Form 8-K - Current report

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 7, 2024

 

TELA Bio, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware		001-39130		45-5320061
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

1 Great Valley Parkway, Suite 24 Malvern, Pennsylvania		19355
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: [phone]

 

Not Applicable

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		TELA		Nasdaq Global Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Item 2.02

Results of Operations and Financial Condition.

 

On November 7, 2024, TELA Bio, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2024. A copy of this press release is furnished as Exhibit 99.1 hereto.

 

The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 7.01

Regulation FD Disclosure.

 

On November 7, 2024, the Company updated information reflected in a corporate slide deck, which representatives of the Company will use in various meetings with investors from time to time. A copy of the presentation is attached hereto as Exhibit 99.2, and incorporated herein by reference.

 

The information furnished pursuant to Item 7.01, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 9.01

Financial Statements and Exhibits.

 

(d) Exhibits

 

The following exhibits are being furnished herewith:

 

Exhibit No.		Document
99.1		Press Release of TELA Bio, Inc., dated November 7, 2024.
99.2		Corporate Slide Deck, dated November 7, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	TELA BIO, INC.
	By:	/s/ Antony Koblish
	Name:	Antony Koblish
	Title:	President, Chief Executive Officer and Director
Date: November 7, 2024

 

 

 

 

Exhibit 99.1

 

 

TELA Bio Reports Third Quarter 2024 Financial Results

Reiterates 2024 Revenue Guidance and Expects Recently Implemented Operational Efficiency Improvements to Reduce Operating Expenses in 2025

 

MALVERN, PA, November 7, 2024 -- TELA Bio, Inc. ("TELA Bio"), a commercial-stage medical technology company focused on providing innovative soft-tissue reconstruction solutions, today reported financial results for the third quarter ended September 30, 2024.

 

Recent Highlights

 

·

Reported revenue of $19.0 million in the third quarter, representing growth of 26% over the prior year period;

 

·

Increased demand for OviTex® and OviTex PRS Reinforced Tissue Matrix products during the third quarter, resulting in a year-over-year growth in unit sales volume for each product of approximately 39% and 44%, respectively;

 

·

Closed on an underwritten public offering yielding gross proceeds of approximately $46.0 million before deducting underwriting discounts and commissions and other estimated offering expenses;

 

·

Implemented certain operating efficiency improvements that are expected to reduce operating expenses in 2025 by between $5.0 million to $10.0 million from annualized first half of 2024 operating expenses; and

 

·

Reiterated full year 2024 revenue guidance of $74.5 million to $76.5 million, representing 27% to 31% year-over-year growth. Impact from IV fluid shortages resulting from recent natural disasters may affect this projection but is currently unpredictable.

 

“Third quarter revenue of $19 million was the highest in TELA Bio’s history and indicates a healthy demand for our products and a return to normalized growth across the OviTex portfolio following the second quarter’s external market disruptions,” said Antony Koblish, President and CEO of TELA Bio. “Our commercial leadership is prioritizing growth, and we are confident in our ability to demonstrate increased operating leverage going forward. With an additional $43 million in net proceeds following the recent underwritten public offering, and actions already taken to reduce operating expenses for 2025, we believe that we are amply funded to attain profitability with current resources.”

 

Third Quarter 2024 Financial Results

 

Revenue was $19.0 million in the third quarter of 2024, an increase of 26% compared to the same period in 2023. The increase was primarily driven by an increase in unit sales of our products due to the addition of new customers and growing international sales. This growth was partially offset by a decrease in average selling prices caused by product mix as the share of smaller-sized units increased with the introduction of robotically compatible OviTex IHR and our increased focus in growing market share in high-volume minimally invasive and robotic procedures.

 

 

 

 

Gross profit was $12.9 million in the third quarter of 2024, or 68% of revenue, compared to $10.4 million, or 69% of revenue, in the same period in 2023. The decrease in gross margin was primarily due to a higher charge for excess and obsolete inventory as a percentage of revenue.

 

Operating expenses were $22.2 million in the third quarter of 2024, compared to $20.6 million in the same period in 2023. The increase was due to higher compensation costs, including increased severance costs and additional employee-related expenses, as well as increased travel and consulting.

 

Loss from operations was $9.4 million in the third quarter of 2024, compared to a loss from operations of $10.2 million in the same period in 2023.

 

Net loss was $10.4 million in the third quarter of 2024, compared to a net loss of $11.0 million in the same period in 2023.

 

Cash and cash equivalents on September 30, 2024 totaled $17.3 million.

 

Conference Call

 

TELA Bio will host a conference call at 4:30 p.m. Eastern Time on Thursday, November 7, 2024, to discuss its third quarter 2024 financial results. Investors interested in listening to the conference call should register online. Participants are required to register a day in advance or at minimum 15 minutes before the start of the call. A live webcast and replay can be accessed via the Events & Presentations page of the investor section of TELA's website.

 

About TELA Bio, Inc.

 

TELA Bio, Inc. (NASDAQ: TELA) is a commercial-stage medical technology company focused on providing innovative technologies that optimize clinical outcomes by prioritizing the preservation and restoration of the patient's own anatomy. The Company is committed to providing surgeons with advanced, economically effective soft-tissue reconstruction solutions that leverage the patient's natural healing response while minimizing long-term exposure to permanent synthetic materials. For more information, visit www.telabio.com.

 

TELA Bio intends to use the Investor Relations section of its website as a means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor TELA Bio’s website in addition to following its press releases, SEC filings, public conference calls, presentations, and webcasts.

 

 

 

 

Caution Regarding Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current expectations are forward-looking statements and reflect the current beliefs of TELA Bio's management. Such forward-looking statements include statements relating to our expected revenue and revenue growth for the full year 2024 and reduction in operating expenses through the full year 2025. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors that could cause actual results and events to differ materially and adversely from those indicated by such forward-looking statements including, among others: the impact to our business from macroeconomic conditions, including any lingering effects of the COVID-19 pandemic and other public health crises, recessionary concerns, banking instability, increasing market interest rates, and inflationary pressures, potentially impacting our ability to market our products, demand for our products due to the deferral of elective procedures, the labor and staffing environment in the healthcare industry, disruption in our supply chain, or pricing pressures concerning our products or the procedures using our products; the impact of cybersecurity events, external supply chain disruptions, and natural disasters or extreme weather events affecting or disrupting hospital operations and procedural volumes; our ability to achieve or sustain profitability; our ability to gain market acceptance for our products and to accurately forecast and meet customer demand; our ability to compete successfully; that data from earlier studies related to our products and interim data from ongoing studies may not be replicated in later studies or indicative of future data; that data obtained from clinical studies using our product may not be indicative of outcomes in other surgical settings; our ability to enhance our product offerings; product development and manufacturing problems; capacity constraints or delays in production of our products; maintenance of coverage and adequate reimbursement for procedures using our products; product defects or failures; and total estimated consideration related to the NIVIS transaction. These risks and uncertainties are described more fully in the "Risk Factors" section and elsewhere in our filings with the Securities and Exchange Commission and available at www.sec.gov, including in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Any forward-looking statements that we make in this announcement speak only as of the date of this press release, and TELA Bio assumes no obligation to update forward-looking statements whether as a result of new information, future events or otherwise after the date of this press release, except as required under applicable law.

 

Investor Contact

Louisa Smith

[e-mail]

 

 

 

 

TELA Bio, Inc.

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

 

		September 30,				December 31,
		2024				2023
Assets
Current assets:
Cash and cash equivalents		$	17,301			$	46,729
Accounts receivable, net of allowances of $230 and $416			11,222				9,737
Inventory			13,600				13,162
Prepaid expenses and other current assets			2,009				2,098
Total current assets			44,132				71,726
Property and equipment, net			2,423				1,984
Intangible assets, net			1,834				2,119
Right-of-use assets			1,796				1,954
Other long-term assets			2,566				—
Restricted cash			265				265
Total assets		$	53,016			$	78,048
Liabilities and stockholders’ (deficit) equity
Current liabilities:
Accounts payable		$	2,479			$	1,667
Accrued expenses and other current liabilities			14,379				15,300
Total current liabilities			16,858				16,967
Long-term debt			40,970				40,515
Other long-term liabilities			1,460				1,685
Total liabilities			59,288				59,167
Stockholders’ (deficit) equity:
Preferred stock; $0.001 par value: 10,000,000 shares authorized; no shares issued and outstanding			—				—
Common stock; $0.001 par value: 200,000,000 shares authorized; 24,717,193 and 24,494,675 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively			25				24
Additional paid-in capital			343,076				339,655
Accumulated other comprehensive income			149				91
Accumulated deficit			(349,522	)			(320,889	)
Total stockholders’ (deficit) equity			(6,272	)			18,881
Total liabilities and stockholders’ (deficit) equity		$	53,016			$	78,048

 

 

 

 

TELA Bio, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)

 

		Three months ended September 30,								Nine months ended September 30,
		2024				2023				2024				2023
Revenue		$	18,957			$	15,052			$	51,651			$	41,455
Cost of revenue (excluding amortization of intangible assets)			6,004				4,568				16,099				12,682
Amortization of intangible assets			95				95				285				285
Gross profit			12,858				10,389				35,267				28,488
Operating expenses:
Sales and marketing			16,472				14,474				50,691				42,517
General and administrative			3,683				3,728				11,133				10,834
Research and development			2,068				2,368				6,784				6,934
Total operating expenses			22,223				20,570				68,608				60,285
Other operating income:
Gain on sale of product line			—				—				7,580				—
Loss from operations			(9,365	)			(10,181	)			(25,761	)			(31,797	)
Other expense:
Interest expense			(1,344	)			(1,334	)			(4,007	)			(3,878	)
Other income			337				558				1,135				1,901
Total other expense, net			(1,007	)			(776	)			(2,872	)			(1,977	)
Net loss		$	(10,372	)		$	(10,957	)		$	(28,633	)		$	(33,774	)
Net loss per common share, basic and diluted		$	(0.42	)		$	(0.45	)		$	(1.16	)		$	(1.51	)
Weighted average common shares outstanding, basic and diluted			24,703,578				24,483,664				24,648,933				22,322,256
Comprehensive loss:
Net loss		$	(10,372	)		$	(10,957	)		$	(28,633	)		$	(33,774	)
Foreign currency translation adjustment			51				51				58				(15	)
Comprehensive loss		$	(10,321	)		$	(10,906	)		$	(28,575	)		$	(33,789	)

 

 

 

Exhibit 99.2

INVESTOR PRESENTATION November 2024

 

 

Forward Looking Statements This presentation contains forward - looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 . All statements other than statements of historical facts contained in this document, including but not limited to statements regarding possible or assumed future res ults of operations, business strategies, development plans, regulatory activities, market opportunity competitive position, potential growth opportunities, and the ef fec ts of competition, are forward - looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause the ac tua l results, performance or achievements of TELA Bio, Inc. (the “Company”) to be materially different from any future results, performance or achievement s e xpressed or implied by the forward - looking statements. In some cases, you can identify forward - looking statements by terms such as “may,” “will,” “should,” “expect ,” “plan,” “aim,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of the se terms or other similar expressions. The forward - looking statements in this presentation are only predictions. The Company has based these forward - looking statements lar gely on its current expectations and projections about future events and financial trends that it believes may affect the Company’s business, financial condition, an d results of operations. These forward - looking statements speak only as of the date of this presentation and are subject to a number of risks, uncertainties and ass ump tions, some of which cannot be predicted or quantified and some of which are beyond the Company’s control, including, among others: the impact to our busine ss from macroeconomic conditions, including any lingering effects of the COVID - 19 pandemic and other public health crises, recessionary concerns, banking instabil ity, increasing market interest rates, and inflationary pressures, potentially impacting our ability to market our products, demand for our products due to the defe rra l of elective procedures, the labor and staffing environment in the healthcare industry, disruption in our supply chain, or pricing pressures concerning our products or the procedures using our products; the impact of cybersecurity events, external supply chain disruptions, and natural disasters or extreme weather events affecting or disrupting hospital operations and procedural volumes; our ability to achieve or sustain profitability; our ability to gain market acceptance for our products a nd to accurately forecast and meet customer demand; our ability to compete successfully; that data from earlier studies related to our products and interim data from ong oin g studies may not be replicated in later studies or indicative of future data; that data obtained from clinical studies using our product may not be indicative of out com es in other surgical settings; our ability to enhance our product offerings; product development and manufacturing problems; capacity constraints or delays in production o f o ur products; maintenance of coverage and adequate reimbursement for procedures using our products; product defects or failures; and total estimated consi der ation related to the NIVIS transaction. These and other risks and uncertainties are described more fully in the "Risk Factors" section and elsewhere in the Company's filings with the U.S. Securities and Exchange Commission (the “SEC”) and available at www.sec.gov. You should not rely on these forward - looking statem ents as predictions of future events. The events and circumstances reflected in the Company’s forward - looking statements may not be achieved or occur, and act ual results could differ materially from those projected in the forward - looking statements. Moreover, the Company operates in a dynamic industry and economy. New ri sk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties that the Compan y m ay face. Except as required by applicable law, we do not plan to publicly update or revise any forward - looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. 2

 

 

We provide innovative soft - tissue reconstruction solutions that optimize clinical outcomes by prioritizing the Preservation and Restoration of the patient’s own anatomy. Our Mission 3

 

 

1. Management estimate. $2.2B total includes $1.5B hernia & abdominal wall reconstruction, $0.7B plastic reconstructive surgery. Redefining soft tissue preservation and restoration with a differentiated category of tissue reinforcement materials and supportive products TELA Bio, Inc. ▫ Advanced reinforced tissue matrix portfolio supported by compelling clinical evidence ▫ $2.2B US market opportunity 1 – still in early stages of growth ▫ Driving commercial adoption with targeted direct - sales approach ▫ Recent product launches in growing markets: robotic hernia surgery, plastic and reconstructive surgery ▫ Broad intellectual property portfolio ▫ Established DRG - based reimbursement pathway for hernia repair and robust GPO access ▫ Highly accomplished executive team with proven track record 4

 

 

5

 

 

Complex, Moderate Ventral / Abdominal Wall Reconstruction Simple Ventral Hernia Repair Inguinal Hernia Repair Hiatal Hernia Repair ~60,000 ~345,000 ~665,000 ~40,000 $360M $515M $600M $40M 1. Sources: Millennium Research Group Reports, IMS Health Data; iData Research MedSKU . 2. Management estimate. Market size based on volume and weighted average selling price for OviTex . Annual Procedures 1 $1.5B 2 Robotic / Minimally Invasive Surgery (MIS) Opportunity Robotic / MIS compatible procedures total over 1M annually and have a potential market opportunity of up to $1.2B 2 6 US Hernia Surgery Market: ~$1.5 Billion Annual Opportunity

 

 

OviTex IHR 4 - layer and 3 - layer device No smooth sides Robot Compatible 2 : Yes OviTex IHR is designed specifically for use in inguinal hernia repair procedures. The design also incorporates an anatomical and rectangular shape to suit surgeon preference. 7 OviTex Core 4 - layer device No smooth sides Robot Compatible 1 : Yes OviTex Core is designed to reinforce primary hernia repairs where the device will not come into contact with viscera. OviTex 2S 8 - layer device 2 smooth sides Robot Compatible: No OviTex 2S incorporates eight layers of tissue for added strength. The two smooth sides make it suitable for intraperitoneal placement. OviTex LPR 4 - layer device 1 smooth side Robot Compatible 1 : Yes OviTex LPR is designed specifically for use in minimally invasive procedures. The design also incorporates a smooth side making it suitable for intraperitoneal placement. 1. Robot compatibility based on use of 10mm trocar. Robot compatibility of LPR and OviTex Core include sizes 400 cm 2 or less. Robot compatibility of OviTex 1S includes sizes 200 cm 2 or less. 2. Robot compatibility based on use of 8mm trocar. Robot compatibility of OviTex IHR include sizes of 221 cm 2 or less. OviTex 1S 6 - layer device 1 smooth side Robot Compatible 1 : Yes OviTex 1S incorporates a smooth side that is designed to minimize tissue attachment and to reinforce primary hernia repairs where the device may come into contact with viscera (e.g. intraperitoneal). OviTex Reinforced Tissue Matrix A more natural hernia repair

 

 

8 Need for Alternative to Permanent Synthetic Mesh 1. Hernia and Abdominal Surgeries Survey (Oct 2020). A group of 71 surgeons were surveyed regarding use of mesh in various he rni a repair surgeries. 2. Figures derived from Company - sponsored online poll of approximately 1,100 potential patients for hernia procedures. 3. See Medtronic plc Form 10 - Q, filed with the SEC on Aug. 27, 2024; Atrium Medical Corp. C - Qur Mesh Products Liability Litigation (Case No: 16 - md - 2753 LM); In RE: Ethicon Physiomesh Flexible Composite Hernia Mesh Products Liability Litigation (Case No: 1:17 - md - 02782 - RWS). 4. Reuters, “Becton Dickinson agrees to settle about 38,000 hernia mesh suits” (retrieved from https://www.reuters.com/legal/ lit igation/becton - dickinson - agrees - settle - about - 38000 - hernia - mesh - suits - 2024 - 10 - 03/); Getinge Press Release, dated December 8, 2021 ; Johnson & Johnson Form 10 - K, filed with the SEC on February 16, 2024 regarding settlement of Ehticon Physiomesh Flexible Composite Mesh claims). 5. U.S. Food and Drug Administration. (n.d.). FDA's activities: Urogynecologic surgical mesh implants. U.S. Department of Health and Human Services. Retrieved from https://www.fda.gov/medical - devices/urogyn ecologic - surgical - mesh - implants/fdas - activities - urogynecologic - surgical - mesh 6. https://www.rcseng.ac.uk/standards - and - research/standards - and - guidance/good - practice - guides/consent/ O f surgeons agree that use of permanent synthetic mesh puts patients at long - term risk of complications 1 59% Hernia patients want proactive control in their care 2 3 of 4 Product liability lawsuits relating to permanent synthetic hernia repair (as of November 2024) 3 Not inclusive of ~40,000 or more cases settled or dismissed within the past three years 4 ~15,000 FDA issued multiple 522 orders to manufacturers requiring pre - market approval prior to sale and distribution of transvaginal mesh for pelvic organ prolapse repair​ 5 2019 Steps surgeons must take in the U.K. as part of the Royal College of Surgeons guidance for Patient Consent Supported Decision Making following the 2015 Montgomery Ruling 6 10

 

 

Source: Refer to “Clinical References” in this presentation. * Indicates one or more surgeons are paid consultants of TELA Bio, Inc. Consistently Low Recurrence Rates Backed by 8+ years of clinical experience and 43 published or presented works 9

 

 

*Overall complications including surgical site occurrences (SSOs) and surgical site infections (SSIs) a – OviTex patients were more complicated with a significantly higher mVHWG distribution and CDC wound classification compared to polypropylene patients. b – OviTex patients experienced significantly less complications than patients receiving the other three biologics. c – OviTex and Strattice patients had a statistically lower recurrence rate than patients receiving the other two biologics. Source: Refer to “Clinical References” in this presentation. Favorable Results of OviTex in Ventral Hernia Repair Comparisons to synthetic mesh and leading generation one biologics 10 Sivaraj et al. 2 Parker et al. 3 37 Surgimend 17 Permacol 51 Strattice 36 OviTex 50 Polypropylene 50 OviTex Total enrolled patients 37.5 months (median) 58.4 months (median) 34.6 months (median) 28.6 months (median) 12 months 12 months Length of follow - up 40% grade 1 51% grade 2 9% grade 3 18% grade 1 71% grade 2 12% grade 3 17% grade 1 79% grade 2 4% grade 3 33% grade 1 58% grade 2 8% grade 3 94% grade 2 6% grade 3 32% grade 2 68% grade 3 a mVHWG 91% class I - II 94% class I - II 86% class I - II 89% class I - II 94% CDC class I 70% CDC class II+ a CDC wound class 43.2%* 52.9%* 47.1%* 16.7%* 22%* 36%* Incidence of SSO 5.4% 11.8% 12.5% 2.8% b - - Incidence of SSI 24.3% 29.4% 13.7% c 2.8% c 12% 6% Recurrence rate

 

 

* Kaplan - Meier survival estimate **No head - to - head clinical studies have been conducted. Due to differences in patient population, surgeons, surgical technique, and other variables, no direct comparisons of results can be made. For a comparative discussion of these studies, please see G. DeNoto , E.P. Ceppa , S.J. Pacella, M. Sawyer, G. Slayden , M. Takata, G. Tuma , J. Yunis, 24 - Month results of the BRAVO study: A prospective, multi - center study evaluating the clinical outcomes of a ventral hernia cohort treated with OviTex ® 1S permanent reinforced tissue matrix, Ann Medicine Surg 2022, 83, 104745 . Hope et al. (ATLAS) 13 Roth et al. 12 Harris et al. (PRICE) 11 DeNoto et al. (BRAVO) 4 120 Phasix ST 121 Phasix 83 Ventralight ST or Bard Soft Mesh 82 Strattice 92 OviTex Total enrolled patients 24 months 36 months 26 months 24 months Length of follow - up - - - 78% grade 2 - 3 mVHWG 100% class I 100% class I 93% class l - ll 90% class l - ll 95% class I - II CDC wound class Laparoscopic (55.8%) Robotic (44.2%) Open Open Open Open (65%) Laparoscopic (13%) Robotic (22%) Surgical technique 0.8% (includes SSI) - 22% (excludes SSI) 21% (excludes SSI) 38% (includes SSI) Incidence of SSO 0% 9% * 34% 39% 20.7% Incidence of SSI 31.7% * (overall) 18.6% * (defects < 7cm 2 ) 17.9% * 22% (overall) 28% (class I wounds) 40% (overall) 34% (class I wounds) 2.6% * Recurrence rate Positive 24 - month BRAVO Results In Ventral Hernia OviTex performance contextualized alongside contemporaneous publications for leading competitive products Source: Refer to “Clinical References” in this presentation. 11

 

 

Hernia Market Evolution TELA Bio positioned to grow from a market shift towards resorbable and reinforced “natural repair” solutions as an alternative to traditional Permanent Synthetics or Biologics 12 Resorbable Synthetics and Reinforced Tissue Matrix strengths : Clinical Evidence Robot Compatibility Cost - effectiveness Patient Choice & Shared Decision - making Sources for Sales Market Share (%): 2009 - 2013 = IMS Hospital Supply Index; 2018 - 202 3 = iData Research MedSKU Sources for Total U . S . Market Size: 2021 - 202 7 = DRG Hernia Repair Devices Report – 2021; 2013 - 2018 = Management Estimate . Sources for % Robotic Procedures: 2018 - 202 7 = DRG Hernia Repair Devices Report – 2021 ; 2013 = Management Estimate . 2027 2021 2018 2013 Permanent Synthetic Biologic Sales Market Share <1% Robotic Procedures (Px) 7% Robotic Px 12% Robotic Px 202 3 1 4 % Robotic Px Resorbable Synthetics Reinforced Tissue Matrix 21% Robotic Px

 

 

13

 

 

Surgeons use products to reinforce soft tissue during various reconstructive surgeries 1 , including: ▫ Head and neck surgery ▫ Chest wall reconstruction ▫ Pelvic reconstruction ▫ Extremities reconstruction ▫ Breast reconstruction Cosmetic Plastic & Reconstructive Surgery $600M 2 $100M 2 Market dominated by human acellular dermal matrices (HADMs): ▫ Prone to high degree of stretch ▫ Expensive, putting pressure on hospital systems ▫ Can experience supply shortages, particularly when large pieces of material are required 1. OviTex PRS is for implantation to reinforce soft tissue where weakness exists in patients requiring soft tissue repair or reinforcem en t in plastic and reconstructive surgery. The device is supplied sterile and is intended for one - time use. OviTex PRS has not been tested in breast surgical procedures. 2. Management estimate. Source: iData Research MedSKU , Q1 2024. Market size based on sales of current biologics. US Plastic and Reconstructive Surgery Market: ~$700 Million Annual Opportunity 14

 

 

An innovative reinforced tissue matrix designed to improve outcomes by facilitating fluid management and controlling degree and direction of stretch Product Features: ▫ Layers composed of biologic building block retain biologically significant macromolecules for tissue regeneration 1,2 ▫ Diamond embroidery pattern and stents allow for directional flexibility; sawtooth embroidery pattern and slits allow for bi - directional stretch while providing stretch resistance ▫ Distinct permeability elements in various configurations – e.g., micropores, macropores, and stents/slits – designed to facilitate fluid management Available in both 2 - layer resorbable (polyglycolic acid) polymer, 3 - layer permanent (polypropylene) polymer, or 3 - layer resorbable (polylactic - co - glycolic acid) polymer reinforcing the same biologic material OviTex PRS compared to market leading human ADM 3 : ▫ Exhibited earlier host cell proliferation, collagen deposition and neovascularization ▫ Demonstrated tissue remodeling into mature, functional and organized collagen 1. Certain configurations available in two or three layers, see product catalog more information. 2. Lun S, Irvine S.M., John son K.D., Fisher N.J., Floden E. W., Negron L., Dempsey S.G. , McLaughlin R.J., Vasudevamurthy M. , Ward B.R., May B.C., A functional extracellular matrix biomaterial derived from ovine forestomach, Biomaterials 31(16) ( 20 10) 4517 - 29. 3. ADM: Acellular Dermal Matrix. Overbeck N, Beierschmitt A, May BC, Qi S, Koch J. In - Vivo Evaluation of a Reinforced Ovine Biologic for Plastic and Reconstructive Procedures in a Non - human Primate Model of Soft Tissue Repair. Eplasty . 2022 Sep 14;22:e43. PMID: 36160663; PMCID: PMC9490877. Animal testing results may not be indicative of clinical performance . OviTex PRS: Specifically Designed for Plastic and Reconstructive Surgery 15

 

 

Leading - edge atraumatic hernia mesh fixation devices Designed to minimize complications for patient safety and comfort 16

 

 

Atraumatic liquid fixation device s ▫ Reduce the need for penetrating mechanical fixation for inguinal and femoral hernia repair ▫ Provide p rec ise , controlled adhesive application Addresses an unmet need in the market, less damage to tissue ▫ Designed to minimize the risk of mechanical tissue trauma 2 ▫ S trong and secure mesh fixation 2 ▫ P re - assembled device ▫ Adhesives polymerize in ~ 10 seconds ▫ Provides versatile liquid anchors at multiple angles LIQUIFIX FIX 8 1 is a complementary product addressing both open and laparoscopic groin hernia repair 1 . LIQUIFIX FIX8 is intended for use in laparoscopic surgical repair of groin (femoral and inguinal) hernias, achieved through t he fixation of prosthetic polypropylene or polyester mesh to the abdominal wall and the approximation of the peritoneum; LIQUIFIX Precision is intended for use in open sur gical repair of groin (inguinal and femoral) hernias, achieved through the fixation of prosthetic polypropylene or polyester mesh to the abdominal wall. 2. Data on file: Advanced Medical Solutions 17 LIQUIFIX FIX8 and LIQUIFIX Precision

 

 

2021: 40 - 45 reps / 5 TB Ltd. 2022: 61 reps / 6 TB Ltd. 2023: 86 reps / 9 TB Ltd. 3Q24: 69 reps + 7 asst. reps / 10 TB Ltd. Rep Productivity Sales Force Size Product Portfolio GPO Access Clinical Experience $ ales >1,600 hospitals ~4,400 hospitals R&D and BD Third national GPO More to come 18 ▫ BRAVO 24 - month data: 2.6% recurrence ▫ 43 published or presented works ▫ 50,000+ OviTex RTM implantations globally ▫ 10,000+ OviTex PRS implantations ▫ Playbook90 training (new reps) & ongoing, intensive product training ▫ Avg. 6 mos. to breakeven ▫ Cadaver labs & other surgeon education and training programs ▫ Medical affairs support ▫ Industry & society meetings Driving Revenue Growth

 

 

Q3 2024 Performance ▫ R ecord quarterly revenue of $19.0 M, growing 26 % over corresponding period of 2023 ▫ Cash and Cash Equivalents at September 30 , 2024: $17.3M ▫ Gross Margin: 68% ▫ The Company implemented cost - cutting measures in Q3, which are expected to result in reduced operating expenses in Q4 and beyond Q4 2024 Fundraise ▫ Net proceeds of $43M from equity offering 19 Delivering Revenue Growth and Margin Improvement +58% +116% +44% +48% +40% +38% +46% +39% +45% +39% +35% +46% +39% +11% +26% 58% 63% 68% 73% 78% 83% $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Gross Margin Revenue ($M) Quarterly Revenue and Gross Margin Revenue Gross Margin $29.5M, +62% $41.4M, +41% $58.5M, +41%

 

 

20 Clinical References 1. Ankney , C.; Banaschak , C.; Sowers, B.; Szotek, P. Minimizing Retained Foreign Body in Hernia Repair Using a Novel Technique: Reinforced Biologic A ugm ented Repair ( ReBAR ). J Clin Medical Res 2021, doi:10.37191/mapsci - 2582 - 4333 - 3(4) - 073. 2. Sivaraj , D.; Henn, D.; Fischer, K.S.; Kim, T.S.; Black, C.K.; Lin, J.Q.; Barrera, J.A.; Leeolou , M.C.; Makarewicz , N.S.; Chen, K.; et al. Reinforced Biologic Mesh Reduces Postoperative Complications Compared to Biologic Mesh after Ventral Hernia Repair. Plastic Reconstr Surg – Global Open 2022, 10, e4083, doi:10.1097/gox.0000000000004083. 3. Parker, M.J.; Kim, R.C.; Barrio, M.; Socas, J.; Reed, L.R.; Nakeeb , A.; House, M.G.; Ceppa , E.P. A Novel Biosynthetic Scaffold Mesh Reinforcement Affords the Lowest Hernia Recurrence in the Highest - Risk Patients. Surg Endosc 2021, 35, 5173 – 5178, doi:10.1007/s00464 - 020 - 08009 - 1. 4. DeNoto, G.; Ceppa , E.P.; Pacella, S.J.; Sawyer, M.; Slayden , G.; Takata, M.; Tuma , G.; Yunis, J. 24 - Month Results of the BRAVO Study: A Prospective, Multi - Center Study Evaluating the Clinical Outcomes of a Ventral Hernia Cohort Treated with OviTex ® 1S Permanent Reinforced Tissue Matrix. Ann Medicine Surg 2022, 83, 104745, doi:10.1016/j.amsu.2022.104745. 5. Sivaraj , D., Fischer, K. S., Kim, T. S., Chen, K., Tigchelaar , S. S., Trotsyuk , A. A., Gurtner , G. C., Lee, G. K., Henn, D., & Nazerali, R. S. (2022).Outcomes of Biosynthetic and Synthetic Mesh in Ventral Hernia Repair. Plastic and reconstructive surgery. Global open, 10(12), e4707. https://doi.org/10.1097/GOX.0000000000 004 707. 6. Agarwal, A. K. ;Lake, S. P.; Deeken , C. R. (2024). Reinforced tissue matrix to strengthen the abdominal wall following reversal of temporary ostomies or to trea t i ncisional hernias. World journal of gastrointestinal surgery, 16(3), 823 – 832. https://doi.org/10.4240/wjgs.v16.i3.823. 7. Goetz, M.; Jurczyk , M.; Junger, J.; Schlitt , H.J.; Brunner, S.M.; Brennfleck , F.W. Semiresorbable biologic hybrid meshes for ventral abdominal hernia repair in potentially contaminated settings: lower risk of recurrence. Updates Surg. 2022; 74(6): 1995 – 2001. Published online 2022 Oct 12. doi : 10.1007/s13304 - 022 - 01378 - 3. 8. Sawyer, M.A.J. New Ovine Polymer - Reinforced Bioscaffold in Hiatal Hernia Repair. Jsls J Soc Laparoendosc Surg 2018, 22, e2018.00057, doi:10.4293/jsls.2018.00057. 9. DeNoto, G. Bridged Repair of Large Ventral Hernia Defects Using an Ovine Reinforced Biologic: A Case Series. Ann Medicine Sur g 7 5, 103446, doi:10.1016/j.amsu.2022.103446. 10. Ferzoco , S. (2018). Early Experience outcome of a reinforced Bioscaffold in inguinal hernia repair: A case series. International Journal of Surgery Open, 12. 9 - 11. https://doi.org/10.1016/j.ijso.2018.06.001. 11. Harris, H.W.; Primus, F.; Young, C.; Carter, J.T.; Lin, M.; Mukhtar, R.A.; Yeh, B.; Allen, I.E.; Freise , C.; Kim, E.; et al. Preventing Recurrence in Clean and Contaminated Hernias Using Biologic Versus Synthetic Mesh in Ventral Hernia Repair: The PRICE Randomized Clinical Trial. Ann Surg 2021, 273, 648 – 655, doi:10.1097/sl a.0000000000004336. 12. Roth, J.S.; Anthone , G.J.; Selzer, D.J.; Poulose , B.K.; Pierce, R.A.; Bittner, J.G.; Hope, W.W.; Dunn, R.M.; Martindale, R.G.; Goldblatt, M.I.; et al. Prospective, Multicent er Study of P4HB ( PhasixTM ) Mesh for Hernia Repair in Cohort at Risk for Complications: 3 - Year Follow - Up. Ann Medicine Surg 2021, 61, 1 – 7, doi:10.1016/j.a msu.2020.12.002. 13. Hope, W.W.; El - Ghazzawy , A.G.; Winterstein , B.A.; Blatnik , J.A.; Davis, S.S.; Greenberg, J.A.; Sanchez, N.C.; Pauli, E.M.; Tseng, D.M.; LeBlanc, K.A.; et al. A Prospective, Multicent er Trial of a Long - Term Bioabsorbable Mesh with Sepra Technology in Cohort of Challenging Laparoscopic Ventral or Incisional Hernia Repairs (ATLAS Trial). Ann Medicine Surg 2022, 73 , 103156, doi:10.1016/j.amsu.2021.103156.

 

 

Cover	Nov. 07, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 07, 2024
Entity File Number	001-39130
Entity Registrant Name	TELA Bio, Inc.
Entity Central Index Key	0001561921
Entity Tax Identification Number	45-5320061
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1 Great Valley Parkway
Entity Address, Address Line Two	Suite 24
Entity Address, City or Town	Malvern
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19355
City Area Code	484
Local Phone Number	320-2930
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	TELA
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

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