TELA Bio(US:TELA)2020-08-13 00:13Financial Data and Key Metrics Changes - Total revenue for Q2 2020 was $3.5 million, an increase of 6% year-over-year, despite significant declines in April due to COVID-19 [9][29] - Gross margin improved to 59% from 58% in the prior year, primarily due to a decrease in charges for excess and obsolete inventory [30] - Loss from operations was $5.2 million in Q2 2020, compared to $4.3 million in the prior year [33] - The company ended Q2 2020 with $85.5 million in cash, bolstered by a successful public offering that raised approximately $45 million [33][34] Business Line Data and Key Metrics Changes - The company reported a significant increase in average monthly revenue of products among surgeons who participated in virtual programs, with a nearly 200% increase [15][58] - Sales and marketing expenses rose to $4.1 million in Q2 2020 from $3.9 million in the same period in 2019, driven by higher salaries and commissions [31] - R&D expenses slightly decreased to $1 million in Q2 2020 from $1.1 million in the prior year [32] Market Data and Key Metrics Changes - The company experienced a significant drop in daily sales in April, with sales more than 70% below pre-COVID-19 levels, but saw a recovery in May and June [9][10] - The sales team adapted to varying hospital access conditions, with improved access noted in many regions by late June [16] Company Strategy and Development Direction - The company is focusing on scaling up its sales force in territories where elective procedures are returning to pre-COVID-19 levels [22] - TELA Bio is implementing virtual sales solutions to educate surgeons about its product portfolio, which has been well received [14][15] - The company is actively pursuing additional IDN and GPO contracts while managing cash judiciously [25][34] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty regarding the impact of COVID-19 on future sales, noting that the situation remains fluid with potential for localized restrictions [10][11] - The management team is optimistic about the company's long-term growth potential, emphasizing the strength of their initiatives and commitment to pushing forward [11][37] Other Important Information - The interim analysis of the BRAVO study showed promising patient outcomes with no recurrences or complications at the 24-month follow-up [17][19] - The company is expanding its commercial launch of OviTex PRS products following positive feedback from surgeons [26] Q&A Session Summary Question: How did the business perform in June and what are the trends in July and August? - Management noted a strong recovery in June, with July starting off well, but some moderation was observed due to regional COVID-19 flare-ups [43][44] Question: What factors are driving growth during this period? - Management indicated that growth is driven by new products, expanding sales force, and the success of the TELA LIVE program [48][49] Question: Can you provide insights on the performance of the sales force? - New sales representatives contributed over 10% of revenue in Q2, with a significant increase in revenue from surgeons participating in TELA LIVE programs [55][58] Question: What is the split between hernia and plastic surgery products? - The split remains approximately 90% hernia and 10% plastic surgery products [63] Question: How is the company managing its GPO contracting strategy? - The company is focused on implementing HealthTrust accounts while also pursuing large IDNs, with positive developments in contracting [80][81]