TELA Bio, Inc. (TELA) Earnings Call Transcript & Summary

Great. All right. Good morning, everybody. This is Matt Taylor, UBS' U.S. medical supplies and devices analyst. And I'm pleased to be kicking off our Virtual Healthcare Conference in the medtech track. And today, we have management from TELA Bio joining us. We got Tony Koblish, the CEO, on the line. And just to get everybody oriented for these sessions, most of them are geared to be a 45-minute fireside chat that will be moderated by me. If you have any questions that you'd like to ask the management team or for us to ask them, please just send in an e-mail to me or any member of my team. And then we also have a way that you can submit questions through the webcast. So we can weave some of those into the conversation. For this first session, this morning, it's going to be very much that format, except we're going to have a few opening comments from Tony talking about TELA, and we'll jump into the Q&A. So I hope everybody has a great day and reach out to my team too if you have any problems with your meetings or anything like that. But Tony, thanks a lot for joining us, and welcome to the call this morning.

Hey, thanks for having me. I really appreciate it. And I guess, to start out, I'll just acknowledge the usual forward-looking statements as usual. But Matt, I'm happy to do sort of an overview before we kick into the Q&A, if that makes sense.

Yes. No, I think it does. Why don't you start with some high-level comments, talk a little bit about the current state of TELA and how things have been going, take us through that.

Yes, sure. So just to orient everybody, we're a soft tissue reconstruction company. We really work in the areas of all things hernia repair and all things plastic and reconstructive, with particular focus on breast reconstruction. The business has been commercial really since around 2017. We started off on the hernia side of things. And then in the last year or so, we've really slowly started the release of our PRS or plastic reconstructive products and are now starting to release that on a more fulsome basis. The company has been very focused on developing very strong preclinical and clinical datasets for driving the adoption and setting the criteria for the use of our products. We've got 1 of the largest publications ever built around testing our technologies in nonhuman primates in direct comparison to all of our competitive products. That's been published for about a year now. And then we've also got a third clinical trial called the BRAVO study in hernia, which is almost fully read out. We only have 20-or-so more patients to go before we have 2-year follow-up. And right now, all the interim results, every step along the way have just been superb. One of the key measures in these hernia studies are for recurrence, which is important, given that's a redo or a revision for the patient, very painful, costly to everyone involved. And our recurrence rate right now is running in the order of 2% for these moderate-to-complex open ventral. There's also a component of robotic surgery that have been done in the BRAVO 1 study. And robotics is a huge focus for what we're doing these days. So that's kind of like the baseline of the business. As far as where we are mechanically, the company went public right at the very end of 2019. We may have been one of the last medtech companies to go public before COVID hit and therefore, we had a strange and abnormal 2020 as a first year public company. But what we did is we really focused on strengthening our business. We went internally. We trained the heck out of our commercial team. We hired 20-some-odd reps. We went from 20 reps to 43, 44 reps. We've built a very strong clinical development team out in the field, a very strong contract team, strategic accounts and contracting, and that's resulted in us winning a piece of The Health Trust contract and being very effective in the IDN contracting [ game ] as well. So we have an excellent commercial base that we've been able to consolidate and build out and strengthen in 2020. While we were simultaneously launching 2 very important products, our LPR hernia product, which is really targeted for robotics but minimally invasive hernias and that product has been going quite well. 52% of our Q1 sales were in robotics or minimally invasive surgery, which is just fantastic signal that our hernia business has broad appeal for everything from simple to more complex. And then the aforementioned PRS product, we really started rolling that product out more thoroughly at the end of last year, and we're starting to see excellent uptake there. So we've got a lot of positive momentum. We really figured out how to operate well in the virtual period during COVID. We touched about 200 different surgeons in terms of our TELA LIVE virtual VIP tours. And we've stockpiled somewhere between 120 and 150 new accounts in the last 2 or 3 quarters that we've got to harvest and start to make productive. So we've got a very good platform built. We've got a de-risked, clinically relevant product with a very strong value proposition, very strong clinical data, and it's going to be slotted into a very strong commercial organization. We're solving some key problems out there in the market. One, we want to get the market away from the use of plastic polypropylene mesh given what happened in the OB/GYN arena. Natural repair products are the way to go. And we have a premier set of natural repair products. So I think there's a lot of things coming together for us, both in the demographics and the market positioning in terms of our internal structure, and we'll start to see this company grow very smartly, very strongly in the next several quarters.

Great. Great. That's a great overview to get us started. And before I dig into some of the questions about trends and operational changes with the business, I was hoping you could just spend 1 minute talking about the value proposition of your meshes and how that is in direct dichotomy to where we've seen some of these other meshes have problems. So what's unique about your core mesh in terms of the way that it combines some of the biologic tissues with polymer fibers to get the kind of results that you're seeing?

Yes. So we take a very composite engineering approach to the development of these products. And that has not been the traditional way. The traditional way up until now has been polypropylene meshes, which have been around since the '60s. And really, the innovation there is how do we coat them with different things? Or how do we make them lighter, heavier, whatever, so that they have less of a foreign body impact on the body, which can cause all kinds of problems in terms of contraction and erosion. And it's all the stuff that we've seen in the OB/GYN market. Same thing happens in hernia. It's just a little bit more delayed. When these meshes have to come out, it's very messy. It's terrible. So one of the solutions and value propositions that we need to offer is around there is expecting that problem with a more natural repair that's designed to work with patients' own healing. And we've done that. The other traditional option that's been available. And usually, these materials -- these biologic materials have only traditionally been used when one or more classic meshes have been removed, and you've got a pretty complicated difficult repair now that's bigger and more complex. And these products may have some nice utility, but they tend to be very, very expensive. You can't really engineer them or control the properties, whatever the donor yields and usually the donor is animal skin or cadaver skin. You're sort of stuck with those physical attributes, both from a biomechanical perspective and from handling and form factor perspective. And then the other factor other than the expense and the fact that you can't engineer them is that they tend to stretch which is their weak Achilles heel. So a product that's too expensive that bulges out prematurely does not have a great ROI or value proposition. So our solution is to use simple, composite engineering. We take multiple layers of very highly pure biological materials and we sew them with polymer fibers. We either use permanent polymer fibers or resorbable polymer fibers. It's up to the surgeon to pick, which they prefer. These polymer fibers are really just like future. They're sewn in at the factory, and we can control the properties of this composite by the pattern, the -- and various other design attributes that are only possible through this tunable, selling platform that we've developed. So we can work very closely with surgeons to design products to do exactly what they want, which is why we can make these natural repair products very flexible and adaptable for things like the robots, et cetera. And I think we've got an excellent solution. If you think about how concrete is used. A lot of times, steel rebar is used in concrete for strength. We believe that our polymer fiber has sewn in a minimal amount of polymer fiber, almost acts as the rebar inside of the biologic to prevent that stretch and to tune the property. So we've been able to deliver all of this at a very cost-effective price. Our goal is to be able to have a pricing structure that saves hospitals tremendous amounts of money for a more innovative, higher-performing product relative to any biologic out there and then have this price point be suitable enough based on the different technologies and sizes that we have that it can replace the plastic polypropylene mesh as well. And I think in Q1, we're starting to see the fruits of this. We started off in the complex -- moderate-to-complex ventral arena, prove ourselves out there with our BRAVO data, and now we're starting to move downstream into the more simple cases that are done more robotically. So our value proposition is one of innovation, performance, cost, efficiency and ease-of-use in utility.

Great. Let's talk a little bit about some of the trends. You mentioned Q1, you had nice growth over the prior year. Obviously, there was some disruption there with COVID. Can you talk about how the business has trended over the past few quarters? It must have been kind of an interesting challenge to deal with COVID your first few periods as a public company?

Yes, it was. I mean it almost felt like we were suspended in amber, if you will, for suspended animation, especially as the elective surgeries were halted in the early part of Q2. So like I said, we refocused internally. We got our processes down, our virtual selling model builds, and we really strengthened our commercial organization, launched that product. We did a lot of good things in the COVID period, which are paying off, and our goal was to come out strong and that is absolutely happening. We are coming out strong. So in Q2 of last year, we basically were flat to Q1. Q1 was also a bit impacted due to COVID. But if you looked at the way Q2 progressed, I think it was the same for everybody, almost no sales in the first months and then progressively better. Q3, we wound up with a bit of a step-up, which was great. We started to see the benefits of all the elements that we put in place. Same thing in Q4, although Q4 died a bit at the end when we expected the start of Q1 to be impacted by that last remnant spike of COVID. So what I said on our Q4 earnings call it turned out to be 100% true. We weren't really going to be too concerned about the actual magnitude of the number in Q1 as long as the exit strength in March was good and that's exactly what happened. We wound up doing $5.9 million, a little under $6 million in Q1, which is great on a year-over-year perspective, on a sequential perspective. It was not bad, modest given the dynamic that we were in. But the way the quarter unfolded was really, really important. Our January indeed was low. I mean [indiscernible] 20% of the month -- of the quarter was in January, which is not a normal. But what is great is that we saw progressive strength in February and then just an excellent March, best month in the history of the company, about 80% or so of sales in the last few months and a really big chunk of that coming in March. And then we saw April perform at a very similar level to March and May has been excellent as well. So it seems like there's an enough clean market out there, maybe the market is not 100% for hernia and plastic reconstructive procedures yet still. But that really shouldn't affect us anymore. We're behaving like COVID is behind us at this point. We are not a big market share player.

Tony, are you still there? You broke up a little bit at the end there.

Like what?

You broke up a little bit at the end there. Are you still there, still with us? [Technical Difficulty] We're going to try to get back on the line here. Sorry about that. We'll bring it in here in a second.

Hello?

Hey Tony, you're back with us, great.

I just got rodeoed right off the line. I don't know what happened.

All right. No worries, no worries. We'll make it through. We'll make it through. I heard you say at the end there, basically, you had really good trends. You're in a small market share position but growing. And you're really just expressing some optimism about the year given the momentum you're seeing. So that's all great. I mean just to clarify, I think folks are pretty interested in the near-term dynamics. Since you are levered to hernia and plastic reconstructive surgery, we've had other players say, those things are a little bit more deferrable in the short run, at least for things like hernia. Do you think that all these dynamics around your business basically boil down to COVID-related impact and just the air pocket that's caused?

Yes. So I think last year, 2020, it's hard to tease apart anything really because it was so COVID impacted. And yes, I think if you look at all of the different types of elective procedures, hernia would fall into the category of procedure that was deferrable. So we've had a lot of start/stops throughout last year with our business. The fact that we've been able to continue to grow in 2020 versus 2019, I think speaks to the fact that we've made our investments, and we came up with a very good TELA LIVE virtual selling model that's going to pay off in the future, right? The rest that we brought on in 2020, right now are doing over 20% of our revenue. So even with suboptimal conditions for introducing the product in terms of office visits and hospital access throughout last year, we've still been able to grow, and we've got a great stockpile of new accounts which we can harvest over the next several quarters. So yes, I think on the hernia side, we saw that business get affected pretty heavily in the Q2, Q3 area. It came back a little bit more steady. And then got impacted again at the end of Q4 and it's a very early part of Q1. But it seems to be back, right? So like I said, we don't need 100% of the market functional to hit our goals. In fact, the way we did our forecasting and guidance set for this year is we basically organized it around COVID really coming off and freeing up by about mid this year. I think we're seeing it a bit early, or I think we're realizing that all of the great elements that we built from the data to the stronger selling team to contracting to the bigger sales force and the new product launches, all that stuff is coming together, and it's going to help us overcome whatever impacts are lingering or remnant due to COVID. So like I said, I think we have a chance to exceed this year. And I think we're off to a great start, not only internally the way we operate, but I think there's enough clean market out there for us to do what we need to do. We're running a little bit ahead of schedule in terms of how we set guidance and forecasted based on COVID coming off. So yes, I think we're at the right place at the right time. This is probably where we should have been in Q2 or Q3, at least of last year without a COVID impact, but I think we did the right things and now it's time for us to get moving.

Got it. Got it. Well, that's great to hear that things are kind of looking up and starting to get better. You touched on my next question about your guidance for the year. So it implies some sequential improvement. And I'm hearing that you're saying that's basically due to COVID getting better by midyear, and I guess you have all these new reps, so some more productivity out of those folks? Are there any other key considerations that went into that guidance and this sequential step-up?

Yes. I think it's our new product launches, right? I mean plastic medtech is, you've strengthened your sales force, work hard to build million-dollar territories on an annualized basis, and we've proven that we can do that and then add products, add data and add supply chain access. And we have all of that stuff working at the same time. Right, our LPR product, which is the laparoscopic robotic hernia product came out at the start of 2020. It's probably our fastest-growing hernia product, and it's really driving us to have a very broad application. Traditionally, any product that had a biologic material in that was only used in a small number of complicated cases. And we are getting both moderate-to-complex and simpler cases as indicated by our 52% use within the robot and laparoscopically. So I think we're proven out the fact that we can continue to add to the hernia product portfolio. There's a lot of new products we can still add in the future. But the range that we have now is quite good and it's quite flexible. I think we have the right form factors, the right data and the right innovation and performance to be able to become a replacement for polypropylene mesh in the long term, which is absolutely going to fit with where I think the world is going to wind up eventually in a post-polypropylene or antiplastic environment in the future. We'll be exceptionally well positioned there. And then on the plastic and recon side, I think that market is screaming choice. It's screaming for new technology. We have the only product portfolio that consists of multiple products there. We have permanent reinforcement, which is very novel for that arena, and then we have temporary reinforcement, which is less novel but we've done some interesting things there like modulate-and-control expansion. We can use timing to start stretching and stop stretch. And I think we have some great innovations there. And again, it's going to be a product portfolio rather than just 1 product targeted to do all things. So the business is going to be able to function as we exit this COVID period. And obviously, when COVID impact is 0, we're going to have a maximum impact, but we're very happy with where we are today regardless of what the COVID tail is. We seem to have more than enough operating room for us to drive growth and do what we have to do.

Got it. Got it. And just on your commercial strategy and expansion. You now have close to 50 territories in the U.S. and added a lot of folks over the last year. Can you, a, speak to the variability, I guess, across the country. You mentioned not all places are back. How much variability are you still seeing? And then maybe talk about the ramp of these salespeople that you expect to happen now versus in the normal time? I would think it's a little bit harder for them to ramp their business, but would love to get something back on that.

Yes. I think if you look at our -- we had a 20-man, 22-person sales force at the IPO. We're now in the low 40s, right? We've got 8 clinical development specialists. Not too long ago, we only had 4 or 5. So we're going to add clinical development specialists and reps. We will get to about 48 to 50 sales reps and then in combination with some amount of clinical development specialists we'll evaluate in the second half of this year if we're going to hire beyond that based on growth need and the fact that we can get productive, what we already have built, right? So there's just a lot of productivity runway in front of us right now with what we have built, and then we'll decide when to add from there when it would make sense. But if you look at the reps that we had at the IPO before COVID, about 40% of those reps are not yet up to pre-COVID levels. So we're not -- we're by no means everywhere in the country with our size sales force. We've really focused our sales force where we have contracts, whether it be Health Trust or all the different IDNs. But still -- so with 40% of our older rep, pre-COVID rep still not quite to where they were before. That means that a lot of the growth that we're getting is coming from the 2020 hired reps, again, which is running probably a little bit above 20% in terms of contribution. So those reps, even with the frictional forces involved with COVID, are starting much faster than our older reps. And that makes sense, right? We had less data, we had less products, we had less contract access, supply chain access, right? We have all the great stuff working together now, much stronger infrastructure. So our goal is to get a very significant percentage of our sales force into that $1 million annualized run rate basis by the end of this year. And I think we're on track to do that. If you look at our regions, we have 6 regions in the country. Every region is running ahead of pre-COVID, except for the Northeast, which is still battling its way back and that makes some kind of sense, given that it was so severe in big markets for us, like New York, et cetera. But overall, the growth is there. The business is much wider and spread than it was before, and we just have a whole lot of sales members and clin dev specialists that can contribute and will contribute over time. And they're being fed by the new products and the new data and all that good stuff.

Understood. Understood. Maybe let's spend another minute on the data and talk about the reception of the BRAVO study, the importance of that in making a clinical sale and talk about opportunities for future, evidence development as you're beginning to enroll BRAVO 2 and you have other potential ways that you could go to show the strength of your products?

Yes. Well, BRAVO 1 has just been excellent, excellent, excellent piece of data for us. I mean, the goal there was to take moderate-to-complex ventral Hernias and study our product and the design -- the study design that we use allows us for direct comparison to lifestyle products that cover natural repair as well. And we're almost through the point of having the entire study through the 2-year follow-up point. But we have about 20-some-odd patients left to go. We'll have the complete study done by the end of this year. But even where we stand today, we're running less than 3%, somewhere in the 2.5%, 2.6% range of recurrence. We've had 2 recurrences in the first 6 months of the study, both of which weren't really through the implant. They sort of squirted out the site. So the recurrence rate has just been fantastic at the 1-year mark and the 2-year mark. We expect that to continue. And you look at other studies that with competitive products that can be as high as 18%, 19% for one; and 23%, 25% for others. I think we're on to something. I think the concept of reinforcement and engineering has solved a true problem. Composite engineering for these types of materials solved a true problem that can't be solved with just polypropylene or just a nonengineered harvested piece of skin. I think there's a true value proposition here. We can make products that will not erode and cut and kind of withstand infection a bit better than plastic, softer to the patient, less likely to crumble up and cause problems long term, yet remodel and heal. So natural repair, I think, is going to be our message going forward directly to patients, to surgeons, to hospital systems or whatever within. And BRAVO is, I think, one of the key cornerstones of how we demonstrate and prove that we have a great solution. And BRAVO 2 will be a very similar study to BRAVO 1, except it will be all robotic. And that's really where we're focusing most of our new product development and clinical data collection going forward is going to be in partnering with the robot. We do have maybe 20 to 30 cases in BRAVO 1 that were done robotically. So there's a nice subset there that also performed well. So it gives us a lot of confidence that BRAVO 2 is going to perform well. As far as the utility of the data, I think our data speaks for itself. Supply chain, surgeons, I think, it gives us a great advantage of having that data but it's not going to be as useful and as powerful until it's fully completed. And then like I said, that will be by the end of this year.

Got it. Great. Great. Yes. I do want to talk a little bit more about robotic surgery because you're making some bets there. We touched on the LPR mesh a couple of times. Maybe we can just spend a second on why your products seem to be especially geared to work well in those kind of lap and robotic situations? And could you talk about what you think the share of robotics or the growth in robotics for hernia and other surgeries where your products are used is going to look like over time?

Well, the trend is clear. Robotics is being used in the simpler procedures right now, in things like inguinals and hiatals so -- but it's migrating into the ventral simple ones first and I think more complex ones eventually will be done robotically. I mean our planning thesis has to be that our products that must work very well robotically period. Because if you can work robotically, it's easy to use the product in an open environment. So to us, everything we're doing is organized around compatibility with the robot. And it's a key advantage that we have because we're not just harvesting a piece of skin from a donor. We're engineering, right, which means that we can layer the product in a way that makes it thin, rollable. We can reinforce the product in a way with polymer suture that makes it unfurl well inside the body, coming through a trocar, makes it stick a little bit to the ceiling, to the surface. And most importantly, easy to sew, right? You have to be able to go through these materials very easily. Most biologic materials, standalone products, older products, they're pretty dense, pretty difficult, so you don't have the robotic arm deflecting all over the place. So there's a lot of advantages to robotic surgery. Everybody knows what they are. And it just seems crazy to have that investment in a $2 million robot training, sophisticated application and technique and tool and then put in a piece of plastic from the 1960s. So I think a natural repair robotic solution is going to be very attractive. We're seeing that start to happen in terms of patient awareness, et cetera. And you have to be able to manipulate a natural repair biological product in a way to change all the properties, so that it's form factors and use cases are compatible with the robot. You just can't do that if you're just blindly harvesting. You can do something to change the properties, but not enough to make it highly compatible with the robot. So that's our philosophy. Everything compatible with the robot as much as humanly possible and then that ensures good opportunity for usage no matter what the technique, whether it be MIS or open.

Understood, understood. And then I wanted to go back to some of your comments about expanding the portfolio because you now have a breadth of a number of different sizes and thicknesses and coming out with more, you're talking about some on the last call. Could you speak to the current state of your portfolio in terms of the areas it covers and how that's going to evolve over the next couple of years? What are you going to come out with that you don't have today? And what will that add?

Yes. So our product range right now as it stands, it's pretty darn complete or capable, I would say, of covering the whole hernia range. So there are some additions that we still can make that can cover some significant niches, things like very large sizes that have different types of reinforcement structures for large and complicated cases. I think there's always a need to continue to innovate and collaborate with surgeons to try to solve some of these brutal abdominal wall reconstruction problems. I think there's always going to be a need at the high complexity end of the market for continued innovation. And so we have some great co-development projects that are going on there. And when I say co-development it really means getting surgeons feedback and just making sure that we cover their needs. On the simple side, there's a lot of functionality that's evolved over the decades and decades of plastic use. So things like self-adhering products, things like easy to use with the rollout, which I've been talking about and various technique compatible implants. And most of what we have right now covers all of that, but there's more room for refinement in terms of robot compatibility, right? Our base core 1x products are very robot compatible. But they're really Gen 1. Our LPR is really a Gen 2 robot compatible product. It's thinner. It's got a little bit more polymer in it. It's just designed appropriately from a shape and thinness perspective and stickiness perspective to work well with the robots. But there's more refinement that we can do to those factors as well. So there's 2 or 3 additional products that we can roll out in the coming years that will just continue to refine and develop that offering. The more interesting place for us is in plastic and reconstructive arena. This market really has been dominated by the use of cadaver skin. There's not much in the way of engineering and tunability and property changes that can be done there. We already have 2 interesting options in our PRS portfolio, both of them are sort of unidirectional stretch with permanent and temporary reinforcement. We're working on a third iteration for the next 12 to 18 months. That will be sort of a bidirectional stretch, a little bit different profile with a medium-term resorbable polymer reinforcement. So we may wind up with 2 or 3 really strong products in that range that can solve really specific problems and they appeal to different surgeon preferences and patient needs. So everything we do is around doing better for the patients, minimizing their need for a second surgery, minimizing their need for a complicated redo or recurrent revision and then just giving surgeons the tools that they need, a lot of new procedures that we work in. Most of the innovation has been happening around technique development, particularly with the robot right. And usually in medical device markets, you have implants evolving in parallel with the technique development. And I feel like what attracted us to this space is the implants have been very stagnant. They haven't evolved all that much but the techniques have changed. And we think there's a great opportunity to improve outcomes, help patients and avoid all those excessive second, third, fourth, fifth surgeries if we can co-evolve the implants along with techniques and have a symbiotic relationship between the device that stays with the patient hopefully for the rest of their lives and doesn't to come out along with the technique used to put it in. So our goals are to do better on all those fronts.

Understood. Understood. Okay. We have a couple of minutes left. I have 2 more questions I wanted to ask before we wrap up. One was I was hoping to get some comments from you on the surgeon side, specifically, I wanted to understand better some of the dynamics that you're seeing around new accounts versus existing ones? And how you expect growth to come from each of those sources? Maybe you can talk a little bit about surgeon training and the learning curve as well as you're starting to roll this out to some new accounts?

Yes. So on the hernia side, there's very little surgeon training required really. We've made our products slot in and fit quite well with existing techniques. And that's by design, right, because of the tunable platform that we have, we can fit all the properties of the material to the technique. And as techniques evolve and change, robotics is a great example of that. We can continue to adjust and tweak the products. So that they have the ability to co-evolve with the technique. So that's really what you're going to see there. So hopefully, it's transparent to surgeons. As they adapt new techniques, our products will adapt with them. And as they use older techniques, our products are already tuned for those techniques. On the plastic and reconstructive side, it's a little bit different, right? I mean the properties of the material that we aim to replace, again, to do better are a little bit different, right? Skin, by nature, cadaver skin, particularly stretches like silly putty almost forever, which works well in the short term, but not so great with aging and gravity in the long term. And so our products have been evolved to sort of work with that short-term need and hopefully protect against that long-term degradation or overstretch. So there's a few technique, nuances that we've learned with PRS, which is why we rolled the product out very slowly and carefully. So that we can get these nuances. They are pretty simple technique adjustments. They're not all that complicated. Plastic surgeons seem to be able to take to them very well and make it their own, right? Plastic surgeons, they're like artists. They're very, very much perfectionists. And all they need to do is understand the characteristics of the materials and then the choices available to them and they'll just evolve and make it their own and do beautiful work. And we see that happening, which is why we're ready to start to roll out the PRS product more fully and why you're going to see great growth in near future there. So our goal is to make it easy for the surgeons, right? Give them the right tools, the right properties but not make it too difficult.

Okay. Maybe I'll just add on 1 on the long term, the future, your vision for the company. You talked about having low market share today, but you're just starting out. What are your aspirations in terms of market share in hernia and plastic and reconstructive over time? Do you think you could be a majority player? And what do you think the company looks like 5 or 10 years from now?

Yes. I mean, so our goals, we sort of block our goals out, right, year by year. Our goals are -- you get a sense of what our goals are for this year based on guidance, et cetera. And again, we hope we can do better than that based on COVID clearing out. But overall, the next goal after this year is really to build this business into a $100 million and then north of $100 million business. And it's very, very doable. We have experience doing that in the past. The leadership team here has built several companies that have gotten into that north of $100 million zone. If you look at where the leading player with biological materials, which I would argue, are a little bit more limited than our offering. That's a $500 million business. So I do think the sky is the limit for this business. I think we offer the only place with continued and steady pace of innovation in collaboration with surgeons to solve patient needs. I think we've got a tremendous opportunity around the shift from plastic to natural repair. I think there's just going to be a slow but inevitable movement away from permanent plastic and more towards natural care products, and we'll be exceptionally well positioned there. So yes, so our ambitions are big. The potential of this business is big. We have the team to execute. We have the product range and data to make it happen. And that's really what we're shooting for. So yes, there's a history in these markets that we're in of 1 or 2. Usually, it's 2 players kind of dominating. And there's no reason like we can't be in the top 3, top 2 in whatever market that we're in and do a great job for the long term. I think we have the chops, we have the team, we have the technology, we have the data. And frankly, we just have a very logical process, we're thoroughly vetting and testing everything we do and then adjusting based on that feedback so that we make sure our products work.

Fantastic. Well, great. Things are looking up, and it was excited to talk with you about the business today. And I think that's a good place to end with some good long-term aspirations and goals. So Tony, thanks so much for joining us and giving us an update. It's a pleasure talking with you and good luck the rest of the year.

Thank you, Matt. I apologize for the technical difficulties, but sometimes we're just at the mercy of the web and Zoom. Sorry about that. Thanks for your patients, everybody.

No worries. Take care.

Take care. Bye.

Bye-Bye.