TELA Bio, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Telebio fourth quarter and full year 2022 earnings conference call. At this time, all participants are on a listening mode. A question and answer session will follow the formal presentation. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Louisa Smith from the Gilmartin Group. Please go ahead.

Thank you, Lisa, and good afternoon. Everyone earlier today, telebio released financial results for the 4th quarter and full year 2022. A copy of the press release is available on the company's website. Joining me on today's call are Tony, president and chief executive officer. And Roberta, 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 annual report on Form 10-K and quarterly reports on Form 10-Q, 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 and pipeline opportunities, product potential, the impact of various macroeconomic conditions, including the ongoing response to the COVID-19 pandemic, recessionary concerns, banking instability, and inflationary pressures, 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 for our fourth quarter and full year 2022 earnings call. I'm pleased to report that in the fourth quarter of 2022, Telebio continued to deliver strong revenue growth and sales of $11.6 million. up 39% over the prior year, and full-year 2022 revenue of $41.4 million, representing 41% growth from 2021 overall. This was despite continued hospital staffing challenges and slower-than-expected GPO contract uptake, which Roberto will describe in greater detail shortly. Yet even with these ongoing headwinds, we are encouraged that Telebio's Obatex portfolio continues to gain market share quarter after quarter. Our ability to drive continued revenue growth and share capture is a result of our focus on the five factors contributing to top line achievement. Salesforce size, individual rep productivity, product portfolio, GPO access, and clinical data. I'll spend some time describing how we advanced each factor since the beginning of 2022 and how they impacted our revenue growth. First, Salesforce size. Given their productivity to date, including through the time of the greatest COVID-19 impact several years ago, we've sought to continue expanding the number of reps selling our products. We entered 2022 with just under 45 sales reps, and our earnings call a year ago announced the goal of reaching 55 sales reps by the middle of 22 and 60 by the end of the year. I'm pleased to report that at the close of 22, we had 61 reps. And as of today, we have a total of 68 on board. I'll talk more about our goals for hiring in 23 in a few minutes. Another important factor driving revenues is contract access to hospital members of GPOs or group purchasing organizations. In addition to our pre-existing health trust contract and the premier contract, which became effective on October 1, 22, we recently announced entry into an agreement with a third national GPO. This three-year dual source agreement extends through January of 26 and places TELA in the biosynthetic category. We are very pleased with this new contract as it provides us access to a significant number of new hospitals. It's also important to understand that this GPO is strictly administered, which means that we are getting incremental access to customers we would not have otherwise been able to reach. Our inclusion in GPO contracts allows physicians to utilize our products without having to first go through a hospital's value analysis committee for access. This clears the way for our sales representatives to introduce surgeons to the use of our Ovitex portfolio and grow their usage from there. A third factor is the extent of our product offerings. We continue to expand our portfolio of complementary soft tissue restoration and preservation solutions. Most recently, we announced the launch of two larger Ovitex LPR device configurations. These are ellipse-shaped products designed for ventral and incisional hernia repair in robotic and laparoscopic procedures, each with a smooth side for placement within the abdominal cavity adjacent to the viscera. With 40% of reported Ovitex cases performed robotically and 20% laparoscopically in the fourth quarter of 22, we expect these two new larger pieces will allow for even broader usage of our products going forward. At the beginning of this year, we announced the launch of the NIVIS Fibular Collagen Pack. This is an absorbent matrix of type 1 and type 3 bovine collagen designed to manage moderately to heavily exudating wounds and to control minor bleeding. Type 1 and type 3 collagen closely resemble the native collagen of a patient and have been shown to stimulate cellular activity and contribute to new tissue development. Specifically, type 3 collagen helps control wound contraction and the amount of scar deposition during wound healing. Tela's NIVIS product is provided in particulate form, allowing it to be molded and packed into wounds to facilitate contact with host tissue. We're very excited to launch this high-quality product, which is already generating physician interest and promises to be a new vehicle of growth in the future. We also have a robust internal R&D program developing reinforced resorbable synthetic mesh solutions for soft tissue restoration, as well as additional technologies for soft tissue preservation. We expect our collaboration, business development, and internal R&D efforts to continue to provide our sales team with a complementary portfolio of products that will yield great outcomes for patients and surgeons. The fourth factor, clinical data, is the key focus for us because these trials and studies allow us to highlight the effectiveness and benefits of Ovitex. In October of 22, we announced the publication of very positive two-year recurrence data and patient-reported quality of life outcomes from our BRAVO hernia study. We recently also highlighted five other studies published in 22 that demonstrate favorable results with Ovitex in a variety of hernia and abdominal wall reconstruction applications. We are currently enrolling our BRAVO II study, which will capture data on the effectiveness of Ovitex when used in robotic procedures. As the use of surgical robot systems in general surgery continues to grow, we believe Ovitex is uniquely positioned to capitalize on this opportunity, and we anticipate using the data from BRAVO II to further build on that foundation. Additionally, we are conducting a retrospective study for our Ovitex PRS products, which could potentially be used to support expanded label indications. And finally, a fifth growth factor is sales rep productivity. In our most recent analysis, we have continued to see that our newest representatives reach break-even within six months of arrival. This results from a combination of high-quality talent joining TELA in recent years and our Playbook 90 training and performance assessment program. As part of this training, reps become proficient in selling both our Ovitex and Ovitex PRS products to a variety of surgeon subspecialists. We continue to expand the number of accounts that purchase both categories, and when that happens, we experience synergistic productivity gains. Accounts that purchase both Ovitex and Ovitex PRS are more productive than the sum of other accounts that purchase only one or the other product categories. That is, one plus one equals three or four rather than two. Our reps continually work to leverage this positive dynamic in more and more accounts, and we expect this to contribute to continued growth for TELA. Before passing it on to Roberto for more details on the financials, and on expectations for 23, I wanted to provide additional color on the growth of the Salesforce going forward. A year ago, we were a company with one GPO contract, and we announced plans to expand our Salesforce from about 45 to 60 reps over the course of 22. Today, we have three quality GPO contracts in place, and we are actively pursuing additional targets. To take optimal advantage of these hunting licenses, we have budgeted the hiring of between 15 and 20 additional reps this year, leading to a 23 year end total of 75 to 80 reps. Hiring will be more geographically targeted this year, given our presence in 68 territories already. We continue to see strong sales rep candidates across the U.S., so we are confident we can grow to this range by the end of the year. Additionally, If we see as many strong applicants as we have to date and their availability lines up with the needs of our new territories, we would be sure to have opportunistic about exceeding the 20 rep target and achieving more aggressive growth goals. We will update you on progress on this front in our quarterly calls over the course of the year. With that, I'll turn the call over to Roberto.