TriSalus Life Sciences, Inc. (TLSI) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the TriSalus Life Sciences Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker, [indiscernible]. Please go ahead.

Good afternoon, and thank you all for participating in today's call. Joining me from TriSalus are Mary Szela, President and Chief Executive Officer; David Patience, Chief Financial Officer; and Dr. Richard Marshall, Chief Medical Officer, who will join for Q&A. Earlier today, TriSalus issued a press release announcing financial results for the quarter ended June 30, 2026. A copy of the press release is available on the Investor Relations section of the company's website. Before we begin, I'd like to remind you that management will make remarks during this call that include forward-looking statements within the meaning of federal securities laws and that these are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward-looking statements. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our Forms 10-Q and 10-K on file with the SEC and available on EDGAR as well as our other periodic filings. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, August 6, 2026. TriSalus disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. And with that, I'll turn the call over to Mary.

Good afternoon, and thank you all for joining us. I'm pleased to report a strong second quarter with total revenue of over $11.4 million. This reflects sequential and year-over-year growth as we continue to raise awareness of TriNav while building clinical evidence and strengthening our commercial foundation. Our growth was driven by the continued execution of our team in the field and was underpinned by progress across our strategic priorities, elevating our commercial team and infrastructure, investing in foundational clinical studies to validate the value of pressure-enabled drug delivery, or PEDD, and lastly, innovating and evolving our PEDD technology and portfolio. Before we continue, I want to highlight why what we're doing at TriSalus is so important. There has been little innovation in catheter-assisted oncology drug delivery for the past several decades. While this critical area of patient care has been stagnant, in that same stretch of time, we've seen significant leaps forward in therapeutic drug discovery and innovation. We developed the TriNav system to address this shortfall, enabling interventional radiologists to deliver any therapy to a tumor with enhanced perfusion, tightened precision and greater concentration and importantly, avoidance of off-target delivery. We remain excited about the opportunity ahead of us as we continue to educate clinicians and patients about the benefits of the TriNav system. As we outlined at the beginning of the year, our primary strategic focus has been on making a disciplined, intentional investment into our commercial infrastructure to deepen physician engagement and adoption of TriNav. As a reminder, we more than doubled our commercial footprint over the first half of the year to better capture the full scope of the opportunity ahead of us. This build-out was deliberate and necessary. And we're excited about the caliber of talent that we've brought on board. We're already seeing positive results from our commercial evolution in the form of ramping engagement and productivity. And we look forward to sharing more of this team's progress over the coming quarters. Turning to a significant development that will expand our commercial opportunity. In July, we received notification from CMS of a G-code that extends reimbursement of the TriNav system into the physician office setting, commonly referred to as an office-based lab or OBL. At its core, moving into the OBL environment is a big win for patients and meaningfully expands the access for our platform once in effect. As a reminder, TriSalus holds two unique HCPCS C-codes established by CMS to specifically reimburse our technology of complex embolization procedures by using a pressure-generating catheter in the outpatient environment, or HOPD, and the ambulatory surgery center or ASC sites of service. These codes have been a foundational commercial driver for TriSalus and provide appropriate reimbursement for HOPDs and ASCs, yet we're seeing treatment for patients with certain liver cancers migrate from these traditional settings into the OBLs. This includes both TACE and TARE procedures. The rationale for this transition is simple. OBLs offer patients more accessible, community-based settings versus large hospitals with shorter wait times and more flexible scheduling. For a patient recently diagnosed with liver cancer, the ability to be seen and treated in weeks rather than months can be the difference between a treatable disease and potentially a fatal one. The new G-code facilitates patient access to PEDD regardless of the treatment site of care. This marks a seminal moment for TriSalus as it expands our reach to an increasingly important and growing site of care and gives clinicians more flexibility in where and how they practice. We are genuinely excited about this rule. And we want to take a moment to express our gratitude to all of our constituents at CMS, whom we've maintained a positive dialogue. Over the years, CMS has spent significant energy in reviewing our clinical evidence in diligencing the benefits of the TriNav system. We're excited to continue our engagement with the agency. We also continue to anticipate 510(k) clearance near term from the U.S. Food and Drug Administration for TriNav Advance, which we believe will further expand our set of solutions for our customers. As a reminder, we believe the TriNav Advance will expand our liver market access by extending PEDD to small distal vessels via microcatheter that are currently not addressable with our existing TriNav technology. Moreover, the TriNav Advance will allow an interventional radiologist to use the microcatheter of their choice, while still delivering the full benefit of pressure-enabled drug delivery to patients. Review is running past the MDUFA goal. But we remain in close dialogue with the FDA and hope to receive clearance in the near future. Our second priority has been to demonstrate and validate the value of pressure-enabled drug delivery, PEDD, to drive greater future awareness and adoption. Our team is hard at work on this objective. And we now have 11 active studies underway across 27 clinical sites. There's data being generated and evaluated across more than 400 patients who have been treated with TriNav. The completed PEDIR study, the investigator-initiated randomized multicenter trial conducted at Massachusetts General Hospital, evaluates how TriNav improves the tumor-to-normal ratio in both hepatocellular carcinoma and hypovascular tumors, has been submitted for publication in a peer-reviewed journal. We believe the PEDIR readout once published, can be a meaningful catalyst for commercial momentum. The other completed investigator-initiated trial, TRIFY90 at MD Anderson, remains in data review. We look forward to sharing that news with you when it becomes available. The two retrospective studies we initiated last quarter examining TriNav-delivered care and HCC, continue to progress. We're ultimately looking to generate cost-efficient evidence on outcomes in target populations. The findings here will directly inform the design of our larger prospective trials, which we look to initiate in the second half of the year. The PREDICTT study at MD Anderson officially launched in the second quarter and is actively enrolling. This is a prospective study evaluating PEDD's impact in hypovascular tumors. And we expect enrollment to take approximately 12 to 18 months to complete. A second investigator-initiated trial PRESSURE at Stanford will launch open enrollment in the third quarter. This is a randomized study of TriNav in care for liver metastases, comparing tumor absorbed dose, response rate and disease control against current standard delivery. Both are designed to generate exactly the kind of prospective head-to-head data that drives clinical adoption at top academic centers. In addition to PRESSURE, there are additional large studies we're looking to kick off in the second half of 2026. We have a new prospective PAIR study designed specifically to prove TriNav's superiority over a microcatheter. We are evaluating liver metastases response to therapy prospectively, an important consideration for physicians to adopt TriNav. Second, we're undertaking a multicenter prospective TACE study in neuroendocrine tumors that is being conducted in collaboration with the University of Pennsylvania, a nationally recognized leader in both liver embolization and the treatment of neuroendocrine tumors. The trial will compare TriNav directly to a standard microcatheter in neuroendocrine tumor patients undergoing TACE and is designed to demonstrate TriNav's superiority in this indication. This study is an expansion of an existing pilot study that already showed TriNav's superiority over a microcatheter, giving us high confidence in the hypothesis we're testing at scale. At the recent American Society of Clinical Oncology meeting, AstraZeneca presented exciting data from their EMERALD-3 trial, comparing TACE alone to TACE plus AstraZeneca's STRIDE immunotherapy regimen and to TACE plus STRIDE plus the tyrosine kinase inhibitor lenvatinib. This study showed that both combination arms showed meaningful improvements in progression-free survival and the still maturing overall survival data looks particularly promising. We believe that these important data will help drive medical oncologists to consider combinations of immunotherapy and liver-directed therapy. This could potentially expand the pool of patients receiving TACE and TARE procedures where we have a particularly strong foothold. Lastly, we're making concerted efforts to expand awareness and appreciation for the value of PEDD with our broader base of stakeholders. In June, we hosted a webinar to further contextualize the groundbreaking real-world evidence study of PEDD in liver cancer. The webinar highlighted findings from a real-world outcome study evaluating over 300 million patient lives, including 16,210 embolization. Of those patients who went through embolization procedures, 1,200 patients were compared using sophisticated matching to produce the largest and the most robust PEDD data set to date. Dr. Alex Misono, Chief of Interventional Radiology at Hoag Health System in California, joined our webinar as a speaker and reinforced the key finding from the study that I think deserves emphasis. Data showed TriNav had historically been employed in procedures with the most challenging patients, those who have the highest disease burden and those with the most complex anatomy. For those patients, TriNav has proven its clinical benefit, particularly in scenarios where anticipated outcomes were poor. Given the clinical benefits and favorable reimbursement in place, Dr. Misono also discussed his approach to expanding TriNav usage with broader utilization across his practice. Additionally, the HEOR data is extremely compelling with average cost savings in certain procedures of $7,700. We continue to believe that new evidence serves to validate our platform and catalyze adoption within the clinical community. Moving to our third strategic focus, innovating and expanding our indications and portfolio. Our first focus, liver embolization, is an area of significant opportunity for us, and we remain focused, first and foremost, on driving growth there. Meanwhile, indications outside of liver, including uterine, genicular and thyroid artery embolization present a vast additional growth opportunity. We believe that liver embolization and these additional indications collectively represent an addressable market in the United States of approximately $2.5 billion. I believe that the continued cultivation of our evidence base to validate our platform as a whole while executing our clinical strategy across multiple indications and physicians, will expand our footprint materially across liver and non-liver indications alike. Beyond liver, we're building a pipeline of emerging markets for the PEDD platform. Uterine artery embolization, thyroid artery embolization and genicular artery embolization mark greenfield opportunities for TriSalus. And each one can be a meaningful growth driver going forward. We're in the early innings with these three indications. But the clinical data we're generating is giving us increased confidence that PEDD can redefine treatment and patient outcomes. On uterine artery embolization, momentum continues to build on the strong SIR data we shared last quarter. The expanded study we approved in Q1 is enrolling well and we remain on track toward our 50-patient target. We continue to advance the design of a prospective trial to more formally evaluate TriNav's potential to streamline workflow, reduce procedure and fluoroscopy time and improve outcomes in UAE. One additional note here that I think is worth highlighting is UAE is a procedure that is increasingly being performed in the OBL setting. The G-Code I discussed earlier, has the potential to be a meaningful accelerant for this indication, specifically by removing the reimbursement barrier that has historically limited TriNav use in the physician office-based labs. We see UAE as one of those earlier beneficiaries of that expanded access. And we look forward to updating you on the progress in the coming quarters. On thyroid artery embolization, our PROTECT registry continues to gain momentum across multiple centers, evaluating PEDD for patients with thyroid nodules or goiters who are not candidates for conventional therapy. I'm pleased to report that we have achieved the enrollment cutoff required for the protocol's interim analysis. And that we remain on track to deliver the first multicenter U.S. data on TAE in the first quarter of 2027. We believe that data set will position PEDD/TAE as the leading approach for this procedure as it is minimally invasive. On genicular artery embolization, we remain focused on executing our clinical strategy. Having concluded our pilot registry, we're actively advancing the formal clinical trial design and look forward to sharing additional updates as that program develops. In total, we view these emerging indications as gateways to significant expansion of our existing addressable market opportunity. We will continue to vigorously propel forward these trials and clinical initiatives as we secure a foothold in these markets. Finally, I'd like to provide a brief update on our nelitolimod and pancreatic programs. First on nelitolimod, we remain on track to deliver our consolidated PERIO Phase I data readout in the second half of 2026. And second, on a broader pancreatic strategy, there's been significant changes in the pancreatic cancer treatment landscape that we're currently evaluating. We will provide an update on our go-forward pancreatic strategy after we complete that analysis. This last quarter was a period of continued focus and execution for TriSalus as we solidified our foundation for future growth. We have a fully deployed meaningfully expanded commercial organization that is ramping toward its full productivity potential. We progressed our clinical trials and continued growing our evidence base, including the landmark real-world data study on PEDD and the proposed G-code extending reimbursement into office-based labs represents a key milestone that will contribute meaningfully to TriNav adoption. Driven by our Q2 results and the ongoing progress in the business, we are reiterating our full year 2026 revenue guidance of $54 million to $57 million, reflecting a 19% to 26% growth over full year 2025. We are excited about our growth trajectory and see a tremendous opportunity ahead for TriSalus. With that, I'll turn the call over to David Patience, our CFO, to provide a review of the second quarter results and 2026 guidance.

Thank you, Mary, and good afternoon, everyone. Revenue for the second quarter was $11.4 million, up 1.7% compared to $11.2 million in the prior year period, driven by increasing demand for our innovative drug delivery technology, TriNav. Gross margin for the quarter was 86.8% compared to 83.9% in the prior year period. The improvement was driven by lower average unit costs on TriNav and our continuous manufacturing improvement. Research and development expenses were approximately $3.1 million compared to $3.7 million in the prior year period. The decrease was primarily due to lower professional service costs and clinical trial expenses related to nelitolimod, which did not occur in the current year period. Sales and marketing expenses were $11.4 million compared to $7.2 million in the prior year period. The increase reflects our deliberate investment in expanding our commercial footprint, which includes elevated expenses related to recruiting, onboarding and training our expanded organization. General and administrative expenses were approximately $5.1 million compared to $5.9 million in the prior year period. The decrease was primarily due to lower professional service costs related to legal and audit-related expenses. Adjusted EBITDA loss for the quarter was approximately $7.1 million compared to $5.3 million in the second quarter of 2025. The increase in adjusted EBITDA loss reflects our deliberate investment in our expanded sales organization to build out our commercial infrastructure for longer term sustainable growth. We ended the quarter with approximately $46.3 million in cash, which we believe fully funds our strategic growth plan. As Mary mentioned, we are reiterating our full year 2026 revenue guidance of $54 million to $57 million, reflecting 19% to 26% growth over the full year 2025. And we expect sequential improvement in growth from Q2 to Q3, followed by a stronger Q4. We also expect sales and marketing expenses to decline sequentially in the third and fourth quarter as we move past the elevated cost of the first half sales force expansion. Taken together, we're confident in the path ahead, a ramping growth trajectory paired with disciplined cost control and cash management through the back half of 2026 and into 2027. Thank you all for your continued support. With that, operator, we're ready to open the line for questions.

[Operator Instructions] First question I have will be coming from the line of Frank Takkinen of Lake Street Capital Markets.

I wanted to start with a follow-up on the sales force. I appreciate the comments on the call. Specific to the new reps that you hired in the first quarter, can you maybe talk a little bit more about some of the metrics they're putting up as far as productivity improvement, where they are in their launch trajectory and how impactful they can be in kind of Q3, Q4?

Frank, good question. So we did the -- we initiated the expansion in February, all our reps were hired by April. So now you're seeing our reps in the back half of the year, they have 2 quarters under their belt. And we're starting to see that contribution increase pretty substantially in the back half of the year. I think here, we've shared previously with everyone, we're really excited about the talent and the caliber of reps that have come into the organization. Frankly, historically, we've never been able to attract this type of talent to the company. And we're really pleased to see how they're hitting the ground running and a number of our reps are really exceeding our internal metrics. We have quite a number of leading indicators and metrics and an internal operational model that we've developed over the years. And so we have really good understanding of how that progresses throughout the year. And essentially, we're right on track. I mean I think Q2 came in exactly on our internal model and exactly as we expected. So we feel really good about where we're at.

Got it. Very helpful. And then I wanted to follow up on the new office-based lab reimbursement. Maybe talk a little bit more specifically on which new indications that could be most impactful for and when you might start to allocate more sales and marketing resource into those to capitalize on that?