MALVERN, PA — TELA Bio, Inc. (NASDAQ: TELA) has reported its financial results for the second quarter ended June 30, 2024. The company showcased notable revenue growth and significant strategic advancements despite facing market disruptions caused by cyberattacks.
Recent Highlights
TELA Bio reported revenue of $16.1 million for the second quarter of 2024, representing an 11% increase compared to the same period in 2023. This growth was driven by higher unit sales due to new customer acquisitions, increased penetration within existing accounts, and expanding international sales under an enhanced commercial organization. However, the company faced a decrease in average selling prices due to product mix changes, with a higher proportion of smaller-sized units following the introduction of the robotically compatible OviTex IHR Reinforced Tissue Matrix.
On May 20, 2024, TELA Bio appointed Greg Firestone as Chief Commercial Officer to steer the next phase of revenue growth. Firestone’s appointment aims to enhance sales representative training, regional supervision, and performance measurement and accountability.
The company also launched its OviTex IHR Reinforced Tissue Matrix in the U.S., targeting the high-volume inguinal hernia market. Additionally, TELA Bio saw the launch of the NIVIS Fibrillar Collagen Pack by its new owner during the second quarter. This launch will trigger quarterly revenue share payments ranging from $3 million to $7 million over the next eight quarters, starting from the third quarter of this year.
TELA Bio reiterated its full-year 2024 revenue guidance of $74.5 million to $76.5 million, representing a 27% to 31% year-over-year growth.
CEO Commentary
“TELA delivered double-digit growth in the second quarter notwithstanding some market disruptions from customer-targeted cyberattacks that we believe led to a shortfall in procedures at some of our largest or most rapidly growing contracted accounts,” said Antony Koblish, President and CEO of TELA Bio. “We believe many of these factors, including most notably a ransomware attack at one of our national GPOs, have been resolved and we are seeing signs of normalized growth returning in the third quarter. As a result, we expect to deliver another year of high growth and are reiterating our 2024 revenue target of $74.5 million to $76.5 million.”
Koblish added, “Under new sales leadership, we are intensely focused on improving the productivity and efficiency of our commercial organization. We have initiated programs that will maximize sales and rep productivity and provide operational leverage. With these efforts, as well as the contribution from the NIVIS revenue share, our cash and cash equivalents will be sufficient to fund us to profitability.”
Financial Results
Revenue for the second quarter of 2024 was $16.1 million, reflecting an 11% increase compared to $14.5 million in the same period in 2023. The growth was attributed to increased unit sales, new customer acquisitions, and expanded international sales. This was partially offset by a decrease in average selling prices due to a higher share of smaller-sized units following the launch of OviTex IHR.
Gross profit for the second quarter was $11.1 million, or 69% of revenue, compared to $10.2 million, or 70% of revenue, in the same period in 2023. The slight decrease in gross margin was primarily due to a higher charge for excess and obsolete inventory.
Operating expenses increased to $22.6 million in the second quarter of 2024, compared to $20.6 million in the same period in 2023. The rise in operating expenses was mainly due to additional headcount, resulting in higher compensation and employee-related expenses as well as increased travel and consulting costs.
Loss from operations was $11.6 million in the second quarter of 2024, compared to a loss of $10.4 million in the same period in 2023. Net loss for the second quarter was $12.6 million, compared to a net loss of $10.8 million in the same period in 2023.
As of June 30, 2024, TELA Bio had cash and cash equivalents totaling $26.5 million.
Conclusion
TELA Bio’s second-quarter results highlight the company’s ability to achieve revenue growth despite facing market disruptions. The strategic appointment of Greg Firestone, the launch of new products, and the reiteration of its full-year revenue guidance underscore the company’s commitment to driving growth and enhancing operational efficiency. As TELA Bio continues to navigate market challenges, its focus on innovation and strategic leadership positions it well for future success.
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