Treace Medical Concepts, Inc. · NASDAQ:TMCI
Treace Medical Concepts — 42nd Annual J.P. Morgan Healthcare Conference (January 2024)
29 slides from Treace Medical Concepts's conference presentation, Jan 10, 2024
Slide 1: 42nd Annual J.P. Morgan Healthcare Conference
42nd Annual J.P. Morgan Healthcare Conference John T. Treace, CEO & Founder January 9, 2024 On solid footing for sustained top-tier growth 1
Slide 2: Forward-Looking Statements
This presentation may include forward- looking statements. All statements other than statements of historical facts contained in this presentation, including statements regarding our future results of operations and financial position, strategy and plans, industry environment, potential growth oppor
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures 3 To supplement the financial results presented in accordance with GAAP, this presentation presents Adjusted EBITDA, which the Company defines as net loss before depreciation and amortization expense, interest income, interest expense, taxes, share-based compensation expe
Slide 4: Treace Medical Concepts, Inc.
Treace Medical Concepts, Inc. Pure-play medical device company focused on the surgical treatment of bunions and related deformities 53 US PATENTS 79 US PENDING PATENTS Growing FY 2023 preliminary revenue of $186.7M to $187.1 million (+32% YOY growth at midpoint)* 5-year revenue growth CAGR of +60% J
Slide 5: A Large, Underserved $5B+ U.S. Market Opportunity
Emily Lapiplasty® patient $5B+ U.S. market opportunity A LARGE, underserved Bunions affect ~1 in 4 U.S. adults¹, a population of 65 million 10,000 U.S. bunion surgeons 450k annual surgical procedures: $2.3B current market² 650k more in need of surgery: $2.7B market 5 Nix S, et al. J Foot Ankle Res 2
Slide 6: Bunions: 3-Plane Deformities
Transverse Plane Sagittal Plane Frontal Plane Bunions: 3-Plane Deformities 6 An unstable joint in the middle of the foot allows the metatarsal bone to shift outward… Bunion (bump) presents here Unstable joint is here In nearly 90% of bunions, the metatarsal bone is rotated in the frontal plane1 Cre
Slide 7: Traditional 2D Surgical Approaches Have Significant Shortcomings
Traditional 2D Surgical Approaches Have Significant Shortcomings 7 Relatively straightforward procedure Doesn’t address the unstable joint Increased recurrence risk1 2D OSTEOTOMY (~75% of cases) Cuts the metatarsal bone and shifts the bump inward 2D LAPIDUS FUSION (~25% of cases) Realigns the entire
Slide 8: 3D Bunion Correction
3D Bunion Correction® Procedure differs from 2D options Our 3D solution: 8 Correct. Make correction before you cut Fixate. Apply multiplanar fixation for robust stability Cut. Perform precision cuts with confidence Compress. Achieve controlled compression of joint surfaces Treace has democratized a
Slide 9: Compelling Outcomes, Supported by Evidence
Patient Reported Outcomes, Mean (95% Cl) Visit MOxFQ and VAS Pain Scores Over Time compelling outcomes, supported by evidence EARLY WEIGHT BEARING in 8.4 days (avg)1,2 (1) Interim ALIGN3D™ study report, AOFAS 2023; HVA >20 degrees; 0.7% of patients (1 of 151 patients) at 24 months and 1.1% (1 of 95
Slide 10: Additional Complementary Markets Added
$5B+ U.S. market opportunity A LARGE, underserved 10 15% $750M TAM Additional complementary markets added Adductoplasty® Midfoot Correction1 ~$500M Hammertoe Correction¹ ~$250M These conditions often coexist with bunions and are often addressed at same time iData Research, Inc., 2022 and TMCI compan
Slide 11: Adductoplasty Midfoot Correction
Rapid, focused innovation and growth Adductoplasty® Midfoot Correction First instrumented approach for correcting metatarsus adductus deformity and osteoarthritis of midfoot Present in up to 30% of bunion patients; increased recurrence if not addressed¹ $4K+ additional per Lapiplasty® case² Precisio
Slide 12: Hammertoe Correction
Rapid, focused innovation and growth Hammertoe Correction Q4 2023 launch Designed to address hammertoe, claw toe and mallet toe deformities PEEK material offers radiolucency and mechanical properties comparable to bone¹,² Sterile-packed kit (1) Treace Medical Concepts data on file (2) Dong XN, et al
Slide 13: Taking Bold Steps to Capture the Market
Taking Bold Steps to Capture the Market (1) 4-year CAGR reflects Q4 2019 to Q4 2023 (2) Active Surgeons perform at least one Lapiplasty® procedure in trailing twelve months 30% 4-year CAGR in Active Surgeons¹ Early in utilization curve: nearly 40% of surgeons added in last two years 30% Approaching
Slide 14: Market-Capturing Momentum
Blended ASP Market-capturing momentum A Step Ahead Revenue growth driven by increasing surgeon utilization, new surgeon users and higher blended average sales prices (BASP) BASP expansion driven by next-gen Lapiplasty® technologies and complementary product usage $17.7 2018 $39.4 2019 $57.4 2020 $14
Slide 15: A Capital-Light, Highly Scalable Model
Sterile-packed implant kits Reusable instrumentation A capital-light, highly scalable model Margin from one procedure pays for our instrument tray 15 ~40 sellable SKUs facilitate supply chain and inventory management with ~80% gross margin 15 Jim Lapiplasty® patient
Slide 16: Where Others Walk, We Sprint
A rapid, nimble, product iteration cycle Where others walk, We sprint 16
Slide 17: Fixation Platform, a Giant Step Forward
“The biggest thing from Treace since Lapiplasty®” “Total game changer” Fixation Platform, a giant step forward SpeedPlate™ - a new standard for foot and ankle fixation for Lapiplasty®, Adductoplasty® and BEYOND. We expect it to fuel continued revenue growth and new surgeon additions. SURGEONS SAY: 1
Slide 18: Why SpeedPlate Is a Game Changer
Why is a “Game Changer” Dynamic compression Designed to deliver stability of a titanium locking plate¹ with speed and compression of a staple Platform technology For Micro-Lapiplasty™ (2cm incision), Lapiplasty® & Adductoplasty® procedures and beyond Not just Lapiplasty® Potential to achieve broad a
Slide 19: Micro-Lapiplasty 2cm Incision
“I’d like the slowest recovery possible” Through continued refinement and innovation, Lapiplasty® can now be performed through a micro 2cm incision Lapiplasty® Procedure ~7cm Incision; 2015 Mini-Incision™ System ~3.5cm Incision; 2021 Micro-Lapiplasty™ System ~2cm Incision; Q1 2024 Uses SpeedPlate™ f
Slide 20: Powerful Future Pipeline: Redpoint PSI Technology
Building on our strengths 20 Powerful Future Pipeline REDPOINT™ PSI TECHNOLOGY Pre-operative planning and patient-specific cut guides Strengthens market leadership position and competitive differentiation First to U.S. market with FDA-cleared PSI solution for bunion and midfoot deformity correction
Slide 21: Investing Wisely in Direct Sales
(1) As of December 31, 2023 Direct vs. Distributor Revenue (%) Distributor Direct Investing Wisely in Direct Sales Our dedicated sales force is a key tactic in growing Treace market penetration This supports higher utilization and ASP TODAY: 227 employee direct sales reps1 ~340 employee “field fleet
Slide 22: Ongoing Commitment to Highly Effective Surgeon Education
Ongoing Commitment to Highly Effective Surgeon Education Hands-on training is required prior to live clinical use of the Lapiplasty® procedure Monthly introductory and advanced events with experienced surgeon faculty and Treace staff Baseline for new surgeon adds going forward: +250-300/yr
Slide 23: Patients Ask for It by Name
Patients ask for it by name Lapiplasty® is fast becoming a standard of care for bunions, and we have built a deep and wide competitive moat 23 Approximately 6.6% market penetration in Q4 2023, up from 3.5% in Q3 2021
Slide 24: Direct-to-Patient Outreach
Generating Brand Awareness and Demand Through Direct-to-Patient Outreach OUTREACH with national programs to raise awareness EDUCATE on Lapiplasty.com SEARCH for a doctor SCHEDULE an appointment We reach surgical candidates via national programs We educate via Lapiplasty.com, then offer the means to
Slide 25: Driving Lapiplasty Awareness via Targeted DTC
Driving Lapiplasty® Awareness via Targeted DTC 2.6 Million Viewers Saw Lapiplasty® On Court Signage Leading indicators show a meaningful impact: Social Channel Impact: >100K total impressions >10k total engagements www.Lapiplasty.com/pickleball +12% bump in organic searches +8% bump in direct traffi
Slide 26: Meaningful Leverage Opportunities to Drive Profitability
Meaningful leverage opportunities to drive profitability Continued focus on operating expense leverage & management Scalability of business Technology-enabled efficiencies Expect positive adj. EBITDA in 4Q’23 The Company defines Non-GAAP adjusted EBITDA as net loss before depreciation and amortizati
Slide 27: Solid Footing, Setting the Pace
Solid footing, setting the pace Differentiated technology and innovative procedures backed by compelling clinical evidence Positioned to deliver sustainable, strong 20%+ revenue growth in 2024 and beyond Driving towards adj. EBITDA breakeven for full-year 2024 and free cash flow positive in 2025 Fas
Slide 28: For Additional Information, Please Contact
FOR ADDITIONAL INFORMATION, PLEASE CONTACT: www.treace.com NASDAQ: TMCI Julie Dewey, IRC jddewey@treace.com 209-613-6945 28 Chief Communications & Investor Relations Officer
Slide 29: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations 29
Treace Medical Concepts — 42nd Annual J.P. Morgan Healthcare Conference (January 2024) on 6ix