TELA Bio, Inc. (NASDAQ:TELA) Q2 2023 Earnings Call Transcript

So I feel like that’s going to be a great source of growth for us. The third GPO has essentially gone from nothing to triple roughly in terms of raw dollars, and we really didn’t start implementing there until April or so, which was by their instruction and design. So there’s a heck of a lot of room for us to grow in the third GPO as well. We are just starting out there. And then on the Premier side, that’s already become our second largest source of revenue. And that’s coming along very nicely. And we’re in the very early stages. We are very underpenetrated in Premier, but that’s grown very, very well since the end of last year. So I think we’re very early days on all fronts, and you’re going to see the GPO contribution in raw dollars shoot up.

It may shoot up a little slower than the growth rate perhaps given the fact that we’re really good at executing at IDNs and systems that aren’t part of GPOs. But it’s a lot for us to work with, and we’re very bullish and optimistic that that’s a strong piece of what we’re going to do here, and we’re putting reps in the right places to take advantage as well.

Unidentified Analyst: Very helpful. Thanks so much.

Tony Koblish: Thanks, Phil.

Operator: Thank you. One moment please for our next question. Our next question will come from David Turkaly of JMP Securities. Your line is open.

David Turkaly: Hi good evening. Tony, I just wonder if you might make a comment on trends you’ve seen in the pricing, ASPs on either side of the business and/or mix from either larger sheets or anything like that, that might have contributed to the hernia side being as strong as it was.

Tony Koblish: Yes. Hernia side was volume. We have not taken a price increase since we’ve rolled these products out. Our strategy is to offer a tremendous value proposition with superb clinical data and performance for patients and a good value for systems. We believe this is the right pathway until we have a very complete array of GPOs. There’s some more that we want to engage with and win contracts. So we’re going to keep our pricing pretty much where it is and then the discounting that we’re showing at the GPOs isn’t crippling either. We’ve priced the product very fair from a list price level and cost savings that are doable by the GPO do not require huge discounting and everyone is happy. So we’re going to stick with that for now.

I think for us, it’s top line growth. It’s getting access, it’s validating our technology, and it’s lot – and it’s driving the clinical data into situations where people are anxious to listen to us. We think that’s the best approach for now. It doesn’t mean we might not take some price increase in the future. But for now, our ASPs have been pretty steady. And we’re still hovering around $3,000, plus or minus a little bit on hernia and about $5,000, plus or minus a little bit on PRS. So nothing really has changed from an ASP perspective, which implies just raw growth across the spectrum. It’s not just big pieces or it’s not just a thing here or there that’s making this go. It’s consistency, which is good for the long haul.

David Turkaly: Great. Thanks for that. I know you’re aware that there’s a competitor out there that’s looking for PMA labeling for specifically on breast. So I’m just curious what are your thoughts on PRS in that landscape? Do you think if that occurs, how do you view that if that is coming in the next couple of years?