TELA Bio (TELA, Financials) shares plunged 43% to $1.33 as of 11:43 a.m. Eastern Time on March 21 after the medical technology company reported a sharp slowdown in fourth-quarter growth and revealed high turnover within its sales force.
Down from a 26% increase in the previous quarter, income for the fourth quarter climbed 3.8% year over year to $17.6 million. The corporation blamed the delay down on storms, IV fluid shortages, and sales staff leaving-related disturbances. Revenue for 2024 full-year came in at $69.3 million, up 19% from 2023.
With 23% to 27% annual growth, TELA Bio anticipated 2025 sales between $85 million and $88 million. First-quarter income for the corporation falls between $17 million and $18 million.
TELA Bio claimed it adopted a redesigned commercial model splitting duties between Territory Managers and Account Specialists in order to handle sales interruptions. The corporation intends to grow the staff to 97 by year-end 2025; by the end of 2024 it claimed having 71 field representatives. In the fourth quarter, TELA Bio lost eleven Territory Managers; so, it is changing pay policies to handle retention issues.
Product performance shown some improvement. Launched in 2024, LiquiFix and OviTex IHR brought around roughly $1 million each. Larger OviTex PRS units and additional resorbable hernia options will help the business grow its range by 2025.
Mostly from inventory changes, fourth-quarter gross margin dropped from 68% to 64% in the same time previous year. Travel and severance costs influenced sales and marketing spending totaling $14 million in the quarter. From $12.9 million year before, the net loss dropped to $9.2 million. The business has $52.7 million in cash reserves at year's end.
Apart from outside disturbances, analysts raised questions about continuous sales force turnover and recruitment challenges. Notwithstanding these challenges, TELA Bio stated it is still dedicated to following its expansion strategy and hopes to generate close-term annual revenue of $100 million.
