TELA Bio, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Telebio First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow after the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to Louisa Smith from the Gilmartin Group. Ms. Smith, the floor is yours.

Thank you, Chris, and good afternoon. Earlier today, Telebio released financial results for the first quarter 2022. A copy of the press release is available on the company's website. Joining me on today's call are Tony Koblish, President and Chief Executive Officer, and Roberto Cuca, Chief Operating Officer and Chief Financial Officer. Before we begin, I'd like to remind you that during this conference call, the company will make projections and forward-looking statements regarding future events. We encourage you to review the company's past and future filings with the SEC, including without limitation the company's 2021 Form 10-K and Form 10-Qs, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include, without limitation, statements regarding product development, product potential, the impact of COVID-19, the regulatory environment, sales and marketing strategies, capital resources, or operating performance. With that, I'll now turn the call over to Tony.

Thank you, Louisa. Good afternoon, everyone, and thanks for joining us today. I'm pleased to report that Telebio had a strong finish to the quarter, with March marking the highest monthly revenue in the company's history. Revenue from the quarter was $8.2 million, up 40% year over year. Although the Omicron variant caused a sluggish start to the year, our momentum built as the quarter progressed. Elective surgery volumes were down in January and February across most of the med tech sector, where we saw simple hernia surgery hit disproportionately as hospital systems tended to prioritize more urgent, non-elective surgeries. In contrast, Ovitec's PRS showed resilience to the effects of COVID-19, with demand growing over the period, resulting in revenues up 111% year over year. Our analysis of market data corroborates anecdotal reports of a backlog in delayable procedures, and we expect some of that backlog to be discharged in the coming quarters. Further evidence in this regard is shown by a strong start to our second quarter. We've noted that the clinical utility and value proposition of Ovitex has generated a lot of traction and we are continuing to win over surgeons as evidenced by our significant rate of growth compared to competitive products. Telebio is the only hernia repair company to have continuously gained market share throughout the COVID-19 pandemic. We attribute this growth to our strong product profile and our highly effective and expanding sales force. In comparison to our plastic mesh competitors, who are facing questions about the long-term safety of their products, and our biologic mesh competitors, who offer a costlier product lacking the same level of biomechanical support, Tela's Ovitex products offer the best of both worlds, strength and safety at a good price point. Our sales team has done an outstanding job of getting this message out, even though the pandemic appears to have broadly favored incumbent MedTech products. We are very excited to see what they can do now that the headwinds from COVID appear to be abating. And here's to hoping it stays that way. March provided a glimpse of the type of performance we can achieve when the impact of COVID is low and hospital systems are able to address the demand in delayed elective procedures. Our market share expansion is also driven by the compelling and growing body of clinical data on Ovitex. As we've shared with you before, recurrence rates for eventual hernias repaired with Ovitex in our BRAVO study were only 2.7% at 12 months and remained below 5% at 24 months. We aim to build upon this clinical evidence in our BRAVO II study, which will further evaluate the safety and efficacy of Ovitex during robotic repairs of ventral and inguinal hernias over a 24-month period. Another strength of the Ovitex portfolio of products is their flexibility. As we're seeing in the market, use of our products, a growing percentage of hernia procedures today are performed robotically, and almost 60% of Ovitex hernia repairs were done via laparoscopic or robotic surgeries last year. Ovitex is the only biologic product that can be delivered to a hernia repair site via trocar for use in robotic procedures. As minimally invasive procedures continue to grow in the hernia space, we expect to be able to leverage our superior utility to accelerate market penetration in this segment. As you know, even the best products don't sell themselves. So another factor in the company's continuing performance is our strong growing sales force. One of TELUS core competencies is our ability to quickly train and make newly hired sales professionals as productive as possible using the program we developed, Playbook 90. Over a new rep's first 90 days with the company, the program provides intensive training in the various resources available to assist in selling. The program also measures their performance and usage of these resources to help predict how quickly the reps will become self-supporting. Playbook 90 was launched at the end of 2020 and helped the 2021 class of reps reach profitability in well under six months. despite the challenges created by COVID-19. Based on year-to-date data through April, 12 of our reps sold at an annualized rate of over $1 million, seven of those at over $1.5 million, and two of those at over $2 million. This has obvious positive financial effects for the company, but also benefits TELA by enabling us to attract and recruit additional high-quality sales reps. The potential to earn incentive compensation on these sorts of sales figures accelerated by the Playbook 90 training is a huge draw for a highly effective and competent sales force. Sales rep performance in the last year has given us confidence to materially grow our sales team with a target of 55 reps by mid-year and 60 reps by year-end, up from just under 45 at the end of 2021. Assuming we continue to see the results from our Playbook 90 program, We expect this increase in our sales force will have a positive impact on our top line without unduly burdening our bottom line. This will be further amplified as we add products to our portfolio to provide a broad tissue restoration and preservation offering. SiteGuard, which is in the initial stages of its launch, is the first step in this expansion. From the start, our strategy for success has been to provide innovative solutions backed by clinical data, addressing an unmet need, and marketed by an exceptional sales team. As we continue to execute on this strategy, we expect to see accelerated market penetration for our products. And with that, I'd like to turn the call over to Roberto Cuca, our Chief Operating Officer and CFO, for a more in-depth review of our first quarter financial results. Thanks, Tony.