TELA Bio Q2 2026 Earnings Call - CEO Transition and PRS Miss Prompt Guidance Withdrawal

Operator, Conference Call Operator, TELA Bio: Good afternoon, ladies and gentlemen, and welcome to the TELA Bio second quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. Following the prepared remarks, there will be a question and answer session. Please be advised that today’s conference is being recorded. I will now like to turn the conference over to Louisa Smith.

Louisa Smith, Investor Relations, TELA Bio: Thank you, Louisa, and good afternoon, everyone. Earlier today, TELA Bio released financial results for the second quarter ended June 30, 2026. A copy of the press release is available on the company’s website. Joining me on today’s call are Joseph Capper, Chairman of the Board, Heather Getz, Chief Executive Officer, Jeff Blizard, President, Roberto Cuca, Chief Operating Officer and Chief Financial Officer, and Jim Hagen, Senior Vice President of Strategic Operations and Marketing. 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 quarterly reports on Forms 10-Q, which identify the specific risk 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, pipeline opportunities, sales and marketing strategies, and the impact of various additional risk factors as identified in our regulatory filings. With that, I’ll now turn the call over to Joe.

Joseph Capper, Chairman of the Board, TELA Bio: Thank you, Louisa. Good afternoon, and thank you for joining TELA Bio’s second quarter 2026 earnings call. I will start the call with a few comments about the important leadership change announced last week, naming Heather Getz as the new Chief Executive Officer and Director of TELA Bio, then turn the call over to the management team for an update on the business. Heather brings a proven track record of driving operational excellence, leading organizations through complex business and financial transformations, and creating long-term value. We are confident that under Heather’s leadership, TELA Bio will build on its strong foundation, expand its impact for patients and surgeons, and deliver value for our shareholders and employees.

On behalf of the board, I also want to extend our sincere gratitude to Antony Koblish for his vision, leadership, and entrepreneurial spirit in founding TELA Bio and guiding the company through its early growth stage. Antony’s commitment to innovation led to the development of OviTex and helped establish TELA Bio as a leader in soft tissue reconstruction. We are deeply appreciative of his many contributions and wish him continued success in his future endeavors. I will now turn the call over to Heather.

Heather Getz, Chief Executive Officer, TELA Bio: Thank you, Joe, and good afternoon, everyone. Let me start by extending my gratitude, especially to our team, for the warm welcome. I am honored to join TELA Bio at such an exciting time in the company’s evolution. There are many things that attracted me to the organization, one of which is its differentiated product portfolio that spans the hernia and plastic and reconstructive surgery spaces. These products were designed with patient outcomes in mind, and they work. For example, the efficacy of the hernia products is supported by robust clinical studies. As demonstrated in the BRAVO study, at a 2.6% recurrence rate, OviTex has one of the lowest needs for repeat surgery while being used successfully in the most complex surgical tissue repair procedures. It is a privilege to be part of an organization that can improve the lives of patients that addresses a $2.8 billion market opportunity.

Unfortunately, the results of the business this quarter do not reflect the quality and potential of the portfolio. We believe that this is because of several factors. The markets in which we compete are highly specialized and require substantial onboarding and training for new sales reps. As a result, the time to productivity for the new hires has taken a bit longer than anticipated. In addition, earlier in the year, some adjustments were made to the sales team’s focus and incentives, specifically around PRS. That initially appeared positive, but that we later determined needed to be adjusted. Finally, the continued practice of anti-competitive contracting and bundling in hospitals, which is the core issue in our lawsuit against Becton, Dickinson and Company, continues to create barriers to OviTex adoption.

While we are not without competitive and market challenges, I am energized by the opportunity to see the company through its next phase of growth by leveraging my experience in leading organizations through complex business and financial transformations. I will now turn the call over to Jeff to discuss the dynamics impacting our business in more detail and how we are addressing each of these challenges. Roberto will review the second quarter financials, and we will then open the call up for your questions. Jeff?

Jeff Blizard, President, TELA Bio: Thank you, Heather. As you saw in the release, revenue for the second quarter was at $19.3 million, a decrease of 4% from the second quarter of 2025 and below our expectations. The shortfall was concentrated almost entirely to our OviTex PRS portfolio. I will now walk through what drove the miss and detail out our action plan that we have in place to get back on track. In January, we initiated a pilot where we tested the concept of having a dedicated PRS rep calling on targeted hospitals. The hypothesis was that in focus, we could build a clinical relationship, provide superior surgical support, and create a sustainable business upon clinical outcomes with exclusive presence. After extensive analysis from our sales leadership team and feedback from the field, we concluded that the pilot had unintended consequences, causing confusion within the sales organization, which subsequently contributed to the PRS decline.

We acted fast and stopped the pilot to move back to our original structure, in which every TM represents a full breadth of portfolio across their entire territory. The PRS action plan we are rolling out now will have a full training program for the U.S. field team, combined with how best to resource and leverage the medical office. With these positive changes in place and what we know about the seasonality of PRS, we expect to see recovery in the second half of the year. Stepping back to the broader U.S. field organization, we continue to make progress on the tenure and productivity curve we’ve talked about over the last several quarters. We’ve previously discussed the importance of sales reps progressing through their early tenure, as historically, we’ve seen productivity build more meaningfully as reps gain experience and mature in their roles.

While progress is happening, it’s not at the pace we originally anticipated due to the changes in focus and competitive challenges, as referenced above. We maintain confidence that the investment we’ve made in this team over the past year is translating into the kind of durable, tenured field organization we need to drive consistent performance. Globally, our core hernia business continues to perform well. OviTex units volumes grew 12% year-over-year, meaningfully ahead of our 6.6% growth in OviTex dollar revenue, which indicates we continue to take procedural share even as the U.S. market shift towards smaller size units with the prevalence of robotic hernia repairs. In the U.S., as Heather mentioned, we continue to battle against the competitive dynamics of bundling from our largest competitors, which has been particularly challenging in the last 18 months.

To help combat this, we’ve upgraded our talent within our market access and contracting team. OviTex long-term data has continuously shown recurrence rates in the low single digits, whereas other biologic and biosynthetic hernia repair materials have recurrence rates consistently 10 times higher. In programs where we are allowed to compete fairly, the value proposition becomes abundantly clear to both surgeons and hospital administrators. I’m encouraged that LIQUIFIX had another strong quarter, with revenue up 39% over the prior year period, and our international business continued to be a source of consistent growth, with revenue up 26% year-over-year as we deepen our presence in the U.K. and other key European markets. As a reminder, our European growth comes entirely from our hernia portfolio, since OviTex PRS is still working through the regulatory process to reach the European market.

Europe continues to be one of our more durable parts of our business, and we remain focused on deepening our positioning in these markets. While we’re behind where we expected to be at the end of the second quarter, our commercial organization has the agility to adjust as needed, and we’re doing just that. We’ve designed the best hernia portfolio on the market, and we’re taking decisive action to get the PRS business back on track. We’ve also upgraded leadership in our market access team. We have a maturing sales force, and we continue to demonstrate sustainable growth in Europe. Our team has stepped up, and I’m truly encouraged by what’s ahead. I’ll now turn it over to Roberto to walk through the financials in more detail.

Roberto Cuca, Chief Operating Officer and Chief Financial Officer, TELA Bio: Thank you, Jeff. As Jeff described, revenue for the second quarter of 2026 was $19.3 million, a decrease of approximately 4% compared to $20.2 million in the second quarter of 2025. This was primarily driven by a decline in our OviTex PRS unit volume and the continued shift to smaller, lower-priced hernia units in our OviTex mix, partially offset by continued growth in our international business. International sales revenue of $3.8 million represents a 26% increase over the prior year period. Global OviTex unit volume increased 12% year-over-year, with 5,776 units sold in the second quarter compared to 5,178 units sold in Q2 2025. OviTex revenue was $13.3 million, up 6.6% from $12.5 million in the prior year period. OviTex PRS revenue was $5.5 million, compared to $7.3 million in the second quarter of 2025, reflecting the 23% decline in PRS unit volume that Jeff discussed.

Other revenue, which includes LIQUIFIX, was half a million dollars, representing growth of 39%. Gross profit was $13.9 million in the second quarter of 2026, modestly below $14.1 million from the prior year period. Gross margin was 72%, compared to 70% in Q2 2025. The increase was driven by the refund of previously paid tariffs and a lower charge for excess and obsolete inventory as a percentage of revenue. Total operating expense was $23.2 million in Q2 2026, flat to the $23.2 million of expense in the prior year period. Sales and marketing was $16.4 million, a decrease of approximately $400,000 from the prior year period, with lower commission expense partially offset by higher meeting and training costs. General and administrative cost was $4.1 million, in line with the prior year period.

Research and development was $2.7 million, an increase of approximately half a million dollars from Q2 2025, driven by higher compensation and benefits and study costs. Loss from operations was $9.3 million in Q2 2026, compared to $9.1 million in Q2 2025, and a sequential decline of 12% from Q1 2026. Net loss was $11.3 million in Q2 2026, compared to $9.9 million in Q2 2025. The increase was primarily due to higher interest expense of $2.1 million associated with our new upsized credit facility that we put in place in November of 2025 versus $1.2 million in the prior year period under the previous facility. We entered the quarter with $30.4 million in cash and cash equivalents. Before I turn the call back to Heather, let me touch on the remainder of the year.

As a result of the lower than expected results in the first half of the year and the longer than expected ramp time for our new sales team, we will be taking steps to meaningfully reduce the overall cost structure to bring it more in line with our top-line performance and expectations. Since Heather just joined the organization, we will need time to finalize the overall plan. As such, we believe it is prudent for us to withdraw our prior full-year revenue guidance. We will provide an update after the plan is finalized. I’ll now turn the call back to Heather for some closing remarks.

Heather Getz, Chief Executive Officer, TELA Bio: Thank you, Roberto. I want to reiterate my excitement for the opportunity to lead the TELA Bio team. We have a differentiated portfolio, a strong commercial foundation, and a clear commitment to improving outcomes for patients and surgeons. I’m excited to partner with our talented employees, leadership team, customers, and board to build on that momentum, accelerate commercial execution, strengthen our customer relationships, and expand our impact. Together, we have a tremendous opportunity to advance the company’s mission and create long-term value for all of our stakeholders. Thank you to the team for your continued focus and effort. Operator, please open the line for questions.

Operator, Conference Call Operator, TELA Bio: Thank you. If you would like to ask a question, please press 1 again. We ask that you wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. Our first question will be coming from the line of Caitlin Cronin of Canaccord Genuity. Please go ahead.

Caitlin Cronin, Analyst, Canaccord Genuity: Hi. Thanks for taking the questions, and welcome, Heather. Just a quick one on the sales force. Would love more of an update there. How many team members did you end the quarter with? And you noted it’s taking a little bit longer for the reps to hit breakeven versus the six months you noted prior. How much longer is it taking for them?

Jeff Blizard, President, TELA Bio: Sure. Hey, Caitlin, it’s Jeff Blizard. We are on pace with our hiring plan. With the focus shifting on onboarding, training, and productivity, it’s making sure that we have the right team in place. Importantly, our growth in headcount reflects our deliberate commercial expansion, not turnover. This is an investment of us building the right team, right people, and right roles. Our newest cohort is already outperforming its predecessors in that same stage of tenure.

Jim Hagen, Senior Vice President of Strategic Operations and Marketing, TELA Bio: Hey, Caitlin, it’s Jim. I’d like some color on your second half around the 6-month productivity timeline. I think we are definitely seeing it long in the 6 months before reps come up. We know tenure in our field force is the biggest indication of sustainable success for us. So we are really looking at that 9 to 12-month ramp for reps to get up to a really strong productivity level. The positive sign is a lot of them are getting there in terms of maturity and tenure in role. We have added more resources to our training team, both in-house and in the field and within our medical office. So I think I am feeling really good that that group will get up to the productivity levels we need by quickly end of Q3 into Q4.

Caitlin Cronin, Analyst, Canaccord Genuity: Mm-hmm. Just on the PRS business, I think you called out last quarter just some issues with the concentration of the customers there. Is that still an issue? Is that confounding with the sales force focus in PRS and then the shifting of that? Maybe a little more color on what’s really driving the results there.

Jeff Blizard, President, TELA Bio: The pilot was the one that probably got the most attention in the organization. We thought in those 6 key markets, we would see lift, and the rest of the organization would keep PRS as part of their focus in their bag. A bit of that was starting to fall off when we realized the pilot wasn’t growing as fast as we wanted it to in that pilot. So that’s why we pivoted quickly and stopped it. PRS, too, is not a systemic issue. Jim, maybe you can pull this up, but ultimately, we have seen in key programs, key surgeons, it’s in less than 10 sites that we ultimately have to get back on board. Again, not a systemic issue, isolated based on surgeons leaving programs, one who is a new mother.

Some of our key users in the first half of this year has been some changes in life and career patterns.

Jim Hagen, Senior Vice President of Strategic Operations and Marketing, TELA Bio: To your concentration point, Caitlin, that is still real for us. We have a smaller cohort of surgeons implanting PRS that make up a larger percentage of our revenue. Disproportionately, there was a number of those surgeons who were out in the first half of the year. Most of them are coming on. As Jeff said, there has been a couple of life changes for some of them that they are out. Part of the PRS pilot, one of the hypotheses was with dedicated focus, we can drive depth at hospitals with more implanters to lessen the concentration on a critical few. That has now shifted to the broader field team. It is still one of our efforts. We know we have to diversify our implanter base to protect from these shocks going forward.

Caitlin Cronin, Analyst, Canaccord Genuity: Understood. Thanks for taking the questions.

Heather Getz, Chief Executive Officer, TELA Bio: Thanks, Caitlin. Thanks, Caitlin.

Operator, Conference Call Operator, TELA Bio: Thank you. One moment for the next question. Our next question is coming from the line of Sam Nap of Lake Street Capital Markets. Please go ahead.

Frank Takkinen, Analyst, Lake Street Capital Markets: Hi, this is Frank Takkinen from Lake Street. Thank you for taking the questions. Was hoping to start with one on the competitive landscape. Heard the comment a few times throughout the call. Maybe helping to characterize what an account looks like where you are competing fairly, then what are the priorities related to the barriers you need to hit down in order to have more accounts replicate what a fair account looks like.

Jeff Blizard, President, TELA Bio: In the Southeast, as an example, we’ve got an organization, a buying group, that has brought us in, and we have a fair share of our contract responsibility. That’s gone to about 13 or 15 sites with full product rollouts, getting surgeons on board, doing patient selection conversations, then cases to follow. That’s what great looks like. We’ve actually had that happen over the last six weeks or so. The inverse is true in a medical system out west, where we exceeded our percentage of share allotment and the competitor went in and threatened a pricing increase to the tune of $400,000, and we were asked to leave the program. So we’re seeing both sides, and it felt a little bit more ramped up in Q2 versus prior quarters.

Frank Takkinen, Analyst, Lake Street Capital Markets: Okay. That’s helpful. Then related to the comment on cost structure in the second half of the year, where should we think about the costs coming out of the model?

Heather Getz, Chief Executive Officer, TELA Bio: Frank, we’re still working on this. I’ve spent some time with the team, and it’s evident that there’s opportunity to take some meaningful cost out, but the specifics of the plan have not been yet finalized. What we will do is protect our top line and our critical functions within the organization that protect patient safety.

Frank Takkinen, Analyst, Lake Street Capital Markets: Okay. That makes sense. Thank you.

Heather Getz, Chief Executive Officer, TELA Bio: I will update you as soon as we have a finalized plan.

Frank Takkinen, Analyst, Lake Street Capital Markets: Makes sense. Thanks.

Jeff Blizard, President, TELA Bio: Thanks, Frank.

Operator, Conference Call Operator, TELA Bio: Thank you. One moment for the next question. Our next question is coming from the line of Matthew O’Brien of Piper Sandler. Please go ahead.

Matthew O’Brien, Analyst, Piper Sandler: Afternoon, thanks for taking the questions. Roberto, did I hear you right that the second half of the year is going to be, as far as revenue goes, better than the first half? For, I know we don’t want to get into 2027 too much, but there’s no reason to think you won’t grow 2027 versus maybe 2025, this year being more of an adjustment year? Then I have a follow-up.

Roberto Cuca, Chief Operating Officer and Chief Financial Officer, TELA Bio: Matt, you’re probably thinking of Jeff, whose voice is almost as deep and resonant as mine. He was the one who was talking about the revenue growth in the second half of the year, so I’ll let him answer that.

Jeff Blizard, President, TELA Bio: We are optimistic that PRS is going to be one of our growth drivers in the back half of this year, given that it is back in as a large percentage of our focus with a training plan for the commercial organization and re-engagement with those key users. Just again, noting the seasonality of PRS and when we see it hit the most is the back half of this year. So that is where you are hearing our optimism. Jeff, that is just on PRS or is that for the whole business?

No, the whole business too is, we are expanding on our hernia business too, with focus on larger pieces. So going after complex abdominal wall, and ultimately, what we see in our trends for our volumes growing up as high as 12%, is keeping that now with larger pieces, which drives higher ASPs.

Matthew O’Brien, Analyst, Piper Sandler: Okay. This one is for Roberto. Just talk about the cash position of the company at this point, Roberto. I know there is going to be some cost structure adjustments, but just given where you are from a cash perspective, how do we think about funding the business going forward and needs there? Thanks so much.

Roberto Cuca, Chief Operating Officer and Chief Financial Officer, TELA Bio: Sure. As Heather mentioned, we are at the beginning of the evaluation process for reducing the cost structure. As we mentioned in the prepared remarks, we have $30.4 million as of the end of the second quarter. Our goal in that review of cost structure, in addition to preserving our revenue growth, will be to extend the cash runway as much as possible to make any sort of additional fundraising a last resort. This is all a work in process, and as Heather mentioned, as soon as we have final results on it, we will be reporting out on it.

Matthew O’Brien, Analyst, Piper Sandler: Thank you.

Jeff Blizard, President, TELA Bio: Thanks, Matt.

Operator, Conference Call Operator, TELA Bio: Thank you. One moment for the next question. Our next question will be coming from the line of Michael Sarcone of Jefferies. Please go ahead.

Michael Sarcone, Analyst, Jefferies: Hey, good afternoon, and thanks for taking the questions. Heather, welcome aboard.

Heather Getz, Chief Executive Officer, TELA Bio: Thank you.

Michael Sarcone, Analyst, Jefferies: Yeah, just some clarification questions for me, just around the PRS unit volume headwinds. It sounded like you cited two sources of pressure. One was the pilot program that kind of changed focus, or selling focus among the organization, and then some lifestyle or behavioral changes from some of the surgeons. I guess, is that right? Which one is the more important factor, and are you expecting changes to both of those headwinds as we work, get through 2H or just kind of a change around the refocus of the sales or

Heather Getz, Chief Executive Officer, TELA Bio: Why don’t you take that, Jeff?

Jeff Blizard, President, TELA Bio: Yeah. Thanks. It’s Michael, right?

Michael Sarcone, Analyst, Jefferies: Yes, that’s right.

Roberto Cuca, Chief Operating Officer and Chief Financial Officer, TELA Bio: Oh, hey, Michael, it’s Jeff. A couple of things. One is simplifying the message in our salesforce playbook so that our team stays focused on really 2 to 3 key initiatives a quarter.

Jeff Blizard, President, TELA Bio: That’s evident. There’s so many challenges in the role. We have to constantly simplify it so that they stay focused on the things that drive the business. Secondarily, within PRS, specifically, since we noted it’s not systemic and it’s on key programs, there’s 2 things I’d like to add. One is, one of our key contributors, with PRS in the year of 2025, left us in January, and he just came back in July. This was one of our top performers, and our business already in that market is starting to take off with his presence alone.

What I’d like to note too, without using surgeons’ names, given that there’s been some competitive challenges with product that’s published with high recurrence rates, we’re starting to see surgeons that are well published, regarded, and they’re on podiums and also in speaking bureaus, for our competitor, are starting to contact us about using our product. So in the future, we hope to share those names and discuss their positive outcomes. But the good news is we’re starting to see a shift in some of those loyal, allegiant programs and doctors to look at our product now as another solution.

Michael Sarcone, Analyst, Jefferies: Okay. Thanks, Jeff. That’s helpful. On the hernia side, you guys had mentioned a focus on some larger pieces that come with higher ASPs. Just trying to understand the messaging there. Do we expect that the shift toward robotic hernias and smaller pieces is still going to kind of outweigh and be a price mix headwind for the foreseeable future? Or is the message that we could start to see some of these larger pieces more than offset that and see, I guess, a stabilization or growth in price?

Jim Hagen, Senior Vice President of Strategic Operations and Marketing, TELA Bio: Hey, Michael, it’s Jim. I’d say both things are true. The market itself, and procedurally, you are seeing more cases move robotically. As we launched IHR into our portfolio in 2024, and we’ve improved our LPR products within our portfolio, you do see those as the fastest unit growth within our hernia portfolio because we’re capturing more of those procedures. What’s also true, and we referenced our data points throughout the call, the OviTex hernia portfolio has the best matchup for the most complex patient that’s out there. Those are naturally performed open procedures. You’re not really going to do those robotically. We have a right to win in that patient population, and we’re going to kind of put the foot on the gas there in the second half.

I think naturally, we’re starting to see some kind of slowdown in the price or kind of the revenue and unit growth gap. We should start to see that start to normalize into 2027. But we can alleviate some of that ASP degradation by getting back to really what’s core to us, which is treating the most complex patient out there with OviTex.

Michael Sarcone, Analyst, Jefferies: Great. That’s really helpful. Thanks a lot.

Jim Hagen, Senior Vice President of Strategic Operations and Marketing, TELA Bio: Thanks, Michael.

Operator, Conference Call Operator, TELA Bio: Thank you. One more moment for the next question. Our next question is coming from the line of David Turkaly with Citizens. Please go ahead.

David Turkaly, Analyst, Citizens: Hey, good evening. This could be for Heather or Joe, but the bundling commentary, given that the recurrence rates are 10 times higher for some of the competitors, I guess I’d just like to know how do you combat that if it’s that much better? I know there’s a lawsuit involved, but I guess could you just walk us through how you think you can slow that down or stop that given that you have what appears to be a better product?

Heather Getz, Chief Executive Officer, TELA Bio: Yeah.

I was going to say, I’ll let Jeff take that one.

Jeff Blizard, President, TELA Bio: Hey, David. It’s Jeff. A couple of things. One is, a lot of times surgeons get to that decision on their own, right? As much as we’ve put the product in a lot of physicians’ hands using cases, and the peer-to-peer network is growing, they’re going to these major conferences, reading data, seeing recently published publications, and realizing that a lot of time recurrence isn’t necessarily their patient. What I mean by that is when a surgeon uses a product and has an outcome and maybe it’s not favorable, they tend not to always see that patient back. That recurrence is usually in the hands of another surgeon, as you probably would seek a procedure if you didn’t have a great case to begin with. We’re trying to do ultimately is get the word out. We’re at all the key forums.

We’re headed to the Americas Hernia Society at the end of this month, which is a big one for us, to be present with some of these surgeons and share our data, share our wins over the past year. Then ultimately continue to grow with this device and those key procedures. As Jim said, we have the right to win. That’s some of the product that’s out there that has high recurrence rates is where those patients aren’t necessarily thriving with their outcomes. We’re doing it the right way. Ultimately letting these surgeons arrive at that decision without necessarily pointing the data out to them. They’re well-versed in it.

Heather Getz, Chief Executive Officer, TELA Bio: Just to say, I think in these more complex cases where physicians may have had poor outcomes before, they’re more likely to go to bat for the OviTex product with the administration where some of these competitive dynamics exist. That’s part of how we get in there and get through these contracting challenges we have. Did you want to add to that?

Jim Hagen, Senior Vice President of Strategic Operations and Marketing, TELA Bio: Yeah, David, I’ll put a final bow on it, maybe. We referenced in the call, we’re upgrading talent within quite a key part of our team that owns our contracting strategy. Especially in hernia, we do see the pendulum swing in terms of decision-making authority moving more towards the administration. Having a relationship there and 10 team members who understand what they value, being able to tell an economic value story derived from our clinical outcomes is critical to us, so we believe we have the people on the team now who know how to do that better. That’s part of that top-down way we have to attack this. As Heather and Jeff alluded to, you still need presence and building clinical champions from the bottom up.

All of that competitive pressure that is out there, which is again, the basis of our lawsuit that is there, is the friction that is. We reference the time to productivity for our reps. That is some of the friction that is in our reps’ way to getting to productivity, because from the bottom up, they have to create all of those networks and relationships across the hospital system just to be able to advocate up the clinical and economic value of OviTex. We are aware of some of those structural barriers. We are making the moves internally. In the market we compete in now and how it is structured, we are not going to give up. We are just going to put different effort to it and overcome that friction.

David Turkaly, Analyst, Citizens: Thank you for that.

Jim Hagen, Senior Vice President of Strategic Operations and Marketing, TELA Bio: Thanks, Dave.

Heather Getz, Chief Executive Officer, TELA Bio: Thanks, David.

Operator, Conference Call Operator, TELA Bio: Thank you. There are no more questions in the queue. I would like to turn the call back over to Heather for closing remarks. Please go ahead.

Heather Getz, Chief Executive Officer, TELA Bio: Okay. Thank you. I want to again acknowledge and thank the entire TELA Bio team for the warm welcome and express my excitement to work alongside you as we position the company for sustainable growth. We are taking decisive action to extend our cash runway by better aligning our cost structure with our top line while preserving high-value customers and critical capabilities to protect revenue and ensure patient safety. I look forward to updating you on our progress in the future. Thank you for joining the call.

Operator, Conference Call Operator, TELA Bio: This concludes today’s program. Thank you so much for joining. You may now disconnect.