TELA Bio, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Telebio First Quarter 2025 earnings conference call. At this time, all participants are in listen-only mode. Following the prepared remarks, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Louisa Smith from Gilmartin Group.

Thank you, Gerald, and good afternoon, everyone. Earlier today, Telebio released financial results for the first quarter, 2025. 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 annual report on Form 10-K and quarterly reports on Forms 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 identified in our filing, like changes in surgical procedural volume, the regulatory environment, sales and marketing strategies, capital resources, or operating performance. With that, I will now turn the call over to Tony.

Thanks, Louisa, and good afternoon, everyone. Thank you for joining Telebio's first quarter 2025 earnings call. I'll begin by reviewing the quarter and the factors that drove performance. Then I'll turn it over to Roberto for a more detailed review of the financials and our outlook. Then share some closing thoughts before opening it up for your questions. We generated 18.5 million in revenue during the first quarter, representing 12% growth over the prior year and 5% sequential growth over the fourth quarter of 24. In Q1, we saw strong demand for both Ovitex and Ovitex PRS, reinforced tissue matrix products, with revenue for each growing approximately 15% and 2% respectively, with PRS coming off a particularly strong performance a year ago. Additionally, we were very pleased with the continued strength in our European business with 17% growth over the first quarter of 2024. reflecting what we believe to be an exceptionally attractive XUS opportunity for TELA moving forward. Based on this performance, the strong morale of our commercial organization, and our continued confidence in their performance, we are reaffirming our 2025 revenue expectation of $85 to $88 million, representing growth from 23% to 27% over full year 24. Let me provide some more insight into the continuing improvement and evolution of our commercial organization. We've seen real effectiveness from our new Territory Manager, or TM, and Account Specialist, or AS, structure, which has already yielded quality results and shown signs of further potential upside. As of this week, we have 70 Territory Managers and 22 Account Specialists across our region, and we plan to further augment these numbers with particular focus on the TMs, including by fostering talent from within the organization. Our improved training program gives us confidence that all new reps will be able to hit the ground running and contribute meaningfully within the first quarter or two of hiring. Year to date, we've trained a total of 25 new sales team members comprising 11 TNs and 14 ASs. We have seen very positive results across all of our trainings as we get the new reps into the field and have observed that ASs have shown great enthusiasm In addition to strong product and clinical knowledge based on internal assessments, we conduct as part of our enhanced training program. The new structure with ambitious ASs will allow TMs to further expand their networks while simultaneously staying in front of existing accounts and driving sales. Furthermore, in the event that a TM departs the company, an in-place AS enables continuity and account coverage, helping ensure customer relationships are maintained and business momentum is preserved. We also continue to see positive dynamics playing out within the broader hernia market with the shift away from plastic mesh and towards more natural repair products. It is to our benefit that the industry is transitioning away from permanent synthetic mesh, and we continue to be strongly positioned to capitalize on this shift. Obatex is equipped with strong and consistent clinical data showing the clinical value of this portfolio of products And as a result, we continue to gain market traction this quarter. We've reached over 69,000 Ovitex hernia implantations since inception. And Ovitex IHR and Liquifix has seen great momentum with over $1 million each in sales since the launch of 2024. We remain committed to bringing new and complementary products to market, and we recently announced the launch of two larger sizes of our Ovitex PRS product, which has the potential to simplify more complex plastic and reconstructive procedures. Surgeons will no longer need to suture smaller pieces together for use in larger applications, increasing their OR efficiency, reducing costs, and establishing Ovitex PRS as a premier repair solution with one of the broadest offerings for surgeon needs. Year to date, we have presented the benefits of our product in front of more than 5,000 surgeons globally, with deep engagement of more than 1,500 surgeons through 25 industry and society meetings, two cadaver labs, numerous educational dinners and webinars, a live surgery symposium, and two standing room only industry symposiums, one in the U.S. and one in Europe. We also hosted our third annual Plastic and Reconstructive Surgery Innovation Summit, bringing together leading surgeons to advance techniques in soft tissue reconstruction. Also of note, We participated in the prestigious Intuitive Connect meeting in April, attended by nearly 1,000 surgeons in our space, where we were headlined as one of the three top sponsors and one of only 14 invited industry attendees. We were also the exclusive sponsor of the general surgeon welcome reception for the meeting, including an Ovatex IHR test drive on the Da Vinci 5 workstation with Dr. Paul Zotek of Indiana Hernia Center. a long-time OviTech user and telebio key opinion leader and faculty member. Before I turn the call over to Roberto to review our financials, I'd like to address the current tariff environment and our exposure. As it stands today, there is a 10% tariff applied to products shipped into the U.S. from New Zealand, which is where the vast majority of our products are manufactured. Based on our long-term supply and license agreement, the tariff is shared equally by us and the manufacturer. Because of the relatively modest acquisition prices of our products, we expect that our share of the tariff will negatively affect our gross margin by no more than 50 to 100 basis points. Additionally, we are working with our partner in collaboration to further reduce the tariff impact by shipping products, for example, intended for Europe directly to our distribution facility there rather than by the U.S. as we've done historically. I'll now ask Roberto to view our financials in more detail.