TELA Bio Announces Sale of Distribution Rights for Wound Care Product to MIMEDX

Rhea-AI Summary

TELA Bio, Inc. sells distribution rights of NIVIS Fibrillar Collagen Pack to MiMedx Group, Inc. for at least $8 million. MIMEDX will pay an initial $5 million with potential future payments up to $7 million based on sales. NIVIS is a collagen matrix for wound management. TELA Bio aims to focus on expanding its hernia repair and reconstructive surgery product portfolio.

Financial Analyst

The divestment of distribution rights by TELA Bio to MiMedx Group represents a strategic financial move for the company. The initial $5.0 million payment bolsters TELA Bio's immediate cash reserves, which can be leveraged for reinvestment into core product lines or R&D initiatives. The structured deal with future payments tied to net sales introduces a variable revenue stream, contingent on NIVIS's market performance. This agreement could be indicative of TELA Bio's strategic focus shift towards its hernia repair and reconstructive surgery products, which may signal to investors potential growth areas.

From a valuation perspective, the deal's size relative to TELA Bio's market cap and its impact on earnings must be considered. If the $8 to $12 million represents a significant portion of TELA Bio's revenue, this transaction could materially affect the company's financials. It's also essential to monitor how this cash influx will be utilized, as strategic investments in their hernia repair technology could lead to market share expansion and long-term shareholder value.

Medical Device Market Analyst

Examining the market implications of TELA Bio's sale of NIVIS distribution rights, it's clear that the wound care market is highly competitive. MiMedx's acquisition could strengthen its position in the sector, given its existing foothold. For TELA Bio, relinquishing these rights could mean a strategic narrowing of focus, which might enable them to concentrate on areas where they have a competitive advantage, such as the hernia repair and reconstructive surgery market.

It's important to assess the potential market reaction to the new LIQUIFIXTM hernia mesh fixation devices and the OviTex® configurations. If these products meet an unfulfilled need or offer superior outcomes, TELA Bio could capture additional market share. However, market adoption rates, surgeon preferences and reimbursement policies will play critical roles in determining the success of these products.

Healthcare Industry Analyst

TELA Bio's strategic decision to sell its distribution rights for NIVIS to MiMedx aligns with broader industry trends where companies focus on core competencies and divest non-core assets. This approach can lead to operational efficiencies and more targeted innovation. The healthcare industry is observing a shift towards specialization and TELA Bio's move reflects this.

Furthermore, the partnership with a company like MiMedx, known for its wound care and regenerative medicine products, could enhance the market reach of NIVIS. The success of this transaction will depend on MiMedx's sales strategy and market penetration capabilities. For TELA Bio, the financial flexibility gained from this deal could accelerate the development of their hernia repair and reconstructive surgery portfolio, potentially leading to increased market presence in these niches.

TELA Bio to receive at least $8 million and up to $12 million in total consideration

MALVERN, Pa., March 20, 2024 (GLOBE NEWSWIRE) -- TELA Bio, Inc. (NASDAQ: TELA), a commercial-stage medical technology company focused on providing innovative soft-tissue reconstruction solutions, today announced the sale of its distribution rights related to NIVIS Fibrillar Collagen Pack to Atlanta-based MiMedx Group, Inc. (“MIMEDX”). As consideration for the sale, MIMEDX will make an initial $5.0 million payment and additional future payments aggregating between a minimum of $3.0 million and a maximum of $7.0 million based on net sales of NIVIS over the next two years.

NIVIS is an absorbent collagen matrix indicated for the management of moderately to heavily exudating wounds and to control minor bleeding. MIMEDX is a pioneer and leader focused on helping humans heal, with a portfolio of products for applications in the wound care, burn, and surgical sectors of healthcare.

“We are pleased to announce this transaction with MIMEDX. We are confident in MIMEDX’s capabilities and in their ability to drive market share and bring this innovative, high-quality wound healing product, which was designed to TELA’s specifications, to more surgeons and patients,” said Antony Koblish, President and Chief Executive Officer of TELA Bio. “We look forward to continuing to expand the use of our robust portfolio of hernia repair and reconstructive surgery products, including two new LIQUIFIX^TM hernia mesh fixation devices and new product configurations of OviTex^® Reinforced Tissue Matrix designed to enhance utility in inguinal hernia repairs performed robotically and laparoscopically.”

About TELA Bio, Inc.
TELA Bio, Inc. (NASDAQ: TELA) is a commercial-stage medical technology company focused on providing innovative technologies that optimize clinical outcomes by prioritizing the preservation and restoration of the patient's own anatomy. The Company is committed to providing surgeons with advanced, economically effective soft-tissue reconstruction solutions that leverage the patient's natural healing response while minimizing long-term exposure to permanent synthetic materials. For more information, visit www.telabio.com.

Caution Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current expectations are forward-looking statements and reflect the current beliefs of TELA's management, including with respect to the sale of NIVIS and the total consideration relating to such sale. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors that could cause actual results and events to differ materially and adversely from those indicated by such forward-looking statements. These and other risks and uncertainties are described more fully in the "Risk Factors" section and elsewhere in our filings with the Securities and Exchange Commission and available at www.sec.gov, including in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Any forward-looking statements that we make in this announcement speak only as of the date of this press release, and TELA assumes no obligation to update forward-looking statements whether as a result of new information, future events or otherwise after the date of this press release, except as required under applicable law.

Investor Contact
Greg Chodaczek
347-620-7010
ir@telabio.com

What is the total consideration TELA Bio will receive from MiMedx Group, Inc.?

TELA Bio will receive at least $8 million and up to $12 million in total consideration from MiMedx Group, Inc.

What is the initial payment amount TELA Bio will receive from MiMedx Group, Inc.?

TELA Bio will receive an initial $5.0 million payment from MiMedx Group, Inc.

What is NIVIS Fibrillar Collagen Pack indicated for?

NIVIS Fibrillar Collagen Pack is indicated for the management of moderately to heavily exudating wounds and to control minor bleeding.

What type of company is MiMedx Group, Inc.?

MiMedx Group, Inc. is a pioneer and leader in wound care, burn, and surgical sectors of healthcare.

What new products is TELA Bio focusing on expanding?

TELA Bio is focusing on expanding its hernia repair and reconstructive surgery product portfolio, including LIQUIFIXTM hernia mesh fixation devices and OviTex® Reinforced Tissue Matrix.