MALVERN, PA — TELA Bio, Inc. (NASDAQ: TELA) has reported financial results for the second quarter ended June 30, 2022.
- Reported revenue of $10.4 million for the second quarter, representing growth of 38% over the corresponding period of 2021;
- Increased demand for OviTex® and OviTex PRS Reinforced Tissue Matrix products in the second quarter of 2022, resulting in a year-over-year revenue increase for each product of approximately 22% and 87%, respectively;
- Entered GPO contract with Premier Inc., an alliance of approximately 4,400 U.S. hospitals and 225,000 other providers, that will provide access to additional hospitals within the Premier network and allow for deeper penetration into its current markets;
- Highlighted additional positive data from the BRAVO and ReBAR studies evaluating the use of OviTex® Reinforced Tissue Matrix in hernia repairs, which will be presented at the 2022 American Hernia Society Meeting; and
- Secured up to $50 million in debt financing from MidCap Financial, including a $10 million tranche that can be accessed at TELA Bio’s option upon meeting certain conditions, and upon closing used a portion of the proceeds to repay its existing $30 million facility.
“We are very pleased to see the growing acceptance of OviTex. We were able to hit our revenue growth targets despite a meaningful rise in COVID-19 infection rates towards the end of the second quarter. Our soft tissue preservation and restoration products are gaining market share as our sales team is effectively educating payors and surgeons on OviTex’s quality, functionality, and value proposition,” said Antony Koblish, co-founder, President and Chief Executive Officer of TELA Bio. “We also continue to see positive clinical results and favorable recurrence rates from the use of OviTex in both our BRAVO patient population and patients studied in other retrospective studies, including those using the ReBAR techniques. These clinical results, along with the recent announcement of our GPO contract with Premier that will take effect in October, and the continued expansion of our sales team should help us drive continued adoption of OviTex and allow us to take further market share from traditional synthetic and biologic mesh products.”
Second Quarter 2022 Financial Results
Revenue was $10.4 million in the second quarter of 2022, an increase of 38% compared to the prior year period. The increase was due to the expansion of the Company’s sales force, increased market adoption with existing customer accounts and stronger international sales.
Gross profit was $6.6 million in the second quarter of 2022, or 63% of revenue, compared to $5.1 million, or 67% of revenue, in the same period in 2021. The decrease in gross margin was due to a one-time cumulative amortization charge recorded in the second quarter of 2022 as the Company reportedly deemed its final milestone target under the Company’s licensing agreement with its manufacturing partner probable of being met.
Operating expenses were $16.8 million in the second quarter of 2022, compared to $12.4 million in the same period in 2021. The increase was due to higher salaries and employee-related expenses from additional headcount as the Company reportedly continues to expand its organization, increased travel expenses and increased professional and consulting fees.
Loss from operations was $10.2 million in the second quarter of 2022, compared to a loss from operations of $7.3 million in the same period in 2021.
Net loss was $12.7 million in the second quarter of 2022, compared to a net loss of $8.3 million in the same period in 2021.
Cash and cash equivalents on June 30, 2022, totaled $27.7 million.
2022 Financial Guidance
We expect full year 2022 revenue to range from $42 million to $45 million, reflecting growth of 43% to 53% over full year 2021, however a higher-than-expected impact from the COVID-19 pandemic in the back half of the year could materially affect this projection.
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