Q4 2020 Acutus Medical Inc Earnings Call

[music].

Ladies and gentlemen, thank you for standby and welcome to the acute medical fourth quarter 2020 earnings conference call. At this time all participant lines are in a listen only mode. After the speaker's presentation there'll be a question and answer session Classic question. During the session you will need to press star one on your telephone. Please be advised that today's conference is being recorded.

Have you quantified the assistance. Please press star Zero I would now like to hand, the comparable that you speak of the day Caroline corner Investor Relations. Thank you. Please go ahead ma'am.

Thank you operator welcome to about curious this fourth quarter and full year 2020 earnings call. Joining me on today's call are bench burgers, President and Chief Executive Officer, and David Rowland Chief Financial Officer. This call will include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, all statements made on this call.

That do not relate to matters of historical facts should be considered forward looking statements factors that may cause results to differ from these forward looking statements are discussed under the forward looking statements section of the press release attached as an exhibit to accuse us of form 8-K filed with the SEC today and are also discussed in more detail under the risk factors sections indicators for this most recent filings with the SEC.

SEC, including the risk factors described in <unk> form S. One.

Any forward looking statements provided during this call, including projections for future performance are based on management's expectations as of today and <unk> undertakes no obligation to update these statements except as required by applicable law by Covid.

This press release with fourth quarter and full year of 2020 results is also available on <unk> website, www dot acute medical dot com under the investors section and includes additional details about <unk> financial results for <unk>.

I'd also like the CUSIP SEC filings, which you're encouraged to review a recording of today's call will be available on the website. Later today now I would like to turn the call over to Vince for his comments on fourth quarter and full year 2020 business highlights.

Thank you everyone for joining us today.

I apologize for the last minute change to the earnings call timing.

The time change is entirely the result of an error by the company's filing agents Donnelley financial services, whereby donnelley inadvertently file the Q2 financial results for automated distribution earlier today at three a M.

Pacific time, six a M eastern time.

Soon as we learned of this error reacted swiftly to ensure we can move our call to discuss results before market open.

We appreciate your understanding of this matter.

As Carolyn mentioned.

I'm on the call today with David Rowland, who as we announced last month has joined US as Chief Financial Officer, Dave.

David brings deep medical technology experience paired with strong operational background and we're very happy to have him on board.

In addition to David joining the team we have made several other leadership changes, including the appointment of Dwain Wilder as our chief commercial officer, as well as expanding our board of directors.

In February we announced the addition of Daniela Cramp to our board of directors, Daniela as senior Vice President and President of bio production at Thermo Fisher price.

Prior to joining thermo Fisher Daniela held senior roles at Johnson, <unk>, Johnson, including U S. President for bio since Webster J&J Electrophysiology business. In addition, John Sheridan President and CEO of tandem diabetes care joined our board as of this week.

Previously John worked extensively in the cardiology field, including his time with volcano, where he and I and many other members of the team here at acute has helped to build the company's highly successful image guided therapy business together.

In the fourth quarter as well as here in the first quarter. Our team has been hard at work installing consoles and laying the groundwork for further adoption of our products.

We're also pressing forward on our planned expansion of our product lines through targeted R&D efforts and we are on track to launch several new products. This year as well as initiated key clinical trials.

Reflecting on our performance.

And forward outlook I want to thank my <unk> colleagues for their tremendous commitment and dedication to executing our strategy.

It also goes without saying that I remain in all of the heroic efforts of our physician customers and healthcare providers to deliver deliver care to patients.

We continued to be as excited as ever about the potential to change the treatment paradigm and electrophysiology nothing gives us more satisfaction and seeing our technology facilitate transformational patient care and better at.

Better physician experience.

This is our guiding principle here at <unk> and it keeps us focused on our mission.

We were excited to see several live cases presented at the <unk> Symposium in January that featured both our <unk> mapping system.

And arguably for sensing ablation catheter.

One case that stood out involve the 74 year old female with recurrent symptomatic persistent atrial fibrillation or AF, who underwent an ablation procedure.

With the <unk> mapping system.

And the Acura blade for sensing ablation catheter.

<unk> Ablate remap strategy was executed to tackle three arrhythmias, both left and right sighted atrial fibrillation typical atrial flutter.

<unk> and atypical atrial flutter.

This case was presented by Professor Tim Bets, who commented on the excellent handling of the catheter along with the superior conduction properties of gold compared to the more commonly used platinum iridium for AF ablation.

This case among several others featured at the symposium reinforces the benefits of the acute as technology, particularly when using our full product suite, including our diagnostics and mapping systems and now our proprietary ablation catheter system.

I will provide more detail on the accurately for sensing ablation catheter product launch later in the call, but overall the early performance of our new therapy system and catheter has exceeded our expectations and represents a critical validation of our overarching strategy.

For those of you who follow our clinical development activities and scientific journals or via our website.

You'll know that 2020 was an important year for us during the year, our company and independent investigators have published an array of key papers covering our disruptive mapping technologies as well as case series and clinical vignettes highlighting the unique contributions of our mapping system as.

Used and troublesome complex cases.

I'd like to highlight a paper recently published jointly by two Premier centers in the U K.

University of Oxford, and the Royal Brompton Hospital.

This paper published online in the <unk>.

Rhythm Journal reported on the real World application of the core to boundary mapping and ablation approach first used and reported on in our seminal uncover as study from circulation 2019.

For context, the quarter boundary mapping and ablation approach uses our mapping system to identify the potential source of the arrhythmia for the core and then and then a bleeding that core and tying enough for the short line connecting them to the nearest anatomical boundary the.

The premise is that this approach allows for better outcomes and less ablation energy delivered.

In this paper the author reported on their results in treating 40 consecutive patients with persistent and long standing persistent atrial fibrillation as compared to 80 propensity matched persistent AF patients treated using our competitors' system at the same two centers, but.

Using a more conventional and non patient specific anatomical approach.

The authors using the prescribed quarter boundary individualized approach facilitate facilitated by the <unk> system.

Ported a very impressive 24 months freedom from atrial fibrillation, <unk> atrial tachycardia of 67% of patients with persistent and long standing persistent AF.

This compares to the matched control arm freedom from AF and <unk> of just 46% at 24 months.

Simply put patients in the control arm were roughly 50% more likely to experience air for tachycardia. After their ablation procedure than those in the acute is treated arm.

Further in the acute us arm, an impressive 35 out of 40 treated patients or 87, 5% were free and on and off anti Arrhythmic drugs at 24 months and operators were able to achieve acute termination out of during the ablation procedure.

Itself and over 70% of patients versus acute termination in the control arm of only 10%.

Seeing the operators.

Two we're also participating in rollers in the earlier uncover AF trial.

Take the learnings from uncover and apply them to their persistent patients and daily clinical practice and deliver these extraordinary results is extremely gratifying and exciting for us here at the company.

Turning to our performance in the fourth quarter.

Consistent with our disclosure on January 13th.

<unk> thousand 21 fourth quarter 2020, net revenues were $2 6 million compared to zero point $7 million in the prior year fourth quarter.

Despite significant headwinds from Covid, we continue to add new customers as well as upgrade existing customers to our groundbreaking second generation electrophysiology mapping system.

During the fourth quarter, we increased our worldwide installed base second generation acumen consoles to 51% up from 37 consoles at the end of the prior quarter.

The combination of new installs and upgrades plus our first generation consoles brought the total global installed base from consoles to 58 as of December 31, 2020, compared to 49 at September 32020.

In the U S. Our total installed base increased to 37 units.

From 29 in the prior quarter, while the installed base outside the U S, including placements through bio Tronic totaled 21 units up from 20 in the third quarter from 2020.

While console placement activity was robust during the fourth quarter.

We observed some COVID-19 driven impacts on placements.

Activity in Europe during the fourth quarter became complicated as travel restrictions were enacted and various hospitals shut off access to vendors.

In the U S. We saw similar pandemic related challenges surface during late November and early December.

We did see installations in both the U S and O U S. Originally scheduled for the fourth quarter of 2020 slide a few weeks out into early 2021.

As always we strive to take advantage of our nimbleness and creativity in times of great change and we have been successful in executing virtual installations and training as well as customer in servicing.

Now moving to case volumes as I discussed at the Jpmorgan Healthcare conference in January we saw meaningful fluctuations in volumes throughout Q4.

Our business had momentum early in the quarter with strong sequential procedure growth in October however, COVID-19 related headwinds drove a sharp drop in the second half of November and December.

These challenges persisted through the early part of Q1, but we have started to see case volumes pickup in recent weeks.

Looking ahead, we are cautiously optimistic that the trends will continue to improve as such we are changing or charging forward on our product launches and commercial and clinical development activities.

Yeah.

The commercial introduction of our Accu blade <unk> ablation catheter and system in Europe has been met with enthusiasm from our physician customers, who have lauded the handling and stability of the beveled gold tip catheter as well as smooth setup and operation of the associated stack of electronic accessories.

<unk>, including the <unk> console RF generator infusion pump and controller unit.

Electrophysiologist have also been impressed with the reduction in sailing irrigation due to the combination of the gold tip and reduced flow rate.

As a reminder, we partner.

We and our partner <unk> commenced our limited market release of this product line in early January in the face of Rolling Covid shutdowns in key markets in Europe.

In just the first nine weeks since introduction the catheter and system have been used in 10 centers in five countries by 17 different physicians and a variety of procedures, including Avi node atrial tachycardia and atrial fibrillation ablation.

The rapid uptake in acute clinical results give us confidence that the combination of our innovative mapping technology and the novel ablation catheter and system is going to significantly improve workflows physician engagement and ultimately our ability to increase share.

Sure.

And revenue per case and accounts across the U K and Europe.

Lastly, we have received consistent and positive customer feedback highlighting that the <unk> catheter can be both integrated with with the <unk> system for more complex procedures get also be used as a standalone system for less complex procedures on the right side of the heart where.

<unk>.

Procedure expense management are important, but we're contact force as desired.

Demand for the <unk> catheters and related electronic components is.

Is currently outpacing supply and we are hiring and training manufacturing personnel to meet the accelerated demand.

Importantly, we think the early success, we are seeing in Europe is a harbinger of things to come around the world.

We have demonstrated clinical differentiation with our core mapping technology and the introduction of an ablation catheter and system will further enhance the value we bring to patients and physicians.

The results in receptivity, we are seeing in Europe, only heightens, our enthusiasm for commencing U S clinical trials for our full array of ablation catheters and accessories.

From a commercial execution perspective, our Europe direct commercial organization has been effectively building physician and hospital interest and our broad product offering the team is driving strong results across all product categories currently available in the region.

Including our second generation consoles, our accu map consumables and most recently our <unk> force sensing ablation catheter. We are also eager to conduct a full launch of our central crossing in access catheters with this team in the second quarter.

Our international commercial efforts are further augmented by our bidirectional distribution agreement with bio tronic.

This agreement this agreement gives <unk> the ability to leverage <unk> global sales distribution infrastructure and helps us more rapidly achieve.

Global reach.

During the fourth quarter, we sold our first two consoles to bio tronic for new accounts in Switzerland.

During the quarter <unk> Mappers, who have undergone acute has extensive month long map for training program performed their first standalone mapping cases.

<unk> and <unk> are actively working in concert on regulatory approvals in other countries as well expanding our footprint as we first envisioned when we entered into the agreement.

We continue to be very pleased with our relationship with <unk> and are encouraged to see strong engagement from local teams as we rely heavily on distance learning for a hardware software catheters installation support.

And related case knowledge during these challenging and travel restricted times.

While we are seeing strong execution and sales performance in Europe direct organization and through our <unk> partnership we have not achieved our goals in the U S.

Despite hiring some of the absolute best and brightest from the electrophysiology community into our commercial organization, we have been slow with the initiation of some of our installs and struggled.

Struggled to drive uptake and consistent utilization.

Covid has no doubt layered significant challenges for a new to market early stage company like ours. However, it is my view that there are other execution factors at play here.

Primarily related to inadequate targeting physician.

Segmentation and proper training and direction of our commercial team.

I take full responsibility for this.

After careful self assessment I decided to bring in a battle tested former colleague of mine Dwain Wilder to run our commercial organization as Chief commercial officer.

Duane started at acute us on March 1st.

In a prior life, Duane and I together with the team at volcano have competed with entrenched incumbents before and one.

He is a world class commercial leader and he has demonstrated a demonstrated ability to develop markets drive adoption of new therapies navigate the capital equipment sales landscape and successfully challenge large and entrenched incumbents. These.

These factors that yielded success at volcano are very much the same foundational elements that will drive future performance at acute is.

In addition to the investments and upgrades, we are making to our commercial team. We continued to make strong progress on our pipeline and clinical developments as well as gain regular regulatory clearances and approvals.

Our teams have made major progress on building out the scope of our left heart access product lines and on the development of our pulsed field ablation or PFA technology.

We continue to advance our PFA program and expect to initiate first in man in pilot trial activities later in 2021.

To illustrate the energy and pace of our innovation, we have conducted 59 preclinical labs.

Since July one.

Each testing, one or multiple new products featuring.

Elements of our full product portfolio be it PFA conventional RF ablation, septal crossing or conventional contact and non contact mapping.

Yeah.

Our clinical and regulatory teams have also been diligently working through the process to initiate three separate U S. IDE studies for therapy catheter line.

<unk> and we expect to enroll our first patient in our flutter trial with our ablation catheter and system in the U S. In the next several weeks.

As we progress through formal initiation of these therapy trials, we will provide relevant updates in earnings earnings calls at medical meeting presentations and other public disclosures.

Closing with key regulatory updates following several.

Important achievements achievements in 2020, including CE Mark approval for our <unk> ablation catheter and the Accu guide flex and many transcept to access systems as well as U S 500, 10-K clearance for a second generation operation.

Second generation Accu map patient electrode kit, we expect a very busy and productive 2021.

Over the course of this year, we anticipate receiving CE mark on several products, including our acumen to point out a mapping catheter and Accu guide Max delivery sheet.

Accu Cross <unk> solo Transcept access system, and our Accu guide viewed delivery sheet with localization electrodes.

In the U S. We anticipate five 10-K clearance on the Ecu Cross <unk> solo Trans septal access system.

And the <unk> guide Max 2.0 delivery sheet.

Each of these products is designed to provide specific procedural advantages for our physician customers and to help the company garner increased market share as well as improved revenues and contribution margin per procedure.

I am confident that no EP company on the planet as a more innovative creative and productive product development team that we have here at <unk> and our recent releases and near term product improvement pipeline bears that out.

With that I'll now turn it over to David for our financial results David.

Thank you Vince and good morning, everyone I am very excited to join <unk> and to be working with Vince and the entire organization.

In my first few weeks on the job I have seen a tremendous commitment to our vision and an unwavering dedication to our mission of serving patients in the clinical community.

A few days ago I had the opportunity to observe several cases here in southern California visit with customers and meet some of our sales team.

I am very encouraged by these interactions and I will be on the road in the coming months to get further acclimated with our field teams and key customers.

In my remarks today I will provide details on the fourth quarter and full year 2020 operating results as well as our outlook for 2021.

Our revenues for the fourth quarter of 2020 were $2 6 million up from zero point $7 million in the year ago quarter.

For Q4 year over year revenue increase was driven by procedural adoption for our broad range of EP products and trans septal access devices. The conversion of consoles previously installed under evaluation agreements and the implementation of the <unk> distribution agreement.

Gross margin was negative 90% for the fourth quarter of 2020, compared with negative 254% in the fourth quarter of 2019.

We continue to make significant investments in our manufacturing infrastructure to support our long term growth outlook.

As volume increases and as volumes increase and our targeted manufacturing cost optimization programs take hold we expect our gross margins to improve.

Operating expenses were $25 7 million in the fourth quarter of 2020 compared to $16 million for the same period of the prior year.

R&D expenses were $9 million in the fourth quarter compared with $7 5 million for the same period of 2019. The increase in R&D expenses was primarily related to investments and the accolade for sensing ablation catheter development, our PSA program console enhancements and upgrades to our asking that mapping catheter.

Sure.

SG&A expenses were $15 2 million in the fourth quarter of 2020, compared with $7 8 million for the same period last year.

The increase was primarily due to the expansion of our commercial team in conjunction with our full commercial launch and an increase in G&A for public company related costs.

As a reminder, we present, our net loss on a GAAP basis, and non-GAAP basis to exclude items that we believe are not representative of core operating results.

For a complete reconciliation of our GAAP financial measures to our non-GAAP financial measures. Please refer to the tables included with the press release and 8-K that we issued today.

Excluding specified items, our non-GAAP net loss for the fourth quarter of 2020 was $24 9 million or <unk> 89 per share compared to a non-GAAP net loss of $17 9 million for the fourth quarter of 2019 for $1 six per share after giving effect to the pro forma conversion of our converts.

<unk> preferred stock.

To briefly recap full year 2020 revenue totaled $8 5 million versus $2 8 million for the full year of 2019 the increase.

Was driven by higher direct sales of Akitas disposables sales of our asking that consoles and distributor sales through our partner <unk>.

Gross margin was negative 88% for the full year of 2020 compared with negative 226% in the prior year.

<unk> compared to 2019 was attributable to increased revenue and higher production volumes.

Total operating expenses of $83 9 million for full year 2020, compared with $66 2 million for the prior year with increases stemming from growth in our commercial organization costs related to being a public company and investments in key R&D programs.

Our non-GAAP net loss for the full year of 2020 was $83 7 million or $3 91 per share compared to a non-GAAP net loss of $76 2 million in 2019 for $5 77 per share after giving effect to the pro forma conversion of our preferred or convertible preferred stock.

<unk> for the fourth quarter of 2019.

Our total cash balance at the end of the fourth quarter of 2020 was $139 9 million.

Looking to 2021, I would like to provide some further detail regarding our full year and first quarter outlook that were included in today's press release.

The early part of 2021 showed a continuation of the trends that negatively impacted Q4 results.

That said, we are starting to see those headwinds abate with the business picking up globally, albeit still with some pockets of disruption such as in France, and Italy, where electric procedure restrictions are going into place as we speak.

With global volume trends, improving we do expect to see modest sequential growth from Q4 to Q1 and project revenue in a range of two 6% to $3 million.

Compared to the $1 6 million, we generated in the first quarter of 2020.

Based on current market trends and planned internal initiatives, we anticipate further sequential growth in Q2, and a more meaningful step up in Q3 and Q4.

In addition to market conditions impacting results the underlying demand for certain products such as the accolade for sensing ablation catheter in Europe, and our trans net flow crossing devices have exceeded initial projections at our own production capacity.

We expect these supply constraints to start easing during the second quarter.

As the investments we are making to increase capacity take effect sales performance is also expected to pick up throughout the year.

Lastly, as constantly utilization increases and physicians gain further experience for their technology. We also expect to see a higher rate of sales and sales conversions on capital equipment.

Putting this altogether, we project full year revenue to be in a range of 22% to $30 million.

From a phasing perspective, we expect 2021 revenue to be heavily weighted to the back half of the year as a result of the timing of capital sales the pace of manufacturing ramp for the accolade for sensing ablation catheter and trans septal access products the impact of anticipated new product.

Approvals and launches overall procedure volume growth and improved execution in the U S.

With that I'll now turn the call back to Vince for closing remarks.

Thank you David before opening the call for Q&A I want to reiterate our priorities for achieving our mission to transform ETP for patients physicians and healthcare systems around the globe.

Early evidence of the value of our complete product offering bring brings to position physicians and the pipeline we have on the horizon further support our conviction in the long term opportunity here.

Bringing disruptive technologies to market is never linear and we are focused on three key areas to achieve our vision and drive shareholder value.

First technology and innovation leadership.

We remain steadfast in our product development efforts with our internal R&D engine delivering important new innovations as well as extensive clinical developments over the short and long term horizons. We will continue to look to augment these efforts through selected licensing and partnership opportunities.

Second commercial execution, our sales in therapy management teams are critical to driving adoption and helping shift the paradigm.

While sales coverage expansion is a top priority. We're also laser focused on performance and ensuring execution across the entire commercial organization, including through our relationship with <unk>.

Third operational excellence as we drive increased sales volumes, we recognize the importance of improving our gross margin as well as continuing to invest and rigorous quality standards at the same time, we will be disciplined with our cash management to ensure we are judiciously deploying capital to support.

Growth.

We appreciate your continued interest and support.

And we will now open the call for questions operator.

Thank you as a reminder to ask a question you will need to press star one on your telephone withdraw your question press the pound key.

We ask that you please limit yourself to one question and one follow up.

Our first question comes from Robbie Marcus with Jpmorgan. Your line is open.

Great Good morning.

And thanks for taking the question.

Since I was I was hoping we could start off to dive into the thought process behind guidance a little bit more.

How are you thinking about unit placements versus utilization. Obviously it was we saw pretty decent unit placement in fourth quarter, but much lower utilization what are you expecting for first quarter and how does that play out through the balance of the year, because obviously the more units you place volume.

<unk> can hopefully come over time, just trying to get a sense between the balance between the two thanks.

Yes, I mean, I think the pace of unit placements.

We certainly in our funnel.

This quarter and next and really through the year.

We have plenty of customers raising their hands.

And saying they want to go through the rather laborious process of bringing in a unit and.

And getting started.

What were the discipline that we are install instilling and installing now and I'm driving this through through joint through Duane, our new CTO and through David and our entire commercial team.

We've got to make sure.

These systems that get place are placed into the hands of physicians and teams at hospitals that are.

Deeply committed.

To taking a hard look.

How they are treating a persistent patients.

And really working with us to streamline their workflow.

<unk> some changes in their procedural technique and I think it's fair to say.

That the changes that we are asking physicians to make.

Our.

More substantive.

In the U S.

And then we had originally anticipated.

It's not.

Wrenching change, it's not a complete 180, but it is there is work to be done there and thats as I alluded to I think on our last call.

We recognize this kind of in in Q4.

Where we were just understaffing our initial site.

Install.

And the launch and not adequately having sort of bodies in the right place at every step.

Step of bringing a new physician hub.

So my focus this quarter and next is on making sure we target the right customers.

That really want to go on that journey service, the daylights out of them.

And bring them up right so that when we get a system installed.

Great uptake in utilization.

So I think we certainly have.

Ability to place units along the pace along the lines of what people have in models and prior models.

One of the things that we're looking at hard here, though is.

Do we do we wanted to know what that pace and do we have the staffing and as our staff trained.

And configured in such a way to make sure that.

Every time, we install a unit.

We get that kind of the kind of uptake we need.

So.

Maybe it is.

Slight change in the pace of new installs.

But really much more focus and intense focus on making sure those systems come up come online.

<unk> generating cases sooner than they have.

And.

Generate better utilization coming out of the gates.

David do you have anything you want to add to that Ravi. The one thing I would add to that end as underscoring vince's commentary around accounts segmentation is it as critical for US that we have these are systems placed in the right accounts.

With the right positions, so as I start to see contracts come across my desk now what I'm observing is some really mark key centers that we where we expect to place systems in the very near term and I do think that that will help continue.

Continued to improve the efficiency and value of the systems that we're placing but safe to say, we do expect the.

Installed base to continue to grow in 2000 and in 'twenty, one and it has year to date.

It's.

To stratify into three kind of really really rough groups. When you bring a new technology like this to market of course, you got late adopters who are.

Our early targets and then you have people who.

Really get it and really want to embrace what youre doing and invest together with you.

To take their centers and their procedures to the next level and then there's a bit of a tweener group there Ravi.

Ravi who.

Just wanted to give it a try it sounds interesting we will give it a try and I'll just tell you we've got to focus on those centers that are just committed to.

To work with us and do the hard work fly out of the training before the center.

It takes delivery of their system will go to a training center with us commit to a certain minimum number of cases.

Rather than have the system come in and get a small number of cases under their belt.

Perhaps go onto the next the next widget, if you will and we just have seen this before in my career, we just need to have the discipline to focus on those folks that really want to go on the journey and fix this persistent afib problem.

Nobody was fixed it yet.

And there are no signs that any of the other technologies and companies in the market are bringing anything new to this market to address that vexing problem.

Got it and maybe as a follow up David.

As streets, basically bringing down numbers by a pretty decent.

And cliff versus where we were before.

Coming out of the IPO, how are you thinking about spending your cash flow needs and how long do you think your current cash balance for the last for.

Sure Ravi and thank you for the question, so maybe I'll take each.

Each piece of that so I'll start I'll start with spending and then go go go to cash.

So one of the things that we are taking a very hard look at here is how we are deploying all of our internal resources and Vince laid out during his prepared remarks, our top priorities to drive growth and value both in the near term and over time, which are.

Innovation commercial execution and operational excellence.

From my past experience is being in environments that are that are very cost conscious and rigorous with capital deployment I am bringing that same mentality and approach here to acute us we're working judiciously to prioritize our investments and ensure that we are putting our dollars in the.

In places that can have the most significant impact both in the immediate term while also supporting long term growth.

On the cash side, we did talk about ending the fourth quarter with $139 $9 million for cash.

We continue to believe we have sufficient cash to fund our operations over at least 12 months and we will continue we will evaluate this as we go forward, but a combination of factors are going to play in here one of which is obviously revenue growth, but I also want to underscore a number of opportunities to control.

Expenses through the P&L as well as optimize things like inventory.

No.

To maybe give you a little bit more perspective, and I wouldn't be surprised if we get this question on this call as we talked about supply constraints impacting some of our results here in <unk>.

In the guidance, but at the same time, you point out correctly that we are bringing down numbers relative to what you had expected at the time of the IPO. The challenge, we actually phases that there has been a bit of a mismatch in the demand for certain products and what we had previously contemplated which has also created.

Higher inventory balance than what we would like to see is there will be actively.

Managing our production volumes to ensure a right sizing.

Inventory as well, which should contribute positively to <unk>.

Cash flow.

Great. Thanks, David appreciate it.

Thank you. Our next question comes from Bob Hopkins with Bank of America. Your line is open.

Oh, great and good morning can you hear me Okay. Yes, we got you Bob how are you.

Good good how are you guys.

The channel.

David Let me for my congratulations on your on your decision.

Look forward to working with you here.

Hi.

A bunch of quick little question, Doug I'd Love to ask and just following up on that.

Commentary on cash.

Where does this guidance for 2021 contemplate youll be at year end from a from a cash perspective David.

Yes, it's a fair it's a fair question Bob.

Not ready to give.

Cash flow guidance for the year at this point in time.

Okay.

I mean, you said at least 12 months.

So I just wanted I know, we're going to get the question outdoors. The question will be.

These guys have to come back to the capital markets from time in 2021.

So.

But I guess, we will look forward to hearing from you when you have more to say on that front.

And then sorry, I would say Bob that we are.

We're comfortable for an 18 month period.

Okay.

And then.

Two other quick ones if okay.

One just following up.

On kind of the inventory.

And then what you're seeing in terms of a little bit of a misalignment in terms of what products were reported.

Hum.

Our drop there because it is an interesting data point, but at the same time you are generating very low right now.

Okay.

No problem.

Generating little revenue kind of it's really the profit.

Colin.

And I have one final follow up thank you.

So Bob I'm sorry.

We only got about two thirds of the words there can you just repeat the question, it's really hard to track.

Oh, sorry about that drop.

I was just wondering how you ran into an inventory issue.

When you're this early in the process and not generating a lot of revenue at this point.

Well I mean, you have to go back and look at the breadth of our product line.

We have.

Gen. Two consoles, we of RF generators, and irrigation pumps in cubic force devices and a whole line of accessories.

Electronic accessories, and then we have.

Our sheets are central crossing a brand new family of I think seven or eight or 10 different central crossing devices were launching.

In this quarter.

Our basket catheters, and then we have our ablation catheters, which were just spinning up production. There. So we did our level best to anticipate when those products would be approved.

And then we do limited market releases, when we first come out with those products.

So it's just it's just prudent to.

Restrain your builds while you make sure when you launch these products they show up in the hands of the customers and they work as intended.

And then you tend to dial up your production after that.

And then we.

We obviously have been building away our our Gen. One basket catheter and then we are transitioning from our Gen. One to our Gen. Two basket catheter.

So all of those launches or some of the hardest logistical things you can do in the medical device business.

We're relatively new in the game here and.

I mean, frankly, the R&D team has done such a great job cranking out see of new products for us and I would just say.

Planning and inventory mix has been we've been on a little bit of a learning curve there.

Which has impacted us so.

We simply we.

You don't have enough ablation catheters and electronic stacks to supply what we're being asked for from <unk> and our European team right now and we don't have enough simple crossing devices to.

To fill the demand at the moment and we have.

We've held off on our European launch of that product and in its entirety until we get up to sustainable levels with appropriate safety stock.

Bob the only thing I would add to that there are some fairly.

I would say industry standard practices that we're going to look to nature.

Nature, we adopted to drive more and more effective planning around both there are obviously sales forecast for more importantly, connecting that to our manufacturing.

Operations, and having a completely integrated sales and operating planning process to ensure that we have the right product being made and the right capacity for the right markets at the right time.

And then last quick question, Vince how much sort of a slow start in the U S.

It might just be due to the fact that you just need more clinical evidence for physicians to get them over the goal.

<unk> line and really engage with the technology how much of this is around data.

I think very little of it is around data to be honest with you.

If you look at how pace have physicians, who are treating patients today for persistent afib.

Ask him what data they're guiding there their procedure.

And their approach, whether theyre doing PDI, plus plus plus terrier wall or roofline or what have you.

It's generally not driven by data, Bob it's driven by work flow and familiarity and.

Just kind of.

Trends.

What physicians in the U S.

Focus on first is workflow and.

Just ease of use.

And.

Our.

I think where we have been a bit slow here.

As in really tuning up our own commercial and clinical teams.

And getting them in a position to educate some of these physicians and their staffs.

And train them up on how to transition their current work flow.

Over to a new workflow and I don't know how to quantify the level of difference, but like I said at the start of the call I think theres a little bit more.

Change here, then maybe high than we had anticipated.

And in order to get somebody to invest the time and energy.

To step back and say okay.

Tell me again, what am I doing here, how am I interpreting this map.

What is.

How should I be thinking about this new ablation strategy.

That just takes a bit more work and a bit more time and a bit more face time in front of people probably means bringing some of these doctors into animal labs.

To do it.

Road test cases before.

They start using the system I think I think we'll be doing a lot more of that.

All of this each will each single element of what I just described.

Is just harder to do in a COVID-19 environment. It just takes more time harder to get mind share harder to get time harder to get people to get on an airplane and go do an animal lab and do a training program. So.

Not just doctors, but literally our own internal people and this is a very hand to hand combat hands on business here.

So I would say there's just been this.

Sort of.

A thousand cuts kind of an issue with.

With Covid. It's just made every little aspect of doing a full rollout of a new procedural approach during travel restricted COVID-19 impacted times.

Got it thank you.

Uh huh.

Thank you. Our next question comes from Margaret <unk> with William Blair. Your line is open.

Hey, guys good morning, Hi, Margaret.

And what the keep going on what you guys have talked about with Bob.

These are kind of a number of issues that you've identified in the U S. And then I guess the question specifically and how quickly can you change those and really see an impact.

Utilization what stage are you at in making those changes and what gives you that confidence that it can have a positive impact for the second half of the year.

Yes, we are.

Started it started to crystallize for us I would say the last week in December 1st week in January.

We hired I think one of the best trainers and the business right around that time got a mic buoy to come in and we very quickly.

Just executed on our plan to pull every single one of our commercial people in the U S.

Out of the field and fly them down to Orlando to the Nickels training Center and spent a week with them down there.

Training people up.

And we're we've repeated that a couple of times over the last six weeks to train and retrain and.

Really start to kind of kind of bake in some of the the real nuts and bolts of how you make sure you have.

Early procedures with a new customer get done and get done right. We're also kind of belt and suspenders staffing cases with new physicians.

So I kind of executed a mandate that where possible. We have two mappers in every case with the new dock and maybe maybe a sales rep at the bedside.

Those first five or 10 cases, just to make sure that we get every aspect of the procedure right.

Now all of that takes a lot of coordination targeting and segmentation takes a lot of discipline.

To walk sometimes you just have to walk past centers that have raised their hand and said they want the system, but if they just don't have the right mindset.

Times, you just want to say hey, not for now.

That's where.

I decided one of the reasons I decided to bring in Duane who I worked with day in day out for eight years, as we got volcano up and running and off the ground and flying.

Duane This every day as we were getting into the <unk> business and competing with Boston scientific and now St. Jude Ratty.

Sure.

He knows how to do this and he's he is disciplined organised.

Executive commercial executive that.

Is just the kind of guy I needed to take the vision that we had here.

For walls of the home office and put it into practice in the field day in day out and.

I think as we as we do this we'll execute and tightened things up and.

And dial in this process and then the site launch process in Q1, and Q2 and I think I think we come out of Q2 with a very good handle on how to do this and do this right.

And I think Margaret we do have some very good examples of where that does materialize in the case that I that I that I observed actually several it was multiple cases when there is an experienced snapper and position working in tandem with one another.

And.

The right training having been completed.

Pretty actually seamless procedure.

The cases that I saw was it pretty was the first patient was a very complex individual who had had to failed ablation and what came in.

With naphtha and asking that catheter for dish.

<unk> was able to isolate two ablation is actually both left and right side of the heart and complete the procedure in under 15 minutes and this is a physician who at that point in time. They completed about 76 cases in total so you can see once that learning curve and initial training period.

Is complete there is a pretty significant ramp and you really can see.

Well orchestrated.

Procedure room.

I had a similar experience is up in Boise and the northwest.

New account, we just just spun up about three or four weeks ago.

And we had a team of three of us.

You know I was there just to kind of observe and I will tell you. These are very complicated cases that the operator does up there.

The day install just went flawless customer is thrilled and we have very very high hopes for.

How that system is going to spin up and utilization were going to see out of accounts.

Okay.

Kind of leads me.

Two questions. If that's a bigger question, which is the utilization ramp expected. Both this year and then going into 'twenty two.

<unk> got two different dynamics on the one hand stepping back from a short term maybe putting more people in the field.

Having team operating in a room.

For a little while at least.

It takes that second map for late from another accounts and so on so.

How much of that I guess is implied within guidance for the.

Change in productivity of those reps I guess more importantly, as we look into 'twenty two.

Should we think about utilization there because you guys did actually have a pretty steep.

Asian curve can we get back to that.

Maybe more specifically what are you going to get to that one procedure per system per week.

Well.

I think what we're seeing early in its early days in Europe, where we have ablation as well.

The catalytic effect of having.

The installation and the mapping together in these cases really helps get.

Physicians and centers.

<unk> to schedule cases in new cases, with you and build that muscle memory by doing a bunch of cases in a day a bunch of cases in the first couple of weeks.

So I pointed out in the U S. We are probably two and a half three weeks away from initiating our E flutter trial.

That's north of 100 110 patients I think in 15 centers and then three two to three months after that we initiate concurrently or Afib trial, which is I think north of 300 patients.

<unk>.

I think north of 30 centers, so by being able to layer in and bringing that ablation catheter capability, which by the way is much more seamlessly integrated with our mapping system procedurally.

And draw physicians and Hey, let's do a bunch of cases as part of this clinical trial. Obviously the current clinical trial is separate and apart from our commercial activities, but the fact of the matter is if a physician and the team do studies.

Do procedures as part of a clinical trial, they build that muscle memory of the familiarity with the cabling and troubleshooting the map interpretation that therapy approach.

We think that that will help catalyze the learning and the familiarity and the adoption and the schedules schedule casing.

The schedule pacing.

As we get into kind of mid year here and obviously that will continue into the following year.

Got it thanks guys.

Thank you. Our next question comes from sales Silvana with Canaccord. Your line is open.

Hey, great. Thanks, Good morning, and thanks for taking my questions.

Just.

I'm going to change.

Change it up a little here and what we do.

Wayne coming in what I'm trying to think of it as just operationally and <unk>.

How do you think of the pace.

Sales force expansion structure.

In the U S. So just operationally now that he's come in and been on board a couple of months.

How are you thinking about that today versus call it six to nine months ago.

Well we.

If you recall from our prior call we accelerated some of our mapping hires in Europe.

And in some sales folks in Europe that were over and above.

For the plan that we had in and around the time of the IPO, because we saw the ablation catheter coming and.

And we wanted to be prepared for that launch.

In the U S. We did accelerate some some mapping hires as well in the back half of last year.

Which which is responsible for a bit of the overage in the SG&A line in the back half of 2020.

Those people will take a certain amount of time to spin up and get up to speed and get fully trained.

We will we will make some additional adds there, particularly on the mapping clinical support side of things in this year and we might re jigger, a little bit the structure of the sales.

Side of the organization, but I think if you look at our projected commercial spend in the U S and Europe.

In terms of the aggregate dollar spend.

I feel like we're in we've got that pretty well dialed in now.

There might we might shift some.

Much shifts from bodies around between sales and clinical support and vice versa.

But and location of where people are but we don't see.

Really material change in how we're thinking about the body count and the spend there.

In the year ahead.

Great. That's helpful. Thank you and then.

I think you've touched on it a little Vince, but really getting into what did you learn you have been out in the field and I think I'm trying to go a little more higher level here in terms of you've got you've got the system out are there in terms of the mapping system is there any major benefit or fee.

Sure Thats not launched in Europe, yet that could change the trajectory number one we know you have the ablation there and then the same question as it relates to the U S are there any major components benefits features of the system that need to get commercialized in the U S and I think you've already given us the ablation timeline. Thanks. So.

In Europe, we've got.

The vast majority of our full product line is available.

In Europe for both.

Our direct team and our <unk> partners.

We have not really fully launched.

The the sort of the more commodity.

Diagnostic and ablation catheters in Europe, yet and we Havent, we havent really launched at all our central crossing product line over there, which I think will do well over there just because of supply constraints for saving those units for the U S where were already on launch.

But each of those problems are not problems those those gaps should be filled as we exit Q2.

Once we do that we've got a full bag over there.

And I'll just tell you bill it's a completely different vibe and energy when you excuse the competitive reps from the lab and you are controlling everything from growing access to mapping to ablation and a case.

It's just a better competitive environment, it's a better level of engagement with the physician and frankly, the numbers are better as well in terms of the opportunity to grab as much of that wallet share.

Sure as you can from a case.

And that obviously helps your ROI on your investment and your ramping and clinical team.

In the United States. There are a couple of things that we look forward to bring into the United States, We've already talked about the ablation catheters.

And a couple of trials that I think are going to help.

With that engagement during the trials.

Secondly, we have a feature in our software in Europe.

That is called Accu track.

The CE marked.

As a sort of a semi automated interpretation algorithm that helps physicians and mappers interpret them apps quickly and it kind of guidance there our eyes to areas of significant interest.

Kind of a region of interest finder.

We are in front of the FDA right now with the submission to bring that over to the U S.

And I'm Super eager to have that over here.

Physicians in the U S and our Mappers are always looking for.

Help from special items automation algorithms to help them quickly figure out what the heck. It is theyre looking at and these very complicated patients.

And guide their focus so they can figure out what their diagnosis is in there and Theyre ablation strategy is going to be.

Okay and then thanks.

Thank you for that that's that's helpful. And then last question for me just I know we've seen a lot of the other companies talking about new systems.

In the.

In the U S have you seen any of this to date.

No.

I mean the.

Other companies do periodic software upgrades.

And I think one of our competitors is talking about a new system I've seen a photograph of it.

I don't I don't.

Nothing that I've heard from any competitor suggests.

Suggest anything more anything other than slight variations on a 20 year old theme.

They're all the same basic contact mapping platform.

They've been throwing at these with great effect in simple cases.

They're doing a good job with simple cases for sure, but they've been throwing these contact mapping systems at persistent Afib and complex second Carty is for two decades now.

<unk>.

Nobody that I talked to.

Thanks for that those systems.

Have any clear near term prospects for change and the change in the game in terms of outcomes.

Great.

Thanks for taking my questions.

Thank you. Our next question comes from Marie Thibault with Pete.

Your line is open.

Alright, Thank you for taking the questions. This morning.

Ask one.

If I could drill down a little bit more on the utilization from Youre seeing right now.

And on the U S. That's obviously going to be an area of focus.

Thank you.

Higher vol.

Volume users. So I wonder if you could tell us a little bit about what your legacy users are doing in terms of prestige.

Procedures per system per week.

And possibly where you would like to see the new users come in.

Sort of a goal or something you have in line, maybe something in track throughout the year.

Yes.

Maybe you could give me a little bit of specific color on that it is a very wide range of utilization across our user user base now and I think your characterization is fair that as physicians gain experience that utilization rate does increase but we look at our procedures per household per month, and we have position.

<unk> who are.

Really in the sub one.

On average and then we had those that are.

Well over one one per week, so that would be.

In the five to 10 range per month, so as though it is a very very very wide range as I mentioned, one of our largest centers.

It is doing two to five a week and Thats one physician. So we still have a very wide band that are pretty large standard deviation around the mean level of utilization we.

Do you expect to see the utilization rate for our console improve over the course of 2021, including here.

Through the first.

First quarter.

And then.

Vince mentioned one of the key initiatives on the commercial execution side is ensuring that once we do open account, we have the right level of training and support for that accounts such that we can ramp that utilization faster than what we've seen in the past so during our.

Our IPO process and around and around that.

The Ipos as you all were getting to know us.

A question that I've got a lot was.

We understand it's a huge market and it's growing but we're trying to get our heads around how quickly can you get share.

Within individual accounts, given who you are competing with and whatnot.

So before this call.

Earlier this week I ask our European leader to take a hard look at.

At how we're doing in the sites that are up and running in the U K and Europe from a market share perspective, now that we have mapping and ablation together.

And I thought the results in the centers, where it was pretty encouraging.

The way it came back was so for complex procedures. So.

This is any kind of a less.

Left side a procedure, that's not just a plain vanilla procedure, so a persistent or redo or complex tachycardia.

The estimates they came back with and those centers that we were we were at between.

It's a different center between about 10% share and 28% share of those complex procedures, where we have we have a mapping system and we are have our ablation system.

So I mean to me that.

That's validating the thesis of where we can go when we have.

The whole.

Our portfolio of products available to our customers to our mappers to our sales team.

Uh-huh that makes a lot of sense and then maybe if I could ask one follow up the cause the feedback from foreign accumulate in Europe, so encouraging can.

Can you give us a better sense of how quickly those new users are ramping or getting to a utilization level that you find really.

Sticky compared to what you see in the U S right now where they don't have actively.

Well, it's early days, but you know.

Sure.

You launched these these are complex systems in there for different pieces of electronics and ex <unk>.

Six or eight cables and a catheter and banging around in these catheters for two or three hours.

The.

The performance of the catheter in the system.

Just fine.

In terms of ease of setup.

No. The thing just works and the track ability and torque ability of the catheter I put against anybody in this industry based on what we've heard seen and what I've felt so far.

We've been in an LMR situation.

I think the majority if not all of the centers that we've come in and trial then have raised their hand and said.

This is a this is a very nice system and we would like to have access to this.

So.

Right now what I, just wish I had was more electronic stacks and more catheters.

To proliferate further.

Out there you know one of the things that's really exciting about this product line is.

It works.

Appears to work very well with our mapping system for these complex cases, but it's also to my knowledge really the only full ablation system that can be used without our mapping system to do simple right sided cases, and still deliver those contact force measures.

And the other.

<unk> have elected not to essentially allow that to try and pull through mapping across the board.

And I'm, just all about meeting the customer needs and just given folks what they want and Thats a great relationship builder, a brand builder and we can make some money on that and drops from top line, there as well and frankly I don't think its going to be particularly easy for our competition to pivot in our direction with in that regard.

Okay, Okay, that's encouraging well best of luck and I'll leave it there. Thank you. Thank.

Thank you.

Thank you and I'm currently showing no further questions at this time, ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.

[music].

Yeah.

[music].

[music].

[music].

Ladies and gentlemen, thank you for standing by and welcome to the acuity Medical fourth quarter 2020 earnings Conference call.

At this time all participant lines are in a listen only mode.

After the speaker's presentation, there will be a question and answer session can I ask a question. During the session you will need to press star one on your telephone please.

Please be advised that today's conference is being recorded.

Have you quantified the assistance please press star zero.

I would now like to hand, the comparable that you speak of the day Caroline corner Investor Relations. Thank you. Please go ahead ma'am.

Thank you operator, welcome to have queued up for fourth quarter and full year 2020 earnings call. Joining me on today's call are <unk>, President and chief.

Executive Officer, and David Berman, Chief Financial Officer. This call will include forward looking statements within the meaning of the private Securities Litigation Reform Act of Thanks from 95, all statements made on this call that do not relate to matters of historical facts should be considered forward looking statements.

That may cause results to differ from these forward looking statements are discussed in the forward looking statements section of the press release attached as an exhibit to acute us. This form 8-K filed with the SEC today and are also discussed in more detail in the risk factors sections in our ketosis. Most recent filings with the SEC, including the risk factors described in a kitted this form F. One and.

Forward looking statements provided during this call, including projections for future performance are based on management's expectations as of today <unk> undertakes no obligation to update these statements except as required by applicable law.

This press release with fourth quarter and full year of 2020 results is also available on <unk> website, www dot acute medical dot com under the investors section and includes additional details about our Q does this financial result.

Just once I'd also I think he was the SEC filings, which you're encouraged to review a recording of today's call will be available on the website. Later today now I would like to turn the call over to Vince for his comments in fourth quarter and full year 2020 business highlights.

Thank you everyone for joining us today.

I apologize for the last minute change to the earnings call timing.

The time change is entirely the result of an error by the company's filing agent Donnelley financial services, whereby donnelley inadvertently file the Q2 financial results for automated distribution earlier today at three a M Pacific time, six a M eastern time.

As soon as we learned is this are we acted swiftly to ensure we can move our call to discuss results before market open we.

We appreciate your understanding of this matter.

As Caroline mentioned.

I'm on the call today with David Rowland, who as we announced last month has joined US as Chief Financial Officer, Dave.

David brings deep medical technology experience paired with strong operational background and we're very happy to have him on board.

In addition to David joining the team we have made several other leadership changes, including the appointment of Dwain Wilder as our chief commercial officer, as well as expanding our board of directors.

In February we announced the addition of Daniela Kraft to our board of directors, Daniela as senior Vice President and President of bio production at Thermo Fisher.

Prior prior to joining thermo Fisher Daniela held senior roles at Johnson, <unk>, Johnson, including U S. President for bio sense Webster J&J Electrophysiology business. In addition, John Sheridan President and CEO of tandem diabetes care joined our board as of this week.

Previously John worked extensively in the cardiology field, including his time with volcano, where he and I and many other members of the team here at acute has helped to build the company's highly successful image guided therapy business together.

In the fourth quarter as well as here in the first quarter. Our team has been hard at work installing consoles and laying the groundwork for further adoption of our products.

We're also pressing forward on our planned expansion of our product lines through targeted R&D efforts and we are on track to launch several new products. This year as well as initiated key clinical trials.

Reflecting on our performance.

And forward outlook I want to thank my <unk> colleagues for their tremendous commitment and dedication to executing our strategy.

It also goes without saying that I remain in awe of the heroic efforts of our physician customers and healthcare providers to deliver deliver care to patients.

We continued to be as excited as ever about the potential to change the treatment paradigms in electrophysiology nothing gives us more satisfaction and seeing our technology facilitate transformational patient care and better.

In a better position experience.

This is our guiding principle here at <unk> and it keeps us focused on our mission.

We were excited to see several live cases presented at the AF Symposium in January that featured both our accu map mapping system.

And arguably for sensing ablation catheter.

One case that stood out involve the 74 year old female with recurrent symptomatic persistent atrial fibrillation or AF, who underwent an ablation procedure.

With the <unk> mapping system.

And the Acura blade for sensing ablation catheter <unk>.

Ablate Remap strategy was executed to tackle three arrhythmia is both left and right sided atrial fibrillation typical atrial flutter and <unk> and atypical atrial flutter.

This case was presented by Professor Tim Bets, who commented on the excellent handling of the catheter along with the superior conduction properties of gold compared to the more commonly used platinum iridium for AF ablation.

In this case among several others featured at the symposium reinforces the benefits of the acute as technology, particularly when using our full product suite, including our diagnostics and mapping systems and now our proprietary ablation catheter system.

I will provide more detail on the accurately for sensing ablation catheter product launch later in the call, but overall the early performance of our new therapy system and catheter has exceeded our expectations and represents a critical validation of our overarching strategy.

For those of you who follow our clinical development activities and scientific journals or via our website.

You'll know that 2020 was an important year for us during the year, our company and independent investigators have published an array of key papers covering our disruptive mapping technologies as well as case series and clinical vignettes highlighting the unique contributions of our mapping system as.

Used and troublesome complex cases.

I'd like to highlight a paper recently published jointly by two Premier centers in the U K University of Oxford, and the Royal Brompton Hospital.

This paper published online in the heart Rhythm Journal reported on the real World application of the core to boundary mapping and ablation approach first views and reported on in our seminal uncover as study from circulation.

2019 for.

For context, the cord a boundary mapping and ablation approach uses our mapping system to identify the potential source of the arrhythmia for the core and then and then a bleeding that core and tying enough for the short line connecting them to the nearest anatomical boundary the premise.

Is that this approach allows for better outcomes and less ablation energy delivered.

In this paper the author reported on their results in treating 40 consecutive patients with persistent and long standing persistent atrial fibrillation as compared to 80 propensity matched persistent AF patients treated using our competitors' system at the same two centers.

Using a more conventional and non patient specific anatomical approach.

The authors using the prescribed core to boundary individualized approach facilitate facilitated by the <unk> system.

Reported a very impressive 24 months freedom from atrial fibrillation, <unk> atrial tachycardia of 67% of patients with persistent and long standing persistent AF.

This compares to the matched control arms freedom from AF and a T of just 46% at 24 months.

Simply put patients in the control arm were roughly 50% more likely to experience air for tachycardia. After their ablation procedure than those in the acute is treated arm.

Further in the acute us arm, an impressive 35 out of 40 treated patients or 87, 5%, where <unk> free and <unk> and off anti arrhythmic drugs at 24 months and operators were able to achieve acute termination out of AF during the ablation procedure.

<unk> itself and over 70% of patients versus acute termination in the control arm of only 10%.

Seeing the operators.

Two we're also participating in rollers in the earlier uncover AF trial.

Take the learnings from uncover and apply them to their persistent patients and daily clinical practice and deliver these extraordinary results is extremely gratifying and exciting for us here at the company.

Turning to our performance in the fourth quarter.

Consistent with our disclosure on January 13th.

2021 fourth quarter 2020, net revenues were $2 6 million compared to zero point $7 million in the prior year fourth quarter.

Despite significant headwinds from Covid, we continue to add new customers as well as upgrade existing customers to our groundbreaking second generation electrophysiology mapping system.

During the fourth quarter, we increased our worldwide installed base second generation acumen consoles to 51% up from 37 consoles at the end of the prior quarter.

The combination of new installs and upgrades plus our first generation consoles brought the total global installed base from consoles to 58 as of December 31, 2020, compared to 49 at September 32020.

In the U S. Our total installed base increased to 37 units from 29 in the prior quarter, while the installed base outside the U S, including placements through bio tronic totaled 21 units up from 20% in the third quarter from 2020.

Sure.

While console placement activity was robust during the fourth quarter, we observed some COVID-19 driven impacts on placements.

Activity in Europe during the fourth quarter became complicated as travel restrictions were enacted and various hospitals shut off access to vendors.

In the U S. We saw similar pandemic related challenges surface during late November and early December.

We did see installations in both the U S and O U S. Originally scheduled for the fourth quarter of 2020 slide a few weeks out into early 2021.

As always we strive to take advantage of our nimbleness and creativity in times of great change and we have been successful in executing virtual installations and training as well as customer and servicing.

Now moving to case volumes as I discussed at the Jpmorgan Healthcare conference in January we saw meaningful fluctuations in volumes throughout Q4.

Our business had momentum early in the quarter with strong sequential procedure growth in October however, COVID-19 related headwinds drove a sharp drop in the second half of November and December.

These challenges persisted through the early part of Q1, but we have started to see case volumes pick up in recent weeks.

Looking ahead, we are cautiously optimistic that the trends will continue to improve as such we are changing our recharging forward on our product launches and commercial and clinical development activities.

The commercial introduction of our Accu blade <unk> ablation catheter and system in Europe has been met with enthusiasm from our physician customers, who have lauded the handling and stability of the beveled gold tip catheter as well as smooth setup and operation of the associated stack of electron.

Accessories, including the <unk> console RF generator infusion pump and controller unit.

Electrophysiologist have also been impressed with the reduction in sailing irrigation due to the combination of the gold tip and reduced flow rate.

As a reminder, we partner.

We and our partner <unk> commenced our limited market release of this product line in early January in the face of roaming Covid shutdowns and key markets in Europe.

And just the first nine weeks since introduction the catheter and system had been used in 10 centers in five countries by 17 different physicians and a variety of procedures, including Avi node atrial tachycardia and atrial fibrillation ablation.

The rapid uptake in acute clinical results give us confidence that the combination of our innovative mapping technology and the novel ablation catheter and system is going to significantly improve workflows for.

Physician engagement and ultimately our ability to increase share.

And revenue per case and accounts across the U K and Europe.

Lastly, we have received consistent and positive customer feedback highlighting that the <unk> catheter can be both integrated with with the <unk> system for more complex procedures. Yet also be used as a standalone system for less complex procedures on the right side of the heart where.

<unk> and procedure expense management are important, but we're contact force as desired.

Demand for the <unk> catheters and related electronic components is currently outpacing supply.

We are hiring and training manufacturing personnel to meet the accelerated demand.

Importantly, we think the early success, we are seeing in Europe is a harbinger of things to come around the world.

We have demonstrated clinical differentiation with our core mapping technology and the introduction of an ablation catheter and system will further enhance the value we bring to patients and physicians.

The results in receptivity, we are seeing in Europe, only heightens, our enthusiasm for commencing U S clinical trials for our full array of ablation catheters and accessories.

From a commercial execution perspective, our Europe direct commercial organization has been effectively building physician and hospital interest and our broad product offering the team is driving strong results across all product categories currently available in the region.

Including our second generation consoles, our accu map consumables and most recently our accurate blade force sensing ablation catheter.

We are also eager to conduct a full launch of our central crossing in access catheters with this team in the second quarter.

Our international commercial efforts are further augmented by our bidirectional distribution agreement with bio tronic.

This agreement this agreement gives <unk> the ability to leverage <unk> global sales distribution infrastructure and helps us more rapidly achieve.

Global reach.

During the fourth quarter, we sold our first two consoles to bio tronic for new accounts in Switzerland.

During the quarter <unk> Mappers, who have undergone acute has extensive month long map for training program performed their first standalone mapping cases.

<unk> and <unk> are actively working in concert on regulatory approvals in other countries as well expanding our footprint as we first envisioned when we entered into the agreement.

We continue to be very pleased with our relationship with <unk> and are encouraged to see strong engagement from local teams as we rely heavily on distance learning for a hardware software catheters installation support.

And related case knowledge during these challenging and travel restricted times.

While we are seeing strong execution and sales performance in Europe direct organization and through our <unk> partnership we have not achieved our goals in the U S.

Despite hiring some of the absolute best and brightest from the electrophysiology community into our commercial organization, we have been slow with the initiation of some of our installs and struggled.

Struggled to drive uptake and consistent utilization.

Covid has no doubt layered significant challenges for a new to market early stage company like ours. However, it is my view that there are other execution factors at play here primarily related to inadequate targeting.

Physician segmentation and proper training and direction of our commercial team.

I take full responsibility for this.

After careful self assessment I decided to bring in a battle tested former colleague of mine Dwain Wilder to run our commercial organization as Chief commercial officer.

Wayne started at acute us on March 1st and.

In a prior life, Duane and I together with the team at volcano have competed with entrenched incumbents before and one.

As a world class commercial leader and he has demonstrated a demonstrated ability to develop markets drive adoption of new therapies navigate the capital equipment sales landscape and successfully challenge large and entrenched incumbents.

These factors that yielded success at volcano are very much the same foundational elements that will drive future performance at <unk>.

In addition to the investments and upgrades, we are making to our commercial team. We continued to make strong progress on our pipeline and clinical developments as well as gain regular regulatory clearances and approvals.

Our teams have made major progress on building out the scope of our left heart access product lines and on the development of our pulsed field ablation or PFA technology.

We continue to advance our PFA program and expect to initiate first in man in pilot trial activities later in 2021.

To illustrate the energy and pace of our innovation, we have conducted 59 preclinical labs.

Since July one.

Each testing, one or multiple new products featuring our <unk>.

Elements of our full product portfolio be it PFA conventional RF ablation, septal crossing or conventional contact and non contact mapping.

Yeah.

Our clinical and regulatory teams have also been diligently working through the process to initiate three separate U S. IDE studies for therapy catheter lines, and we expect to enroll our first patient in our flutter trial with our ablation catheter and system in the U S and the next.

Several weeks.

As we progress through formal initiation of these therapy trials, we will provide relevant updates in earnings earnings calls and medical meeting presentations and in other public disclosures.

Closing with key regulatory updates following several important achievements.

<unk> achievements in 2020, including CE Mark approval for our Accu blade for sensing ablation catheter and the Accu guide flex and many transcept to access systems as well as U S 500, 10-K clearance for a second generation operation.

Second generation Accu map patient electrode kit, we expect a very busy and productive 2021.

Over the course of this year, we anticipate receiving CE mark on several products, including our <unk>, two <unk> mapping catheter and Accu guide Max delivery sheet.

<unk> Cross <unk> solo Transcept <unk> ex.

<unk> system, and our Accu guide viewed delivery sheath with localization electrodes.

In the U S. We anticipate five 10-K clearance on the Ecu Cross <unk> solo Trans septal access system.

And the <unk> Max 2.0 delivery sheet.

Each of these products is designed to provide specific procedural advantages for our physician customers and to help the company garner increased market share as well as improved revenues and contribution margin per procedure.

I am confident that no E&P company on the planet is a more innovative creative and productive product development team that we have here at <unk> and our recent releases and near term product improvement pipeline bears that out.

With that I'll now turn it over to David for our financial results David.

Thank you Vince and good morning, everyone I am very excited to join <unk> and to be working with Vince and the entire organization.

In my first few weeks on the job I have seen a tremendous commitment to our vision and an unwavering dedication to our mission of serving patients and the clinical community.

A few days ago I had the opportunity to observe several cases here in southern California visit with customers and meet some of our sales team.

I am very encouraged by these interactions and I will be on the road in the coming months to get further acclimated with our field team and key customers.

Yes.

In my remarks today I will provide details on the fourth quarter and full year 2020 operating results as well as our outlook for 2021.

Our revenues for the fourth quarter of 2020 were $2 6 million up from zero point $7 million in the year ago quarter.

For Q4 year over year revenue increase was driven by procedural adoption for our broad range of EP products and trans septal access devices. The conversion of consoles previously installed under evaluation agreement and the implementation of the <unk> distribution agreement.

Gross margin was negative 90% for the fourth quarter of 2020, compared with negative 254% in the fourth quarter of 2019.

We continue to make significant investments in our manufacturing infrastructure to support our long term growth outlook.

As volume increases.

As volume increase and our targeted manufacturing cost optimization programs take hold we expect our gross margins to improve.

Operating expenses were $25 7 million in the fourth quarter of 2020 compared to $16 million for the same period of the prior year.

R&D expenses were $9 million in the fourth quarter compared with $7 5 million for the same period of 2019. The increase in R&D expenses was primarily related to investments and the accolade for sensing ablation catheter development, our PSA program console enhancements and upgrades to our asking that mapping.

<unk>.

SG&A expenses were $15 2 million in the fourth quarter of 2020, compared with $7 8 million for the same period last year.

The increase was primarily due to the expansion of our commercial team in conjunction with our full commercial launch and an increase in G&A for public company related costs.

As a reminder, we present, our net loss on a GAAP basis, and non-GAAP basis to exclude items that we believe are not representative of core operating results.

For a complete reconciliation of our GAAP financial measures to our non-GAAP financial measures. Please refer to the tables included with the press release and 8-K that we issued today.

Excluding specified items, our non-GAAP net loss for the fourth quarter of 2020 was $24 9 million or <unk> 89 per share compared to a non-GAAP net loss of $17 9 million for the fourth quarter of 2019 for $1 six per share after giving effect to the pro forma conversion of our convertible.

Preferred stock.

To briefly recap full year 2020 revenue totaled $8 5 million versus $2 8 million for the full year of 2019.

The increase was driven by higher direct sales of Akitas disposables sales of our acting that council and distributor sales through our partner <unk>.

Gross margin was negative 88% for the full year of 2020 compared with negative 226% in the prior year.

Proven compared to 2019 was attributable to increased revenue and higher production volumes.

Total operating expenses of $83 9 million for full year 2020, compared to $66 2 million for the prior year with the increases stemming from growth in our commercial organization costs related to being a public company and investments in key R&D programs.

Our non-GAAP net loss for the full year of 2020 was $83 7 million or $3 91 per share compared to a non-GAAP net loss of $76 2 million in 2019 for $5 77 per share after giving effect to the pro forma conversion of our preferred convertible preferred stock.

<unk> for the fourth quarter of 2019.

Our total cash balance at the end of the fourth quarter of 2020 was $139 9 million.

Looking to 2021 I would like to provide some further details regarding our full year and first quarter outlook that were included in today's press release.

The early part of 2021 showed a continuation of the trends that negatively impacted Q4 results.

That said, we are starting to see those headwinds abate with the business picking up globally, albeit still with some pockets of disruption such as in France, and Italy, where electric procedure restrictions are going into place as we speak.

With global volume trends, improving we do expect to see modest sequential growth from Q4 to Q1 and project revenue in a range of two 6% to $3 million compared to the $1 6 million, we generated in the first quarter of 2020.

Based on current market trends and planned internal initiatives, we anticipate further sequential growth in Q2, and a more meaningful step up in Q3 and Q4.

In addition to market conditions impacting results the underlying demand for certain products such as the accolade for sensing ablation catheter in Europe, and our trans net flow crossing devices have exceeded initial projections at our own production capacity.

We expect these supply constraints to start easing during the second quarter.

As the investments we are making to increase capacity take effect sales performance is also expected to pick up throughout the year.

Lastly, as constantly utilization increases and physicians gain further experience for their technology. We also expect to see a higher rate of sales and sales conversions on capital equipment.

Putting this altogether, we project full year revenue to be in a range of 22% to $30 million from a phasing perspective, we expect 2021 revenue to be heavily weighted to the back half of the year as a result of the timing of capital sales the pace of manufacturing ramp for the accurately for sensing ablation.

<unk> and trans septal access products, the impact of anticipated new product approvals and launches overall procedure volume growth and improved execution in the U S.

With that I'll now turn the call back to Vince for closing remarks.

Thank you David before opening the call for Q&A I want to reiterate our priorities for achieving our mission to transform EEP for patients physicians and healthcare systems around the globe.

Early evidence of the value of our complete product offering bring brings to position physicians and the pipeline we have on the horizon further support our conviction in the long term opportunity here.

Bringing disruptive technologies to market is never linear and we are focused on three key areas to achieve our vision and drive shareholder value.

First technology and innovation leadership.

We remain steadfast in our product development efforts with our internal R&D engine delivering important new innovations as well as extensive clinical developments over the short and long term horizons. We will continue to look to augment these efforts through selected licensing and partnership opportunities.

Second commercial execution, our sales in therapy management teams are critical to driving adoption and helping shift the paradigm.

While sales coverage expansion is a top priority. We're also laser focused on performance and ensuring execution across the entire commercial organization, including through our relationship with <unk>.

Third operational excellence as we drive increased sales volumes, we recognize the importance of improving our gross margin as well as continuing to invest and rigorous quality standards at the same time, we will be disciplined with our cash management to ensure we are judiciously deploying capital to support.

Growth.

We appreciate your continued interest and support.

And we'll now open the call for questions operator.

Thank you as a reminder to ask a question you will need to press star one on your telephone withdraw your question press the pound key.

We expect to please limit yourself to one question and one follow up.

Our first question comes from Robbie Marcus with Jpmorgan. Your line is open.

Oh great.

And thanks for taking the question.

Vince I was I was hoping we could start off to dive into the thought process behind guidance a little bit more.

How are you thinking about unit placements versus utilization. Obviously it was we saw a pretty decent unit placement in fourth quarter, but much lower utilization what are you expecting for first quarter and how does that play out through the balance of the year, because obviously the more units you place.

Volumes can hopefully come over time, just trying to get a sense between the balance between the two thanks.

Yes, I mean, I think the pace of unit placements.

We certainly in our funnel.

This quarter and next and really through the year.

We have plenty of customers raising their hands.

And saying they want to go through the rather laborious process of bringing in a unit.

And getting started.

What were the discipline that we're install instilling and installing now and I'm driving this through through drawing through Duane our new CTO.

David and our entire commercial team is we've got to make sure that these systems that get place are placed into the hands of physicians and teams at hospitals that are day.

Deeply committed.

To taking a hard look.

How they're treating their persistent patients.

And really working with us to streamline their workflow.

Doc some changes in their procedural technique and I think it's fair to say.

That the changes that we are asking physicians to make.

Our.

More substantive.

Clearly in the U S.

Than we had originally anticipated.

It's not.

Wrenching change, it's not a complete 180, but it is there is work to be done there and that's as I alluded to I think on our last call.

We recognize this kind of in Q4.

Where we were just under staffing our initial site.

Install.

And the launch and not adequately having sort of bodies in the right place at every step.

Step of bringing a new physician hub.

So my focus this quarter and next is on making sure we target the right customers.

That really want to go on that journey service, the daylights out of them.

And bring them up right so that when we get a system installed.

Great uptake in utilization.

So I think we certainly have the ability to place units along the pace along the lines of what people have in models and prior models.

One of the things that we're looking at hard here, though is.

Do we do we want to grow at that pace and do we have the staffing and as our staff trained.

And configured in such a way to make sure that every time, we install a unit.

We get that kind of the the kind of uptake we need.

So.

I think I think you'll you'll see in some of our numbers going forward.

Maybe it is.

Hawaii change in the pace of new installs.

But really much more focus intense focus on making sure those systems come up come online.

<unk> generating cases sooner than they have.

And.

And generate better utilization coming out of the gates.

David do you have anything you want to add to that Rob.

The one thing I would add to that and it is underscoring vince's commentary around accounts segmentation is it as critical for US that we have these are systems placed in the right accounts with the right positions. So as I start to see contracts come across my desk now what I'm observing is some really marquee centers.

Is that where we expect to place systems in the very near term and I do think that that will help.

Continue to improve the efficiency and value of this system that we're replacing but safe to say, we do expect.

The installed base to continue to grow in 2000 and in 'twenty, one and it has year to date.

It's.

To stratify into three kind of really really rough groups and when you bring a new technology like this to market of course, you got late adopters, who just our early targets and then you have people, who really get it and really want to embrace what youre doing and invest together with you.

To to take their centers and their procedures to the next level and then there's a bit of a tweener group there.

Ravi who.

Just wanted to give it a try it sounds interesting we'll give it a try and I'll just tell you we got to focus on those centers that are just committed to.

To work with us and do the hard work fly out of the training before the center.

It takes delivery of their system will go to a training center with us commit to a certain minimum number of cases.

Rather than have the system come in in and get a small number of cases under their belt.

Perhaps go onto the next the next widget, if you will and we just have seen this before in my career, we just need to have the discipline to focus on those folks that really want to go on the journey and fix this persistent afib problem.

Because nobody is fixed it yet.

And there are no signs that any of the other technologies and companies in the market are bringing anything new to this market to address that vexing problem.

Got it.

It's a follow up David.

As streets, basically bringing down numbers by a per.

Pretty decent clip versus where we were before.

Coming out of the IPO, how are you thinking about spending your cash flow needs and you know how long do you think your current cash balance will last for.

Sure Ravi and thank you for the question, so maybe I'll take each.

Each piece of that so I'll start I'll start with spending and then go go go to cash.

So one of the things that we are taking a very hard look at here is how we are deploying all of our internal resources and Vince laid out during his prepared remarks, our top priorities to drive growth and value both in the near term and over time, which are.

Innovation commercial execution and operational excellence.

From my past experience is being in environments that are that are very cost conscious and rigorous with capital deployment I am bringing that same mentality and approach here to acute us we're working judiciously to.

Prioritize our investments and ensure that we are putting our dollars in the in places that can have the most significant impact both in the immediate term while also supporting long term growth.

On the cash side, we did talk about ending the fourth quarter with $139 $9 million of cash.

We continue to believe we have sufficient cash to fund our operations over at least 12 months and we will continue we will evaluate this as we go forward, but a combination of factors are going to play in here one of which is obviously revenue growth, but I also want to underscore a number of opportunities to control it.

Expenses through the P&L as well as optimize things like inventory.

No.

Maybe give you a little bit more perspective, and I wouldn't be surprised if we get this question on this call as we talked about supply constraints impacting some of our results here in.

Yeah.

In the guidance, but at the same time, you pointed out correctly that we are bringing down numbers relative to what you had expected at the time of the IPO. The challenge we actually face is that there has been a bit of a mismatch in the demand for certain products and what we had previously contemplated which has also created a higher inventory balance.

And what we would we'd like to see is that we'll be actively managing our production volumes to ensure a right sizing.

Inventory as well, which should contribute positively to cash flow.

Great. Thanks, David appreciate it.

Okay.

Thank you. Our next question comes from Bob Hopkins with Bank of America. Your line is open.

Oh, great and good morning can you hear me Okay. Yes, we got you Bob how are you.

Good good how are you guys.

The channel.

Let me for my congratulations on your on your decision.

Look forward to working with you here.

Hi.

A bunch of quick little question that I'd love to ask and just following up on that.

Commentary on cash.

Does this guidance for 2021 contemplate youll be at year end from a from a cash perspective David.

Yes, it is it fair for us to.

Fair question, Bob I'm, not ready to give.

Cash flow guidance for the year at this point in time.

Okay.

You said at least 12 months.

So I just wanted to I know, we're going to get the question outdoors. The question will be.

These guys have to come back to the capital markets from time from 2021.

So.

But yes, we will look forward to hearing screen when you have more to say on that front.

And then sorry, I would say Bob.

We're comfortable for an 18 month period.

Okay.

And then.

Two other quick ones if okay.

One just following up.

Kind of the inventory.

And then interest you are saying in terms of a little bit of a misalignment in terms of what products, we're moving forward.

Hum.

Our drop there because it is an interesting data point, but at the same time youre generating very low right now.

Okay.

No problem.

Generating very little revenue.

Really the problem.

And I have one final follow up thank you.

So Bob I'm sorry.

We only got about two thirds of the words there can you just repeat the question, it's really hard to track.

Oh, sorry about that I'm a drop.

I was just wondering how you ran into an inventory issue.

When you're this early in the process and not generating a lot of revenue at this point.

Well I mean, you have to go back and look at the breadth of our product line.

We have.

Gen. Two consoles, we of RF generators, and irrigation pumps from cubic force devices and a whole line of accessories.

Electronic accessories, and then we have our.

Our sheets are central crossing a brand new family I think seven or eight or 10 different central crossing devices were launching.

And this quarter.

We've got our basket catheters, and then we have our ablation catheters, which were just spinning up production there.

So we did our level best to anticipate when those products would be approved.

And then we do limited market releases, when we first came out with those products.

So it's just it's just prudent to.

Restrain your builds while you make sure when you launch these products they show up in the hands of the customers and they work as intended.

And then you tend to dial up your production after that.

And then we.

We obviously have been building away our our Gen. One basket catheter and then we are transitioning from our Gen. One to our Gen. Two basket catheter.

So all of those launches or some of the hardest logistical things you can do in the medical device business.

And we're relatively new in the game here and.

I mean, frankly, the R&D team has done such a great job cranking out a sea of new products for us and I would just say.

Planning and inventory mix has been we've been on a little bit of a learning curve there.

Which has impacted us so.

We simply we.

Don't have enough ablation catheters, and electronic stacks to supply what we're being asked for from <unk> and our European team right now and we don't have enough set for crossing devices to fill the demand at the moment and we have.

We've held off on our European launch of that product and in its entirety until we get up to sustainable levels with appropriate safety stock.

Bob the only thing I'd add to that there are some fairly.

I would say industry standard practices that we're going to look to.

Nature, we adopt here to drive more and more effective planning around both there are obviously sales forecast for more importantly, connecting that to our manufacturing.

Operations, and having a completely integrated sales and operating planning process to ensure that we have the right products being made and the right capacity for the right markets at the right time.

And then last quick question, Vince how much of that sort of a slow start in the U S.

It might just be due to the fact that you just need more clinical evidence for physicians to get them over the goal.

<unk> line and really engage with the technology how much of this is around data.

I think very little of it is around data to be honest with you.

If you look at how patients have physicians, who are treating patients today for persistent afib.

Ask him what data they are guiding there their procedure on.

And their approach, whether theyre doing PDI, plus plus plus terrier wall or roofline or what have you.

It's generally not driven by data, Bob it's driven by work flow and familiarity.

No.

Kind of.

Trends.

What physicians in the U S.

Focus on first is workflow and.

Just ease of use.

And.

Our.

I think where we have been a bit slow here.

As in really tuning up our own commercial and clinical teams.

And getting them in a position to educate some of these physicians and their staffs.

And train them up on how to transition their current work flow.

Over to a new workflow and I don't know how to quantify the level of difference, but like I said at the start of the call I think theres a little bit more change here, then maybe high than we had anticipated.

And in order to get somebody to invest the time and energy to.

To step back and say okay.

Tell me again, what am I doing here, how am I interpreting this map.

What is.

How should I be thinking about this new ablation strategy.

That just takes a bit more work and a bit more time and a bit more face time and from a people probably means bringing some of these doctors into animal labs.

To do.

Road test cases before they start using the system I think I think we'll be doing a lot more of that.

All of this each will each single element of what I just described.

Is just harder to do in a COVID-19 environment. It just takes more time harder to get mind share harder to get time harder to get people to get on an airplane and go do an animal lab and do a training program.

And that not just doctors, but literally our own internal people and this is a very hand to hand combat hands on business here.

So I would say there's just been this.

Sort of.

You know a thousand cuts kind of an issue with.

With.

With Covid, it's just made every little aspect of doing.

A full rollout of a new procedural approach during travel restricted COVID-19 impacted times.

Got it thank you.

Thank you. Our next question comes from Margaret <unk> with William Blair. Your line is open.

Hey, guys good morning, Hi, Margaret.

And I want to keep going on what you guys have talked about with Bob.

And these are kind of a number of issues that you've identified in the U S. And then I guess the question specifically is how quickly can you change those really see an impact.

And what stage are you at in making those changes and what gives you that confidence that yes.

It can have a positive impact in the second half of the year.

Yes.

Started have started to crystallize for us I would say last week in December 1st week in January.

We hired I think one of the best trainers and the business right around that time got a mic buoy to come in.

And we very quickly.

Just executed on our plan to pull every single one of our commercial people in the U S.

Out of the field and fly them down to Orlando to the Nickels training Center and spent a week with them down there.

Training people up.

And we're we've repeated that a couple of times over the last six weeks to train and retrain and.

Really start to kind of kind of bake in some of the the real nuts and bolts of how you make sure you have.

Early procedures with a new customer get done and get done right. We're also kind of belt and suspenders staffing cases with new physicians.

So I kind of executed a mandate that where possible. We have two mappers in every case with the new dock and maybe maybe a sales rep at the bedside.

Those first five or 10 cases, just to make sure that we get every aspect of the procedure right.

Now all of that takes a lot of coordination targeting and segmentation takes a lot of discipline.

To walk sometimes you just have to walk past centers that have raised their hand and said they want the system, but if they just don't have the right mindset.

So you just want to say hey, not for now.

That's where.

I decided one of the reasons I decided to bring in Duane who I worked with day in day out for eight years, as we got volcano up and running and off the ground and flying.

Duane did this every day as we were getting into the <unk> business and competing with Boston scientific and now St. Jude Ratty.

Sure.

He knows how to do this and he is he is disciplined organised.

Executive commercial executive that.

Is just the kind of guy I needed to take the vision that we had here.

For walls of the home office and put it into practice in the field day in day out and.

I think as we as we do this we'll execute and tightened things up and.

And dial in this process and then the site launch process in Q1, and Q2 and I think I think we come out of Q2 with a very good handle on how to do this and do this right.

And I think Margaret we do have some very good examples of where this does materialize in the case that I that I that I observed actually with several it was multiple cases when there is an experienced snapper and position working in tandem with one another.

And.

The right training having been completed.

Pretty actually seamless procedure.

The cases that I saw was a pretty was the first patient was a very complex individual who had had to failed ablation and what came in.

NASA <unk> catheter for.

Additionally, as able to isolate two ablation is actually both left and right side of the heart and complete the procedure in under 15 minutes and this is a physician who at that point in time. They completed about 76 cases in total so you can see once that learning curve and initial training period.

Is complete there is a pretty significant ramp and you really can see.

A well orchestrated.

Procedure room.

I had a similar experience I was up in Boise and the northwest the brand New account, we just just spun up about three or four weeks ago.

We had a team of three of us.

I was there just to kind of observe and I will tell you. These are very complicated cases that the operator does up there.

In the.

The install just with flawless customer is thrilled.

We have very very high hopes for how.

How that system is going to spin up and the utilization, we're going to see out of that accounts.

Okay.

It kind of leads me.

To some questions.

Your question.

Asian ramp expected both this year and then going into 'twenty two.

<unk> got two different dynamics right now.

One hand stepping back from the short term, maybe putting more people in the field.

Having team operating in a room.

For a little while at least.

It takes that second half for away from another accounts and so on so how much of that I guess is implied within guidance for <unk>.

Change in productivity of those reps, then I guess more importantly, as we look into 'twenty two.

Should we think about utilization there.

You guys did actually have a pretty steep utilization curve can we get back to that.

Maybe more specifically what are you going to get to that one procedure per system per week.

Well.

I think what we're seeing early in its early days in Europe, where we have ablation as well.

The catalytic effect of having.

The installation and the mapping together in these cases really helps get.

Physicians and centers.

<unk> to schedule cases in new cases, with you and build that muscle memory by doing a bunch of cases in a day a bunch of cases in the first couple of weeks.

I point out in the U S. We are probably two and a half three weeks away from initiating our Heidi flutter trial.

That's north of 100 110 patients I think in 15 centers and then three two to three months after that we initiate concurrently or Afib trial, which is I think north of 300 patients.

And.

I think north of 30 centers, so by being able to layer in and bringing that ablation catheter capability, which by the way is much more seamlessly integrated with our mapping system procedurally.

And draw physicians and Hey, let's do a bunch of cases as part of this clinical trial. Obviously the current clinical trial is separate and apart from our commercial activities for <unk>.

Fact of the matter is if a physician and the team do studies.

Luke do procedures as part of a clinical trial, they build that muscle memory of the familiarity with the cabling and troubleshooting the map interpretation that therapy approach.

We think that that will help.

<unk>, the learning and the familiarity and the adoption and the schedules schedule casing.

The schedule pacing.

As we get into kind of mid year here and obviously that will continue into the following year.

Got it thanks guys.

Thank you. Our next question comes from sales Silvana with Canaccord. Your line is open.

Hey, great. Thanks, Good morning, and thanks for taking my questions.

Just.

This change it up a little here with Duane coming in what I'm trying to.

Think of it as just operationally.

And.

How do you think of the pace of sales force expansion structure.

In the U S. So just operationally now that he's come in and been on board a couple of months.

Or are you thinking about that today versus.

Call it six to nine months ago.

Well we.

If you recall from our prior call we accelerated some of our mapping hires in Europe.

And in some sales folks in Europe that were over and above the.

The plan that we had in and around the time of the IPO, because we saw the ablation catheter coming and.

And we wanted to be prepared for that launch.

In the U S. We did accelerate some some mapping hires as well in the back half of last year.

Which which is responsible for a bit of the overage in the SG&A line in the back half of 2020.

Those people will take a certain amount of time to spin up and get up to speed and get fully trained.

We will we will make some additional adds there, particularly on the mapping clinical support side of things in this year and we might re jigger, a little bit the structure of the sales.

Side of the organization, but I think if you look at our projected commercial spend in the U S and Europe.

In terms of the day.

Aggregate dollar spend.

I feel like we're in we've got that pretty well dialed in now.

There might we might shift some.

Much shifts some bodies around between sales and clinical support and vice versa.

But and location of where people are but we don't see.

Really material change in how we're thinking about the body count and the spend there.

In the year ahead.

Great. That's helpful. Thank you and then.

I think you've touched on it a little Vince, but really getting into what have you learned you have been out in the field and I think I'm trying to go a little more higher level here in terms of you've got you've got the system out are there in terms of the mapping system is there any major benefit or fee.

That's not launched in Europe, yet that could change the trajectory number one we know you have the ablation there and then the same question as it relates to the.