UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 7, 2021
TELA Bio, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-37526 | 45-5320061 |
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
| 1 Great Valley Parkway, Suite 24 Malvern, Pennsylvania |
19355 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (484) 320-2930
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.001 per share | TELA | Nasdaq Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.02 | Results of Operations and Financial Condition. |
On May 13, 2021, TELA Bio, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2021. A copy of this press release is furnished as Exhibit 99.1 hereto.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such filing.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On May 7, 2021, Nora Brennan, the Chief Financial Officer of the Company, notified the Company of her decision to resign effective June 4, 2021, in order to pursue another opportunity. Megan Smeykal, the Company's Vice President and Corporate Controller, will assume the duties of the principal financial officer of the Company on an interim basis until such time as the Company appoints a new Chief Financial Officer.
Ms. Smeykal joined the Company in December 2019 as Vice President of Financial Reporting and became Vice President and Corporate Controller in May 2021. Previously, Ms. Smeykal served as the Vice President of Financial Reporting and Assistant Controller at Nutrisystem, Inc. from 2006 to August 2019. Ms. Smeykal began her accounting career with Arthur Andersen LLP from 1997 to 2002. Ms. Smeykal received a Bachelor of Science degree in Accounting from Villanova University and maintains an active certified public accounting license in the Commonwealth of Pennsylvania.
There are no arrangements or understandings between Ms. Smeykal and any other persons pursuant to which Ms. Smeykal was appointed as interim principal financial officer of the Company. In addition, there are no family relationships between Ms. Smeykal and any director or executive officer of the Company, and there are no transactions involving Ms. Smeykal requiring disclosure under Item 404(a) of Regulation S-K.
| Item 7.01 | Regulation FD Disclosure. |
On May 13, 2021, the Company updated information reflected in a corporate slide deck, which representatives of the Company will use in various meetings with investors from time to time. A copy of the presentation is attached hereto as Exhibit 99.2, and incorporated herein by reference.
The information furnished pursuant to Item 7.01, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
The following exhibits are being furnished herewith:
|
Exhibit No. |
Document | |
| 99.1 | Press Release of TELA Bio, Inc., dated May 13, 2021. | |
| 99.2 | Corporate Slide Deck, dated May 13, 2021. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TELA BIO, INC. | ||
| By: | /s/ Antony Koblish | |
| Name: | Antony Koblish | |
| Title: | President, Chief Executive Officer and Director | |
Date: May 13, 2021
Exhibit 99.1
TELA Bio Announces First Quarter 2021 Financial Results
MALVERN, Pa., May 13, 2021 (GLOBE NEWSWIRE) -- TELA Bio, Inc. ("TELA") (Nasdaq: TELA), a commercial stage medical technology company focused on designing, developing, and marketing innovative tissue reinforcement materials to address unmet needs in soft tissue reconstruction, today reported financial results for the first quarter ended March 31, 2021.
First Quarter 2021 Financial Results and Business Highlights
| - | Reported revenue of $5.9 million for the first quarter of 2021, increasing 58% over the first quarter of 2020; |
| - | Our OviTex LPR product line continues to experience high utilization in robotic and MIS procedures and the first quarter of 2021 represented our highest volume quarter for LPR products; |
| - | Hosted successful Key Opinion Leader Webinar featuring surgeons speaking on their use of OviTex® Reinforced Tissue Matrix for simple and complex hernia procedures; and |
| - | Published additional positive data, including initial two-year data, from the BRAVO study evaluating OviTex® Reinforced Tissue Matrix for the treatment of ventral hernias showing favorable recurrence rates. |
"We are very pleased with our revenue growth in the first quarter despite the ongoing headwinds from COVID-19, and we are encouraged by the increasing demand for our products, particularly our LPR product line, as we head into the second quarter,” said Antony Koblish, co-founder, President and Chief Executive Officer of TELA Bio. “Along with the expected improvement of procedure volumes throughout 2021, we anticipate the current litigation surrounding synthetic mesh may increase patient demand for non-synthetic options. OviTex was purposefully designed to provide patients a more natural repair, and we believe TELA Bio is well positioned to experience top-line growth in 2021 as the portfolio is expected to gain increased utilization by general and plastic reconstructive surgeons.”
First Quarter 2021 Financial Results
Revenue was $5.9 million for the first quarter of 2021, an increase of 58% compared to the prior year period despite experiencing increased volatility in demand for our products in January due to the COVID-19 resurgence. The increase in revenue was primarily driven by an increase in unit sales of our products due to the expansion of our commercial organization and increased penetration within existing customer accounts.
Gross profit was $3.5 million for the first quarter of 2021, or 59% of revenue, compared to $2.2 million, or 59% of revenue, in the same period in 2020.
Operating expenses were $10.7 million in the first quarter of 2021, compared to $8.7 million in the same period in 2020. The increase was due to the expansion of our commercialization activities, higher personnel costs and increased research and development expenses.
Loss from operations was $7.3 million in the first quarter of 2021, compared to a loss from operations of $6.5 million in the same period in 2020.
Net loss was $8.1 million in the first quarter of 2021, compared to a net loss of $7.2 million in the same period in 2020.
Cash and Cash Equivalents at March 31, 2021 were $65.8 million.
Financial Outlook
For the full year 2021, TELA Bio is maintaining the total revenue guidance to be in the range of $27.0 million to $30.0 million, representing growth of 48% to 65% over the prior year period. Continued uncertainty relating to the dynamic environment with the COVID-19 pandemic could materially impact our estimate.
Conference Call and Webcast Details
The Company will host a live conference call and webcast to discuss these results and provide a corporate update on Thursday, May 13, 2021, at 4:30 PM ET.
To participate in the call, please dial (855) 548-1219 (domestic) or (409) 217-8881 (international) and provide conference ID 7381947. The live webcast will be available on the Events & Presentations page of the Investors section of TELA's website.
About TELA Bio, Inc.
TELA Bio Inc. (NASDAQ: TELA) is a commercial-stage medical technology company focused on designing, developing, and marketing innovative tissue reinforcement materials to address unmet needs in soft tissue reconstruction. The Company is committed to providing patients with advanced, economically effective biologic material repair solutions to minimize long-term exposure to permanent synthetic materials and improve clinical outcomes. TELA Bio’s OviTex® and OviTex PRS Reinforced Tissue Matrix products are purposefully designed to address the shortcomings of existing reinforcement materials in hernia repair, abdominal wall reconstruction and plastic and reconstructive surgery. For more information, visit www.telabio.com.
Caution Regarding Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current expectations are forward-looking statements and reflect the current beliefs of TELA's management. Such forward-looking statements include statements relating to our expected revenue and revenue growth for the full year 2021, expected increases in procedure volumes in 2021 and expected increases in the utilization rate of our products by general and plastic reconstructive surgeons. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors that could cause actual results and events to differ materially and adversely from those indicated by such forward-looking statements including, among others: the impact to our business of the ongoing COVID-19 pandemic, including but not limited to any impact on our ability to market our products, demand for our products due to deferral of procedures using our products or disruption in our supply chain, our ability to achieve or sustain profitability, our ability to gain market acceptance for our products and to accurately forecast and meet customer demand, our ability to compete successfully, our ability to enhance our product offerings, development and manufacturing problems, capacity constraints or delays in production of our products, maintenance of coverage and adequate reimbursement for procedures using our products, product defects or failures. These and other risks and uncertainties are described more fully in the "Risk Factors" section and elsewhere in our filings with the Securities and Exchange Commission and available at www.sec.gov, including in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Any forward-looking statements that we make in this announcement speak only as of the date of this press release, and TELA assumes no obligation to updates forward-looking statements whether as a result of new information, future events or otherwise after the date of this press release, except as required under applicable law.
Investor Contact
Greg Chodaczek
347-620-7010
ir@telabio.com
TELA Bio, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
| March 31, | December 31, | |||||||
| 2021 | 2020 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 65,829 | $ | 74,394 | ||||
| Accounts receivable, net | 2,795 | 2,683 | ||||||
| Inventory | 4,688 | 3,907 | ||||||
| Prepaid expenses and other assets | 1,892 | 2,241 | ||||||
| Total current assets | 75,204 | 83,225 | ||||||
| Property and equipment, net | 584 | 626 | ||||||
| Intangible assets, net | 2,531 | 2,607 | ||||||
| Total assets | $ | 78,319 | $ | 86,458 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 965 | $ | 652 | ||||
| Accrued expenses and other current liabilities | 4,673 | 5,953 | ||||||
| Total current liabilities | 5,638 | 6,605 | ||||||
| Long-term debt with related party | 30,982 | 30,827 | ||||||
| Other long-term liabilities | 8 | — | ||||||
| Total liabilities | 36,628 | 37,432 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock; $0.001 par value: 10,000,000 shares authorized; no shares issued and outstanding | — | — | ||||||
| Common stock; $0.001 par value: 200,000,000 shares authorized; 14,440,411 and 14,437,289 shares issued and 14,440,275 and 14,437,107 shares outstanding at March 31, 2021 and December 31, 2020, respectively | 14 | 14 | ||||||
| Additional paid-in capital | 246,548 | 245,736 | ||||||
| Accumulated other comprehensive loss | (82 | ) | (71 | ) | ||||
| Accumulated deficit | (204,789 | ) | (196,653 | ) | ||||
| Total stockholders’ equity | 41,691 | 49,026 | ||||||
| Total liabilities and stockholders’ equity | $ | 78,319 | $ | 86,458 | ||||
TELA Bio, Inc.
Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share amounts)
(Unaudited)
| Three months ended | ||||||||
| March 31, | ||||||||
| 2021 | 2020 | |||||||
| Revenue | $ | 5,877 | $ | 3,726 | ||||
| Cost of revenue (excluding amortization of intangible assets) | 2,336 | 1,450 | ||||||
| Amortization of intangible assets | 76 | 76 | ||||||
| Gross profit | 3,465 | 2,200 | ||||||
| Operating expenses: | ||||||||
| Sales and marketing | 6,299 | 5,269 | ||||||
| General and administrative | 2,756 | 2,518 | ||||||
| Research and development | 1,679 | 912 | ||||||
| Total operating expenses | 10,734 | 8,699 | ||||||
| Loss from operations | (7,269 | ) | (6,499 | ) | ||||
| Other (expense) income: | ||||||||
| Interest expense | (889 | ) | (879 | ) | ||||
| Other income | 22 | 158 | ||||||
| Total other expense | (867 | ) | (721 | ) | ||||
| Net loss | $ | (8,136 | ) | $ | (7,220 | ) | ||
| Net loss per common share, basic and diluted | $ | (0.56 | ) | $ | (0.63 | ) | ||
| Weighted average common shares outstanding, basic and diluted | 14,438,405 | 11,406,783 | ||||||
| Comprehensive loss: | ||||||||
| Net loss | $ | (8,136 | ) | $ | (7,220 | ) | ||
| Foreign currency translation adjustment | (11 | ) | 27 | |||||
| Comprehensive loss | $ | (8,147 | ) | $ | (7,193 | ) | ||
Exhibit 99.2
Advancing Soft Tissue Reconstruction Investor Presentation May 2021
2 Forward Looking Statements This presentation contains forward - looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 . All statements other than statements of historical facts contained in this document, including but not limited to statements regarding possible or assumed future res ults of operations, business strategies, development plans, regulatory activities, market opportunity competitive position, potential growth opportunities, and the ef fec ts of competition, are forward - looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause TELA B io, Inc.’s (the “Company”) actual results, performance or achievements to be materially different from any future results, performance or achievements expresse d o r implied by the forward - looking statements. In some cases, you can identify forward - looking statements by terms such as “may,” “will,” “should,” “expect,” “plan ,” “aim,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these term s o r other similar expressions. The forward - looking statements in this presentation are only predictions. The Company has based these forward - looking statements largely on its curr ent expectations and projections about future events and financial trends that it believes may affect the Company’s business, financial condition and results of operations. These forward - looking statements speak only as of the date of this presentation and are subject to a number of risks, uncertainties and assumptions , s ome of which cannot be predicted or quantified and some of which are beyond the Company’s control, including, among others: changes resulting from the finalizati on of the Company’s financial statements for the quarter ended March 31, 2021, information or new changes in facts or circumstances that may occur prior to the filing of the Company’s Quarterly Report on Form 10 - Q for the quarter ended March 31 , 2021, the impact to the Company's business of the ongoing COVID - 19 pandemic, including but not limited to any impact on the Company's ability to market its products, demand for the Company's products due to deferral of procedures using the Compa ny' s products or disruption in the Company's supply chain, the Company's ability to achieve or sustain profitability, the Company's ability to gain market accep tan ce for the Company's products and to accurately forecast and meet customer demand, the Company's ability to compete successfully, the Company's ability to enhance th e Company's product offerings, development and manufacturing problems, capacity constraints or delays in production of the Company's products, maintenance o f c overage and adequate reimbursement for procedures using the Company's products, product defects or failures. These and other risks and uncertainti es are described more fully in the "Risk Factors" section and elsewhere in the Company's filings with the Securities and Exchange Commission and available at www.sec. gov . You should not rely on these forward - looking statements as predictions of future events. The events and circumstances reflected in the Company’s forward - look ing statements may not be achieved or occur, and actual results could differ materially from those projected in the forward - looking statements. Moreover, the Compa ny operates in a dynamic industry and economy. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict al l r isk factors and uncertainties that the Company may face. Except as required by applicable law, we do not plan to publicly update or revise any forward - looking statemen ts contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
Redefining soft tissue reconstruction with a differentiated category of tissue reinforcement materials ~$2B U.S Market Opportunity 1 in hernia repair , abdominal wall reconstruction and plastic and reconstructive surgery 3 Innovative Products Compelling Clinical Evidence Products Offer Attractive Value Proposition for Hospitals 1 Management estimate. $2B total equals $1.5B hernia & abdominal wall reconstruction and $0.5B plastic reconstructive surgery.
4 Creating Advanced Biologic Materials Novel Biologic Tissue (derived from sheep) Polymer Fibers (permanent or resorbable) Innovative Textile Engineering Purposefully designed to address shortcomings & unmet clinical needs Issued patents protect underlying biologic tissue and product design Hernia & Ab Wall Reconstruction Plastic Reconstruction
5 OviTex: ~$1.5 Billion Annual U.S. Hernia Market Opportunity Simple Ventral Hernia Repair Complex, Moderate Ventral / Abdominal Wall Reconstruction Simple Ventral Hernia Repair Inguinal Hernia Repair Hiatal Hernia Repair ~58,000 ~326,000 ~711,000 ~40,000 $350M $500M $650M $40M Source: Millennium Research Group Reports, IMS Health Data 1 Management estimate. Market size based volume weighted average selling price for OviTex Annual Procedures $1.5B 1
6 Hernias Occur Throughout the Abdomen 1 Funk LM, Perry KA, Narula VK, Mikami DJ, Melvin WS. Current national practice patterns for inpatient management of ventral abdominal wall hernia in the United Sta te s. Surg Endosc . 2013;27(11):4104 - 4112. What is a hernia? ◦ Occurs when an internal part of the body pushes through a weakness (that is natural occurring or from a previous surgical incision) or hole in the muscle or surrounding tissue ◦ Likelihood of developing a hernia increases with age & obesity Treating a hernia ◦ Standard of care: Surgical repair of a hernia with a reinforcing material (mesh) ◦ ~90% of hernia patients receive a mesh repair 1 ◦ Mesh intended to reinforce the defect and provide long - term support Hiatal Hernia Diaphragm Epigastric Hernia Incisional Hernia Umbilical Hernia Inguinal Hernia
7 Ventral Hernia Patients Range in Complexity • CDC Wound Class I (clean) • Healthier patients - no co - morbidities • Primary hernia repair • CDC Wound Class II (clean - contaminated) • Patient co - morbidities (i.e., obesity, diabetes, COPD) • May have prior hernia repair failure • CDC Wound Class III (contaminated) & IV (infected) • Large defects • Infected synthetic mesh removals • Multiple prior hernia repair failures COMPLEX MODERATE SIMPLE Ventral Hernia Complexity Objective: provide patients the best repair the first time to prevent the simple patient from becoming the complex
8 Current Ventral Hernia Treatment Options: No Perfect Product Persistent inflammatory response Encapsulation of implant Chronic post operative pain Scar tissue / lack of remodeling Mesh infections Significant costs of re - operation Organ erosion or perforation 6,000 related U.S. lawsuits PERMANENT SYNTHETIC MESH Strattice Œ RESORBABLE SYNTHETIC MESH Strattice Œ BIOLOGIC MESH Parietex 䉼 PROCEED ® GORE ® BIO - A ® SurgiMend ® XenMatrix 䉼 Natural Repair Products Simple Ventral Hernia Inguinal Hernia Complex, Moderate Ventral Repair / Abdominal Wall Reconstruction Hiatal Hernia Repair ProGrip 䉼 + Ventralight 䉼 P HASIX 䉼 Mesh Strattice 䉼 Gentrix ® ▫ Persistent inflammatory response ▫ Encapsulation of implant ▫ Chronic post operative pain ▫ Scar tissue / lack of remodeling ▫ Mesh infections / Significant costs of re - operation ▫ Organ erosion or perforation LIMITATIONS ▫ Inflammatory response until absorbed ▫ Encapsulation of implant or contraction until absorbed ▫ Scar tissue / lack of remodeling ▫ Mesh infection until resorbed ▫ Organ erosion or perforation ▫ Lack of mid - term and long - term reinforcement ▫ Lack of strength or durability ▫ Prone to laxity and stretching ▫ Challenges to surgeon handling ▫ Difficult to use in laparoscopic or robotic surgery ▫ High costs
9 Lawsuits against permanent synthetic meshes estimated to be assembled across the U.S. 2 of surgeons agree that use of permanent synthetic mesh puts patients at long - term risk of complications 1 Growing Need for Alternative to Permanent Synthetic Mesh 1 Hernia and Abdominal Surgeries Survey (Oct 2020). 2 www.drugwatch.com (October 2020) 59% Hernia patients have voiced concern over use of permanent synthetic mesh in the past 12 months, according to surgeons 1 1 in 5 ~15K
10 OviTex Reinforced Tissue Matrix: a More Natural Hernia Repair 䉼 An innovative reinforced tissue matrix designed to reduce stretch compared to biologic matrices and long - term complications experienced with resorbable and permanent synthetic meshes Unique permeable design facilitates rapid fluid transfer and movement of cells through the device Layers of biologic material enable functional tissue remodeling Interwoven polymer for added strength and improved handling Lockstitch embroidery pattern creates a ripstop effect and prevents unraveling when cut
11 Comprehensive Portfolio for a Broad Range of Hernia Types and Surgical Techniques Images represent permanent polymer OviTex products. Resorbable polymer products have clear polymer. * Biomechanical data on file. PRODUCT DESIGN OviTex 4 - layer device, not intended for intraperitoneal placement Strength*: + Common Procedures: Moderate ventral hernia (pre - peritoneal placement), inguinal hernia, hiatal hernia OviTex 2S 8 - layer device, with 2 “smooth sides” suitable for intraperitoneal placement Strength*: +++ Common Procedures: Complex ventral hernia and abdominal wall reconstruction and can be used for bridging OviTex 1S 6 - layer device, with “smooth side” suitable for intraperitoneal placement Strength*: ++ Common Procedures: Moderate to complex ventral hernia Each configuration is available with either permanent (polypropylene) polymer or resorbable (polyglycolic acid) polymer reinforcing the same biologic material.
12 OviTex LPR for Laparoscopic & Robotic Hernia Repair Tailored OviTex product designed for improved handling in MIS techniques and trocar accessibility Our Solution: OviTex LPR Increase in Robotic - Assisted Hernia Repair ▫ Surgeons have adopted robotic - assisted techniques, primarily for inguinal & simple ventral Hernia repair, due to perceived patient and technique benefits ▫ Legacy biologic products are difficult to use minimally invasively (MIS) due to their thickness and handling properties
13 Compelling Clinical Evidence Ventral Hernia Inguinal Hernia Hiatal Hernia Presentations / Publications 18 Presentations / Publications 5 Presentations / Publications 4 Low incidence of chronic post - operative pain Low hernia recurrence Low SSO / SSI Ease of use Low rate of surgical site occurrences & infections (SSO/SSI) Low hernia recurrence Ease of use Compatibility with MIS approaches Low hernia recurrence OviTex supported by data from ~500 hernia patients across multiple hernia types Moderate - to - complex ventral hernia patients Multi - center, prospective study with 92 patients enrolled Patient follow - up at 3, 12 & 24 - months Additional data readout expected by YE 2020 and upon study completion in mid - 2021 BRAVO Study
14 BRAVO Study Shows Low Recurrence Rate at 12 and 24 - months Product Name Tissue Reinforcement Material Hernia Recurrence Rate Number of Hernia Recurrence Number of Patients who Completed Follow - up Follow - up Period in Months OviTex Reinforced Tissue Matrix 2 76 12 OviTex Reinforced Tissue Matrix 0 51 24 Product Name Tissue Reinforcement Material Published Hernia Recurrence Rate Number of Hernia Recurrence, (%) * Number of Patients who Completed Follow - up Follow - up Period in Months Phasix Resorbable Synthetic Mesh 5 (5.3%) 95 12 1 Phasix Resorbable Synthetic Mesh 11 (11.6%) 95 18 2 Phasix Resorbable Synthetic Mesh 19 (23.2%) 82 36 3 Strattice Biologic Matrix 15 (21.7%) 69 12 4 Strattice Biologic Matrix 22 (32.8%) 67 24 4 9% 17.9% 19% 28% 4.1% 2.6% 1 Roth, J. S., Prospective Evaluation Of Poly - 4 - Hydroxybutyrate Mesh in Cdc Class I/High - Risk Ventral and Incisional Hernia Repair: 1 Year Follow - Up. Poster presented at: AHS 18 th Annual Hernia Repair Meeting; 2017 March 8 – 11; Cancun, Mexico 2 Roth, J. S., Anthone , G. J., Selzer, D. J., Poulose , B. K., Bittner, J. G., Hope, W. W., . . . Voeller , G. R. (2018). Prospective evaluation of poly - 4 - hydroxybutyrate mesh in CDC class I/high - risk ventral and incisional hernia rep air: 18 - month follow - up. Surg Endosc , 32 (4), 1929 - 1936. doi:10.1007/s00464 - 017 - 5886 - 1 3 Roth, J. S., Anthone , G. J., Selzer, D. J., Poulose , B. K., Pierce, R. A., Bittner, J. G., . . . Voeller , G. R. (2021). Prospective, multicenter study of P4HB (Phasix) mesh for hernia repair in cohort at risk for complications: 3 - Ye ar follow - up. Ann Med Surg ( Lond ), 61 , 1 - 7. doi:10.1016/j.amsu.2020.12.002 4 Itani , K. M., Rosen, M., Vargo, D., Awad , S. S., Denoto, G., 3rd, Butler, C. E., & Group, R. S. (2012). Prospective study of single - stage repair of contaminated hernias using a biologic porcine tissue matrix: the RICH Study. Surgery, 152 (3), 498 - 505. doi:10.1016/j.surg.2012.04.008 * Hernia Recurrence Rate based on number of hernia recurrences reported in patients who completed follow up and patients who re por ted recurrent hernia before the specified follow up period. Clinical literature and conference presentations included hernia recurrence rates based on number of hernia recurrences in patients who comprised the initial intent - to - treat population (includi ng those who did not complete the follow up period and did not report a hernia recurrence). OviTex BRAVO Study Results from Post - Market Clinical Studies of Competitive Materials 0%
15 OviTex PRS: ~$500 Million Annual U.S. Plastic & Reconstructive Surgery Market Opportunity $500M 1 Market dominated by human acellular dermal matrices (HADMs) ▫ Prone to high degree of stretch ▫ Expensive, putting pressure on hospital systems ▫ Often experience supply shortages, particularly when large pieces of material are required Surgeons use products to reinforce soft tissue during various reconstructive surgeries, including: ▫ Breast reconstruction ▫ Head and neck surgery ▫ Chest wall reconstruction ▫ Pelvic reconstruction ▫ Extremities reconstruction 1 Management estimate. Market size based on sales of current biologics
16 OviTex PRS: Purposely Designed for Plastic and Reconstructive Surgery Layers of biologic material enable functional tissue remodeling Corner - lock diamond embroidery pattern allows the product to stretch while maintaining its shape Fenestrations and slits facilitate fluid management, allow for rapid cellular infiltration, and create a directional bias to the stretch Expanded commercial launch in June 2020 following limited launch initiated in 2019 An innovative reinforced tissue matrix designed to improve outcomes by facilitating fluid management and controlling degree and direction of stretch
17 Commercial Organization 46 sales territories as of March 31, 2021 ▫ OR - based Account Managers call on General, Plastic Recon, Colorectal & Trauma surgeons ▫ Carry full OviTex & OviTex PRS portfolios 6 sales regions ▫ Plan to scale existing regions until each region has ~8 territories ▫ Supported by Clinical Development and Strategic Customer Relations teams
18 Growth Strategy ▫ Promote broader awareness of OviTex & OviTex PRS products ▫ Employ virtual sales & marketing programs, including TELA LIVE ▫ Drive market awareness of risks of permanent synthetic mesh use ▫ Publish BRAVO clinical data INCREASE ADOPTION ▫ Scale direct sales force ▫ Drive account manager productivity ▫ Increase utilization within health systems under GPO contracts ▫ Secure additional contracts with high - potential IDNs and GPOs COMMERCIAL EXECUTION ▫ Launch new product features and designs for OviTex and OviTex PRS ▫ Initiate robotic hernia post - market study ▫ Support investigator - led clinical studies for OviTex PRS MARKET EXPANSION
19 $3.7 $5.9 2020 2021 Q1 2021 Performance ▫ Revenue growth of 58% year over year ▫ Cash and cash equivalents (as of March 31, 2021): $65.8 million Delivering Revenue Growth ($ millions) Annual Revenue Revenue CAGR: 63% $4.2 $8.3 $15.4 $18.2 2017 2018 2019 2020 First Quarter Revenue Revenue Growth: 58% ($ millions)
20 Investment Highlights Advanced reinforced tissue matrix portfolio supported by compelling clinical evidence Focused on ~$2.0 billion annual U.S. total addressable markets Driving commercial adoption with targeted direct - sales approach Recent product launches in growing markets: robotic hernia surgery + plastic and reconstructive surgery Broad intellectual property portfolio Established DRG - based reimbursement pathway for hernia repair Industry leading executive team with proven track record