Third Quarter 2026 Earnings Call - TRISALUS LIFE SCIENCES INC

Financial Performance:

• Total revenue for Q3 2026 was $12.9 million, representing an 11% year-over-year increase from $11.6 million and a 13% sequential increase from $11.4 million in Q2.
• Gross margin improved to 86% from 84% in the prior year period, driven by lower average unit costs and manufacturing efficiencies.
• R&D expenses decreased to $3.2 million from $5.7 million year-over-year, primarily due to the non-recurrence of Nelotolimod clinical trial costs.
• Sales and marketing expenses were $10.7 million, down from $11.4 million in Q2 but up from $6.8 million in the prior year, reflecting investment in the expanded sales force.
• Adjusted EBITDA loss narrowed to $5.4 million from a loss in Q3 2025, supported by higher product revenue and lower operating expenses.
• The company ended the quarter with approximately $41 million in cash, sufficient to fund its strategic growth plan.

Guidance and Future Outlook:

• Full-year 2026 revenue guidance has been updated to $46 million–$48 million, reflecting 2%–6% growth over 2025 and accounting for slower sales ramp-up and a shift to super-selective procedures.
• Management anticipates a sequential revenue step-up in Q4 2027, though they are not providing specific numerical guidance for the quarter or 2027 yet, deferring formal 2027 guidance to the Q4 call.
• Key growth catalysts for 2027 include a full year of productivity from the expanded sales team, the broad launch of Trinav Advance, and improved reimbursement rates.
• The company aims to achieve meaningful double-digit growth in 2027 while stabilizing the cost base to reduce cash burn.

Business Segments and Product Lines:

• FDA clearance was received for Trinav Advance in September, enabling pressure-enabled drug delivery (PEDD) in small distal vessels previously inaccessible with the original Trinav.
• A limited market release of Trinav Advance is underway to gather early clinical and customer feedback ahead of a broader launch.
• Trinav remains the core revenue driver, with the addressable U.S. market estimated at $2.5 billion across liver embolization and other indications.
• Non-liver expansion is progressing: UAE retrospective studies are on track, TAE (Thyroid) registry data expected in Q1 2027, and JAE (Jugular) trial design is in progress.
• Nelotolimod data consolidation is expected by year-end, with pancreatic cancer strategy evaluation ongoing.

Market and Competitive Landscape:

• The primary competitor is the standard microcatheter, a commodity product used for decades; Trinav competes on superior drug delivery, precision, and safety.
• A shift toward super-selective Y90 administration for tumors 2cm and smaller has accelerated faster than anticipated, initially limiting revenue until Trinav Advance cleared.
• Revenue growth in existing territories remains strong, while new expansion territories (approx. 8 reps) are ramping slower than expected but showing sequential improvement.
• Ordering accounts increased by double digits year-over-year in Q3, with September being the strongest month for both account acquisition and units sold.

Risks and Challenges:

• Sales productivity in new expansion territories lagged initial expectations due to the time required for new representatives to build relationships and integrate workflows.
• A faster-than-anticipated market shift toward super-selective procedures in small distal vessels created a temporary gap in product coverage until Trinav Advance clearance.
• The company faces challenges in communicating the economic value of a premium-priced product to hospitals, though reimbursement improvements are helping.
• Forward-looking statements are subject to risks regarding actual results differing from projections due to market trends, regulatory changes, and operational execution.

Management Commentary and Tone:

• Management expressed confidence in the long-term strategy, emphasizing that the expanded sales footprint and Trinav Advance launch position the company for accelerated growth in 2027.
• The tone was optimistic about the reimbursement landscape changes but cautious regarding short-term Q4 revenue growth due to the product mix shift.
• CFO David Patience emphasized a disciplined approach to cost management while investing in sales expansion.
• CEO Mary Zella highlighted the safety profile of Trinav (0.02% reportable event rate) as a key validation of the technology's consistency.

Analyst Questions and Answers:

• Frank Takinen (Lake Street): Asked about slower ramping geographies and turnover; Management confirmed ~8 new territories are ramping slowly due to zero prior exposure, with negligible turnover and no new issues.
• Bill Flavanek (Canaccord): Inquired about the market size impact of super-selective Y90 and Q4 guidance; Clarified that super-selective cases (tumors <2cm) were a small portion of Q3 volume, and Q4 guidance reflects current field productivity rather than lack of confidence.
• Justin Walsh (Jones Trading): Asked about competitive dynamics; Reiterated that the standard microcatheter is the main competitor and the key sales challenge is proving economic value to justify the premium price.
• Charles Wallace (HSC Winwright): Inquired about new hires' productivity and Trinav Advance revenue in Q4; Confirmed no attrition among new hires and stated Q4 guidance excludes Trinav Advance revenue, with a broad launch expected after the limited pilot.

Other Key Points:

• CMS finalized payment rules effective Jan 1, 2027, reassigning the Y90 mapping code (C8004) to a higher APC, increasing payment by ~76% to ~$20,910.
• National pricing established for the new G-code (G0577) for PEDD embolization in office-based labs at ~$13,788 per procedure.
• Eleven active clinical studies across 27 sites with over 400 patients are generating evidence to prove efficacy, patient selection, and economic value.
• The company is structured to have a "payment path in every site of care" including hospital outpatient, ASCs, and office-based labs starting 2027.