Conference Transcript - TLSI 2026-09-14

James Young, Head of Investor Relations

Good afternoon, and thanks for joining us to have a conversation with Mary Zella, president and CEO, and David Patience, CFO of Trisalus Life Sciences. Trisalus is a commercial stage medical device company whose FDA-cleared TriNav infusion system uses pressure-enabled drug delivery, or PEDD, and a one-way smart valve to modulate intratumoral pressure and flow, improving selective drug uptake into the tumor while limiting normal tissue exposure. The market at Trina sweet-generated $45.2 million in 2025, which was up 53% year-over-year, and management has guided for $54 to $57 million this year, following a first-half commercial reset which um which the field force was uh after which the field force was more than doubled so near-term milestones include potential 510k clearance for trinav advance cms finalization of the new office based office based lab g-code effective which is going to be effective january 1st and then a consolidated period phase one package for nelly tolimon in second half 26 and the first multicenter U.S. thyroid artery embolization data from the project registry in the first quarter of 27. So to discuss all these, I welcome Mary and David to this fireside chat. So glad to see you both and appreciate you taking time and, you know, coming down to talk to our audience today. So Mary, briefly, you know, for those who are new to trizylis, you know, how would you frame the long-term strategy and then also you have described the company you know taking on and decades old catheter essentially a tube with two holes and upgrading it into a roughly two and a half billion opportunity so first of all thank you so much for the opportunity to be here i'm delighted to share the trisella story with you we're a mission-driven company our goal is to infuse more therapy into solid tumors and if you look at oncology outcomes solid tumors have

Mary Szela, CEO

have really struggled with improvement and overall outcomes for patients and what we're starting to see in the oncology arena is incorporation of a lot of different combinatorial therapies where delivery to the tumor in addition to systemic therapy is happening more and more five years ago that was in the nascent delivery. They're now recognizing that the challenge of the reason why we're not getting those outcomes is oftentimes the drug doesn't get into the tumor. What led me to the company was my own personal experience. I'm a cancer survivor. My sister and I were both diagnosed with breast cancer. We lost my sister to breast cancer liver mets. And when she was dying, we had put her on a systemic tyrosine kinase inhibitor. And Roche asked us, could we do a rapid autopsy? We wanted to see what the concentration of the drug in our tumors were, and it was zero. And so what we saw was none of the therapy systemically was getting into the tumor. And why is that? So what Trisalus is solving is often these tumors have very high pressure inside them. Cells are rapidly dividing. There's like, they're very leaky new vessels that, You know, fluid leaks into, you know, the area of the tumor. There's not a good lymphatic system. So what happens is the pressure in the tumor is much higher than the heart can pump at. And so you don't get any therapy into the tumor. We developed a technology that we think is quite unique. Loon catheters were used kind of in the early, you know, approach to try to modulate pressure and overcome that. But they didn't really do it in the way that we needed to. Because these vessels are so new and fragile, oftentimes you could rupture them or you really didn't get the penetration of the therapy into the tumor because it stops flow. You use the balloon catheter to actually stop the therapy and the flow. What ours does is it's a valve-like structure that modulates pressure and flow, and it's very physiologic. When you place it in a vessel, it beats in synchrony with diastole and systole. So it gently opens up these collapsed vessels, and it allows forward flow. So it keeps the blood flowing moving so you can get deep into the tumor. But it also prevents off-target delivery because it has anti-reflux capability. So we've been using it primarily today, and where we're selling it is for liver-directed therapy. in 2020, when we got it cleared by the FDA, we got a designation called transitional pass-through payment. It was the first interventional radiology product in a long time to actually get that type of designation, demonstrating that it was statistically better, that we got more therapy into the drug other than a normal catheter. When you think about a normal catheter, think of it just like your garden hose. It's hard to kind of direct where flow is, particularly if there's you know, a stricture or whatever, sometimes when you undo that, you know what, it can get very wild. That's kind of how a catheter is. It really doesn't have a lot of control. It doesn't have the ability to influence pressure. It doesn't have the ability to, you know, overcome, you know, any type of, you know, significant back pressure. And we're very excited about this because we've demonstrated not only clinical outcomes, but health economic and outcome research outcomes that are quite persuasive and we've been growing very rapidly about 50 a year since we launched the product we made a decision this year because of the growth and the significant potential of the company to expand the sales organization quite significantly so we doubled that in size and to set us up for the future growth in the coming years perfect so um maybe you have said that currently you have a market share of over 10%

James Young, Head of Investor Relations

in the liver embolization procedures. So, and the other 90% is using the, you know, the old standard catheters. So, you know, what are the two or three catalysts that need to happen so that that percentage market share can increase?

Mary Szela, CEO

So I think there's a couple of things. One of the things that we as a company feel very proud of is that we want to be an evidence-driven company. So we want to produce, you know, comparative clinical trials to really demonstrate the value of the product. We want to show health, economic, and outcome research. We just completed the largest one ever for our technology in over 1,200 patients. And we also do registries. So we we want to correct the right evidence. So part of that, moving that market share with our goal to be standard of care, and we define that as over 50%, is how do we create the right cadre of evidence in each of the areas that we participate in that give physicians the confidence to do that? Right now, with the 10% market share, we get all those early adopters, people who can see that very, very clearly. One of the challenges that we have is interventional radiologists really weren't educated about the tumor microenvironment, some of the challenges with delivery and flow and treatment outcomes. They do know that if they get more drug into the tumor, just based on, you know, just extensive data and multiple different studies, not trisalis data, but other data, if you get more drug into the tumor, you tend to get an overall response that is substantially better that can correlate with overall survival. So that concept is well known by the interventional radiologist but they don't they don't they weren't really taught about some of just the physical you know the physiological challenges in getting drug to tumor and how to think about it and why our device could be a better solution so that's really about education it's really about teaching those physicians and that takes some time Okay.

James Young, Head of Investor Relations

Talking about education. So you have done this reset of the commercial structure itself, right? So roughly 40% of the territories are both, you know, rep to physician and rep to manager relationships have changed at one instance. And that obviously led to, you know, having a flat first half 26 disruption in sales yeah revenues but but at the same time you know the second quarter revenues it was a beat you know with 11 and a half million dollars reported and also you are reiterating your guidance of 54 to 57. so what are the factors that are giving you that confidence and also you know at what point do you think you know you will share those metrics with us so that we can model it out better for the future years?

Mary Szela, CEO

Yeah, we'll unlikely share the metrics because that's a proprietary, we've developed them ourselves. We actually have a very robust model that we use that we've followed very closely since the day we launched. And so we have some very, you know, hard metrics that we look at literally every day and that's a very clear predictor of our performance.

James Young, Head of Investor Relations

But, you know, we continue to manage that very tightly and so that helps us guide us of how we feel about how the business is performing and why we have confidence in terms of moving forward okay and also the guidance implies the second half is going to do much better than the first half you know and and since you just started you know this 40 percent of the the sales force roughly just in April, I think they came on board completely. So do you, you know, do you think they'll be able to, you know, deliver in time so that your second half looks as good as what you want it to look?

Mary Szela, CEO

So I think we're right now we're performing right on track. You're right that, you know, when we looked historically, when a new rep came into a territory or they had a new manager typically was a six to nine month ramp and you saw it heavily weighted to the back four months so we're early in the cycle based on what we see so far we're pretty pleased i think over time that will reveal itself but if it performs like it did in the past we're very comfortable with that okay so going back to the education question so the other way to educate is peer-to-peer So you said you're trying to increase that number. Yeah, we've substantially increased. We found that peer-to-peer was probably one of the most impactful and immediately responsive type of approaches because this is, again, interventional radiology is still a very apprentice type. You know, they're taught in the procedural room what to do. And so it just, that type of education just lends, this product lends it towards that approach.

James Young, Head of Investor Relations

Okay. So David, on the gross margin, you know, it was approximately 87% in the second quarter versus 84%, you know, a year ago. And you have pointed, you know, to roughly 93%, you know, as a ceiling. So what is the remaining, you know, how should we think about it to get to that point from here?

David Patience, CFO

Yeah, as we scale the operation, you know, we have a near-term focus on bringing out new products. You know, we have the formula with having the right durable reimbursement, as Mary outlined, and also having the right product set that is going to be anatomically able to deliver the therapeutics, but most importantly, give physicians their preference as well. And so with our new Trinev Advanced, which we're waiting for clearance any day, that's a new skew, a different catheter body. And so that is dragging on our, you know, right now our current yields. But, you know, we see 85% to 93% is where we should be. And then as we get more maturity into the manufacturing line, we will see, you know, towards that 90. As a reminder, we had Flex launched similar time last year, that drug on our margins for about a quarter, and we recovered quite nicely in the subsequent quarters.

James Young, Head of Investor Relations

And we're confident we can do that with the same team yeah anytime you introduce a new product it just takes a little bit of learning and then we can ramp you know snap right back up to our productivity okay one more question for you david on trying to turn the business cash flow positive you know you said you know you need to get about 80 million in an annual run rate so what needs to happen you know for you to get there And then also, do you think you need not only additional SKUs, but also additional investment in terms of either organically or inorganically to grow the pipeline?

David Patience, CFO

Of course. And just taking a step back, if you're new to the story, with the Salesforce expansion, we moved our annual GAAP operating expenses from about the low $60 million to probably about $70 million on a GAAP perspective on an annual basis. and at, you know, you just do the math at an 85 to, you know, about a 90% gross margin, we can be cashflow positive, essentially between 19 and $21 million on a quarterly basis. That's not too far off of where we expect this Salesforce team to be, you know, in, you know, the coming quarters and exiting the year with a very strong run rate. So for us, we're very focused on getting this team productive, capable of what they're able to achieve in the procedural volumes that are in each of their territories. And then with the durability of our gross margins, we should be able to turn the corner and turn the corner quite quickly. And so for us, you know, we're confident we can get there. We're not going to give timing on that just now until we see the sales force ramp. But our operating structure is very durable right now. We had an increase in sales and marketing in the second quarter as we onboarded these reps. But other than that, we see, you know, each of our line items pretty durable without, you know, significant growth.

Mary Szela, CEO

And maybe I'll comment on there's really two catalysts that could could accelerate that david mentioned we're waiting for clearance for trying to have advance there is a group of physicians you know they get very comfortable with their own catheter technology it's what they trained on advance allows them to use that their own micro catheter with but still get the pressure enabled drug you know effect so that i think is a big benefit and will open up a lot of users who just didn't want to move because they're comfortable. And then the second one is, you know, the G-code is the OBL environment where a lot of our other applications, TriNav is not covered today. That now can open a lot of utilization in that side of care as well.

James Young, Head of Investor Relations

So on the OBL itself, let's say once it becomes effective, you know, on 1st January, 2027, you know, when, I understand you're going to expand that, but do you need to expand your sales force again, you know, to manage that?

Mary Szela, CEO

No, you know, what's really interesting about it is, and I'll give you an example, for example, one hospital in the New York metro area, they do mappings in their OBL, and they, and this is, you know, the hospital set these OBLs up with the, with physicians, because there was so much congestion in the hospital, then they do treatments in the hospital. So they're the same physicians. Often these are physicians who go to their OBL and then they come back to the hospital. So this is a real opportunity. There's going to be a lot more fluidity of care that we think that will open up the opportunity for us.

James Young, Head of Investor Relations

So now I'm trying to grow the portfolio in terms of adjacent indications. So, you know, you have talked about two or three different indications that you could expand the business into. You know, what's the low-hanging fruit and what's the one which you really want to get?

Mary Szela, CEO

So today we were, about 5% of our business is in uterine artery embolization. And you'll start to see us really scale that up. We wanted to collect some data in that we really wanted to prove to ourselves this is something that's value-driven and that we could add value to that procedure. In the OBL, that's where it's predominantly done. So I think that could spur a lot of growth. We saw a pretty dramatic impact with our technology in uterine fibroid, where you could actually use less embolic material. You can do the procedure much more quickly, and you can actually get up to 95% to 100% coverage of the tumor. Today with an end hole catheter, it's about 50% to 60%. so pretty dramatic impact. The second one is thyroid artery embolization. We're doing a registry. We think this is game-changing because it could actually eliminate the need for surgery. Today, if you wanted multinodular goiter, which are big thyroid nodules that grow into your chest or are very large, you have to have surgery. They remove a portion of your thyroid. The risk of stroke is more significant. You have a big scar on your neck and you're often on replacement levothyroxine therapy for the rest of your life. This is a 25-minute procedure that can shrink the nodule and avoid all of the costs and complications of that. So we're really excited about that. We think ADVANCE could also open the door for prostate artery embolization. This is another procedure that is really in need of, unmet need of off-target delivery of treatment. So we think we could add value there. Genicular artery embolization is one that we're very excited about. It's growing. And this is, ironically, you know, a lot of patients are coming directly to interventional radiologists on this. I've been to a couple OBLs where I was astonished by the level of volume in that. So that's just a few of the procedures. There's 38 embolization codes where our technology could have application in. So we're just prosecuting them, but we're doing them in a way where, back to our mission, we want to have the right type of clinical data. We want to have the right technology, and we want to do it in a way where we really offer value to the procedure.

James Young, Head of Investor Relations

So the other thing that you have talked about is Nelitolomide. Nelitolomide, yeah.

Mary Szela, CEO

So we, yes, we actually invested in a therapeutic. And we did this purposely because we wanted to demonstrate to people that we could take a drug that cannot be administered systemically. Nelitolomide is essentially 31 snippets of bacterial DNA. And if you infused it, you would go into COVID cytokine, like COVID cytokine storm, because it would just engage your overall immune system and elevate it to a point where it'd be very dangerous. We can infuse that drug into the tumor and treat the dysfunctional immune system in the tumor, but not have any systemic circulation. And so we're very, very excited about releasing that data in the second half. We'd like to find a partner for that. We think it demonstrates it's another avenue of how this technology could deliver these type of agents intratomorally very safely.

James Young, Head of Investor Relations

Okay, so last question. You closed the quarter, the second quarter, with 46.3 million in cash. So what set of runway, you know, can you get from that? And then, you know, what are the two or three major catalysts that investors should be on the lookout for?

Mary Szela, CEO

David, you want to answer Sure.

David Patience, CFO

In terms of runway, we like where our cash burn is, you know, today, given our OPEX, we think is very durable where it is. And then with that, we think that's more than sufficient to not only just turn the corner, but to turn the corner, you know, and sustain us independently from capital markets. When it comes to catalysts, it's really, it's the market share growth that we'll see. That's the main metric we want to, we want to focus on. What is our market share today in not just the liver and growing that, but also in the newer applications, such as uterine artery, thyroid and then with that genicular and prostate and for us you know we think it's a very exciting opportunity for us and you know what you will see is the market share gain on a quarterly update but also advance launching advance and getting that as the final tool we really need to you know deeply penetrate the liver market and then rolling out that clinical data prospectively against the n-hole catheter and the liver as well as in our newer applications and and i'll comment on that because we think that evidence is doing comparative studies that would be sufficient to be included in the NCCN guidelines.

Mary Szela, CEO

We believe that's really the pivotal time where you actually see, you know, this becomes standard of care. It's unequivocal of why you should use this technology. And so we think that's the ultimate driver of really, you know, ensuring that this business is highly durable and has high growth. Perfect.

James Young, Head of Investor Relations

Thank you very much, Mary and David, for coming down. Thank you.