Establishment Labs Holdings Inc. (NASDAQ:ESTA) Q4 2022 Earnings Call Transcript

Juan Jose Chacon-Quiros: Yes. Thank you, Josh. As you well noted, we are always looking forward to showing our numbers, let the data speak for itself and for the safety of the Motiva Implants. When we published in Nature Biomedical Engineering about the mechanism by which our surface design creates higher biocompatibility. What we wanted to highlight is that when you see the numbers, whether in our 10-year post-market surveillance data with more than 2.5 million implants, when you look at the different data sets, when you look at our two-year data, what you’re looking at is the downstream effect of that design. And of course, we do track numbers year to years. We’ve been in the market now for 12 years internationally. And what we see is that, of course, complications get aggregated over time.

but capsular contracture is a phenomenon that takes place mostly in year one and two. Of course, you can continue capturing some of those numbers as patients come back for their checkup. But overall, these additions tend to be modest. Same thing with rupture over time. For the first few years, you will see things that may have happened inadvertently during the procedure or things that may happen towards the tail end of the life of those implants, but that would be many, many years later. So, overall, I think based on all the data sets that we have, we are extremely confident on our ability to gain approval for Motiva Implants in the U.S.

Josh Jennings: Great. Thanks a lot.

Operator: Thank you. And our next question comes from George Sellers with Stephens. Please state your question.

George Sellers: Good afternoon, and congrats on a great quarter. Maybe sticking with Mia in Japan, could you just give us some additional color on how that launch is progressing and maybe some early feedback from surgeons and patients? And also, maybe timing for expanding that launch to the additional clinics that this group sells through?

Juan Jose Chacon-Quiros: Yes. Thanks, George. And to be clear, we have signed up our first group of clinics, which is the Seishin Plastic and Aesthetic Surgery Clinic, which manage 10 high-end clinics overall in Japan. We are planning to launch soon. Our medical education and practice development teams are working hard with them to put everything in place. So, as soon as we start doing commercial cases with Seishin, we will let you know. And of course, we are very happy to do this in Japan. Japan is at the genesis of Mia. That’s where we had the original idea of the need for this type of procedure. And eventually, we realized that there were these type of customers all over the world. So, what we plan to do with Mia this year is to prove that we have new consumers that were not seeking for a traditional breast augmentation.

We want to be able to show how these clinics basically scale up, because as we bring Mia out to different geographies, this is the type of information that I think is going to get everyone excited about the market expansion that it can create.

George Sellers: Okay. Got it. That’s really helpful. Maybe switching gears a little bit to margins. There’s obviously a lot of moving pieces this year with the launch of Mia in Japan and in Europe as well, hopefully, Motiva in China and then potentially the U.S. at the end of the year. So, could you just maybe help us with how we should think about the quarterly cadence for gross margins? It sounded like there were some — maybe some ASP headwinds here in the fourth quarter, but how should we think about that as the year progresses and these additional markets start to contribute more significantly?