Q2 2020 Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to the cardiovascular systems Inc. fiscal year, 2022nd quarter earnings Conference call.
At this time, all participants are really listen only mode.
After the speaker presentation, there will be a question and answer session.
To ask your question. During this session you will need to press star one on your telephone.
If you require any further assistance please press star zero.
I would now like to have the conference over to Jack Nielsen Vice President Investor Relations and corporate communications. Thank you. Please go ahead.
Thank you, Chris Good afternoon, and welcome to our fiscal 2022nd quarter Conference call.
With me today, our Scott Ward, CSR, Chairman, President and Chief Executive Officer, Rhonda, Rob Chief operating Officer.
Yep points, Chief Financial Officer, and Dr., Ryan again, Chief Medical Officer.
Fortunately 30 minutes ago, we issued a press release announcing our fiscal 2022nd quarter results. You may find a copy of this release on our Investor Relations section of our corporate website. Here. You May also finding earnings presentation that includes additional details on our performance and outlook.
A few moments so you're talking management will discuss results for our second quarter, which ended on December 31st 2019. After our prepared remarks, we will entertain your questions.
During today's call we will make forward looking statements. These forward looking statements are covered under the safe Harbor provisions of the private Securities Litigation Reform Act that 1995 nickel statements regarding csrtwo future financial and operating results or other statements that are not historical facts actual results could differ materially from those stated or implied by.
Forward looking statements due to certain risks and uncertainties included those described in our most recent form 10-K.
Subsequent quarterly reports on form 10-Q.
Yes, I disclaims any duty to update or revise our forward looking statements as a result of new information future events or developments or otherwise.
Also refer to non-GAAP measures, because we believe they provide useful information to our investors.
Today's press release contains a reconciliation table to GAAP results I will now turn the call there, but it's Scott.
Thank you Jack and good afternoon, everyone. Thank you for joining us today.
In our second quarter see aside delivered solid consistent growth with balanced performance across our businesses and geographic markets.
Second quarter revenues of 68.3 million, representing 13.5% growth compared to last year and these results Mark the seventh consecutive quarter of double digit revenue growth for our company.
Gross profit margin remained strong at 79.9% and once again, our growth was driven by the successful execution of key initiatives in our core domestic business and revenue from new products and new geographic markets.
In Q2 worldwide peripheral revenue increased 8% to 47.6 million led by 12% unit growth in our domestic atherectomy business with continued strong performance in Betsy LDL and the hospital sites of service.
Good wide coronary revenue increased over 30% to 20.8 million led by 14% unit growth in our domestic atherectomy business increased sales of our procedures support products and continued adoption of orbital atherectomy in Japan.
Our strategy to strengthen our domestic coal atherectomy franchises with product innovation and comprehensive physician education is delivering strong and consistent results.
For example, new products like exchangeable and radio contributed to our success in peripheral and we are capturing greater revenue per procedure in coronary where we now offer a comprehensive set of procedures support products.
We continue to build a strong foundation for future growth with the addition of new accounts and new physicians. So yes, I has a reputation for delivering exceptional medical education programs and we trained approximately 200 physicians are U.S.
Nearly 70, new customers in international markets in Q2.
Overall, our company is performing very well delivering consistent double digit growth and strong gross profit margins, while expanding our product portfolio and geographic footprint.
Rhonda will provide additional information regarding R&D and our commercial progress in just a few moments, but first I will ask Jeff will provide you with details regarding our second quarter financial results.
Yes.
Thank you Scott and good afternoon, everyone.
As Scott mentioned second quarter revenue of 68.3 million represented nearly 14% increase compared to last year.
In total we sold over 22500 atherectomy devices during the quarter, representing an 18% increase compared to last year.
Worldwide peripheral revenue increased 8% of 47.6 million.
Domestically.
Referral unit volumes increased 12%.
The U.S.P. decline was again in the low single digits, similar to Q1 and consistent with expectations.
Worldwide coronary revenue increased 30% the 20.8 million.
Domestic coronary revenues grew 22% from last year, driven by increased atherectomy unit volumes and increasing sales of our procedures support products.
Revenue generated in the U.S. and international markets was as follows.
Well the U.S. revenue increased 13% the 66 million.
So with our expectations.
Domestic peripheral revenue increased 9% 47.5 million and domestic coronary revenue increased 22%.
18.5 million.
International revenue totaled 2.4 million.
It was at the upper end of the range I provided on the Q1 call.
As Ron will discuss in a moment, our commercialization efforts coupled with strong collaboration with our international partners has resulted in strong performance through the first six months of the year.
For your models, we now anticipate for your international revenue of approximately 11 million, which is at the high end of the range that I shared last August.
In Q2 gross profit margin remains strong at 79.9%.
Operating expenses of 58 million increased 9.6 million or 20% compared to last year.
R&D expenses associated with investments in new product development and increasing enrollment in the eclipse clinical trial increased 3.6 million or 50%.
SGN a increased 14% due to several factors.
First increased investments in clinical specialists.
Second.
Physician training and medical medical education investments to support our international expansion.
Third legal expenses related intellectual property matters.
And finally amortization expense related to our recent acquisition of the wire on Embolic protection devices.
Second quarter net loss was 3.4 million.
Adjusted EBITDA was a positive 1 million.
We continue to anticipate sequential increases in revenue and improving profitability in Q3 and Q4.
On the balance sheet, we ended the quarter with over 109 million in cash and marketable securities and no long term debt.
That concludes my comments on the Q2 financial results.
Now turning to our annual guidance.
Strong revenue results through the first half of the fiscal year now position us to deliver fiscal 20 revenue towards the upper end of our original guidance range. As a result, we're pulling up the lower end of our fiscal 2000 guidance range to reflect our expectation of 13% to 14% revenue growth in fiscal Tony.
These expectations include 10% growth in our core atherectomy business.
Sequential quarterly growth and procedure support product revenue.
On international revenues of approximately 11 million.
Previously I provided guidance that our net income or loss for fiscal 20 would be approximately breakeven.
Excluding the impact of approximately 2 million of intangible asset amortization and direct expenses related to the wire on acquisition.
We now anticipate that fiscal 2000 investments in new product development and clinical evidence as well as legal expenses related to intellectual property matters will be higher than previously forecasted.
As a result, we now anticipate a net loss for the fiscal year.
In summary for fiscal 20, we now anticipate.
Revenues in the range of 280 to 283 million, representing an annual revenue growth of 13% to 14%.
Gross profit margin of 79% to 80%.
Net loss of approximately 2% of revenues, which includes approximately 1 million of intangible asset amortization and an additional 1 million of direct expenses related to the wire on acquisition.
And positive adjusted EBITDA.
Now onto will now discuss our commercial developments Rhonda.
Thank you Josh and you just heard our second quarter revenues rose, 13.5% was driven by strong commercial execution and momentum in our three growth driver.
First generating above market unit growth in our core domestic atherectomy businesses, that's driving growth from the sale of procedure support devices and finally continued international expansion overall, we're very pleased.
Balanced performance across our therapy franchises.
Service and geography.
Starting in coronary our worldwide revenue grew 30% compared to last year and over 9% sequentially as we've shared with you previously the strength and stability in coronary comes from several strategies.
Been executing now for over a year in the U.S., we achieved 14% unit growth our physician appreciate the ease of use anatomical flexibility and procedural outcomes from our unique mode of action provides both bidirectional standing as well as opposed to trial forces to fracture deeper calcium.
Finally, the see if I field organization continues to provide high level of service and commitment to the cath lab or physician practices and most importantly their complex patients.
Strong presence ongoing education and high touch clinical support has earned the confidence of our physicians and as a result, we have the opportunity to introduce new products would improve the quality of care for their patients while increasing our revenue per procedure.
In Q2, we sold over $2 million of procedures support products in coronary merely the sapphire angioplasty balloons and teleport microcatheter.
During the quarter, we also brought under offering of angioplasty.
And we now offer a full line of Sapphire balloons from one to five millimeters.
Q2 represented the sixth consecutive quarter of sequential revenue increases from our coronary support products.
Now not all of these products are used exclusively in our coronary atherectomy procedures. However, we are now selling about $450 a support products for every coronary device sold and we have significant opportunity to further increase penetration in accounts performing complex coronary procedures.
We remain excited about the recent launch of our new National coronary Viper wire recall that we launched the swearing Japan, one year ago and it has been an important contributor to our coronary success in that market. Similarly feedback from physicians in the U.S. has been exceptionally strong in fact, we believe this new wire is enabling increased diamondback.
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We continue to make progress in expanding our clinical evidence in coronary enrollments in our 2000 patient eclipse coronary trial continue to grow we now have over 1200 50 patients enrolled in the largest randomized coronary atherectomy trial ever conducted we continue to target completion of enrollment in fiscal 21.
Turning out of peripheral our worldwide business grew 8% in Q2, and 5% sequentially driven primarily by 12% unit growth in the court domestic peripheral atherectomy business.
In Q2, we continue to introduce our expanded lineup of low profile orbital atherectomy devices that leverage our core technology, providing physicians with new options for treating their most challenging personal patient.
Reception to the early launch of our exchangeable device with why does it have been very positive. It's devices designed to serve up to 50% of the peripheral patients that have multi vessel disease throughout their legs.
This ends our embracing the idea of full leg <unk> revascularization using one device.
It's both first full quarter exchangeable adoption continues to grow as we educate and build value in this one of the kind system.
Recall, we fell exchangeable at a premium and the opportunity to use multiple crown sizes in one procedure can further increase revenue per procedure.
We also continue to leverage our five French low profile orbital atherectomy system to expand the use of our products that provide alternate sites that access.
Our radio device further position see aside the valued procedural partner in Cath labs by offering physicians, a minimally invasive atherectomy tool that can ask to access the vasculature through the radial artery in Q2 radial units sold grew 20% sequentially.
Position speak to fees, we treat a difficult patient population or radial device provide see aside with a sustainable competitive advantage.
Well drive increased adoption of our radial device with unique physician education programs and medical evidence through our reach peripheral radio study.
We completed enrollment in this study earlier than forecasted and as a result, we now have the opportunity to share. The data. This may at the new cardiovascular horizons or and CDH Congrats.
A reminder, this study will perspective, we evaluate acute clinical outcomes of orbital atherectomy using radio access.
Treatment of peripheral disease. We believe this study will demonstrate many of the known <unk> benefits of radio access such as low complication rate.
Cost effectiveness.
I'm trying to emulation.
Read out of the study will dovetail nicely as we plan to introduce radio support product in fiscal 21.
Yes, I again saw growth this quarter in both the hospital sites of service at over 4% and be LDL, nearly 21% year over year.
We estimate that up to 55% of peripheral procedures are now conducted in the Ob out.
Yes, I hospital growth was driven by both exchangeable and radio program and Ob All growth was driven by continued traction and focus in large obiols volume based contracting and case coverage.
Finally in international we continued to make great progress driving revenue growth and sort of find new physicians. Our successes. Most notable in the second largest coronary atherectomy market Japan.
Now been commercial there with our coronary device for over two years and in Q2, we saw strong sequential and year over year growth in cases.
And physician certified we now have nearly 200 physicians certified in that market to use diamondback.
Overall Q2 results represent a continuation of the successful execution of our strategy innovation on our core technology, and adding new products are driving higher revenue per procedure domestically.
Recently targeting and training key positions worldwide is driving strong performance internationally together, our efforts position us to deliver fiscal 20 revenue growth at the upper end of our forecast.
As we begin calendar 2020, we are encouraged at U.S. reimbursement for both peripheral and coronary atherectomy procedures remained stable.
In November CMS released their outpatient ambulatory surgical centers final rule for 2020 payments and their Medicare physician fee schedule final rule for 2020.
Assistance with the previously released final inpatient rules the outpatient rules represents a six consecutive year steady reimbursement for atherectomy on a blended basis, the forecasted impact of the inpatient and outpatient reimbursement in 2020.
An increase of 2.5% in coronary and an increase of 8.8% in peripheral.
Looking ahead, we are aware that and they May review, the lower extremity Endovascular procedure codes that at a CPT editorial panel meeting.
However, it has not yet hit the agenda, including this week's panel meeting we are monitoring that closely and we'll keep you updated in future periods. If the endovascular codes are added to a future meeting agenda.
Looking forward to the back half of fiscal 20, we will look to drive increased adoption of our coronary supports devices.
Resulting in higher revenue per procedure and expanding the adoption of a nightmare for wire, giving us access to more complex patients.
Internationally, we will look to train and certify increasing numbers of physicians on orbital atherectomy.
And peripheral we will drive increased adoption on our expanded OAS offering.
Including exchangeable radio and the recently launched next generation peripheral Alaska's flight effect on our 1.25 millimeter your models of both stealth and Diamondback.
Called it the introduction of gotten quite assist our coronary diamondback has enabled physicians to access torturous calcified lesions in the heart.
I'm glad to assist our 1.2 millimeter peripheral models now provides physicians and ability to better access and treat challenging basket, which are below the knee.
Finally, we continue to take the learnings from the success of the commercialization of our coronary support devices and look to apply those to the launches of our peripheral support devices later this calendar year.
That concludes my prepared remarks.
Thank you Rhonda well as you've heard today. This was another outstanding quarter Percy aside.
I did by our mission to save limbs and save lives every day, we're fulfilling our promise to our physician partners in patients around the world to deliver the highest quality products services and relationships.
We are delivering on our promise to shareholders to achieve sustainable long term growth by investing in our core business innovating through our product pipeline and simultaneously extending our reach to patients in need around the world.
Our technologies deliver superior patient outcomes, because we have the strongest medical evidence in the market and an increasing commitment to medical education.
As our second quarter results illustrate our leadership team has devoted to driving commercial execution developing new markets and building product portfolios that improved the quality of care for patients with cardiovascular disease.
Finally, I want to thank our 800, plus strong see aside team for their tireless efforts in achieving our strategic goals and I want to thank all of you for your continued interest in see aside.
Look forward to updating you on our progress in the coming quarter.
And we will take questions now so Chris if you would please repeat the instructions that would be great. Thank you.
As a reminder to ask a question you will need to press star one on your telephone please standby what we've compiled acuity roster.
Your first question is from Chris Haswell with Guggenheim Your line is open.
Thanks, and congrats on a good quarter guys, Scott, there's a lot of focus on the potential for the reimbursement codes to be looked at this year I think there's some confusion about that process and potential outcome. So maybe be helpful. Just spend a minute.
Making sure views on the on the same page in terms of the process a in the variety of outcomes that you guys are preparing for as you think about what could happen there.
Yeah, Thanks, Chris Rondeau didn't address that after her comments around I'll, let you published by Yep Yep, absolutely. Thanks, Chris So I think as everybody knows the M. <unk> and CMS routinely review and screen CPT codes in or use and typically that Chris about every five years and you know last year.
For trivial pair Aneel atherectomy was identified.
By a high volume growth screen and it was not really a surprise because you know more patients are being treated more complex patients are being done in patients are candidly getting better care. So that's that's a good thing and so the M&A as a result may update their lower extremity endovascular procedure codes that the first step in that is.
It's for the CPT editorial panel to convene this as a group that need three times, a year and thus far the topic has not been schedule on the meeting I think in terms of you know anticipating outcomes you know they could go down because the efficiency of the therapy has increased so dramatically, particularly with see upside, but they could also go up because we're just treating.
A lot more complex patients than we were historically as well so as I said and the comments. It's something we're watching closely you know will certainly be an observer and mountain provide information as requested to the societies that will play a role in those meetings.
That's helpful. Thanks.
And then the the progress on the procedural support tools within the coronary pieces of business very encouraging.
Good to talk about the path to replicating that on the peripheral side are you expecting that to get to be built out in the early part of that for 21 or something that's going to flow through over the course of next year.
Yeah. Good point, so we have had real good success now with increasing our revenue per procedure in coronary and we will look to add balloons in catheters to our peripheral product line, starting actually an early applied 21, and those products will be launched throughout the year. So.
As we as we proceed through the course of of next fiscal year, we would we would head towards having a a full product offering there as well.
We do certainly expect that as we as we add.
The support products in peripheral that that will substantially enhance our revenue per case and will become an important growth driver for us as we look over the next year too.
Thanks.
Your next question comes from Frank Sticking with Lake Street Capital. Your line is open.
Hey, Thanks, taking my questions first on the OBO area, it's nice to see that Reaccelerate, 21% from 16% last quarter I know you talked on it briefly but if you could take a couple of more minutes just to explain exactly what's going on there and the strength, you're seeing and how you feel about your competitive position positioning nobody's fantastic.
Okay, well, thanks, Frank Thanks for that question.
So yeah, I think what we're seeing as we've talked about in the past the portfolio marketplace in the United States and perhaps around the world is really characterize today as has an epidemic. You know you have an underlying growth rate here of the high single digits lets say, 789% per year and so these patients.
Our continuously in need of being treated we we see in the U.S. a move a flip to to try to manage that patient population, it's difficult for all of those patients to pass through hospitals and perhaps it's you know financially not feasible to do that as a result, more and more of these patients now are being treated in office.
Spacelabs and we're seeing no that market shift continue that is a market trend that I think benefits us because in particular for the treatment of patients was severely calcified lesions.
We are really the only device that can be used to treat that patient population. We've made a real strong effort to collaborate and partner with Ob all customers, providing them with increased support and medical education or long term contracts to stabilize their business models and.
Favorable supply chain in some cases, so we feel like we have a very strong competitive advantage in the Ob Els, it's an important focus for us and as you can see we continue to sustain strong growth there over time as that.
Segmentation continues as we see a more and more cases being performed moving from the hospital setting to the LTL setting I think will eventually see that growth rate began to slow but for now we've been sustaining that 20% plus growth rate. We're we're happy about that but certainly in time, we'll see that begin to come down.
Great and then secondly, just getting looking for an update on the additional coronary reps that you guys were looking to hire I believe you were out.
10 last quarter on your call up the 20 targets for the year and then if you could just that overlay that with the additional updates the guidance on the little wider lots of new gets its just because you're hiring a little bit quicker than you anticipated.
Yeah, I'll, let Jeff address that and just a moment, we continue to make progress on our hiring of our coronary specialists I think as you know we anticipate a hiring approximately 20 over the course of the fiscal year and we're doing that on a on a regular basis over there over the course in the quarter. All we continue right on track with that I think Republic.
Being around the mid teens at this point and so that gives you a pretty good idea, where we're at but we continue right on schedule and as we've talked about before you know that adjustment to our salesforce of just increasing the coronary focus.
We'll have impact overtime, and we will position us to to obviously take advantage of the strike we haven't coronary. So I just want to talk just a bit about how about the guidance. There yeah. It's just on the guidance Frank just a few reasons I highlighted in my prepared remarks for the increased losses I mentioned, our clinical specialists.
Increase we made significant investments in our clinical specialists and I feel we've got about 125 today last year. At this time, we had about 100, so really focused on providing that case support and increased presence in the field.
The second thing is really just all the investments, we're making for physician training in the medical education as it was support our international watch.
The third item I mentioned was the legal expenses related to our intellectual property matters and then of course, the amortization expense related to wire on so all those factors really contribute to a higher.
As expected net loss for the year.
Great. That's all I had thanks and congrats.
Thanks. Thank you Frank Thank you very much.
Your next question is from Matthew Bachman with Stifel. Your line is open.
Oh, thanks for taking the questions. Good afternoon, everybody maybe to start on on the ancillary portfolio procedure support.
I think at your conference in November and in our conference. In November You said, you give a metric that something like 60% of your coronary accounts had adopted.
Procedure support devices any any updates as to how that's trending today and then I've got one more follow up.
We continue to trend pretty strongly we've got strong adoption across our accounts and I think as we have we as we've talked about in the past Matt.
It does take time to to get.
A hospital contracts.
And to penetrate these accounts for once we do a weren't pretty good place, we're able to sustain retain those accounts. So I guess at this point in time, we continue to have good penetration and we're pleased with where we're out there.
Did you have a follow on question.
Good.
We think about to the next move all right you've talked about building out the peripheral support product lines over the next couple of years, you think about sort of the magnitude of incremental revenue per case opportunity I think corner, you said, you're up to something like $450, an incremental revenue per case said with more to go how do you think about sort of the all in opportunity.
On the peripheral side, we've got a full suite of products is it similar magnitude to the opportunity in coronary the bigger is at smaller anyway to add to reconcile those.
So sure let let's talk about coronary first is to set a baseline you are correct and as we indicated they were at about $450 per case now if you think about the utilization of balloons and wires in a typical coronary case balloons and catheters and wires.
We would expect that the revenue available for pull through there for US is probably on the range of $802000 per case now we're not going to penetrate all cases and not all of our devices will be used in every case, but that gives you kind of the total potential and then as Rhonda reported were at about that for 50 range now so as we look at that in.
In comparison to bring for all the peripheral potential is also right around that $802000 per case for balloons.
Catheters and wires and then in addition to that we'll be adding our wire on embolic protection device and the average selling prices for that for lets say you P.D. is in the market today is around $1000. So.
Our overall potential in peripheral once again is probably on the range of 1800 two $2000.
Okay. That's really helpful. I appreciate that Scott that's a that's all I had okay.
Great. Thank you.
Your next question is from a Danielle Antalffy with SPV Leerink. Your line is open.
Hey, good afternoon, guys. Thanks, so much for taking the question and congrats on another quarter hi, good good to see the consistency here I had Q.
Q2 questions for you first of all as strong growth on the or adoption uptake I guess I'd say have the exchangeable platform as well as radio do you think you did you give a sense of whether you're growing the market growing share or you cannibalizing some of your existing well would've been your existing procedures like how do we think about Oh, what Tom.
Turning in the market there.
Yeah.
Ask Rhonda due to address that you want to address that question. Yeah. No I think we're growing faster than the market Daniel since of 12% unit growth and that's to really exceptional in a market that's growing and you know high single digit. So we think it's making a real difference there and you know continuing to convert doctors to to both book devices.
Got it okay. Thanks for that and then on the <unk> the potential around this reimbursement dynamic regardless of what happens here I'd love to get your thoughts on where you how much flexibility from a pricing perspective, I mean, obviously as you shifted to the Obiols you've demonstrated the ability to.
To come down a little bit on price and not pressure margins too much but would just love to get your thoughts here should we see reimbursement calm down how to think about the flexibility in the price while still maintaining margins. Thanks. So much.
Thanks, Danielle. Thank you for that question has really well said and I think first of all let me say that it's it's premature at this point to really speculate about what will happen I think we know that there's a possibility as rhonda had indicated that these codes maybe open there's no indication right now that they will be it's not been scheduled on at a gen.
There is some talk in the analyst community and elsewhere that maybe this is going to happen we have not seen that schedule yet. So at this point in time, we can't say definitively that these will be reviewed even if they are reviewed as Ron said are they the.
Relative value units for these person for this particular procedure or may go up or down depending on how how the luck reviews. This oh. These procedures. So there's a lot to be said it will happen over a period of probably a couple of years and during that time, we'll have a lot of opportunity to keep you updated.
Now that said if there is some pricing some reimbursement reduction that ultimately negatively affects.
The use of atherectomy treat P.A.D. patients.
We have a fair amount of room in our margins and that's because as you know from watching us in the LDL.
We have the benefit of.
Volume and as we move more volumes through our manufacturing operations. We can can consistently reduce our cost of goods sold so I'm very confident that we're well positioned to manage.
Any pricing dynamic that comes at US at this point in time and certainly we also believe that we have a fair amount of time to address anything that may come along here if something were to develop so.
Hope that addresses your question and thank you for that.
Yes, Thank you sound matrix.
Hey, Thanks Daniel.
Your next question is from Mike Mattson with Needham and company. Your line is open.
Hi, Thanks for taking my questions.
So the international coronary cells.
Obviously up a lot.
If it does look like they they ticked down a little bit sequentially.
Well I don't want to be nitpicky, but just curious what happened there and such as normal fluctuations in the but rather than Japan or something.
Yeah, I think you need to look at that is really normal fluctuations our Japan business continues to perform extremely well, we're very pleased with how we're doing there.
In the rest of the World we work through Orbi speech overseas is our distributor for for the rest of world and as we've said before there will be ups and downs in their ordering because we're selling you know in volume to our distributor who then is moving a units out four per case coverage. So there will be lumpiness to that and I think Jeff has referred to.
That's just you want to add to that at all no I think that covers a very well that's exactly right that as I've stated before Mike that's they're just going to be lumpiness and timing issues that go into ordering patterns and Scott summarizes this accurately yeah and you know it is difficult because I realize you know we monitor this on a quarterly basis, but as we look at our inner.
National performance on an annualized basis, we're now projecting that to be around $11 million of revenue, which is outstanding performance over the course of a full year and that's really perhaps more hall our revaluated.
Okay, Great and then just wondering if you get update us if there's anything due to report on sport pump for directional atherectomy development programs.
Yeah, I'll take that no. We're still we're still playing for our first in human F. why 21, we noted that in the slide but really no new updates beyond that today, we're really focused on getting to that first in human and continue to have interactions with FDA and well just provide additional updates in future calls when we can do so.
Okay, Great and then on direction.
You asked about directional trend I apologize.
To.
<unk> to work on the development for that program and I think we said first in human and that's why 22 for that device previously and we're staying with that and we'll get an update as a future developments occur without program.
Alright, Thanks, a lot.
Your next question comes from.
Margaret because with William Blair Your line is open.
Hi, Thanks for taking your question.
If I could just asked a question on guidance and kind of.
Oh.
<unk>.
Sure.
Access side.
What kind of outcomes.
Study.
Yes.
Kind of upside.
Okay.
Is that.
Got it.
Yeah that wasn't that would already.
What are to be bake into our expectations are continuing to grow.
Peripheral and coronary at or or above market rates that we've talked about previously.
Got it.
Yes.
There's a concern that read out just to remind you in may which is towards the latter part of our fiscal year.
Got it.
And then.
And then in terms of sales.
Huh.
Sequentially.
<unk> products.
Sure.
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He stands today.
In terms of.
Sorry.
Sales force.
A question that's kind of.
How much.
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Yes.
Yes.
Yeah, well also well first of all I I or sales rep productivity is improving we continue to have all right around 200 sales reps and as a result, I think you're seeing meaningful benefit there.
So, we'll probably at about $1.3 million per rep right now.
As I said before a we think that we can continue to improve the productivity in the sales organization. The there is a limitation to that however, because part of our competitive advantages that we do provide K support and as a result of that case support and having a rough president in cases, we have the potential for.
Pull through and the pull through comes or the advantage of that comes from the sale then of these balloons wires catheters embolic protection devices. So having those sales rep present in these cases is critically important but the enhanced productivity can come from driving that increased revenue per se per procedure.
In every case that they're in.
And you know really that comes back to the launch now as you've seen in in coronary the launch of our full offering and as a result, we've seen our revenue per case increased to about our increased by about $450 there and as we've talked about earlier on this call as we launch in peripheral we have the potential over the course, the next year or two to can.
You need to substantially increase our revenue per case and that segment of our of our business frankly, the larger part of our business. So I do think that there is a.
Continued upside.
In our Rep productivity I will say that we continuously monitor rep productivity and performance on a local basis and as we need to split territories or whereas we need to manage our.
Capacity, we do so on a regular basis now and that is a continuing process of I've, just really disciplined and careful management of our of our sales channel and our sales leadership team does an excellent job add at assuring that we're taking every action to continuously optimizer ourselves reform pending.
Hope that answers your question.
Yeah.
Very helpful.
Okay. Good thank you.
And our last question is from and Jason but fourth with Raymond James Your line is open.
Good afternoon, and congrats on the on the progress just a couple of quick ones for me.
Peripheral atherectomy volume growth was quite strong and my impression is that drug coated balloon market seems like it's getting a bit healthier from from this summer.
And so my question is and I go back and forth on this but do you view, a healthier drug coated balloon market as good or bad for the opportunity that you see or simply no one class.
Hi, Thanks station, where the crushing and good to hear from your I would say that right now it's pretty it's become neutral I think over the past few quarters have been indicating that was probably a mild tailwind for us and the sub segment of our business honestly in this quarter I think drug coated balloons have become a somewhat neutral to us and I think.
It's largely become more because we're seeing now kind of a restoration of I'd, just continuous and relatively standard use of drug coated balloons, albeit perhaps in patients that have a high risk of restenosis, but.
The their purchase station that was caused by the the Katsanos paper in that marketplace has pretty much settled out at this point and.
Frankly, right now, it's probably neutral to us.
That's helpful and just I don't want to be greedy here you guys give a lot of detail, but when you look at the 21% growth.
On the peripheral side is there anyway, you could kind of parse that out between.
Same center volume growth and the benefit which I'm sure you're getting a bit of a benefit from opening.
Yes.
No I don't think we can parse that out to that level of detail I I think you know we're seeing a.
Less new account growth because if you recall a couple of years ago. We really started this focused initiative and as a result for that for a period of probably 12 to 18 months. We were we were largely benefiting from new accounts I think a lot of our growth now is coming from same store sales, but we don't we don't breakout that in.
In detail.
Okay. That's actually helpful. Thank you.
Okay great.
Thanks, very much alright.
Yes, I think that is yet so I want to thank everybody for calling in we look forward to.
Giving you an additional update next quarter. Thanks, everyone.
Ladies and gentlemen, this concludes todays conference call. Thank you for your participation and you may now disconnect.
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