Q4 2021 Cardiovascular Systems Inc Earnings Call
Including Covid recovery.
Users and new accounts, and our pipeline and strong sales execution, and our high volume coronary and peripheral accounts.
As a result, we achieved double digit sequential revenue growth and both our U S peripheral and coronary franchises compared to our third quarter.
And peripheral we achieved 13% sequential revenue growth with a solid rebound and our hospital business and continued momentum and office based labs.
And coronary we achieved a 12% sequential increase and Diamondback unit sales and increased revenue generated from the sale of our procedure support devices.
International revenue at $3.7 million increased 76% compared to last year.
New account growth and Japan, and our successful launch of our of coronary and the EU both contributed to better than expected results.
For the full year fiscal 'twenty, 1 revenues increased 9.5% to a record $259 million.
U S peripheral revenue increased about 7%, while coronary revenue increased over 17%.
Our full year fiscal 'twenty, 1 revenues also reflect and $11 million or 4.4% increase over our pre COVID-19 and fiscal 19 results.
And peripheral our strategy to target high volume office based labs combined with the migration of patients to the site of service during the pandemic resulted in a 22% year over year increase and OBL revenue in fiscal 'twenty 1.
Our peripheral hospital business was about flat for the year due to COVID-19 related weakness and the referral pipeline and the deferral of procedures for patients with lower acuity qualification.
For the full year U S coronary revenues increased over 17% versus last year, driven by Covid recovery robust increases and new users and deeper adoption of orbital atherectomy at high volume Cath labs that focus on the treatment of complex coronary artery disease.
Despite the pandemic demand for physician education programs has remained strong and FY 'twenty..1 we certified 384, new customers, including a 53% increase and coronary fellow certifications and this drove strong unit volume and increased demand for our products throughout the year.
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Even as a new competitor entered the space.
Outside the U S. We are encouraged by the resiliency of our international franchise revenue grew 8% and fiscal 'twenty, 1 to $11.3 million.
Our peer to peer education model and Japan has resulted in strong revenue and market share growth and the 3 year since launch.
We deployed the same education model for the EU coronary launch and we have built a strong foundation of new accounts that will accelerate OIS adoption and market expansion.
Finally, we continue to make progress on our R&D milestones and with the launch of wire on and our Jade peripheral balloons, we are poised to drive strong revenue growth and fiscal 'twenty 2.
Rhonda will provide additional details and our commercial progress and a few moments, but first Jeff will provide details regarding our financial results and our fiscal year 'twenty 2 guidance Jeff.
Thank you Scott and good afternoon, everyone.
I will now provide a brief review of our Q4 financial results.
Before I begin please note that the impact of the pandemic on our business on our business last year's results and substantial revenue comparisons year over year for additional details. Please refer to the earnings supplement slide deck on our website.
Worldwide coronary revenue increased 96% to $23.2 million.
In the U S coronary revenue increased 101% to $19.6 million led by a 102% growth and units sold and a 153% increase and coronary support products.
We believe that Covid recovery may have contributed and up to $1 million of incremental coronary revenue in Q4 as customers address the backlog of cases that were deferred from Q3.
Outside the U S.
Ordinary revenue increased 72% to $3.6 million as a result of continued strength and Japan combined with the successful launch of coronary OAS and Europe.
Worldwide peripheral revenue increased 56% to $47.8 million.
And the U S.
Peripheral franchise revenue increased 55% led by a 79% increase and LVL revenue and a 46% increase and hospital revenue.
Similar to coronary we observed a favorable uplift and revenue generated from deferred cases, and our peripheral hospital segment.
We believe that the backlog of procedures may have contributed up to $2 million and Q4.
U S peripheral and peripheral revenue also benefited from the late Q4 launches of the wire on Embolic protection system and Jade angioplasty balloons.
And total peripheral support products generated over 800000 and Q4 revenue.
Turning to expenses.
Profit margin was 79% in line with our expectations.
And we forecasted that Q4 gross margin would be and the 70% to 71% range due to 2 factors first.
We incurred a onetime charge to cost of goods sold related to our recent decision to upgrade sailing pumps that will be reaching end of service over the coming 24 to 36 months.
This is a normal course of action to replace the remaining older generation pumps over several quarters beginning in fiscal 'twenty 2.
Upgrading these pumps now will benefit our gross margin and over time, while we assure uninterrupted support for our customers.
Additionally, as we stated at the outset of the pandemic 1 of our primary goals was to invest and our business to ensure that we are able to support our customers and patients throughout the duration of the pandemic.
Throughout the first 9 months of fiscal 'twenty..1 we operated both of our production facilities to ensure that we maintained adequate safety stock and the event 1 of our facilities experienced a pandemic related disruption.
With the recovery now underway, we lowered build levels during Q4 and reduced the accumulated safety stock.
Both of these factors were isolated to the fourth quarter and we do not expect them to have and ongoing impact on our gross margin going forward.
Operating expenses totaled $55.3 million.
SG&A increased 31%.
Primarily due to higher sales compensation related to the 67% increase and overall revenues and increased marketing activity related to the conference participation.
And the launches of our peripheral support products.
R&D expenses declined $2.6 million compared to last year.
The comparable period, a year ago included a $3.3 million noncash charge related to patents that we are no longer associated with our commercial activities.
We ended the quarter and fiscal year with $207 million and cash and marketable securities and no long term borrowings.
Looking ahead to fiscal 'twenty, 2 we expect that the sustained improvement and the state of the U S health care system combined with strong sales execution, new product introductions and international expansion and we will accelerate our growth.
We note however that the Covid pandemic is not over and uncertain market dynamics may persist that could impact our fiscal 'twenty 2 forecast.
With that in mind, we forecast fiscal 'twenty, 2 revenues to be and a range of $295 million to $305 million, representing an increase of 14% to 18%.
Turning to expenses.
Increasing peripheral procedure mix and the OBL and increased sales of distributed procedure support products.
And ongoing international expansion are expected to result in gross margins of approximately 76%.
On the bottom line before cash the net loss equal to 2.2% to 3% of revenues and positive adjusted EBITDA of 6% to 8% of revenues.
First quarter is typically our lowest revenue quarter of the year due to lower procedure volumes in the July and August timeframe.
This seasonality typically results in Q1 revenue.
That is approximately 5% to 6% lower than Q4.
As a result Q1 typically results in the largest quarterly loss of the fiscal year.
We anticipate that our financial results both on the top and bottom line will improve sequentially as we move throughout the fiscal year.
I will now turn the call over to Rhonda, who will provide a commercial update product. Thank.
Thank you, Jeff and good afternoon, everyone. Today I will provide my thoughts regarding Q4 results share some of the key drivers for fiscal 'twenty, 2 and discuss recent reimbursement development.
In total we are encouraged with the momentum that we achieved throughout the quarter across our peripheral and coronary and international franchises.
Our success was driven by recovery. The addition of new users and new accounts.
Deeper adoption of orbital atherectomy and high volume accounts.
And to the introduction of new products.
And total Q4 revenue grew 12% sequentially and compared to Q3.
And peripheral we achieved double digit sequential growth and the OBL and hospital market segment with the addition of new users and success and high volume accounts.
Our peripheral hospital business improved in Q4, but is still hindered by COVID-19 related net related weakness and referral pipeline and the deferral of procedures for patients with lower acuity acuity qualification.
We do see light at the end of the tunnel, but this remains a very dynamic situation.
The pace and continued recovery will depend on multiple factors, including patient confidence to return to clinic visits.
Vaccination and Delta staffing.
Staffing shortages and fatigue and the ability of hospitals to manage through share gains.
Of course, we will continue to provide updates as more data and trends are known.
Towards the end of the quarter, we completed the full commercial launch of the wire, an embolic protection device and our day peripheral angioplasty balloons as Jeff mentioned, we generated over $800000 from the sale of our peripheral support support products with much of this revenue being generated in June.
Physician response to these products is consistently strong and we believe these products will drive strong sequential revenue growth going forward.
Turning now to coronary.
U S coronary revenue growth was driven by strong sales execution and the addition of new customers and increased penetration of high volume hospitals, and the continued adoption of our coronary support products.
Focus on hospitals that treat complex coronary artery disease, and we support our customers with case coverage and train new users and coronary fellows and the use of our product and Q4, we trained and certified 113, new coronary and users in the United States.
And with increased case coverage and our differentiated product offering our revenue per coronary procedure continues to grow.
During Q4, we sold $645 and support products for every client coronary OAS salt.
And total sales of coronary support products were $2.9 million and the quarter.
Q4 International revenues of $3.7 million were stronger than expected and marked the first time over 2000, and OAS cases were performed in a quarter outside the United States.
Our case volume and Japan remained remained stable despite the Covid Lockdown and and in addition, and the launch of coronary OAS and Europe is ahead of pace.
We continue to experience strong demand for physician training and certification and all of our international markets. We.
We certified nearly 350 coronary interventional and outside the United States during fiscal 'twenty, 1 including over 90 in Q4 exclusively using remote training and case support.
Looking ahead to fiscal 'twenty 2.
We have the components in place to continue our strong top line growth.
And peripheral and the introduction of peripheral support devices and our wire an embolic protection device are expected to be a substantial driver of peripheral revenue growth in fiscal 'twenty 2.
Finally, as the pandemic wanes, and we look to reintroduce that they sent to our expanded offering of peripheral atherectomy products and we expect to drive deeper adoption within our existing accounts, while capturing new volume from recently trained peripheral interventional line.
And total the treatment of <unk> is expected to grow and the upper single digits and we believe we can exceed that level of unit growth.
And coronary we will leverage our focused channel to drive increased adoption of diamondback back and increased utilization of our support devices.
Continue to focus on high volume and specialized hospitals and training new users and coronary fellows.
With nearly 400 newly certified use physicians, we will be working closely with these physicians to enable the full adoption of our technology for their most challenging patients.
Turning to international we look to build on and increased use of imaging in Japan to drive revenue growth and market share in Europe, We will continue to remotely train and certify new physicians and support cases, and finally, we plan to launch OAS and as many as 15, new countries and fiscal 'twenty 2 and.
In total we are confident that our plans will yield the desired results driving attractive and sustainable growth for CSI.
And before Scott provide his closing remarks, I will briefly comment on recent developments related to the reimbursement of our atherectomy procedures.
And as always this is a rather complex capex with some reinvestment.
Reimbursement rates, increasing while others are decreasing.
Starting with the easiest capex for 2022, the proposed inpatient and outpatient payments for peripheral and coronary atherectomy would increase by approximately 2% to 3%.
Now for the physician fee schedule and CMS released the 2022 proposed rule in July and they unexpectedly proposed at 22% rate reduction for peripheral vascular CPT codes.
In summary, CMS proposed to increase general clinical labor rates and offset this incremental cost by reducing fees and numerous unrelated procedure categories, including all device intensive procedures performed and physician office based lab.
The proposed rule is currently open to public comment and.
And after hearing from societies physicians and providers about the direct impact of the proposed changes.
Ms may reduce or reverse the reduction and the payment rate.
However, if this proposal is approved it is possible that more interventional PRT cases may be performed and the hospital setting where we have sustained high market share over the years and.
And any case, the relative value of using atherectomy and a case remains intact and on balance we do not believe these changes will negatively impact the adoption of OIS for the treatment of calcified peripheral artery disease.
And final rule for the physician fee schedule will be published in November and become effective on January 1.
Last week, we also learned that the review of the lower Endovascular Revascularization. Cole is currently listed on the agenda for the CPT editorial panel meeting scheduled for October.
And although we do not know how the coke will be changed it is possible that they will be stratified to reflect disease complexity addressing a difficulty of caring for patients with critical limb ischemia, which may favor approximately 60% of our peripheral cases and.
We've been saying for a few years now this can be a long and arduous process and we look forward to learning how the new codes may or may not impact our peripheral franchise and we still believe that it could be 2024 or later before these new codes are implemented.
That completes my prepared remarks Scott.
Thank you Rhonda well in closing, let me say that I am confident that we are emerging from all the disruptions caused by the Covid crisis as a stronger company with a great set of near term opportunities to further accelerate our growth.
In parallel to these efforts, we also bolstered our long term pipeline with several important product development initiatives.
Such as CTO catheters.
Peripheral and coronary <unk> hemodynamic support products and.
And other innovative products that we will continue to share with you over the course of the next 12 months.
Each of these products are designed to open new markets and sustained and attractive growth rate for many years to come.
Our entire organization at CSI is energized to execute on these opportunities to support our customers and improve patient care.
I want to thank all of our CSI employees for their commitment to our mission and the patients that we serve.
We believe fiscal 'twenty, 2 will be and exciting year and I look forward to sharing our progress with you going forward.
For those of you and attendance today. We appreciate your continued interest and CSI. We will now take your questions Susana and if you would please repeat the instructions please.
As a reminder to ask a question and you will need to press star 1 on your telephone.
Your first question comes from the line of Danielle and policy of SBB Leerink.
Hey, good afternoon, everyone. Thanks, so much for taking the question I have 1 question on the competitive landscape and then another question on the potential cut to the OBL physician fee. So maybe Scott I'll start with the competitive landscape I mean, obviously, that's top of mind, you alluded to it and your prepared remarks.
Just wondering if you can give any color on how youre seeing.
Your customers adopt the competitive product and is in fact.
And not the same day are you seeing it not being the same patient population.
Yeah.
Thank you for the question Danielle I think what we're seeing is that.
The <unk> product is really expanding the marketplace.
We are seeing some crossover, albeit limited.
And in accounts, where <unk> has launched we have continued to grow and we've continued to get our cases. So if you look at our results over the course of the fourth quarter I think we continued to grow very well and and.
As we look to the future we expect that to continue so.
Still early days, but I think at this time I would say that.
We expect to continue to grow and coexist with <unk> going forward and the future.
Okay. That's helpful and then.
This question is for Rhonda, maybe but just on that.
Proposed Scott last weekend, and we'll see what happened and the final and I imagine there's a lot of pushback from from the field on these but.
How do you think about this has been and area of growth, but it's been an area of growth really because the site of care has shifted so I guess I'm curious about my perception here is that the and patient population isn't really going to change just where they're getting treated would love to hear how you see this playing out if we're in a hypothetical world where these cuts do go into place. Thanks.
So much.
Yes, Danielle I'll go ahead and take that I mean, as you can imagine there's a tremendous amount of energy I think we were.
Not expecting to see a 22% decreased by any stretch, but there is a history of some of these more dramatic proposed coming out and then the societies physicians rally they reevaluate the information and May ultimately improve and and that's really our expectation as to.
What will happen here as well.
And clearly the migration of patients.
To the OBL has continued through this last year, we see that.
And going into the future, but if there are drastic cuts physicians will really.
Take a look at that and things may migrate as I said in your prepared comments back to the hospital, which is again, where we have a strong.
Position from a market share standpoint, so very dynamic I think the key thing that we're focused on is just really getting patients treated who need to be treated.
And reducing amputations.
Thank you very much.
Next question comes from the line of Travis Steed of Barclays.
Hi, this is actually Ian on from travelers today.
Maybe just asking 1 on on international here, how is the European launch Dragon relative to expectation relative.
And relative to the Japan launch, where you're able to get 40% share and a couple of years is that kind of the trajectory you're on here.
Any idea of how much share you have been able to get in a short amount of time, Inc.
Yes. Thank you for the question and we're pretty excited about the progress and in Japan, and in Europe, particularly and the last quarter.
And the physician reception and I will say in Europe had been has been exceptionally strong.
Pleased with the efficiency of the training.
Pleased that we're able to do this so successfully remotely.
And it is early days, though to be able to really understand our share position. So maybe ask us again and a quarter, we will have a better understanding of kind of where things fit there but.
But really strong and strong reception and Japan also continued momentum and we now have across the 40% share Mark and Japan. So continued progress there as well.
Perfect. Thanks, and then maybe just on Covid a little bit just.
And as Covid cases drop off in certain regions are you seeing a reversal and any of the market dynamics that happened during the pandemic like maybe cases moving back away from sort of the OBL environment and then last quarter. I think you also said inventory and the field is as lean as it's ever been which is kind of helping.
Manage manufacturing operations and a more specific manner is that are you still seeing rats and the last few months is that kind of gone back to sort of pre COVID-19 dynamics at all and.
And you are seeing there.
Thanks again for the question.
Regarding.
The inventory management and what we have done during COVID-19 was to build up our inventory really so that we would have a safety stock and protect against the possibility that we may have an outbreak and 1 of our manufacturing facilities and as we built up that.
Net inventory stock.
Ultimately that that served as a as a good safety outlet for the company as we moved into the fourth quarter, we felt that we no longer needed to retain that that inventory and as a result, we slowed our production and basically flowed more of that inventory into the market too.
Really balance out our factories and get our inventory.
Situation back in line with our normal expectations.
So that is really what our commentary has been as it relates to the.
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Adjustments since the Covid crisis, now and regards to the site of service.
We really have not seen much change.
Patients choose.
And <unk> to be treated and office based labs for a number of reasons.
And as obviously.
And more preferred by patients who are not having to go into the hospital.
And physicians prefer it as well.
So we expect to see this migration to the office based lab continue not unlike what you've seen perhaps and other medical technology markets that have the same characteristic so really post COVID-19, there has not been much change we see above.
And equal.
<unk> of our patients being cared for in the hospital versus those and the OBL segment.
Okay. Thank you congrats on a good quarter.
Thank you.
Next question comes from the line of Brandon Vazquez of William Blair.
Hi, everyone. Thanks for taking the question.
First of all and just in terms of the backlog commentary that was really helpful color that you all provided.
The question loan you get the sense from talking to your accounts are true.
<unk> all of their backlog or is there some backlog that youre kind of expecting and the next couple of quarters in fiscal 'twenty..2 I think some other med tech peers have described the law says.
Like a quarterly bolus, but may be a small tailwind as more patients trickle and so curious what you're assuming in terms of guidance for any remaining backlog.
Yes, I would say that that is very similar to our circumstance I think we just saw throughout the quarter.
Consistent kind of improvement that most likely can from other rebound of some of these cases, most specifically and peripheral we saw that in the lower acuity Quantico and patients in our in hospital segment.
And that was very similar to what we saw in July of last year.
When when we last saw a significant rise and cases, followed by a recovery. So we saw very similar circumstance I think the same circumstance occurred and coronary where we just experienced a slight uplift over the course of the quarter as Jeff.
<unk> said and the case of coronary and it's probably.
Somewhere up to $1 billion probably.
And somewhat less than that but.
It gives you an idea that we do think we saw throughout that quarter.
Some of and uplift that was due to the treatment of cases that were deferred from Q3 into Q4.
Got it and.
And then.
We've also been maybe some from med tech peers as well, we've been trying and get a better sense, we've heard both ways in terms of.
Pronounced seasonality I know you all had talked about expecting seasonality. This is pretty typical for your first fiscal quarter.
But theres a lot of a lot of talk and rumors about pent up demand for vacation between both physicians and patients.
I'm curious what you're all hearing.
Are you are you kind of expecting something more in line with historical.
Seasonality and your fiscal first quarter or is there potential for that to be a little bit more pronounced given more vacations and the accounts.
Yes.
Thanks for that question, Hi, I do think that we typically see seasonality and.
And our business and.
And I can't say that it's more pronounced than it has been and in the past, but we are anticipating a relatively traditional summer season and that normally impacts our business in and.
In Q1, the July and August timeframe is normally a slower time and most cath labs across the country and Jeff I think and your commentary you mentioned what are typical reduction and so I'll just slightly respond to that yes, Brandon. Thanks for the question typically if you look at the last 3 years prior to Covid, we usually see a seasonality effect in Q1 normally.
And our revenues are down about 5% to 6% and Q1 versus Q4, so that's something that you'll want to factor into your.
And to your model.
Got it that's helpful and if I could just ask 1 last 1.
It might be helpful and in terms of the CPT editorial panel meeting can you all just remind us of what the catalysts are coming up. After this next meeting I think thats happening next month in September.
If they decide to move forward with it what are kind of like the timelines. We're looking at for updates on that code set. Thank you.
Thank you Brandon the processes actually rather opaque and process that remains closed and confidentiality and in fact, we really won't.
And be able to share a whole lot about this process. After it gets started but at least regarding the specifics of what's been proposed.
In terms of timing.
And what we expect is that.
This will remain on the agenda and October the.
And that the meeting will happen.
Even with all of the Covid concerns.
And that.
And this will be followed most likely by a rock process, which will take some number of months.
And will ultimately lead to and approval of a new set of codes that would go into effect probably in 2020.
3.
But maybe also in 2024.
If a.
If a.
<unk> study group is required for these codes then we would expect to see that delayed probably to 2025 and maybe maybe even later.
So I think that is about the best I can give you in terms of what you should expect from a timing.
Got it that's super helpful. Thank you.
Okay. Thank you.
As a reminder, the ask a question you want and need to press star 1 on your telephone.
Your next question comes from the line of Suraj Kalia of Oppenheimer.
Hey, Scott Rhonda <unk> and you alright.
Yes, suraj. Thank you.
Perfect Congrats on the quarter so Scott.
Let me start out with a generic question.
And we see the overall numbers.
And if I can drill down 1 Additionally, Scott.
Total sales utilization metrics, specifically and the coronary side U S versus all U S Youll see.
C E D.
Moving accounts easily.
For case.
Give us a sense from your line is so that's true that we can clean and new store versus same store sales.
Yes, I think in particular the first thank you suraj for that question, but in particular, we are launching.
Outside the United States really and almost all of our markets using what we refer to as a peer to peer.
Training approach and that allows us to utilize remote technology train and educate a local key opinion leader, who then trains and educates his or her colleagues, who then educate others. So really the most important metric that we watch and that.
Is.
Our accounts trained and then new <unk>.
And then new users because we can open up let's say a new accounts, but then within that account we will be training additional physicians, who then are able to use our technology to treat their patients.
So those are those are really the key metrics that we use now.
And as Rhonda said in her remarks.
And if we if we look at how Europe in particular, our Europe current coronary launch is performing.
We are actually a little bit ahead of pace in comparison to where we were when we originally launched in Japan, So our new accounts in Europe for coronary.
And are actually a little bit ahead of pace and we're very pleased right now with the progress that we're making with the European launch.
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I hope that addresses your question, where you is there something more specific that youre seeking.
No fair enough I mean at the end of the and I can take it offline.
Scott I was really what I was trying to get at or at least strike and understand us.
Kind of put a framework share.
<unk> is used and the coronary side.
Ultimately map about 2.2 IV alpha.
And certainly kick it off line.
Scott I'll quickly choice 2 other questions..1 is if you could give us an update of the appeals process with Igl and the second thing is at this stage of the key.
Are you are your sales guys picking up any price elasticity of demand I E.
And we asked versus IV and the field huge placement from shell per case, right now and I'm curious.
If that is EBITDA factor.
That is being talked about below the surface.
Okay.
Thank you Suraj the update on the IPR appeal process.
And is really the same theres been no change.
And are still awaiting a decision on all 3 IPR is we expect to hear on it.
And 2 of those by the end of this calendar year and then the third probably in some period over the course of the next coming year. So that is.
That's the update there.
And there and then as we as we look at pricing and the marketplace.
And about the only thing I can tell you is that our pricing and coronary over time has been very stable and continues to be so we do not incur large ASP erosion and our coronary segment.
The IV L price.
Been published.
Is is is out there we know that and some accounts they were surprised by that.
But of course, you know the.
And THP and and other means we will probably balance out that pricing of it anyway. So.
Thus far we're pleased that our pricing has been stable and we've continued to grow and <unk>.
Despite the introduction of this competitive product.
And Scott, particularly can I ask 1 more question.
Yes.
Scott.
Anecdotally have you seen.
And the field 8 cases, where.
And so.
I would argue.
But I would use.
Or vice versa.
It was true early in the game and you talk.
And the reason I ask is so globally and I'm just trying to think it's the market by FERC day.
Into longer more diffuse lesions treated let's say for us versus shorter and more focal lesions with IBM.
It's too early and that game right.
Yes.
Thank you Suraj.
I think most definitely we are seeing cases that have converted from and what were thought to be IV. All balloon cases back to orbital atherectomy cases, and the fundamental reason behind that is largely due to the stenosis deletion that is being treated so if you think about.
This.
Interventional cardiologists Mei.
And it will be looking at a and an angiogram and.
Detect that in fact, some calcium is present they drop a wire down thinking that they can expand that lesion with the balloon.
And as they then position that balloon and try to open it and they find that they can't and maybe they can't even and cross the lesion with the balloon and under those circumstances. They really need to then convert to orbital atherectomy and treat the patient following the use of atherectomy that and would use a balloon to further.
And the lesion and then of course, they would drop their Stanton stamp delusion from healthy to healthy tissue.
So that is a very common.
Thing that happens, we we see that and the more sophisticated sites.
They will often times decide which technology to use based upon the percentage to gnosis that they're experiencing in other words, they have to be able to get a balloon across to usable.
Secondly.
It's important that you have nearly concentric calcification.
No.
And there is 360 degree calcification.
And have sufficient containment.
For the <unk>.
Pulse of the IV airwave to be effective if you have less than that.
And then you of course, we can lose a portion of the energy generated by the IBM out of let's say and calcified portion.
Of the lesion and you don't have as effective responses you otherwise might have finally for sites that are using <unk> imaging.
And those sites oftentimes can detect the presence of nodules and.
And in these more severely calcified lesions non.
<unk>, our president and 45% to 50% and the time.
When these nodules are present.
It is important to us and atherectomy device to treat them and that's also a primary indication and has been for the use of orbital atherectomy.
The lesion length as you referred to is also important because I think physicians are reluctant both due to time and cost considerations to use more than 1 <unk> balloon and a case, so if they come across long coronary lesions and there.
And generally still using orbital atherectomy to treat those cases, so hopefully that's helpful and thank you again from the question.
There are no further questions at this time I would now like to turn the call back and Scott Ward.
Please go ahead.
Okay. Thank you and thank you everyone.
Joining today's call.
I think you can tell that we are very proud of the way we executed our plan and Q4 and we are quite confident about our outlook for FY 'twenty..2 so thank you for your time and we look forward to updating you again soon and thanks everyone.
This concludes today's conference call. Thank you for participating you may now disconnect.
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