TELA Bio (TELA) Q2 Earnings call transcript Aug 12, 2024
TELA Bio, a leader in the surgical mesh market, recently held its second quarter 2024 earnings call, shedding light on the company's financial performance, strategic initiatives, and future outlook. The call, led by CEO Antony Koblish and COO Roberto Cuca, highlighted both challenges faced and opportunities seized, providing valuable insights into the company's trajectory.
Financial Performance and Strategic Initiatives
The second quarter of 2024 saw TELA Bio's revenue grow by 11% year-over-year to $16.1 million, with OviTex and OviTex PRS growing 11% and 9% respectively. This growth was primarily driven by an increase in unit sales, driven by the addition of new customers, increased penetration within existing customer accounts, and growing international sales. Despite facing challenges such as cyberattacks at key customer accounts, TELA Bio remains optimistic about its future, expecting to deliver sales of $74.5 million to $76.5 million for the year, representing a projected growth of 27% to 31% over 2023.
One of the company's strategic initiatives includes the launch of LIQUIFIX, the only FDA-approved liquid adhesive for internal use in hernia surgery, and OviTex IHR, a trocar compatible next-generation soft tissue repair platform designed for inguinal hernias. These products are poised to capture market share in the transition away from traditional synthetic meshes. OviTex units grew by 29% year-over-year, with a greater share of growth among smaller units employed for inguinal hernia repairs, including robotic and laparoscopic procedures. TELA Bio's European operations have also seen significant momentum, with sales in Europe reaching $2.4 million in Q2, up from $1.5 million in 2023, and year-to-date unit growth of 87%.
Addressing Challenges and Moving Forward
Despite the challenges faced in the second quarter, including ransomware attacks at key customer accounts and lightness in procedure volumes, TELA Bio remains confident in its ability to recover and continue its growth trajectory. The company's maturing sales organization, led by Chief Commercial Officer Greg Firestone, is focused on refocusing the U.S. sales force on data-driven selling and enhancing sales rep training to increase operational efficiency and productivity. TELA Bio is also deepening relationships with key industry players, such as Intuitive Surgical, to capitalize on the shift towards robotic hernia repair.
Looking Ahead
With a strong product portfolio, a focus on innovation, and a strategic approach to growth, TELA Bio is well-positioned to navigate the challenges of the surgical mesh market and capitalize on opportunities for expansion. The company's guidance for the full year of $74.5 million to $76.5 million in revenue, with expectations for operating loss and net loss to be less in 2024 than in 2023, underscores its confidence in its ability to deliver strong financial performance. TELA Bio's commitment to offering premier products for hernia repair and plastic reconstructive surgery, both of which are serving preference-driven markets, further solidifies its position in the industry.