Tela Bio at Jefferies: Strategic Moves in Hernia and Reconstruction

On Thursday, 05 June 2025, Tela Bio (NASDAQ:TELA) presented at the Jefferies Global Healthcare Conference 2025, revealing strategic insights into its operations. The company, specializing in soft tissue restoration, aims to replace traditional materials in hernia repair and breast reconstruction with innovative solutions. While Tela Bio’s growth trajectory is promising, challenges such as import tariffs and competitive pressures were also discussed.

Key Takeaways

• Tela Bio targets $85 million to $88 million in sales this year, holding a 10% to 12% share in complex ventral hernia procedures.
• The company plans to reach profitability with $27.5 million in revenue, leveraging stable operating expenses.
• A 10% import tax on sheep rumen from New Zealand is expected to impact gross margins by 1% to 2%.
• New leadership appointments aim to boost sales force productivity in the U.S. and Europe.
• Strategic focus on robotic-compatible hernia repair and engineered solutions in breast reconstruction.

Financial Results

• Revenue Target: Tela Bio aims for $85 million to $88 million in sales this year.
• Market Share: The company estimates a 10% to 12% share in complex ventral hernia procedures and 3% to 4% of the overall hernia market.
• Profitability Goal: Achieving $27.5 million in revenue is crucial to covering operating expenses.
• Impact of Tariffs: A 10% import tax on sheep rumen from New Zealand could reduce gross margins by 1% to 2%.
• European Sales: Account for 15% of total revenue.

Operational Updates

• Commercialization Growth: Since its IPO in 2019, Tela Bio has expanded its hernia repair operations significantly.
• Product Portfolio Expansion: The introduction of the inguinal hernia repair product, Liquefix, has broadened their market reach.
• Competitive Landscape: Becton Dickinson’s Phasics product poses competition, particularly after a mesh settlement.
• Leadership Changes: Jeff Blizzard has been appointed as President of U.S. and European Commercialization to enhance sales force efficiency.

Future Outlook

• Growth Drivers: Expansion in hernia repair and leveraging new clinical data for plastic and reconstructive surgery are key drivers.
• OpEx Management: Tela Bio plans to maintain stable operating expenses while increasing revenue through strategic reallocations.
• Contracting Strategy: Success with local IDN contracts positions Tela Bio well for upcoming national contracts.

Q&A Highlights

• Inguinal Product Strategy: Focus on inguinal hernia repair grants access to larger market segments.
• Competitive Positioning: Tela Bio emphasizes cost-effective solutions and superior clinical data against larger competitors.
• PRS Growth Potential: The company expects new clinical data to drive growth in plastic and reconstructive surgery.

Readers are encouraged to refer to the full transcript for a detailed account of Tela Bio’s presentation.

Full transcript - Jefferies Global Healthcare Conference 2025:

Mike Sarcone, Analyst, Jefferies: All right. We can kick this off. Hello, everyone. My name is Mike Sarcone. I’m an analyst on the US Medical Supplies and Devices team.

And this is day two of the Jefferies twenty twenty five New York Health Care Conference. This is a fireside chat with TeleBio. And from the company, we have Tony Koblish, founder, president, and CEO and Roberto Kuka, chief operating officer and CFO. Gentlemen, thank you for joining us today.

Tony Koblish, Founder, President, and CEO, TeleBio: Thank you for inviting us. Really appreciate the invite.

Roberto Kuka, Chief Operating Officer and CFO, TeleBio: Thanks, Mike.

Mike Sarcone, Analyst, Jefferies: Sure. So maybe we can kick it off high level. Tony. For those in the audience or those listening who may not be as familiar with the Tella story, can you talk about the company’s mission and the value proposition and the key markets you’re addressing?

Tony Koblish, Founder, President, and CEO, TeleBio: Sure. So TeleBio is a soft tissue restoration and preservation company. The two markets that we work in specifically are all things hernia repair and then all things in plastic and reconstructive surgery. So we have two main product lines, a hernia based product line that is robot compatible. One of our main focuses is to have a natural repair solution that can be used robotically from the most simple inguinal procedures to the most complicated ventral procedures.

And then the breast reconstruction side, our main reason for being is to help evolve the space beyond the use of cadaver skin, more towards engineered composite solutions. And then on the hernia side, reason for being our core mission is to get polypropylene mesh out of people’s bellies. And more and more companies, surgeons, supply chain are starting to think that perhaps this isn’t the best solution. There’s been a massive $2,000,000,000 settlement around the use of polypropylene mesh in hernia repair. It tends to contract and erode and cause all types of problems.

And we have a product that has superior clinical results and none of those downstream complications. So as this market evolves away from these plastic meshes and right now about 80% of the meshes that are implanted are made of polypropylene, which means a massive chunk of the market is open for dislocation over time. We’re exceptionally well situated as these natural repair solutions come to bear. Our solution is very, very unique. No one else has a product set quite like ours.

And it’s got patent protection that lasts a very, very long time. So we call it a reinforced tissue matrix. We use a very specialized tissue material that we can layer together and then sew with both permanent and resorbable polymer fiber. And we essentially create a composite that we can engineer the properties. So for example, in plastic and reconstructive, you probably want it to stretch and then stop stretching at some point.

And in anything having to do with hernia repair, you want rapid integration and healing, but you don’t want any stretch. So we’re the only company that has the ability to control these properties. If our product ever has a problem and has to be removed, it really looks like a virgin primary procedure. It doesn’t increase the zone of injury like plastic meshes do. Because of its natural components, it tends to remodel and integrate into the body very efficiently.

So we’re in the right place at the right time in two big markets. Each market is about a billion. I think the hernia repair market’s a little over, maybe a billion and a half. And the plastic and reconstructive market is around a billion. Dollars In the next five years, there’s going to continue to be this evolution and shift.

And we are one of the premier companies and products supported by data and a great economic value proposition to be in the right place when that market does continue to shift. And actually, we’re pushing all of the big players to follow us and try to get beyond these less sophisticated, more damaging biomaterials.

Mike Sarcone, Analyst, Jefferies: All right. Thank you for that. And yeah, I mean, follow ups on that. From an economic perspective, can you talk about I guess we can start with abdominal wall reconstruction, where you fit in versus the biologic players? When

Tony Koblish, Founder, President, and CEO, TeleBio: we started this company, there was really two categories of products in abdominal wall and hernia repair. One would be these polypropylene meshes, which tend to be very inexpensive. And for the inexpensive, you get expensive problems later, which we’ve seen through this mesh litigation settlement. And then first generation biological materials, which tend to be made out of skin. So those tend to be very highly overpriced.

Skin doesn’t integrate well. And it actually stretches too much for a hernia repair product. So there really were no viable solutions. Now there’s an advent of resorbable polymers. So temporary plastic goes in and then eventually goes away.

We’re the only company that has a product that actually will remodel and heal efficiently. So the way we priced our entire hernia portfolio is about a 30% to 40% discount off of those first generation biologics, which by any measure were overpriced. And we’re about a 20% to 25% cost savings in comparison to these temporary plastic materials as they stand today. And we are a premium onto these permanent plastic materials that hopefully will start to wane in use. Now some of our simple products, our inguinal product, for example, is priced probably $100 maybe more than what a plastic piece would be priced at.

So we have a fairly wide range of pricing and flexibility that allows us to be a solution in terms of cost savings. And it’s virtually the same situation over on the plastic and reconstructive side.

Mike Sarcone, Analyst, Jefferies: Got it. That’s great. I did want to also delve in. You started to allude to this, that you’ve seen some market evolution since you guys have been on the market. I think that was around July 2016 when you first started

Tony Koblish, Founder, President, and CEO, TeleBio: commercially. Yeah. Started commercially on the hernia side at the end of ’sixteen. But we really didn’t have the capital to build a substantial effort and commercial team until the end of twenty nineteen when we went public. And then, of course, COVID started in 2020.

So I’d say most of the commercial progress that we have made from zero to our target for this year is 85,000,000 to $88,000,000 And sales has come since that IPO, so starting in 2020.

Mike Sarcone, Analyst, Jefferies: Got it. I guess where do you stand today in the abdominal wall reconstruction market from a share perspective?

Tony Koblish, Founder, President, and CEO, TeleBio: Yeah, I think we estimate out to be in the ten to twelve percent range for the more complicated or moderately complicated ventral procedures. If you look at the overall hernia market, we may be in the three percent to four percent range. That’s going to change as our inguinal product starts to gain traction. It’s growing rather smartly. And as our product is known more and more for its da Vinci V, da Vinci in general, robot compatibility, I think we’re going to get more and more usage in those simpler higher volume

Mean, if look at the situation in both spaces of having low market share with highly regarded, cost effective, great clinical data products, on the hernia side, 80% of the procedures are still being done with a product which, in my opinion, is eventually going to wane.

That is a lot of market that’s up for grabs that’s going to slowly start to shift. And on the PRS side, the plastic side, I don’t think cadaver skin is going to last forever as the product of choice. It’s super expensive. It’s complicated to harvest and manage. And there is some ick factor associated with that technology.

And there’s about 15 or 20 of them. So there’s no differentiation. They’re very expensive me too products. And there’s a thirst, I think, that’s starting to develop in the plastic surgery community for alternative materials. And again, we are one of them and well situated.

Mike Sarcone, Analyst, Jefferies: Great. And on the abdominal wall market, you talked about you’ve seen some competitive response. I’ve mentioned this to you. We hear Becton Dickinson mentioned phasics on their calls a bunch now. Guess what have you seen in terms of the evolution of competitive response as you’ve gained some share in the market?

Tony Koblish, Founder, President, and CEO, TeleBio: Yeah. Well, is interesting that a company of that size and scale does call out that product. And I think there’s a good reason for it. Their ambition is to shift their polypropylene business to their phasics product, I believe. I think the CEO has been pretty straightforward about that.

And there’s a massive cost differential when you do that. So there’s benefit to the company. I’m not sure there’s benefit to the hospital systems. But there’s certainly benefit to the company. So they’ve been very competitive and aggressive.

It’s almost like it’s been coordinated with their mesh settlement, their settlement, which could be up to about $2,000,000,000 And so they’re very good at bundling and creating tiered pricing structures and that type of thing. So I think that activity has picked up. It’s always been in place. We know how to deal with it. We have very good strategy for dealing with it.

Our value proposition plays very well when you get to the right audience at the hospital in terms of cost savings. Even in a bundling situation with a competitor that’s large, we have the ability to save hospital systems considerable amounts of money, and I think do better for patients. Our product is softer. It does not have a high recurrence rate. Our clinical data converges to show a very low reoperation rate compared to any of the products of any of our competitors.

So I think by any measure, we’re one of the innovative technological clinical leaders in this space. And our time is coming.

Mike Sarcone, Analyst, Jefferies: Got it. And you mentioned IHR and guineal hernia repair. I think that was cleared or you started to commercialize in May of last year. And as you mentioned, that’s been a good grower for you. And it also broadened out your product portfolio to include focus on some of the simpler procedures.

So I guess, can you discuss the physician receptance of the product? And what type of commercial benefits have you seen from having this broader portfolio?

Tony Koblish, Founder, President, and CEO, TeleBio: Yeah, it’s interesting. I have a lot to say about this. So we’re very fortunate that we’ve worked very hard to show our clinical and economic value proposition such that Intuitive Surgical, the company, has allowed us to come to their Connect meeting in the last couple of years. And I would say it’s one of the best, most sophisticated, well run meetings I’ve ever experienced, including society meetings. It’s impressive.

And there’s three mesh companies or implant providers, I would say, that were there. There was Becton Dickinson, there was us, and then there was Gore. And arguably, that’s the most technologically advanced hernia meeting on the planet, given that the DV5 is a super technologically advanced product. And so when you look at what all the companies were displaying, there was exactly one polypropylene mesh on display at that meeting. And that was Becton Dickinson’s three d Max product which is an inguinal product.

So everything else was that Becton Dickinson was showing was all their temporary plastic, their phasics product which is what they’re they want to put through their entire system and have a version of that product to replace all their polypropylene product, I believe. But not inguinal. And the interesting thing is is you cannot have failure and recurrence and reoperations in inguinal because it’s such a commonly performed procedure. So the fact that they still have that polypropylene on display even after settling is super interesting. And when I look at the number of units that we’ve moved with our inguinal product, the price advantage that we have, and the low recurrence and exceptional clinical data we have, I think we may have the only inguinal product not made of polypropylene that is a winner and a contender.

And once you can crack the inguinal market, that’s by far the largest number of procedures. And it gives you access to shelf space and mind share space to do all the other procedures. So the clinical results we’re seeing with our inguinal product are superb. The reoccurrence rates are super low. And it may be the only product that’s really viable for day in and day out usage that is not made of permanent or temporary plastic.

Mike Sarcone, Analyst, Jefferies: Okay. I’m always a little hesitant to ask you to speculate about other companies, but do you have a hypothesis why for for Inguinal, Beck and Dickinson still has the polypropylene and

Tony Koblish, Founder, President, and CEO, TeleBio: Male Yeah, absolutely. I mean, you don’t have to ask a company, just have to ask a surgeon, right? So, you know, general surgeons, if they’re going to do hernia procedures at all, their bread and butter is the inguinal procedure, right? There may be ten, twenty five of those a week in a busy practice. So if you think about a general surgeon’s local area reputation and marketing, that is the one procedure that they cannot have a failure in.

They cannot have recurrence. They cannot have a temporary piece of plastic go away and pop back open. They just cannot have it. They’ll be out of business. Their referral base will dry up.

So they’re very conservative. And when you have something that’s not made of the stuff that causes problems and is working well, you’ve got a winner there long term. We just have to continue to get the word out and continue to work hard.

Mike Sarcone, Analyst, Jefferies: Got it. Just on the concept of this broader portfolio, both simple and complex and moderate, are you seeing commercial synergies? Maybe you’re able to get into accounts now offering the inguinal and pull through some of the complex

Tony Koblish, Founder, President, and CEO, TeleBio: It’s even more interesting than that. The general surgeon mindset, if they looked at our reinforced tissue matrix product, would say, oh, they’re a biologics company. But now that we have Liquefix as a fixation device, we look like a hernia company now. So it’s not just the inguinal product that makes you a hernia company.

That’s probably the most important implant that does make you a viable hernia company in the eyes of general surgeons. We have that now, but we also have a very unique fixation product that is not tax. It’s not sharp points. It doesn’t poke in and have the threat of hitting nerve bundles or vascular structures. It’s very easy to use.

And it can glue implants in place very effectively without creating traumatic damage. So I think we’re at the early stages of being viewed as a real hernia, broad portfolio provider that can do almost anything in this space. And that really came about with Liquefix and our inguinal product coming to market. And we’re well over a million dollars on each of those products and growing fast. Every quarter you can see them stepping up.

So once those products gain traction, you get the shelf space for the ventrals and the hiatals and the other types of hernias. And vice versa, if we’re known originally for our complex work, that complex work, if the product works so well, it has such a low recurrence rate, why not give it a shot for the lower product? So I think it works both ways.

Mike Sarcone, Analyst, Jefferies: Okay. Yeah, that’s very interesting. And I did want to hone in on, we’ve seen some ASP erosion from the mix shift toward Inguinal. Can you give us just some background on why that is and how we should think about ASP going Absolutely.

Roberto Kuka, Chief Operating Officer and CFO, TeleBio: So one of the things that Tony touched on is that when we first entered the market, we started in the more complex chest wall repairs, so with larger pieces, the highest ASPs. And so as surgeons saw how the product performed and the successes of those repairs, they started using us for simpler repairs. And then we’ve now shifted down to the smallest, the inguinal repairs. So as we’ve added those new applications to our portfolio, those lower priced products have, just because of the size of them, have become much more prevalent as part of the portfolio. So just on an average basis, the ASP does go down, but these are all incremental revenues that we hadn’t previously been getting.

So we view it as a positive. But over the course of seventy five to 80 SKUs in our portfolio, much of the variability from quarter to quarter is really just the mix of the sizes that are being used.

Mike Sarcone, Analyst, Jefferies: That makes sense. Do you have any thoughts as to when the mix ultimately settles out to where it might be more stable? We’ll get to kind of a

Tony Koblish, Founder, President, and CEO, TeleBio: I’ve got a ways to go.

Roberto Kuka, Chief Operating Officer and CFO, TeleBio: It’ll be a while. I mean, one of the things that we see, for example, is in TRS, breast reconstruction, just the types of surgeries and repairs that surgeons choose to do, their approach to this surgery, will demand different kinds of products. So more recently, surgeons have been shifting to using a larger sheet that they wrap around the implant, which increases our ASP, from using a smaller sheet that they sewed to the chest wall. So just even that stylistic change in approach to surgeries can change our ASPs. So it’s kind of unpredictable.

But at some point, when we become a larger portion of the total share of the market, it should stabilize.

Tony Koblish, Founder, President, and CEO, TeleBio: Yeah. And I think on the hernia side, if the thesis of backward and forward integration holds, the more inguinal we’re doing, the more bigger piece ventrals we’ll be doing as well. So I think there will be a downward pressure on the ASP. It should be made up with volume and it possibly could be made up with volume of the more expensive pieces because you know I think as inguinal goes, your share goes.

Mike Sarcone, Analyst, Jefferies: Got it.

Roberto Kuka, Chief Operating Officer and CFO, TeleBio: But one thing to you know highlight about that you know change in ASP is that that doesn’t change our gross margin. So the way that we compensate our manufacturer is with a 27% revenue share. So even as you see that ASP move around, our gross margin percentage does not move around because of that share.

Tony Koblish, Founder, President, and CEO, TeleBio: Yeah. The design of the license is for that reason. Our margins are solid, but obviously it affects top line based on mix. But margins are right there.

Mike Sarcone, Analyst, Jefferies: No, that makes sense. Since you brought it up, maybe it’s worth delving into where your supply comes from, and any impact you’ve talked about in terms of tariffs.

Roberto Kuka, Chief Operating Officer and CFO, TeleBio: Sure. So our manufacturer is located in New Zealand. That’s where there are a lot of sheep. And the base product for our products is sheep rumen. New Zealand is subject to a 10% import tax under the new tariffs.

Because though of the way that we import the product, we buy it at a transfer price that’s a much smaller portion of the total amount that we end up paying them, the 27%. So the original transfer transaction, the 10% on that, has a very small impact on our total gross margin. So we expect it to negatively affect total gross margin by no more than one or 2%.

Mike Sarcone, Analyst, Jefferies: Got it. It’s not a big impact by any means, but are there any mitigation strategies that you can implement? Or is this something we kind of live with and grow through?

Roberto Kuka, Chief Operating Officer and CFO, TeleBio: So we do sell in Europe. So about 15% of our total revenues are from Europe. We currently ship the product that we sell there into The US and then re export it to Europe. So one of the obvious mitigations is to ship directly so it doesn’t get subject to the tariff.

Mike Sarcone, Analyst, Jefferies: Got it. Okay. And I did want to shift a few questions on PRS. I mean, can you talk about key growth drivers there? And just also highlight 1Q.

I think we saw some deceleration just on a tough compare.

Tony Koblish, Founder, President, and CEO, TeleBio: Tough compare and probably the mix of sizes again, So yeah, I mean there’s a big, big development around our PRS business and that is we finally have good clinical data, any clinical data really use as a reference for the product’s performance. So up until now, since we were later in the launch of this product in comparison to our hernia platform, the collection of clinical data has taken a little bit more time and has been phase delayed. Well, now, we’ve got about three sixty patients in a various array of surgeon developed studies and FDA sanctioned retrospective analyses that are starting to emerge, get published, and get presented, that those will roll out throughout this year and into next year. And I can say the data looks excellent. The adverse event rate is as good or better than anything on the market, including the market leaders.

And it has a very good profile in terms of rapid integration and very good cosmetic reproduction. And one of our papers even shows an improvement in capsular contracture, which can be negative in terms of an aesthetic appeal. And that’s a big deal. It seems to perform very well in the presence of radiation, which is really interesting. So we have not had this type of information up until now.

So I think that makes a big difference for us in the next few years. So I mean, with

Mike Sarcone, Analyst, Jefferies: the reps having that in hand, do you expect that to drive some growth acceleration?

Tony Koblish, Founder, President, and CEO, TeleBio: Yeah, think it will help the business, no doubt. I mean, clinical data has been a very key part of our hernia side, and I don’t think the PRS side will be any different.

Mike Sarcone, Analyst, Jefferies: Got it. And you briefly touched on this before, but can you, for PRS, give us a lay of the land in terms of the competition?

Tony Koblish, Founder, President, and CEO, TeleBio: Yeah. So the top player is really AbbVie Allergan, which is the old life cell. Their product had an 85% market share at some point. It’s now down to about 50, I think. There’s been a proliferation of copycat products, cadaver skin products that aren’t all that differentiated.

I think surgeons are starting to pick their head up and say, well, why are these things so expensive? If they’re all the same, you really can’t change the properties. What you harvest is what you harvest. So there’s a new interest, I think, in resorbable polymers, which may be a good solution as opposed to hernia. Hernia’s popping open when they resorb, but you want them to resorb and help create a capsule, a nice pliable capsule.

And so there’s a big interest away, I think, from cadaver skin materials. It’s going to be slow given that it’s been so entrenched in the marketplace, but you know, you can see it. When you talk to surgeons, there’s interest and you can see the growth rates on some of these alternative products are looking pretty good, including our product. So yeah, I think that market is shifting and it’s shifting towards our favor again, long term, for sure.

Mike Sarcone, Analyst, Jefferies: Got it. All right. That’s helpful. And I did also want to touch on sales reps’ productivity. Late last year, we saw some unexpected attrition or kind of elevated levels of that.

You’ve made some changes to the commercial organization and some of your processes. Could you just give us some background there? Talk about the changes you’ve made and what you’ve seen so far through this year.

Roberto Kuka, Chief Operating Officer and CFO, TeleBio: Sure. So we announced on Monday that one of our board members, Jeff Blizzard, who was at J and J AbbVie previously AbbVieomed previously, has joined us as our president of the organization responsible for commercialization in The US and Europe. This was something that we had considered could be a possibility when we brought him onto the board about a year ago. And he attended our national sales meeting earlier this year, as he was thinking about what he was going to be doing next. Was very excited about the opportunity and has hit the ground running.

He’s assessing the productivity of individual reps, how we can amplify that. We currently use a rep and account specialist collaboration system. That’s something he’s familiar with from his work at Abiomed. But thinking about how to further improve that is something he’ll be focusing on.

Tony Koblish, Founder, President, and CEO, TeleBio: Yeah. And just to take a step back, Michael, Greg Firestone remains our Chief Commercial Officer. I can’t think of anybody who’s better at managing supply chain contracting and implementation. So he’s going to focus on that 100% of his time mostly in messaging. And I think he’s going faster than we anticipated in terms of getting contracts.

And so it made a lot of sense to bring somebody in with the clout and horsepower of Jeff to then take over the sales force so that we’re taking maximum advantage of the contracts that Greg is getting, right? Too much for one person to get the contracts and then manage the sales force simultaneously. So that division of labor, I think fits exceptionally well. We’re way ahead of where I thought we would be in terms of contract adjustments. And once I started figuring that out, was like, Okay, we’ve got to get strength in two areas now.

And so we’re very optimistic long term about Jeff’s presence and about Greg’s ability to continue to drive the contracting process to our advantage.

Mike Sarcone, Analyst, Jefferies: Got it. Just on that contracting process, I mean, maybe it was more ’twenty three, early ’twenty four. There were consistently questions about where do we stand with the major GPO contracts and how you’re penetrating those different accounts. Can you just give us kind of a state of the union on the contracting side?

Tony Koblish, Founder, President, and CEO, TeleBio: Yeah, it’s been fairly stable on the big national GPO side. It still remains HealthTrust, Ascension, and Premier. Visient is coming for requests for bid, I think, at the end of this year. I think they pushed it back a little bit, unfortunately. But we’re having tremendous success and speed of contracting at the IDN hospital system level.

You know, as this shift is happening towards expensive, resorbable, you know, temporary plastic products away from polypropylene, we offer a considerable cost savings versus those temporary plastic products with better clinical data by any objective. So, you know, that’s what’s propelling these local area contracts that we’re doing well with, which should set us up for when the national contracts come due. If you have all the if you have enough of these local area IDN contracts in place, then the national, they kind of follow more easily. So there’s a lot of reasons to feel good about where our business is. The contracting game is looking good.

And then our ability to execute and implement with the sales force is now at a much higher level.

Mike Sarcone, Analyst, Jefferies: Great to hear. And maybe we can switch gears. Roberto, just on cash runway, been a big topic for investors as well. Maybe you can just comment on where we stand today and how we should think about cash burn going So

Roberto Kuka, Chief Operating Officer and CFO, TeleBio: as we said on our most recent call, we do believe that the cash that we have on hand is sufficient to get us to profitability. The next question is typically, okay, what does profitability look like for us? So around $27,500,000 of revenue, the gross profit that we generate from that is sufficient to cover our operating expenses or cash operating expenses. We just did $18,500,000 and so that $27,500,000 is not that far away. And we expect operating expense to become fairly constant over the course of the year with revenue growing on top of that.

So investors will be able to see the leverage from quarter to quarter as that revenue grows and as the cash consumption steps down. There is some seasonality to our cash consumption. We do pay out bonuses in the first quarter and we re up our inventory in the first quarter. So first quarter tends to be one of the larger cash consumption quarters of the year. So we’ll see a nice step down into the second quarter and then a continuing decrease in cash use over the course of the year.

Mike Sarcone, Analyst, Jefferies: Got it. And can you delve into a little bit where is the OpEx leverage coming from? Like what’s driving that?

Roberto Kuka, Chief Operating Officer and CFO, TeleBio: So not OpEx leverage, but leverage on the OpEx. OpEx is constant over the course of the year and then revenue grows on top

Mike Sarcone, Analyst, Jefferies: of Okay. And then I guess when you look out to 2026, not asking you to provide guidance here, but kind of what are the high level moving pieces around how you’re thinking about OpEx and what you’re spending?

Roberto Kuka, Chief Operating Officer and CFO, TeleBio: We expect so we guided for this year that OpEx should be flat to last year. We’d expect some growth, particularly with the addition of a new exec, but nothing dramatic. We expect that he’s going to be thinking about how to reallocate the existing resources in the commercial organization. We do expect that as some of our clinical studies begin to decelerate a bit in the coming years, that’ll free up some additional resource for application to commercial. So we don’t expect large step ups in OpEx going forward.

Tony Koblish, Founder, President, and CEO, TeleBio: Goal is to hold it as steady as possible while we grow on top of it.

Mike Sarcone, Analyst, Jefferies: All right. Well, think that’s all the time we have. So Tony, Roberto, thank you for your time. And for everyone in the audience, thanks for your interest.

Tony Koblish, Founder, President, and CEO, TeleBio: Thank you.

Roberto Kuka, Chief Operating Officer and CFO, TeleBio: Thanks, Mike.

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