~ Revenue up 197% year-over-year ~
~ Subsequent to Quarter End, National Launch of the Catamaran™ SI Joint Fusion System at NASS ~
LOS GATOS, CA / ACCESSWIRE / November 10, 2022 / Tenon Medical, Inc. (NASDAQ:TNON) ("Tenon Medical" or the "Company"), a company transforming care for patients suffering with certain sacroiliac disorders, today reported financial results for the third quarter ended September 30, 2022.
Recent Highlights
- National launch of the Catamaran™ SI Joint Fusion System (the "Catamaran") at the North American Spine Society (NASS) meeting (Chicago, IL), October 12-15, 2022, with a technical exhibit, interactive surgeon training sessions, and outcomes from a single center experience with the Catamaran presented at an Innovative Technology Session
- Received Institutional Review Board ("IRB") approval from WCG IRB for two separate Tenon-sponsored post market clinical studies of Catamaran which allows designated Catamaran study centers to begin recruiting and enrolling patients into the respective studies
- Modified our National Distribution arrangement allowing accelerated commercial scale with the development of Tenon Medical commercial infrastructure and sales management to support top line growth
- 100 surgical procedures utilizing Catamaran completed in the pre-launch phase
- 71 physicians have completed a Catamaran workshop as of November 1, 2022
- Revenue of $208,000 in the third quarter of 2022, an 197% increase from the same period in 2021, and a 54% increase on a sequential basis compared to the second quarter 2022
- Recently released CMS final rule for code 27279 increases 2023 Medicare facility fee by approximately 26% for SI joint fusion procedures performed in ASCs and 33% for these procedures done in hospital outpatient settings
"We had multiple significant advancements for Catamaran in the third quarter to move us along our commercialization pathway," said Steve Foster, CEO and President of Tenon Medical. "Catamaran's official national debut at the North American Spine Society conference in October was a great success, introducing in-person and virtual spine specialists and other health care providers to Catamaran at our technical exhibit, interactive surgeon training sessions and podium presentation.
"In addition, we have continued outreach to introduce and educate physicians on our optimized surgical approach for SI Joint Fusion at 11 physician workshop events during the third quarter. Taken together, we are highly focused on showcasing our unique story at conferences and hands-on workshops where we are receiving highly positive feedback from the clinician community. This ongoing outreach is a critical step in building commercial momentum for Tenon as we develop commercial infrastructure and our sales management team, and transition control of all commercial distribution and sales activities to the Company.
"Specific to Clinical Research, we recently received IRB approval for two feasibility and CT scan strategic post market studies that will assess patient pain scores, fusion as well as other patient reported outcomes out to 12 and 24 months. This investment allows our designated Catamaran study centers to begin recruiting and enrolling patients into the respective studies and represents our continued commitment in validating and differentiating patient outcomes and radiographic assessment with the Catamaran System.
"Looking ahead on our commercialization pathway and the addition of our synthetic training model option, we anticipate further acceleration of physician training and ultimately, adoption. We are excited to begin moving efficiently to enrollment initiation at selected centers for our post market clinical studies with IRB approval. We continue to believe there is significant unmet market opportunity for the Catamaran, and that it will become a compelling alternative to deliver pain relief for patients suffering from SI Joint issues. We look forward to providing additional updates in the months to come as we ramp commercialization of Catamaran, building long-term value for our shareholders," concluded Foster.
Third Quarter 2022 Financial Results
Revenue was $208,000 in the third quarter of 2022, an increase of 197%, compared to $70,000 in the comparable year ago period. Revenue was $414,000 in the nine months ended September 30, 2022, an increase of 287%, compared to $107,000 in the nine months ended September 30, 2021. The increase in revenue for the three and nine months ended September 30, 2022, was primarily due to increases of 200% and 345%, respectively, in the number of surgical procedures in which The Catamaran System was used, combined with lower revenue per procedure due to a national distribution agreement in effect for sales from July 2020 through April of 2021.
Gross loss in the three months ended September 30, 2022 was $(94,000) compared to a gross profit of $52,000 in the comparable year ago quarter, due to the increases in overhead spending and the number of surgical procedures. Gross margin percentage decreased from 74% to (45)%, driven by higher operations overhead spending and partially offset by higher revenue per procedure resulting from an amended and restated national distribution agreement.
Operating losses totaled $3.3 million for the third quarter of 2022, compared to a loss of $2.1 million in the third quarter 2021. The increase in operating expenses was a result of the creation of an infrastructure to support future growth, stock-based compensation and the costs associated with being a public operating company.
Net loss was $3.2 million for the third quarter of 2022, compared a loss of $2.3 million in the same period of 2021. The Company expects to incur additional losses in the future.
As of September 30, 2022, cash and cash equivalents and short-term investments totaled $12.5 million. The Company believes existing cash and cash equivalents and short-term investments will enable Tenon Medical to fund hiring additional personnel, product development and sales and marketing activities including clinician training and clinical study activities.
Q3 2022 Earnings Conference Call
Management will host an investor conference call at 4:30 p.m. EDT (1:30 PDT) today, Tuesday, November 10, 2022, to discuss Tenon's third quarter 2022 financial results, provide corporate update, and conclude with a Q&A session. To participate, please use the following information:
| Date: | Tuesday, November 10, 2022 |
| Time: | 4:30 p.m. Eastern time |
| Dial-in: | 1-800-289-0438 |
| International Dial-in: | 1-323-794-2591 |
| Conference Code: | 8611623 |
| Webcast: | TNON 3Q22 Conference Call |
About Tenon Medical, Inc.
Tenon Medical, Inc., a medical device company formed in 2012, has developed The Catamaran™ SI Joint Fusion System that offers a novel, less invasive Inferior-Posterior approach to the SI joint using a single, robust titanium implant. The system features the Catamaran™ Fixation Device which passes through both the axial and sagittal planes of the ilium and sacrum, transfixing the SI joint along its longitudinal axis. With an entry that mimics SI joint injection, the surgical approach is direct to the joint and inferior to the wide and variable dorsal recess. The angle and trajectory of the Inferior-Posterior approach is designed to provide a pathway away from critical neural and vascular structures and into the strongest cortical bone. Tenon is preparing a national launch of this system to address the greatly underserved market opportunity that exists in this space. For more information, please visit www.tenonmed.com.
The Tenon Medical logo and Tenon Medical, are registered trademarks of Tenon Medical, Inc. Catamaran is a trademark of Tenon Medical, Inc.
Safe Harbor
This press release contains "forward-looking statements," which are statements related to events, results, activities or developments that Tenon expects, believes or anticipates will or may occur in the future. Forward-looking often contain words such as "intends," "estimates," "anticipates," "hopes," "projects," "plans," "expects," "seek," "believes," "see," "should," "will," "would," "target," and similar expressions and the negative versions thereof. Such statements are based on Tenon's experience and perception of current conditions, trends, expected future developments and other factors it believes are appropriate under the circumstances, and speak only as of the date made. Forward-looking statements are inherently uncertain and actual results may differ materially from assumptions, estimates or expectations reflected or contained in the forward-looking statements as a result of various factors. For details on the uncertainties that may cause our actual results to be materially different than those expressed in our forward-looking statements, please review our Registration Statement on Form S-1 on file with the Securities and Exchange Commission at www.sec.gov, particularly the information contained in the section entitled "Risk Factors". We undertake no obligation to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise unless required by law.
Investor Contact
Shannon Devine
MZ North America
203-741-8811
[email protected]
Tenon Medical, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
(In thousands, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Revenue | $ | 208 | $ | 70 | $ | 414 | $ | 107 | ||||||||
Cost of sales | 302 | 18 | 848 | 38 | ||||||||||||
Gross (Loss) Profit | (94 | ) | 52 | (434 | ) | 69 | ||||||||||
Operating Expenses | ||||||||||||||||
Research and development | 797 | 601 | 2,016 | 925 | ||||||||||||
Sales and marketing | 645 | 556 | 2,864 | 1,473 | ||||||||||||
General and administrative | 1,726 | 992 | 5,483 | 1,570 | ||||||||||||
Total Operating Expenses | 3,168 | 2,149 | 10,363 | 3,968 | ||||||||||||
Loss from Operations | (3,262 | ) | (2,097 | ) | (10,797 | ) | (3,899 | ) | ||||||||
Other Income (Expense) | ||||||||||||||||
Gain on investments | 72 | 1 | 108 | 1 | ||||||||||||
Interest expense | - | (267 | ) | (362 | ) | (340 | ) | |||||||||
Other income (expense) | 19 | - | 39 | (1 | ) | |||||||||||
Total Other Income (Expense), net | 91 | (266 | ) | (215 | ) | (340 | ) | |||||||||
Net Loss | (3,171 | ) | (2,363 | ) | (11,012 | ) | (4,239 | ) | ||||||||
Loss attributable to non-controlling interest | - | (22 | ) | - | (33 | ) | ||||||||||
Net Loss Attributable to Tenon Medical, Inc. | $ | (3,171 | ) | $ | (2,341 | ) | $ | (11,012 | ) | $ | (4,206 | ) | ||||
Net Loss Attributable to Tenon Medical, Inc. Per Share of Common Stock | ||||||||||||||||
Basic and diluted | $ | (0.28 | ) | $ | (2.55 | ) | $ | (1.59 | ) | $ | (4.85 | ) | ||||
Weighted-Average Shares of Common Stock Outstanding | ||||||||||||||||
Basic and diluted | 11,237 | 919 | 6,920 | 868 | ||||||||||||
Consolidated Statements of Comprehensive Loss: | ||||||||||||||||
Net loss | $ | (3,171 | ) | $ | (2,363 | ) | $ | (11,012 | ) | $ | (4,239 | ) | ||||
Unrealized loss on investments | (10 | ) | - | (37 | ) | - | ||||||||||
Foreign currency translation adjustment | (19 | ) | 1 | (40 | ) | 1 | ||||||||||
Total Comprehensive Loss | (3,200 | ) | (2,362 | ) | (11,089 | ) | (4,238 | ) | ||||||||
Comprehensive loss attributable to non-controlling interest | - | (22 | ) | - | (33 | ) | ||||||||||
Total comprehensive loss attributable to Tenon Medical, Inc. | $ | (3,200 | ) | $ | (2,340 | ) | $ | (11,089 | ) | $ | (4,205 | ) | ||||
Tenon Medical, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share data)
| September 30, | December31, | |||||||
| 2022 | 2021 | |||||||
| (Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 3,153 | $ | 2,917 | ||||
Short-term investments | 9,381 | 4,404 | ||||||
Accounts receivable | 144 | 76 | ||||||
Inventory | 810 | 188 | ||||||
Prepaid expenses | 177 | 87 | ||||||
Total current assets | 13,665 | 7,672 | ||||||
Fixed assets, net | 294 | 101 | ||||||
Deposits | 51 | 41 | ||||||
Operating lease right-of-use asset | 927 | 1,084 | ||||||
Deferred offering costs | - | 374 | ||||||
TOTAL ASSETS | $ | 14,937 | $ | 9,272 | ||||
| LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 422 | $ | 478 | ||||
Accrued expenses | 603 | 1,088 | ||||||
Current portion of operating lease liability | 241 | 202 | ||||||
Convertible notes payable and accrued interest, net of debt discount of $0 and $31 at September 30, 2022 and December 31, 2021, respectively | - | 12,857 | ||||||
Convertible notes payable and accrued interest due to related parties, net of debt discount of $0 and $2 at September 30, 2022 and December 31, 2021, respectively | - | 649 | ||||||
Total current liabilities | 1,266 | 15,274 | ||||||
Operating lease liability, net of current portion | 724 | 911 | ||||||
Total liabilities | 1,990 | 16,185 | ||||||
Commitments and contingencies | ||||||||
Convertible preferred stock: | ||||||||
Series A convertible preferred stock, $0.001 par value; 4,500,000 and 2,805,839 shares authorized at September 30, 2022 and December 31, 2021, respectively; 0 and 2,550,763 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | - | 12,367 | ||||||
Series B convertible preferred stock, $0.001 par value; 491,222 shares authorized; 0 and 491,222 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | - | 1,272 | ||||||
Stockholders' equity (deficit): | ||||||||
Common stock, $0.001 par value; 130,000,000 and 10,487,904 shares authorized at September 30, 2022 and December 31, 2021, respectively; 11,236,801 and 989,954 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 11 | 1 | ||||||
Additional paid-in capital | 44,691 | 113 | ||||||
Accumulated deficit | (31,587 | ) | (20,575 | ) | ||||
Accumulated other comprehensive income (loss) | (168 | ) | (91 | ) | ||||
Total stockholders' equity (deficit) | 12,947 | (20,552 | ) | |||||
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 14,937 | $ | 9,272 | ||||
SOURCE: Tenon Medical, Inc.