TELA - Earnings call transcript Q1 2024

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Operator

Good afternoon, ladies and gentlemen, and welcome to the TELA Bio First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Louisa Smith from the Gilmartin Group.

Louisa Smith

Thank you, Michelle, and good afternoon, everyone. Earlier today, Televio released financial results for the first quarter of 2024. press available the website. the of copy release on is company's A

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

call, events. SEC, Form like differ XX-K without and which limitation, I'd future company's actual and you annual this make begin, company's we you specific the quarterly that identify regarding to these XX-Q, including, to those may on factors report future Before on the company statements past the in encourage and that filings remind results reports during with conference We forward-looking the projections Form statements. or materially the may described forward-looking cause events from to review

statements product the now pipeline limitation, or macroeconomic capital development These operating regulatory of filings, various strategies, With include, regarding potential, will to identified impact sales that, factors opportunities, turn in our Tony. environment, resources call performance. conditions over the without and the marketing product and may I

Antony Koblish

Thank you you quarter strategic TELA opportunities. for hit call, and critical the you, we like earnings as XXXX well to joining everyone. continued In I'd call. milestones Thank afternoon, first quarter for highlight Bio's in us on some growth and our as update good Louisa, progress this ongoing

started year off strong. We've the

our was quarter and with same consecutive XXth the or XXXX revenue $XX.X in quarter greater. First of million, representing over XX% period growth growth XX%

in momentum considerable all generated the the quarter, on we firing capitalizing business are on and fourth We cylinders. our is

will significant the the some key our of are enable As that you to team the commercial year. hear in benefiting recent from launches drive remainder addition growth to us to we today, through will product enhancements

robotic-assisted inguinal IHR, soft launched platform procedures. in we and hernias, laparoscopic April, tissue repair a designed next-generation the for use specifically for OviTex In trocar-compatible,

to synthetic other OviTex with additional leverage rumen our designed suture of performance. devices polymer. meshes. and our OviTex optimize strength strength further synthetic and All minimize or X in enough remodeling, available traditionally existing the permanent utilizes layers and just which penetration facilitate healing complement natural and into market, IHR provide devices, is configurations IHR by dominated response, portfolio embroidered been ovine are allow like tissue product footprint of OviTex body a polymer patient's the Just sheep inguinal has to foreign will

phenomenal in Paul technique hernia industry Endoscopic study repair. XXX a includes The This by patients recurrence using with SAGES. Surgical and events, recent follow-up repair has Connect demonstrating initial There Society efficacy product X.X average underwent an and the the years. of ReBAR presented response led XX X TAPP been OviTex's or known of inguinal commonly at of Dr. debuts or the across as low published with Intuitive are works at American meeting of a robotic the Gastrointestinal clinical rate Surgeons who hernia Szotek X.X% now exhibiting

visits efforts VIP various robust on comprehensive we experiences sessions. OviTex with as as educational our cases. TELA labs QX, more other to Bio and U.S. several observation training through training medical minimally invasive our the case headquarters, and the than XXX an Our are in globally educated surgeons peer-to-peer emphasis of labs use other ever. In cadaver Europe surgeon of robotic in This and includes at XX Malvern sites,

U.S., who X hernia Intuitive We at society industry success mesh of we March at abdominal we April, reconstructive the GPO focusing where purchasing were have provide launched da XX and tremendous on we of invited trauma only had year, classic Annual and their meeting they or and for with In Vinci meetings. X Connect schedule this surgery. also very organizations. companies Through platform, X at a surgery, society and meetings surgeons industry busy hernia, engaged the in

growing and pivotal a was our credibility robotic space. in leadership meeting this to invitation in demonstrating the Our milestone further

At had interest surgeons attended Feedback to at the both surgeon LIQUIFIX surgeons OviTex prominent IHR. were meeting. nearly presence who follow-up X,XXX tremendous from the meeting, saw we in and indicates impressed exposure and by TELA's

to May, PRS, for year. its and milestones. procedures. TELA's that over Over surgery Of XX% very we plastic more resorbable prior note, up in configuration PRS sales in now of with in has first announce the major also now makes used mid-XXXX, reconstructive grown of the of grew PRS been half portfolio. PRS implantation significantly hernia XX% of complex some accounts of than which revenue ab the reached am XX,XXX have OviTex OviTex launched pleased long-term and X/X XX,XXX wall and and procedures I used units in the

TELA's Langstein, the surgeons Surgeon commitment we Rochester joins Center strategic TELA's of Howard a the and Reconstructive reconstructive Plastic and opportunity represents, in Dr. TELA's it and plastic University clinical highlighting to X, administrators former member Vice awareness of team the of welcomed Medical PRS the at April Medical Further of as as Affairs Surgery President space. a Chief and with benefits of Strategy. He hospital TELA the of products driving on

to LIQUIFIX precise liquid peritoneum. fixation in inguinal affixing we alternative the including risk They both fixation in U.S., These you the meeting, tacks, of national for where the LIQUIFIX sutures suite Hernia or Mesh hernia Fixation methods and mesh quarter's Devices. sales products LIQUIFIX from the allow are mesh we laparoscopic Open products the approximating for tissue and devices staples. were coming our last and Precision polypropylene mechanical PMA FDA-approved femoral only from FIXX On use call, for procedures and polyester eliminating such adhesive of launched while damage the as in

The sales represents have tremendous the at then. over date, elevate seen TELA products suite industry top at national choice To that meeting, for interest sales of been mind the XX within to the products meetings to our of have hands-on we LIQUIFIX, on of addition offerings. surgeons since yet the and force another complementary and trained surgeon's certification received product

are in markets preference-driven repair surgeon of premier share market expanding and awareness driving the committed offering portfolio our with hernia reconstructive and reach surgery. and the products of are to plastic We

turn to of overview call Roberto over now I'll for our the an financials.

Roberto Cuca

Thanks, Tony.

to increase addition of growing growing in commercial continued first expansion Each XX% due were of in of grew accounts our the mentioned increases $XX.X primarily quarter earlier, increased to and as of XX% products PRS year-over-year these our sales OviTex unit These our XX% the in organization. customer As revenue XXXX an existing of the OviTex and period. with customers. well penetration as the for million, of new Tony resulted

was percentage Gross a of margin result excess quarter. of for as quarter in as XX% to due XX% compared The obsolete during first in inventory revenue the inventory improvements a management charges the was period. year to increase primarily lower our for prior the and

$XX.X organization, million marketing was a result of increased and additional million expenses commercial the and of Sales our $XX.X due XXXX. mainly in expense consulting the the in increase XXXX period same of due to costs was compared headcount. expansion first to higher This and to quarter higher as in costs compensation travel employee-related

and in headcount as compared primarily by General development pre-IDE of activities due to by $X.X related and higher to XXXX. increases, in period quarter $X.X employees due expense expense in well a higher of employee-related expense. compared OviTex devices. outside in increase decreases R&D in same million offset as higher million expense and an compensation bad insurance the debt for PRS costs prior to result to This was $X.X new million administrative was was to million as the $X.X in first the year, costs driven

the driven was was prior $X.X XXXX the by from assets of year variable to decrease a gain adjustment consideration quarter estimate compared operations Collagen of first million related in periods March Loss the from period. million of onetime Device MiMedx recognition The million the XXXX. in to we from future of to assess $X.X $XX.X as Pack subject the to transaction. of This NIVIS sale certain in Fibrillar the our is in recognition

XXXX first compared in $X.X same with million in the $XX $XX.X cash We loss equivalents. in to the the and XXXX. Net period cash in quarter million was first of ended million quarter

outlook million from of be the full for XX% representing XX% now prior project year $XX.X of XXXX. million, growth the to for We the the $XX.X to to revenue to year. in range Turning

in market continue Following our the positive and first feel the dynamics as quarter our win range products market, comfortable increasing we strong to share. continued in guidance

net notwithstanding the loss from past, typical we loss less we the to should in again, the grow excluding and over expect even NIVIS. in XXXX, the expect in seasonality course reasonably both excluding some NIVIS. the to expect More to ever, operating we be revenue and in contribution sequentially, XXXX we decline the contribution of divestiture loss expenses the have operating operating of the divestiture net loss be than of over year, since of said As the course from steady year, And expense.

to the be will equivalents that, We expect us Tony continue remarks. and profitability. hand fund cash that back to for I'll With cash our closing to to sufficient call

Antony Koblish

afternoon. by are getting in Roberto, Thanks. and and Thanks, this the team started. the I we tuning thank am everyone, you, the quarter, excited made just first has in progress for

We competitors have largest in our to with the reached where space. point are the even able compete we

We highly sales backed have a well-trained, competitive exceptional data. products and direct experienced force with

on and the outstanding, collect Our data of performance we is continue to our more. products

position, LIQUIFIX share financial to that to with previously expect IHR closed greenfield for to by excited fully the doors potential we strong take and open to I a for the am in and is years TELA opportunity were come. us.

and team our their continued commitment focus I'd on closing, driving our like in for relentless So to mission thank growth. their to

the line are year We ask eager and execution. deliver your top things here the TELA I'll solid on for With growth to questions. great operational that, of a of to open now strong precipice on Michelle and at I'm line

Operator

going Frank [Operator line from Lake Takkinen Markets. is Instructions] Street the Our with first question come of to Capital

Frank Takkinen

I start calls about I seasonally you've know quarter. talked previous to QX being a solid to year. sequential expectations. hoping start about with the on was asking strong years, in the and Congrats

these from with sequential there's should excitement a of selling a IHR be thinking all can it staffed think your other it How what a standpoint? factors. and going into couple translate I fully around things particular we and growth into about some organization, that

Roberto Cuca

had and a to fairly And second the Tony from historically, the there So sequential healthy have out, quarter-to-quarter. growth pointed as quarters. first we in tends step-up has be

were something would the that XXXX, year, and for of be a will historical the the progression of at is so in bottom adjust look to the like prepared the you And income. we drop that, that had course third over If do form quarter step-up in expect. OpEx look down maybe last revenue to the data at we that operating mentioned year in expect remarks, we in such the steady line I in improved fairly as the of to hiccup revenue

Frank Takkinen

ask to know business. It XX there. of seems mesh out to impact for development those on like related to of date. but second some then kind I'm help not potential lawsuit decision Okay. there's going a that, us synthetic been outcomes maybe some I Perfect. how there's think you And could May your maybe one, my of speculate outcome the the through

Antony Koblish

the that's mediation the like But secret, a arbitration, think, out for out there there. date yes, law that. has hidden of some was kind greatest of a there firms set that one I notice by been Well, something put or

So keeping eye obviously on close very a we're it.

have a then for plan right? plan eventual think I we'll really like in after sort at some for breaks able it And way of case game what ready We effects of one end, the knock-on that to that. looks this we'll the understand what come understand other, the us have communication it to to means, be the in or

products right? clear is repair people's possible, of come position even company that built beginning, plastic a the of natural company makes around. mission as much the basic hernia are We on process, with But and minimal have as are do out bellies damage, that it at repair point. getting remodeling We consistent they this Those we soft product. out their tenets We are to much from sense the some as in as and founded to. permanent our focused are natural the for if

And that. by and large, we've on delivered

pointing is ventrals rate these digits. has rate the ], problem very cetera, our have the is a superb our clinical recurrence [ single in where inguinal, low simple We there out, that et very, recurrence in the been litigation data,

And are so on that we I promise. think delivering

to I positioned as people's very an into we think some belies come point. products And to well end be there's last excellent that an to putting players at polypropylene and not is few going as are forever. plastic are to alternative. going It's

can The product and the us broad setting now the product do gives laparoscopic, product technique, that any name LIQUIFIX with procedures with in addition IHR the any any polypropylene of open, a of any you portfolio robots, it. done

going help future mission patients to and forward look our on surgeons help keep being in the original we So been the the to mission, continuing has able of company. which

Roberto Cuca

which add multi-district parties focused in defendant in that be and which presumably later in and in both postponed a next that were and the would of sent May. federal bit Island that wasn't said state that MDL, to try was the with The cases, MDL Rhode the Ohio. deadline would settle extended. just sync MDL the the mediation is And up. That can cases cases, little the was this the at a It detail, notice notice a be was the Bard, Rhode are think time. I'll a And to cases that one want State could litigation, to Island same tricky deadline it case litigation

plans our be what in any pretty So in Becton Dickinson get notice unpredictable, post potential by the part did to settlement. will which does response finalize to it large but the driven is settlements, just us

Operator

is Our Cronin Caitlin from the Genuity. going to with come next of line Canaccord question

Caitlin Cronin

off, Just end of on first your XXXX? do at reps feel for selling? my How about bolus is the trending, to of productivity. start that you is And you on question brought including initiatives the balanced that how

Antony Koblish

to feel we of very training our almost to bolus sales. continue train enhanced percentage we been marketplace. in the PRS reps, of team the new it enhance so program best uptick about pretty selling. a training the mean There's I point We to have the in balanced feel we're that as going significantly, good an program already about of we've and training and that Yes. perpetual good to relates the

I think line about now XX%. about I in we QX, with And believe we XX%, XX% were top of PRS. are running

selling So to what balanced I think we're see of of that's the beginning starting approach. a in terms

the front-loaded at exact number legs in And this. still more last with good difficult. off overall, I a before, started with time along So right? year start. sales the year we're with we of the productivity point we force, we're little which reps our were year and So to made But finding think hiring, a a forecasting any

full Here, we're in front got for team the the We've loaded. place year. full

So to and on and productivity. it allow in in will things execution, us more the success like should result which focus confidence training

Roberto Cuca

for new about we data, bit reps to reps we which of the costs. the it get one have months it have is cohorts get on talk average running reps at And X time to metrics to new breakeven. new the these is seen that we paying with under for And latest a for takes for variable of still just to their own

Caitlin Cronin

this expect then And about the how quarter cash trend to Awesome. burn and how you that do you throughout feel year?

Roberto Cuca

Sure.

to since bonuses So for described get in out of top be course to fourth OpEx it course full of the we towards improve of over metrics to expect the will the we first quarter year our better that revenue seasonality profitability a I flow year, the to tend and P&L we cash the again, the makes of steady from steadily P&L and do NIVIS, the There ignoring perspective, such pay -- the additional quarter. on as will grow buy which year. is that, some over contribution inventory from reasonably

So if the top sort the progression, year. that that natural cash you over overlay the we the progress of comfortable to seasonality way and with course is on the of going cash feel of burn P&L

Operator

the with from of line going Jefferies. come And next question is our to Michael Sarcone

Michael Sarcone

talk how for you've start, to and maybe do into baked guidance? Just 'XX could about what IHR think about you year you maybe this contribution got thinking you're

Roberto Cuca

the the X IHR So there for to dimensions are year. contribution

products trocars. in about as Roughly do the robotic was repairs. participant a revenue hernia XX% in our hernia have inguinal even previously we're inguinal currently -- is down in already are repairs. that So going used of We just reminder, is, first a

expect that the who in using So we repairs have IHR pickup our hernia quick doing uptake amongst products. already surgeons will a inguinal fairly were

meshes maybe and a more opportunities, using introduce little repairs. In wanted Tony for who a the are bit synthetic inguinal to with greenfield something mentioned, of targeted addition, there's our lot products, as familiar physicians to are but product

to as expect see from well. that we so And pickup some

what quantified is, contribution it that that amount. be the do the we that to million the we million breakout $XX.X to to of expect in noticeable $XX.X year haven't but and for exactly So a

Antony Koblish

I'll We're Yes, good to that, start. to add Michael. a off

we're But this, those of weeks. our which well complex for of inguinal. right? off complex Just rest forward And got about the us of elevate XX will and a to in as couple will lot Roberto use We've is ventral. a implantations, ventral started in ventral but over integration, thinking us really get simple a surgeons then which customers, portfolio great. and backwards more don't And said, this new So to we and ventral. allow product

reversing and take are a side. think on good the on solid our the going look side at customers adopt complex that, hard us products I So think, ventral are and inguinal I to side, that our the

largest a offers after to range gives the shelf So that portfolio. system of whole now capability, fixation the addition competitors, parity we it I share, full that LIQUIFIX, our have suite space We fact with significant us complete that us think very got it complete the compared and of it to we've mind usage advantages gives procedures. tackers. go routine a us atraumatic novel like product right? And gives with

Michael Sarcone

just Got really an just it. on give you're And us That's and second how GPO helpful. there? could ramping your maybe update one, you contracts

Antony Koblish

Yes.

the we place. X remains in have that it contracts So big

supply think near all. terms grow X GPOs, XX% on at ones that certainly till is next bid even big track their very this requests that. the going the by Our large XX%. to revenue and approximately We're IDNs, smaller confident getting for we're them think year. GPOs, in contribution We're We active due and We're to large looking GPOs, much it's access later aren't various of getting future. in the to up smaller from I get GPOs. all The the and the via chain are continually going we

So over it sell XX% of might rest event. to assured, the we're our represents to very our be which IDN But consistent. within and more of confident very a ability sales been next continue in year today has framework,

new So with as That's existing actually IHR extension. in we're a technology. new some had seem that get speed our as us a we technology take line getting see the success a which contracts places be success to to time but up we've great to starting LIQUIFIX, on is certain getting contracts help LIQUIFIX going as going designation, little more for well. to And in also to

So everything front the very is looking GPO positive. on

Operator

And question O'Brien going is with Piper from of our next to Sandler. the come line Matthew

Matthew O'Brien

QX raise or and was bit Guidance guidance Maybe there's what all out the I you've doing I with QX, comp growth seeing even for drivers just growth think of the a couple about. kind guess, to a we're quite that what last is higher not you But years? result did starters, and delivered year for been the range dynamic why versus there, then well what in little the over below of metrics these just good. you different know

Roberto Cuca

Sure. Thanks for the question, commitment year investors. a to Matt. We approached our guidance as this our

we as to felt was increase reflect quarter-by-quarter, more going learned And we numbers. these we year, that would So felt hit that. over we that, confident what the Understanding know. that and comfortable, we guidance we the range of we doable where if very course more are the it given to put

our numbers. range we range the We can range. we data and So the by a will sort the as what more more than is But comfortable we use we of the bit sort going Part raised forward. to what get of compared about we this belt, slightly that. quarter. feel did fractions of reconsider And consensus dynamic under raised well do

Matthew O'Brien

training You've start been point a to mean inflection after. growing then, Okay. just talking about well, What massive for when quite is that to data. needed? going little market bit know we're I wondering strong the got you're in but I terms think see Tony, of really you're a Understood. utilization. a do I'm is And this all really you this while. And of you've more going

them made You've got great it, this ] from inflect here? indications, really products, see [ what

Antony Koblish

call you look right, XXXX, if Well, So I the as our we right? quasi it capital history, until end know. the of parity, had you at no

we force the mission great mission. started proof all well out had place but GPO access terms really earnest due we in COVID across be grew and until through had capability parity or patients all And market, commercialization think size, in but well getting roughly, of So years, in now, we by more good and and good right? data, we surgeons that. of start, And types building for are I procedures and X But XXXX. portfolio were successful of parity in appreciated excellent X crazy our did I I in hampered roughly, of even What roughly, think sales terms in parity very interested haven't to in infrastructure to that we this mean a concepts, in some product surgeons. was right? our more is understood that of

right? I -- started surgeons think them which first think ground, are the slower, Nothing. jump think company be. adopters, to it's is out conservative we what zero tend to to be you're with things prove a in. they want want on before They I But I that seeing you So

methodically And now, go now so And year. big I to think of toe-to-toe this parity time start quasi this we build players. taken the it's us at with starting can the

is this next of think I growth, So phase Matt. and the our evolution

Operator

with comes JMP. Citizens question line Turkaly the next from of David Our

David Turkaly

have might force part of I still reps? a missed XX and you this I know Did reps is say year, X -- not expansion and assistant Sorry, at but you're it. sales big

Roberto Cuca

We are reps. X reps at XX and associate

Antony Koblish

consistent Yes. No, we're Dave. time, very last from

David Turkaly

don't because and tangible terms further us you your adding to hear number but love guys us, leave new your new. maybe that accounts any in I'm surgeons. just existing and know meeting. about thoughts sort for some meeting could penetration to you if of anything great seems could accounts curious then if some quantifiable give in like would on even scope it the I'd new Got you that I commentary mentioned it. there's out And And you Intuitive of with some be there's opportunity a

Antony Koblish

we best lot do to us. the partners us, mean short -- commitments. lot have us, was time. going to go it's I to a were into good it who of we first for for case deal nice up And take of is there's those solid their the felt always application It's Yes. store. for Intuitive the for validated world medtech And store I great mean they ecosystem, part like A open right? well A really It over to -- already the percentage things We very had in turned I the seeing meeting it a felt for I only We over into us the leads. meeting, surgeons the like a And were time. think we was I never cases right? granted. or of say, are. being us. appreciate in seeing going that big Surgical app our pick of Apple immensely. for XX

it's opening the great and look. many, of takes as an time, think case also kind that excellent excellent, was very meeting too. that start. take is though, surgeons more, in but robotic are for for I we ORs And and something very, up robot, We've surgeons to the their OviTex, to And that's So sites for thing many do observation good. want that's the now come Connect great got a

everything that sits other want standing the think who all robot. think the the We the products, GPO is of we be top -- we surgeons them may use right? GPOs, on the do Intuitive focus always to I make and our with giga good in on with So compatibility so that sure I that that

that, So we're but Dave. good. I attaining slowly It's nothing think

Operator

questions further no back further over conference And showing at this time. like Tony remarks. the Koblish hand for to I'm And I'd any to

Antony Koblish

of We Thank in for a rest Have and you, joining continued thank us. interest your evening. Michelle, appreciate Bio. your TELA Thank you. everyone, great you,

Operator

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

may You now disconnect.

TELA Bio (TELA) 9 May 242024 Q1 Earnings call transcript