Q1 2024 TELA Bio Inc Earnings Call

Operator: Good afternoon, ladies and gentlemen, and welcome to the TELA Bio First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference call is being recorded. I would now like to turn the call over to Louisa Smith from the Gilmartin Group.

Good afternoon, ladies and gentlemen, and welcome to the bio first quarter 2024 earnings conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.

Louisa Smith: This conference call is being recorded I would now like to turn the conference over to Luisa Smith from the Gilmartin group.

Louisa Smith: Thank you, Michelle, and good afternoon, everyone. Earlier today, TELA Bio released financial results for the first quarter of 2024. A copy of the press release is available on the company's website. Joining me on today's call are Tony Koblish, President and Chief Executive Officer, and Roberto Cuca, 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.

Louisa Smith: Thank you Michelle and good afternoon, everyone earlier today Tela Bio released financial results for the first quarter 2024, a copy of the press release is available on the company's website.

Antony Koblish: Joining me on today's call are Tony Carroll, Busch, President and Chief Executive Officer, and Roberto <unk>, Chief operating Officer, and Chief Financial Officer.

Louisa Smith: We encourage you to review the company's past and future filings with the SEC, including, without limitation, the company's annual report on Form 10-K and quarterly reports on Form 10-Q, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include, without limitation, statements regarding product development and pipeline opportunities, product potential, the impact of various macroeconomic conditions identified in our filings, the regulatory environment, sales and marketing strategies, capital resources, or operating performance.

Louisa Smith: 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.

Louisa Smith: We encourage you to review the company's past and future filings with the SEC, including without limitation.

Louisa Smith: Company's annual report on Form 10-K, and quarterly reports on Form 10-Q, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward looking statements.

Louisa Smith: These factors may include without limitation statements regarding product development and pipeline opportunities products potential the impact of various macroeconomic conditions identified in our filings the regulatory environment sales and marketing strategies capital resources or operating performance.

Antony Koblish: With that, I will now turn the call over to Tony.

Louisa Smith: With that I will now turn the call over to Tony.

Antony Koblish: Thank you, Louisa, and good afternoon everyone. Thank you for joining us for TELA Bio's first quarter 2024 earnings call. In this call, I'd like to highlight some critical milestones we hit in the quarter as well as update you on our continued strategic progress and ongoing growth opportunities. We started the year off strong; first quarter revenue was $16.6 million, representing 39% growth over the same period in 2023 and our 13th consecutive quarter with growth of 35% or greater.

Speaker Change: Thank you Luisa and good afternoon, everyone.

Antony Koblish: For joining us for Tela bio its first quarter 2024 earnings call and this call I'd like to highlight some critical milestones we hit in the quarter as well as update you on our continued strategic progress and ongoing growth opportunities.

Antony Koblish: We've started the year off strong first quarter revenue was $16 6 million, representing 39% growth over the same period in 2023, and our 13th consecutive quarter with growth of 35% or greater.

Antony Koblish: We are capitalizing on the considerable momentum we generated in the fourth quarter, and our business is firing on all cylinders. As you will hear today, we are benefiting from recent enhancements to our commercial team in addition to some key product launches that will enable us to drive significant growth through the remainder of the year. In April, we launched Ovatex IHR, a Trocar-compatible, next-generation soft tissue repair platform designed for inguinal hernias, specifically for use in laparoscopic and robotic-assisted procedures.

Antony Koblish: We are capitalizing on the considerable momentum we generated in the fourth quarter and our business is firing on all cylinders as you will hear today, we are benefiting from the recent enhancements to our commercial team. In addition to some key product launches that will enable us to drive significant growth through the remainder of the year.

Antony Koblish: In April we launched Overtax IH are a trocar compatible next generation soft tissue repair platform designed for inguinal hernia.

Antony Koblish: Specifically for the use in laparoscopic and robotic assisted procedures, just like our other overtax devices Overtax IHI utilizes layers of ovine or shape room, and embroidered with just enough polymer suture to provide additional strength in performance all over text devices are designed to leverage a patient's natural healing.

Antony Koblish: Just like our other Ovatex devices, Ovatex IHR utilizes layers of ovine or sheep rumen embroidered with just enough polymer suture to provide additional strength and performance. All Ovatex devices are designed to leverage a patient's natural healing response, facilitate tissue remodeling, optimize strength, and minimize the foreign body footprint of synthetic polymer. IHR is available in three configurations and will complement our existing product portfolio and allow further penetration into the inguinal market, which has traditionally been dominated by permanent synthetic meshes.

Antony Koblish: Sponsor facilitate tissue remodeling optimize strength and minimize the foreign by footprint of synthetic polymer IHI is available in <unk> configurations, and will complement our existing product portfolio and allow further penetration into the England market, which has traditionally been dominated by permanent synthetic meshes.

Antony Koblish: The initial response has been phenomenal, with debuts of the product at two recent industry events, the Intuitive Surgical Connect meeting and at the Society of American Gastrointestinal and Endoscopic Surgeons, more commonly known as SAGES. There are now 35 published or presented works demonstrating Ovatex's clinical efficacy in hernia repair. This includes a study led by Dr. Paul Zotak exhibiting a low recurrence rate of 1.2% across 259 patients who underwent robotic inguinal hernia tap repair using the rebar technique with an average follow-up of 1.5 years. Our medical training efforts are as robust as ever.

Antony Koblish: The initial response has been phenomenal with the abuse of the product at two recent industry events.

Antony Koblish: <unk> surgical connect meeting and at the Society of American gastrointestinal and endoscopic surgeons more commonly known as stages.

Antony Koblish: There are now 35 published or presented works demonstrating over taxes clinical efficacy in hernia repair. This includes the study led by Dr. Paul Zotac exhibiting a low recurrence rate of one 2% across 259 patients who underwent robotic inguinal hernia tap repair using the rebar.

Antony Koblish: Technique with an average follow up of one five years.

Antony Koblish: Our medical training efforts are as robust as ever and.

Antony Koblish: In Q1, we educated more than 250 surgeons globally through TELA Bio labs and other peer-to-peer training with an emphasis on the use of Ovatex in minimally invasive robotic cases. This includes comprehensive surgeon VIP visits to our Malvern headquarters, experiences at several of our 14 case observation sites, cadaver labs in the US and Europe, and various other educational sessions. We also have a very busy schedule at industry and society meetings.

Antony Koblish: In Q1, we educated more than 250 surgeons globally through Tela bio labs, and other peer to peer training with an emphasis on the use of over tax and minimally invasive robotic cases. This includes comprehensive surgeon VIP visits to our Malvern headquarters experiences at several of our 14 case observations.

Antony Koblish: <unk> cadaver labs in the U S and Europe and various other educational sessions.

Antony Koblish: We also have a very busy schedule at industry and society meetings through March of this year in the U S. We engage with surgeons at 25 industry or society meetings, focusing on hernia plastic and reconstructive surgery, abdominal trauma and GPO purchasing organizations in April we had tremendous success at the annual.

Antony Koblish: Through March of this year, in the U.S., we engaged with surgeons at 25 industry or society meetings, focusing on hernia, plastic and reconstructive surgery, abdominal trauma, and GPO purchasing organizations. In April, we had tremendous success at the annual Intuitive Connect meeting, where they launched their DaVinci 5 platform, and we were only one of three invited companies to provide mesh for hernia surgery.

Antony Koblish: Intuitive connect meeting where they launched their da Vinci five platform and we were only one of three invited companies who provide match for hernia surgery or.

Antony Koblish: Our invitation to this meeting was a pivotal milestone in further demonstrating our credibility and growing leadership in the robotic space. At the meeting, we had exposure to nearly 1,800 surgeons and saw tremendous interest in both LIQUIFIX and OVITEX IHR. Feedback from surgeon follow-up indicates that surgeons who attended were impressed by TELA's prominent presence at the meeting. I am also very pleased to announce that in the first half of May, we reached a major implantation milestone. Over 50,000 units of Ovatex have been used in hernia and complex ab wall procedures, with 10,000 Ovatex PRS units used in plastic and reconstructive surgery procedures.

Antony Koblish: Our invitation to this meeting was a pivotal milestone in further demonstrating our credibility and growing leadership in the robotic space at the meeting we expect had exposure to nearly 800 surgeons and saw a tremendous interest in both liquid fixed and overtaxed IHI feedback from surgeon follow up indicates surgeons, who attended were impressed.

Antony Koblish: Mitel is prominent presence at the meeting.

Antony Koblish: I am also very pleased to announce that in the first half of May we reached a major implantation milestones over 50000 units of other tax has been used in hernia and complex AB wall procedures with 10000, <unk> Prs used in plastic and reconstructive surgery procedures Prs now accounts for more than a third.

Antony Koblish: PRS now accounts for more than a third of TELA's sales, and its revenue grew 54% over the prior year. Of note, the long-term resorbable configuration of PRS, which launched in mid-2023, has grown significantly, and now makes up 55% of the PRS portfolio. Further highlighting TELA's commitment to PRS and the opportunity it represents, on April 1st, we welcome Dr. Howard Langstein, the former Chief of Plastic Reconstructive Surgery at the University of Rochester Medical Center, as TELA's Vice President of Medical Affairs and Surgeon Strategy.

Antony Koblish: <unk> of Tele sales and its revenue grew 54% over the prior year.

Antony Koblish: Of note the long term reserve a book configuration of Prs, which launched in mid 2023 has shown has grown significantly and now makes up 55% of the Prs portfolio.

Antony Koblish: Further highlighting tell his commitment to prs and the opportunity. It represents on April one we welcome Dr. Howard Laing steam the former chief of plastic reconstructive surgery at the University of Rochester Medical Center as Tellers, Vice President of Medical Affairs and surgeon strategy.

Antony Koblish: He joins TELA as a member of a strategic team driving awareness of the clinical benefits of TELA's products with surgeons and hospital administrators in the plastic and reconstructive space. On last quarter's call, we were coming to you from our national sales meeting where we launched the LiquiFix suite of products in the U.S., including both the LiquiFix 6-8 Laparoscopic and LiquiFix Precision Open Hernia These products allow for precise mesh fixation while eliminating the risk of mechanical tissue damage from alternative fixation methods such as tacks, sutures, or staples. They are the only FDA-approved PMA liquid adhesive devices for use in affixing polypropylene and polyester mesh in inguinal and femoral hernia procedures, and for approximating the peritoneum.

Antony Koblish: He joined <unk> as a member of the strategic team driving awareness of the clinical benefits of <unk> products with surgeons and hospital administrators in the plastic and reconstructive space.

Antony Koblish: On last quarter's call, we were coming to you from our National sales meeting, where we launched the liquid fixed suite of products in the U S, including both the liquefaction fix eight laparoscopic and liquid fixed precision open hernia mesh fixation devices. These products allow for precise message mesh fixation, while eliminating the risk of <unk>.

Antony Koblish: Mechanical tissue damage from alternative fixation method.

Antony Koblish: Such as tax sutures or staples.

Antony Koblish: They are the only FDA approved PMA liquid adhesive devices for use in a fixed and colleague propylene in polyester mash in England, and femoral hernia procedures and for approximating the peritoneum. The Salesforce received hands on certification for the products at the National sales meeting and we have seen tremendous interest interest at industry.

Roberto E. Cuca: The sales force received hands-on certification for the products at the national sales meeting, and we have seen tremendous interest at industry meetings since then. To date, over 87 surgeons have been trained on Liquifix, and the product represents yet another addition to our complementary suite of products that elevate TELA to the top of mind within the surgeon's choice of offerings. We are driving awareness and expanding market share with the reach of our portfolio and are committed to offering premier products in the surgeon-preference-driven markets of hernia repair and plastic reconstructive surgery. I'll now turn the call over to Roberto for an overview of our financials. Thanks, Tony.

Roberto: Meeting since then to date over 87 surgeons have been trained on liquefaction and the product represents yet. Another addition to our complementary suite of products that elevate tailored to top of mind within the surgeons choice of offerings, we are driving awareness and expanding market share with the reach of our portfolio and are committed to offering <unk>.

Roberto: Premier products and with surgeon preference driven markets in hernia repair and plastic reconstructive surgery.

Roberto E. Cuca: I'll now turn the call over to Roberto for an overview of our financials.

Roberto E. Cuca: As Tony mentioned earlier, revenue for the first quarter of 2024 grew 39% year over year to $16.6 million, with Ovatex growing 31% and Ovatex PRS growing 54% in the period. These increases were primarily due to an increase in unit sales of our products and the continued expansion of our commercial organization. Each of these resulted in increased penetration of our existing customer accounts as well as the addition of new customers.

Speaker Change: Thanks, Tony as Tony mentioned earlier revenue for the first quarter of 2024 grew 39% year over year to $16 $6 million with <unk> growing 31% and <unk> Prs growing 54% in the period.

Roberto E. Cuca: These increases were primarily due to an increase in unit sales of our products and the continued expansion of our commercial organization.

Roberto E. Cuca: Each of these resulted an increased penetration of our existing customer accounts as well as the addition of new customers.

Roberto E. Cuca: Gross margin was 68% for the first quarter compared to 66% in the prior year period.

Roberto E. Cuca: Gross margin was 68 percent for the first quarter compared to 66 percent in the prior year period. The increase was primarily due to lower charges for excess and obsolete inventory as a percentage of revenue as a result of improvements in our inventory management during the quarter. Sales and marketing expense was $17.5 million in the first quarter of 2024, compared to $13.5 million in the same period of 2023. This increase was mainly due to higher compensation costs as a result of the expansion of our commercial organization, higher travel and consulting expenses, and additional employee-related costs due to increased headcount.

Roberto E. Cuca: The increase was primarily due to lower charges for excess and obsolete inventory as a percentage of revenue as a result of improvements in our inventory management during the quarter.

Roberto E. Cuca: Sales and marketing expense was $17 5 million in the first quarter of 2024 compared to $13 5 million in the same period in 2023.

Roberto E. Cuca: This increase was mainly due to higher compensation costs as a result of the expansion of our commercial organization higher travel and consulting expenses and additional employee related costs due to increased head count.

Roberto E. Cuca: General and administrative expense was $3.8 million compared to $3.6 million in the same period of 2023. This was driven by higher employee-related costs as a result of headcount increases offset by decreases in bad debt expense and insurance expense.

Roberto E. Cuca: General and administrative expense was $3 8 million compared to $3 6 million in the same period in 2023 with this was driven by higher employee related costs. As a result of head count increases offset by decreases in bad debt expense and insurance expense.

Roberto E. Cuca: R&D expense was $2.4 million in the first quarter, compared to $2.1 million in the prior year, primarily due to higher compensation due to an increase in employees, as well as higher costs related to pre-IDE activities for overtax PRS and outside development of new devices. Loss from operations was 4.8 million dollars in the first quarter of 2024 compared to 11.3 million dollars in the prior year period. The decrease is driven by the recognition of a one-time gain of $7.6 million from the sale of certain assets related to the Nivis Fibrillar Collagen Pack device to Memetics in March 2024.

Roberto E. Cuca: R&D expense was $2 4 million in the first quarter compared to $2 1 million in the prior year, primarily due to higher compensation due to an increase in employees as well as higher costs related to pre <unk> activities for Olympics, Prs and outside development of new devices.

Roberto E. Cuca: Loss from operations was $4 8 million in the first quarter of 2024 compared to $11 3 million in the prior year period. The decrease was driven by the recognition of a one time gain of $7 $6 million from the sale of certain assets related to the nearest pivotal oncology tack device to <unk> in March 2024.

Roberto E. Cuca: This recognition is subject to adjustment in future periods as we assess our estimate of variable consideration from the transaction.

Roberto E. Cuca: This recognition is subject to adjustment in future periods as we assess our estimate of variable consideration from the transaction. Net loss was $5.7 million in the first quarter of 2024 compared to $12 million in the same period of 2023. We ended the first quarter with $37.1 million in cash and cash equivalents.

Roberto E. Cuca: Net loss was $5 $7 million in the first quarter of 2024 compared to $12 million from the same period in 2023.

Roberto E. Cuca: We ended the first quarter was $37 $1 million in cash and cash equivalents.

Roberto E. Cuca: Turning to the outlook for 2024, we now project revenue for the full year to be in the range of $74.5 million to $76.5 million, representing growth of 27% to 31% from the prior year. Following a strong first quarter and continued positive dynamics in the market, we feel comfortable in increasing our guidance range as our products continue to win market share. As we have said in the past, we expect operating loss and net loss to be less in 2024 than in 2023, even excluding the contribution from the divestiture of NIVS.

Roberto E. Cuca: Turning to the outlook for 2024, we now project revenue for the full year to be in the range of $74 5 million to $76 5 million representing growth of 27% to 31% from the prior year.

Roberto E. Cuca: Following a strong first quarter and continued positive dynamics in the market, we feel comfortable in increasing our guidance.

Roberto E. Cuca: Range as our products continue to win market share.

Roberto E. Cuca: As we've said in the past, we expect operating loss and net loss to be less in 2024, then in 2023, even excluding the contribution from the divestiture of notice.

Roberto E. Cuca: Moreover, we expect operating expenses to be reasonably steady over the course of the year, notwithstanding some typical seasonality and expenses. And since we expect revenue to grow sequentially, both operating loss and net loss should decline over the course of the year, again excluding the contribution from the divestiture of net.

Roberto E. Cuca: Wherever we expect operating expenses to be reasonably steady over the course of the year notwithstanding some typical seasonality in expense and since we expect revenue to grow sequentially, both operating loss and net loss to decline over the course of the year again, excluding the contribution from the divestiture of notice we continue to expect that our cash and cash equivalents will be sufficient to fund.

Antony Koblish: We continue to expect that our cash and cash equivalents will be sufficient to fund us to profitability. With that, I'll hand the call back to Tony for closing remarks. Thanks, Roberto, and thank you, everyone, for tuning in this afternoon. I am excited by the progress the team has made in the first quarter, and we are just getting started.

Antony Koblish: As to profitability with that I'll hand, the call back to Tony for closing remarks.

Antony Koblish: Thanks.

Tony: Thanks, Roberto and thank you everyone for tuning in this afternoon I am excited by the progress. The team has made in the first quarter and we are just getting started we have reached the point, where we're able to compete with even the largest competitors in our space. We have a well trained experienced direct sales force and highly competitive products backed with exceptional data.

Antony Koblish: We have reached the point where we are able to compete with even the largest competitors in our space. We have a well-trained, experienced direct sales force and highly competitive products backed by exceptional data. Our data on the performance of our products is outstanding, and we continue to collect more. TELA is in a strong financial position, and we fully expect to take share for years to come. I am excited by the greenfield opportunity with IHR and the potential for Liquifix to open doors that were previously closed to us.

Antony Koblish: Our data on the performance of our product is outstanding and we continue to collect more <unk> in a strong financial position and we fully expect to take take share for years to come I am excited by the Greenfield opportunity with IHS and the potential for a liquefaction to open doors that were previously closed to us.

Antony Koblish: So in closing, I'd like to thank our team for their continued commitment to our mission and their relentless focus on driving growth. We are on the precipice of great things here at TELA, and I'm eager to deliver on a year of strong top-line growth and solid operational execution. With that, I'll now ask Michelle to open the line for your questions. Thank you.

Michelle: So in closing I'd like to thank our team for their continued commitment to our mission and their relentless focus on driving growth. We are on the precipice of great things here at Keller and I'm eager to deliver on a year of strong top line growth and solid operational execution.

Antony Koblish: With that I'll now ask Michelle to open the line for your questions.

Operator: Thank you. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment while we compile our Q&A roster. Our first question is going to come from the line of Frank Takkinen with Lake Street Capital Markets. Your line is open, please go ahead.

Speaker Change: Thank you to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment, while we compile our Q&A roster.

Operator: Our first question is going to come from the line of Frank Kennon with Lake Street Capital markets. Your line is open. Please go ahead.

Frank James Takkinen: Great, thanks for taking the questions. Congratulations on the solid start to the year. I was hoping to start by asking about sequential expectations. I know in previous calls and years you've talked about Q2 being a seasonally strong quarter. I think there's some particular excitement around that going into it with a fully staffed selling organization, IHR, and a couple other factors. How should we be thinking about all these things and how they can translate into sequential growth?

Speaker Change: Great. Thanks for taking my questions. Congrats on the solid start to the year.

Frank James Takkinen: Was hoping to start with asking about sequential expectations I know in previous calls and years, you've talked about Q2 being a seasonally strong quarter. I think there is some particular excitement around that going into it with a fully staffed selling organization AHRI and a couple of other factors how should we be thinking about all of these things and what it can translate into a sequential.

Frank James Takkinen: <unk>.

Roberto E. Cuca: So, historically, we have had sequential growth from quarter to quarter, and as Tony has pointed out, there tends to be a fairly healthy step up from the first to the second quarters. If you were to look at the historical data and adjust for the hiccup we had in the third quarter of last year, so maybe look at 2022, a progression like that in revenue is something that we would expect. And, as I mentioned in the prepared remarks, we do expect OPEX to be fairly steady over the course of the year, such that that step up in revenue will drop down to the bottom line in the form of improved operating income.

Roberto E. Cuca: So.

Speaker Change: Sure standpoint.

Roberto E. Cuca: So historically, we have had sequential growth from quarter to quarter and as Tony has pointed out that tends to be a fairly healthy step up from the first and second quarters.

Roberto E. Cuca: If you were to look at the historical data.

Roberto E. Cuca: Adjust for the hiccup, we had in the third quarter of last year. So maybe look at 2022, a progression like that in revenue is something that we would expect.

Roberto E. Cuca: And as I mentioned in the prepared remarks, we do expect opex to be fairly steady over the course of the year such that that step up in revenue will drop down to the bottom line in the form of improved operating income.

Antony Koblish: Okay, perfect. And then maybe for my second one, I know there's been some developments related to the synthetic mesh lawsuit out there. It seems like there's kind of a May 24 decision day. I'm not going to ask you to speculate on the outcome of that, but maybe help us think through how some of those potential outcomes could impact your business.

Speaker Change: Okay, Perfect and then maybe for my second one I know there's been some development related to the synthetic mesh lawsuit out there. It seems like there is kind of a may 24th decision date I'm not going to ask you to speculate on the outcome of that but maybe help us think through.

Antony Koblish: Some of those potential outcomes could impact your business.

Antony Koblish: Well, that's the greatest hidden secret, I think, out there, but yes, there was a notice put out by one of the law firms that there has been a date set for some kind of mediation or arbitration, something like that. So, we're obviously keeping a very close eye on it. We have a communication plan at the ready in case this breaks one way or the other. I think for us to really understand what it means, we'll have to understand what it looks like in the end, right?

Antony Koblish: Well, that's the that's the greatest hidden secret I think out there, but yes.

Antony Koblish: There wasn't noticed put out by one of the law firms.

Antony Koblish: That there had been a date set for some kind of mediation or arbitration something like that so we're obviously keeping a very close eye on it.

Antony Koblish: We have a communication plan at the ready.

Antony Koblish: In case.

Antony Koblish: Breaks one way or the other I think for us to really.

Antony Koblish: And understand what it means we'll have to understand what it looks like in the end right.

Antony Koblish: And then we'll be able to sort of game plan for some of the eventual knock-on effects that come after that. But our position is clear and consistent from the beginning, right? We are a natural repair product. We founded this company with the mission of getting permanent plastic out of people's bellies for hernia repair as much as possible, as much as it makes sense to. We focused on products that are natural in their remodeling process, are soft, and do minimal damage, even if they have to come out at some point.

Antony Koblish: And then we will be able to sort of game plan for some of the eventual knock on effects that come after that but our position is clear and consistent from the beginning right. We are a natural repair product. We founded this company with the mission of getting permanent plastic out of People's bellies for hernia repair as much as.

Antony Koblish: Possible.

Antony Koblish: As much as it makes sense to we focused on products that are natural and theyre remodeling process are soft and do minimal damage even if they have to come out at some point those are the basic tenants that we built the company around and by and large we've delivered on that we have superb clinical data a recurrence rate in these simple England.

Antony Koblish: Those are the basic tenets that we built the company around, and by and large, we've delivered on that. We have superb clinical data; our recurrence rate in these simple inguinal ventrals, etc., where there has been a problem that the litigation is pointing out is in the very, very low single digits. And so I think we are delivering on that promise. You know, I think putting polypropylene plastic into people's bellies is not going to last forever. It's going to come to an end at some point.

Antony Koblish: Ill debenture holes et cetera, where there has been a problem that the litigation is pointing out our recurrence rate is in the very very low single digits.

Antony Koblish: And so I think we are delivering on that promise.

Antony Koblish: Think putting polypropylene plastic into people's values is not going to last forever.

Antony Koblish: It's going to come to an end at some point.

Antony Koblish: And there are very few players and products that are as well positioned as we are to be an excellent alternative. The addition of the IHR product and the LiquiFix gives us a broad product portfolio now that can do any of the procedures done with any polypropylene product in any setting with any technique, robots, laparoscopic, open, you name it. So we look forward to being able to help surgeons and patients in the continuing future and keep going on our mission, which has been the original mission of the company.

Antony Koblish: There's very few players in products that are as well positioned as we are to be.

Antony Koblish: An excellent alternative.

Antony Koblish: The addition of EHR product in a liquid <unk> gives us a broad product portfolio now that Ken.

Antony Koblish: Do any of the procedure is done with any polypropylene product in any setting with any technique robotic laparoscopic and open you name. It. So we look forward to being able to help surgeons help patients and the continuing in the future.

Antony Koblish: And keep going on our mission, which has been the original mission of the company.

Antony Koblish: And I'll just add a little bit of detail, which is that this was a notice in the federal MDL multi-district litigation focused on Ohio. It wasn't the Rhode Island cases, which are state cases. It was a notice that said that the next case in that MDL litigation was postponed, and the parties were sent to mediation with a deadline later in May. The deadline presumably can be extended, and one would think that Bard, that convict, and the defendant, would want to try and settle both the MDL cases and the Rhode Island State cases at the same time.

Antony Koblish: Add a little bit of detail, which is that this was a notice in the federal MTO multi district litigation.

Antony Koblish: Focused in Ohio.

Antony Koblish: It wasn't the Rhode Island cases, which are state cases.

Antony Koblish: It was a notice that said that the next case in that MTO litigation was postponed and the parties were sent from mediation with the deadline later in the day.

Antony Koblish: The deadline, presumably can be extended and one would think that bard becton Dickinson the defendant would want to try and settle both BMD at our cases in the Rhode Island State cases at the same time.

Antony Koblish: That could be tricky to sync up, so it is pretty unpredictable. But the notice just did get us to finalize our plans in response to any potential settlement, which would be driven in large part by what Dickinson does post-settlement.

Antony Koblish: That can be tricky to sync up so it is pretty unpredictable.

Antony Koblish: But I noticed just did.

Antony Koblish: Get us too.

Antony Koblish: Finalize our plans and response to any potential settlements, which were driven in large part by what.

Antony Koblish: Concerning the tickets invest post the settlement.

Frank James Takkinen: Got it. That's helpful, Culler. I'll stop there. Thanks, guys.

Speaker Change: Got it that's helpful color I'll stop there thanks, guys. Thanks.

Operator: Thank you, and one moment as we move on to our next question. And our next question is going to come from the line of Caitlin Cronin with Canaccord Genuity. Your line is open, please go ahead.

Speaker Change: Thanks, Greg.

Speaker Change: Thank you and one moment as we move on to our next question.

Caitlin Cronin: And our next question is going to come from the line of Caitlin Cronan with Canaccord Genuity. Your line is open. Please go ahead.

Caitlin Cronin: Hey, thanks for taking my questions. Um, you know, just to start off, my first question is on productivity. How is it trending, including, you know, your initiatives for balanced selling? And how do you feel about the bolus of reps that you brought on at the end of 2023?

Caitlin Cronin: Hey, Thanks for taking my questions.

Caitlin Cronin: Just to start off my first question is on productivity, how is that trending including.

Caitlin Cronin: Your initiatives for balanced selling and how do you feel about the bolus of reps that you brought on at the end of 2023.

Antony Koblish: Yeah, I mean we feel very good about the bolus of new reps, and you know we've enhanced our training program significantly, and we're going to continue to enhance that training program almost to the point of perpetual training so that you know we have the best trained team in the marketplace. We feel pretty good about the balance selling. You know there's already been an uptick in PRS as it relates to a percentage of sales.

Antony Koblish: Yes, I mean, if we feel very good about the bolus of new reps and.

Antony Koblish: We've enhanced our training program significantly and we're going to continue to.

Antony Koblish: Enhanced enhanced that training program almost to the point of perpetual training. So that we have we have the best trained team.

Antony Koblish: The marketplace.

Antony Koblish: We feel pretty good about the balanced selling there has already been an uptick in prs as it relates to a percentage of sales I think we were running about 30% of topline with Prs and I believe now in Q1, we were about 35%, 36%. So I think thats the beginning of what we're starting to see in terms of.

Antony Koblish: I think we were running about 30% of top-line with PRS, and I believe now in Q1 we were about 35-36%, so I think that's the beginning of what we're starting to see in terms of, you know, a balanced selling approach. So we're still finding our legs with this, but overall, I think we're off to a good start and you know we started the year with a front-loaded sales force, right? So last year and the year before, we were hiring, which made forecasting, you know, the exact number of reps at any point in time along with productivity a little more difficult.

Antony Koblish: Our balance selling approach so we're still finding our legs with this but overall I think we're off to a good start and.

Antony Koblish: We started the year with a frontloaded salesforce right. So last year and the year before we were hiring which made forecasting the exact number of reps at any point in time, along with productivity a little more difficult here were front loaded we've got the full team in place for the full year. So it should allow us to focus on things like training and.

Antony Koblish: Here we're front-loaded. We've got the full team in place for the full year, so it should allow us to focus on things like training and execution, which will result in more confidence and success in productivity. And one of the metrics we talk about is the time it takes for new reps to get to break even, and we have seen with the latest cohorts of new reps for which we have data that it is still running at a bit under six months for new reps, on average, to get to paying for their own variable costs.

Antony Koblish: Execution, which will result in more confidence and success and the productivity and one of the metrics we talked about at the time it takes for new reps to get to breakeven and we have seen with the latest cohorts of new reps for which we have the data.

Antony Koblish: It is still running at a bit under six months for new reps on average to get to paying for their own variable costs.

Roberto E. Cuca: And then how do you feel about cash burn this quarter and how do you expect that to trend throughout the year?

Speaker Change: Awesome and then how do you feel about cash burn this quarter and how you expect that to trend throughout the year.

Roberto E. Cuca: Sure, so as I described from a P&L perspective, we do expect OPEX to be reasonably steady over the course of the year and revenue to grow on top of that such that, again, P&L metrics of profitability will improve steadily over the course of the year, ignoring the contribution from NIVS, which makes things better for the whole year. There is some seasonality to our cash flows since we tend to buy additional inventory in the first quarter and we pay out bonuses in the fourth quarter, so if you overlay that sort of natural seasonality on top of that P&L progression, we feel comfortable with cash burn and the way that cash is going to progress over the course of the year.

Speaker Change: Sure so.

Roberto E. Cuca: As I described from a P&L perspective.

Roberto E. Cuca: We do expect opex to be reasonably steady over the course of the year in revenue and revenue to grow on top of that such that.

Roberto E. Cuca: P&L metrics of profitability will get will improve steadily over the course of the year ignoring the contribution from <unk>, which makes it better for the full year.

Roberto E. Cuca: There is some seasonality to our cash flows since we tend to buy additional inventory in the first quarter.

Roberto E. Cuca: We pay out bonuses towards the fourth quarter. So if you overlay that sort of natural seasonality on top of that P&L progression.

Roberto E. Cuca: We feel comfortable with the cash burn in the way the cash is going to progress over the course of the year.

Caitlin Cronin: Great. Thanks so much.

Speaker Change: Great. Thanks, so much.

Operator: Thank you, and one moment as we move on to our next question. And our next question is going to come from the line of Michael Sarcone with Jeff Rees. Your line is open. Please go ahead. Thank you.

Speaker Change: Thanks, Kevin.

Speaker Change: Thank you and one moment as we move on to our next question.

Operator: And our next question is going to come from the line of Michael Sarcone with Jefferies. Your line is open. Please go ahead.

Michael Anthony Sarcone: Hey, good afternoon. Thanks for taking the questions. Thanks, Michael. Just to start, do you think you could talk about how you're thinking about IHR contribution for this year and maybe what you've got based on the 24 guidance?

Michael Anthony Sarcone: Hey, good afternoon, thanks for taking the questions.

Michael Anthony Sarcone: Thanks, Michael.

Michael Anthony Sarcone: Just to start maybe you can talk about how youre thinking about HR contribution for this year and maybe what you've got baked into 'twenty for guidance.

Roberto E. Cuca: So, there are two dimensions to the IHR contribution for the year. First, just as a reminder, we're already a participant in inguinal hernia repairs. We do have products that are currently used, even in robotic surgery going down in procars.

Michael Anthony Sarcone: So there are two dimensions to the IHS contribution for the year. So the first is just as a reminder, we're already participant in England.

Roberto E. Cuca: Hernia repairs, we do have products that are currently used even in robotic going down for cars.

Roberto E. Cuca: Roughly about 16% of our revenue previously was in inguinal hernia repairs, so we expect that IHR will have a fairly quick pick-up and uptake amongst the surgeons who are already doing inguinal hernia repairs using our product. In addition, there's a lot of greenfield opportunity, as Tony mentioned, to introduce the product to physicians who are maybe using synthetic meshes and are familiar with our products but want something a little bit more, you know, targeted for inguinal repairs.

Roberto E. Cuca: Roughly about 16% of our revenue is.

Roberto E. Cuca: Previously it was in inguinal hernia repairs. So we expect that <unk> will have a fairly quick pickup uptake amongst the surgeons, who are already doing inguinal hernia repairs using our products. In addition, there is a lot of greenfield opportunity as Tony mentioned.

Roberto E. Cuca: To introduce the product to physicians, who are maybe using synthetic matches.

Roberto E. Cuca: And are familiar with our products, but that's something a little bit more.

Roberto E. Cuca: <unk> for inguinal repairs.

Roberto E. Cuca: And so we expect to see some pickup from that as well. We haven't quantified that exactly and what the breakout of that in the $74.5 to $76.5 million for the year is, but we do expect it to be a noticeable contribution to that amount. Yeah, I'll add to that, Michael. We're off to a good start, you know, just a couple of weeks.

Roberto E. Cuca: And so we expect to see some pickup from that as well. So we haven't quantified that exactly and what the breakout of that in the 74, 5% to $76 $5 million for the year is.

Speaker Change: But we do expect it to be a noticeable contribution to that amount, yes, I'll add to that Michael while we're off to a good start just a couple of weeks, we've got well over 50 and plantations, which is great.

Antony Koblish: We've got well over 50 implantations, which is great. And, you know, we're thinking about this, as Roberto said, but really a forward and backward integration, right? So, you know, this will allow us to get to new customers, which will elevate the rest of our product portfolio in ventral and complex ventral. But we started off in complex ventral and then, you know, more simple ventral. And a lot of those surgeons don't use us for inguinal hernia surgery.

Antony Koblish: And we're thinking about this as Roberto said, but really a forward and backwards integration right. So.

Antony Koblish: This will allow us to get to new customers, which will elevate the rest of our product portfolio in ventral and complex ventral, but we started off in complex ventral and then sit more simple ventral and a lot of those surgeons don't use us for England. So I think reversing that our customer.

Antony Koblish: So I think, you know, reversing that, our customers that are solid on the ventral side and the complex side, you know, I think they are going to take a good hard look at us and adopt our product on the inguinal side. So it gives us that complete product portfolio. I like the fact that it gives us mind share, you know, routine usage capability, shelf space. And with the addition of LiquiFix, it gives us complete parity with our largest competitors, right? We have a very novel atraumatic fixation system that we think offers significant advantages compared to tackers. And now we've got, you know, a full range.

Antony Koblish: Or is that are solid on the venture side and the complex side I think I'm going to take a good hard look at us and adopt our product on the England side. So it gives us that complete product portfolio I like the fact that it gives us mind share routine usage capability shelf space and.

Antony Koblish: With the addition of liquefaction it gives us complete parity with our largest competitors right. We have a very novel Atraumatic fixation system that we think offer significant advantages compared to <unk>.

Antony Koblish: And now we've got.

Antony Koblish: A full range to go after the whole suite of procedures.

Michael Anthony Sarcone: Got it. That's really helpful. Uh, thank you. And just second one. Could you maybe just give us an update on your GPo contracts and how you're doing?

Antony Koblish: Okay.

Speaker Change: Got it that's really helpful. Thank you and just second one could you maybe just give us an update on your GPO contracts and how you are ramping there.

Antony Koblish: Yeah, so it remains a big three contract that we have in place, you know, our revenue contribution from all the various GPOs, even the smaller ones, and the big three is, you know, approximately 60%. We think it's going to grow up to 70% in the near future.

Michael Anthony Sarcone: Yes, so it remains at the big three contracts that we have in place our revenue contribution from all the various GPO is even the smaller ones and the big three is approximately 60% we think it's going to grow up to 70% in the near future.

Antony Koblish: We're certainly on track for that we're continually getting access to <unk>.

Antony Koblish: And supply chain and by smaller GPO and we are active in terms of.

Antony Koblish: We're certainly on track for that. You know, we're continually getting access via the IDN supply chain and by smaller GPOs, and we are active in terms of looking at getting more and more large GPOs. We're very confident that we're going to get them all.

Antony Koblish: We're looking at getting the next large GPO.

Antony Koblish: We're very confident that we're going to get them all the large GPO with I think they are bid request aren't due until much later this year. So it might be more of a next year event.

Antony Koblish: But rest assured we're very confident in our ability to continue to sell within the Ida IGN framework, which represents over 40% of our sales today and it's been very consistent. So we've also had great success in getting IHS on our existing contracts as a line extension.

Antony Koblish: The large GPOs, I think their bid requests aren't due until much later this year, so it might be more of a next year event, but rest assured, we're very confident in our ability to continue to sell within the IDN framework, which represents over 40% of our sales today and has been very consistent. So we've also had great success getting IHR on our existing contracts as a line extension. And we're actually starting to see some success with LiquiFix as a new technology.

Antony Koblish: And we're actually starting to see some success with liquid fix.

Antony Koblish: It's gonna take a little more time to get the contracts for LiquiFix, but the new technology designation, which we seem to be getting in certain places, is gonna help us speed that up as well. So everything on the GPO front's looking very positive.

Antony Koblish: As a new technology, that's going to take a little more time to get contracts for liquid fixed.

Antony Koblish: The new technology designation, which we seem to be getting in certain places is going to help us speed that up as well so everything on the GPO front is looking very positive.

Speaker Change: Great. Thank you.

Speaker Change: Thanks, Michael.

Operator: Thank you, and one moment as we move on to our next question. And our next question is going to come from the line of Matthew O'Brien with Piper Sandler. Your line is open. Please go ahead.

Speaker Change: Thank you and one moment as we move on to our next question.

Matthew O'brien: And our next question is going to come from the line of Matthew O'brien with Piper Sandler. Your line is open. Please go ahead.

Matthew O'brien: Thanks for taking the questions. Maybe, for starters, just so you know, the Q1 result was quite good. Guidance for the year is, you know, well below what you just delivered in Q1, and I know there's a crop dynamic to think about, but with all these different growth metrics or growth drivers that we're seeing out there, I guess, you know, why not raise the guidance range a little bit even higher versus, you know, what you did and then kind of what you've been doing over the last couple years.

Speaker Change: Alright, thanks for taking the questions maybe for starters.

Matthew O'brien: The Q1 result was quite good guidance for the year.

Matthew O'brien: Well below what you just delivered in Q1 and I know there is a cost dynamic to think about.

Matthew O'brien: As with all these different growth metrics are growth drivers that we're seeing out there.

Matthew O'brien: I guess why why not raise the guidance range, a little bit even higher versus.

Matthew O'brien: What <unk>, what you did and then kind of what you've been doing over the last couple of years.

Roberto E. Cuca: Sure. Thanks for the question, Matt.

Speaker Change: Sure. Thanks for the question Matt.

Speaker Change: We approached our guidance. This year is a commitment to our investors. So we are going to hit these numbers.

Roberto E. Cuca: You know, we approached our guidance this year as a commitment to our investors. So we are going to hit these numbers, and we put the guidance range where we felt very confident that that was doable, given what we know. And we understood that as we learned more over the course of the year, quarter by quarter, and if we felt more comfortable, we would increase it to reflect that. So, you know, we did do well compared to consensus this quarter.

Roberto E. Cuca: And we put the guidance range, where we felt very confident that that was doable given what we know understanding that as we learn more over the course of the year quarter by quarter and if we felt more comfortable we would increase that to reflect that.

Roberto E. Cuca: So.

Speaker Change: We did.

Roberto E. Cuca: Do well compared to consensus this quarter, we've raised the range by a bit more than that.

Roberto E. Cuca: We raised the range by a bit more than that. You know, part of the dynamic is, you know, what sort of fractions we can use and what sort of numbers. But we feel comfortable about the slightly raised range, and as we get more data under our belts, we will reconsider the range going forward.

Roberto E. Cuca: Part part of the dynamic is what sort of fractions, we can use and what sort of numbers, but we feel comfortable about the slightly raised range.

Roberto E. Cuca: As we get more data under our belts, we will reconsider the range going forward.

Antony Koblish: Okay, understood. And then Tony, you know, we've been talking about really strong training for quite a while. And I'm just wondering when we're going to start to see a little bit more of this, this inflection point in terms of utilization. I mean, I know you're growing really well, but this is a massive market that you're going after. You know, what do you think is needed? You've got all the data, you've got, you know, great products, indications. What's needed to really see this inflect from here? Thanks. Well, you know, I call it the quasi-pure.

Speaker Change: Okay understood and then Tony you've been talking about really strong training for quite a while and I'm just wondering when we're going to start to see a little bit more of this.

Tony: Flexion point in terms of utilization I mean, I know you are growing.

Tony: Well, but this is a massive market that youre going after.

Antony Koblish: What do you think is needed.

Antony Koblish: The data you've got great product indications whats needed that really curious.

Antony Koblish: Well, you know, I call it quasi-parity, right? So, you know, if you look at our history, right? We had no capital until the end of 2019, as you know. So, commercialization really started in earnest in 2020. And we did well for two or three years, but we were hampered in building out our infrastructure, you know, due to the COVID start. But we grew crazy good even through that.

Tony: Inflect from here, well I call it the core.

Antony Koblish: Badai quasi parity right so.

Antony Koblish: If you look at our history right.

Antony Koblish: No capital until.

Antony Koblish: At the end of 2019 as you know.

Antony Koblish: So commercialization really started in earnest in 2020.

Antony Koblish: And we did well or two or three years, but we were hampered in building out our infrastructure.

Antony Koblish: Due to the Covid start, but we grew crazy good even through even through that but.

Antony Koblish: But, you know, to be successful in this market, parity in terms of Salesforce size, roughly, parity in GPO access, roughly, parity in terms of product portfolio capability across all types of procedures, roughly, right? I mean, we haven't had all of that in place until now, right? What we had was excellent proof of concepts, great data, you know, a very good mission that I think is well understood and appreciated by patients and some surgeons.

Antony Koblish: To be successful in this market parity in terms of sales force size roughly parity in GPO access roughly parity in terms of product portfolio capability across all types of procedures roughly right. I mean, we haven't had all of that in place until now what we have.

Antony Koblish: <unk> was excellent proof of concepts great data.

Antony Koblish: A very good mission that I think is well understood and appreciated by patients and some surgeons and I think more and more surgeons are are getting interested in our mission.

Antony Koblish: And I think more and more surgeons are getting interested in our mission. So I think what you're seeing is, you know, surgeons tend to be slower, conservative adopters, which I think you want them to be. They want to prove things out first before they jump in. But you know, we are a company that started with zero on the ground, right? Nothing.

Antony Koblish: So I think it's.

Antony Koblish: I think what Youre seeing is young surgeons tend to be slower conservative adopters, which I think you want them to be they want to prove things out first before they jump in.

Antony Koblish: But we are a company that started with zero on the ground right nothing and and so it's taken us time to methodically build this quasi parity with the big players and I think we can go toe to toe now starting starting now at the start of this year. So.

Antony Koblish: And, and so, you know, it's taken us time to methodically build this quasi-parity with the big players, and I think we can go toe to toe now, starting, starting now, at the start of this year. So, you know, I think this is the next phase of our evolution and growth, Matt.

Antony Koblish: I think I think this is the next phase of our evolution and growth math.

Matt: Alright, thanks, so much.

Operator: Thank you. And one moment for our next question. And again, ladies and gentlemen, if you have a question at this time, please press star 11 on your telephone. Our next question comes from the line of David Turk... Turkaly with Citizens, JNP, your line is open, please go ahead.

Antony Koblish: Thank you and one moment for our next question and again, ladies and gentlemen, if you have a question at this time. Please press star one on your telephone. Our next question comes from the line of David.

Operator: Sure.

David Louis Turkaly: Secondly, with citizens.

David Louis Turkaly: JMP. Your line is open. Please go ahead.

David Louis Turkaly: Hey, good evening guys. Tony, I might have missed it. Did you say, and I know Salesforce expansion is not a big part of this year, but are you still at 86 reps and six assistant reps? We are at 86.

David Louis Turkaly: Hey, good evening guys.

David Louis Turkaly: Sorry, I might've missed it did you say I know sales.

David Louis Turkaly: Sales force expansion is not a big part of this year, but you're still at 86 reps in six assistant reps, we are at 87 reps and <unk>.

Antony Koblish: We are at 87 reps and 7 associate reps. Yeah. Now we're very consistent from last time, Dave.

Speaker Change: Associate reps.

Antony Koblish: Now, we're very consistent from last time, Dave.

Antony Koblish: Got it. And then, you know, you mentioned the intuitive meeting and your commentary about, you know, some further penetration into existing accounts and adding some new ones. I'm just curious if there's anything tangible you could leave us with, maybe even in terms of new accounts, because that sort of seems like it would be a great opportunity for you guys to, you know, scope out some new surgeons. And I don't know if there's any quantifiable number you could give us, but I'd love to hear your thoughts on that meeting. Yeah, I mean, the meeting was great for us. I mean, for

Antony Koblish: Got it and then.

Antony Koblish: Mentioned the intuitive meeting.

Antony Koblish: And your commentary about some further penetration in existing accounts and adding some new I'm just.

Antony Koblish: Curious if theres anything tangible you could leave us with maybe even in terms of new accounts.

Antony Koblish: Does that sort of it seems like it would be a great opportunity for you guys.

Antony Koblish: Scope out some new surgeons and I don't know if theres any quantifiable number you could give us great.

Antony Koblish: Good to hear your thoughts on that media.

Antony Koblish: Yeah, I mean, the meeting was great for us. For a short meeting, we had over, well over 70, you know, really solid, validated leads. A lot, you know, there's a very nice percentage of those have already turned into cases or case commitments.

Antony Koblish: Yes, I mean, the meeting was great for Us I mean for our short meeting we had over well over 70 really solid validated leads.

Antony Koblish: Very nice percentage of those have.

Antony Koblish: <unk> turned into cases or a case commitments.

Antony Koblish: You know, it felt like, you know, we were part of the ecosystem, right? I always say, Intuitive Surgical is the Apple of medtech in our time. And, you know, they only pick the best partners to go into their application store.

Antony Koblish: It felt like.

Antony Koblish: We were part of the ecosystem right I always say intuitive surgical is the Apple of Med Tech and our time and.

Antony Koblish: They only pick the best partners to go into their application store and I felt like being in that App store was that was a big deal for US we never take it for granted we appreciate it immensely.

Antony Koblish: And I felt like, you know, being in that app store was a big deal for us. We never take it for granted. We appreciate it immensely. And I think it's going to do good things for us, right? It's going to open up the world to seeing us for who we are. A lot of the surgeons, you know, were seeing us for the first time. You know, so that kind of thing takes time.

Antony Koblish: And I think it is going to do good things for US right. It's going to open up open up the world to seeing US who we are locked a lot of the surgeons were seeing us for the first time.

Antony Koblish: So that kind of thing takes time, but connect meeting with an excellent excellent.

Antony Koblish: But the Connect meeting was an excellent, excellent start. And, you know, we want to do more of those. I think, you know, the case observation sites are something that's also very, very good.

Antony Koblish: Start and we want to do more of those I think the case observation Sciences is something that is also very very good.

Antony Koblish: You know, we've got many, many robotic surgeons that are now opening up their ORs for surgeons to come in and take a look. And, you know, that's great for the robot, and it's great for Ovatex, too. So, you know, I think, you know, I always think that Intuitive may be the giga GPO that sits on top of all the other GPOs, right? We want to make sure that everything we do is in good standing with them, and that we focus on our compatibility with the surgeons who use the products. So, the robot. So, I think we're slowly, you know, attaining that, Dave. It's nothing but good.

Antony Koblish: Got many many robotic surgeons that are now.

Antony Koblish: Opening up their hours for surgeons to come in and take a look.

Antony Koblish: And that's great for the robot and it's great for Overtaxed too so I think.

Antony Koblish: I always think that.

Antony Koblish: It may be the Giga GPO that sits on top of all the other GPO is right.

Antony Koblish: We want to make sure that everything we do is in good standing with them and that we.

Antony Koblish: We focus on our compatibility with the surgeons who use the.

Antony Koblish: The products. So the robot so I think I think we're slowly attaining that Dave it's nothing but good.

Dave: Great. Thank you.

Operator: Thank you, and I'm showing no further questions at this time, and I'd like to hand the conference back over to Tony Koblish for any further remarks.

Speaker Change: Thanks, David.

Antony Koblish: Thank you and I'm showing no further questions at this time and I'd like to hand, the conference back over to Tony <unk> for any further remarks.

Antony Koblish: Thank you, Michelle, and thank you everyone for joining us. We appreciate your continued interest in TELA Bio. Have a great rest of your evening. Thank you.

Antony Koblish: Thank you Michelle and thank you everyone for joining us.

Antony Koblish: We appreciate your continued interest in <unk> have a great rest of the year evening. Thank you.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Operator: This concludes today's conference call. Thank you for participating you may now disconnect.

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