TELA Bio, Inc. (TELA) Q2 2020 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen, and welcome to the TELA Bio's Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the prepared comments. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Mr. Stuart Henderson, Vice President of Corporate Development and Investor Relations for TELA Bio. Sir, the floor is yours.

Thank you, Joanna and good afternoon, everyone. Earlier today, TELA Bio released financial results for the quarter ended June 30, 2020. A copy of the press release is available on the company's website. Joining me on today's call are Tony Koblish, President and CEO; and Nora Brennan, CFO. Before we begin, I'd like to remind you that during this conference call, the company will make projections and forward looking statements regarding future events. We encourage you to review the company's past and future filings with the SEC, including without limitation the company's Forms 10-K, filled on March 30, 2020; and 10-Q, filled on May 15, 2020, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include without limitation, statements regarding product development, product potential, the regulatory environment, sales and marketing strategies, capital resources, operating performance or potential impact of COVID-19. With that, I will now turn the call over to Tony.

Thank you, Stuart, and good afternoon, everyone. We hope you are safe and healthy. Thank you for joining us. Total revenue for the second quarter was $3.5 million, an increase of 6% from the same period last year. Our second quarter like many in the med tech space was a tale of two quarters with the second half being nothing like the first. In early April, when hospitals were postponing many non-emergent procedures, our daily sales fell precipitously. For the full month of April, our daily sales were more than 70% below our average daily sales prior to the beginning of the COVID-19 pandemic. However, throughout May and June, our daily sales experienced steady improvement. And in late June, our volumes exceeded our pre-COVID-19 levels. While we are very encouraged by the accelerating sales we experienced in May and June, the situation remains fluid in the United States with several of our sales territories located in current COVID-19 hot zones. Though our early read on our sales in the current quarter look similar to the trend we experienced in late June, we have recently been hearing that several hospitals in these territories have limited or even stopped performing elective procedures. The impact to our third quarter remains unpredictable with this recent resurgence of COVID-19 cases and the possibility of a second wave in other regions. Despite this uncertainty what remains clear is the strength of our team's commitment and our drive to push our initiatives forward as we scale up to position TELA Bio for growth into 2021 and over the long-term. To that end throughout the second quarter our commercial team worked tirelessly to support our customers and patients, continuing to cultivate and make meaningful progress on our strong surgeon pipeline. We adjusted quickly and implemented two virtual sales solutions designed to educate surgeons about our product portfolio and clinical data. The first is a virtual version of our VIP tours, whereas, we previously brought surgeons to our facility here in Malvern to learn about our products and to discuss different use scenarios with our senior management and clinical team, we are now utilizing virtual solutions in an effort to achieve the same experience. Our second virtual solution is for KOL seminars. This solution offers surgeons a platform to engage with KOLs and importantly discuss the growing clinical data and their case history using OviTex and OviTex PRS. I'm happy to report these settings have been broadly well received by the attending surgeons as well as with our KOLs and sales staff. Through the end of July, over 120 surgeons have attended our virtual VIP tours or our KOL webinars. Among surgeons who participated in the event in Q2, we have seen close to a 200% increase in average monthly revenue of our products. Due to the success of these solutions, we will continue to use these strategies moving forward and are excited to introduce branding of our virtual approach to customer engagement. It's called TELA LIVE leadership-initiated virtual engagement. We expect to continue to add to our suite of virtual programs and are actively exploring additional platforms to provide our customers with virtual support and case coverage as well, which we call virtual proctoring. Our sales reps have done an excellent job, providing continuous support to their surgeon and hospital customers. The hospital access environment continues to evolve throughout this pandemic and varies from hospital to hospital. Our sales team continues to adapt and comply with these various policies to mitigate disruptions and develop innovative solutions to meet customer needs and build their territories. While we are now generally seeing improved hospital access, our reps are flexible and remain ready to adjust as localized hotspots may arise within their regions. On the clinical front, we recently announced the results of an interim analysis of our post-market BRAVO study. The analysis included patient outcomes at several time points including the all-important 24-month follow-up period. At 90 days post-op, there were no recurrences reoperations or implant removals among the 85 patients analyzed. At 12 months of the 57 patients that had been assessed, only one patient experiencing a recurrence. Notably this recurrence stemmed in a location adjacent to the original repair in an area of abdominal weakness and the initial repair using OviTex remained intact. Of the 20 patients that reached 24-month follow-up none experienced a recurrence or long-term complication. This interim analysis continues to clearly demonstrate the effectiveness of OviTex in improving patient outcomes in ventral hernia repair. These data have been submitted to a medical journal for publication and additional analyses of these data have been submitted to upcoming medical conferences. As a reminder the BRAVO study is a post-market study designed by TELA Bio and its investigators to evaluate postoperative complications and reherniations following the use of OviTex in subjects with moderate to complex ventral hernias. Due to many hospitals limiting nonessential visits because of COVID-19, we are working very closely with our study locations to make sure all follow-up visits can occur in a timely manner as much as possible. Turning next to our operations. During the first quarter call, we discussed several cash conservation strategies we initiated in April, including among other things a hiring freeze. On the heels of our successful capital raise in June and the lifting of hospital moratoriums on performing elective procedures, we are revisiting several of our capital conservation measures. In late June, we began cautiously scaling up our sales force in territories where non-emergent procedures are being performed close to pre-COVID-19 levels and where we have hospital access through our existing IDN and GPO contracts. These new sales territories are being added within our existing six regions. So, each region will consist of approximately eight territories. At a regional level, we are managing the business nimbly, employing both virtual and in-person strategies as appropriate given the local situation related to COVID-19. We continue to actively monitor the situation, make sure we move with our operational growth initiatives while judiciously managing our cash. Regarding our GPO contracts, we are in communications with supply chain and clinical resources within hospital systems about the favorable efficacy and economics of OviTex when compared to other natural repair technologies. Supply chain functions at hospitals have come online in recent months to engage with suppliers and we are focused on reinitiating discussions to drive our implementation strategy within contracted accounts. We also continue to make progress on securing additional IDN and GPO contracts. But time lines are variable as each organization manages its priorities relative to the pandemic. We are continuing to stay in front of the decision-makers and support our business partners through this tough time, leveraging virtual solutions where possible and we look forward to updating you on our progress in the months ahead. Lastly, we continue to make progress in the plastic and reconstructive surgery market with OviTex PRS products. Following a limited commercial launch period, where we solicited feedback from a core group of surgeons, we expanded our commercial launch in June. Our clinical development team has done an excellent job engaging plastic surgeons through our TELA LIVE program and we expect to continue to broaden our surgeon base over the coming quarters. We also continue to work with plastic surgeons to identify opportunities to further refine and advance our OviTex PRS portfolio and playing a similar approach to our OviTex hernia portfolio expansion. So now I'll turn the call over to Nora.

Thanks, Tony and hello, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the second quarter of 2020. Revenue for the second quarter increased 6% year-over-year to $3.5 million. Though our revenue increased over the prior year period, it was impacted by lower-than-expected procedural volumes, due to hospitals and patients deferring elective procedures due to COVID-19. Gross profit as a percentage of revenue improved in the second quarter compared to the prior year period, primarily due to a decrease in the charge recognized for excess and obsolete inventory, as a percentage of revenue. Second quarter gross margin increased to 59% from 58% in the prior year period. Sales and marketing expenses were $4.1 million in the second quarter of 2020 compared to $3.9 million in the same period in 2019. The increase was due to higher salaries, benefits and commission costs, as a result of our sales expansion activities. However, the increase was partially offset by the salary reductions, lower travel and consulting expenses, resulting from the cost containment actions taken in Q2. G&A expenses were $2.1 million in the second quarter of 2020 compared to $1.2 million in the same period in 2019. The increase was due primarily to increased costs associated with operating as a public company. R&D expenses were $1 million in the second quarter of 2020 compared to $1.1 million in the same period in 2019. This slight decrease was due to reduced outside development expenses and a lower level of laboratory spend. Loss from operations was $5.2 million in the second quarter of 2020 compared to $4.3 million in the prior year period. We ended the second quarter of 2020 with $85.5 million in cash. In late June, we successfully closed our underwritten public offering of 3 million shares, increasing our cash position by approximately $45 million. This additional capital will allow us to continue to build our team strategically, invest in clinical support and R&D and support our growth initiatives. Based on these plans, we believe that our existing cash resources will be sufficient to meet our capital requirements and fund our operations for the long term. Now turning to 2020 guidance. Due to the continued uncertainties from the impact of COVID-19 on our business, we will continue the suspension of our full year 2020 guidance. With that I'll turn the call over to Tony.

Thanks, Nora. In closing, I want to thank everyone again for your time this afternoon and for your interest in TELA Bio. I also want to thank our team for your continued energy, creativity and dedication to working as one, to help patients and support our customers throughout these challenging times. I'm confident in the fundamental strength of our business and I'm very optimistic that we will continue our success and achieve sustainable growth in the long term. So I'll now turn the meeting back over to the operator and queue up questions.

[Operator Instructions] Your first question comes from the line of Raj Denhoy from Jefferies. Your line is open.

Good afternoon.

Hey, Raj.

So I wonder if I could maybe ask a little bit about how the business ended in June and how it's looked here now in July and part of the way through August. You gave that guidance for that – that update I should say kind of mid-June about you were tracking kind of I think two to one – $2.1 million to $2.3 million ended up at $3.5 million. So obviously a very sharp recovery in the back half of the quarter. But I'm curious how that's sustained now, as you've looked at July and August, has it continued to ramp? Or what are you really seeing on the ground now?

Yes. So keep in mind that our business is really quarterly, as most med tech businesses are. So we can see in perfect times without COVID, 40% to 45% of revenue come in for a quarter in that last month. So in Q2, April was so low a little bit back in May. There's a distortion of those ratios, right? So, I would say that, we came in a bit heavy at the very end of June, I would say, better than pre-COVID levels. And I'd say in July, we saw a continuation of that, but maybe a little bit of moderation based on the fact, that we're just starting the quarter out, I believe, Raj. So, I don't think we'll really know, if we're seeing that acceleration, until we get through the full quarter. But I can tell you that, if you use pre-COVID measures, we were right there, at that pre-COVID level, maybe a little bit better through July. So we were very happy with where July started almost relative to any other month we've had. But I just throw those caveats out there. As we went through the month of July, I believe that was the first month where we saw these flare-ups in Texas and that kind of thing. So, there was a little bit of undulation in territories. Overall, our business, if you just looked at the top line number, it was great. It was fine for July. But if you look at some of the underlying components that add into that, we did see some undulations and off a little bit by I don't know 8% or so in Texas, Arizona a little bit in Florida. So, we're treating this, I guess, philosophically almost as rolling brownouts, right, that we're just going to have to contend with. Not blackouts. I think those days are behind us for sure. So in a brownout you're not going to see elective procedures go to zero. You may see a slowdown, you may see a shift to other facilities, you may see all kinds of mitigating factors as hospitals fight and they will fight to keep the procedures going. So our goal here is to almost create our own reality, where we operate aggressively nimbly and agilely into whatever each territory has given us. So for example, if there's a rolling brownout, bam, we go hit hard with TELA LIVE we go virtual we drive those programs and we bank those new customers for the next couple of months. Where it's open we go hard, right? So I think, I focused the team on that. Let's control what we can control and let's just assume, it's going to be rolling brownouts as we go forward off and on, maybe sometimes week-to-week adjusting. Our goal is going to be to grow through that and optimize through that. So I feel pretty good that we've got a system in place and a team in place that can do all that. So that's a long answer, but that's a bunch of color too thrown in Raj.

That's super helpful. And maybe just as a follow-up and this may be a difficult question to answer as well. But when one thinks about what drives your growth, whether in this period there's some level of deferral catch-up versus underlying hernia demand, breast reconstruction as well that sort of underlying demand and then also now opening up new accounts, or sort of competitive wins, is there any way you can maybe parse out what has been driving the recovery for you? Are there any one of those that's maybe more important right now?

Well, like I said on our last earnings call Raj, we have so many factors that are – have come together for us, right, whether it's new products with PRS and LPR, whether it's the new data, it's the expanding sales force. And now I'm going to say this TELA LIVE program has been a really great weapon for us. So even if we look at Q2, right, we had only a handful of new territories. I think 35 versus 31 in Q1. But our new reps that we hired in 2020 and look they've had no time in the field in the real world. They've been doing it all virtually. They contributed 11% roughly well over 10% of revenue in Q2. So I think there a few things going on here. Was there a little bit of a pent-up demand in the second quarter? Probably, you probably could have spread a little bit of that June kick across April or May. But I think that gets overwhelmed by all the other factors that we have that – and we also have diversity of procedure as well, right? We've got an array of hernia procedures from complex to simple, touches different types of surgeons and then we have the plastic and reconstructive, which touches a different type of surgeons. So there's a diversity of opportunity as I spoke about last quarter as well in terms of docs and procedures. But like I said, we're creating our own reality. We're going to maximize all the assets that we've built and make this thing go no matter what's handed to us. All we need is procedures somewhere right? And I feel like we can make this thing happen.

That’s great. Appreciate. Thank you.

Your next question comes from the line of Matthew O'Brien from Piper Sandler. Matthew your line is open.

Afternoon, thanks for taking the question. Actually I have a few, if that's okay. Just for starters Tony, I think you did $1.3 million in the last two weeks of June. Are you saying you did -- you had a similar type first half of July, second half of July type of performance of that around the $1 million in the first each of the first two weeks of the quarter?

No. What I'm saying is, keep in mind that the last month of the quarter is 40% to 45% of revenue right? So what I'm saying is, July was very strong when compared to pre-COVID levels, right? So we started Q3 off at a very good place. There's a lot of PO cleanup, maybe there was some of that pent-up demand that I just described thrown into the end of June too, Matt. So if we saw the last two weeks of June now ramping to infinity, we'd be very, very happy. But that's not the case. We're not there yet. There's still these rolling brownouts patchiness. Rep access is still hit or miss. I think we're smoothing that out particularly with our TELA LIVE program, which I think is very effective. But I think, we can outkick and grow through all of this and I think we'll really know how we look in the last two weeks of this quarter when we compare that to the last two weeks of June right? So I'm looking forward to that in September. But the trend in July was excellent. Excellent, in terms of where we started the quarter relative to Q2 even relative to Q1 I think. So yes we're pleased with it.

Okay. And then you started giving us a little bit of a peek behind the curve as far as the performance of the sales force. And I think you said that the reps you added in 2020 are doing about 10% of revenue in Q2?

A little higher.

I mean I think you only added 4 reps in the first quarter. So that'd be like they're on a run rate for about $100,000 a piece in just Q2. So that would seem like they're ramping very quickly. Can you talk about why that might be? Are they focused on HealthTrust? And then this 200% increase in the docs that looked at TELA LIVE just some of the things -- some of these other metrics that you're seeing underneath because the performance in the quarter, especially versus -- and I know it's off a smaller base versus the rest of med tech, it's quite good in terms of growth with everybody else contracting. So just other metrics that we can kind of get our head around as far as the better-than-expected performance for your business? And then where that could go from here in new accounts et cetera?

Yes. So let's level set. And I'll just ask Stuart to correct me, if I'm out of whack on the rep counts versus territories. But going into the IPO, we really had in the 20s let's say. And we really ended last year 2019 with about 30 right?

30 bodies.

About 30 -- about 30 reps. And so, I'm including all of those reps when we got in there. So yes, there is a grouping of new reps. I think they've been very successful really driven by the TELA LIVE program, right? So I mentioned one metric in my script monologue that we've seen about a 200% increase in average monthly revenue among surgeons who participated in a LIVE program. So I think that has helped us out tremendously. There are certain areas of the country which we just didn't have reps in pre-IPO and we do now. And those territories by and large have really started to produce and the only mechanism available to us is TELA LIVE virtual and also through the contracting. And we've made sure that we've overlapped it -- overlapped sorry, the live programs in the contracted arenas. Now there's another thing going on here as well, with the LIVE programs which I'm going to focus on. And that is -- it's that we're also doing these LIVE programs for existing customers with the goal of expanding their personal usage. Let's say they start off doing complex ventrals. We want to expand their usage into simple hernias or they're perhaps a new customer around PRS, we use the LIVE program so with -- and we also want to spread into more surgeons within a hospital. So we're seeing about a 60% increase in revenue from existing customers who participate in a LIVE program. And right now, and I expect this metric to get better as time goes forward that we're averaging over a 50% conversion of new users of our products that have done a LIVE virtual program since April. And I think that we're going to see that ratio go up. I think there's mitigating circumstances on why they may or may not be starting. It could have been elective procedures. It could have been just slowing down the back process and getting -- going at the hospitals what have you. But we're seeing virtually on every metric these TELA LIVE programs are having a positive impact. And the reason why that's possible is because of the access that we're seeing in HealthTrust and other IDNs. So I think that's really what's working for us and that's really the concept of creating our own reality. We wired it. We've mastered it. And now we got to just execute it over and over and over again. And we've been doing it. We're averaging well over 20 of these LIVE surgeon engagements per month.

Okay. That's really helpful. Last one is actually for Nora. Nora was it the same kind of 90-10 split between hernia and plastic this quarter? And then the OpEx came in -- I know you had signaled it was going to come down in Q2 but it was about 10% lower than I was expecting. I know you're adding a few reps here. Should we expect levels that are slightly higher than Q2? And is it as far as thinking about Q3, Q4? Or are we going to go back to Q1 levels on OpEx?

So I'll answer your first one Matt. So it is roughly about 90-10 still the split between OviTex and PRS. With respect to OpEx, I mean as Tony mentioned that we're going to start investing in our commercial program again. It's -- as surgeries come back, we're going to spend a little bit more money. And so we'll see it in the commercial as well as within R&D. So we should see some increases in our spending going forward certainly higher than Q2.

Got it. Very helpful. Thank you.

Thank you, speakers. Your next question comes from the line of Kyle Rose from Canaccord. Your line is open.

Great. Thank you very much for taking the questions. Can you hear me, all right?

Yes, Kyle.

Yes.

Good afternoon. So I had a couple of questions that dovetail on some of the other topics previously. So maybe just to start you mentioned like pent-up demand a couple of times. I mean obviously you were really priming the pump with the TELA LIVE programs. But you already had some existing utilization with your underlying core user base. So maybe when you think about the growth that you saw in May and June can you just try to tease out how much of that was just catch-up versus some of these new accounts coming on board?

Yes. I mean it's hard for me to say there was any catch-up in May. May was 50% pre-COVID levels. We were scratching and clawing, but diligently executing these LIVE programs, right? So I think the only place I can point to where I feel like if there was a pent-up demand perhaps could have been PO cleanup at the back end of June. That's it. So I don't think there was any kind of sustained pent-up demand much more than a couple of weeks. So I think most of what we drove was through this LIVE stuff that we've been doing. And keep in mind, we started doing it right at the very beginning in March, April, May over and over and over again. And so we're just starting to see the fruits of that given the time lines that it takes to get new customers up and running or just to go through the process. And we didn't really have access to a lot of the supply chain, OR director-type people to get the hospitals moving much beyond the surgeons until really the end of May, early June. So right now, it's just a little bit phase, right? I think we're starting to see supply chain, OR director engagement started in June and is now picking up to more normal levels albeit virtual. And then the surgeon side of things the case volume really did not seem at good levels until we started to get through June and into July. But, again, by July we started to see this rolling brownout or patchiness here and there. So, I think, overall, most of what we drove here so far is due to our own efforts in Live. That's where my head is at. We just talked to so many surgeons. It's impossible for it not to be a big driver.

Okay. That's very helpful. And then, I appreciate the breakout of OviTex versus PRS. I'm wondering if you could just give us a little more insight on the OviTex side there, specifically, around the minimally invasive and the laparoscopic utilization.

Yes. That's an interesting -- that's a good interesting question, right? I mean, last quarter we were thinking the complex ventral stuff was going to lead us out, right, and then the PRS. And to a certain extent that was the case. But if we look at how the quarter sort of smoothed out, it really wasn't that much different in terms of ratios of the different types of procedures in the hernia arena pre-COVID. So we had roughly 64% of our Q2 hernia cases were ventral, umbilical, parastomal. Pre-COVID, when was that, I'd say, Q4, it was 63%. And then on the inguinal side, that actually grew in Q2 to 19%. Pre-COVID, it was about 12%. And then for some reason the hiatals came down a bit. We did about 22% hiatals in Q4 2019 and about 13%. So, it was a good mix and it was also a very consistent mix on open versus robotic, versus laparoscopic. Roughly, 60% of our procedures, 57% in Q2 were open. And in Q4, it was 53%. And then the robotic has actually been growing, right? Our pre-COVID robotic ratio was about 27% robotic. Now it's 33% robotic. And then laparoscopic was 18%. And that you'd expect has come down a bit to 10% as the robot starts to take over. So, I think, the ratios of procedures and types of techniques has been pretty consistent as of Q2, which I think speaks to a pretty decent recovery on the hernia side, if not in total procedure volume, at least in getting the patients that want to come back with an array of problems getting fixed. So I think that's a positive sign all around.

I really appreciate the insights there. And then, just one last one then on, if I can sneak one in, is just HealthTrust. I think on the Q1 call you talked about being somewhere north of 65 accounts, but a lot of those hospital administrators has been furloughed and kind of were waiting to come back. So just how that has trended from a getting them contracted and into those hospitals standpoint?

Yes. Our percent of revenue in Q3 from HealthTrust accounts was about 30%. And you look at pre-COVID, that's up a bit, right, from high 20s or mid to high 20s. And if you look at the number of accounts, we were pretty solid in Q2 at 55 HPG accounts. Q1, if you think of the first part of that quarter, was really driving those new accounts to come on and then fell off in March and really didn't recover. Like I said, we didn't have access to the supply chain folks until just starting in May, a little more so in June and July. So we expect that this HPG will go up. What's really gratifying is if you look at our GPO contracting strategy, Kyle, is step one is implement HealthTrust, right? So I think we're doing fine there. COVID has set us back, but we'll be back. That's going well. But the good news is that, the second underlying strategy underneath that is to drive large IDNs. And that's happening. For example, we just got, what amounts to almost a sole agreement at Allegheny Health Network. We're on contract at Mayo in Florida and there's just a great pipeline of consignment agreements and RFPs that are in motion. So this is a never-ending process. It's going to be HealthTrust implementation, job one. Job two is this B2B process that's really going to be focused on IDNs and consignment. We know that if there's consignment inventory on the shelf we can do cases, particularly with our virtual proctoring programs that are emerging. And then as far as the other GPOs go we're just going to surf that wave and whenever those RFPs come up we'll do them. But for the most part, I feel like we're we've got more than enough to work with here on the GPO and IDN front between the IDN strategy and the HealthTrust implementation. So we're really focused on making those parts of the business go now.

Great. Thank you for taking the questions.

All right.

Your next question comes from the line of Dave Turkaly of JMP Securities. Dave, your line is open.

Hey. Thanks and yes, congrats on posting growth in a super difficult quarter. Tony, I was wondering maybe if you would be willing to share with us the number of active users that you may have had at the end of the quarter? And then I was just trying to get an idea around what percent were up and running and then maybe a guess at the percent where you're seeing these brownouts like what percent of the business that is? If possible?

Yes. Well, I mean, I'll let me -- while Stuart's scrambling to think about the numbers, I'll just give some commentary on the rolling brownout, right? So we try to take that little block of what we'll call Texas, Florida, Arizona. And that ran about 25 -- those three states ran about 25% for Q2. And in July that ran about 19% so less than 20%. So I think that's an example of one rolling brownout cluster of states if you will and there's probably a bunch of those going on up and down all over the place. And even amongst that cluster it's not homogeneous, right? Texas has shut down certain counties, but they're trying to move procedures. Florida some of the HealthTrust accounts in Florida have actually stopped for now. And then Arizona is kind of a mixed bag. So I think it's week-to-week. It's not month-to-month with these rolling brownout clusters, but that gives you just an example down 6%. And theoretically those areas should have kept growing for us because they were rich in IDN and HealthTrust accounts so on contract and also rich particularly, in Florida with the LIVE programs. And we saw some great growth out of the LIVE programs in Florida and then we've seen it, sort of, taper off a little bit. So Stuart wrote down the number of customers about 270 customers in Q2 versus a little less than that 265 or so in Q1. So yes, we grew the customer base as well. And that's I guess with people starting and stopping. So it's a good sign.

Okay. Thanks for all that detail. I guess maybe just, sort of, a quick follow-up just the pipeline. I think you have a new LPR coming. And anything else you'd highlight for us in the remainder of the year? Thanks a lot.

Yes. So we've got a bunch of new products in the pipeline that we'll talk about probably next year. Some really good ones. As I said in my remarks our plan is to have a suite a portfolio of PRS products and then we've got some really interesting new robot-specific hernia-based products that are in development. We got the bulk of our LPR product range out in Q1 so that's still finding its footing. We're not going to really add to that for the rest of this year. And then we're really not going to add to the PRS product set for this year as well. So we've launched a bunch of new products this year. Our goal is to launch new products every year. So we're not ready to talk about next year yet. The timing of some of those is in flux getting our folks into the labs and doing contract, research, animal studies et cetera. But we're tracking well for all those new products. We'll have more to say next year on that or maybe at the end of this year.

Thanks a lot.

All right.

Thank you, speakers. We do have a follow-up question from Matthew O'Brien from Piper Sandler. Your line is open.

Okay. Thanks for the follow-up. Just quickly on PRS. I know you guys are circling the wagons right now on the hernia side given what's going on with COVID. So that's the focus. How do we think about PRS over the next couple of years? I know that was a meaningful growth driver heading into the IPO. I'm sure you still think the market opportunity is huge. But how do we think about the progression of that product specifically now that things have gotten off to a little bit slower start because of COVID? Thanks.

I think it's going to be the same. I don't see it changing. I mean, if anything we've lost what two quarters right? I think we've lost Q1 and Q2. I'll be very darn happy if Q3 looks more like Q1 should have looked. And then I think you just spread it out going forward Matt and we keep stepping. If anything I'm much more bullish on all of our products based on how the surgeons react right? I mean, we've never had such an opportunity with this LIVE stuff to talk to 20 to 25 surgeons a month. And it's really honing the way we present these products. It's honing the way we present the data. It's honing how we present all the science and work that went into them. And it's also popping out a lot of new ideas. And there is a huge opportunity on the PRS front to have an array of tuned products that are engineered for specific surgeon philosophies and types and things like that. So if anything long-term, I'm more bullish on PRS given all of the flavors that I think we can roll out in the next three to five years with that portfolio. So I think as we roll out flavors of hernia -- from hernia where we started in 2017, we've been launching new products every year and we'll continue to do so. I think we're going to have a similar looking portfolio over time on the PRS side. So right now this is all really good foundational work. This LIVE stuff is keeping us going, allowing us to grow, allowing us to be aggressive in a smart way without being a burden to those that are on the front lines. But it's also just been a gold mine engine for honing our messaging, honing our commercialization talk track, and then driving new product ideas. So we're going to keep going with this until we melt Zoom.

Okay. Much appreciated.

Thanks, Matt.

Thank you. Speakers I am showing no further questions at this time. I would like to turn the conference back to Mr. Tony Koblish, President and CEO.

Thanks everybody for your interest and we'll see you next time. Stay safe out there. Bye.

Thank you. Thank you speakers. Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.