Q2 2022 TELA Bio Inc Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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Ladies and gentlemen, and welcome to the Tela bio second quarter 2022 earnings conference call.
At this time all participants are in a listen only mode.
And after this session will follow the formal presentation.
As a reminder, this conference is being recorded.
I would now like to turn the conference over to will be dismissed from the Gilmartin group. Please go ahead.
Okay.
Thank you Louis and good afternoon, everyone.
Earlier today Tela bio released financial results for the second quarter of 2022, a copy of the press release is available on the company's website.
Joining me on today's call are Tony Cobalt, President and Chief Executive Officer, and Roberto Cougar, Chief operating Officer, and Chief Financial Officer.
Before we begin I'd like to remind you that during this conference call. The company may 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 2021 Form 10-K, and form 10, Qs, which identify the specific factors that may cause actual results or events to differ materially from those described.
These forward looking statements. These factors may include without limitation statements regarding product development product potential the impact of COVID-19, the regulatory environment sales and marketing strategies capital resources or operating performance.
With that I'll now turn the call over to Tony.
Thank you Lisa good afternoon.
And thanks for joining us today on our second quarter 2022 earnings call I am very pleased to report that <unk> achieved its first double digit revenue quarter with net sales of $10 4 million growing 38% year over year and 26% sequentially from the first quarter on.
Today's call I'll describe how we plan to continue growing revenue and taking market share update you on the progress of our sales force expansion discussed the signing of the premier contract and what that means for our business and review our latest clinical news then Roberto who will provide a financial review of the quarter and I will make some closing comments.
Before we take your questions.
As I've described before.
<unk> revenue and market share capture can be thought of as the product of five factors. One the size of our sales force to per sales rep productivity three the number of products in our portfolio for GPO and supply chain access and five clinical data throughout the <unk>.
Last year and certainly within the second quarter, we have improved each of these dimensions, resulting in continued financial and operational performance as we've disclosed previously we ended 2021 with just under 45 sales reps. Our goal was to grow to 55 reps by midyear and 60 by the end of <unk>.
'twenty two I am pleased to report that we had 57 sales reps at the end of June and remain on track to reach our target for the end of 2022 more important than the number of reps, though is their quality. We are continuing to see that strong rest with prior experience within the med tech industry are eager to join Teva having.
Seeing our success over the past few quarters and hearing about the culture and compensation potential from current sales reps within their professional networks, who have already found success here.
We've had two training sessions in the first half of the year, yielding reps, who are thoroughly knowledgeable and playbook 90, and who have hit the ground running and generating sales.
Our most recent metrics on new reps continue to show that on average they have covered their costs within the three first three to six months of hiring quickly contributing to the top line without negatively affecting profitability.
We're in the process of planning the pace of sales force expansion in 2023, and evaluating whether it makes sense to accelerate any of that into 2022, we will update you on that later in the year.
COVID-19 is still seems to be affecting the market for us.
I think both challenges and opportunities, although our second quarter got off to a strong start we saw some softness in June .
Such that the last typically strongest revenue month of the quarter was only slightly above may that said, we continue to believe there is considerable backlog in hernia repair due to COVID-19 based on market growth rates before and after the March 2020.
So COVID-19, Lockdown and more recently, we estimate there maybe as many as 100000 hernia repair procedures that have been deferred due to COVID-19 that need to be treated in the coming quarters.
This represents potential for the use of <unk> products and is the reason that we remain confident about performance over the full year Roberto will have more on that shortly.
Towards the end of July we announced our entry into a group purchasing organization agreement with Premier for our Overtaxed hernia and Prs products. The contract becomes effective on October one Premier has the second largest GPO in the U S covering over 4400 hospitals and 2200 25000.
<unk>. This is a meaningful achievement for Taylor, we are already seeing the impact of GPO contracts can have on our business with healthtrust now comprising approximately one third of our revenue Premier is an even larger organization.
And offers us an excellent opportunity to grow our business even faster.
Additionally, Premier gives us access to many west coast markets, we have not fully penetrated to date, we believe the potential downstream impact of this agreement is substantial and will serve as an important driver of our future growth.
We were pleased to announce recently that 24 month results from Bravo and Rebar studies were accepted for presentation at the American Hernia Society meeting in September and our Bravo study the recurrence rate for eventual Hernias repaired with Overtaxed was only two 6% at 24 months, which we believe compares favorably to.
Reported recurrence rates from competitive products in these types of procedures.
A separate retrospective study examined the recurrence rates of patients who underwent inguinal hernia repair utilizing overtaxed in a minimally invasive technique known as the rebar technique. After two years only three recurrences were identified from the 167 inguinal hernia repair to using the rebar technique a rate of one 9%.
High quality outcomes data is one of the factors contributing directly to <unk> revenue and market share capture we will continue to develop further supportive data with one area of focus being outcomes from overtax using robotic repairs as in Bravo to.
Today, approximately 60% of <unk> repairs employee minimally invasive procedures and we expect this to grow developing additional products compatible with surgical robots and <unk>.
Property and the data supporting their outcomes is therefore, a high priority for Tyler.
On that note. The final important factor for revenue growth is portfolio expansion, we continue to advance projects in both R&D and business development and expect to be able to discuss some details of this more fully by the end of the year. Our salesforce is excited to get additional high quality products to discuss with their customers.
And we take seriously the goal of being a broader tissue preservation and restoration company, we look forward to providing updates in the future with that I'll turn the call over to Roberto for a more detailed for more details on our second quarter financial results.
Thanks, Tony.
Revenue for the second quarter of 2022 increased 38% year over year to $10 4 million.
Gross profit percentage was 63% in the second quarter of 2022 compared to 67% in the same period last year.
Cost of revenues included a one time cumulative amortization charge of approximately $462000.
This charge related to the final $1 million milestone payments were a contract manufacturer for the payment of $5 million in cumulative sales in Europe , which we expect to occur next year.
Sales and marketing expenses were $11 1 million in the second quarter of 2022 compared to $7 5 million in the same period of 2021.
This increase was mainly due to higher salaries benefits and commission costs as a result of the expansion of our commercialization activities higher travel and consulting expenses and additional employee related costs due to increased head count, particularly in our consumer facing roles.
G&A G&A expenses were $3 6 million in the second quarter of 2022 compared to $3 million in the same period of 2021. This.
<unk> was primarily due to higher salaries and benefits and increased professional and consulting and legal expenses.
R&D expenses were $2 1 million in the second quarter of 2022 compared to $1 9 million in the same period last year. The increase was primarily due to higher salaries and benefits.
Loss from operations was $10 2 million in the second quarter of 2022 compared to $7 $3 million in the prior period prior year period.
Net loss was $12 $7 million in the second quarter of 2022 compared to $8 3 million in the same period. In 2021, we ended the second quarter of 2022 with $27 2 million in cash and cash equivalents.
For the full year 2022, we expect revenue to range from $42 million to $45 million representing growth of 43% to 53% over the prior year at.
As Tony said this assumes that the potential impacts of COVID-19 will be no more disruptive in 2022 and 2021, however, a significant increase in COVID-19 infections beyond our estimates could negatively negatively affected this projection.
I will now turn the call back to Tony for closing remarks.
Thank you Roberto.
As you've heard today, our momentum is strong and we expect it to continue despite any COVID-19 headwinds everything is in place to drive significant multiyear revenue revenue growth, we delivered both market, leading innovation and value to payers and providers. Our products are supported by an outstanding sales and service organization and the perf.
<unk> data on Overtaxed is extremely compelling finally, the importance of the Premier agreement should not be underestimated. This is a huge win for Taylor and our sales and business teams will be laser focused on maximizing the potential of this opportunity.
With that said I'll now ask <unk> to open the line for your questions.
Thank you so much.
Alright.
So your first question comes from the line of Ben <unk> from Lake Street Capital Markets. Please go ahead and ask your question.
Hey, Tony here Bertel, congrats on the results and guidance and all of the above Premier New data I wanted to start with a question on premier and just digging a little bit deeper so maybe a two parter first starting with positioning how is <unk> positioned within the premier contract and why is that important.
And then two just curious if there's any volume based incentives built into the contract yet or if that's potentially.
A negotiation that at a later date.
Yeah. So premier is an important agreement for us.
But it's not just the size of the GPO.
The footprint and the opportunity it's the nature of what.
The agreement says right so.
The category that we've been placed and is called the.
The biosynthetic category, so and the Healthtrust agreement, we were definitely placed in the biologic category biologics over the years had been used in more and more complicated complex abdominal wall procedures, which means youre sort of in that.
Smaller segment of the market. This this segment that we're in now this bio absorbable segment is really sort of in the middle it's in that sort of simple ventral moderate ventral area, but the potential of these natural repair product that reside in this sort of middle middle.
Middle Zone means that we can go upstream into the complicated and in downstream into the simple. So in many ways I think this is a clear signal.
Oh, the tax has sort of gotten beyond that niche complex opportunity, which is high price low volume and now we're being viewed as a more complete provider capable of doing everything from the most simple, England LS robotically to the most complicated open app walls, which puts us very much on a level playing.
Field with our competitors, so we like being in the zone that we're in it allows us to take advantage of the breadth of the opportunity in the foot within the footprint of those hospitals.
Yes.
And the second part of the question Frank Sorry volume.
Yes, just if there was any volume based incentives.
Yes.
There is there is there are some tiers there we're not going to really be able to talk about that the contract is.
Proprietary I would say.
But.
There is some pricing tiers and volume issues that are at play I think we were sort of new to the game on that structuring those kinds of deals that we walk into that fairly carefully.
But we're very satisfied with the way that works and our ability again to reach across all of the hernia types is just excellent. So the big news is that we won the contract to be.
Bigger news is that we're in that bio absorbable category. That's just absolutely huge news it takes us from a niche player to a broad provider.
Okay really helpful. And then maybe just shifting over to competitive landscape and I hope I don't.
Uncomfortable position asking this but just curious if you had any.
Recent thinking or comments to provide on the synthetic lawsuits that are ongoing are specifically.
The Providence, Rhode Island case, that's developing in real time.
Yeah, Yeah. So we're.
We're early I think in the process right now with.
This class action litigation.
I'm not sure how many cases have gone have started in the early phases, maybe two or three but theres certainly a new case going on right now I assume if youre talking about Providence, youre, referring to the trevino versus de Waal and C. R. Bard case.
I can't really get.
Into any details we don't know any details all I can do is talk about what we've read in the press specifically there was an article.
That came out a little while ago, and Bloomberg, which I think.
Cracked open some of the internal issues, which I'm not going to discuss here, but that's free for anybody to take a look at that may be in play here.
So whatever its been reported in the press.
What we know we can't comment on anything specific what I can comment on is.
What we think the overall trends are.
That this is starting to kick off right.
And we do believe that this will increase this case, specifically, perhaps and maybe that article that has come out already on it may increase the negative attention that gets focused on permanent synthetic measures. So this should accelerate the ongoing market trends towards natural repair products, which at this point really.
Our resorbable plastic meshes.
Logic meshes and then products like <unk> that are a combination of all of those things right. So I think this pushes things more towards natural repair, which dovetails beautifully with the fact that our premier contract puts us in the high usage categories.
We also know.
That.
Just from the Street intelligence sales force kind of.
Reading the tea leaves.
That bar they understand exactly what's happening in this market. They are in the middle of all this right. So we know that there.
Reducing commissions or maybe even eliminating commissions. There is certainly creating incentives we believe to move their customers away from permanent synthetic matches and more towards their resorbable mesh platform, thereby absorbable their natural repair product called phases.
<unk>.
So this may take the form of Incentivising on multiple fronts.
This is good news for us as well I think the more players credible players big players strong players that validate the need for this natural repair the better for us and the reason is simple we offer a tremendous comparison right. So our product has superb clinical data in comparison to any permanent or resorbable.
Plastic mesh.
Our recurrence rates are are superb and we also have a great cost advantage when it comes to these.
<unk> products as well could be as high as 20%, 25% from what we're seeing.
Need to let that shake out a little bit and see where that goes but we certainly offer a cost advantage in comparison to the resorbable plastics.
We talked a bit more than permanent mesh depend.
Depending on the technology level, whether it's coated or or not coded, but if the market is moving towards natural repair. This is good for us.
So to the extent that this litigation creates any kind of awareness and physicians and patients to.
To move towards natural repair.
We are just situated exceptionally well.
With our <unk> platform our data set.
And our recurrence rates to performed very well in this market. So we like where we like where we are.
And like I said, we're in the early stages of this litigation unfolding. There's many sort of bellwether early cases that will decide how this goes so thats about all I can say.
I had one which is that that move from permanent synthetic to resorbable synthetic was already happening and its probably just being accelerated by the additional license being shown by the litigation.
Okay. That's helpful. Maybe if I could just touch upon like with one more question on the same topic.
It's a pure speculation to ask on my part, but understanding the case and how it's unfolding.
Do you think that there could be a case, where bard thinks that their their best strategy is to elect to pull their synthetic products from the market to try and protect some downside or is that maybe.
Going a little bit too extreme in two of the situation.
I think we're way out over our skis, we have no idea.
I mean, we don't even know how these cases are going to turn out yet.
Compared to the pelvic masses.
A lot of cases before companies started pulling products in many years. So given that I think this is only the fourth case, it's probably a ways off before Barbara would be faced with a decision like that if at all.
Okay.
Okay. That's great. Congrats again on all the progress and I really appreciate all the color. Thanks for taking my question.
Thank you so much and your next question comes from the line of casing running from Canaccord. Please go ahead and ask your question.
Yes.
Hi, good afternoon. Thanks for taking our questions. This is Kevin on for Tavis.
Couple of questions.
Safeguard holds the lifestyle as it helps drive closer into accounts that product and then how is the market environment trending into Q3 has public pressures eased or are you guys still seeing a buildup of backlog. Thank you.
Yeah, I'll start with the second part first so it looks like.
It looks like there's hotspots or flare ups right at least that's our Q2 experience right. We started Q2 exceptionally strong as our opening comments reflected the first two months were excellent and we thought we were going to knock the cover off the ball even more than what we did and we just had a little bit of a two week.
Sort of turbulent patch right.
Eight June mid to late June .
And.
It felt it felt like it was a little bit of.
Nursing shortages hospital staffing.
And then it sort of cleared up and we had a strong finish to the months. So the good news is is that these packages seem to be getting shorter and smaller.
The bad news is they still rear their head in there and there may be a little bit unpredictable for some reason it could be.
The VA for five omicron variants are highly contagious, they don't do too much damage or relative to the older variants, perhaps and.
There's such good home testing now that maybe everybody is not reporting that.
Get it but when they do get it they fall out of the system right. There the patients fall out the doctors fallout et cetera. So.
I think I.
I think it's just going to be patchy here and our job is to figure out how to navigate through that patch.
Regarding sight guard.
We're in an evaluation period with this product we are still learning so well.
We will keep you posted as that unfolds.
It's a very minor contributor right now.
Most of the business if not.
The bulk of the business as Phil.
And then the hernia in the Prs platform.
But we're learning a lot with that market and I think we're.
It is guiding us on how to position products in the anti microbial space I think thats going to pay great dividends for us in the future. So we are in learning mode right now.
Okay.
Great. Thanks.
Thanks Caitlin.
Thank you Caitlin.
And your next question comes from the line of Matthew O'brien.
From Piper Sandler. Please go ahead and ask your question.
Clarification, one Roberto did you say there was a onetime purchase in the quarter I don't think I caught that.
So there was a one time GAAP accounting based charge in the quarter, Okay. So under our contract with our contract manufacturer.
When we achieve $5 million in cumulative sales in Europe , we owe them, a 1 million dollar milestone payment, we expect to hit that milestone and paid in the $1 million of sometime next year, probably in the first quarter for GAAP accounting purposes, though we needed to take and that $1 million it gets amortized.
The launch of the European business through the expected lifetime of the business.
Because we launched a couple of years ago, we had to make a catch up charge to the tune of $462000.
In the second quarter, even though it was a noncash charge. So if you were to figure out the.
The cash basis or cash gross profit percentage, you would just add that $462000 back to our gross profit.
Okay perfect. Thank you.
And then.
Obviously.
While in.
In the quarter, but the.
And that was clearly Trs.
No you probably don't have as much COVID-19 pressure there but.
So thats certainly, helping what is going on with Trs specifically I know, it's an area that you expect to be a big contributor in the coming years, what have you seen kind of underneath the hood as far as new accounts and new clinicians in share taking within that category and then I do have one more on premier.
Yes, so Matt.
So prs did well.
Sure.
It may be a bit more insulated given that it's related to cancer.
Compared to hernia that has certainly been our experience up till now, but really we're just seeing the maturity of the launch start to take shape right. So we have a process it's very methodical.
It involves training learning feedback loops.
<unk> type approach.
The same approach, we did with hernia right hernia started off in.
The end of 2016 or so.
Prs started off in.
In 2019 or so.
We're two to three years behind.
The launch with Prs.
But what you have to understand is prs.
Being rolled out with the same process, but into a much more mature organization right when we rolled out.
Hernia initially we might have had 589 10 reps something like that now we have 57 reps.
Our processes in place we have our ecosystem, our playbook 90, and we're just slowly but surely systematically working the process.
And it's paying dividends and Youre just seeing.
The overlay of how we did hernia how were doing hernia is the same way, how we're doing prs and youre seeing the benefits of just being into bigger footprint more mature just more maturing company in process and our commercialization.
<unk>, particularly is getting quite sophisticated with the ecosystem and we're also benefiting from the contracting also and the rep talent. It's all improving it's a virtuous cycle of improvement, which is going to uplift everything.
Got it okay.
Okay, and then just one more I can I can ask.
A bunch more but just.
Sticking with one more on premier.
It's great that you've got this broader.
Number of cases that you can address I think you said healthtrust is a third of revenue so call it $10 million to $12 million Bucks on an annual basis.
Do you get a buy in right away in Q4.
Of note and then how quickly can you get to a health trust kind of level of revenue and surpass I mean, how big could this be could it be two X healthtrust or even more.
Yes, it does a great questions Matt Thanks.
So look I think healthtrust is underperforming for US right now right because 18 months of the three year contract have been in and Covid, where we've had no access to install into healthtrust for the bulk of the contract right. So.
So that hopefully will not be the case with premier now.
All the hospitals within Healthtrust and Premier don't do Prs.
In hernia procedures right, but if you just look at a proxy right 600 hospitals for.
Healthtrust and 4400 for Premier that's a pretty good ratio proxy for what the ultimate potential could be for this market and then again like I said before we're a healthier more mature organization. Our clinical data is now more mature our salesforce is improving that.
Virtual site virtuous cycle of uplift.
<unk> is in place when we start premier right. So our expectation is that we're going to grow like crazy within both healthtrust now that.
Things are clearing out in terms of Covid and premier.
Is going to be sort of that ratio that mimics the ratio of hospitals. So yes, it's a big deal and we invested heavily early in our commercialization process.
In building the talent and the experience to master contracting and I think it's paying off.
We're going to get every major contract in time, they only come due every three years.
But we offer a compelling value proposition compelling innovation.
At compelling cost savings and compelling clinical performance delivered by our first rate selling organization. So yes, I expect everything to be explosive once we gain traction. It does it happen overnight no right nothing goes from zero to 100, and Med Tech right you've got to work your way into it.
You've got to be patient diligent and when we start the contract in October that's the way, we're going to approach it but I like our chances with a third of our revenue and health Trust in the middle of Covid I like our chances with Premier given all those factors.
Great. Thanks, so much.
Thank you Ed.
Thank you.
And our next question comes from the line of Zachary Wanger from Jefferies. Please go ahead and ask your question.
As Chris filling in for Zach. Thanks for taking the question you guys talked a little bit about how access is trended through the quarter.
Excess return to pre Covid levels.
Kind of as a result of this how has your utilization or reliance on kilowatt shifted.
Well Hello live as a permanent part of the landscape now for us right.
We're doing tele lives as part of our normal course of business.
We can reach more surgeons.
Can offer that service to our sales force they can get a touch high touch with senior leadership.
But we're also doing in person VIP. So those have started up again and.
Those are picking up quite nicely so.
It is going to be a permanent part of the landscape. The vips are coming back in person I think we're sort of way beyond where we were in a post COVID-19 era in terms of those activities.
Hi, touches with surgeons in terms of our reps and their access I can't even remember what pre COVID-19 would like to be honest with you given.
We were pretty underdeveloped back then right. We this was pre IPO for us and we didn't have the capital didn't have a big sales force.
So all we know is what it is what we're in now I don't feel like we have a big problem with access right now I think our reps are getting to where they have to go I think these patches that erupt are coming from the surgeons the nurses.
And the patients either getting these these later variance of Covid or.
Just just shortages right on the labor side. So that's more of the issue for US I don't think our reps are having any kind of problem, making contact with customers and presenting that is really strong for us right. Now it's really this up and down flow that we're seeing these patches that erupt every now and then.
Awesome, Thank you and kind of going off that last point you made.
Have you guys been affected by the broader supply chain pressures that we've been seeing across the industry.
So we haven't had too much pressure on supply chain. So as you know we get most of our products.
From New Zealand.
The ECM material sourced from slaughterhouses there.
And the cost of that manufacturing are borne by that contract manufacturer, we compensate them with a revenue share.
So the cost for us of our primary products have not been increasing.
There is.
We do pay for shipping and Theres, obviously been some constraints on that but thats not a huge contributor to our expenses.
And then there is no competition for.
Expertise.
This applies more to R&D and G&A because our sales forces are still compensated based on a base salary and then a commission based on how much they sell so we're reasonably well insulated from cost pressures.
There is a little bit of excess but not much that's material.
Thanks.
Thanks, Chris.
Thank you so much.
Last question comes from the line of Steve <unk> 17.
<unk> Securities. Please go ahead and ask your question.
Great. Thanks.
Tony you mentioned culture and sort of.
Compensation potential for the reps I was wondering if you can maybe expand on that a bit I mean are they able to make more are you doing something different than say you did at other med tech entities in the past in terms of the rate you are paying these folks and what specifically.
Would you highlight some of the culture side.
Allow you to attract these folks.
Our comp plan is I think rather typical for what I've done in the past and.
What we've done in the past we've got our whole team here virtually has built sales forces.
Have grown from zero to 100 zero to $200 million, which is what our goal is right. So we have a very experienced crew here.
Typical for companies that have that ambition on capitate it incentive.
Compensation right I mean.
Get paid less.
Up till quota and then get paid much more beyond quota, we do some things that again that I think our typical that introduced some non linearity into the pay scale right. The more you beat your quota.
The more you get paid beyond the percentage that you would be and the more you Miss your quota is unless you get paid beyond the percentage that you Miss by right. So it's a culture that rewards high performance I don't think Theres anything crazy about it but it's just the opportunity that the hunter style reps can can see.
Yes.
Coming from a large more established company.
They can see the opportunity here in some of our competitors have been bought and then bought again and then we've been bought again.
And they wind up working for big pharma or big giant giant Med Tech that's a different story than working for our Hungary, nimble agile mobile little bit hostile.
Company like Tela bio right.
I think that permeates our culture.
We try to create a.
Superbly supportive environment, we have you back.
Is one of the things that we say all the time, that's our piece of the equation and your piece of the equation is you've got to deliver.
We believe in transparency understanding what's going on your part of the team we're supportive.
And we're building a great culture, and I think that culture is attracting people.
Both internally and in the commercial organization and this culture construction is very intentional and the reason why I'm waffling on about it now because I hope people are listening and consider this an invitation if you have what it takes and you wanted to be a part of this culture contact us. Thanks.
Thanks for the advertising time, Dave.
I'll send my resume.
Yeah.
I guess as a quick follow up you mentioned the 100, K, so deferred hernia procedures.
Yes.
What are your thoughts on timing in terms of how.
As you worked through that backlog I imagine thats the market backlog, but.
Is this something.
You think you get through this year or is this something that drags on.
So we had a interesting conversation with a hospital administrator, a couple days ago and parked it validates the size of the backlog that we've estimated.
Did confirm that that's.
Reasonable to him.
And then just talk to exactly what you just asked so he made the point that to work through our backlog if youre getting new additional new patients and at the same rate. You. Previously did you have to be doing surgeries in more than 100% of the raise that you did pre COVID-19.
Because you have to do both the surgeries are coming in in the normal course and then.
Dip into that backlog and work it down.
But he said is that as hospitals doing something on the order of $80 to 85% of what they were doing pre COVID-19, and that he sort of other hospitals do even less than that.
At those rates youre not working through much of the backlog I mean, some of those patients are getting their hernias repaired, but you are contributing and expanding potentially the back log because youre not doing even a 100% of what youre doing before the additional point. He made is that many of those patients who are in the backlog by deferring their hernias are coming in with Lara.
<unk> hernias that require in some cases more invasive procedures.
So that's kind of a long roundabout way of saying that the backlog is not going to get worked through very quickly it's going to require getting back to.
Prior staffing levels with hospital plus.
And we don't see that happening anytime soon but we expect that all.
All of the backlog patients and all the new patients are going to be ripe for use of our <unk> products.
And it sounds like there could be.
Some potential upside there as we look ahead.
Thank you for that okay. Thanks.
Thanks, Dave.
Thank you so much everyone and I would now like turn the conference back to Tony for closing.
Thanks Louis.
Thank you everybody for joining us this evening and we appreciate your interest in Tela bio we look forward to meeting up with you again in about three months time. Thank you.
The conference will begin shortly to raise Johan during Q&A you can dial one one.
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As Johan during Q&A.
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