TELA Bio, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Telebio Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow 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. Please go ahead.

Thank you, Loui, and good afternoon, everyone. Earlier today, Telebio released financial results for the second quarter of 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 may 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. And thanks for joining us today on our second quarter 2022 earnings call. I am very pleased to report that Telebio achieved its first double-digit revenue quarter with net sales of $10.4 million, growing 38% year-over-year and 26% sequentially from the first quarter. On today's call, I'll describe how we plan to continue growing revenue and taking market share, update you on the progress of our Salesforce expansion, discuss the signing of the premier contract and what that means for our business, and review our latest clinical news. Then Roberto will provide a financial review of the quarter and I will make some closing comments before we take your questions. As I've described before, TELA's revenue and market share capture can be thought of as the product of five factors. One, the size of our sales force. Two, per sales rep productivity. Three, the number of products in our portfolio. Four, GPO and supply chain access. And five, clinical data. Throughout the past year, and certainly within the second quarter, we've improved each of these dimensions, resulting in continued financial and operational performance. As we've disclosed previously, we ended 2021 with just under 45 sales reps. Our goal was to grow to 55 reps by mid-year and 60 by the end of 2022. I am pleased to report that we had 57 sales reps at the end of June, and remain on track to reach our target for the end of 2022. More important than the number of reps, though, is their quality. We are continuing to see that strong reps with prior experience within the med tech industry are eager to join Della, having seen our success over the past few quarters and hearing about the culture and compensation potential from current sales reps within their professional networks who have already found success here. We've had two training sessions in the first half of the year, yielding reps who are thoroughly knowledgeable in Playbook 90 and who have hit the ground running in generating sales. Our most recent metrics on new reps continue to show that on average, they have covered their costs within the first three to six months of hiring, quickly contributing to the top line without negatively affecting profitability. We're in the process of planning the pace of Salesforce expansion in 2023, and evaluating whether it makes sense to accelerate any of that into 2022. We'll update you on that later in the year. COVID-19 still seems to be affecting the market, presenting both challenges and opportunities. Although our second quarter got off to a strong start, we saw some softness in June, such that the last typically strongest revenue month of the quarter was only slightly above May. That said, we continue to believe there is considerable backlog in hernia repair due to COVID-19. Based on market growth rates before and after the March 2020 initial COVID-19 lockdown and more recently, we estimate there may be as many as 100,000 hernia repair procedures that have been deferred due to COVID-19 that need to be treated in the coming quarters. This represents potential for the use of Ovitex products and is the reason that we remain confident about performance over the full year. Roberto will have more on that shortly. Toward the end of July, we announced our entry into a group purchasing organization agreement with Premier for our Ovitex Hernia and PRS products. The contract becomes effective on October 1st. Premier is the second largest GPO in the US, covering over 4,400 hospitals and 225,000 providers. This is a meaningful achievement for Tela. We've already seen the impact a GPO contract can have on our business, with Health Trust now comprising approximately one-third of our revenue. Premier is an even larger organization and offers us an excellent opportunity to grow our business even faster. Additionally, Premier gives us access to many West Coast markets we have not fully penetrated to date. We believe the potential downstream impact of this agreement is substantial and will serve as an important driver of our future growth. We were pleased to announce recently that 24-month results from BRAVO and rebar studies were accepted for presentation at the American Hernia Society meeting in September. In our BRAVO study, the recurrence rate for eventual hernias repaired with Ovatex was only 2.6% at 24 months, which we believe compares favorably to reported recurrence rates from competitive products in these types of procedures. A separate retrospective study examined the recurrence rates of patients who underwent inguinal hernia repair utilizing Ovitex in a minimally invasive technique known as the rebar technique. After two years, only three recurrences were identified from the 157 inguinal hernias repaired using the rebar technique, a rate of 1.9%. High-quality outcomes data is one of the factors contributing directly to Ovitex revenue and market share capture. We will continue to develop further supportive data with one area of focus being outcomes from Ovitex using robotic repairs as in Bravo 2. Today, approximately 60% of Ovitex repairs employ minimally invasive procedures and we expect this to grow. Developing additional products compatible with surgical robots and laparoscopy and the data supporting their outcomes is therefore a high priority for TELA. On that note, The final important factor for revenue growth is portfolio expansion. We continue to advance projects in both R&D and business development and expect to be able to discuss some details of this more fully by the end of the year. Our sales force is excited to get additional high quality products to discuss with their customers. And we take seriously the goal of being a broader tissue preservation and restoration company. We look forward to providing updates in the future. With that, I'll turn the call over to Roberto for more details on our second quarter financial results.