Financial Data and Key Metrics Changes - Revenue for Q3 2024 was $887,000, a decrease of 6% compared to $944,000 in Q3 2023. For the nine months ended September 30, 2024, revenue was $2.5 million, an increase of 18% compared to $2.1 million in the prior year period [27] - Gross profit in Q3 2024 was $418,000, or 47% of revenue, compared to $535,000 or 57% of revenue in Q3 2023. For the nine months ended September 30, 2024, gross profit was $1.4 million, or 54% of revenue, compared to $682,000 or 32% of revenue in the prior year period [29] - Net loss was $3.2 million for Q3 2024, an improvement from a net loss of $3.3 million in the same period in 2023. For the nine months ended September 30, 2024, net loss was $10.6 million, improving from $12.6 million in the previous year period [33] Business Line Data and Key Metrics Changes - Surgical procedures utilizing the Catamaran System increased by 5% for the nine months ended September 30, 2024, but decreased by 15% in Q3 2024 compared to the same quarter in the previous year [27][28] - The company introduced the Catamaran SE, a second-generation and smaller version of their implant, which is expected to enhance market share during its second year of commercialization [10][12] Market Data and Key Metrics Changes - The company experienced unexpected reimbursement preauthorization headwinds, attributed to coding confusion, which is expected to improve with upcoming coding clarity [8][39] - The company anticipates that the combination of coding clarity and new clinical data will positively impact reimbursement issues going forward [40][42] Company Strategy and Development Direction - The company is focused on building market share for the Catamaran System and securing capital to fund growth initiatives [6] - A significant component of the growth strategy includes investment in clinical research to reinforce the safety and effectiveness of the Catamaran System [14] - The company plans to expand its sales force and continue its post-market study with the publication of further analysis for the Catamaran [11][34] Management's Comments on Operating Environment and Future Outlook - Management believes that the reimbursement impacts and timing of sales force restructuring will become tailwinds moving forward [28] - The company expects to maintain momentum and is excited about the growth trajectory supported by capital resources and expanding commercial infrastructure [36] Other Important Information - The company received an investment of approximately $9.6 million during the quarter, which will be used to expand the sales force and advance the launch of the new Catamaran SE [11][34] - The U.S. Patent Office issued three patents related to the enhanced Catamaran prosthesis, strengthening the company's competitive position [23][24] Q&A Session Summary Question: What caused the unexpected reimbursement preauthorization headwinds? - Management indicated that reimbursement issues are regional and stemmed from coding confusion, which is expected to improve with clarity from recent AMA meetings [38][39] Question: How is the feedback from physicians regarding the system? - Management confirmed that feedback has been positive, leading to the development of the Catamaran SE, which is a smaller version of the system to meet varying physician preferences [43][44] Question: Is the expansion of the sales force currently underway? - Management stated that the expansion of the sales force is an active initiative and will continue over the coming months and quarters [45]
Tenon Medical(TNON) - 2024 Q3 - Earnings Call Transcript