UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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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).
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| Item 2.02 | Results of Operations and Financial Condition. |
On May 10, 2022, TELA Bio, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2022. 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 7.01 | Regulation FD Disclosure. |
On May 10, 2022, 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 10, 2022. | |
| 99.2 | Corporate Slide Deck, dated May 10, 2022. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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 10, 2022
Exhibit 99.1
TELA Bio Reports First Quarter 2022 Financial Results
MALVERN, PA, May 10, 2022 -- TELA Bio, Inc. ("TELA"), a commercial-stage medical technology company focused on providing innovative soft-tissue reconstruction solutions that optimize clinical outcomes by prioritizing the preservation and restoration of the patient's own anatomy, today reported financial results for the first quarter ended March 31, 2022.
Recent Highlights
| · | Reported revenue of $8.2 million for the first quarter, representing growth of 40% over the corresponding period of 2021; |
| · | Increased demand for OviTex® and OviTex PRS Reinforced Tissue Matrix products in the first quarter of 2022, resulting in a year-over-year revenue increase for each product of approximately 21% and 111%, respectively; |
| · | Ended the first quarter with 50 sales reps and remain on track for 55 sales reps by midyear; and |
| · | Appointed D. Taylor Ocasio as the Company's new General Counsel. |
"Our latest results reflect another solid quarter for our soft-tissue reconstruction solutions. Strong demand for our novel preservation and restoration products grew throughout the quarter and has continued into the second quarter," said Antony Koblish, co-founder, President and Chief Executive Officer of TELA Bio. "We were especially encouraged by the positive response to our third hands-on medical education course held in March, which was attended by over 30 healthcare personnel. The popularity of these courses remains strong and our next hands-on event will be held later this week. These educational activities and our growing sales force combined with the continued shift from plastic mesh to natural repair solutions and our ever-increasing volume of compelling clinical research, lead us to believe that 2022 will be a breakout year for TELA Bio."
First Quarter 2022 Financial Results
Revenue was $8.2 million in the first quarter of 2022, an increase of 40% compared to the prior year. The increase was due to the expansion of our commercial organization, increased penetration within our existing customer accounts and stronger international sales.
Gross profit was $5.0 million in the first quarter of 2022, or 61% of revenue, compared to $3.5 million, or 59% of revenue, in the same period in 2021. The increase in gross margin was due primarily to a decrease in the excess and obsolete inventory adjustments as a percentage of revenue as compared to the prior year.
Operating expenses were $14.8 million in the first quarter of 2022, compared to $10.7 million in the same period in 2021. The increase was due to higher salaries and employee-related expenses from additional headcount as we continue to expand of our organization, increased travel expenses and increased professional and consulting fees.
Loss from operations was $9.8 million in the first quarter of 2022, compared to a loss from operations of $7.3 million in the same period in 2021.
Net loss was $10.9 million in the first quarter of 2022, compared to a net loss of $8.1 million in the same period in 2021.
Cash and cash equivalents on March 31, 2022 totaled $33.0 million.
2022 Financial Guidance
We continue to monitor and evaluate the impact the COVID-19 pandemic has had and will continue to have on our results of operations. Despite these challenges, full year 2022 revenue remains projected to range from $40 million to $45 million, reflecting growth of 36% to 53% over full year 2021. A higher than expected impact from the COVID-19 pandemic in 2022 could materially affect this projection.
Conference Call
TELA Bio will host a conference call at 4:30 p.m. Eastern Time on Tuesday, May 10, 2022 to discuss its first quarter 2022 financial results. The conference call can be accessed by dialing 855-548-1219 for participants in the U.S. or Canada, and 409-217-8881 for international callers, using conference ID 8249526. A live and archived webcast of the event can be accessed via the Events & Presentations page of the investor section of TELA's website.
About TELA Bio, Inc.
TELA Bio, Inc. (NASDAQ: TELA) is a commercial-stage medical technology company focused on providing innovative technologies that optimize clinical outcomes by prioritizing the preservation and restoration of the patient's own anatomy. The Company is committed to providing surgeons with advanced, economically effective soft-tissue reconstruction solutions that leverage the patient's natural healing response while minimizing long-term exposure to permanent synthetic materials. For more information, visit www.telabio.com.
Caution Regarding Forward-Looking Statements
This press release contains 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 2022. 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 and the development of new variants of COVID-19, 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, the labor and staffing environment in the healthcare industry, 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 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 update 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
332-895-3230
ir@telabio.com
TELA Bio, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
| March 31, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 33,016 | $ | 43,931 | ||||
| Accounts receivable, net | 4,311 | 4,234 | ||||||
| Inventory | 10,267 | 7,658 | ||||||
| Prepaid expenses and other assets | 2,735 | 3,232 | ||||||
| Total current assets | 50,329 | 59,055 | ||||||
| Property and equipment, net | 1,460 | 1,186 | ||||||
| Intangible assets, net | 2,227 | 2,303 | ||||||
| Right-of-use asset | 1,339 | — | ||||||
| Total assets | $ | 55,355 | $ | 62,544 | ||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,703 | $ | 2,414 | ||||
| Accrued expenses and other current liabilities | 6,583 | 8,161 | ||||||
| Total current liabilities | 12,286 | 10,575 | ||||||
| Long-term debt with related party | 31,669 | 31,491 | ||||||
| Other long-term liabilities | 1,362 | 380 | ||||||
| Total liabilities | 45,317 | 42,446 | ||||||
| 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; 14,556,750 and 14,529,606 shares issued and 14,556,748 and 14,529,577 shares outstanding at March 31, 2022 and December 31, 2021, respectively | 15 | 15 | ||||||
| Additional paid-in capital | 250,819 | 250,064 | ||||||
| Accumulated other comprehensive loss | (5 | ) | (52 | ) | ||||
| Accumulated deficit | (240,791 | ) | (229,929 | ) | ||||
| Total stockholders' equity | 10,038 | 20,098 | ||||||
| Total liabilities and stockholders' equity | $ | 55,355 | $ | 62,544 | ||||
TELA Bio, Inc.
Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share amounts)
(Unaudited)
| Three months ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Revenue | $ | 8,231 | $ | 5,877 | ||||
| Cost of revenue (excluding amortization of intangible assets) | 3,156 | 2,336 | ||||||
| Amortization of intangible assets | 76 | 76 | ||||||
| Gross profit | 4,999 | 3,465 | ||||||
| Operating expenses: | ||||||||
| Sales and marketing | 9,378 | 6,299 | ||||||
| General and administrative | 3,458 | 2,756 | ||||||
| Research and development | 2,007 | 1,679 | ||||||
| Total operating expenses | 14,843 | 10,734 | ||||||
| Loss from operations | (9,844 | ) | (7,269 | ) | ||||
| Other (expense) income: | ||||||||
| Interest expense | (911 | ) | (889 | ) | ||||
| Other (expense) income | (107 | ) | 22 | |||||
| Total other expense | (1,018 | ) | (867 | ) | ||||
| Net loss | $ | (10,862 | ) | $ | (8,136 | ) | ||
| Net loss per common share, basic and diluted | $ | (0.75 | ) | $ | (0.56 | ) | ||
| Weighted average common shares outstanding, basic and diluted | 14,538,864 | 14,438,405 | ||||||
| Comprehensive loss: | ||||||||
| Net loss | $ | (10,862 | ) | $ | (8,136 | ) | ||
| Foreign currency translation adjustment | 47 | (11 | ) | |||||
| Comprehensive loss | $ | (10,815 | ) | $ | (8,147 | ) | ||
Exhibit 99.2
A Soft - Tissue Preservation and Restoration Company Investor Presentation May 2022
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 as sumed future results of operations, business strategies, development plans, regulatory activities, market opportunity competitive position, potential gr owth opportunities, and the effects of competition, are forward - looking statements. These statements involve known and unknown risks, uncertainties and othe r important factors that may cause TELA Bio, Inc.’s (the “Company”) actual results, performance or achievements to be materially different from any fu tur e results, performance or achievements expressed or implied by the forward - looking statements. In some cases, you can identify forward - looking statemen ts by terms such as “may,” “will,” “should,” “expect,” “plan,” “aim,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “belie ve, ” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward - looking statements in this presentation are only predictions. The Company has based these forward - looking statements largely on its current expectations and projections about future events and f inancial trends that it believes may affect the Company’s business, financial condition and results of operations. These forward - looking statements spea k only as of the date of this presentation and are subject to a number of risks, uncertainties and assumptions, some of which cannot be predicted or q uan tified and some of which are beyond the Company’s control, including, among others: the impact to the Company's business of the ongoing COVID - 19 pa ndemic and the development of new variants of COVID - 19, 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 Company's products, the labor and staffing environment in the heal thc are industry, or disruption in the Company's supply chain, the Company's ability to achieve or sustain profitability, the Company's ability to ga in market acceptance for the Company's products and to accurately forecast and meet customer demand, the Company's ability to compete successfully, the Co mpa ny's ability to enhance the Company's product offerings, development and manufacturing problems, capacity constraints or delays in production of the Company's products, maintenance of coverage and adequate reimbursement for procedures using the Company's products, product defects or fai lures. These and other risks and uncertainties are described more fully in the "Risk Factors" section and elsewhere in the Company's filings w ith the Securities and Exchange Commission and available at www.sec.gov. You should not rely on these forward - looking statements as predictions of futu re events. The events and circumstances reflected in the Company’s forward - looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward - looking statements. Moreover, the Company operates in a dynamic industry and economy. New ri sk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainti es that the Company may face. Except as required by applicable law, we do not plan to publicly update or revise any forward - looking statements contained herei n, 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 $0.6B plastic reconstructive surgery.
Creating Advanced Biologic Materials Purposefully designed to address shortcomings & unmet clinical needs
OviTex : ~$1.5 Billion Annual U.S. Hernia Market Opportunity
Ventral Hernia Patients Range in Complexity
Current Ventral Hernia Treatment Options: No Perfect Product
Growing Need for Alternative to Permanent Synthetic Mesh 1 Hernia and Abdominal Surgeries Survey (Oct 2020). 2 www.drugwatch.com (October 2020)
OviTex Reinforced Tissue Matrix: a More Natural Hernia Repair 䉼
OviTex LPR for Laparoscopic & Robotic Hernia Repair
Compelling Clinical Evidence
OviTex PRS: ~$600 Million Annual U.S. Plastic & Reconstructive Surgery Market Opportunity 1 Management estimate. Market size based on sales of current biologics
OviTex PRS: Purposely Designed for Plastic and Reconstructive Surgery
Growth Strategy
Delivering Revenue Growth
Investment Highlights