TELA Bio Announces Fourth Quarter and Full Year 2019 Financial Results

Financial Results

MALVERN, PA — TELA Bio, Inc. (Nasdaq: TELA), a commercial-stage medical technology company focused on designing, developing and marketing a new category of tissue reinforcement materials to address unmet needs in soft tissue reconstruction, recently reported financial results for the fourth quarter and full year ended December 31, 2019.

Recent Highlights

  • Recognized revenue of $4.9 million for the fourth quarter and $15.4 million for the full year 2019, representing increases of 100% and 87% respectively, over the corresponding periods of 2018
  • Awarded a group purchasing agreement for its full portfolio of OviTex hernia repair and OviTex PRS products
  • Continued to expand marketing activities to support the ongoing commercialization of OviTex and OviTex PRS product lines
  • Published positive one-year data from the BRAVO study evaluating OviTex for the treatment of ventral hernias
  • Completed its IPO raising $50.6 million in net proceeds

“2019 was a year of many accomplishments, including significant revenue growth driven by the adoption of our OviTex® and OviTex® PRS product lines, expansion of our commercial organization, the signing of a major group purchasing agreement, publication of compelling clinical data, and the completion of a successful IPO,” said Antony Koblish, co-founder, President and Chief Executive Officer of TELA Bio. “As we look towards 2020, we share in a collective concern for the impact of the COVID-19 pandemic across the globe. While it is too early and uncertain to determine the actual effects of this pandemic on our business, we are beginning to feel the impact and intend to use many of our business levers to best position our Company for the long-term, leveraging our strong clinical data, sales, marketing and GPO strategies.”

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Fourth Quarter 2019 Financial Results

Revenue was $4.9 million for the fourth quarter of 2019, an increase of 100% compared to the prior year period. This increase was due primarily to the expansion of the commercial organization, increased penetration within existing customer accounts, as well as the introduction of larger sizes of OviTex during 2019.

Gross profit was $3.0 million for the fourth quarter of 2019, or 61% of revenue, compared to $1.0 million, or 42% of revenue, in the same period in 2018. The increase in gross margin was due primarily to the decrease in the charge recognized for excess and obsolete inventory.

Operating expenses were $8.8 million in the fourth quarter of 2019, compared to $6.5 million in the same period in 2018. The increase was due to the expansion of the salesforce and related activities, higher personnel costs and increased professional fees associated with operating as a public company.

Loss from operations was $5.8 million in the fourth quarter of 2019, compared to a loss from operations of $5.5 million in the same period in 2018.

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Net loss was $6.5 million in the fourth quarter of 2019, compared to a net loss of $7.4 million in the same period in 2018.

Full Year 2019 Financial Results

Revenue was $15.4 million for the full year 2019, an increase of 87% compared to the full year of 2018. This increase was due primarily to the expansion of the commercial organization and increased penetration within existing customer accounts.

Gross profit was $9.3 million for the full year 2019, or 60% of revenue, compared to $2.9 million, or 36% of revenue, for the full year 2018. The increase in gross margin was due to the decrease in the charge recognized for excess and obsolete inventory.

Operating expenses were $28.4 million for the full year 2019, compared to $20.7 million in the prior year. The increase was due to the expansion of the salesforce, higher personnel costs and increased professional fees associated with operating as a public company, and a $2.2 million gain on litigation settlement that occurred in 2018.

Loss from operations was $19.2 million for the full year 2019, compared to a loss from operations of $17.8 million for the full year 2018. Excluding the $2.2 million gain on litigation settlement in 2018, loss from operations for the full year 2018 was $19.9 million.

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Net loss was $22.4 million for the full year 2019, compared to a net loss of $21.1 million for the full year 2018. Excluding the $2.2 million gain on litigation settlement in 2018, net loss for the full year 2018 was $23.3 million.

Cash, cash equivalents and short-term investments on December 31, 2019 were $54.6 million, including net proceeds of $50.6 million from the Company’s November 2019 initial public offering.

Financial Outlook

For the first quarter of 2020, TELA Bio expects total revenue to be in the range of $3.5 million to $4.0 million, representing growth of 6% to 21% over the prior year period. Due to uncertainties in procedural volume stemming from COVID-19 and its potential negative impact on its financials, TELA Bio is not providing guidance for the full year 2020. The Company intends to provide an update during its first quarter 2020 earnings call.

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