Release Date: May 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue increased by 66% year-over-year, driven by a 42% rise in surgical procedures using the Catamaran system.
- Gross profit reached $470,000 or 65% of revenues, showing a significant improvement from a gross loss in the previous year.
- The company has a strong patent portfolio with 8 issued patents and 23 pending applications, enhancing its competitive edge.
- Positive interim results from ongoing post-market clinical studies indicate effective clinical outcomes and safety of the Catamaran system.
- Tenon Medical Inc has strengthened its balance sheet, generating $2.6 million from preferred stock and retiring $1.25 million in secured debt.
Negative Points
- Operating losses totaled $3.5 million for the first quarter of 2024, although this is an improvement from the previous year.
- The company anticipates continued losses in the future as it is still in the early stages of commercialization.
- Restructuring of the sales organization could imply initial disruptions and a learning curve for new personnel.
- The company is still in the process of ramping up its commercial infrastructure, which may involve significant investment and operational challenges.
- Dependence on the success of the Catamaran system and its adoption by healthcare professionals, which is still uncertain.
Q & A Highlights
Q: Can you describe the mix of doctors participating in your workshops, specifically the balance between interventional pain physicians and spine surgeons?
A: Steven Foster, President and CEO of Tenon Medical, explained that the mix is approximately 50/50 between orthopedic and neuro spine surgeons and interventional pain surgeons. The company aims to ensure that participating physicians have the necessary experience with SI joint procedures, regardless of their specialty.
Q: Regarding the post-market study, how many patients were included in the initial data released, and what should we expect from the upcoming data release?
A: Steven Foster mentioned that the initial press release included data from the first few patients who reached their 12-month milestone. The upcoming data release will include a larger group, potentially up to 10-12 patients, providing an interim analysis of the study's findings.
Q: Will physicians wait for the full 24-month data from the study before adopting the Catamaran system, or is the 12-month data sufficient?
A: Steven Foster noted that physician responses might vary. Some may wait for the complete study results, while others might be convinced by the interim data, especially if it shows significant pain reduction and radiographic proof of bone fusion.
Q: How many patients are currently enrolled in the study, and how many sites are involved?
A: Steven Foster stated that enrollment is nearly complete, with high 30s to 40 patients currently enrolled out of a maximum of 50. The study is being conducted at eight active sites.
Q: How do you foresee the expansion of physician training and the sales force by the end of this year?
A: Steven Foster discussed plans to increase training sessions and expand the sales force to support five geographical regions, with potential future expansion based on sales growth. The company aims to build local support through these regions.
Q: What are the anticipated gross margins for the Catamaran system at normal volumes?
A: CFO Steve Van Dick and CEO Steven Foster indicated that while current gross margins are around 65%, they expect this could improve to mid-70s as sales volume increases, thanks to the scalability of their operations and relatively fixed overhead costs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
