- Establishment Labs, a manufacturer of smooth, silicone gel-filled breast implants, recorded 40% sales growth during the third quarter to $22.9 million. The results beat Wall Street's expectations in a new high mark for the Costa Rican medtech.
- With Establishment now selling in approximately 80 countries, Brazil remains its strongest market, accounting for more than 16% of total sales. The company does not yet have marketing authorization in the U.S. for any of its products, but filed a 510(k) submission during the quarter for a tissue expander product. A U.S. clinical trial assessing its Motiva implants in primary breast augmentation, primary breast reconstruction or revision breast surgery is ongoing.
- Establishment now expects full-year sales of up to $87 million, or at least 40% year-over-year growth. CFO Renee Gaeta, formerly a vice president at competitor Sientra, told investors Tuesday the company anticipates decreasing cash burn in 2020 and hitting or surpassing $100 million in annual revenues.
Establishment Labs is seeking share in the global breast aesthetics market as leading manufacturer Allergan and regulators around the world prompt plastic surgeons to transition away from certain textured implants linked to a rare form of cancer. Allergan's breast implant sales are down 45% so far this year, the company reported last week.
Unlike the macrotextured implants Allergan recalled in July, Establishment's Motiva implants have a smooth surface texture designed to minimize negative immunologic response.
In spite of the "complicated regulatory environment" and "chatter on social media" raising concerns over breast implants safety, CEO Juan José Chacón-Quirós told analysts on an earnings call the company has not been able to quantify any significant slowdown in patient demand in the market.
Still, winning substantial business from Allergan-held accounts has not been immediate, Chacón-Quirós said, noting most of those surgeons in international markets were never trained in using smooth devices. "Their natural impulse is to move to the next textured device [they can get their hands on]."
But Establishment expects the Allergan recall to accelerate a worldwide shift to smooth implants.
"Most of the transition [is] yet to come," Chacón-Quirós said. "You will continue to see this be a factor in our growth."
Less than 5% of implants sold in the U.S. have the most widely implicated macrotextured surface, according to the FDA. But in certain international markets, textured implants still account for more than 80% of devices sold. Last month, the FDA recommended adding a black box warning to the devices in an attempt to increase awareness of potential adverse outcomes associated with the implants.
The company has previously said it's targeting FDA approval for its Motiva implant in 2022. Chacón-Quirós said the decision of whether or not to launch a tissue expander in the U.S. prior to an implant has yet to be determined and depends on timing of FDA's review. Chacón-Quirós called it an "important opportunity" but noted the company will require "significant investments" to launch products in the U.S. market.
Shares in the company jumped more than 13% in premarket trading Tuesday.