MALVERN, Pa., Oct. 09, 2025 (GLOBE NEWSWIRE) -- TELA Bio, Inc. (“TELA Bio”) (NASDAQ: TELA), a commercial-stage medical technology company focused on providing innovative soft-tissue reconstruction solutions, today announced the appointment of Betty Jo Rocchio, DNP, RN, CRNA, CENP, EBP-C, to its Board of Directors, and the departure of Lisa Colleran, who has stepped down following five years of service on the Board. Dr. Rocchio is a nationally recognized healthcare leader and one of Modern Healthcare’s 50 Mo ...

TELA Bio (TELA) FY Conference Summary Company Overview - TELA Bio is a public company focused on novel soft tissue solutions for hernia repair and reconstructive plastic surgery [1][3] - The company operates in two key areas: hernia repair and plastic/reconstructive surgery, particularly breast reconstruction [5][6] Industry Dynamics - The hernia repair market is undergoing significant transformation, moving away from legacy polypropylene mesh due to litigation and patient issues, with a recent $2 billion settlement in the hernia sector [4] - TELA Bio is positioned as a disruptor in the industry, advocating for non-permanent plastic solutions for hernia repair [4][5] - Robotic hernia repair is becoming increasingly prevalent, with projections indicating that up to 80% of hernia repairs may be performed robotically [5] Financial Performance - TELA Bio is on track to achieve revenues between $85 million to $88 million for the year, up from approximately $69 million the previous year [7] - The company reported a 26% growth in Q2, slightly behind consensus expectations, but ahead of internal plans for the first half of the year [15][16] Leadership and Team - A new commercial leadership team has been brought in from Abiomed, with experience in scaling businesses from $100 million to $500 million [8][9] - The team has been assessing talent and morale within the company to drive growth and improve performance [16][17] Product and Market Strategy - TELA Bio has developed a Reinforced Tissue Matrix (RTM) product that is patent-protected and aims to create its own category outside of corporate bundling structures [20][21] - The company has secured approximately 25 RTM contracts, which is faster than anticipated [21] - TELA Bio is focusing on expanding its presence in Integrated Delivery Networks (IDNs) and aims to secure contracts with major Group Purchasing Organizations (GPOs) [22][23] Clinical Data and Product Adoption - TELA Bio has over 73,000 implantations and more than 40 publications demonstrating strong clinical data, particularly in hernia repair [12][13] - The company is working to expand its clinical data for its plastic and reconstructive surgery products, which have seen over 16,000 implantations [13] International Expansion - International sales account for about 15% of TELA Bio's revenue, with plans to expand into Europe, particularly with the introduction of the PRS product line [30][31] - The company is filing a design dossier for its PRS product by the end of the year to facilitate entry into European markets [32] Operational Efficiency - Operating expenses (OpEx) are expected to remain flat throughout the year, with revenue growth leading to improved profitability [50][51] - The company believes it has sufficient cash to reach profitability, with a declining trajectory in operating loss and cash consumption anticipated [52] Medical Education Initiatives - TELA Bio has a strong medical education team focused on developing clinical data and fostering relationships with key opinion leaders (KOLs) [43][44] - The company plans to adjust its medical education approach to focus more on didactic sessions rather than cadaver labs, reallocating existing resources [44][45] Future Outlook - TELA Bio aims to continue its growth trajectory by leveraging its innovative products and expanding its market presence, both domestically and internationally [7][30] - The company is committed to its mission of providing safer, non-permanent solutions for hernia repair and reconstructive surgery, positioning itself as a leader in the industry [40][41]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 increased by 26% year over year to $20.2 million, with OviTex revenue growing by 12% and OviTex PRS revenue growing by 53% [28] - Gross margin improved to 69.8% from 68.8% in the prior year, primarily due to lower charges for excess and obsolete inventory [28] - Net loss decreased to $9.9 million from $12.6 million in the prior year [30] Business Line Data and Key Metrics Changes - OviTex unit sales grew by 17% for the quarter, while PRS unit sales grew by 40% [28] - OviTex IHR revenue grew by 322% compared to 2024 and 29% sequentially over Q1 sales [9] - Liquefix revenue saw year-over-year growth of 121% this quarter [8] Market Data and Key Metrics Changes - European sales grew by 25% over Q2 last year, driven by 29% unit growth [10] - Contracts secured with three major national GPOs to improve market access for Liquefix [8] Company Strategy and Development Direction - The company aims to transition from a niche player in complex abdominal wall reconstruction to a broad portfolio provider in hernia repair [60] - A focus on building patient and outcome-centric partnerships with healthcare providers is emphasized [16] - The company is launching educational initiatives targeting teaching hospitals to engage the next generation of surgeons [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of the company and the impact of recent organizational changes on sales performance [33] - The company reiterated its full-year 2025 revenue guidance, anticipating revenue in the range of $85 million to $88 million, representing growth of 23% to 27% over 2024 [30] Other Important Information - The company plans to share a patient case each quarter to highlight the real-world performance of the OviTex platform [31] - Recent publications and presentations have underscored the clinical utility of OviTex products [14] Q&A Session Summary Question: Update on Salesforce headcount and expectations for 2025 - The company has 69 territory managers and 25 account specialists, with plans to reach 76 territory managers [37][39] Question: Update on guidance and revenue cadence - The revenue cadence is expected to follow historical patterns, with a heavier second half compared to the first half [41][42] Question: Details on spending and patient-centric culture - The company is revising travel and expense policies and focusing on recruiting the right hires to enhance patient-centric culture [46][49] Question: Performance of reinforced tissue matrix contracts - Approximately 25 contracts are in place, with positive reception and a focus on patient-centric approaches to transcend existing pricing structures [51][52] Question: Confidence in reiterating sales guidance - Confidence stems from historical performance and the productivity of the sales team, with expectations for increased activity in Q4 [70][72]

[Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section defines forward-looking statements, outlines factors influencing actual results, and directs readers to risk disclosures - Forward-looking statements discuss the future of the business, operations, financial performance, and growth strategies, rather than historical facts[8](index=8&type=chunk)[9](index=9&type=chunk) - Key factors that could cause actual results to differ from forward-looking statements include estimates for future operations, market acceptance of products, new product introductions, ability to expand sales, performance of contract manufacturers, supply chain integrity, competition, reimbursement levels, product enhancements, regulatory approvals, pricing pressures, healthcare reform, and macroeconomic factors[10](index=10&type=chunk)[13](index=13&type=chunk) - Readers are advised to consult the 'Risk Factors' section in the Annual Report and subsequent Quarterly Reports for a comprehensive discussion of these factors[12](index=12&type=chunk)[13](index=13&type=chunk) [PART I FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section encompasses the unaudited interim consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited interim consolidated financial statements, including the balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with their accompanying notes. It provides a snapshot of the company's financial position, performance, and cash movements for the periods ended June 30, 2025, and December 31, 2024 (balance sheet), and June 30, 2025, and 2024 (income statement, equity, cash flow) Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :-------------- | :---------------- | :----- | | Cash and cash equivalents | $34,977 | $52,670 | -$17,693 | | Total current assets | $60,745 | $78,071 | -$17,326 | | Total assets | $67,537 | $86,570 | -$19,033 | | Total current liabilities | $19,061 | $15,598 | +$3,463 | | Long-term debt | $38,051 | $41,124 | -$3,073 | | Total liabilities | $58,353 | $58,112 | +$241 | | Total stockholders' equity | $9,184 | $28,458 | -$19,274 | | Accumulated deficit | $(379,917) | $(358,730) | -$21,187 | Consolidated Statements of Operations Highlights (in thousands, except per share) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Revenue | $20,197 | $16,091 | $38,717 | $32,694 | | Gross profit | $14,105 | $11,073 | $26,617 | $22,409 | | Loss from operations | $(9,081) | $(11,570) | $(19,553) | $(16,396) | | Net loss | $(9,923) | $(12,600) | $(21,187) | $(18,261) | | Net loss per common share, basic and diluted | $(0.22) | $(0.51) | $(0.47) | $(0.74) | | Weighted average common shares outstanding | 45,365,325 | 24,663,234 | 45,316,444 | 24,621,310 | Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(17,630) | $(25,081) | | Net cash provided by investing activities | $342 | $4,763 | | Net cash (used in) provided by financing activities | $(119) | $51 | | Net decrease in cash and cash equivalents and restricted cash | $(17,693) | $(20,233) | | Cash and cash equivalents and restricted cash, end of period | $35,242 | $26,761 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) | Assets | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $34,977 | $52,670 | | Accounts receivable, net | $11,236 | $10,098 | | Inventory | $11,371 | $12,781 | | Prepaid expenses and other current assets | $3,161 | $2,522 | | **Total current assets** | **$60,745** | **$78,071** | | Property and equipment, net | $2,167 | $2,341 | | Intangible assets, net | $1,549 | $1,739 | | Right-of-use assets | $1,616 | $1,738 | | Other long-term assets | $1,131 | $2,276 | | Deferred tax asset, net | $64 | $140 | | Restricted cash | $265 | $265 | | **Total assets** | **$67,537** | **$86,570** | | **Liabilities and stockholders' equity** | | | | Accounts payable | $1,741 | $2,147 | | Accrued expenses and other current liabilities | $13,987 | $13,451 | | Current portion of long-term debt | $3,333 | — | | **Total current liabilities** | **$19,061** | **$15,598** | | Long-term debt | $38,051 | $41,124 | | Other long-term liabilities | $1,241 | $1,390 | | **Total liabilities** | **$58,353** | **$58,112** | | Common stock | $40 | $39 | | Additional paid-in capital | $388,968 | $387,059 | | Accumulated other comprehensive income | $93 | $90 | | Accumulated deficit | $(379,917) | $(358,730) | | **Total stockholders' equity** | **$9,184** | **$28,458** | | **Total liabilities and stockholders' equity** | **$67,537** | **$86,570** | [Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Revenue | $20,197 | $16,091 | $38,717 | $32,694 | | Cost of revenue (excluding amortization) | $5,997 | $4,923 | $11,910 | $10,095 | | Amortization of intangible assets | $95 | $95 | $190 | $190 | | **Gross profit** | **$14,105** | **$11,073** | **$26,617** | **$22,409** | | Sales and marketing | $16,857 | $16,699 | $33,465 | $34,219 | | General and administrative | $4,126 | $3,621 | $7,962 | $7,450 | | Research and development | $2,203 | $2,323 | $4,743 | $4,716 | | **Total operating expenses** | **$23,186** | **$22,643** | **$46,170** | **$46,385** | | Gain on sale of product line | — | — | — | $7,580 | | **Loss from operations** | **$(9,081)** | **$(11,570)** | **$(19,553)** | **$(16,396)** | | Interest expense | $(1,188) | $(1,331) | $(2,407) | $(2,663) | | Other income | $379 | $301 | $858 | $798 | | **Total other expense, net** | **$(809)** | **$(1,030)** | **$(1,549)** | **$(1,865)** | | Loss before income tax expense | $(9,890) | $(12,600) | $(21,102) | $(18,261) | | Income tax expense | $(33) | — | $(85) | — | | **Net loss** | **$(9,923)** | **$(12,600)** | **$(21,187)** | **$(18,261)** | | Net loss per common share, basic and diluted | $(0.22) | $(0.51) | $(0.47) | $(0.74) | | Weighted average common shares outstanding | 45,365,325 | 24,663,234 | 45,316,444 | 24,621,310 | | Comprehensive loss | $(9,921) | $(12,599) | $(21,184) | $(18,254) | [Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) | Metric | Balance at Jan 1, 2025 | Net Loss | Stock-based Comp. Expense | Other Changes | Balance at Jun 30, 2025 | | :-------------------------------- | :--------------------- | :--------- | :------------------------ | :------------ | :---------------------- | | Common stock (Amount) | $39 | — | — | $1 | $40 | | Additional paid-in capital | $387,059 | — | $2,029 | $(180) | $388,968 | | Accumulated other comprehensive income | $90 | — | — | $3 | $93 | | Accumulated deficit | $(358,730) | $(21,187) | — | — | $(379,917) | | **Total Stockholders' Equity** | **$28,458** | **$(21,187)** | **$2,029** | **$(176)** | **$9,184** | - Total stockholders' equity decreased from **$28.5 million** at January 1, 2025, to **$9.2 million** at June 30, 2025, primarily due to a net loss of **$21.2 million**[20](index=20&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(17,630) | $(25,081) | | Net cash provided by investing activities | $342 | $4,763 | | Net cash (used in) provided by financing activities | $(119) | $51 | | Effect of exchange rate on cash and cash equivalents | $(286) | $34 | | **Net decrease in cash and cash equivalents and restricted cash** | **$(17,693)** | **$(20,233)** | | Cash and cash equivalents and restricted cash, beginning of period | $52,935 | $46,994 | | **Cash and cash equivalents and restricted cash, end of period** | **$35,242** | **$26,761** | - Net cash used in operating activities decreased by **$7.451 million**, from **$(25.1) million** in H1 2024 to **$(17.6) million** in H1 2025, primarily due to a lower net loss when excluding the gain on sale of product line in 2024[26](index=26&type=chunk)[164](index=164&type=chunk) - Cash provided by investing activities significantly decreased from **$4.8 million** in H1 2024 to **$0.3 million** in H1 2025, mainly due to lower proceeds from the sale of the NIVIS product line in 2025[26](index=26&type=chunk)[165](index=165&type=chunk) [Notes to Unaudited Interim Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Interim%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the interim consolidated financial statements, covering accounting policies, risks, and specific financial line items - Interim financial statements are prepared in accordance with GAAP for interim information and SEC Rule 10-01 of Regulation S-X, allowing for reduced disclosures[33](index=33&type=chunk) - The Company operates as one reportable segment, focusing on innovative soft-tissue reconstruction solutions[37](index=37&type=chunk) [Background (Note 1)](index=11&type=section&id=Background%20%28Note%201%29) This note provides an overview of TELA Bio, Inc. as a commercial-stage medical technology company specializing in soft-tissue reconstruction solutions - TELA Bio, Inc. is a commercial-stage medical technology company specializing in innovative soft-tissue reconstruction solutions, primarily with its OviTex and OviTex PRS product portfolios[29](index=29&type=chunk) [Risks and Liquidity (Note 2)](index=11&type=section&id=Risks%20and%20Liquidity%20%28Note%202%29) This note details the company's accumulated deficit, anticipated losses, and various operational risks including macroeconomic conditions and supply chain constraints - The Company has an accumulated deficit of **$379.9 million** as of June 30, 2025, and anticipates incurring additional losses[30](index=30&type=chunk) - Operations are subject to various risks, including product development uncertainty, macroeconomic conditions (e.g., inflation, geopolitical conflicts), cybersecurity events, supply chain constraints, and comprehensive government regulations[31](index=31&type=chunk) [Summary of Significant Accounting Policies (Note 3)](index=11&type=section&id=Summary%20of%20Significant%20Accounting%20Policies%20%28Note%203%29) This note outlines the key accounting principles applied in preparing the interim financial statements, including revenue recognition and segment reporting [Revenue Recognition](index=16&type=section&id=Revenue%20Recognition) This sub-section details the company's policy for recognizing revenue, primarily upon product shipment or surgical use, and provides a breakdown of revenue by product - Revenue is recognized when the customer obtains control of the promised good, which occurs either upon product shipment or when the product is used in a surgical procedure for consigned inventory[47](index=47&type=chunk) Product Revenue (in thousands) | Product | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | OviTex | $12,487 | $11,124 | $24,596 | $21,659 | | OviTex PRS | $7,333 | $4,796 | $13,377 | $10,741 | | Other | $377 | $171 | $744 | $294 | | **Total revenue** | **$20,197** | **$16,091** | **$38,717** | **$32,694** | - Sales outside of the U.S. were **$3.0 million** and **$2.4 million** for the three months ended June 30, 2025 and 2024, respectively, and **$5.6 million** and **$4.7 million** for the six months ended June 30, 2025 and 2024, respectively[50](index=50&type=chunk) [Net Loss per Common Share](index=18&type=section&id=Net%20Loss%20per%20Common%20Share) This sub-section explains the calculation of basic and diluted net loss per common share, noting that potentially dilutive securities are antidilutive during periods of net loss - Basic and diluted net loss per common share are identical in periods of net loss, as potentially dilutive securities are considered antidilutive[56](index=56&type=chunk) Antidilutive Securities (in shares) | Security | 2025 | 2024 | | :-------------------------- | :--------- | :--------- | | Stock options | 2,817,979 | 2,239,140 | | Unvested restricted stock units | 1,359,116 | 991,391 | | Common stock warrants | 88,556 | 88,556 | | **Total** | **4,265,651** | **3,319,087** | - Pre-funded warrants to purchase **5,800,000 shares** are included in the weighted-average shares outstanding as common stock equivalents due to their nominal exercise price[58](index=58&type=chunk)[61](index=61&type=chunk) [Recently Issued Accounting Pronouncements](index=19&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This sub-section summarizes new FASB Accounting Standards Updates that will impact future financial reporting, including expanded disclosures for segments, income tax, and income statement expenses - FASB issued ASU 2023-07, effective for annual periods beginning after December 15, 2023, which expands public entities' segment disclosures[62](index=62&type=chunk) - FASB issued ASU 2023-09, effective for annual periods beginning after December 15, 2024, requiring additional income tax rate reconciliation and payment disclosures[63](index=63&type=chunk) - FASB issued ASU 2024-03, effective for fiscal years beginning after December 15, 2026, requiring additional disclosure of specific types of income statement expenses[64](index=64&type=chunk) [Accrued Expenses and Other Current Liabilities (Note 4)](index=19&type=section&id=Accrued%20Expenses%20and%20Other%20Current%20Liabilities%20%28Note%204%29) This note provides a detailed breakdown of the company's accrued expenses and other current liabilities, including compensation, professional fees, and amounts due to manufacturers Accrued Expenses and Other Current Liabilities (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Compensation and related benefits | $6,439 | $7,343 | | Third-party and professional fees | $3,191 | $2,493 | | Amounts due to contract manufacturer | $2,550 | $2,095 | | Current portion of operating lease liabilities | $518 | $545 | | Research and development expenses | $42 | $20 | | Other | $1,247 | $955 | | **Total accrued expenses and other current liabilities** | **$13,987** | **$13,451** | [Long-term Debt (Note 5)](index=20&type=section&id=Long-term%20Debt%20%28Note%205%29) This note details the company's long-term debt, including the MidCap term loan, its maturity, interest rate, and recent payment extension Long-term Debt (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | MidCap term loan | $40,000 | $40,000 | | Exit fee | $2,000 | $2,000 | | Unamortized exit fee and issuance costs | $(616) | $(876) | | **Total debt** | **$41,384** | **$41,124** | | Less current portion | $(3,333) | — | | **Long-term debt** | **$38,051** | **$41,124** | - The Company has a **$40.0 million** MidCap term loan maturing on May 1, 2027, with an interest rate of **6.25%** plus the greater of one-month Term SOFR or **1.0%**[68](index=68&type=chunk)[72](index=72&type=chunk) - In May 2025, the Company elected to extend monthly interest payments by an additional 12 months, followed by 12 months of straight-line amortization, with the entire principal payment due at maturity[72](index=72&type=chunk) [Stockholders' Equity (Note 6)](index=22&type=section&id=Stockholders%27%20Equity%20%28Note%206%29) This note outlines the components of stockholders' equity, including common stock, additional paid-in capital, and details regarding warrants and offering programs - The Company has an at-the-market offering program for up to **$50.0 million** in common stock, but no sales were made under it during the six months ended June 30, 2025 or 2024[76](index=76&type=chunk) Warrants Outstanding | Type | Outstanding | Exercise Price | Expiration Dates | | :-------------------------- | :---------- | :------------- | :--------------- | | Common stock warrants | 8,379 | $28.65 | 2028 | | Common stock warrants | 80,177 | $28.65 | 2027 | | Pre-funded common stock warrants | 5,800,000 | $0.0001 | NA | | **Total** | **5,888,556** | | | [Sale of Product Line (Note 7)](index=22&type=section&id=Sale%20of%20Product%20Line%20%28Note%207%29) This note describes the sale of the NIVIS Fibrillar Collagen Pack Device assets, including the upfront payment, future revenue-sharing, and the recognized gain - In March 2024, the Company sold its NIVIS Fibrillar Collagen Pack Device assets to MiMedx Group, Inc. for an initial **$5.0 million** upfront payment and future revenue-sharing payments ranging from **$3.0 million** to **$7.0 million**[78](index=78&type=chunk) - A gain of **$7.6 million** on the sale was recognized in the consolidated statement of operations and comprehensive loss during the three months ended March 31, 2024[79](index=79&type=chunk) - As of June 30, 2025, **$0.6 million** of revenue-share payments had been collected, with **$1.3 million** recorded as a current receivable and **$1.1 million** as a long-term receivable[79](index=79&type=chunk) [Stock-Based Compensation (Note 8)](index=24&type=section&id=Stock-Based%20Compensation%20%28Note%208%29) This note details the company's stock-based compensation plans, including stock options and restricted stock units, and the associated expense recognition - The Company's board approved an amendment to the 2019 Equity Incentive Plan on April 3, 2025, increasing authorized shares by **3,500,000** and eliminating the 'evergreen' provision[81](index=81&type=chunk) - Total stock-based compensation expense for the six months ended June 30, 2025, was **$2.029 million**, down from **$2.192 million** in the prior year[82](index=82&type=chunk) - Unrecognized compensation expense for unvested stock options was **$2.4 million** (expected over 2.9 years) and for RSUs was **$4.2 million** (expected over 2.7 years) as of June 30, 2025[87](index=87&type=chunk)[89](index=89&type=chunk) [Stock Options](index=24&type=section&id=Stock%20Options) This sub-section provides a summary of stock option activity, including grants, cancellations, and outstanding options, along with their weighted average exercise prices Stock Option Activity | Activity | Number of Shares | Weighted Average Exercise Price per Share | | :-------------------------- | :--------------- | :-------------------------------- | | Outstanding at January 1, 2025 | 2,119,183 | $10.92 | | Granted | 734,100 | $2.19 | | Canceled/forfeited | (35,304) | $9.78 | | **Outstanding at June 30, 2025** | **2,817,979** | **$8.66** | | Exercisable at June 30, 2025 | 1,813,952 | $11.25 | - The weighted average grant-date fair value per share of options granted was **$1.48** during the six months ended June 30, 2025[85](index=85&type=chunk) [Restricted Stock Units](index=25&type=section&id=Restricted%20Stock%20Units) This sub-section summarizes restricted stock unit activity, including grants, vesting, and outstanding units, noting performance-based RSUs Restricted Stock Unit Activity | Activity | Number of shares | | :-------------------------- | :--------------- | | Outstanding at January 1, 2025 | 732,288 | | Granted | 677,050 | | Vested | (231,011) | | Canceled/forfeited | (35,711) | | **Outstanding at June 30, 2025** | **1,142,616** | - Performance-based RSUs (**216,500** outstanding at June 30, 2025) are subject to continued service and achievement of fiscal year 2026 performance milestones, with no expense recognized yet[88](index=88&type=chunk)[89](index=89&type=chunk) - The weighted average grant-date fair value per RSU granted was **$2.39** during the six months ended June 30, 2025[89](index=89&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the company's business, its product portfolio, market opportunities, and recent developments. It also discusses the impact of macroeconomic conditions on operations and details the components of the company's results of operations, including revenue, cost of revenue, operating expenses, and other income/expenses. The section concludes with a comparison of financial results for the three and six months ended June 30, 2025 and 2024, and an analysis of liquidity and capital resources - TELA Bio is a commercial-stage medical technology company focused on soft-tissue reconstruction, with OviTex for hernia repair and OviTex PRS for plastic and reconstructive surgery[91](index=91&type=chunk)[93](index=93&type=chunk)[98](index=98&type=chunk) - The company has an accumulated deficit of **$379.9 million** as of June 30, 2025, and expects to incur losses for the foreseeable future[108](index=108&type=chunk) - Macroeconomic conditions, including general economic uncertainty, cybersecurity events, supply chain disruptions, and financial strain on hospitals, continue to impact the business[109](index=109&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) [Overview](index=26&type=section&id=Overview) This section provides a business overview, detailing TELA Bio's focus on soft-tissue reconstruction, its product lines, market opportunities, and recent financial performance highlights - TELA Bio is a commercial-stage medical technology company focused on soft-tissue reconstruction, with OviTex for hernia repair and OviTex PRS for plastic and reconstructive surgery[91](index=91&type=chunk)[93](index=93&type=chunk)[98](index=98&type=chunk) - OviTex products address hernia repair and abdominal wall reconstruction, with an estimated annual U.S. total addressable market of approximately **$1.8 billion**[93](index=93&type=chunk)[94](index=94&type=chunk) - OviTex PRS products address plastic and reconstructive surgery, with an estimated annual U.S. current addressable market of approximately **$800 million**[98](index=98&type=chunk)[99](index=99&type=chunk) - Recent product launches include OviTex IHR (inguinal hernia repair) in April 2024 (U.S.) and June 2025 (Europe), and larger sizes of OviTex PRS in March 2025[95](index=95&type=chunk)[98](index=98&type=chunk) - The company sold its NIVIS product line distribution rights in March 2024 for an initial **$5.0 million** and future revenue-sharing payments[103](index=103&type=chunk) - Revenue increased by **26%** to **$20.2 million** for Q2 2025 (from **$16.1 million** in Q2 2024) and by **18%** to **$38.7 million** for H1 2025 (from **$32.7 million** in H1 2024)[107](index=107&type=chunk) - Net loss decreased by **21%** to **$9.9 million** for Q2 2025 (from **$12.6 million** in Q2 2024) but increased by **16%** to **$21.2 million** for H1 2025 (from **$18.3 million** in H1 2024), with H1 2024 including a **$7.6 million** gain on product line sale[107](index=107&type=chunk) [Business Update Regarding Macroeconomic Conditions](index=32&type=section&id=Business%20Update%20Regarding%20Macroeconomic%20Conditions) This section discusses the impact of general economic uncertainty, tariffs, cybersecurity events, and hospital financial strain on the company's operations and financial outlook - General economic uncertainty, including potential recession, increasing interest rates, and geopolitical issues, has contributed to stock price volatility and could impact capital access[109](index=109&type=chunk) - A **15%** U.S. tariff on imports from New Zealand, where products are manufactured, is shared equally with Aroa, potentially leading to price increases and impacting demand[110](index=110&type=chunk) - Cybersecurity events and supply chain disruptions for critical surgical supplies have adversely impacted procedural volumes at customer accounts[111](index=111&type=chunk)[112](index=112&type=chunk) - Financial strain on hospital customers may adversely affect demand, reimbursement rates, and product adoption[113](index=113&type=chunk) [Components of Our Results of Operations](index=34&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section explains the key drivers and components of the company's financial results, including revenue recognition, cost of revenue, gross margin, and operating expenses - Revenue growth is driven by an expanding customer base and deeper penetration, but macroeconomic pressures may impair the ability to sustain historical growth rates[114](index=114&type=chunk) - Cost of revenue primarily includes licensed product costs, inventory adjustments, royalties, and shipping, with product purchases from Aroa at **27%** of net sales (or fixed transfer cost for OviTex IHR)[115](index=115&type=chunk)[104](index=104&type=chunk) - Gross margin is influenced by sales volume, royalties, and inventory excess and obsolescence costs[117](index=117&type=chunk) - Sales and marketing expenses are expected to decrease as a percentage of revenue due to operational leverage and efficiencies[119](index=119&type=chunk) - Research and development expenses are expensed as incurred and are expected to vary based on the level and timing of new product development and clinical trial initiatives[122](index=122&type=chunk)[123](index=123&type=chunk) - A **$7.6 million** gain on the sale of the NIVIS product line was recognized in March 2024[124](index=124&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the company's financial performance for the three and six months ended June 30, 2025 and 2024, across key income statement metrics Financial Performance Comparison | Metric | Q2 2025 vs Q2 2024 | H1 2025 vs H1 2024 | | :-------------------------------- | :----------------- | :----------------- | | Revenue | +26% | +18% | | Cost of revenue (excl. amortization) | +22% | +18% | | Gross profit | +27% | +19% | | Gross margin | +1 pp (70% vs 69%) | 0 pp (69% vs 69%) | | Sales and marketing expenses | +1% | -2% | | General and administrative expenses | +14% | +7% | | Research and development expenses | -5% | +1% | | Loss from operations | -22% | +19% | | Net loss | -21% | +16% | [Comparison of the Three Months Ended June 30, 2025 and 2024](index=37&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares the company's financial results for the second quarter of 2025 versus 2024, highlighting changes in revenue, net loss, and gross margin - Revenue increased by **$4.1 million (26%)** to **$20.2 million**, driven by new customers, international sales growth, and new larger-sized PRS configurations, partially offset by a decrease in average selling prices for hernia products due to product mix[128](index=128&type=chunk) - OviTex unit sales increased by **17%** (**5,178 units** vs. **4,410 units**), and OviTex PRS unit sales increased by **40%** (**1,362 units** vs. **971 units**)[128](index=128&type=chunk) - Net loss decreased by **$2.7 million (21%)** to **$9.9 million**, primarily due to increased revenue and gross profit, and lower interest expense[127](index=127&type=chunk)[131](index=131&type=chunk)[137](index=137&type=chunk) - Gross margin improved to **70%** from **69%**, mainly due to a lower charge for excess and obsolete inventory as a percentage of revenue[133](index=133&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=40&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares the company's financial results for the first half of 2025 versus 2024, focusing on revenue growth, net loss, and expense trends - Revenue increased by **$6.0 million (18%)** to **$38.7 million**, driven by new customers, international sales, and new larger-sized PRS configurations, with OviTex unit sales up **23%** and OviTex PRS unit sales up **16%**[143](index=143&type=chunk) - Net loss increased by **$2.9 million (16%)** to **$21.2 million**, primarily because the prior year period included a **$7.6 million** gain on the sale of the NIVIS product line[141](index=141&type=chunk)[152](index=152&type=chunk) - Sales and marketing expenses decreased by **$0.8 million (2%)** due to lower compensation costs and consulting/travel expenses, partially offset by higher commissions and post-market study spending[149](index=149&type=chunk) - Interest expense decreased by **$0.3 million (10%)** due to a decrease in the variable component of the interest rate[153](index=153&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's cash position, working capital, and capital-raising activities, assessing its ability to meet short-term and long-term financial obligations - As of June 30, 2025, the company had **$35.0 million** in cash and cash equivalents, **$41.7 million** in working capital, and an accumulated deficit of **$379.9 million**[156](index=156&type=chunk) - In October 2024, a public offering of common stock and pre-funded warrants generated net proceeds of **$42.9 million**[157](index=157&type=chunk) - The company believes existing cash resources are sufficient for at least the next 12 months but may seek additional financing through equity, debt, or a new credit facility[160](index=160&type=chunk) [Cash Flows](index=44&type=section&id=Cash%20Flows) This section details the company's cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 - Net cash used in operating activities was **$17.6 million** for H1 2025, a decrease from **$25.1 million** in H1 2024, primarily due to a lower net loss (excluding the 2024 gain on sale)[161](index=161&type=chunk)[162](index=162&type=chunk)[164](index=164&type=chunk) - Non-cash items in H1 2025 included **$2.0 million** in stock-based compensation and **$0.9 million** in inventory excess/obsolescence charges[162](index=162&type=chunk)[163](index=163&type=chunk) [Investing Activities](index=46&type=section&id=Investing%20Activities) This section describes the cash flows generated or used in investing activities, primarily influenced by the sale of the NIVIS product line - Cash provided by investing activities decreased significantly from **$4.8 million** in H1 2024 to **$0.3 million** in H1 2025, mainly due to lower proceeds from the NIVIS product line sale[165](index=165&type=chunk) [Financing Activities](index=46&type=section&id=Financing%20Activities) This section outlines the cash flows from financing activities, including stock-based compensation related withholding taxes and employee stock purchase plan proceeds - Cash used in financing activities was **$0.1 million** for H1 2025, primarily for withholding taxes related to stock-based compensation, partially offset by proceeds from the employee stock purchase plan[166](index=166&type=chunk) [Indebtedness](index=46&type=section&id=Indebtedness) This section details the company's outstanding debt, including the MidCap Credit Agreement terms, interest rates, and associated covenants - The company has **$40.0 million** outstanding under the MidCap Credit Agreement, which matures on May 1, 2027[168](index=168&type=chunk)[171](index=171&type=chunk) - The loan bears interest at **6.25%** plus the greater of one-month Term SOFR or **1.0%**, and in May 2025, monthly interest payments were extended by 12 months, followed by 12 months of straight-line amortization[171](index=171&type=chunk)[173](index=173&type=chunk) - The agreement includes covenants limiting additional indebtedness, corporate changes, investments, acquisitions, dispositions, and dividend payments, and requires maintaining minimum net revenue levels[169](index=169&type=chunk)[171](index=171&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, primarily related to interest rate fluctuations and inflation. It also addresses credit risk associated with cash equivalents and accounts receivable, and notes minimal exposure to foreign currency fluctuations - The company is exposed to interest rate risk due to its floating-rate MidCap Credit Facility; a **1%** increase in interest rates would increase interest expense by **$0.2 million** for the six months ended June 30, 2025[180](index=180&type=chunk) - Credit risk for cash equivalents is limited by investments in highly-rated money market funds, and for accounts receivable, by performing credit evaluations without requiring collateral[179](index=179&type=chunk) - While inflation has not materially impacted financial results to date, a high rate in the future could adversely affect gross margin or operating expenses if selling prices do not keep pace with cost increases[181](index=181&type=chunk) - The company has no material exposure to foreign currency fluctuations and does not engage in any hedging activities[182](index=182&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms that management, with the participation of the CEO and COO/CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025. It also states that there were no material changes in internal control over financial reporting during the period - Management concluded that disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[184](index=184&type=chunk) - No material changes in internal control over financial reporting occurred during the period covered by the report[185](index=185&type=chunk) [PART II OTHER INFORMATION](index=50&type=section&id=PART%20II%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, equity security sales, and other disclosures [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings - The Company is not currently involved in any material legal proceedings[187](index=187&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the risk factors described in the company's Annual Report, noting no material changes since the previous Quarterly Report for the period ended March 31, 2025 - No material changes to risk factors have occurred since the Annual Report and the Quarterly Report for the period ended March 31, 2025[188](index=188&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company reported no unregistered sales of equity securities or issuer purchases of equity securities during the period - There were no recent sales of unregistered securities[189](index=189&type=chunk) - There were no purchases of equity securities by the issuer[190](index=190&type=chunk) [Item 3. Defaults Upon Senior Securities](index=50&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[191](index=191&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the Company[192](index=192&type=chunk) [Item 5. Other Information](index=52&type=section&id=Item%205.%20Other%20Information) During the three months ended June 30, 2025, none of the company's directors or officers adopted, terminated, or modified any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or officers adopted, terminated, or modified Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[193](index=193&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report, including amendments to the Certificate of Incorporation, Equity Incentive Plan, an employment agreement, and various certifications - Exhibits filed include amendments to the Certificate of Incorporation and Equity Incentive Plan, an employment agreement, and certifications from the CEO, CFO, and Chief Accounting Officer[198](index=198&type=chunk) [Signatures](index=53&type=section&id=Signatures) The report is duly signed on behalf of TELA Bio, Inc. by its Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, and Chief Accounting Officer and Controller, dated August 11, 2025 - The report is signed by Antony Koblish (CEO), Roberto Cuca (COO & CFO), and Megan Smeykal (Chief Accounting Officer & Controller) on August 11, 2025[202](index=202&type=chunk)

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) TELA Bio reported strong Q2 2025 results with 26% revenue growth, appointed a new President, expanded European presence, and reiterated full-year guidance Q2 2025 Key Metrics and FY 2025 Guidance | Metric | Q2 2025 Result ($ million) | YoY Growth (%) | FY 2025 Guidance ($ million) | | :--- | :--- | :--- | :--- | | Revenue | $20.2 | 26 | $85.0 - $88.0 | | OviTex Revenue Growth | ~12 | - | - | | OviTex PRS Revenue Growth | ~53 | - | - | - Appointed Jeffrey Blizard as President, effective June 2025, to strengthen commercial leadership and drive sales execution[6](index=6&type=chunk) - Announced the European commercial launch of OviTex Inguinal for robotic and laparoscopic inguinal hernia repair, expanding the company's European footprint[6](index=6&type=chunk) - Management expressed excitement about transformative opportunities, citing an innovative product portfolio, compelling clinical data, and a refined sales approach under new leadership[4](index=4&type=chunk) [Second Quarter 2025 Financial Performance](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Performance) TELA Bio's Q2 2025 revenue grew 26% to $20.2 million, with improved gross margin and significantly reduced operating and net losses, demonstrating enhanced efficiency [Revenue Analysis](index=1&type=section&id=Revenue%20Analysis) Q2 2025 revenue increased 26% year-over-year to $20.2 million, driven by new customers, international expansion, and a new OviTex PRS configuration, partially offset by product mix shifts Q2 Revenue Performance | Metric | Q2 2025 ($ million) | Q2 2024 ($ million) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $20.2 | $16.1 | 26 | - Primary growth drivers included an increase in unit sales from new customers, growing international sales, and the U.S. launch of a new OviTex PRS configuration[5](index=5&type=chunk) - Growth was partially offset by a decrease in average selling prices for hernia products due to a product mix shift towards smaller, robotically compatible units[5](index=5&type=chunk) [Profitability Analysis](index=2&type=section&id=Profitability%20Analysis) Gross profit increased to $14.1 million with a 69.8% margin, primarily due to lower inventory charges, leading to reduced operating and net losses of $9.1 million and $9.9 million respectively Q2 2025 vs Q2 2024 Profitability (in millions) | Metric | Q2 2025 ($ million) | Q2 2024 ($ million) | | :--- | :--- | :--- | | Gross Profit | $14.1 | $11.1 | | Gross Margin | 69.8% | 68.8% | | Operating Expenses | $23.2 | $22.6 | | Loss from Operations | $(9.1) | $(11.6) | | Net Loss | $(9.9) | $(12.6) | - The increase in gross margin was primarily due to a lower charge for excess and obsolete inventory as a percentage of revenue[7](index=7&type=chunk) - Operating expenses increased due to higher commission costs and professional fees, partially offset by lower compensation from a reduced headcount[8](index=8&type=chunk) [Financial Position](index=2&type=section&id=Financial%20Position) As of June 30, 2025, TELA Bio maintained a cash and cash equivalents balance of $35.0 million - Cash and cash equivalents totaled **$35.0 million** on June 30, 2025[10](index=10&type=chunk) [Full Year 2025 Financial Guidance](index=2&type=section&id=Full%20Year%202025%20Financial%20Guidance) TELA Bio reiterated its full-year 2025 revenue guidance, projecting $85.0 million to $88.0 million, representing 23% to 27% year-over-year growth Full Year 2025 Revenue Guidance | Metric | Guidance Range ($ million) | YoY Growth (%) | | :--- | :--- | :--- | | Revenue | $85.0 - $88.0 | 23 - 27 | [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents the unaudited consolidated financial statements for Q2 2025, including Balance Sheets and Statements of Operations, detailing the company's financial status and performance [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $67.5 million, liabilities $58.4 million, cash $35.0 million, and stockholders' equity $9.2 million, reflecting changes from year-end 2024 Key Balance Sheet Items (in thousands) | Account | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $34,977 | $52,670 | | Total assets | $67,537 | $86,570 | | Total liabilities | $58,353 | $58,112 | | Total stockholders' equity | $9,184 | $28,458 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 revenue reached $20.2 million with a net loss of $9.9 million, or ($0.22) per share, an improvement from the prior year, and six-month revenue totaled $38.7 million with a $21.2 million net loss Q2 Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :--- | :--- | :--- | | Revenue | $20,197 | $16,091 | | Gross Profit | $14,105 | $11,073 | | Loss from Operations | $(9,081) | $(11,570) | | Net Loss | $(9,923) | $(12,600) | | Net Loss per Share | $(0.22) | $(0.51) | Six Months Ended June 30 Highlights (in thousands) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Revenue | $38,717 | $32,694 | | Net Loss | $(21,187) | $(18,261) | [Supplementary Information](index=2&type=section&id=Supplementary%20Information) This section provides details on the upcoming investor conference call, a corporate overview of TELA Bio, and standard legal disclaimers regarding forward-looking statements [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) TELA Bio will host a conference call on August 11, 2025, at 4:30 p.m. Eastern Time to discuss its second quarter financial results, requiring online registration - A conference call to discuss Q2 financial results is scheduled for 4:30 p.m. Eastern Time on Monday, August 11, 2025[12](index=12&type=chunk) [About TELA Bio, Inc.](index=2&type=section&id=About%20TELA%20Bio%2C%20Inc.) TELA Bio is a commercial-stage medical technology company focused on innovative and economically effective soft-tissue reconstruction solutions - TELA Bio (NASDAQ: TELA) is a commercial-stage medical technology company specializing in innovative soft-tissue reconstruction solutions[13](index=13&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section cautions on forward-looking statements, including 2025 revenue guidance, highlighting risks such as macroeconomic conditions, market acceptance, and competition that could affect actual results - The press release contains forward-looking statements, including revenue guidance for 2025, which are subject to risks and uncertainties[14](index=14&type=chunk) - Key risks include macroeconomic conditions, demand for products, ability to achieve profitability, market acceptance, competition, and product development challenges[14](index=14&type=chunk)

Core Insights - TELA Bio, Inc. reported a significant revenue growth of 26% year-over-year for Q2 2025, reaching $20.2 million, driven by increased unit sales and new customer acquisitions [4][9] - The company is at a pivotal point with a strong product portfolio and leadership changes aimed at optimizing sales and market access [3][9] - TELA Bio reiterated its full-year revenue guidance of $85.0 million to $88.0 million, indicating a projected growth of 23% to 27% compared to 2024 [10][9] Financial Performance - Revenue for Q2 2025 was $20.2 million, a 26% increase from $16.1 million in Q2 2024, with a sequential growth of 9% from Q1 2025 [4][9] - Gross profit was $14.1 million, representing a gross margin of 69.8%, up from 68.8% in the same quarter of the previous year [5] - Operating expenses increased to $23.2 million in Q2 2025 from $22.6 million in Q2 2024, primarily due to higher commission costs and professional fees [6] Loss and Cash Position - Loss from operations decreased to $9.1 million in Q2 2025 from $11.6 million in Q2 2024, while net loss improved to $9.9 million from $12.6 million [7] - As of June 30, 2025, cash and cash equivalents totaled $35.0 million, down from $52.7 million at the end of 2024 [7][15] Product and Market Developments - The company experienced increased demand for its OviTex® and OviTex PRS products, with year-over-year revenue growth of approximately 12% and 53%, respectively [9] - TELA Bio announced the European commercial launch of OviTex Inguinal for robotic and laparoscopic hernia repair, expanding its market presence [9]

Company Overview - TELA Bio, Inc. is a commercial-stage medical technology company focused on innovative soft-tissue reconstruction solutions that optimize clinical outcomes by preserving and restoring the patient's own anatomy [2] - The company aims to provide advanced and economically effective solutions for surgeons, leveraging the patient's natural healing response while minimizing long-term exposure to permanent synthetic materials [2] Upcoming Events - TELA Bio will participate in the Canaccord Genuity 45 Annual Growth Conference, with management scheduled to present on August 13, 2025, at 10:00 am ET [1] - Interested parties can access the live and archived webcast of the presentation at ir.telabio.com [1]

Core Viewpoint - TELA Bio, Inc. is set to report its second quarter 2025 financial results on August 11, 2025, and will host a conference call and webcast to discuss these results and provide a corporate update [1]. Group 1: Financial Reporting - The second quarter 2025 financial results will be reported on August 11, 2025 [1]. - A conference call and webcast will take place at 4:30 p.m. ET on the same day to discuss the financial results [1]. Group 2: Company Overview - TELA Bio, Inc. is a commercial-stage medical technology company focused on innovative soft-tissue reconstruction solutions [3]. - The company aims to optimize clinical outcomes by preserving and restoring the patient's own anatomy while minimizing long-term exposure to synthetic materials [3].

Core Points - TELA Bio, Inc. announced the approval of an inducement grant of stock options and restricted stock units to Jim Hagen, the Senior Vice President of Strategic Commercial Operations, as part of his employment compensation [1][2] - The stock options have an exercise price of $1.42 per share, with a ten-year term and a vesting schedule over four years [2] - TELA Bio focuses on innovative soft-tissue reconstruction solutions that prioritize the preservation and restoration of the patient's own anatomy [3] Summary by Category Inducement Grant Details - The Compensation Committee approved an option to purchase 75,000 shares and restricted stock units covering 30,000 shares for Jim Hagen [1] - The stock options will vest 25% on the first anniversary of the grant date, with the remaining 75% vesting in equal monthly installments over the following 36 months [2] - The restricted stock units will vest in equal annual installments over four years [2] Company Overview - TELA Bio is a commercial-stage medical technology company [3] - The company aims to provide advanced, economically effective soft-tissue reconstruction solutions that leverage the patient's natural healing response [3] - TELA Bio minimizes long-term exposure to permanent synthetic materials in its solutions [3]

Summary of TELA Bio Conference Call Company Overview - **Company**: TELA Bio - **Industry**: Medical Supplies and Devices - **Focus**: Soft tissue restoration and preservation, specifically in hernia repair and plastic/reconstructive surgery [4][5] Key Markets and Products - **Hernia Repair Market**: Estimated at over $1.5 billion, with 80% of current implants made from polypropylene, which is facing scrutiny due to complications [6][9] - **Plastic and Reconstructive Surgery Market**: Estimated at around $1 billion, with a shift away from cadaver skin towards engineered composite solutions [9] - **Product Lines**: - Hernia-based product line compatible with robotic surgery - Engineered composite solutions for breast reconstruction [4][5] Competitive Landscape - **Market Position**: TELA Bio holds approximately 10-12% market share in complex ventral procedures and 3-4% in the overall hernia market [17] - **Competitive Advantage**: Unique reinforced tissue matrix with patent protection, offering superior clinical results and lower complication rates compared to traditional polypropylene meshes [6][8][10] - **Market Evolution**: Increasing interest in alternatives to polypropylene and cadaver skin, with TELA Bio positioned to capture market share as these materials decline in use [18][19] Economic Perspective - **Pricing Strategy**: TELA Bio's hernia portfolio is priced 30-40% lower than first-generation biologics and 20-25% lower than temporary plastic materials, while still being a premium option over permanent plastics [13][14] - **Cost Savings**: The company emphasizes significant cost savings for hospital systems, which enhances its value proposition [23] Sales and Market Growth - **Sales Growth**: From 2020, TELA Bio has seen substantial growth, targeting $85 million to $88 million in sales for the current year [16] - **Product Acceptance**: Positive reception of inguinal hernia products, with expectations of increased market penetration as awareness grows [25][28] - **Sales Strategy**: The introduction of Liquefix as a fixation device has broadened TELA Bio's portfolio, enhancing its perception as a comprehensive hernia solutions provider [31] Financial Outlook - **Cash Runway**: Current cash reserves are expected to be sufficient to reach profitability, with a target revenue of $27.5 million to cover operating expenses [68][69] - **Operating Expenses**: Expected to remain flat with revenue growth, allowing for operational leverage as sales increase [71][72] Clinical Data and Product Performance - **Clinical Studies**: TELA Bio has gathered substantial clinical data supporting the efficacy of its products, which is expected to drive growth in the plastic and reconstructive surgery market [51][52] - **Competitive Landscape in PRS**: The market is shifting away from cadaver skin products, with TELA Bio's offerings gaining traction due to their cost-effectiveness and clinical performance [57] Supply Chain and Tariffs - **Manufacturing Location**: Products are manufactured in New Zealand, with a 10% import tax impacting gross margins minimally [48][49] - **Mitigation Strategies**: Plans to ship directly to Europe to avoid tariffs, which currently account for a small portion of total gross margin impact [49] Conclusion - TELA Bio is strategically positioned in the evolving medical supplies market, focusing on innovative solutions for hernia repair and plastic surgery. The company is leveraging its unique product offerings, competitive pricing, and strong clinical data to capture market share and drive growth.