring right different patient XX% a yes, or maybe portfolio. process is think of puzzle different piece going serve looking on But each and I in so I we quite within still the can dollars. needs, are probably But And terms that business. yield that mean, of different technique the things that's portfolio it's and going of of it's units through to for We're difficulty. preferences, important to process XX% different degrees good. running now, well in XX%, different have working to fits. needs, working product I in think to so continue about where ratio more like be piece the XX%, our far, And an

eye So It's definitely coming nicely. pleased. for keep an out We're along PRS.

Andrew Stafford

please commentary last to correct like down side, And hernia hear. the numbers to it little the sequentially largely that's correct, compared are core bit helpful Okay. provided they're marketplace some if looks Perfect. And the but you me in to quarter. I related then know I good it if on past. a And assume was and my in COVID. not,

just trends. can you recent maybe on October update say would So helpful as be Anything an on well.

Roberto Cuca

in Drew. before give market. steps Tony to just Sure, some And on color the

clarify. to Just

OviTex was quarter. sequentially slightly So was PRS the quarter the second down sequentially second from up from and actually

if Tony, on... to So you want touch

Tony Koblish

Yes. Yes.

-- more minimally done we're of quarters. invasively, up broadly used So units foundation, XX% is to from and and estimate either hernia our there's We're hernia about XX% or a robotically last for getting is which XX%, of sure. couple more being up

really feeling hernia data. the bolstered that clinical is It's So business strong. by

cases Most of compensation some quite of here based a months being it quarter, do quarterly concentration cetera. usually around of really really, of with only there centered were in collection did a which about PO certainly, XX% September. effect of you that, is revenue chugging and quarter's and along give the little incentive in was of X to were mostly September. first of probably XX% for quarter. us, We month we the well and revenue bit we through in both hernia to et the schedules, of losing about a I -- And September. last the color in PRS think But up we our

September, So tapering out going bit was September. but now we're rolling then September I we and to from as quite we again. say were a I'm the then are a hole, of climbing and fell classify October hole of rocking taper where in into improved sort it we would of And a I'm and up happy

a it's So concentrated We've that effect here remains more had hopefully short-lived. to interesting. be

Andrew Stafford

helpful. for side just Okay. the last Thanks of That's rep there. one for correction on And Perfect. the very me then things.

you about If mentioned year-end. I by XX I remember reps. been number you the around think XX correctly, targeting had that

got mean the So QX. step that like I seems there, sizable a if that in I numbers up here correctly

that's what are could you last well, great? understand how maybe would you trending just So relative the productivity just and how quarter metrics discussing trending be us help guys as were to

Tony Koblish

are rep productivity is mean improvements looking our Yes. I -- we really good. stark. The

to I'd year, on range. We have sales but of productivity in on is to that say, less million or track then last quite our X/X higher $X And X/X to $X at force nicely. even is or either to for $XXX,XXX come million, curve get a been their board $XXX,XXX the than has starting up the

and So good. we've depth is never penetration been terms quite rep into accounts stronger looking in and productivity of

Now part low to of the that program performers. has prune been

the really really has you. are and this based Officer isn't and prescriptive we're will that that allows put whole here maybe months put not place place place so right be us doing our metrics here's work them, what Chief we or know to on on last -- the And if XX you're the in history. then Commercial measuring really activities for exacting the now in have We for it is commercial team that

proven classify rigorous we're a and say in thoroughly, to to on implemented thoughtfully, make reps process, little that this were and tried recipe So down more and bit the algorithm as we and sure get using true can rep slowly a success. up. more this build I interviewing we now we process that that starting future hiring follow We're we're guidepost a count, the and more as the for

I goal of better, rep higher tick a early And this would it higher that year. would or of pace should worse, of news I up end year, but XX year, we not short by say, is at the less. first good half by better up with So the more little the a to start the next a I be for end our the expect in next hiring But not may we doing make a think of pace to year. pace, but we're

Operator

from Jefferies. of Anthony line the from comes question next Petrone Our

Frank Pinal

This is Frank for Pinal on Anthony.

I ones, guess. quick X Just

looking First the Vinci X robotics da of I'm at penetration or sort how can works wondering sort next over you one, trace the out if on year just of procedures. robotics, out just

they think XXXk I year. the last mark crossed

Just you're a follow-up could think and thinking And you from seeing And persist? wondering in access a you're just wondering staffing how standpoint? impacts? that, then what that TAM/penetration about how just terms of as question, long that hospital

Tony Koblish

Yes.

the I've Wall robotics cases. all special circumstance So I'll reconstructions complicated most robot and said front, on this I before, guess is eat again, a going the Ab say or maybe accept to it hernia

inguinal the XXX,XXX at look just you procedures penetrated. the XX% at to if roughly, is X robot market So million

is LPR goal through the a version with accomplishing extremely our compatibility, to well consider our we're robot more the more a right? strategy, little what maniacal lockstep what on line little the would our focus I So with polymer, that's to center product. a really in reinforcement, be second-generation and be robot. product And works So of

Our more entire that's next-generation robot We'll next the more a product on is compatible. couple product LPR years. in but even have product portfolio is third-generation working robot-compatible. a of robot-compatible, We're

to robot robots. So we or we're going with go as scale, they lockstep scale. the And

So feature technology the technique And that. XX% in it's is deliberate quarters the conscious, or beginning, this roughly XX%, expect We and and choice enabled spent and and we're key very hovering I to us which been robot our XX% from ReBAR a a at at continue is invest about of just to products has thereabouts. now working. our compatibility by X

bit started, This where depletes. we're is think ICUs shortages this like chain time, of fills It previously, the the ICU protect was depletes, nursing/labor seen is up feels or I impact then supply just the I the seeing it fills issues. terms then more it than shock if little or we've since COVID hospitals a right? that situation, the feels it here all different and and previously, In third like different. and point after feel character up

go. predict I harder they're elements when are think going come and these to to

to ourselves the plan to things that that's to may to activities. the persist They into like phase longer but do the first are That pandemic was can And reps the right? improved. OR, think patchy. think and Our through just TELA activities be I going they some LIVE. different, to the is the I is through we they're servicing make can selling do just grow our there going initially It's can volume, through that case still be factor. the continue impact of get much grow

commodities is TELA for piece is LIVE next investment The on always a and forward. increased thing right? going to program We're incumbent. inventory, to inventory not the certainly, big So consignment The We've that we're next shape of there the we're the that issues done COVID a favors enough the little be piece game, and that. volumes, player, are got inventory. incumbent, chain ahead we've supply good have right? in is of in going case that so in new as

shelf So means really that if account territories, size through is we our we've can the before we're go then started. survive more shape. diversified since business in in which and reference, of can started, And whatever we managers started get that doubled up COVID on phase COVID of any the grow this. to And down last all or reason, we reps consignment, for commercializing areas right and and through continue then good the micro for

just formula we're because is here there. L-I-V-N, little new that's that's we've what There's out. that of LIVN, right? TELA model I inventory proven productivity I got a rep think of playing So we've a here thought And out LIVE, kind consignment think was and the the thinking. with I that's, reps, well So acronym

is now to the go. time So

Operator

line Our of question next the from Rose Canaccord. from Kyle comes

Kyle Rose

XX on longer respect could Next to far from we what can from the the know your XX months? and just more development you're expect get pretty what wanted color maybe just business a over have to maybe perspective, the then product R&D to guys I the bringing see with market, Sciences if model? here partnership medium we perspective next a course should we as as I a been from So new the to prolific little products term expect And you of term,

Tony Koblish

question, term, that Kyle. most we a that's as to of shorter for little have going Thanks stuff frame I'm it but out some there. basically, a time because it XX-month is horizon

is and in the to -- soft right? range. and doing of our reconstitution concept we we're is or what what ... tissue OviTex be traditionally products tissue, have to our suddenly soft reinforcement in bigger So been tissue with So about soft of we're around now have opportunity repositioning bigger a tissue company a all We're reconstruction reconnection thinking soft play the

Roberto Cuca

Maintenance.

Tony Koblish

Maintenance support, yes.

of soft and antimicrobial, management, can line Next reinforcement solution soft like management, there's right? So look One at the is a like create the soft tissue There's Science that, of whole stuff anti-infection space what which of there. a tissue And well take great management. example whole is invest tissue is make products subcomponents in, our X work almost is we or technologies calling we're product a we'll very sort range reinforcement, other around dead fluid product current management, that a things reconstitution. we if the that and the

that's we're focused. where So

hopefully, types management to of time products that that products So you're reinforcement different going of that soft in out to in see, that roll see And tissue range horizon. roll time horizon. range a going of new you're out a

concept the sort make hit in that be a more closer. of deal. to an as that strategic perspective. Next a how better and going a We'll from technology goal we're reconstructed to get now, way. things going that and like the for direction But we're release. pretty I pleased expert phased heal the We solution darn about on Science of do anti-biofilm And the soft Our with have be really say a become the tissues company it is is bundled to the we've to in to we're think taking

we start, maybe the and all how should and to to test product product we next revenue nuances between of in revenue doing plenty or will hopefully, we then, start and out be price the posted to you we'll The first and position understand stuff. that good we'll make year, see soon, of third the sure generating as now the how launch learn. phase and and once the start very we learn alpha to but quarter We of keep second should cases

Kyle Rose

maybe us you -- have And give think productivity, given you but talked core missed where may you accounts. you maybe just could an just on Great. within core but update and rep it, it, stand accounts I I was maybe then And sales your Health Trust?

Tony Koblish

Yes. I mean, right, we Health our chain up, Trust is work issues. ticking supply as through way

up from think I about to $XX probably rate of run from so, started. Trust. up about coming rate up our when We're $X is or run million about we're getting Health XX% we to business million a

So IDNs, very future premier, outside and that's but well in longer bodes I going suspension which also activities around maybe we're think quite doing Vizient. for eventually perhaps well, well contracting term

do IDN quite those So and to the many up and we're we those doing across well a those we of IDNs individual have a at play all have strategy, GPOs, roll level, of and GPOs.

or I team our a solidify look better we all proposition contracting accounts data to So we the those works advantage excited branding a of forward in as value we're with schemes. great have continue some that perspective, to And and and a known very is get our doing great strong, to opportunity and from of those. strategic as these move job think all think

Operator

the of from JMP Dave comes Turkaly Securities. question line Our from next

David Turkaly

Tony, program. of I'd that LIVN sound like the

BRAVO. that. done? X-year I And it patients similar question for have I you Is be X So think do here XX The follow-up, a will How are when that the the published? year? to guess in for thanks many

Tony Koblish

on the just and got database years. We the X year published. the just analysis we Well, X locked did the

to to is So remains be Patient We are COVID -- get strong, roughly X the solid. X-year X-year some could developed reveal thing the can't might more going have due to don't say. be not whole But lost to then similar. to we to been I say we mean that from the in record go results. I It to data get we have guess, there definitely X-year But that. on the count have between results dissimilar that publication. But want it the we'll the before all X-year. the published. before is wanted manuscript and we months, and

took So study, recurrence held with we're I go we're we data, all the time these because across pointing types with very think pleased darn it. to pleased things on all have quite through the with. And well a that happy the today all rate, which low also of techniques and to ancillary which different signal is we're procedures pretty

David Turkaly

is Got I longer. II BRAVO much it. know And

time. quite important that I of can imagine think it's there, robot be the But used supposed but I to take BRAVO, I given original as more only sort guess you're the just option not with that the it's as update any thoughts? any

Tony Koblish

roughly has Yes. were done XX it. in BRAVO actually robotically that I I mean, patients

the certainly, SAGE robotics. that then at was ReBAR And already. subset presented a is there's stuff So mostly

looking set even robotic before good BRAVO is our So II. data fairly

is but Bravo additive in So nothing what II going hand. to to we already be have

all signals are and results that are those our across also good types. procedure these So different good techniques looking

Operator

to Tony Mr. Koblish. would At back conference hand time, I to this the like now

Tony Koblish

All you, Suzanne. right. Thank

and reverberations We will many market from growth growth that generate allow excited if all we're the optimistic these for going made Like with are while, we conditions. manifesting be I any to in that to of we a generate through shortages, remain -- believe said, cetera. et us us place to quarter labor through the continue progress have about this in So the strategic we'll initiatives. foundation

going it grow outline and to do we're is how that. goal Our through to

think to we and interest afternoon your great tuned. great evening. still time have and Thank here, for your in and stay best The a setup is this we TELA So thank have and a Bio, safe we want you. to everyone stay come

Operator

This today's for now Thank you participating. conference call. concludes

You disconnect. may now

TELA Bio (TELA) 13 Nov 212021 Q3 Earnings call transcript