TELA Bio FY Conference Summary Company Overview - **Company**: TELA Bio (NasdaqGM: TELA) - **Industry**: Medical Technology, specifically focused on hernia repair and plastic reconstruction Key Points and Arguments Product Strength and Market Position - TELA Bio claims to have the best hernia product on the market, combining the strength of synthetic materials with the benefits of biologics [6][8] - The company is currently in the early adopter phase of market penetration, with aspirations to reach the mainstream market [15] - TELA Bio's revenue has grown from approximately $10-$12 million at the start of 2020 to an $80 million business focused on hernia repair and breast reconstruction [16][17] Competitive Landscape - TELA Bio's product portfolio is compared to established competitors like Becton, Dickinson's Bard portfolio and LifeCell, with Bard's hernia business estimated at around $600 million and LifeCell at approximately $500 million [17][18] - The company aims to capture market share from competitors by focusing on natural repair products, which are gaining traction among younger surgeons [24][25] Sales and Marketing Strategy - TELA Bio has recently upgraded its commercial leadership team and board to enhance sales force effectiveness and operational execution [19] - The company has identified gaps in its sales regions and is actively working to fill these with new talent [20] - The sales force currently consists of 76 representatives, with plans to expand to 90 by the end of Q1 2026 [88][89] Financial Performance and Projections - TELA Bio has set a revenue growth target of at least 15% for the next year, with potential for upside based on new product launches and earlier hiring of sales reps [82][92] - The company ended Q3 with approximately $30 million in cash and has access to additional funds through a debt facility, positioning it well to avoid further fundraising in the near term [126] Product Development and Innovation - TELA Bio plans to double its hernia portfolio in the first half of 2026, introducing a new long-term resorbable polymer product [36][37] - The company is also developing two new plastic and reconstructive products aimed at expanding its market opportunities [98][99] Operational Efficiency - The company has reduced its sales and marketing spend from 93% of sales to 70-73%, indicating improved operational efficiency [29] - TELA Bio aims to manage volatility better as it scales from $80 million to $200 million in revenue [27][28] Challenges and Risks - The company faces institutional inertia in the healthcare system, where established surgeons may be resistant to adopting new products [27] - TELA Bio acknowledges the need to improve execution and manage the transition from a startup phase to a more established business model [25][28] Additional Important Insights - TELA Bio's pricing strategy positions its products between traditional polypropylene mesh and first-generation biologics, aiming to maintain ASPs while offering economic value [35][36] - The company has a strong focus on clinical data to support its product offerings, which is crucial for gaining surgeon and patient trust [41][46] This summary encapsulates the key insights from TELA Bio's FY conference, highlighting the company's strategic positioning, growth trajectory, and operational plans within the medical technology industry.

Core Viewpoint - TELA Bio, Inc. is actively participating in the healthcare sector by presenting at Piper Sandler's 37th Annual Healthcare Conference, highlighting its commitment to innovative soft-tissue reconstruction solutions [1]. Company Overview - TELA Bio, Inc. is a commercial-stage medical technology company focused on optimizing clinical outcomes through innovative technologies that prioritize the preservation and restoration of the patient's own anatomy [2]. - The company aims to provide surgeons with advanced and economically effective soft-tissue reconstruction solutions that leverage the patient's natural healing response while minimizing long-term exposure to permanent synthetic materials [2]. Event Participation - TELA's management is scheduled to present at the Piper Sandler's 37th Annual Healthcare Conference on December 3, 2025, at 2:30 pm ET, with live and archived webcasts available for interested parties [1].

Core Insights - Several small-cap biotech and therapeutics companies experienced significant gains in after-hours trading, driven by earnings updates, financial guidance, and regulatory developments [1] Company Summaries - Inotiv, Inc. (NOTV) saw a 36.61% increase in after-hours trading to $0.94, recovering from a 33.20% decline at the close, following preliminary Q4 revenue expectations of $137.5 million to $138.5 million and full-year revenue projections of $512.5 million to $513.5 million [2] - Applied Therapeutics, Inc. (APLT) rose 16.89% to $0.33 after a 30.19% gain at the close, with investors reacting positively to a narrower Q3 net loss of $19.0 million, or $0.13 per share, compared to a $68.6 million loss, or $0.48 per share, in the same quarter last year [3] - Alumis Inc. (ALMS) advanced 7.09% to $5.97, despite reporting a Q3 net loss of $110.8 million, wider than the $93.1 million loss in the prior year, with $2.1 million in collaboration income potentially boosting investor confidence [4] - TELA Bio, Inc. (TELA) increased 7.89% to $1.23 after a 14.08% gain at the close, reporting a reduced Q3 net loss of $8.6 million compared to $10.4 million a year earlier, with revenue growth of 9% to $20.7 million and revised 2025 guidance projecting at least 16% revenue growth over 2024 [5] - Corcept Therapeutics Inc. (CORT) gained 4.90% to $78.80, reflecting continued investor interest despite no specific news released [6] - BioRestorative Therapies, Inc. (BRTX) jumped 8.06% to $1.34, rebounding from a 6.77% decline at the close, following the announcement of a Type B meeting with the FDA to discuss a potential accelerated Biologics License Application pathway for its BRTX-100 program [7]

Revenue Performance - Revenue increased by $1.7 million, or 9%, from $19.0 million for the three months ended September 30, 2024, to $20.7 million for the same period in 2025[117]. - Revenue for the nine months ended September 30, 2025, was $59.4 million, an increase of $7.8 million, or 15%, from $51.7 million for the same period in 2024[117]. - Revenue increased by $1.7 million, or 9%, to $20.7 million for the three months ended September 30, 2025, driven by new customers and growing international sales[140]. - Revenue increased by $7.8 million, or 15%, to $59.4 million for the nine months ended September 30, 2025, compared to $51.7 million for the same period in 2024, driven by new customers and growing international sales[155]. Net Loss and Financial Position - The net loss decreased by $1.8 million, or 17%, from $10.4 million for the three months ended September 30, 2024, to $8.6 million for the same period in 2025[117]. - The company has an accumulated deficit of $388.5 million as of September 30, 2025, and expects to incur losses for the foreseeable future[119]. - Net loss for the nine months ended September 30, 2025, was $29.8 million, compared to a net loss of $28.6 million for the same period in 2024, reflecting a 4% increase in loss[167]. - As of September 30, 2025, cash and cash equivalents were $29.7 million, down from $52.7 million as of December 31, 2024[168]. - Cash used in operating activities was $23.3 million for the nine months ended September 30, 2025, an improvement from $34.1 million used in the same period in 2024[173]. Market Opportunity - The annual U.S. total addressable market opportunity for OviTex products is estimated to be approximately $1.8 billion[104]. - The annual U.S. current addressable market opportunity for OviTex PRS products is estimated to be approximately $800 million[109]. Product Development and Sales - The OviTex portfolio includes multiple configurations for various surgical procedures, with new product launches in 2023 and 2024 targeting specific hernia repair needs[105]. - Unit sales volume of OviTex increased by 22% to 5,795 units for the three months ended September 30, 2025, compared to 4,767 units in the same period of 2024[140]. - The company is focusing on research and development for new product variations and enhancements to extend the shelf life of existing products[116]. Expenses and Cost Management - Cost of revenue increased by $0.6 million, or 10%, to $6.6 million for the three months ended September 30, 2025, primarily due to higher product purchases[141]. - Gross profit increased by $1.1 million, or 9%, to $14.0 million for the three months ended September 30, 2025, attributed to increased unit sales and new customers[143]. - Sales and marketing expenses decreased by $1.2 million, or 8%, to $15.2 million for the three months ended September 30, 2025, due to lower compensation and benefits[146]. - General and administrative expenses increased by $0.3 million, or 7%, to $3.9 million for the three months ended September 30, 2025, primarily due to higher compensation and professional fees[147]. - Research and development expenses increased by $0.3 million, or 14%, to $2.3 million for the three months ended September 30, 2025, mainly due to higher study and development costs[148]. - Cost of revenue (excluding amortization of intangible assets) rose by $2.4 million, or 15%, to $18.5 million for the nine months ended September 30, 2025, primarily due to increased product purchases to support higher unit sales[156]. - Gross profit increased by $5.3 million, or 15%, to $40.6 million for the nine months ended September 30, 2025, attributed to higher unit sales and new customer additions[158]. - Sales and marketing expenses decreased by $2.0 million, or 4%, to $48.7 million for the nine months ended September 30, 2025, mainly due to lower compensation and benefits[161]. - General and administrative expenses increased by $0.8 million, or 7%, to $11.9 million for the nine months ended September 30, 2025, driven by higher professional fees and compensation[162]. - Research and development expenses rose by $0.3 million, or 5%, to $7.1 million for the nine months ended September 30, 2025, due to increased study costs[163]. Debt and Financing - The MidCap term loan matures on May 1, 2027, with an interest rate of 6.25% plus the greater of one-month Term SOFR or 1.0%[183]. - A debt refinancing transaction secured up to $70.0 million from Perceptive Advisors, with an initial loan of $60.0 million and an additional $10.0 million available upon meeting certain conditions[186]. - The new credit facility bears interest at a rate of 7.85% plus the greater of one-month Term SOFR or 4.25%, maturing on November 14, 2030[186]. - A 1% increase in interest rates would have resulted in a $0.3 million increase in interest expense for the nine months ended September 30, 2025[191]. - The company has made 36 monthly interest payments on the MidCap term loan since June 2022, with an extension of these payments elected in May 2025[183]. - The MidCap term loan has a prepayment fee of 1.0% and an exit fee of 5% at maturity or prepayment[184]. - As of September 30, 2025, there were no significant changes to the company's commitments and future minimum contractual obligations[185]. Risk Factors - The company is currently assessing the impact of the One Big Beautiful, Bill Act ("OBBBA") on its consolidated financial statements[152]. - The company does not currently have any material exposure to foreign currency fluctuations and does not engage in hedging activities[193]. - Inflationary factors may adversely affect operating results, although the company does not believe inflation has had a material impact to date[192]. - The company has established a redundant account at a high-credit-quality financial institution to mitigate liquidity risk following the events related to Silicon Valley Bank in 2023[189].

Core Insights - TELA Bio Inc reported mixed results for Q3, with losses of $0.19 per share, slightly better than the analyst consensus of $0.20 per share, but sales of $20.7 million fell short of the expected $21.788 million [1][2] Financial Performance - Quarterly losses were reported at $0.19 per share, beating the consensus estimate of $0.20 per share [1] - Quarterly sales amounted to $20.7 million, missing the analyst consensus estimate of $21.788 million [1] Management Commentary - CEO Antony Koblish highlighted continued growth and progress due to a strengthened leadership team and strategic changes in the commercial organization [2] Stock Offering - TELA Bio announced a $13.0 million underwritten registered direct offering of common stock and pre-funded warrants [2] Market Reaction - Following the earnings announcement, TELA Bio shares fell by 13.7%, trading at $0.96 [2] Analyst Ratings and Price Targets - Citizens analyst David Turkaly maintained a Market Outperform rating but lowered the price target from $7 to $5 [5] - Piper Sandler analyst Matt O'Brien reiterated a Neutral rating and reduced the price target from $2 to $1.25 [5]

Core Insights - TELA Bio Inc reported mixed results for Q3, with losses of 19 cents per share, slightly better than the analyst consensus of 20 cents per share, but sales of $20.700 million fell short of the expected $21.788 million [1][2] Financial Performance - Quarterly losses were reported at 19 cents per share, beating the consensus estimate of 20 cents per share [1] - Quarterly sales amounted to $20.700 million, missing the analyst consensus estimate of $21.788 million [1] Management Commentary - CEO Antony Koblish highlighted continued growth and progress due to a strengthened leadership team and strategic changes in the commercial organization [2] Stock Offering - TELA Bio announced a pricing of $13.0 million for an underwritten registered direct offering of common stock and pre-funded warrants [2] Market Reaction - Following the earnings announcement, TELA Bio shares fell by 13.7%, trading at $0.96 [2] Analyst Ratings and Price Targets - Citizens analyst David Turkaly maintained a Market Outperform rating but lowered the price target from $7 to $5 [5] - Piper Sandler analyst Matt O'Brien reiterated a Neutral rating and reduced the price target from $2 to $1.25 [5]

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Company Performance - TELA Bio, Inc. reported a quarterly loss of $0.19 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.17, representing an earnings surprise of -11.76% [1] - The company posted revenues of $20.69 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 5.53%, but showing an increase from $18.96 million in the same quarter last year [2] - TELA Bio has not surpassed consensus EPS estimates over the last four quarters and has topped consensus revenue estimates only once during that period [2] Stock Performance - TELA Bio shares have declined approximately 62.3% since the beginning of the year, contrasting with the S&P 500's gain of 16.5% [3] - The current Zacks Rank for TELA Bio is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is -$0.15 on revenues of $24.8 million, and for the current fiscal year, it is -$0.79 on revenues of $85.4 million [7] - The outlook for the Medical - Biomedical and Genetics industry, where TELA Bio operates, is currently in the top 35% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was reported at $20.7 million, reflecting a 9% growth year-over-year, driven by stronger adoption and new accounts [4][14] - Gross margin remained stable at 68% for both Q3 2025 and Q3 2024, with gross profit increasing to $14 million from $12.9 million [14] - Net loss decreased to $8.6 million in Q3 2025 from $10.4 million in the prior year [16] Business Line Data and Key Metrics Changes - Revenue from OviTex grew by 6%, while OviTex PRS revenue increased by 12% compared to the prior year [14] - OviTex unit sales grew by 22% in Q3, while PRS unit sales saw a 3% increase [14] Market Data and Key Metrics Changes - International sales grew by 9%, with notable traction in the U.K. and early progress from the OviTex IHR launch in Europe [4] - The company expanded its market presence in the U.S. by adding 835 hospitals to its portfolio [9] Company Strategy and Development Direction - The company is focused on expanding its commercial footprint, improving operational discipline, and strengthening its patient-centric culture [4] - Investments in the sales organization are expected to enhance commercial performance moving forward [5] - The company aims to become a market leader in hernia and plastic reconstructive surgery through enhanced medical education and market access strategies [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving at least 16% revenue growth for the full year 2025 compared to 2024 [16] - For 2026, the company anticipates at least 15% revenue growth from 2025, with a focus on hiring and operational efficiency [17] Other Important Information - The company announced a refinancing and upsizing of its debt facility from $40 million to $60 million, along with a $13 million equity offering, adding approximately $26 million in net cash [18] - The company has surpassed 100,000 implantations of OviTex and OviTex PRS globally, indicating strong market impact [7] Q&A Session Summary Question: Rationale for debt refinancing and equity raise - Management feels comfortable with the cash runway, stating the refinancing was proactive to avoid future amortization issues and to secure additional capital [25] Question: Guidance for 2025 and 2026 growth expectations - The company provided a conservative growth estimate for 2025, factoring in hiring and operational adjustments, with a goal of at least 15% growth for 2026 [26][27] Question: Details on Salesforce hiring - The company aims to increase its Salesforce to over 90 territory managers by Q1 2026, with a focus on hiring high-caliber talent [31][34] Question: Break-even profile - Management continues to target a break-even point in the high $20 million range per quarter, emphasizing operational efficiency [36] Question: Q4 growth expectations - The company expects at least 16% year-over-year growth in Q4, with potential upside from recent hiring and organizational improvements [46]

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