TELA Bio (TELA) Canaccord Genuity 44th Annual Growth Conference & Private Company Showcase summary

Key business updates and growth drivers

• Revenue guidance for the year remains in the mid-$70 million range, with strong historical growth since 2018 and a focus on resilience to disruptions.

• The company is expanding its product suite, especially with the IHR product for inguinal hernia, aiming for mass adoption and a complete portfolio for all hernia types.

• European operations, particularly in the U.K., are accelerating due to a shift away from polypropylene mesh, with expectations for a strong second half.

• U.S. growth was temporarily impacted by cyberattacks and procedural volume softness in Q2, but July rebounded strongly, indicating the disruption was short-lived.

• Commercial team expansion is complete, with a focus now on rep productivity and leveraging existing resources for topline growth.

Product innovation and clinical positioning

• The product portfolio covers complex abdominal wall, ventral, hiatal, and minimally invasive hernia repairs, with new products planned for the next 12-24 months.

• Clinical data shows a low recurrence rate for hernia repairs, supporting the transition from polypropylene to natural repair solutions.

• The company is also innovating in plastic and reconstructive surgery, aiming to replace cadaver skin with engineered materials for better integration and controlled stretch.

• Atraumatic fixation technology, including a unique cyanoacrylate glue, enhances the full-service offering and opens new surgeon relationships.

• Compatibility with robotic surgery platforms, especially Intuitive's da Vinci, is a strategic focus, with strong engagement at key industry meetings.

Financial performance and outlook

• Gross margin targets are around 70%, with 27% of revenue shared with the manufacturer and additional leverage from shipping and international sales.

• Q2 cash ended at $26.6 million, with expectations for profitability driven by revenue growth, OpEx leverage, and contributions from a divested product.

• The divestiture of NIVIS provides up to $7 million in additional cash over eight quarters, supporting the path to breakeven.

• The company expects to reach profitability with current resources, aided by stabilizing or decreasing OpEx and continued revenue growth.

• GPO contracting is a key commercial initiative, with three of five major U.S. GPOs secured and ongoing efforts to expand access.