Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Treace Medical Concepts Inc (TMCI, Financial) reported third-quarter revenue of $45.1 million, representing an 11% growth over the same period in 2023.
- The company announced the limited market release of the Nanoplasty 3D MIS System, marking its entry into the large metatarsal osteotomy market.
- TMCI's gross margin remained strong at 80.1% for the third quarter of 2024.
- The company is expanding its product portfolio with new technologies like Adductoplasty and SpeedPlate, which have seen increased adoption.
- TMCI revised its full-year 2024 revenue guidance upwards to $204 million to $211 million, reflecting a 9% to 13% increase over 2023 revenue.
Negative Points
- TMCI reported a net loss of $15.4 million for the third quarter, although this was an improvement from the $17.5 million loss in the same period of 2023.
- Operating expenses increased to $51.3 million in the third quarter of 2024, up from $50.6 million in the same period of 2023.
- The company is facing competitive pressures and has filed a patent infringement and unfair competition lawsuit against Stryker Corporation.
- There are uncertainties regarding the adoption and market reception of new products like the Nanoplasty 3D MIS System, which currently lacks clinical data.
- TMCI's guidance for the fourth quarter implies a step down in growth, with potential impacts from factors like hurricane disruptions and IV bag rationing.
Q & A Highlights
Q: How do you feel about launching the new MIS osteotomy product without clinical data, and do you expect it to achieve the same market differentiation as Lapiplasty?
A: John Treace, CEO, explained that initially, Lapiplasty was marketed without solid evidence, and success was observed in practice before data reinforced outcomes. For Nanoplasty, they plan to develop data sets and believe the added third plane of correction will appeal to surgeons, supported by existing scientific literature.
Q: What are your thoughts on achieving adjusted EBITDA break-even in 2025, and any early comments on the top line for next year?
A: Mark Hair, CFO, reiterated their commitment to improving adjusted EBITDA by 50% in 2025, aiming for break-even. They plan to manage costs effectively and are optimistic about new product launches, though they want more time to assess market adoption before discussing 2025 revenue guidance.
Q: Can you update us on the SpeedPlate rollout and its utilization in cases?
A: John Treace noted that SpeedPlate has become a preferred fixation method, with utilization growing beyond 40%. The new larger design is in full supply and well-received, and upcoming configurations are expected to be embraced, enhancing fixation in smaller incisions.
Q: How will the CMS final reimbursement decision impact margins and market trajectory?
A: Mark Hair stated that while the CMS ruling is favorable, it won't significantly alter their gross margin profile. However, it could improve patient access to Lapiplasty procedures, potentially benefiting the Lapidus segment.
Q: How might the finalized reimbursement rates for 2025 influence competitive dynamics and market share?
A: John Treace expressed optimism about the adjustments, noting they could broaden patient access to Lapidus procedures. However, it's too early to predict specific impacts on market share or competitive dynamics.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
