TELA Bio(TELA) - 2024 Q3 - Quarterly Report

Revenue Growth - Revenue increased by $3.9 million, or 26$15.1 million for Q3 2023 to $19.0 million for Q3 2024[85] - Revenue for the nine months ended September 30, 2024, was$51.7 million, up $10.2 million, or 25$41.5 million for the same period in 2023[85] - Revenue increased by $3.9 million, or 26$19.0 million for the three months ended September 30, 2024, compared to $15.1 million for the same period in 2023, driven by increased unit sales and new customers[108] - Revenue for the nine months ended September 30, 2024, increased by$10.2 million, or 25%, to $51.7 million from$41.5 million for the same period in 2023, driven by increased unit sales and new customers[120] Market Opportunity - The annual U.S. total addressable market opportunity for OviTex products is estimated to be approximately $1.5 billion[73] - The annual U.S. current addressable market opportunity for OviTex PRS products is estimated to be approximately$700 million[79] Unit Sales - Unit sales of OviTex increased by 39% to 4,767 units for the three months ended September 30, 2024, compared to 3,426 units for the same period in 2023[110] - Unit sales of OviTex increased by 34% to 13,034 units for the nine months ended September 30, 2024, compared to 9,704 units for the same period in 2023[120] Financial Performance - The company has an accumulated deficit of $349.5 million as of September 30, 2024[85] - The company has not been profitable since inception and expects to incur losses for the foreseeable future[85] - Net loss for the nine months ended September 30, 2024, was$28.6 million, a decrease of $5.1 million, or 15$33.8 million for the same period in 2023[119] Operating Expenses - Total operating expenses for the nine months ended September 30, 2024, were $68.6 million, an increase of$8.3 million, or 14%, from $60.3 million for the same period in 2023[119] - Cost of revenue (excluding amortization of intangible assets) increased by$1.4 million, or 31%, to $6.0 million for the three months ended September 30, 2024, from$4.6 million for the same period in 2023[111] - Cost of revenue increased by $3.4 million, or 27$16.1 million for the nine months ended September 30, 2024, compared to $12.7 million for the same period in 2023[121] - Sales and marketing expenses increased by$2.0 million, or 14%, to $16.5 million for the three months ended September 30, 2024, compared to$14.5 million for the same period in 2023[114] - Sales and marketing expenses rose by $8.2 million, or 19$50.7 million for the nine months ended September 30, 2024, from $42.5 million in the prior year[124] - General and administrative expenses increased by$0.3 million, or 3%, to $11.1 million for the nine months ended September 30, 2024, compared to$10.8 million for the same period in 2023[125] - Research and development expenses decreased by $0.2 million, or 2$6.8 million for the nine months ended September 30, 2024, from $6.9 million in the prior year[126] Cash Flow and Financing - Cash and cash equivalents decreased to$17.3 million as of September 30, 2024, down from $46.7 million as of December 31, 2023[130] - Cash used in operating activities was$34.1 million for the nine months ended September 30, 2024, compared to $29.8 million for the same period in 2023[136] - The company completed a public offering of 14,670,000 shares at a price of$2.25 per share, resulting in gross proceeds of $46.0 million[132] - The MidCap Credit Agreement has a term loan of$40.0 million, maturing in May 2027, with an interest rate of 6.25% plus the greater of one-month Term SOFR or 1.0%[145] - MidCap Credit Facility bears interest at a floating rate of 6.25% plus the greater of one-month Term SOFR or 1.0%[152] - A 1% increase in interest rates would result in a $0.3 million increase in interest expense for the nine months ended September 30, 2024[152] Strategic Initiatives - In September 2023, the company entered into a distribution agreement with Advanced Medical Solutions Limited for LiquiFix Hernia Mesh Fixation Devices[81] - The company launched OviTex IHR Reinforced Tissue Matrix in April 2024, specifically designed for inguinal hernia procedures[74] - The company implemented cost-cutting measures starting in Q3 2024, expected to reduce operating expenses in future periods[85] Inventory and Inflation - Gross margin decreased to 68$7.6 million from the sale of certain assets related to NIVIS during the nine months ended September 30, 2024[127] - Gain on sale of product line amounted to $7.6 million during the nine months ended September 30, 2024[104]