Establishment Labs Holdings Inc.

Good afternoon. Welcome to Establishment Labs' fourth quarter 2020 earnings call. At this time, all participants will be in listen-only mode. At the end of this call, we will open the line for a question and answer session, and instructions will follow at that time. If you require assistance, please press start and zero to reach an operator. As a reminder, this call is being recorded. I will now turn the call over to Raj Dinhoy, Head of Strategy and Investor Relations. Please go ahead.

Thank you, Operator, and thank you, everyone, for joining us. With me today are Juan Jose Chacon Quiroz, our Chief Executive Officer, and Renee Galleta, our Chief Financial Officer. Following their prepared remarks, we will take our 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 the company's annual report on Form 10-K, which we plan to file with the SEC tomorrow, and which will be available on our website at establishmentlabs.com. The content of this conference call contains time-sensitive information, accurate only as of the date of this live broadcast, March 10, 2021. Except as required by law, Establishment Labs undertakes no obligation to revise or otherwise update any statement to reflect events or circumstances after the date of this call. With that, it is my pleasure to turn over the call to our CEO, Juan Jose.

Thank you, Raj, and good morning, everyone. I hope everyone is healthy and continues to remain safe. Our fourth quarter revenue of $27 million represents a new record for our company. Fourth quarter revenue increased 11% over the fourth quarter of 2019 and was up sequentially 18% from the third quarter. Our strong results and recovery we saw over the course of 2020 are the latest evidence that we are moving beyond the pandemic and that the foundations of our growth story are very much intact. Our singular focus on women's health and the superior aesthetic and safety profile of our implants continues to resonate in the marketplace. We continue to grow our total global market share. In October of last year, we shared the 10-year post-market surveillance data of our Motiva implants. With now over 1.4 million implants worldwide, we continue to report a less than 1% complication rate in the key safety measures of capsular contracture and implant rupture. These results are at least an order of magnitude better than anything seen from the legacy competitor products in the international markets. As impressive as this data is, it speaks to something beyond just a competitive advantage. it should change how women perceive the safety of breast augmentation procedures. At Establishment Labs, we believe that this is not just possible, but likely. We believe that our data and aesthetic outcomes are quite literally game-changing. And as perceptions change and as new possibilities become available, the total addressable market could grow substantially. Another area where we are working to change perceptions is in the breast reconstruction sector. With one in eight women afflicted by breast cancer, being able to offer a substantially better alternative is an important mission for our company. In many countries around the world, less than 10% of women have browned the world, less than 10% of women have breast reconstruction after a mastectomy. One reason for this is that the historical focus of breast reconstruction has not been on achieving an aesthetic outcome. Our goal is not just to allow for safer breast reconstruction, but to create a new standard of aesthetic breast reconstructions where the patient's aesthetic outcome matches traditional breast augmentation. With an aesthetic outcome, we can have much more comfort with this important surgery. The planned launch of our floor at tissue expander is an important step in offering a better solution to these patients. 2020 was also an important year for Establishment Labs because it tested better solutions to these patients. 2020 was also an important year for Establishment Labs because it tested our company and showed that we can manage well during the most difficult times. We conserved cash and protected our people while continuing to invest in strategically important initiatives. We reduced spending at the height of the pandemic. but we did not reduce headcount with our customer-facing commercial team. Our balance sheet remains in great shape with $84.5 million in cash. Renee and her finance team manage our operating expenses and working capital well, and our cash balance increased in the fourth quarter. As impressive as this discipline has been over the last year, we are increasingly confident that the worst of the pandemic is behind us. And given the significant opportunities still in front of us, we intend to invest in our future. In manufacturing, just last week, we passed our annual audit under the MD SAP standard with no major observations. MD-SAP is a single audit program that covers requirements for US FDA as well as regulators in Europe, Canada, Japan, Brazil, Australia, and other jurisdictions. 2020 has also validated our focus on making digital part of the fabric of our company. With our Motiva Edge online programs, we trained thousands of plastic surgeons in 2020 and attracted many new potential customers through our best-in-class digital training and educational resources. On social media, we have built a commanding presence with our message of women's health and improved safety and aesthetic outcomes. We have more than 10 times the social media engagement of our closest competitors. This level of engagement allows us to support a patient's journey as she conducts research and helps us provide answers customized to her specific areas of interest. Our marketing team is also focused on initiatives to leverage our online presence to provide valuable insights into women's decision-making as they seek breast aesthetic procedures. This level of digital-based activity is unmatched in our industry. As challenging as the last year has been for all of us, are strong financial results and the resiliency in our business makes us even more confident that we will have continued strong growth for the foreseeable future. Given the momentum which has carried over from the fourth quarter, we are providing guidance for the full year 2021 of $110 to $112 million. This represents growth of 30 to 32% over 2020. Renee will provide more detail on our financial results and our outlook in a moment. Before I turn the call over to her, I want to provide an update on several near-term initiatives. On February 9th, we hosted a virtual meeting showcasing the significant development work we have done on MotivaMia, our minimally invasive breast enhancement procedure. Along with strong investor and industry participation, we had over 100 plastic surgeons tune in, and the feedback has been outstanding. A minimally invasive breast enhancement procedure that can be done in less than 30 minutes without general anesthesia and with no visible scars has been a goal for decades in our industry. And with Mia, we feel we have developed a system that matches that goal and one that is simple to perform, reproducible, and safe. We have learned a tremendous amount in our early series of cases. The learning curve for Mia is very fast, with all surgeons able to reduce their procedure time by 50% after performing only three to four procedures. Procedure times fell to as low as just 13 minutes. Recovery is also very fast. with patients discharged in our initial series in as little as 28 minutes, and back to work in less than two days with little pain or discomfort. MotivaMia opens up breast enhancement to many women who previously had not considered breast surgery, and we view this technology as expansive to the overall market opportunity for breast aesthetics. Based on our proprietary market research conducted with over 4,000 women around the world, our initial estimate of the global market size for Mia is 1.9 million procedures a year. This market expansion will increase the total addressable market from $1.5 billion with traditional breast implants to more than $5 billion with Motiva Mia. The Ergonomics II diamond implant used in MIA received CE mark in December and we are now advancing with the regulatory process for the tools that are part of the MotivaMIA system. We continue to define our commercial strategy and we will share more detail in the near future. Our Ergonomics II round implant was also CE marked in December. The Ergonomics II platform builds upon our successful Ergonomics implant which has become our best-selling and most premium offering in Europe and Asia Pacific. The features of this innovative new product, including enhanced mechanical properties, advanced chemistry, and improved ergonomics, we believe will result in even greater patient satisfaction. As it is so feature-rich, we expect Ergonomics II to command the price premium over ergonomics. Our early experience in Latin America with Ergonomics II implants has been very positive. We are on track to begin early commercial activity in Europe with Ergonomics II over the summer. Flora, our novel tissue expander, received CE mark in June of 2020. Renowned centers for breast reconstruction in Europe have used Motiva implants for years. and are looking forward to pairing them with the Flora Tissue Expander and the unique features it offers, including our proprietary smooth silk bioengineered surface. With an integrated RFID port, Flora will be the only MRI compatible tissue expander on the market, which is a significant improvement over the current standard of care. Pre-marketing activities are underway in preparation for a broad commercial launch in Europe over the summer. and we are already in contract discussions with several hospital accounts. Our clinical and commercial progress in China continues, and we are moving toward launching in this important market in 2022. Our regulatory timelines for U.S. approval also remain unchanged. More than half of our U.S. ID study patients in the aesthetic cohorts have now reached their two-year post-op anniversary. I will now turn the call over to Renée.