Establishment Labs Holdings Inc.

Good afternoon, and welcome to Establishment Labs' third quarter 2020 earnings conference call. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session, and to ask a question during the session, we need to press star one of your telephones. Please be advised that today's conference is being recorded, and if you require any further assistance, please press star, then zero. I would now like to hand the conference over to your speaker today, David Erickson, Vice President of Investor Relations. Please go ahead.

Thank you, Operator, and thank you, everyone, for joining us. With me today are Juan Jose Chacon Quiros, our Chief Executive Officer, and Renee Galleta, our Chief Financial Officer. Following their prepared remarks, we'll take your questions. Before we begin, I would like to remind you that comments made by management during this call will include forward-looking statements within the meaning of federal securities laws. These include statements on Establishment Labs' financial outlook and the company's plans and timing for product development and sales. These forward-looking statements involve material risks and uncertainties, and the company's actual results may differ materially. For discussion of risk factors, I encourage you to review our quarterly report on Form 10-Q that we filed with the SEC today and is available on our website at establishmentlabs.com. The content of this conference call contains time-sensitive information Thank you, David, and good afternoon everyone. I hope everyone is healthy and continues to be safe.

As we guided to in October pre-announcement, total revenue in the third quarter was $22.8 million, which is comparable to the $22.9 million reported in the third quarter of 2019, and more than double the sales reported for the second quarter this year. With a strong recovery from the pandemic well underway, we are comfortable issuing full-year 2020 revenue guidance of 80 to 82 million dollars. While we are now back to our 2019 revenue levels, we believe we are actually recovering faster than our global industry. Our success at returning to pre-pandemic levels is actually indicative of continued market share gains, which can be attributed not only to the superior aesthetic and safety profile of our implants, but also in how our digital efforts have amplified In addition to strong top-line sales this quarter, our focus on lowering expenses and driving efficiencies led to a continued decrease in our operating cash burn. During the third quarter, our cash burn was $3 million, giving us a cash position at September 30 of $81.4 million. These Kipsas and a strong financial position and affords us the flexibility to continue managing our business for continued growth and market share gains. Importantly, in the quarter, we continue to advance the technologies in our R&D pipeline that will contribute to our sales growth in 2021. Equally important, our submission timeline to gain regulatory approval and enter the US market remains on track. Like most of the world, Our business and industry have not yet returned to normal, but we are on a clear path towards doing so. Of course, we are seeing country-to-country volatility as COVID-19 clears up in some places, but sales in more than 80 countries has given us some stability to manage our business throughout this period. As of today, plastic surgeons are operating even where government restrictions have limited other activities. It certainly helps that the majority of breast enhancement procedures are not performed in hospitals but in private clinics, which are generally owned or controlled by plastic surgeons. While not all countries are performing procedures at pre-pandemic levels, all countries in which we operate are open and performing procedures. Our Q3 sales in Europe and Asia were at or above levels reported in the third quarter last year. Latin America appears to have seen the worst of things and finished October fully reopened with continuing improvement across the region, including Brazil. Most importantly, we have seen continued month-over-month improvements since the lows of April, and this has continued into the fourth quarter. Third quarter direct sales, which continue to be the most reliable indicator of real-time trends, were back to the levels of direct sales in the first quarter of 2020, which, except for the final two weeks of March, were mostly unaffected by COVID shutdowns. Distributor sales, which are best viewed as an indicator of future demand, showed stronger sequential gains than direct sales. The most important takeaway from our third quarter results is this. Patient demand is strong. Across our many geographies, we consistently hear from surgeons that they have never been busier as they work through their backlogs and that new patients are interested in using this time to recover at home from aesthetic procedures. One of the interesting and unexpected outcomes of the pandemic is that with the increased time at home, patients are eager to invest in themselves. Both plastic surgeons and patients have become much more adept and comfortable with online tools for education and initial consultations. As we noted last quarter, the level of optimism and business outlook among our plastic surgeon customers remains quite positive. Turning to some recent events, I would like to recap some of the data we announced at our 10-year Motiva Symposium a few weeks ago. At that event, we were pleased to report 10-year post-market surveillance data from a variety of sources demonstrating an unmatched device-related complication rate of less than 1% for the key safety endpoints of capsular contracture and implant rupture. These are two of the most important safety metrics when evaluating the success of breast augmentation procedures. Of all the data sets that we discussed at our symposium, I would like to highlight one in particular, our warranty data from the past five years. With approximately 12,500 women purchasing extended warranty coverage, only 9 of them, just 0.73%, required coverage for re-operations. This data is incredibly compelling. Patients and doctors are economically incentivized to let us know about every complication. And yet, the reported number remained below 1%. If continued studies support these findings, It will represent a dramatic improvement over the historical published numbers of our industry. This data speaks to something beyond a competitive advantage, however. It could change how women perceive the safety of breast augmentation procedures in general. If perception of the industry improves, along with widely reported new safety data, the total addressable market could grow substantially. While we would like to focus on the data that we are generating, Regarding our improved safety profile, even more important is improved patient experiences. Word of mouth and online forums are an important component of our growth. And the superior performance and results of our products is at the heart of our success. As firsthand experiences are the driving force behind our business, the second part of the symposium featured a panel of leading plastic surgeons who discussed the important technological differences between Motiva and other implants, and shared their real-world experiences with our products. Their belief in Motiva and the growing body of evidence supporting our matched clinical results are why nearly 1.3 million Motiva implants have been placed worldwide over the last 10 years. If you did not get a chance to catch the symposium, we have archived it on our website, and I hope you find time to do so. Surgeons are taking time to listen to their peers. Our digital platform Motiva Edge offers online training programs and seminars and attracts both new and existing surgeons interested in education and the latest innovations in breast implant technology. So far this year, the total audience for online Motiva Edge scientific events has been more than 19,000 plastic surgeons and other medical professionals. Now for an update on our product pipeline, We have a number of exciting and innovative new technologies, several of which represent potential growth drivers in 2021. Beginning with our Motiva Flora Tissue Expander, we are continuing to collect early patient experience in advance of our broad commercial launch in Europe early next year. We believe the market will be receptive to the advancements offered by Flora, including a proprietary integrated RFID port and our smooth silk bioengineered surface. In the eight sites that have used Flora so far, feedback has been very encouraging with surgeons commenting on its ease of use and patients reporting overall satisfaction and comfort. Although our Motiva implants are already used in breast reconstruction procedures in Europe, the ability to pair them with one of the most advanced tissue expanders available means that we will be able to fully access This important market segment. As for Flora in the U.S., we now expect to submit our 510K in the first half of 2021. Once cleared by the FDA, we will be able to access the largest portion of the $225 million global tissue expander market. We expect receipt of a CE mark in Europe for Motiva Ergonomics II implant in the fourth quarter. Ergonomics II builds upon our successful ergonomics implant, which has become our best-selling and most premium offering in many markets, including Europe and Asia Pacific. The features of this innovative new product, including enhanced mechanical properties, advanced chemistry, and improved ergonomics, should result in even greater patient satisfaction. As it is so feature-rich, we expect Ergonomics II to command a premium price over ergonomics. Plastic surgeons familiar with ergonomics should be able to switch easily to ergonomics too, which will be available in a wide range of sizes throughout Europe. Turning to Motivamia, our minimally invasive breast augmentation program, we are continuing to make good progress as we fine-tune the surgical technique. During the quarter, we received IRB approval to begin a patient series in Thailand. To broaden our experience even further, we are also planning to initiate a patient series in Latin America by the end of the year. Motiva Mia is a very promising technology, and we are excited by the opportunity to expand the addressable market for breast aesthetics by creating a new product category. We are confident of the large number of women who would be interested in a less invasive breast procedure with safety and aesthetic outcomes similar to our current Motiva implants. If MIA is successful, it would contribute meaningfully to our growth and further differentiate us in the market. Motiva is already the implant of choice for many surgeons and patients around the world, and we are eager to introduce our innovative product portfolio to the large Chinese and U.S. markets. We are continuing to make progress with our regulatory submission in China, and we expect approval during the first half of 2022, as previously discussed. Customers in this market are active digital users for product information, breast enhancement education, and scheduling of plastic surgeon consultations, and this plays very well to our strong digital capabilities. The United States represents the single largest breast implant market in the world, and we are continuing to pursue approval to offer Motiva to women and plastic surgeons in this geography. Study follow-up visits are continuing for all patients of our US IDE clinical trial, and follow-up compliance is high, even during the more challenging pandemic environment. Approximately half of the patients in the aesthetic cohorts have reached their two-year anniversary date, and all study-related activities remain on track per FDA requirements. We are very eager to demonstrate the advantages of Motiva in an FDA clinical trial. You will recall We successfully completed enrollment in the revision reconstruction sub-cohort during the second quarter. Enrollment in our remaining reconstruction cohorts, which was delayed by the pandemic, still continues, and we are making steady progress. With that, I'd like to turn the call over to Renee to discuss the financials in detail. Renee?