TELA Bio Inc

Invention:	Hernia repair matrix
Trademark:	OviTex®
Patents:	TBA
NASDAQ:	TELA

The invention:

• Combination of Biologic and Polymer Materials: OviTex products address unmet needs in hernia repair and abdominal wall reconstruction by effectively combining the benefits of biologic matrices and polymer materials​​.

Performance Advantages:

• Combination of Biologic and Polymer Materials: OviTex products address unmet needs in hernia repair and abdominal wall reconstruction by effectively combining the benefits of biologic matrices and polymer materials​​.
• Reduced Inflammatory Response: The design of the OviTex products minimizes the body’s inflammatory response, showing less foreign body inflammatory response compared to synthetic mesh products in studies​​.
• Enhanced Soft-Tissue Remodeling and Healing: The construction of OviTex allows for rapid absorption of wound fluids, promoting revascularization and functional tissue remodeling during healing. This leads to a pattern of collagen formation that is more conducive to connective tissue development compared to synthetic mesh​​.
• Biomechanical Properties: OviTex products are reinforced with interwoven polymer fibers, providing substantial mid-term and long-term support. This reinforcement increases the strength of the products by about 25% compared to the biologic material alone​​.
• Low Recurrence Rate: Clinical evidence shows a low recurrence rate (2.6%) and surgical site occurrences (38%) in high-risk patients, indicating the effectiveness of OviTex in challenging clinical scenarios​​.
• Surgeon Handling and Satisfaction: The products are designed for ease of handling, trimming, suturing, and tacking in various surgical approaches, leading to high surgeon satisfaction​​.
• Cost-Effectiveness: OviTex products offer meaningful cost savings over competing products, providing a cost-effective solution for advanced biologic repair​​.
  
  

OviTex is designed to offer an advanced solution in the space of hernia repair and abdominal wall reconstruction. The incumbent products it aims to replace or provide an alternative to include:

1. Synthetic Mesh Products: Traditional synthetic mesh products have been commonly used in hernia repair surgeries. However, they can lead to complications such as foreign body inflammatory response and are not always conducive to natural tissue remodeling.
2. Biologic Matrices: These are another type of incumbent product in the hernia repair market. While they offer benefits in terms of biocompatibility and reduced inflammatory response compared to synthetic meshes, they may not provide the same level of strength and long-term support.

OviTex Reinforced Tissue Matrix seeks to combine the advantages of both biologic matrices and synthetic mesh products while minimizing their respective shortcomings. The product aims to offer reduced inflammatory response, enhanced tissue remodeling, and improved biomechanical properties compared to these traditional solutions in hernia repair and abdominal wall reconstruction​​​​.

Intellectual Property:

• Broad Portfolio of IP: TELA Bio’s intellectual property protects the differentiated product construction and materials. This portfolio, along with proprietary manufacturing processes, creates significant barriers to entry for competitors​​.
• Exclusive Manufacturing and Supply Agreement: The company has an exclusive long-term supply and license agreement with Aroa for the supply of ovine rumen, a key biologic material used in OviTex products. This agreement provides a competitive advantage by securing an exclusive supply at a low cost​​.
• Innovative Product Design: OviTex and OviTex PRS products are FDA-cleared and uniquely incorporate polymer fibers interwoven through layers of biologic material in a lockstitch pattern. This design is optimized for soft-tissue reconstruction​​.
• Disruptive Technology: Supported by extensive pre-clinical and clinical evidence, OviTex technology demonstrates improved physiologic strength, compliance, tissue remodeling, and fluid transfer compared to traditional products​​.
• IP Covering Biomechanical Tailoring: TELA Bio’s patents claim the ability to tailor stretch resistance by changing a biologic matrix’s biomechanical properties through the interweaving of polymer thread. The patents also cover various aspects of scaffold development and reinforced matrix design​​.

Pricing

• Competitive Pricing: OviTex products are priced competitively, offering meaningful cost savings compared to leading biologic matrices and resorbable synthetic mesh products in hernia repair and abdominal wall reconstruction. This pricing strategy is designed to make OviTex an accessible option for a broader range of patients and healthcare providers​​.
  
• Savings for Healthcare Systems: TELA Bio's approach to pricing allows OviTex products to be sold to hospitals and healthcare systems at substantially lower prices than competitive products. On average, customers realize cost savings of approximately 20% to 40% over leading biologic matrices and resorbable synthetic mesh. This pricing flexibility is expected to drive greater adoption of OviTex products due to the financial benefits alongside improved clinical outcomes​​.
  

Addressable market
The annual U.S. total addressable market opportunity for TELA Bio's OviTex products is estimated to be approximately $1.5 billion. This estimate is based on the volume-weighted average selling price of OviTex products and considers hernia repair, one of the most common surgeries in the U.S., which represents approximately 1.1 million procedures annually​​.

Upside
The market cap of the company (USD$164m) is small relative to the company's addressable market.

Sources
​TELA Bio Inc Annual Report, 2023