Core Points - A class action has been filed against Treace Medical Concepts, Inc. for allegedly misleading investors regarding the demand for its primary product, the Lapiplasty 3D Bunion Correction System [1][2] - The complaint states that competition negatively impacted the demand and utilization of the Lapiplasty system, leading to a decline in Treace Medical's revenue [2] - Following the revelation of these issues, Treace Medical's stock price dropped nearly 63%, closing at $4.17 per share on May 8, 2024 [2] Company Overview - Treace Medical Concepts, Inc. focuses on advancing surgical management standards for bunion and related midfoot deformities [1] - The company is under scrutiny for its failure to disclose critical information regarding competition and product demand [2] Legal Proceedings - Shareholders interested in serving as lead plaintiffs must file their papers by June 10, 2025 [3] - Participation in the class action is not mandatory for recovery; shareholders can remain absent class members [3] Firm Background - Robbins LLP is a recognized leader in shareholder rights litigation, dedicated to helping shareholders recover losses and improve corporate governance since 2002 [4]

Core Viewpoint - A class action lawsuit has been filed against Treace Medical Concepts, Inc. for alleged misleading statements and failure to disclose critical information regarding its primary product, the Lapiplasty 3D Bunion Correction System, impacting investor decisions during the specified Class Period [1][5]. Group 1: Lawsuit Details - The class action lawsuit is on behalf of purchasers of Treace Medical securities between May 8, 2023, and May 7, 2024 [1]. - Allegations include that competition affected the demand for the Lapiplasty system, leading to a decline in revenue and necessitating an accelerated product development plan [5]. - The lawsuit claims that the defendants made materially misleading statements about the company's business and prospects, resulting in investor damages when the truth was revealed [5]. Group 2: Participation Information - Investors who purchased Treace Medical securities during the Class Period may be entitled to compensation without any out-of-pocket fees through a contingency fee arrangement [2]. - Interested parties can join the class action by visiting the provided link or contacting the law firm directly [3][6]. - A lead plaintiff must file a motion with the court by June 10, 2025, to represent other class members [1][3]. Group 3: Law Firm Credentials - The Rosen Law Firm has a strong track record in securities class actions, having achieved significant settlements and recognition in the field [4]. - The firm has recovered hundreds of millions of dollars for investors, with notable achievements in previous years, including over $438 million in 2019 [4].

Core Viewpoint - A securities class action lawsuit has been filed against Treace Medical Concepts, Inc. for allegedly making false and misleading statements regarding its business operations and financial performance during the specified class period [1][2]. Company Summary - The lawsuit claims that Treace Medical failed to disclose significant competition affecting the demand for its primary product, the Lapiplasty 3D Bunion Correction System, leading to a decline in revenue [2]. - The company is accused of needing to accelerate plans to introduce an alternative product to osteotomy due to competitive pressures [2]. - Positive statements made by the company regarding its business prospects are alleged to be materially misleading [2]. Financial Impact - On May 7, 2024, Treace Medical reported its financial results, revealing that competition from minimally invasive osteotomy and Lapiplasty knockoffs hindered growth [3]. - Following this announcement, the company's stock price plummeted by $6.95, nearly 63%, closing at $4.17 per share on May 8, 2024, with unusually high trading volume [4].

Core Viewpoint - A securities class action lawsuit has been filed against Treace Medical Concepts, Inc. for allegedly misleading statements regarding its business and financial condition, leading to significant stock price declines during the class period [1][4][5]. Group 1: Lawsuit Details - The lawsuit was filed by Scott+Scott Attorneys at Law LLP in the U.S. District Court for the Middle District of Florida against Treace Medical and certain officers/directors [1]. - The class action asserts claims under the Securities Exchange Act of 1934 and SEC Rule 10b-5 for individuals who purchased Treace Medical securities between May 8, 2023, and May 7, 2024 [1]. - The lead plaintiff deadline for the lawsuit is June 10, 2025 [2][6]. Group 2: Company Overview - Treace Medical is a medical technology company focused on surgical management of bunion and related midfoot deformities, with its primary product being the patented Lapiplasty system [3]. Group 3: Allegations Against Defendants - The lawsuit alleges that during the class period, defendants made misleading statements about the company's business and financial prospects, failing to disclose competition affecting demand for the Lapiplasty system [4]. - It is claimed that Treace Medical's revenue declined, necessitating an acceleration of plans to offer alternative products to osteotomy [4]. - Defendants' positive statements about the company's operations were allegedly materially misleading and lacked a reasonable basis [4]. Group 4: Impact on Stock Price - Following the revelation of the company's lowered revenue guidance from $220 million-$225 million to $201 million-$211 million on May 7, 2024, Treace Medical's stock price fell by $6.95, or nearly 63%, closing at $4.17 per share on May 8, 2024 [5].

Core Insights - Treace Medical Concepts, Inc. presented updated interim data for its clinical studies on Lapiplasty and Adductoplasty procedures at the 2025 ACFAS Annual Meeting, highlighting positive clinical outcomes and the differentiation of these procedures in the market [1][2]. Clinical Study Summaries - **ALIGN3D™ Lapiplasty Clinical Study**: The interim analysis included 135 of 173 patients with at least four years of follow-up, showing low radiographic recurrence rates of 0.8% using HVA>20° and 7.7% using HVA>15° at 48 months, along with significant improvements in pain and patient-reported outcomes [3][6]. - **Mini3D™ Lapiplasty Mini-Incision™ Clinical Study**: The study involved 75 of 105 patients with at least one year of follow-up, reporting early return to protected weightbearing at an average of 7.9 days and low recurrence rates of 0.0% using HVA>20° and 5.5% using HVA>15° at 12 months [4][7]. - **MTA3D™ Adductoplasty Clinical Study**: This study included 18 of 38 patients with at least one year of follow-up, showing early return to protected weightbearing at an average of 7.5 days and clinically significant improvements in pain and patient-reported scores at 12 months [5][8]. Company Overview - Treace Medical Concepts is focused on advancing surgical management for bunions and related midfoot deformities, with an estimated 1.1 million annual surgical candidates in the U.S. [15][16]. The company has developed the Lapiplasty 3D Bunion Correction System and the Adductoplasty Midfoot Correction System to address these conditions [15][16].

Core Insights - Treace Medical Concepts, Inc. is enhancing its market position with new bunion technologies showcased at the 2025 ACFAS Annual Scientific Conference [1][2] - The company aims to improve surgical outcomes for bunion patients through innovative technologies and clinical evidence [2] Company Overview - Treace Medical Concepts focuses on advancing surgical management for bunions and related midfoot deformities, affecting approximately 67 million Americans, with an estimated 1.1 million surgical candidates annually [4] - The company has developed the patented Lapiplasty® 3D Bunion Correction® System, addressing the root cause of bunions through a comprehensive surgical approach [4] New Innovations - The company introduced next-generation technologies including Micro-Lapiplasty™ and Mini-Adductoplasty™, supported by the new SpeedPlate™ MicroQuad™ implant for stable fixation [5] - New minimally invasive osteotomy systems, Nanoplasty™ and Percuplasty™, are designed to enhance surgeon access and reproducibility in procedures [5] - The SpeedMTP™ implant offers a unique fusion option for patients with arthritic great toe joints, combining advanced fixation technology for early weight bearing [5] Personalized Solutions - The IntelliGuide™ PSI platform provides personalized surgical solutions with patient-specific 3D-printed cut guides and anatomic foot models based on CT scans, leading to a new era in bunion and midfoot deformity corrections [5]

Financial Data and Key Metrics Changes - Fourth quarter revenue was $68.7 million, representing a 10.4% growth over the fourth quarter of 2023, at the top-end of previously announced preliminary results [22][27] - Full-year 2024 revenue was $209.4 million, a 12% increase over 2023, also at the top-end of prior guidance [28] - Gross margin for the fourth quarter was 80.7%, down from 81.6% in the fourth quarter of 2023, while full-year gross margin was 80.4%, compared to 81.2% in 2023 [28][29] - Fourth quarter net loss was $0.5 million or $0.01 per share, compared to a net loss of $6.3 million or $0.10 per share in the fourth quarter of 2023 [30] - Adjusted EBITDA for the fourth quarter was $11.1 million, an improvement of 322% compared to the fourth quarter of 2023 [30] Business Line Data and Key Metrics Changes - The growth was driven by a product mix shift, increased adoption of newer technologies such as Adductoplasty and SpeedPlate, and an increase in active surgeon users [22][28] - The company aims to capture a larger share of the remaining 75% of bunion procedures performed by its surgeon customers [20] Market Data and Key Metrics Changes - The company has a growing base of over 3,100 surgeon customers, representing a ready audience for its expanding suite of technologies [10] - The company estimates that around 10% to 15% of all metatarsal osteotomies today are being performed with minimally invasive approaches, indicating a significant growth opportunity [14] Company Strategy and Development Direction - The company focuses on expanding its portfolio of innovative solutions to address all four classes of bunions, aiming to maximize market share [20][26] - The strategy includes making procedures less invasive, which is expected to appeal to a larger portion of the 4.4 million Americans seeking medical attention for bunions each year [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the setup for 2025, expecting revenue guidance of $224 million to $230 million, reflecting a 7% to 10% increase over 2024 [24][32] - The company anticipates break-even adjusted EBITDA for full-year 2025 and a 50% decrease in cash burn compared to 2024 [32] Other Important Information - The company has introduced new technologies such as Mini-Adductoplasty and SpeedMTP, which are expected to ramp availability and revenue impact in the back half of 2025 [21][19] - The company is monitoring reimbursement trends following significant increases in material reimbursement for CPT code 28297, associated with Lapiplasty procedures [23] Q&A Session Summary Question: Thoughts on revenue pacing through 2025 - Management acknowledged that Q1 will be a tougher comp but expects higher growth rates in Q2, Q3, and Q4 [38] Question: Impact of new products on ASPs and unit volumes - Management indicated that the focus will be on procedure volume rather than significant shifts in blended ASP [44] Question: Profitability and leverage components - Management highlighted natural leverage from a more experienced sales force and reduced aggressive hiring [52][54] Question: Early feedback on new products and competitive dynamics - Early feedback on new products has been positive, with some surgeons returning to Lapiplasty after trying competitors [58] Question: Thoughts on the Zimmer-Paragon deal - Management stated they are focused on growing their product line and will observe the market effects of the acquisition [66] Question: Clinical outcomes of new osteotomy solutions - Management emphasized the importance of three-plane correction in their osteotomy approach, which they believe will lead to better long-term outcomes [72] Question: Q1 revenue expectations - Management confirmed that Q1 is expected to show low-single digit growth rates year-over-year [76] Question: Targeting new surgeons with broader product offerings - Management aims to add approximately 200 new surgeons to their customer base in 2025 [84] Question: Future opportunities in foot and ankle market - Management indicated a robust pipeline of products and a focus on penetrating the bunion and midfoot markets [90][92] Question: Utilization of new osteotomy offerings - Initial adopters of the new osteotomy systems are high utilizers of minimally invasive techniques [98] Question: Update on SpeedPlate attach rates - SpeedPlate has grown to over 50% of the overall fixation mix, with expectations for continued growth [108]

Financial Data and Key Metrics Changes - Fourth quarter revenue was $68.7 million, representing a 10.4% growth over the fourth quarter of 2023, at the top-end of previously announced preliminary results [22][28] - Full-year 2024 revenue was $209.4 million, a 12% increase over 2023, also at the top-end of prior guidance [28] - Gross margin for Q4 2024 was 80.7%, down from 81.6% in Q4 2023; full-year gross margin was 80.4%, compared to 81.2% in 2023 [28][29] - Fourth quarter net loss was $0.5 million or $0.01 per share, compared to a net loss of $6.3 million or $0.10 per share in Q4 2023 [30] - Adjusted EBITDA for Q4 was $11.1 million, an improvement of 322% compared to Q4 2023 [30] Business Line Data and Key Metrics Changes - The growth was driven by a product mix shift, increased adoption of newer technologies such as Adductoplasty and SpeedPlate, and an increase in active surgeon users [22][28] - The company aims to capture a larger share of the remaining 75% of bunion procedures performed by its surgeon customers [20] Market Data and Key Metrics Changes - The company has a growing base of over 3,100 surgeon customers, representing a significant audience for its technologies [10] - The U.S. sees approximately 450,000 bunion cases performed annually, indicating a substantial market opportunity [10] Company Strategy and Development Direction - The company focuses on expanding its portfolio of innovative bunion solutions, including less invasive procedures to attract a larger patient base [11][12] - The introduction of new technologies such as Mini-Adductoplasty and 3D MIS osteotomy systems aims to broaden the appeal to surgeons and patients [13][15] - The company is targeting all four classes of bunions with specialized solutions to maximize market share [20][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the setup for 2025, expecting revenue guidance of $224 million to $230 million, reflecting a 7% to 10% increase over 2024 [24][32] - The company anticipates break-even adjusted EBITDA for 2025 and a 50% decrease in cash burn compared to 2024 [32] Other Important Information - CMS has significantly increased material reimbursement for procedures associated with Lapiplasty, which is expected to positively impact the company [23] - The company has a strong balance sheet with cash, cash equivalents, and marketable securities totaling approximately $102 million as of December 31, 2024 [31] Q&A Session Summary Question: Thoughts on revenue pacing through 2025 - Management acknowledged Q1 as a tough comp but expects higher growth rates in subsequent quarters [38] Question: Impact of new products on ASPs and unit volumes - Management believes there will be more of a procedure volume play rather than a significant shift in blended ASP [44] Question: Profitability and leverage components - Management indicated natural leverage from a more experienced sales force and reduced aggressive hiring [52][54] Question: Early feedback on new products and competitive dynamics - Early feedback on new products has been positive, with some surgeons returning to Lapiplasty after trying competitors [58] Question: Thoughts on the Zimmer-Paragon deal - Management refrained from commenting extensively, focusing on their own growth strategies [66] Question: Clinical outcomes of new osteotomy solutions - Management emphasized the importance of three-plane correction in their osteotomy approach for better long-term outcomes [72] Question: Utilization of new osteotomy offerings - Initial users of the new osteotomy systems are high utilizers of minimally invasive techniques, with plans to expand the customer base [99] Question: Update on SpeedPlate attach rates - SpeedPlate's attach rate has increased to over 50% of the overall fixation mix [108]

Company Performance - Treace Medical Concepts reported a quarterly loss of $0.01 per share, better than the Zacks Consensus Estimate of a loss of $0.03, and an improvement from a loss of $0.10 per share a year ago, representing an earnings surprise of 66.67% [1] - The company posted revenues of $68.71 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.16% and showing an increase from $62.21 million in the same quarter last year [2] - Over the last four quarters, Treace Medical Concepts has exceeded consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Movement and Outlook - Treace Medical Concepts shares have increased approximately 30.4% since the beginning of the year, significantly outperforming the S&P 500's gain of 1.3% [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at -$0.25 for the coming quarter and -$0.77 for the current fiscal year [4][7] - The estimate revisions trend for Treace Medical Concepts is currently mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Medical - Instruments industry, to which Treace Medical Concepts belongs, is currently ranked in the top 33% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - The company incurred net losses of $55.7 million and $49.5 million for the years 2024 and 2023, respectively, with an accumulated deficit of $190.0 million as of December 31, 2024[152]. - Future revenue growth is uncertain and may be constrained by competition, market acceptance, and operational challenges[153]. - The company has significant debt obligations, with $54.0 million outstanding under loan agreements, which could restrict operational flexibility[152]. - The company has experienced seasonal fluctuations in revenue, with higher sales volumes in Q4 and lower volumes in Q1 due to factors like patient insurance deductibles and adverse weather[168]. - The company may face significant costs and risks associated with future international expansion, which could adversely affect its financial condition[200]. Market Dependency and Competition - The company is highly dependent on the Lapiplasty System for revenue generation, which poses a risk if market acceptance does not grow[152]. - Sales of the Lapiplasty System accounted for substantially all of the company's revenues in prior years, indicating a high dependency on this product for financial success[169]. - The competitive landscape includes major players like Stryker Corporation and emerging companies, which intensifies the need for effective marketing and product differentiation[160]. - The company faces significant competition from larger firms with greater sales and financial resources, which may impact its market share and profitability[161]. - Approximately 70% of bunion surgeries in the U.S. continue to use metatarsal osteotomies, highlighting the competitive landscape and the need for the company to innovate[165]. Growth Strategy and Operational Challenges - The company plans to continue investing in research and development, product offerings, and marketing initiatives to drive future growth[158]. - The company must effectively manage its rapid growth to avoid operational strains and ensure continued success[156]. - The company may seek growth through acquisitions or strategic alliances, but failure to manage these effectively could adversely affect operations[151]. - The company is investing significantly in recruiting and training sales representatives to enhance its direct sales force, which is crucial for revenue generation[164]. - The company anticipates launching new products in the second half of 2025, which will be essential for diversifying its revenue streams beyond the Lapiplasty System[169]. Regulatory and Compliance Risks - The company faces risks related to the approval and reimbursement of its products by healthcare facilities and third-party payors, which could impact sales[151]. - Approval from hospitals and healthcare facilities is critical for product usage; delays in obtaining these approvals could negatively impact sales and operating costs[181]. - The company must comply with the Health Insurance Portability and Accountability Act (HIPAA), which includes civil and criminal statutes against schemes to defraud health care benefit programs[231]. - Regulatory compliance costs are increasing, which may impact the company's profitability[232]. - The FDA's 510(k) clearance process typically takes from three to 12 months, while the PMA process can take one to three years or longer, affecting product introduction timelines[236]. Intellectual Property and Legal Risks - The company is involved in litigation against Stryker Corporation for alleged infringement of 9 patents related to its Lapiplasty technologies[212]. - The company has a patent portfolio that includes 68 owned U.S. patents, one licensed U.S. patent, 83 pending U.S. patent applications, 26 granted foreign patents, and 21 pending international PCT patent applications as of December 31, 2024[203]. - The company may face significant product liability exposure due to potential design or manufacturing failures, which could adversely affect its reputation and customer retention[175]. - Current product liability insurance may not be adequate to cover future claims, exposing the company to substantial liabilities[176]. - The company may face claims of misappropriation of intellectual property from former employees, which could lead to costly litigation[227]. Employee and Operational Management - The number of full-time employees increased from 32 in 2017 to 477 in 2024, indicating significant growth and increased operational demands[155]. - The company’s ability to attract and retain skilled employees is critical for its commercial, quality, and research and development programs[197]. - The company faces challenges in training podiatrists and orthopaedic surgeons, which may affect sales growth and profitability if not addressed[194]. - Maintaining relationships with healthcare professionals is essential for research and development; loss of these relationships could hinder product innovation[192]. - The company relies on independent sales agencies for product sales, posing a risk to anticipated revenue growth if relationships cannot be maintained[178]. Market and Economic Conditions - Unfavorable global economic conditions, including inflation and political disruptions, could adversely affect demand for the company's products and its ability to raise capital[290]. - The stock market for medical device companies has experienced significant volatility, influenced by factors such as inflation and supply chain disruptions, which may impact the company's stock price[273]. - If the company's financial performance does not meet public guidance, it may lead to a decline in the stock price, reflecting market expectations[275]. - The company may face potential limitations on product pricing and reimbursement due to government proposals aimed at controlling healthcare costs, which may adversely affect profits and operational results[245]. - Changes in tax laws could adversely affect the company's business and financial performance, impacting both domestic and international operations[302].