What changed in this filing

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Item 1. Business

2025-03-21 compared with 2024-03-22 · 145 added, 126 removed, 702 unchanged (28% of the section changed)

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We are dedicated to building true partnerships with surgeons and healthcare providers to deliver solutions that provide both clinical and economic improvements.

We believe that genuine collaboration with surgeons and healthcare providers results in the development of new solutions that empower patient care.

We believe that genuine collaboration with surgeons and healthcare providers results in the development of new solutions that empower patient care and addresses unmet needs within the soft tissue reconstruction market.

Our first portfolio of products, the OviTex Reinforced Tissue Matrix ( “OviTex”) which we first commercialized in the U.S.

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Our OviTex portfolio consists of multiple product configurations intended to address various surgical procedures within hernia repair and abdominal wall reconstruction, including ventral, inguinal, and hiatal hernia repair.

In addition, we have also designed an OviTex product specifically for use in laparoscopic and robotic-assisted hernia repair, which we market as OviTex LPR and we began commercializing this product in November 2018.

In February 2023, we launched two new, larger configurations of OviTex LPR, designed for ventral and incisional hernias.

More recently, we have designed a set of OviTex products specifically for use in the inguinal hernia repair (“IHR”), which we expect to launch in the second quarter of 2024.

In addition, we have also designed an OviTex product specifically for use in laparoscopic and robotic-assisted hernia repair, which we market as OviTex LPR and began commercializing in November 2018.

In February 2023, we launched two larger configurations of OviTex LPR, designed for ventral and incisional hernias.

In April 2024, we launched OviTex IHR Reinforced Tissue Matrix, a new OviTex configuration specifically designed to address inguinal hernia procedures performed robotically and laparoscopically.

We have also focused on evaluating and publishing clinical data on the effectiveness and safety of our OviTex products.

To date, there have been over thirty published or presented works relating to these clinical findings, either by us or a third-party evaluating the OviTex product.

To date, there have been over forty published or presented works relating to these clinical findings, either by us or a third-party evaluating one or more product configurations in our OviTex portfolio.

In October 2022, the 24-month results of our single arm, multicenter post-market clinical study, which we refer to as our BRAVO study, were published in the Annals of Medicine and Surgery .

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The recurrence rate at the 24-month time point was 2.6%, and surgical site occurrences (“SSOs”), were observed in 38% of the study population.

Of the enrolled patients, 78% were characterized as high risk for experiencing an SSO based on at least one known risk factor, which included obesity, active smoking, COPD, diabetes mellitus, coronary artery disease, or advanced age (≥75 years).

Of the enrolled patients, 78% were characterized as high risk for experiencing an SSO based on at least one known risk factor, which included obesity, active smoking, chronic obstructive pulmonary disease (“COPD”), diabetes mellitus, coronary artery disease, or advanced age (≥75 years).

The results also indicated that BRAVO patients experienced statistically significant and clinically meaningful improvements in their quality of life and perceived health based on patient responses to the EuroQol-5 Dimension (EQ-5D) health assessment and the validated 12-question Hernia-Related Quality of Life survey (HerQLes).

In addition to the BRAVO study and other current clinical initiatives, we also commenced enrollment in May 2021 for our BRAVO II study, a prospective study evaluating the use of OviTex in robot-assisted ventral and inguinal hernia repairs.

In addition to the BRAVO study, we have also initiated other clinical data collection initiatives evaluating the use of OviTex across a variety of hernia and abdominal wall reconstruction procedures.

Among these other initiatives, we continue to enroll patients for our BRAVO II study, a prospective study evaluating the use of OviTex in robot-assisted ventral and inguinal hernia repairs.

Our second portfolio of products, the OviTex PRS Reinforced Tissue Matrix, (“OviTex PRS”) which we first commercialized in the U.S.

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OviTex PRS is indicated for use in implantation to reinforce soft-tissue where weakness exists in patients requiring soft-tissue repair or reinforcement in plastic and reconstructive surgery.

Our OviTex PRS portfolio consists of three product configurations with two or three layers of high-quality tissue derived from ovine rumen (the forestomach of a sheep), which is

reinforced with either permanent or resorbable polymer for added strength, stabilization, and controlled stretch.

Our OviTex PRS portfolio consists of three product configurations with two or three layers of high-quality tissue derived from ovine rumen, which is reinforced with either permanent or resorbable polymer for added strength, stabilization, and controlled stretch.

These products are designed to improve outcomes by facilitating functional tissue remodeling while controlling the degree and direction of stretch.

In August 2023, we announced the launch of our OviTex PRS Long-Term Resorbable product configuration, which was designed to enhance the OviTex PRS portfolio with specific design features including bi-directional stretch and a fully resorbable, long-term polymer for reinforcement.

OviTex PRS Long-Term Resorbable, our most recent product configuration, launched in August 2023, and was designed to enhance the OviTex PRS portfolio with specific design features including bi-directional stretch and a fully resorbable, long-term polymer for reinforcement .

Our OviTex PRS portfolio is supported by non-human primate data that demonstrated more rapid tissue integration and tissue remodeling compared to the market leading biologic matrix used in this indication.

In addition, there have been a growing number of published or presented works evaluating the use of OviTex PRS in plastic and reconstruction applications.

We also continue to enroll patients in our OPERA study, a retrospective-prospective trial evaluating the safety profile of OviTex PRS in previous pre-pectoral and sub-pectoral implant-based breast reconstructions.

Based on the current sales of biologic matrices in the U.S., we estimate the annual U.S.

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In March 2023, we received an additional 510(k) clearance for our OviTex PRS Long-Term Resorbable device, which is currently held by us.

We have also engaged in discussions with the FDA regarding an Investigational Device Exemption (“IDE”) protocol to study the safety and effectiveness of our OviTex PRS product for an indication in breast reconstruction surgery.

The FDA has stated that a premarket approval (“PMA”), rather than 510(k) clearance will be required for such an indication.

We have also commenced a retrospective clinical study evaluating the effectiveness and safety of our OviTex PRS products.

We also continue to expand our service offerings and diversify our supplier base as we continue to create a soft tissue preservation and restoration portfolio, including through the development of complimentary solutions in our indications such as atraumatic mesh fixation devices or surgical wound management and infection control.

In September 2023, we entered into a distribution agreement with Advanced Medical Solutions Limited, a company registered in England, to be their exclusive distributor of their LiquiFix Hernia Mesh Fixation Devices (LiquiFix FIX8™ and LiquiFix Precision™).

In May 2024, we received clearance of a Special 510(k) related to minor changes to our OviTex PRS Permanent and Short-Term Resorbable devices.

In October 2024, we received approval from the FDA for our investigational device exemption application relating to the study of the safety and effectiveness of our OviTex PRS product in implant-based breast reconstruction.

We continue to evaluate and finalize the clinical study protocol and anticipate additional FDA interactions related to such to support a pre-market application to obtain approval for an indication for OviTex PRS for use in breast reconstruction.

Historically, we have sought to expand our service offerings beyond our OviTex and OviTex PRS products through commercial partnerships to distribute complimentary soft tissue preservation and restoration solutions.

Some additional product offerings include or have included atraumatic mesh fixation devices or surgical wound management and infection control solutions.

In September 2023, we entered into a distribution agreement with Advanced Medical Solutions Limited, a company registered in England, to distribute their LiquiFix Hernia Mesh Fixation Devices (LIQUIFIX FIX8™ and LIQUIFIX Precision™).

In March 2024, we announced the full commercial launch of LiquiFix in the U.S.

We previously co-developed and commercialized our NIVIS Fibrillar Collagen Pack (“NIVIS”), an absorbent matrix of Type I and Type III bovine collagen designed to manage moderately to heavily exudating wounds and to control minor bleeding, in partnership with Regenity Biosciences.

We previously co-developed and commercialized the NIVIS Fibrillar Collagen Pack, (“NIVIS”) an absorbent matrix of Type I and Type III bovine collagen designed to manage moderately to heavily exudating wounds and to control minor bleeding, in partnership with Regenity Biosciences.

In March 2024, we sold our distribution rights to MiMedx Group, Inc.

in exchange for 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.

We continue to assess additional strategic partnerships with medical device companies whereby we may enter into distribution, product development and/or licensing agreements for new products complimentary to, or related to, existing and future products in our distribution channel.

We may assess additional strategic partnerships with medical device companies whereby we may enter into distribution, product development and/or licensing agreements for additional products complimentary to, or related to, existing and future products in our distribution channel, which could result in the payment by us of single digit percentage royalties or other product acquisition costs

We have a broad portfolio of intellectual property protecting our products that we believe, when combined with the proprietary manufacturing processes associated with our products and our know-how, provides significant barriers to entry.

Our intellectual property applies to our differentiated product construction and materials.

In addition, we believe our exclusive manufacturing and long-term supply and license agreement (the “Aroa License”) with Aroa creates a competitive advantage by allowing us to secure an exclusive supply of ovine rumen at a low cost.

Ovine rumen is the source of the biologic material used in our OviTex and OviTex PRS products.

In addition, we believe our exclusive manufacturing and long-term supply and license agreement with Aroa (the “Aroa License”) creates a competitive advantage by allowing us to secure an exclusive supply of ovine rumen at a low cost.

Ovine rumen, the forestomach of a sheep, is the source of the biologic material used in both of our OviTex and OviTex PRS products.

We use biologic material from ovine rumen because of its plentiful supply, optimal biomechanical profile and open collagen architecture that allows for rapid cellular infiltration.

Our OviTex products are manufactured by Aroa at their FDA registered and ISO 13485 compliant facility in Auckland, New Zealand.

We purchase product from Aroa at a fixed transfer cost as a percentage of Aroa’s cost of goods sold, and, with the exception of our recent IHR-dedicated products equals 27% of our net sales of licensed products.

Our OviTex and OviTex PRS products are manufactured by Aroa at their FDA registered and ISO 13485 compliant facility in Auckland, New Zealand.

We purchase product from Aroa at a fixed transfer cost as a percentage of Aroa’s cost of goods sold, and subject to a true-up adjustment, resulting in an amount equal to 27% of our net sales of our OviTex and OviTex PRS products, with the exception of OviTex IHR product configurations, for which we pay the greater of the initial fixed transfer cost or 27% of our net sales of OviTex IHR.

This revenue sharing arrangement allows us to competitively price our products and pass along cost-savings to our customers.

We market our products through a single direct sales force, predominantly in the U.S., as augmented by a smaller number of sales representatives and distributors in certain European countries.

We primarily market our products through a single direct sales force, predominantly in the U.S., with a small number of sales representatives in the United Kingdom and European Union, and also utilize a smaller number of independent contractors and distributors in the United States and certain European countries.

We have invested in our direct sales and marketing infrastructure to expand our presence and to promote awareness and adoption of our products.

As of December 31, 2024, we had 75 sales territories in the U.S.

As part of our commercial strategy, we plan to continue to invest in our commercial organization by hiring additional territory managers and administrative and field-based support

employees to support and service new accounts for soft-tissue reconstruction procedures.

and 13 sales territories in Europe.

We believe we can enhance the productivity of our sales force by improving customer segmentation and targeting, implementing and further refining our proprietary training programs, leveraging support from our medical education and medical affairs functions to drive physician awareness, education and clinical understanding of our products, and utilizing engagement analytics to support further product development and enhancement opportunities.

Additionally, we have contracted with three national group purchasing organizations (“GPOs”) covering our OviTex and OviTex PRS products and plan to continue to contract with additional GPOs and other integrated delivery networks (“IDNs”) to increase access to and penetration of hospital accounts.

We are currently devoting research and development resources to develop additional variations of our OviTex and OviTex PRS product lines, including the additional IHR configurations to further enhance product compatibility in robotic procedures, larger versions of our current product configurations, the development of configurations with longer-acting resorbable polymers and other potential product and packaging enhancements to extend the shelf life of our products.

Additionally, we have contracted with three national group purchasing organizations (“GPOs”) in the United States covering our OviTex and OviTex PRS products and plan to continue to contract with additional GPOs and other integrated delivery networks (“IDNs”) to increase access to and penetration of hospital accounts for all products we commercialize.

We are currently devoting research and development resources to develop additional variations of our OviTex and OviTex PRS products, including larger versions of our current OviTex PRS product configurations, the development of OviTex configurations with longer-acting resorbable polymers and other potential product and packaging enhancements to extend the shelf life of our products.

In addition, we also continue to explore the development of lower-cost, higher-margin resorbable polymer-based devices targeting our current indications.

We are also exploring additional technologies that may complement our existing products, or expand the number of our product lines, in each case within the hernia, plastic and reconstruction, and broader soft-tissue reconstruction and preservation markets.

We are also exploring additional technologies that may complement our existing products, or expand the number of our products, in each case within the hernia, plastic and reconstruction, and broader soft-tissue reconstruction market.

We intend to continue to make investments in research and development efforts to develop improvements and enhancements to our product portfolio.

We are also assessing strategic partnerships with medical device companies whereby we may enter into distribution, product development and/or licensing agreements for products complimentary to, or related to, existing and future products in our distribution channel, which could result in the payment by us of single digit percentage royalties or other product acquisition costs.

Our business was directly impacted by the COVID-19 pandemic.

We experienced volatility in demand for our products which primarily resulted from government and hospital restrictions, as well as patient health and safety concerns, decreasing the volume of elective procedures using our products.

While procedure volumes have continued to normalize to pre-pandemic levels, we continue to monitor any lingering economic effects on labor and hospital staffing levels, procedural volumes and ultimately on our results.

Our revenue for the years ended December 31, 2024 and 2023 was $69.3 million and $58.5 million, respectively, which represents an increase of $10.8 million, or 19% for the year ended December 31, 2024.

Our net loss for the same time periods was $46.7 million and $44.3 million, respectively, which represents an increase of $2.4 million, or 5% for the year ended December 31, 2023.

Our net loss for the same time periods was $37.8 million and $46.7 million, respectively, which represents a decrease of $8.8 million, or 19% for the year ended December 31, 2024 inclusive of the gain recognized of $7.6 million on the sale of NIVIS to the MiMedx Group, Inc.

As of December 31, 2024, we had an accumulated deficit of $358.7 million.

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Increased pain from the hernia is the most common reason that a patient who is deferring surgical hernia repair will ultimately elect repair surgery.

Following surgical hernia repair, convalescence has a significant socioeconomic impact.

Following surgical hernia repair, convalescence has a significant

socioeconomic impact.

Absence from work during this period can range from approximately five to 14 days according to one study.

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current addressable market opportunity for our OviTex PRS products to be approximately $800 million.

Given the limitations of and lack of innovation in existing biologic matrices for plastic and reconstructive surgical procedures, we believe a significant market opportunity exists for our OviTex PRS portfolio products.

Current Materials Used in Hernia Repair and Abdominal Wall Reconstruction and Their Limitations

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Surgical instruments and devices, such as mesh products, are then delivered to the surgical site through a trocar, which is an access port to the patient’s abdomen or groin.

assisted surgery is also performed using small incisions in the patient’s abdomen or groin and a trocar, but the surgeon sits at a console in the operating room and operates the robotic instruments remotely.

Robotic-assisted surgery is also performed using small incisions in the patient’s abdomen or groin and a trocar, but the surgeon sits at a console in the operating room and operates the robotic instruments remotely.

At the advent of hernia repair, all procedures were performed using an open surgical technique in which an incision is made through the body to access and repair the hernia.

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Based on longitudinal data from the Danish Hernia Database, in an analysis of approximately 2,900 patients who received a hernia repair using a permanent synthetic mesh, the observed rate of surgical intervention due to either recurrence or mesh-related complications at five years post operatively was approximately 17%.

As a result of these complications and litigation involving these complications, the number of adverse events reported to the FDA for permanent synthetic mesh hernia repairs has risen from 1,484 in 2016, 3,220 in 2017, 9,887 in 2018 to 18,072 in 2019.

Synthetic mesh products have been the subject of an increasing number of lawsuits with over 25,000 cases filed in federal and state courts across the U.S.

as of March 2024.

As a result of these complications and litigation involving these complications, the number of adverse events reported to the FDA for synthetic mesh hernia repairs has climbed from over 2,400 reported events in 2016, to over 21,000 in 2019, while remaining in excess of 8,000 reported events per year in each of 2023 and 2024.

Synthetic mesh products have been the subject of a significant number of lawsuits over this time period, with approximately 15,000 cases outstanding in federal and state courts across the U.S.

as of November 2024, and not inclusive of more than 40,000 cases that have been settled or dismissed in the prior three-year period.

Biologic Matrices

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Resorbable synthetic mesh is polymer-based and does not include biologic material to promote tissue remodeling and healing.

Despite improvements

compared to the use of permanent synthetic mesh or biologic matrices, current limitations of resorbable synthetic mesh may include:

Despite improvements compared to the use of permanent synthetic mesh or biologic matrices, current limitations of resorbable synthetic mesh may include:

● significant foreign body inflammatory response that can result in encapsulation or contraction of the mesh until resorbed;

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Additionally, biologic matrices are typically expensive to source.

We have created a new category of tissue reinforcement materials that were purposefully designed in close collaboration with more than 100 surgeons to address the unmet clinical needs in soft-tissue reconstruction.

Our portfolio of products, generally designed with over 95% biologic material, combines the benefits of both biologic and polymer materials while addressing their limitations by interweaving polymer fibers through layers of a minimally-processed biologic material.

We have created a new category of reinforced tissue matrices that were purposefully designed in close collaboration with more than 100 surgeons to address the unmet clinical needs in soft-tissue reconstruction.

Our portfolio of products, generally designed with over approximately 95% biologic material, combines the benefits of both biologic and polymer materials while addressing their limitations by interweaving polymer fibers through layers of a minimally-processed biologic material.

These products are priced competitively and designed for use with a range of surgical techniques, allowing the benefits of an advanced biologic repair to be available to more patients for use in accordance with the products’ 510(k) clearances and instructions for use.

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This material consists of an intact, minimally-processed extracellular matrix derived from ovine rumen, which is the forestomach of a sheep.

Polymer fibers are interwoven through the layers of biologic material in unique embroidered patterns and contribute to approximately 5% of the overall device by mass.

Polymer fibers are interwoven through the layers of biologic

material in unique embroidered patterns and contribute to approximately 5% of the overall device by mass.

The interwoven polymer utilized can be either permanent, made from polypropylene, or resorbable, made from polyglycolic acid (“PGA”) or polylactic-co-glycolic acid (“PLGA”).

The embroidering pattern varies between our OviTex and OviTex PRS portfolios to impart different biomechanical properties tailored for their respective intended clinical applications.

The embroidering pattern varies between our OviTex and OviTex PRS products to impart different biomechanical properties tailored for their respective intended clinical applications.

Our OviTex products are designed with a lockstitch embroidery pattern that is sewn in a grid pattern to minimize unraveling (when cut).

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These competencies also allow our technical team to tailor the degree of stretch, direction of stretch, overall strength, handling properties, permeability, thickness, texture, size and shape of each reinforced tissue matrix to suit the needs of particular clinical applications and surgical techniques.

This expertise has been utilized in the development of our OviTex and OviTex PRS products and is currently being leveraged in the development of our additional OviTex and OviTex PRS product pipeline seeking to enhance product features for various applications within our indications.

This expertise has been utilized in the development of our OviTex and OviTex PRS products, including our OviTex LPR and OviTex IHR configurations and is currently being leveraged in the development of our additional configurations within product pipelines seeking to enhance product features for various applications within our indications.

Our reinforced tissue matrices are designed to improve the outcomes of soft-tissue reconstructions by reinforcing tissue while allowing rapid tissue integration, revascularization and biomechanical control.

In addition to overall strength, a key property that we engineer into our products is the degree to which they stretch, known as compliance.

In addition to overall strength, a key property that we engineer into our products is the degree to which they stretch, which we refer to as compliance.

Each of our products is designed to exhibit a degree of compliance appropriate for its intended clinical application.

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were characterized as high risk for experiencing an SSO based on at least one known risk factor, which included obesity, active smoking, COPD, diabetes mellitus, coronary artery disease, or advanced age (≥75 years).

Based on this data, we believe that this recurrence rate is the lowest reported rate in any published study, including our biologic or resorbable synthetic mesh competitors.

We believe based on a review of available literature that the BRAVO recurrence rate is among the lowest reported rate in any published study, including our biologic or resorbable synthetic mesh competitors evaluating product use in this procedural setting and with a similar cohort of high-risk patients.

The addition of polymer to our reinforced tissue matrices allows each product to maintain its physiologic compliance properties, while resisting stretching and elongation.

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Our Strengths

We are focused on developing and commercializing a new category of tissue reinforcement materials for surgeons and patients that aim to address the shortcomings of existing products.

We are focused on developing and commercializing a new category of reinforced tissue matrix for surgeons and patients that aim to address the shortcomings of existing products.

We believe the following strengths will allow us to build our business and potentially increase our market penetration:

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Our Aroa License provides for the exclusive supply of ovine rumen and manufacture of our OviTex and OviTex PRS products, which gives us a low and fixed cost of raw materials.

● Potential cost savings to healthcare systems and hospitals.

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The ability to predictably control the biomechanical properties of a biologic matrix is the cornerstone of our product portfolio.

Our intellectual property also covers the development of extracellular matrix scaffolds derived from ovine rumen, methods for isolating these scaffolds from ovine rumen, layering multiple sheets of these ovine rumen scaffolds together, sewing in an anti-adhesive layer into a scaffold, and adding unique patterns sewn or embroidered into these scaffolds using different polymers to impart reinforcing strength.

Our intellectual property also covers the development of extracellular matrix derived from ovine rumen, methods for isolating these scaffolds from ovine rumen, layering multiple sheets of these ovine rumen matrices together, sewing in an anti-adhesive layer into a matrix, and adding unique patterns sewn or embroidered into these matrices using different polymers to impart reinforcing strength.

Our portfolio also includes patents covering implants with gripping strands, and implants with multivesicular liposomes that may be used to deliver drugs.

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The key elements of our strategy include:

● Expand our U.S.

● Successfully deploy our U.S.

commercial organization to support our growth.

We sell our products through a single direct sales organization in the U.S.

We primarily sell our products through a single direct sales organization in the U.S.

As of December 31, 2024, we had 75 sales territories in the U.S.

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based commercial organization.

We plan to continue to invest

in our commercial organization by hiring additional territory managers and administrative and field-based support employees to support and service new accounts for soft-tissue reconstruction procedures.

We plan to hire additional territory managers and field-based support employees to support and service new accounts for soft-tissue reconstruction procedures.

We believe we can also enhance the productivity of our sales force by improving customer segmentation and targeting, implementing and further refining our proprietary training programs, leveraging support from our medical education and medical affairs functions to drive physician awareness and education on our products, and utilizing engagement analytics to support product development.

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● Drive utilization through existing GPO and IDN contracts and secure additional contracts.

We are focused on partnering with our existing GPO- and IDN-contracted customers to promote implementation of our contracts, increase our access to surgeon customers, broaden awareness of products and help drive utilization of our products within associated hospitals and healthcare systems.

We are focused on partnering with our existing GPO- and IDN-contracted customers to promote implementation of our contracts, increase our access to surgeon customers, broaden awareness of products and our economic messaging and help drive utilization of our products within associated hospitals and healthcare systems.

To date, we have contracted with three national GPOs covering our OviTex and OviTex PRS products.

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We have begun our next post-market prospective study, BRAVO II, which evaluates OviTex LPR, OviTex Core Permanent and OviTex 1S Permanent in the robotic repair of ventral and inguinal hernias over 24 months.

With respect to OviTex PRS, in addition to independent, third-party publications evaluating the use of the product in various soft tissue applications, we also continue to enroll patients in our OPERA study, a retrospective-prospective trial evaluating the safety profile of OviTex PRS in previous pre-pectoral and sub-pectoral implant-based breast reconstructions.

Following receipt of our investigational device exemption application in October 2024 relating to the study of the safety and effectiveness of our OviTex PRS product in implant-based breast reconstruction, we continue to evaluate and finalize the clinical study protocol to eventually support a pre-market application to obtain approval for an indication for OviTex PRS for use in breast reconstruction.

● Advance our portfolio of reinforced tissue matrices with the introduction of new product features and designs.

We plan to continue to expand our product offerings and the treatment capabilities of our products to address a broader patient base within soft-tissue reconstruction.

As we innovate and develop our products, the new features and improved surgical techniques expand the clinical applications for soft-tissue reinforcement.

Areas of focus include enhanced surgical handling, increased permeability, and longer-acting resorbable polymers.

As we innovate and develop our

products, the new features and improved surgical techniques expand the clinical applications for soft-tissue reinforcement.

Areas of focus include enhanced surgical handling, larger product configurations, increased permeability, and longer-acting resorbable polymers.

Improving the surgical handling and implementation of our devices benefits both the clinician and patient.

We believe that increasing the size of our product configurations will support utilization in new surgical applications or with certain patient populations.

Increasing product permeability encourages a more-natural healing response.

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For example, in September 2023, we entered into a distribution agreement with Advanced Medical Solutions Limited, a company registered in England, to be their exclusive distributor of certain hernia mesh fixation devices in the U.S.

In March 2024,

we announced the full commercial launch of the LiquiFix Hernia Mesh Fixation Devices (LiquiFix FIX8™ and LiquiFix Precision™) in the U.S.

In March 2024, we announced the full commercial launch of the LiquiFix Hernia Mesh Fixation Devices (LiquiFix FIX8™ and LiquiFix Precision™) in the U.S.

Similarly, we continue to evaluate additional product opportunities that address patient health and unmet needs within the indications in which we operate.

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Our OviTex Reinforced Tissue Matrix has received 510(k) clearance from the FDA, which clearance was obtained and is currently held by Aroa and is intended for use as a surgical mesh to reinforce and/or repair soft-tissue where weakness exists.

Indications for use include the repair of hernias and/or abdominal wall defects that require the use of reinforcing or bridging material to obtain the desired surgical outcome.

Indications for use include the repair of hernias and/or abdominal wall defects that require the use of reinforcing

or bridging material to obtain the desired surgical outcome.

Our OviTex products can be used in a variety of hernia repairs, including simple and complex ventral, inguinal and hiatal hernias, as well as abdominal wall reconstructions.

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All of our OviTex products were designed to minimize the amount of polymer material implanted in patients.

The synthetic material in our OviTex products comprise less than 5% of our final product or approximately 12% in our OviTex LPR devices.

The synthetic material in our OviTex products comprise less than 5% of our final product or approximately 12% in our OviTex LPR devices or approximately 15% in our OviTex IHR devices.

Depending on the configuration selected, the amount of polymer is approximately 75% less than the polymer content of the most widely implanted permanent synthetic mesh, thereby reducing the patient’s foreign body inflammatory response to the polymer.

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Surgeons may select the most appropriate product from our OviTex portfolio based on the size of the defect, necessity or surgeon preference for internal organ contact, use of a minimally invasive or open surgical technique and risk of infection.

OviTex Laparoscopic and Robotic Procedures

OviTex Configurations for Laparoscopic and Robotic Procedures

Our OviTex LPR product was specifically designed for use in laparoscopic and robotic-assisted hernia surgical repairs.

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Based on surgeon feedback, OviTex LPR was designed in an elliptical or circular shape to minimize trimming.

Our OviTex IHR product was specifically designed for use in laparoscopic and robotic-assisted inguinal hernia repair and is available in anatomical and rectangle shapes.

OviTex Portfolio

Size and Shape

4 × 8 cm to 25 × 40 cm* (Rectangle or Square)

12 × 18 cm to 15 x 25 cm (Ellipse);

4x8 cm to 25x40 cm* (Rectangle or Square)

12x18 cm to 15x25 cm* (Ellipse);

9cm to 15cm (Round)

10x17 cm (Anatomical);

13x17 cm (Rectangle)

Layers of Ovine Rumen

Three or Four (anatomical);

Three (Rectangle)

Common Procedures

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Laparoscopic or Robotic-assisted surgery

Laparoscopic or Robotic-assisted inguinal hernia repair

Resorbable (PGA) or Permanent (Polypropylene)

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Permanent (Polypropylene)

Resorbable‑18 months

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Exposed polymer on one side, and one smooth side

Exposed polymer on both sides

Commercial Availability

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The third option, the long-term resorbable PRS, provides bi-directional stretch and longer resorption profile utilizing PLGA.

Our OviTex PRS product is available in arced rectangle, contour and oval shapes in a range of sizes (4 × 16 cm through 20 × 25 cm) to suit surgeon preference and nature of the soft-tissue repair in plastic and reconstructive surgery.

reconstructive surgery.

The device may be trimmed to a desired shape to further accommodate individual anatomy.

The current shelf life of permanent OviTex PRS is 36 months and the current shelf life of resorbable OviTex PRS is 12 months.

The current shelf life of permanent OviTex PRS is 36 months, the current shelf life of short-term resorbable OviTex PRS is 12 months and the current shelf life of the long-term resorbable OviTex PRS is 18 months.

Product Pipeline and Research and Development

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As we innovate and develop our products, the new features and improved surgical techniques expand the clinical applications for soft-tissue reinforcement.

Areas of focus include enhanced surgical handling, increased permeability, and longer-acting resorbable polymers.

Areas of focus include enhanced surgical handling, larger product configurations, increased permeability, and longer-acting resorbable polymers.

Improving the surgical handling and implementation of our devices benefits both the clinician and patient.

We believe that increasing the size of our product configurations will support utilization in new surgical applications or with certain patient populations.

Increasing product permeability encourages a more-natural healing response.

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In addition, we continue to explore the development of lower-cost, higher margin resorbable polymer-based devices targeting our current indications.

believe these technology enhancements and new product alternatives will continue to bolster our portfolio and expand the successful use of our products across a variety of soft-tissue surgical applications.

We believe these technology enhancements and new product alternatives will continue to bolster our portfolio and expand the successful use of our products across a variety of soft-tissue surgical applications.

Scientific Evidence

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We expect our clinical evidence will provide surgeons with safety and efficacy data on the appropriate use of our products and we plan to obtain further clinical evidence to support additional regulatory clearances or approvals of our reinforced tissue matrices for additional indications for use in the future.

Preclinical Program

Preclinical Programs

Our pre-clinical program is paramount in the design of our products.

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The OviTex PRS results have been published in the peer-reviewed journal ePlasty (ePlasty 2022;22:e43).

Clinical Program

Clinical Programs

We are committed to obtaining evidence to support the safety and efficacy of our products across their indications.

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The results also indicated that BRAVO patients experienced statistically significant and clinically meaningful improvements in their quality of life and perceived health.

Surgeons continue to use our OviTex PRS reinforced tissue matrices in their surgeries and, in addition to a potential IDE study, we have also commenced a retrospective clinical study evaluating the effectiveness and safety of our OviTex PRS products.

Surgeons continue to use our OviTex PRS reinforced tissue matrices in their surgeries and, in addition to a potential IDE study, we have also commenced our OPERA study, a retrospective-prospective trial evaluating the safety profile of OviTex PRS in previous pre-pectoral and sub-pectoral implant-based breast reconstructions.

Intellectual Property

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In addition, we paid Aroa $4.0 million in revenue-based milestone payments upon our achievement of certain net sales thresholds for sales of our products within the Licensed Territory.

As of December 31, 2022, we had satisfied all milestone payment obligations under the Aroa License.

We have satisfied all milestone payment obligations under the Aroa License.

We are responsible for commercializing the products manufactured for us by Aroa.

We pay Aroa for the supply and manufacturing of our products through a revenue sharing agreement.

Pursuant to the Aroa License, we purchase product from Aroa at a fixed transfer cost as a percentage of Aroa’s cost of goods, which, with the exception of our recent IHR-dedicated products, equals 27% of our net sales of licensed products.

For the IHR-dedicated products, this revenue share arrangement may be limited on an annual basis to ensure that Aroa retains at least the aggregate transfer pricing we pay for such products.

Pursuant to the Aroa License, we purchase product from Aroa at a fixed transfer cost as a percentage of Aroa’s cost of goods, and subject to a true-up adjustment, resulting in an amount equal to 27% of our net sales of our OviTex and OviTex PRS products, with the exception of OviTex IHR product configurations, for which we pay the greater of the initial fixed transfer cost or 27% of our net sales of OviTex IHR .

If at any point during the term of the Aroa License we and Aroa determine that our anticipated product needs exceed Aroa’s manufacturing capabilities, we and Aroa will mutually approve an expansion and equally share the cost of such expansion.

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patents that will expire in 2029 and 2031.

We own seventeen U.S.

issued or allowed patents which will expire between 2035 and 2041 and sixteen pending U.S.

We own twenty-three U.S.

issued or allowed patents which will expire between 2035 and 2041 and twelve pending U.S.

patent applications, which subject to issuance, are projected to expire between 2035 and 2045, without taking into account potential patent term extensions or adjustments.

In addition to our U.S.

intellectual property, we also own five issued non-U.S.

patents and three pending non-U.S.

patent applications, which, subject to issuance, would be projected to expire between 2036 and 2040 and have exclusively licensed issued patents in Europe and Canada that will expire in 2029.

intellectual property, we also own eight issued non-U.S.

patents and seven pending non-U.S.

patent applications, including six applications under the Patent Cooperation Treaty (“PCT”), which, subject to issuance, would be projected to expire between 2036 and 2044 and have exclusively licensed issued patents in Europe and Canada that will expire in 2029.

Our patents and patent applications cover, among other things, our corner-lock embroidery pattern, the use of adhesion barriers sewn into soft-tissue and compliance associated with stretching.

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We also rely on trademarks and trade designs to develop and maintain our competitive position.

TELA Bio ® , OviTex ® , Minimize the Foreign Body Footprint ® , and A More Natural Hernia Repair ® are registered trademarks of ours in the U.S.

TELA Bio ® , OviTex ® , the TELA Bio logo OviTex ® , Minimize the Foreign Body Footprint ® , and A More Natural Hernia Repair ® are registered trademarks of ours in the U.S.

and TELA Bio ® and OviTex ® are registered trademarks in the foreign jurisdictions in which we conduct our business.

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We have a number of design improvements for our reinforced tissue matrices in various stages of development that are expected to enhance our current products and increase surgeon adoption of our products.

In addition, we have engaged in discussions with the FDA regarding an IDE protocol to study the safety and effectiveness of our OviTex PRS portfolio

for an indication in breast reconstruction surgery.

The FDA has stated that a PMA, rather than 510(k) clearance, will be required for such an indication.

Our research and development efforts are based at our facility in Malvern, Pennsylvania.

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As of December 31, 2024, we had 133 employees in our U.S.

based commercial organization in 91 sales territories, which includes sales management, territory managers, marketing and administrative and field-based support staff.

We plan to continue to invest in our commercial organization by hiring additional territory managers and administrative and field-based support employees to support and service new accounts for soft-tissue reconstruction procedures.

based commercial organization in 75 sales territories, which includes sales management, territory managers, marketing and administrative and field-

based support staff.

We plan to hire additional territory managers and field-based support employees to support and service new accounts for soft-tissue reconstruction procedures.

Manufacturing

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We sell our products directly to our customers, which are hospitals and ambulatory surgery centers.

Except for our stocking distributors in Europe, we do not use distributors to sell our products.

Outside of Europe, we do not use stocking distributors to sell our products.

The medical device industry is intensely competitive, subject to change and significantly affected by new product introductions and other market activities of industry participants.

In the hernia repair market, our primary competitors are Bard, a subsidiary of Becton, Dickinson and Company, which produces Phasix and Ventralight ST, and LifeCell, a subsidiary of AbbVie, which produces Strattice.

In the plastic and reconstructive surgery market, our primary competitors are LifeCell, a subsidiary of AbbVie, which produces AlloDerm, MTF Biologics, which produces FlexHD and RTI Surgical, which produces Cortiva.

In the hernia repair market, our primary competitors are Bard, a subsidiary of Becton, Dickinson and Company, which produces Phasix and Ventralight ST, and Allergan, a subsidiary of AbbVie, which produces Strattice.

In the plastic and reconstructive surgery market, our primary competitors are Allergan, a subsidiary of AbbVie, which produces AlloDerm, MTF Biologics, which produces FlexHD, Novadaq, which produces DermACell, RTI Surgical, which produces Cortiva, Bard, which produces GalaFLEX, and Integra Lifesciences, which produces SurgiMend and DuraSorb.

Many of these competitors are large, well-capitalized companies with significantly greater market share and resources than we have, selling products that have been on the market prior to the commercialization of our products.

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● greater financial and human resources for product development, sales and marketing and patent prosecution;

● more established, wider-ranging and deeper contractual relationships with GPO and IDNs that can be leveraged to drive greater utilization of their products.

We believe that our continued ability to compete favorably depends on:

● successfully expanding our commercial operations;

● successfully deploying our commercial operations;

● continuing to innovate and maintain scientifically-advanced technology;

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Class I includes devices with the lowest risk to the patient and are those for which safety and effectiveness can be reasonably assured by adherence to a set of FDA regulations, referred to as the General Controls for Medical Devices, which require compliance with the applicable portions of the Quality Systems Regulations, or QSR, facility registration and product listing, reporting of adverse events and malfunctions, and appropriate, truthful and non-misleading labeling and promotional materials.

Some Class I devices, also called Class I reserved devices, also require premarket clearance by the FDA through the 510(k) premarket notification process described below.

Some Class I devices, also called Class I reserved devices, also require premarket clearance

by the FDA through the 510(k) premarket notification process described below.

Most Class I products are exempt from the premarket notification requirements.

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If the FDA agrees that the device is substantially equivalent to a predicate device currently on the market, it will grant 510(k) clearance to commercially market the device.

If the FDA determines that the device is “not substantially

equivalent” to a previously cleared device, the device is automatically designated as a Class III device.

If the FDA determines that the device is “not substantially equivalent” to a previously cleared device, the device is automatically designated as a Class III device.

The device sponsor must then fulfill more rigorous PMA requirements, or can request a risk-based classification determination for the device in accordance with the de novo classification procedure, which is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent to a predicate device.

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The FDA can always review these letters-to-file in an inspection.

If the FDA disagrees with a manufacturer’s determination, the FDA can require the manufacturer to cease marketing and/or request the recall of the modified device until marketing authorization is obtained.

If the FDA disagrees with a manufacturer’s determination, the FDA can

require the manufacturer to cease marketing and/or request the recall of the modified device until marketing authorization is obtained.

Also, in these circumstances, we may be subject to significant regulatory fines or penalties.

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If it is not, the agency will refuse to file the PMA.

If it is, the FDA will accept the application for

filing and begin the review.

If it is, the FDA will accept the application for filing and begin the review.

The FDA has 180 days to review a filed PMA application, although the review of an application can occur over a significantly longer period of time, and can take up to several years.

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Clinical trials are almost always required to support a PMA and are sometimes required to support a 510(k) submission.

All clinical investigations of investigational devices to determine safety and effectiveness must be conducted in

accordance with the FDA’s IDE regulations which govern investigational device labeling, prohibit promotion of the investigational device, and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators.

All clinical investigations of investigational devices to determine safety and effectiveness must be conducted in accordance with the FDA’s IDE regulations which govern investigational device labeling, prohibit promotion of the investigational device, and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators.

Some types of studies deemed to present a “non-significant risk” are deemed to have an approved IDE once certain requirements are addressed and Institutional Review Board, or IRB approval is obtained.

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Generally, clinical trials for a significant risk device may begin once the IDE application is approved by the FDA and the study protocol and informed consent are approved by an appropriate IRB.

There can be no assurance that submission of an IDE will result in the ability to commence clinical trials, and although the FDA’s approval of an IDE allows clinical testing to go forward for a specified number of subjects, it does not bind the FDA to accept the results of the trial as sufficient to prove the product’s safety and efficacy, even if the trial meets its intended success criteria.

number of subjects, it does not bind the FDA to accept the results of the trial as sufficient to prove the product’s safety and efficacy, even if the trial meets its intended success criteria.

During a study, the sponsor is required to comply with the applicable FDA requirements, including, for example, trial monitoring, selecting clinical investigators and providing them with the investigational plan, ensuring IRB review, adverse event reporting, record keeping and prohibitions on the promotion of investigational devices or on making safety or effectiveness claims for them.

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● the FDA’s refusal to issue certificates to foreign governments needed to export products for sale in other countries;

● withdrawing 510(k) clearance or premarket approvals that have already been granted;

● withdrawing approvals that have already been granted;

● criminal prosecution.

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Until May 25, 2021, medical devices were regulated by the Council Directive 93/42/EEC, or the Medical Devices Directive (“MDD”), which has been repealed and replaced by Regulation (EU) No 2017/745, or the Medical Devices Regulation (“MDR”).

There is a transition period during which certificates issued under the MDD remain valid, however, when such certificates expire the devices must be valid under Regulation (EU) 2023/607 of 15 March 2023

amending Regulations (EU) 2017/745 with regard to the transitional provisions for certain medical devices and in vitro diagnostic medical devices or be certified under the new regime set forth in the MDR.

There is a transition period during which certificates issued under the MDD remain valid, subject to compliance with certain requirements under the MDR (e.g.

having put in place a quality management system in accordance with the MDR by May 26, 2024).

The MDR went into effect on May 26, 2021, and it:

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Manufacturers are responsible for entering the necessary data on Eudamed, which includes the UDI database, and for keeping it up to date.

Eudamed is not yet fully functional, however the European Commission is aiming to have a fully functional version of the Eudamed medical device database available in the second quarter of 2024.

The Medical Device Coordination Group (MDCG) has published guidance on administrative practices for manufacturers until Eudamed is fully functional.

Post-Brexit, the MDR does not apply in the United Kingdom (except for Northern Ireland, which under the Northern Ireland Protocol is bound by certain EU laws).

The medical device legislative framework in the United Kingdom is set out in the Medical Devices Regulations 2002.

These Regulations are based on the previous medical device directives of the EU but have been amended so that they function properly now the United Kingdom is no longer part of the EU.

amended Medical Devices Regulations 2002 have introduced several changes including (but not limited to) replacing the CE mark with a UKCA marking, requiring manufacturers outside of the United Kingdom to appoint a “UK Responsible Person” if they place devices on the market in the United Kingdom and more wide-ranging device registration requirements.

For the time being, manufacturers can continue placing CE marked medical devices on the Great Britain market with the appropriate transitional agreements.

Eudamed is not yet fully functional and will be gradually rolled out.

Use of a particular module of Eudamed (e.g.

the UDI/device registration module) will become mandatory six months after the publication in the OJEU of the notice confirming the functionality of such module.

The Medical Device Coordination Group (MDCG) has published guidance (in November 2024) on the gradual roll-out of Eudamed.

The United Kingdom formally left the EU on January 31, 2020.

In respect of medical devices, since the end of the Brexit transitional period on January 1, 2021, medical devices must be registered with the Medicines and Healthcare products Regulatory Agency (“MHRA”) (the UK medicines and medical devices regulator) before being placed on the Great Britain market.

If a manufacturer of a device placed on the market in Great Britain is based outside of the United Kingdom, the manufacturer must appoint a UK responsible person with a registered place of business in the United Kingdom to act on the manufacturer’s behalf in respect of certain activities (e.g.

device registration).

CE marks issued by EU notified bodies to place medical devices on the market in the EU will remain valid in the United Kingdom up until, at the latest, June 30, 2028 (for CE marks issued under the EU MDD) or June 30, 2030 (for CE marks issued under the EU MDR), following which a UK Conformity Assessed (“UKCA”) mark will be required to place a device on the Great Britain market.

Manufacturers may choose to use the UKCA mark on a voluntary basis prior to such dates.

UCKA marking will, however, not be recognized in the EU.

The EU regulatory framework on medical devices continues to apply in Northern Ireland under the Windsor Framework and medical devices in Northern Ireland may either carry an EU CE mark or a UK and Northern Ireland CE mark (“CE UK(NI)”), although devices bearing the CE UK(NI) marking will not be accepted on the EU market.

Following a public consultation, the UK government is implementing changes to the medical devices legislation.

The first piece of legislation will come into force on June 16, 2025, and implements changes to the post-market surveillance requirements for medical devices in Great Britain, with the aim of facilitating greater traceability of incidents.

legislation will be put in place in 2025 and 2026 to introduce new pre-market requirements, including an international reliance procedure for approval of certain medical devices for the Great Britain market.

Privacy and Security Laws

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These laws may be similar to or even more protective than HIPAA and other federal privacy laws.

For example, California enacted the California Consumer Privacy Act (“CCPA”) which creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal data.

The CCPA went into effect on January 1, 2020, and the California Attorney General may bring enforcement actions for violations beginning July 1, 2020.

The CCPA has been amended from time to time, and it remains unclear what, if any, further modifications will be made to this legislation or how it will be interpreted.

And the CPRA, which will take effect in most material respects on January 1, 2023, modifies the CCPA significantly, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses to comply.

For example, the California Consumer Privacy Act (“CCPA”) is a comprehensive privacy law that created individual privacy rights for California residents and increased the privacy and security obligations of entities handling certain personal data, including sensitive personal information.

We may be subject to other state and federal privacy laws, including laws that prohibit unfair privacy and security practices and deceptive statements about privacy and security, laws that place specific requirements on certain types of activities, such as data security and texting, and laws requiring holders of personal information to maintain safeguards and to take certain actions in response to a data breach.

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The United Kingdom has transposed the GDPR into domestic law with a United Kingdom version of the GDPR that took effect in January 2021 (“UK GDPR”).

Currently, the GDPR and

UK GDPR remain largely aligned, but the United Kingdom has announced plans to reform the country’s data protection legal framework in its Data Reform Bill, which will introduce significant changes from the GDPR.

Currently, the GDPR and UK GDPR remain largely aligned, but the United Kingdom announced plans to reform the country’s data protection legal framework in its Data Reform Bill, which failed in the UK legislative process.

A new Data (Use and Access) Bill, or UK Bill, has been introduced into parliament.

If passed, the final version of the UK Bill may have the effect of further altering the similarities between the UK and EU data protection regime and threaten the UK adequacy decision from the EU Commission.

This may lead to divergence between the GDPR and UK GDPR.

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The federal Physician Payments Sunshine Act (“Sunshine Act”) which was enacted as part of the Patient Protection and Affordable Care Act (“PPACA”) generally requires certain manufacturers of a drug, device, biologic or other medical supply that is covered by Medicare, Medicaid or the Children’s Health Insurance Program and applicable GPOs to report on an annual basis:

(i) certain payments and other transfers of value given to certain healthcare professionals and teaching hospitals and (ii) any ownership or investment interest that U.S.

(i) certain payments and other transfers of value given to certain healthcare professionals and

teaching hospitals and (ii) any ownership or investment interest that U.S.

physicians, or their immediate family members, have in their company.

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Recently, the SEC and Department of Justice have increased their FCPA enforcement activities with respect to pharmaceutical companies.

Violations could

result in fines, criminal sanctions against us, our officers, or our employees, the closing down of our facilities, requirements to obtain export licenses, cessation of business activities in sanctioned countries, implementation of compliance programs, and prohibitions on the conduct of our business.

Violations could result in fines, criminal sanctions against us, our officers, or our employees, the closing down of our facilities, requirements to obtain export licenses, cessation of business activities in sanctioned countries, implementation of compliance programs, and prohibitions on the conduct of our business.

Enforcement actions may be brought by the Department of Justice or the SEC, and recent enacted legislation has expanded the SEC’s power to seek disgorgement in all FCPA cases filed in federal court and extended the statute of limitations in SEC enforcement actions in intent-based claims such as those under the FCPA from five years to ten years.

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In the U.S., the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively the “Affordable Care Act”, substantially changed the way healthcare is financed by both governmental and private insurers and significantly impacts the healthcare industry.

The Affordable Care Act is intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical and medical device manufacturers, and impose additional health policy reforms.

The Affordable Care Act was intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new fees on pharmaceutical and medical device manufacturers, and impose additional health policy reforms.

There have been significant ongoing judicial, administrative, executive and legislative efforts to modify or eliminate the Affordable Care Act.

For example, the Tax Act enacted on December 22, 2017, repealed the shared responsibility payment for individuals who fail to maintain minimum essential coverage under section 5000A of the Internal Revenue Code, commonly referred to as the individual mandate.

Other legislative changes have been proposed and adopted since passage of the Affordable Care Act.

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The American Taxpayer Relief Act of 2012 reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

The Affordable Care Act has been subject to challenges in the courts.

On June 17, 2021, the Supreme Court dismissed the most recent challenge to the Affordable Care Act, ruling that the plaintiffs lacked standing to challenge the law as they had not alleged personal injury traceable to the allegedly unlawful conduct.

Due to the Statutory Pay-As-You-Go Act of 2010, estimated budget deficit increases resulting from the American Rescue Plan Act of 2021 and subsequent legislation, Medicare payments to providers were further reduced starting on January 1, 2025;

however, legislation has been introduced (but not passed) in the U.S.

Congress that would, if enacted, reverse these payment reductions.

The Affordable Care Act has also been subject to challenges in the courts since it was enacted.

On June 17, 2021, for example, the Supreme Court dismissed the most recent challenge to the Affordable Care Act, ruling that the plaintiffs lacked standing to challenge the law as they had not alleged personal injury traceable to the allegedly unlawful conduct.

As a result, the Supreme Court did not rule on the constitutionality of the Affordable Care Act or any of its provisions.

Further changes to and under the Affordable Care Act remain possible, but it is unknown what form any such changes or any law proposed to replace or revise the Affordable Care Act would take, and how or whether it may affect our business in the future.

and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control healthcare costs, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

We expect that additional federal, state and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business