Q4 2020 TELA Bio Inc Earnings Call
[music].
Ladies and gentlemen, and thank you for standing by and welcome to the town of Bio fourth quarter earnings Conference call. At this time all participant lines are in a listen only mode.
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And I'd like to hand, the conference to speak of today, whereas the Dutch it from.
Jill Martin Please go ahead Sir.
Thank you Victor and good afternoon, everyone earlier today Tela Bio released financial results for the fourth quarter and year ended December 31, 2020, a copy of the press release is available on the company's website.
Joining me on today's call are Tony Cold, Blake, President and CEO and Nora Brennan CFO.
Tony will begin the call by providing an overview of our operational highlights and then nor will provide a detailed analysis of our fourth quarter and full year financial performance.
Before we begin I'd like to remind you that during this conference call. The company will make projections and forward looking statements regarding future events.
We encourage you to review the company's past and future filings with the SEC, including without limitation. The company's forms 10-K, and 10-Q, which identify the specific factors that may cause actual results or events to differ materially from those described and these forward looking statements.
These factors may include without limitation statements regarding product development product potential and the regulatory environment sales and marketing strategies and capital resources, our operations operating performance with that I'll now turn the call over to Tony.
Thanks, Greg and good afternoon, everyone.
We appreciate you taking the time to join US today before reviewing our operational highlights I would like to recognize our team's hard work and dedication and tela bio despite the challenges and uncertainties of COVID-19, Our company has made meaningful progress and all areas of our business over the past 12 months.
From 2021, and we plan to build out and this momentum and continued to be a leader and innovator and developing tissue reinforcement materials for soft tissue reconstruction.
Now turning to our results total revenue for the fourth quarter was $5 7 million representing growth of approximately 17% compared to the fourth quarter of 2019 like many med tech companies with product use and surgical procedures, we experienced both highs and lows and the fourth quarter.
Throughout October and into November sales force Overtax products, we're picking up and we were cautiously optimistic about recording strong year over year growth. However, as the holidays approach and then the second half of the quarter, we experienced increased volatility and demand for our products as Covid cases, and hospitalizations increased this trend continued into January.
And with some areas of the country being worse than others.
Starting in early February and continuing through today surgical procedure trends have improved while we are hopeful these trends will continue throughout the year forecast and COVID-19 cases, and hospitalizations as a challenge and it's best left to the experts before turning the call over to Noah I would like to talk about some of our.
From 2020.
Starting with our Bravo study as a reminder, the Bravo study is a multicenter prospective study designed to evaluate the clinical performance of Overtax per the treatment eventual hernias and 85 per cent of the patients met the criteria for eventual hernia and working group grade two or grade three.
Last week, we submitted our latest data set for publication and the data continues to be very good 76 of the 84 participants over 90% has completed their 12 months follow up with only two having hernia recurrence is both of which occurred at adjacent to the repair and.
In addition, and 51 patients completed their 24 month follow up and non experienced and new hernia recurrence of these 51 patients only one experience and the surgical site occurrence between 12, and 24 months and that's S. S that did not require surgical intervention or implant removal.
As we have noted in previous calls the 24 months post procedure data are considered to be the gold standard and it is vital and persuading surgeons to adopt overtaxed.
Just on the current Bravo clinical trial data the hernia recurrence rates for Overtax at 12 months is two 6% and zero per cent for the 51 patients that are out at 24 months. These rates compare very favorably to results published for synthetics resorbable synthetics or biologics.
Based on our latest estimates, which account for delays, we're experiencing and scheduling and follow up and site visits for data verification. We expect to have validated data and our 24 month patients by the end of the year.
In 2020, and another area of success for US has been robotic hernia repair today, most robotic hernia repairs use plastic mesh due to its strength and the ability to roll it tightly to sit down and trocar. However, due to the unique properties of overtaxed, we are gaining market share with minimally invasive and robotic hernia procedures for the fourth.
Quarter, we estimate that approximately 50% of our usage came from M. I S and robotic procedures and we saw a 32% sequential increase and our L. P. Our unit sales. This data point coincides nicely with our recently completed survey.
Based on the data, we compiled synthetic mesh products have been the subject of and increasing number of lawsuits with over 13000 cases filed in the state of Rhode Island alone.
As this number continues to grow and make headlines surge and tell us that approximately 20% of their patients are concerned about the use of plastic mesh and would prefer something more natural could be used also nearly 60% of the surgeons. We surveyed believe that synthetic mesh probably causes long term risk of complications.
We believe the migration from plastic mesh will continue and we are hopeful that sales of all the tax will benefit as a result.
Regarding the plastic and reconstructive reconstructive market. We are very pleased with the continued expansion of the Prs launches, we experienced record unit volume and dollar growth in the quarter. This is very encouraging, giving the variability and access to supply and to supply chain administration for new products and.
Allergy.
It is emerging but theres, a real opportunity for a portfolio of Prs products that are tuned to different patient needs and surge and technique preferences. This is a vastly different paradigm than what exists today with one material cadaver skin for all situations.
As we mentioned last year and response to the pandemic, we developed tell alive, our virtual marketing sales solution designed to educate surgeons about our product portfolio and clinical data since the start of these programs approximately 200 and surgeons have participated and roughly a third had been plastic surgeons and.
Engagement with plastic surgeon, who remains high and many have told us they are seeking advancements and plastic reconstruction, especially as it relates to acellular dermal matrices or Atms.
This data point is consistent with the uptick and the number of IGN and G. P. O requests we are receiving for cross referencing our Prs portfolio.
We continue to grow our commercial team and at the end of 2020, we had 45 territories.
And <unk> by 40 sales reps. Our goal is to have 48 reps in place by the middle of 2021, and we expect to continue to increase our number of reps through the remainder of the year. These sales reps will be selling our healthtrust accounts, making sure that we have coverage and all of our major ideas and G. P OS in the fourth quarter.
And we increased the number of hospital customers from 270 to 325 with the number of Health Trust accounts also increasing and finally, we believe physical access to hospitals is beginning to ease as our sales reps are seeing more requests cover surgeries and we expect this trend to continue as more vaccines are rolled out.
And <unk>.
I would now like to turn the call over now to Nora to review, our fourth quarter and full year financial summary.
Thanks, Tony and.
Hello, everyone and please refer to our press release issued earlier today for a summary of our financial results for the fourth quarter and full year, 2020 after commenting and our financial results I will also provide our financial guidance for 2020 one.
Revenue for the fourth quarter of 'twenty, and 'twenty increased 17% year over year to 5.79 and 10.
Full year, 'twenty, and 'twenty revenue increased 18% to $18 2 million compared to 2019.
The increase in both periods was due primarily to the expansion of our commercial organization and increased penetration within existing customer accounts.
Gross profit as a percentage of revenue and improved and boats.
Fourth quarter, and full year periods compared to the respective prior year periods due to longer shelf life on our product and inventory management part overtaxed products.
Fourth quarter gross margin and.
Increased to 65 per cent from 61 per ton the prior year period.
While full year, 2020 gross margins increased to 62 per cent from 60%.
Sales and marketing expenses were $6 4 million and the fourth quarter of 2020 compared to $5 4 million and the same period and 2019.
For the full year, 2020 sales and marketing expenses were $22 1 million compared to $18 1 million for the full year 2019.
The increase in both periods was due to the expansion of the commercial organization and related activity, partially offset by lower travel and consulting expense at.
G&A expenses were $2 nine nine and in the fourth quarter of 2020 compared to 2.5 line and the same period and 2019.
For the full year 2020, G&A expenses were $10 1 million compared to $6 2 million in 2019. The increase in both periods was due primarily to an increase and insurance premiums and personnel costs and professional fees.
R&D expenses were $1 2 million and the fourth quarter of 'twenty, and 'twenty and $4 3 million for the full year 2020.
And fourth quarter 2020, R&D costs were slightly higher than the same period and 29 2019 based on personnel costs and additional testing peak.
However, full year 2020, R&D costs remain relatively flat compared to 2019.
Loss from operations operations was $6 seven nine and the fourth quarter of 2020 compared to $5 eight and nine in the prior year period.
For the full year 2020 patients with $25 3 million compared to $19 2 million for 2019 net.
Net loss was $7 8 million and the fourth quarter of 2020 compared to $6 five nine and the same period and 2019 for the full year 2020 net loss of $28 8 million compared to $22 4 million for 2019.
We ended 2020 was $74 4 million and cash and cash equivalents compared to cash cash equivalents and short term investments.
And people are point 6 million at year end 2019. This increasing includes net proceeds of approximately $44 7 million from the company's public offering completed in June 2020.
Now turning to the outlet outlook for 2020, one and we expect total revenues to be and a range of 27 nine to 39, representing growth of 48, 65% over 2020.
We are providing guidance today, but recognize that the course of the pandemic remains uncertain and as a result, the rate of recovery and surgical procedures remains variable and our full year guidance, we assume a gradual improvement and procedures.
And the first half with no further step back from knee surgeries.
Our new Covid variance.
We will continue to assess the current environment and provide updates on our quarterly calls as continued uncertainty relating to the dynamic environment with the COVID-19 pandemic could materially impact this projection.
I'll now turn the call back over to Tony.
Thank you Noah.
I'm happy to announce we will be hosting a virtual K O L day on April 12th from three P. M to 430 P M Eastern time.
This 90 minute webinar will feature presentations from key opinion leaders discussing the benefits of natural repair and soft tissue reconstruction and how overtaxed have shown superior outcomes for patients. These presentations will be followed by a question and answer session. A formal invitation will be sent out later this week, we hope you can.
Join us with that Victor Please open the call up for questions.
As a reminder, ladies and gentlemen to ask a question.
And I need to press star one and your telephone.
And to withdraw your question press the pound key please.
Police and violence and part of the Q&A roster.
Our first question comes from the line of Matthew O'brien from Piper Sandler your.
Your line is open.
Afternoon, and thanks for taking the questions and just wanted to pass along my heartfelt condolences on the news that Martin had passed away and so sorry.
Thank you, Matt and thanks, Matt.
Yeah. So.
Turning to guidance.
Nor I appreciate you, providing some of that guidance today.
It's about 20% lower than and we kind of and thinking.
Heading into the year understanding there's some COVID-19 impacts so can you just kind of deconstruct.
We're you know we're expecting you know some softness here and her.
Arnie aside on the plastic side.
And where where things can potentially even by a little bit of upside as we start to exit this year.
I'm sure Phil Thanks for the question, Matt So I think as Tony mentioned and it from.
And when he was speaking before it and said we saw some softness coming out of December into January and and held up a little bit through February and so we're starting to see a rebound.
And certainly in the back half of February and into March. So you know just to be a little bit more cautious around and the guidance. That's why we're we're guiding a little bit lower than where you had us I think for us, it's really making sure that we get that rep count up I mean as Tony mentioned.
We ended the year with about 40, you apps that 45 territory, it's really making sure that we've got reps and the location and who have access to.
Hospitals are and I D and so I think with that that's part of the conservative nature and the guidance that we're providing today. The other thing is you know where where and when we think about per S. I mean, we're still doing the launch and we were had some great growth in Q4.
And our peer asks and we expect that to continue but you know it's still a new it's a new product we are still working.
Working with plastic surgeons and to use it and working with our clinical development team. So I think for US, it's just try and be really conservative and not really sure when and how quickly we're going to be able to get into the hospitals certainly around them with a lot of vaccines.
Yeah, I'll add a little bit map as well that's color to ignore just said.
For us we're thinking about the transition zones between quarters right. So we go back to 2020, and we look at that transition zone between Q2 and Q3 are the <unk>.
Transition zone, there was tough tough quarter, and Q2, a little bit of backlog and Q3, and then I'd say Q3 was really stabilization and probably at a bit of a depressed level due to COVID-19, but certainly stabilization that lasted until until around Thanksgiving and then it got pretty volatile up and down.
And that volatility seemed to have.
Have a more national impact I'd say for the month of January.
But then by February you know, we snapped back pretty good right back on plan and then March is looking really strong I think we have a very good shot at exceeding plan. So I like where we are very much you know Q4, sorry.
Sort of and <unk>.
And did a chopper Lee.
Whereas we're jumping off from Q1 and to that transition into Q2 Super Super strong right. We invested we hired trained and we.
Got great data we.
And we just have everything firing on all cylinders, so that transition zone, if it happens and we stabilize and get stronger in Q2, I think that represents some upside as we sat and our notes and as Laura indicated.
And we really forecasted around more of a Q2 to Q3 transition and really with more chop.
And Q2, so I think there's some upside there and then certainly you know we think theres just a lot of upside around our Prs business and how thats starting to move forward, but again, it's it's new we're not the incumbent and we've got to overcome.
You know being the new Guy on the block and and getting the hospital administration moving.
Other things that we're really cautiously optimistic about is the number of accounts that we put on right. So the supply chain and there's two there's two real problems that COVID-19 causes right problem one.
Is surgeon and rep.
Access getting together servicing during the cases, but problem too is really dealing with supply chain and admin and they come and go they came back and I think we had a backlog of new accounts come online in Q4 that really haven't started producing yet and so those will start producing as COVID-19 clears out so yeah I think.
There's I think there's upside baked into what we're doing here.
We just have to be realistic and we had to pick our spot and when we think things are going to clean out and and we chose a quarter later more like a second half clean cleanup.
Okay. Okay. It makes total sense, it just sounds like youre being conservative and and hoping that things kind of kind of free up as meat and do we get into the back half got it.
And I can tell you our commercial team is bullish.
Coming out of Q1.
We just need to have things straighten out at least where the way. They were in Q3, if things straightened out like they were in Q3.
We have a lot of pent up stuff, that's getting ready to break loose.
And we're feeling good about it so that's the key.
Okay helpful. And then just two more questions I'll ask them both together.
Mindful of everybody's time, but just you know Tony I think you have to 200 surgeons on Tullow alive, how many and then and there was 140 coming out of last quarter, how many have converted over to to using or starting and getting close to being able to use your product is it.
50%, 80, and 90% and and nor what is cash burn look like this year, if youre doing somewhere in that $27 million to $30 million of revenue. Thank you.
Yeah tell alive has just been excellent for us its been our lifeblood.
You know our mix is starting to get a little more heavy on the plastic surgery side and I think about a third of those surgeons have been on the plastic surgery side and the house, which is really really good.
And we estimate that there has been about I'd say, 115% increase on average for the surgeons that go through.
The type of live program now keep in mind that we're targeting to two types of surgeons right. We have those that are fresh brand new have never used the product there's less of those but we really have you know the bigger group are the surgeons that have done a little bit they're intrigued and they like what they see.
And and and this is a way to drive increased usage.
But also perhaps to get their partners and get other surgeons engaged so we're looking at that uptick as the key measure and by.
By any measure that how does and 15% uptick in the next few months after tell alive execution.
He's a very good signal and I do think that the tell alive metric is also tied very closely to those 47, new accounts that we put on in Q4, and and and frankly all of the new accounts right because it's the main mechanism that we have.
Forgetting surge and buying so I I think it could be half of the tell alive programs have not yet started contributing yet to this to this revenue base because of whatever is going on and on the ground. So there's a tremendous.
Pent up demand.
If you and maybe another way of looking at this is if you look at our territories, we're estimating that about 40% of our accounts right now are operating below pre COVID-19 levels right. So.
That means that we have you know.
Pretty close to 60% of our accounts that are operating above pre COVID-19 levels and that is all.
Ill tell alive and all of that all the stuff that we're doing to adapt to the environment.
Got it and and the.
The cash burn.
Yeah. So I mean, we burned about up seven and $9 and Q4 and I think on a run rate basis, and that will do well burn through and maybe 28 to 30 million and.
And based on our revenue guide and so we've done a lot of good thing certainly with expenses and 2020 and some of that stuff is going to stick with us.
Got it thank you.
Thanks, Matt.
Thank you. Our next question comes from the line of Anthony Petrone from Jefferies. Your line is open.
Thank you very much and I'll second again condolences on on passing of of Martin and <unk>.
Best wishes to his family and and everyone and the team at Taylor. So again, our condolences from myself and thank you and from the broader team at Jefferies as well.
Got it.
Yeah and absolutely Tony.
Maybe to just.
Follow up on the 60 40 statistics, you just gave me a little bit more color there.
40% are still pre pandemic level 60 per cent or at or above pre debt pre pandemic levels is there a weighted just sort of splice that out a bit in the sense that.
Are the 40% that are behind where those higher volume accounts or is it just the mix of yeah. Yeah. So so there's a couple of things going on there right. So one factor is just the construction stage of where our sales force was when Covid hit right. So we had just bill.
And out to six sales regions when Covid hit so we had essentially one non functional region.
Our grouping because it was just getting built.
When Covid hit we had literally just hired the regional manager and he didn't really have any reps and we and we locked down hiring so you know.
He was at a deficit he is now.
Building his territory up.
And and we expect great things from that territory and the next next coming quarters, and then one of our strong territories pre Covid was the northeast we were really strong in New York and that really took a beating.
And the early stages of Covid, everybody clearly remembers that and that territory has not come back to full speed. So so in that grouping theres a lot of the.
The accounts that rests in those two regions. So you know right now we really have four of six regions that are fully built out fully staffed and are executing well.
But we're not far away from having all six regions come back now that said everything is not perfect and those four regions right. So when things got choppy and greedy at the end of last year and in January we saw you know localized territory shifting in terms of Covid impact we saw floor.
<unk>, Texas, California, and then we saw a rotation back where the Midwest started to take some hits in January and a lot of those states are where we had some of our best.
Territories and highest producing account managers, so it's almost a little bit of whack, a mole that it's been going around the country as these COVID-19.
Swings and role, but really for us the core of it is that architecture of the two regions.
Got the most impacted by Covid. So so we have not yet seen the benefit of all six regions firing and and I think we're going to start to see it Q2 Q3 is common the <unk>.
Optimism and bullishness within our commercial team is really really excellent and good to see right now.
That's very helpful. As a backdrop and then two follow ups from me real quick and I'll hop back in one would be and update on hernia mesh lawsuits and I know last year, Bard and and Ethicon. We're supposed to have I guess, the commencement of M. D. L suits on synthetic mesh and bill.
And that's been pushed out so any update there would be helpful and as you look now at face ex and stratus being sort of embedded you have more bravo data out there, presumably going to get some ruling on litigation that I believe would be negative headline for the competitors and so.
Do you think the conversation this year is going to feel a with your sales force and talking to physicians about making finally, making that switch.
And I have already free up that yeah.
It already feels better right. So so so you are correct.
<unk> and lawsuits were probably ret slated to kick off around summer of last year right now our latest information is that the main bolus of suits and Rhode Island, and maybe starting in the next month or so so we're getting closer.
And you know.
I think that that is already having an impact in terms of swinging the conversation more.
Two natural repair right. We did a little survey work that we've talked about in the past, where even even before the litigation and becomes very public 20% of patients are acutely aware and would love to have something different you know that.
And plastic mesh and a good percentage 60 per cent of the surgeons.
Are now starting to think deeply about well you know are there potential long term complications and you know I have to I have to think about and listen to what my patients are asking those questions and so I think the.
The environment has never been better.
And you mentioned two competitors there I think one competitor.
The Stratus product is a very expensive product, it's not really designed tuned to be used robotically.
Price is not right. The handling is not right for a lot of these simple procedures, such as inguinal and hiatal and simple ventral and robotics.
Basics and the other hand is it is tuned for a wide array of procedures.
And it's priced just a little bit more than our products. So we're in the ballpark with them. So I think a likely.
And and hopeful outcome would be.
That open text and physics can sort of become the duo and that replaces physics and strata as what they were right. As this shift slowly starts to come come on line and we would take that all day that would be.
That would be spectacular for us. So I think the dialogue is happening the market research data seems to be showing the right trends.
And we're very well positioned and and you know what's interesting is and if you look at the IQ via data and you look at sort of Bard as their own control, we definitely see growth and shift towards phases at the expense of their wide wide array of polypropylene.
And from permanent mesh products so.
I think that to me is pretty good evidence.
And that there's a lot of interest and natural repair products.
Very helpful. Thank you so much.
Our next question comes from the line of Kyle Rose from Canaccord may begin.
Great. Thank you for taking the questions and I Echo the condolences on our and as well.
Wanted to just get a little more insight around maybe some of the underlying productivity that you're seeing.
I appreciate the account gains and obviously impressive given the backdrop of the pandemic.
But maybe help us understand how much of those account gains are utilizing both products from both families of products versus maybe just overtaxed or just Prs alone and then you.
Maybe just help frame out a little bit more you talked about more than 40 accounts and the Q4 of those really haven't contributed yet how should we think about what that utilization looks like so the run rate you're you're entering.
'twenty one.
Assuming.
Covid is behind us.
Yeah, So I'm gonna add and get another variable.
Just to stack up on you know the proof source that we have you know that we're exceptionally well positioned we did all the right things and 2020 right. We brought on 21, new reps right.
Now in the pandemic and those.
Those reps have already contributed about 20% to the revenue.
So we've proven that we can.
Attract the right talent that has the right relationships. So they can function and the pandemic first of all and then we've we've invested mightily and the training and education. It's just constant right, we're going to use this downtime.
To make them better and better and then the virtual day last the last piece of the pipe to the to the sale is definitely that surge and that hospital process and our tela live stuff.
Worked exceptionally well so I think you know that's yet another variable that's on top of but definitely contributes I think to that 60%.
Figure of accounts being better than pre Covid right and it all comes down to all of that stuff that.
And that was going on and the middle and and the middle of that so.
And now if that answers the question or if you need a little bit more and just kind of like a day hates them and I can just jump in a little bit too as well as you know how I think what we saw in Q4 about 25 per cent of the new accounts. We're just Prs and then they you know the remainder with hernia, but overall, we have the overlap of about 15%, we're standing up for both Prs and hernia. So.
And as we get into 2020, one the expectation and if you know, we'll see more accounts coming on board without overtaxed standing in for about the other tax and parents product and we certainly see that seeing that within our healthtrust accounts. Yeah. Thank you for covenant and alright. Thank you.
Okay. That's great that's very helpful.
And then when we think about the core hernia business, maybe obviously the trends within LPR robotics are very encouraging, but maybe just help us understand like what type of hernia cases are you seeing be prioritized versus maybe some that are that are building up from a backlog perspective, just trying to understand the mix of the type of cases, we're gonna see and 2021.
And then kind of how thats impacting pricing because they knew that some of the smaller meshes on the LPR side do come at a different asps. So yeah.
And the hernia business Yeah. That's that's very true our units are up more than our dollars right now and hernia, which I think is ultimately a good thing.
In the sense that it.
It demonstrates the utility of the product across all hernia and types of procedures, right, and but particularly and miss and robotic.
So there may be a higher baseline volume that's driven by the L. P. R. L. P. R is contributing more and more.
And to the portfolio, but at the end of the day the mix has been fairly consistent and I'm looking at the day to hear you know across the quarters.
Roughly 50% open and roughly 50% robotic and lap.
<unk> seems to be fairly consistent and.
And you know our ventral business is still the bread and butter business right that that business is the mainstay compared to England.
And <unk> and even just simple <unk>, which are more robotic and nature, but I think about 50% is and that mis category, which is probably simple eventual line down so.
I think we're going to continue and continue to see that and then I think the large sizes I I think we expect a large sizes, which really is a proxy for the complex ventral and AB walls.
Theyre going to tick up as the year goes forward because those are emergent and as those get delayed we see backlogs of those coming out.
And I and I expect that there'll be a bolus of those coming at wherever the transition point is right.
Spoke of earlier, whether it's Q1 and Q2 or Q2 to Q3.
It's going to be these emerging complex cases.
They just pick up steam so I think we're going to see those start to come at us as well.
Great and then I've just got two last questions.
And then I'll sneak in together.
First one is just the overall competitive response, you've seen in the market and obviously you don't have 12 month data and we'll get more than 50 patients that came out last week. So what kind of counter selling are you seeing.
And from other players.
And then maybe just overall talk about the penetration into healthtrust from and account base and you talked about higher accounts, but maybe just help us understand Gerry you at rental cross penetrate share. So so so yeah. So competition right. So.
The comp competitive response.
Evolved right as we gain success when we first came out the competitive response was fairly simple theyre not on contract kick them out and they have no clinical data share their primary data is interesting, but clinical data right. So we've largely solved those to counter detail counter punch.
He is right we've got excellent clinical data emerging of course.
We need more and we are collecting more.
In terms of retrospective series et cetera, and we need to finish off Bravo one to have the full complement of data at two years, but you can see that day.
Bravo data looks just spectacular relative to competitive products and Bravo, too, which will be robot specific studies needs to get going as well.
It's been delayed due to COVID-19, but we have some interesting ideas on how to jumpstart robotic datasets. There. So we've shifted now to a point where clinical data and contracting are in place. So interestingly enough. You know, we're just seeing usual med tech hands and combat kind of kind of tactics right I mean, there's been.
And a rash lately of what I'll call a little picky tax studies, you know like a.
Put a piece of plastic and a pouch and infected with bacteria and compare it to overtax and.
And if the bacteria eats the biologic material it must be bad right.
Means nothing clinically right, it's sort of like a.
Our rig test and we've seen little Tiki Tak trials like that using enzymes and things like that so it's it's good it's healthy.
We have the answers to every one of those.
You know little preclinical studies that they are thrown at us because we feel super confident and the product set the clinical data is awesome, it's very consistent and not just with Bravo, but with the rest of our clinical data and we have about 500 patients aggregated and various studies from everything from robotics to England all to complex ventral and.
And we even have some surgeons that have done 100% conversions.
One of the guys thats going to be speaking at the K O. L event I think he might have 500 procedures under his belt.
Just on a zone, so theres, just a drumbeat methodical steady disciplined.
And then and Thats just the way, we're going to do it right. So share at the black will come at us.
And right now I wouldn't consider the flag to be.
Anything out of the normal that I've experienced in my career of hand to hand combat.
In the field and the LR with surgeons.
And I think the other the other question was around the Health Trust accounts.
So helps right and I'll, just say I can get back in line.
And I was just going to take households at Q4 about a third of our accounts, where healthtrust accounts generated about a third of our revenue. So yeah. We saw at a 12% increase and our Q4 numbers for our health Catholic counts. So we're going to continue to penetrate and and the areas where yes.
There's real opportunity is just kind of getting them getting some more of the health Trust accounts signed up and I think that's a real opportunity for us certainly coming into 2020, one absolutely yeah I'll throw a couple of numbers at you to Kyle we had about 60, some odd healthtrust accounts at the start of 2020 and I think we ended the year and the nineties and.
And with a big chunk of the year being shut down to.
And to new products so healthtrust.
I said and methodical slow steady as they open up we're there we're ready we have the reps we made the investments. So we feel like we're in good shape there.
Great. Thank you for taking the questions.
Thanks Scott.
Thank you.
Last question will be from the line of Dave to colleagues from GMP Securities you may begin.
And I reiterate condolences, what a great Guy Tony.
Tony.
And obviously, we can look at some of the comments you made about how the first quarter progress but.
Where does that stand today and sort of what is underlying.
Your guidance in terms of how those procedures grow.
Back to sort of a normal cadence and I would imagine it might even get a little bit and an uptick from.
Some of the re scheduling yeah.
Yeah, I think that's right like I said.
And my other comments, if we could just get the volatility.
Stabilized similar to the way it was in Q4, if we could get him I'm, sorry, Q3 of last year, if we could get that back in place starting in Q2, that's where I think it gives us that clean air to get all six regions cranking.
Get those 47, new accounts moving all.
All of those metrics that I have been talking about that can spring load. This thing. We're just trying to pick our spots Dave like you know I mean, it made no sense for us to build.
The forecast for the guidance around Q2 start I mean, I'm hopeful I think it can happen.
But we built it really around.
Q3 start right. So so that's where it all is it's in that time.
And that time zone, and it's the three months Delta basically.
It was sort of our planning strategy.
But like I said I've never seen our commercial team as optimistic and as bullish and and that includes Prs right Prs.
Even though it's a.
It's a newer product and it's been and.
And it's very highly dependent on supply chain, it's a really attractive set of products from a pricing perspective and from a technology perspective.
And it's running.
Higher as a percentage of revenue for sure it's coming in closer to 2020 plus percent.
Compared to 10% to 15% and and I think that's going to that's going to grow as well. So you know as a newer product. We don't have sort of an exact calibration on that pace, but you know that's an overlay on to answer all of the great territory metrics, New Rep metrics, new account metrics, we're feeding that great.
New product set into all of that as well. So it's not just a hernia story for 2021 I think it has been up till now for the most part but I think the story is going to it's going to shift and we're going to work.
And I have two meaningful products here and in the next couple of quarters to start talking about here Dave.
And I appreciate that and you know we've talked about.
You guys have and the potential to be sort of a 100% plus growth company and if I look at your midpoint guidance.
Guidance over 2019, you're sitting right around 80 485 so.
And I feel like you're far off.
But I guess as we look at that.
In 2021.
And obviously understand and Prs is new and and thanks for the color on the mix rate there but.
And I imagine it grows faster, but any color you might want to give in terms of.
Hernia versus Prs in terms of the and how you get up to that.
Yeah.
I think dramatically right, let's assume.
Let's assume we can crack the supply chain access.
Through Covid, let's assume that.
That cleans up and Q2 right that's going to help Trs tremendously. If you just look at the two procedures right, there hernia and stuff.
And the Prs procedures.
Hernia is definitely more impacted it's more delayable.
And a lot of the volume of those procedures are more quote unquote elective and Delayable then the Prs procedures right. So our feeling right now having been through these ups and downs and Covid cycles is that hernia gets hit harder.
So the fact that we're able to grow our volume into the simpler cases in that period I think is a great sign we already talked about the complex big procedures those are going to come Roaring back and we're well situated for those.
And then it's really Prs, which I think is going to be governed and more on our ability to get access into the supply chain admin to get the new products started and.
I think the plastic surgeons, they have a bit more power in the system to get what they want.
The cost savings around our Prs offering are substantial and very attractive to hospitals and this environment.
And all of that is going to is going to play into our ability to get that product and moving and the fact that the procedure volumes are probably more stable through the ups and downs and Covid. So I would not be surprised if we saw a little bit more of a weight on the growth at least as we are and the early stages of transitioning out of.
Covid.
And onto the Prs a bit as we figure out and crack the code and supply chain admin.
And then we will start to see the hernia I think be very much hard wired to the recovery of the COVID-19 recovery and that that'll come back nicely as well too.
Thank you.
Yes.
Thank you and I'm not showing any further questions and the queue I'd like to turn the call back over to the speakers for any closing remarks.
Alright, Thanks Victor.
So I.
I want to thank everyone again for your time this afternoon and for your interest and Tela bio.
Before concluding the call I'd like to spend a moment and remembering Telus co founder and Chief Medical Officer, Martin per personnel, who passed away unexpectedly on March 7th.
And I had the privilege to work with Martin for many years and and many of you have known him for many years as well at ortho Vita and here at Tela bio and I can honestly say that tela bio would not exist without Martin and he was a cofounder and he puts his money where his mouth was he was an investor and the company from the beginning like most of us here where.
And he cared tremendously about patients he and I share and office with him.
And I use on the phone every day with surgeons.
Discussing their outcomes and patients and he also cared about the health care system, you know Martin wanted nothing to do and starting the company did that improve patients lives and decrease the total cost of care to the system.
And he really had tremendous pride and our company and he works tires tirelessly to deliver clinical data, which we're going to benefit from for a long time the whole bravos system. As you know he is the architect of that so we're going to miss him tremendously.
He's got a wonderful family and kids wife, all of that and our <unk>.
Thoughts go out to his family and all of Us and Tela bio will forever be grateful to Martin and.
And we will continue to work to honor and build upon his legacy.
The entire company is.
And motivated.
To deliver and to deliver big results.
For for him for his family.
And for everyone involved so thanks, that's the end of May.
Discussion.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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