TriSalus Life Sciences, Inc. Q2 FY2025 Earnings Call

Good afternoon, and welcome to TriSalus Life Sciences Second Quarter 2025 Earnings Conference Call. As a reminder, this call is being recorded for replay purposes. I will now turn the call over to Jeremy Feffer, Managing Director with LifeSci Advisors. Please go ahead, sir.

Thank you, operator, and thank you all for participating in today's call. Joining me today from TriSalus Life Sciences are Mary Szela, President and Chief Executive Officer; David Patience, Chief Financial Officer; and Dr. Richard Marshall, Medical Director. Ms. Szela will provide an overview of the company's second quarter results and strategy for the balance of the year, and then David will review the financial results for the quarter in detail. Following their prepared remarks, Dr. Marshall will join the call to help address questions from covering analysts. Earlier this afternoon, TriSalus released its financial results for the quarter ended June 30, 2025. A copy of this press release is available on TriSalus's website. Before we begin, I would like to remind you that management will make statements during this call that includes forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Any statements contained in this call other than the statements of historical fact are forward-looking statements. All forward-looking statements, including, without limitation, statements relating to our sales and operating trends, business and hiring prospects, financial and revenue expectations and future product development and approvals are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties, including the impact of macroeconomic conditions and global events that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our Form 10-Q on file with the SEC and available on EDGAR and in other reports filed periodically with the SEC. TriSalus disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, August 12, 2025. And with that, I'll turn the call over to Mary.

Thank you, Jeremy, and good afternoon, everyone. Thank you for joining us for our review of our second quarter 2025 results. Before we begin, I'd like to personally welcome David Patience to the TriSalus team as our Chief Financial Officer. David joins TriSalus with deep expertise in capital markets and a proven track record of financial leadership and operational excellence. His strategic insight and executional strength will be instrumental as we accelerate into our next phase of growth. We're thrilled to welcome him to the team. David will follow my remarks to provide a more in-depth review of our financial results for the quarter. With that, let's begin. I'm pleased to report that our second quarter results were strong with $11.2 million in net sales, a 52% increase compared to Q2 2024 and a 22% sequential gain over our first quarter 2025 results. During the quarter, we also announced the launch of the TriNav FLX infusion system, successfully completed a $22 million private placement with healthcare-focused institutional investors, pursued new clinical applications, expanded our market opportunity and simplified our capital structure through the successful completion of our exchange offer and consent solicitation for preferred stock. This additional capital raise strengthens our balance sheet and provides the resources needed to invest further in our commercial strategy. TriSalus remains sharply focused on executing a strategy that expands the clinical and commercial potential of our pressure-enabled drug delivery, PEDD platform across multiple solid tumor types and novel interventional procedures. In parallel, we are advancing partnership discussions for nelitolimod to support its development across several high-value oncology indications. These initiatives are central to unlocking long-term value, and we're encouraged by the growing momentum across our programs. Our strategic priorities include driving adoption of PEDD across a broad range of solid tumors, advancing new clinical applications for TriNav, expanding our TriNav product portfolio with the launch of the TriNav FLX Infusion System, along with new TriNav devices specific to future indications where needed, improving operational performance in manufacturing and gross margins and continuing to build a high-growth, scalable organization. Specific to our commercial strategy and TriNav adoption, we've maintained strong momentum in the quarter, gaining further penetration in the complex liver embolization market while continuing to expand the TriNav platform into new clinical settings. In April, we announced that the Centers for Medicare and Medicaid Services issued a new code, providing coverage for simulation or mapping procedures using TriNav. This new code allows clinicians to use TriNav for both treatment planning and delivery and radioembolization, effectively doubling the reimbursable use of our technology and supporting broader adoption. We see the key requirement for interventional radiologists to effectively treat a broad range of tumors is access to a portfolio of devices that address varying anatomical and delivery challenges. TriSalus continues to expand our product suite to meet these needs, offering a range of technologies with differentiated features and sizes tailored to the complexity of the tumor vasculature. As part of our innovation-driven strategy, we recently launched TriNav LD and TriGuide, enabling pressure-enabled drug delivery in larger vessels. Additionally, we are pleased to announce the full commercial launch of TriNav FLX, formerly TriNav 2.0, which has demonstrated improved trackability and is engineered specifically for use in tortuous vascular anatomy. This next-generation device strengthens our PEDD platform and enhances our ability to support interventional radiologists in addressing some of the most challenging clinical scenarios. We will continue to invest in the TriNav product portfolio to further deliver superior drug penetration, reduce complications and expand patient eligibility for TriNav usage. Initial sales since launch are exceeding our internal projections, and we're pleased to see our continual investment within our product suite is further fueling our commercial momentum. We believe TriNav is well-positioned to become the standard of care in liver embolization for complex patients. To accelerate this trajectory, we are executing a focused strategy centered on three pillars: strengthening the clinical evidence base, deepening engagement with key medical societies and driving sustained commercial expansion. These efforts are critical to establishing TriNav as the preferred solution in complex embolization procedures and unlocking its full market potential. Moving to an update on our development on nelitolimod. Following the successful completion of our Phase I trials for nelitolimod, we announced last quarter our strategic shift to a partnership-focused approach. This transition will eliminate all development-related expenses for nelitolimod by the end of 2025, while preserving the long-term value of the program. It also enables us to focus internal resources on the more immediate and expansive opportunities within our PEDD device technology platform. Phase I studies in multiple liver tumor types, which include metastatic uveal melanoma, hepatocellular carcinoma or HPC, and cholangiocarcinoma are now complete. Additionally, enrollment has concluded in PERIO-03, our Phase I trial evaluating nelitolimod in patients with locally advanced pancreatic cancer. We remain on track for final data from PERIO-03 in the second half of 2025. Currently, we're in the midst of preparing final reports and data presentations to support future partnership interactions. The completion of patient enrollment and closure of these trials are anticipated to result in a meaningful reduction in R&D expenditures, particularly in the second half of 2025, with no further development spend projected for 2026. While early days, we see strong tailwinds from our strategic shift to partner nelitolimod development and focus on near-term investment in both expanding our TriNav product portfolio as well as our clinical body of evidence to further support our commercial efforts. We see this as an example of our prudent capital allocation strategy as we continue to streamline expenses and focus on meaningful near-term growth. Now turning to our strategy and new clinical applications for the TriNav product portfolio. Last quarter, we launched the PROTECT Registry, a multicenter effort led by Sarasota Memorial and others, evaluating PEDD for patients with thyroid nodules or goiters, who are not candidates for surgery, radioiodine or ablation. The goal is to assess disease-related quality of life, thyroid function and outcomes following PEDD-based thyroid artery embolization. This novel approach called PED-TAE was pioneered by Dr. Juan Camacho. Dr. Camacho has now treated over 40 patients and presented outcomes, and we're encouraged by the growing interest in this application. A preliminary readout has been published in the Journal of Endocrine Society for this minimally invasive vascular intervention for patients with large non-cancer thyroid nodules using a pressure-enabled device. The primary outcome was the successful embolization via the inferior thyroid artery, volume reduction of thyroid and normalization of thyroid function. The results were quite impressive with 100% technical and clinical success, no neurovascular complications, 81% of patients experienced mild pain or discomfort, all of which were resolved within two weeks, 73% thyroid shrinkage and 71% achieved normal thyroid function. We're extremely encouraged by these results as this minimally invasive procedure is now available to patients in lieu of a complicated thyroidectomy surgery. Additionally, we've now launched a pilot registry within the emerging space of Genicular artery embolization or GAE, which provides patients with an alternative pain management and mobility option with a minimally invasive procedure to potentially delay total knee arthroplasty. Now turning to our operational performance. We're reiterating our guidance of 50% revenue growth to reflect our confidence in future growth. As stated last quarter, we remain committed to improving EBITDA performance while also making a deliberate decision to invest in strategic areas of the business. As discussed, we have accelerated the development of new clinical applications as well as expanding our commercial organization, which we believe will expand our addressable market and drive significant long-term value while delaying our path to being EBITDA positive or cash flow positive until 2026. As always, we remain a science-driven organization, committing to putting patients at the center of everything we do. Our progress is making a real difference for people living with liver, pancreatic and other solid tumors. Looking ahead, we're entering the second half of 2025 with strong tailwinds. Our strategic priorities are clear: deepening penetration in the liver embolization market, advancing the TriNav platform for multiple indications focused on the interventional radiology call point, generating and publishing new HEOR and clinical data, improving operational performance in manufacturing and gross margins, and continuing to build a high-growth, scalable organization. And with that, I'll turn the call over to David.

Good afternoon, everyone, and thank you, Mary, for the warm introduction. I'm truly excited to join TriSalus Life Sciences at such an inflection point in the commercial trajectory of TriNav. As we build on this momentum, I've committed to seizing growth opportunities while maintaining the financial discipline needed to achieve near-term cash flow positivity. As Mary stated earlier, results for the quarter were strong. Revenue for the period was $11.2 million, which is an increase of 52% year-over-year and an increase of 22% quarter-over-quarter. We also increased the number of unique ordering accounts by 28% year-over-year as well as increased TriNav utilization per unique ordering account. This is consistent with our expectations as we expand our reach within existing accounts, leveraging physician champions and broadening the product portfolio to increase both physician adoption and usage. Gross margin was 84% for the quarter compared to 88% for the second quarter of 2024. This year-over-year decline was primarily driven by lower manufacturing efficiency associated with the newly launched products, a dynamic we expect to improve as production scales and processes mature over the course of the year. Research and development expenses for the second quarter were $3.9 million compared to $4.7 million in the second quarter of 2024. During the second quarter, we incurred approximately $500,000 of nonrecurring expenses related to the nelitolimod closeout of clinical trial sites. As previously noted, we anticipate concluding the nelitolimod-related expenses by year-end. Moving forward, our focus will be on device innovation and expanding our rapidly growing clinical body of evidence with TriNav to further support market penetration in the liver embolization market and new applications of TriNav to further drive revenue growth. This strategic transition will reduce our ongoing R&D run rate expenses. Sales and marketing expenses for the second quarter were $7.2 million compared to $6 million in the second quarter of 2024. The increase reflects our previously communicated investment in the expansion of our commercial organization to scale our sales and marketing efforts for continued commercial momentum and growth. General and administrative expenses for the second quarter were $5.7 million compared to $4 million in the second quarter of 2024. The increase in G&A costs was primarily driven by approximately $1 million of nonrecurring legal and audit professional service expenses for our auditor transition and our various registration statements filed during the period. Moving forward, we plan to streamline G&A costs to meaningfully reduce the run rate expenses. Operating losses for the second quarter were $7.3 million compared to operating losses of $8.2 million in the second quarter of 2024. The reduction in operating losses was due to increased sales and reduced R&D expense associated with the ramp down of nelitolimod clinical trial spending. Adjusted EBITDA loss for the second quarter of 2025 was $5.3 million compared to $6.7 million in the second quarter of 2024. The decreased loss can be attributed to increased sales, reduced R&D expense and higher noncash stock-based compensation in 2025. At quarter end, cash and cash equivalents were $26.5 million, which includes approximately $22 million in gross proceeds through the private placement we conducted in April. We have sufficient liquidity to fund operations throughout 2025 and expect to become cash flow positive in early 2026. As part of the private placement, we reached an agreement with 55% of preferred shareholders to proceed with the exchange offer and consent solicitation completed in July with 99% of the outstanding preferred shares being tendered. Preferred shareholders exchanged preferred shares for 3.3 common shares. Non-tendered preferred shares were automatically converted and the exchange settled on August 1, 2025. This results in approximately 50 million basic shares outstanding, eliminated the 2027 reset provision and better aligned our long-term investor base with a more simplified capital structure moving forward. With that, we are ready to open the line for questions.

Our first question comes from Frank Takkinen with Lake Street Capital Markets.

This is Nelson Cox on for Frank. Congrats on all the progress this quarter. And I guess we'll start with the new mapping that's now effective since April. Maybe just talk about that a bit more. Any incremental color on the reception in the market there? And what kind of contribution you're starting to see from that would be helpful.

Yes, we're really excited to get that in early April. I'll have Dr. Marshall elaborate on it. This addition to reimbursement is very important because we previously lacked coverage for the mapping. As a result, it was only used for treatment. It's vital to utilize the same technology for both simulation mapping and treatment. We're beginning to see that physicians appreciate how quickly we secured this, and it’s contributing to the momentum we have. I'll have Dr. Marshall provide comments from a user's perspective, as this is a significant addition from a reimbursement standpoint.

Thanks, Mary. I can comment a lot on it because I'm part of this. So as you may know, mapping procedures are performed prior to delivering Y90 radiation into the liver. And it's very important to know exactly where that's going to go. And being able to map with the same catheter that you're going to treat with gives the physician a lot of confidence in what they're going to do. Previously, there was some hesitancy when physicians were mapping patients and thought they might not get reimbursed for the catheter. Now they can reliably use it, map with an apple, treat with an apple. So I think it gives physicians a lot more confidence to pull that and use it when they see fit for it.

That's helpful information. For David, I have a question about operating expenses. I understand there are some one-time costs included. Could you explain your thoughts on OpEx going forward? What base should we consider, and how should we approach modeling for the rest of the year as we aim for cash flow positivity and adjusted EBITDA for next year? Also, it would be beneficial to hear your thoughts on the strategic changes with partnerships.

Yes, of course. Thank you for the question. So yes, we remain confident in having an adjusted EBITDA positivity early next year. With that, we're going to see nelitolimod really, at the end of the day, close out mainly in the third quarter, you'll see the last real numbers coming through. And then from there, we should be thinking closer to a run rate of something in the neighborhood of $2 million, maybe $3 million early next year, moving to $2 million as we focus on the device innovation and building out our clinical body of evidence in R&D. And then sales and marketing, there are some one-timers with shows and the timing of those shows typically are in the second quarter in the summer. But with that, we're pretty confident with the current run rate where it is today. And then G&A is going to be my main focus moving forward, and we think we can get that down back to around like the low 4s here just by improving our audit and reducing our registration statements, and a lot of that is going to be seen here in the coming quarters.

Our next question coming from the line of William Plovanic with Canaccord.

First off, you mentioned that unique ordering accounts increased by 28% year-over-year. However, it seems that this only amounts to about a 3% or 4% growth sequentially. Could you provide some insight on that? Additionally, you mentioned investments in the commercial organization; could you elaborate on that further?

Yes, of course. So with the unique ordering accounts, I think last quarter, we discussed that it was going to be about 30 accounts from a back approval. So from that standpoint, unique ordering accounts are in kind of the low 300s, while back approvals are mid-300s from an approval standpoint. And then that's driving the increased utilization. Does that answer your question on unique ordering accounts and back approvals?

Well, help us understand what it was in first quarter and what it was in the second quarter? And how much of an increase was that sequentially?

Yes, of course. And so...

Maybe some of the terminology is changing. That's what I'm trying to understand.

Yes. No, fair question. So unique ordering accounts was up about 10% quarter-over-quarter. And then back approvals were up something in the neighborhood of 300, mid-300s. So that's roughly about 10% as well. So the focus for us over the past few years has been really opening a ton of accounts, and now we're shifting that focus to utilization per account as we're building off of our champions in each account and broadening the champion base within the account.

Okay. Regarding the new products, what kind of contribution did the large or the Tri-Guide make compared to the Flex? Is the Flex more of an opportunity for the second half of this year and into next year? I also have one last follow-up on prostate.

Yes. We estimate that the TriNav large is around 10% to 15%, which is giving us a nice boost from its availability. The recently launched FLX is exceeding our expectations. This technology addresses the challenges of tortuosity, allowing physicians to navigate to the desired location more effectively than with the TriNav. We're confident that FLX will enhance our utilization and address missed case opportunities in the second half of the year. I'm excited about this product as it completes our portfolio. Previously, we only had the TriNav, and with the addition of the large size, we now have FLX, enabling interventional radiologists to use TriNav in nearly every case.

Yes. Thanks, Mary. I think this is an important part of our portfolio, and this is a product of physician feedback. Specifically, when physicians look at a case before they start or at the beginning of the case, we do an angiogram and we find out what the anatomy of the arteries is. This addresses the physicians who will look at anatomy and say, 'Wow, I don't think I can get a catheter into that tortuous artery. I'm not going to use TriNav in this situation.' We heard that from physicians, and now we can give physicians a tool to do that. I use it quite frequently. I actually used it for a thyroid last week, and it worked really well. We can get it around some pretty tight corners, but the real impact is that physician confidence when they pull it, they know that they can go where they want to go.

My question is about thyroid. With the single site data published, does that drive adoption, or do you need to enroll the DELIVER trial to really move forward?

This is very exciting data for us as it's the first major publication of this novel application. The interest from physicians across the country is significant, with consistent inquiries from those wanting to utilize it. While we continue to promote our PROTECT registry as our primary avenue for thyroid artery embolization, we are receiving numerous inquiries about the procedure and strong interest from physicians everywhere.

Yes. And Bill, what we'd like to do is really build out a robust database. If the physician has interest, we'll train them and get them involved. And I think this is the first publication. So we're really excited about that. And we anticipate impact from thyroid just beginning in the back half of the year, but real impact in 2026.

Okay. That's fantastic. And then for my last question, how should we consider the third quarter's performance regarding the growth expected in the latter half of the year? I believe the consensus estimates are around $11.5 million to $12 million for the third quarter and closer to $13 million for the fourth quarter. I understand you have reaffirmed the guidance for over 50% growth, but I would like to focus more specifically on the third quarter.

Yes, Bill, this is David. Thanks for the question. And we're really proud of where we were for the second quarter with 22% growth sequentially. So we can get low double-digit growth for the next two quarters and get to our target. And we've taken a decent amount of that growth out of the equation, if you will. And we're confident we can get there. And just to round out your question on investment in the sales team because what we're doing is really bringing in a lot of structure and process into our sales commercial organization. And so with that, we're investing in sales leadership, process and structure to further improve that account utilization on a per rep basis and a per account basis. And so for us, that's giving us confidence in hitting those numbers.

Our next question coming from the line of Ross Osborn with Cantor Fitzgerald.

This is Matt Park on for Ross today. I guess just starting on gross margin, it came in a little bit softer than what we had. And I know you guys highlighted some lower manufacturing efficiencies as you start to ramp these newly launched products. Can you just walk us through the levers to see incremental margin expansion in the back half of this year and then into 2026?

Yes. No, it's a great point. So we're confident we can get back on track with gross margin after what was a minor setback for the quarter. Where we are is really getting a strong understanding of understanding our business, understanding the product mix from what's going to be TriNav, FLX and LV and then just really getting in that cadence of understanding the use cases for a forecasting perspective and then getting our teams to have an optimal lot size when they're going to be manufacturing. But this is something that we're taking very seriously, and this is something we're confident we can get back on track.

Got it. That's helpful. And then I guess one more for me on these registry trials. So please correct me if I'm wrong, but you initiated a pilot registry in GAE and then discussed previously about initiating one in uterine fibroid. I guess, can you just walk us through what type or level of evidence you need and you believe will be the most compelling to guideline committees as they evaluate TriNav in these procedures?

Yes. What we do is we just did a Phase 0 in GAE, and we did that specifically for collecting just a really broad array of various endpoints. And then we'll sit with our advisory committee, figure out what we think is the most powerful and influential ones to focus on, and then power the registry so we have the appropriate number of patients and follow-up so we can have a robust data set that we can include in guidelines. So our process really is let's collect the initial data, then we sit with our advisory panel. We formulate what we think are the right endpoints to focus on, and then we scale up this study to actually have the appropriate impact. So we did that on GAE. We hope to do that on UE in the fourth quarter of this year. So we're starting quite a number of different studies to actually implement that across this broad array of new applications.

Our next question comes from Suraj Kalia with Oppenheimer.

This is Seamus speaking for Suraj. Congratulations on the strong quarter. To begin, I know this may seem like a repeat of a previous question, but I'm trying to approach it from a different angle. What has been the mapping usage with TriNav since the mapping code was implemented? Specifically, what percentage of physicians were using that mapping code before it was put in place compared to what you are observing now? Additionally, what strategies are you employing to enhance mapping utilization among physicians?

Well, let me take it first with the second point. So how we're helping people increase the mapping utilization is we onboarded a reimbursement consultant called ZHealth. I don't know if you guys are familiar with this company. The key person who leads this event is an interventional radiologist. He's been in coding for 25 years. He actually leads many webinars, and we now have him as our back-office support for reimbursement. So he can work with coders directly on how to code specifically for mapping and for treatment. And that's been just an incredible resource. Just to give you a flavor of that, he had a webinar at the end of July. We had close to 8,000 people on the webinar. So that's kind of the key metric of how we're getting information out to the individuals of how to code for it. That's really been the biggest barrier on mapping. People are concerned about, will I get reimbursed? How do I do this with this new C-code? And so that's helped immensely. I will tell you, since April, it's really starting to grow. And we track it through our Veeva data, so it's representative reported. We can't really see the code until we have kind of another quarter of data and we can go into the data. But based on reports from our representatives, we're really starting to see a big acceleration following the reimbursement, and that really began in the May and June timeframe.

Got it. Appreciate that. That's helpful color. Just one last one from our end. I know you guys are focusing on a partnership for nelitolimod. I guess when could we expect to potentially to hear something? What are you looking for in a partner for a partner that you're going to bring in? And just any color there.

Yes, we're wrapping up the work on nelitolimod. We've been discussing it for some time and anticipate sharing data in Q3. We are looking for a partner who can help advance it to the next stage and bring it to market, particularly one that specializes in liver and pancreas treatments and understands the TLR9 mechanism and the effect of reducing myeloid-derived suppressor cells. We have a clear list of potential partners categorized into first, second, and third tiers that would find this a valuable addition to their portfolio. Once we acquire the final data, we will begin discussions in Q3, which we're eager to start. However, we recognize that the current biotech market environment is challenging, making it difficult to find a Phase I asset with strong data. Nevertheless, we look forward to initiating these discussions and hope to move forward effectively.

And I'm showing there are no further questions in the queue at this time. I will now turn the call back over to Mary Szela for any closing remarks.

Thank you, everyone. Really appreciate your interest in TriSalus.

This concludes today's conference call. Thank you for your participation, and you may now disconnect.