Q3 2021 Penumbra Inc Earnings Call
Good afternoon. My name is Suzanne and I will be a conference operator today at this time I would like to welcome everyone to opinion breath third quarter 2021 conference call.
All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question answer session.
I would like to ask a question. During this during this time simply press star followed by the number one on your telephone keypad.
He would like to withdraw your question press the pound key. Thank you I would now like to introduce MS. Jee Hamlyn Harris Investor Relations for opinion, Brad Ms. Hamlyn Harris you May begin your conference.
Thank you operator, and thank you all for joining us on today's call to discuss the numbers.
Third quarter 2021 copy of the press release and financial tables, which includes the GAAP.
To non-GAAP reconciliation can be viewed.
This tab on our company website at Www Dot Penumbra, Inc. Dot com.
During the course of this conference call. The company will make forward looking statements pursuant to the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995, including statements regarding our financial performance commercialization clinical trials regulatory status quality compliance and business trends.
Results could differ materially from those stated or implied by our forward looking statements.
Excluding noise referenced in our 10-K for the year ended December 31 2025.
As a result, we caution you against placing undue reliance on these forward looking statements I'm encourage you to review our periodic filings.
The 10-K previously mentioned for more complete discussion of these factors and other risks that may affect our future results or the market price of ethanol.
But not limited to the impact of the COVID-19 pandemic on our business results of operations and financial condition.
The number disclaims any duty to update or revise our forward looking statements as a result of new information future events developments or otherwise.
This call financial measures are presented on a non-GAAP basis, a reconciliation of GAAP to non-GAAP financial measures is provided in our posted a press release.
We anticipate the prepared comments on today's call will run approximately 18 minutes, Adam Elsesser the numbers chairman and CEO will provide a business update Maggie Yuen, our Chief Financial Officer will then discuss our financial results for the third quarter and Jason Mills, Our executive Vice President of strategy will discuss our updated 2021 guidance with that I would like to.
I turn over the call to Adam Elsesser.
Thank you Qi <unk>. Good afternoon, everybody. Thank you for joining <unk> third quarter 2021 conference call.
Our total revenues for the second quarter were $191 million a year over year increase of 25, 8% as reported and 25, 6% in constant currency and a 3.2% sequential increase from the prior quarter for.
For the third quarter of 2021 we recorded operating income of $8 8 million or four 6% of revenue compared to an operating loss of $22 million or 13, 3% of revenue during the same period last year.
Against the backdrop of this spreading delta variant, particularly in the first part.
Of the quarter, our team executed very well.
Our vascular business achieved record results in our neuro business nearly matched our record quarter as well.
Our business was exceptionally strong in the United States, where latest products in both vascular and neuro thrombectomy are experiencing strong adoption.
Overall, our business accelerated throughout the quarter.
Driven by the Red series of stroke catheters and continued strength in vascular thrombectomy, while our embolization business also performed well, especially as the fall season progressed.
I also want to acknowledge our physician customers and hospital staff, who against challenging circumstances, especially with Covid worked particularly hard to take care of their patients.
As a company. We think we are in the best position, we've ever been to help more patients than ever before.
As we look forward in the world emerges from this pandemic.
The three key dynamics that have defined penumbra.
Constant innovation hiring the best people.
And execution once again defined our work in the third quarter and give us a lot of confidence that we can deliver strong durable growth for years to come.
As it relates to hiring the best people, we are adding remarkable people to the penumbra team.
In addition to the new engineers other professionals and best in class salespeople that we added I would like to call your attention to new senior additions.
Fred have art and Jon Christianson recently joined US with decades of senior medical device experience Fred will lead international commercial efforts as senior Vice President focused on areas outside of Europe, and North America, Joan will lead our efforts in Europe, and the Middle East as Vice President and head of Europe.
Also Riley Russell, a former senior executive at Sony Interactive Entertainment working on Sony Playstation and third party developers has joined US as executive Vice President of third party partnerships for immersive health care and Amir Rubin former CEO of sixth sense is leading our research efforts for immersive health.
Kearns Executive Vice President of research for Immersive Health care also we will continue to promote as well as add additional senior members of the team and the quarters ahead.
Now, let's focus on our products starting with the vascular business, we reported growth of 43% year over year to $105.5 million in the third quarter.
Vascular thrombectomy revenue increased 10% sequentially in the United States with strong performances across Venus P E arterial and coronary.
We continued to see accelerating growth in new physician customers adopting our thrombectomy products in the third quarter.
Which we think is a testament to both excellent patient outcomes and the value proposition our proprietary computer aided lightning thrombectomy system brings to the health care system.
We are focused on the opportunity to expand the paradigm of single session therapy to many more patients going forward as.
As evidenced by strong results in the third quarter, our computer aided lightning technology is resonating with an increasing number of physicians and is becoming an integral part of the treatment algorithms and P E venous and arterial procedures. Indeed, both lightning 12, and lightning seven produced strong.
Growth in the quarter growing double digits sequentially in the U S. Like other unique and transformational products. We have developed our lightning platform is the product of our focus on constant innovation dedicated to what's truly important to successful and safe outcomes for patients and the most talented team.
<unk> of engineers and product development professionals in the industry.
Moreover, we continue to invest in innovation clinical studies and market development initiatives to reach the 90% of patients that can still benefit from this technology each year.
And some we are just getting started and our teams work continues move.
Moving to coronary we continued seeing an accelerating number of physicians utilize cat Rx to treat their patients in the quarter. We have a tremendous opportunity ahead of us with cataracts, having reached only about 10% of the coronary patients. We believe we can help the most those with high thrombus.
Burton.
Also we look forward to the presentation of results of the Cheetah study, which will be highlighted during the featured clinical research session at the upcoming TCT Conference in Orlando, Florida, and two days on Friday November 5th.
I will be in attendance and I hope to see many of you there.
Within our vascular embolization business, we matched our record second quarter results. Notwithstanding Q2 benefited from some catch up in deferred procedure, while this quarter faced a modest COVID-19 headwind.
The uniqueness and breadth of our vascular embolization portfolio continues to resonate with physicians, who are finding more reasons to use our products in both chronic and acute settings, including continued strong adoption of Ruby L P, which had another record quarter.
Let me now turn to our neuro business in which we recorded growth of 11.5% year over year to $84.7 million in the third quarter.
The neuro team has done incredible work alongside our physician customers throughout this pandemic. The initial launch during the quarter of Red 72, and Red 68 in the United States went extraordinarily well.
[noise] paired with Red 62, the Red series expands upon our U S stroke stroke portfolio, which recorded robust 17% sequential growth this quarter.
[noise] positions in the United States have responded very positively to the Red series the.
The extraordinary track ability and clot removal capabilities of the Red series, driven buyer, new Red glass coating technology and proprietary catheter architecture are unrivaled in the field and the breadth of the Red series allows physicians to choose the catheter that best matches the patient vessel.
Size and some the Red series is designed to give physicians the technology they need to use aspiration as a frontline treatment and maximize the ability to achieve first pass success.
One of the hallmarks of our neuro business as portfolio breadth with our stroke access and embolization franchises complementing each other extraordinarily well.
Our neuro access business produced another record quarter led by continued adoption of BMX ninety-six and strong international growth, our neuro embolization business nearly matched our record Q2 results notwithstanding the COVID-19 related headwinds to these type of procedures in the third quarter.
In sum, we expect momentum to continue in our neuro business as we continue to invest in our team our innovation engine and important initiatives to expand access to our neuro products to more patients going forward.
Let me now turn to our immersive health care business, we hosted an Investor day in late September that marked a monumental moment for penumbra.
In addition to announcing the acquisition of <unk>, a leader in virtual reality technology in our longtime partner, we outlined plans to build a platform to provide immersive therapy to tens of millions of patients across a broad range of health care settings. The combination of our proprietary hardware.
Tracking technology software and unique content.
Sourced from our own studio second party partners as well as a robust group of third party developers define the real platform and an ecosystem. We plan to build as we tried to help over 50 million patients in the U S alone.
The feedback we've received since this event from the health care community has been extremely positive we are dedicated to the important work ahead.
Turning to our international markets, China continues to be a strong contributor to our business and we see significant opportunities for additional growth well into the future.
In addition, we continue to see good momentum in our Japanese business, where we look forward to introducing our latest stroke and neuro products, our entire vascular product portfolio and eventually our immersive health care platform in the future.
Our EMEA Latin America, and Asia Pacific businesses, all showed solid growth year over year, and we think there are many opportunities to expand our presence in each one of these geographies going forward.
Overall, notwithstanding the challenges all companies are facing we are confident that we are set up to help more and more patients with our existing and future products across all of our product categories and geographies.
I would now like to turn the call over to Maggie to go over our financial results for the quarter.
Adam today, I will discuss the financial results for the third quarter 2021.
No details will be contained within our quarterly reports on Form 10-Q.
For the third quarter ended September 30 of 2021 our total revenues were $191 million, an increase of 25, 8% reported and 25, 6% in constant currency compared to the third quarter of 2020.
And sequential growth of three 2% over the second quarter of 2021.
Our geographic mix of sales in the quarter were 79% U S and 29, 1% International.
U S and international reported growth of 23% and 33, 5%, respectively compared to the same period in 2020.
Moving to revenue by franchise revenue from our vascular business grew to $105 $5 million in the third quarter of 2021.
An increase of 43% reported and constant currency compared to the same period last year.
<unk> to the prior quarter revenue from our vascular business grew by four 7% driven by strong performance in peripheral thrombectomy volume in the U S.
Revenue from our neuro business was $84 $7 million in the third quarter of 2021 an increase of 11, 5% reported an 11.1% in constant currency compared to the same period a year ago.
With growth across neuro access embolization and come back to me franchises.
Gross margin in the third quarter was 63, 1% compared to 62% in the same quarter last year due to benefits from additional volume and stable product mix.
We are pleased with our ability to increase our manufacturing capacity and expand our supply chain and manufacturing footprint in 2021 to support rapidly growing demand for our new product launches.
The coming months, we will continue to our salary our investment in our Roseville manufacturing site, including hiring and training product builders transferring multiple key manufacturing processes and improving efficiency and productivity.
This may continue to have short term margin impact as it did in the third quarter, but will set us up for strong margin expansion opportunities in coming years.
Total operating expense for the quarter was $111 $1 million or 59% of revenue compared to 111 totaling $1 million or 74% of revenue for the same quarter last year.
Our research and development expenses for Q3, 2021 were $16 $7 million compared to $34 $9 million for Q3 'twenty 'twenty.
SG&A expenses for Q3, 'twenty, 'twenty, one where $94.4 million compared to $76 $2 million from Q3 'twenty 'twenty.
In the fourth quarter of 2021 we anticipate payments related to research and development milestones and one time expenses associated with the <unk> acquisition we.
We estimate Dst's additional expenses in Q4, 2021 in a range of 35 million to $45 million the majority of which is noncash.
For the third quarter of 2021 we recorded operating income of $8 $8 million or four 6% of revenue compared to an operating loss of $22 million or 13, 3% of revenue for the same period last year.
We ended the third quarter with cash cash equivalents and marketable security balance of $267 million, an increase of $28 million in operating cash.
And now I'd like to turn the call over to Jason to discuss out 2021 guidance.
Thank you Maggie with the update of our third quarter results. We are formerly increasing our 2021 revenue guidance range to $735 million to $740 million, which would represent 31% to 32% growth over 2020 revenue of 506.
D point $4 million. This updated guidance compares to our previous 2021 guidance range of $720 million to $730 million given on our second quarter call in August we.
We see multiple drivers of growth going forward, both near and long term in the fourth quarter, we expect sequential growth compared to our record third quarter results driven predominantly by vascular thrombectomy across Venus P E arterial and coronary further.
<unk> of our peripheral embolization business and increasing contribution from our new Red series of catheters for stroke intervention.
Overall, consistent with our approach to setting guidance in the past our updated 2021 revenue guidance represents our current views on our markets timing of new product launches and other relevant inputs I will now turn the call back to Adam for closing remarks.
Thank you, Jason Maggie and the Chi as we report the third quarter and we move through the fourth quarter number is well positioned to help more and more people in the months and years ahead.
We are making investments to constantly innovate both in neuro and vascular.
As well as the newer area of immersive health care, we are hiring the best people in all parts of our business and we continue to execute in our day to day work.
These three elements have defined our success for many years.
Finally, I want to acknowledge and thank everyone at penumbra.
For doing so much in working so well together.
To design manufacture and make available all of our products to physicians and patients even in these challenging times. Thank.
Thank you for your attention on the call today, and we'd like to open the call to questions. Operator. Please go ahead.
At this time I would like to remind everyone in order to ask a question Press Star One and then number one your telephone keypad. Please pause for just a moment with as we compile the Q&A roster.
Our first question comes from the line of Larry Nielsen from Wells Fargo.
Good afternoon, thanks for taking the questions.
Let me start off on the guidance.
You reported obviously, a very nice quarter here.
Compared to your historical seasonality, but the Q4 guidance at the midpoint implies lower sequential growth than we typically see from you guys and it's only about 12% year over year growth. So what are you seeing that's leading to that conservatism and how do we put that into context for 2022, the street's assuming about 17%.
Year over year growth and I, just wanted to confirm you're still confident in the $1 billion in 2023, and I had a follow up.
Larry It's a great question, let me start with the last question and then I'll let.
Jason take over with some of the specifics.
The answer is.
We are definitely confident.
About our 'twenty.
Twenty-three come in about a one.
$1 billion and I think if you look at how we've done this quarter and the guidance going forward. It gets you there pretty quickly so.
We have a lot of confidence.
Our commentary today shows that I'll, let Jason talk about this specific a guidance.
But.
No question.
We feel very confident about the future yes.
And just before we leave the $1 billion comment I'll, just add a little bit to what Adam said as you might recall Larry.
At the time, we said that we actually said 1 billion plus and just to remind you that the plus referred specifically to our immersive health care business that continues to be the way we look at that comment at this point in time as well so and I. Appreciate your question about the <unk>.
<unk> obviously.
The sequential increase in our business in the third quarter was quite strong. It was a strong performance as we talked about across both neuro and vascular businesses.
Obviously stronger sequentially than a lot of folks in and obviously representative of the strength of our products and our business and so we're cognizant of that strong record growth and we're also cognizant of the world and what others are saying.
About COVID-19 as we talked about in our remarks, we saw pretty good growth throughout the quarter and we expect that to continue into the fourth quarter, which is why we expect sequential growth to continue.
Alright, thanks for that and just for my follow up so Adam on the Cheetah data. What do you think physicians will be focused on how do you plan to leverage the data and just.
Adam what we didn't hear anything about lightning.
Is that still on track thanks for taking the questions.
Yeah, well first of all I think we I said a lot about lightning I think you meant thunderbolt.
Thunderbolt, sorry, if I heard you right if I'm not mistaken.
I know the names who are close.
Let's talk first about Cheetah.
It's two days away I as you know being Wanna be vary.
Respectful to the physicians, who are presenting the data in the appropriate rules around that.
I obviously.
I'm going to be there and look forward to talking about it with anyone after the presentation.
And we.
We can address that in a couple of days, but.
Needless to say.
There's a lot of data to go through and we look forward to doing that.
As it relates to Thunderbolt.
I think you guys.
You guys know me well enough to know.
Last time, I mentioned the name sort of publicly.
We like to let our actions and the products speak for themselves.
So it seemed appropriate this quarter.
Not to continue.
Continue to to have that conversation, but there is nothing and I mean, nothing about that that you should take as anything on the negative side.
By the fact that I didn't mention the name and I think you guys can.
Interpret.
The fact that I didn't mention in the public comments.
Hey, I meant it to be.
Thanks, Adam.
Thank you Congress from the line of Bill <unk> from Canaccord Genuity.
Hi, Sean on for Bell Tonight, Thanks for taking our questions Adam.
I don't know if you can go back to Chile quite quick can you just talk about the overall opportunity in coronary and then how are you going to balance that with your work in our Cheerios DVT A&P and then perhaps can you just talk about the call point overlap any possible synergies there.
Sure so.
You know that the way, we've talked about that market and I mentioned it on the prepared remarks of this call is really going after the patients that have.
A really high clot burden, our thrombus burden the patients that really need it the most and.
And that was what the cheapest trial was designed to study that's what we'll report out and that's really been.
The opportunity, that's a significant opportunity where only about 10% penetrated in and as we've said in the past that opportunity is is a roughly the same size as the U S stroke opportunity for for the U S patients in coronary so it's not insignificant at all.
And as I think you all know that the.
The Big Technology changes I change is the idea of using continuous at power aspiration.
As opposed to some of the older technology and and when you look at some of the older studies, they really highlighted the need.
In those studies for innovation in technology to to deal with those high thrombus patients. So that's the framework in which you can see and digest the data on Friday morning in in Orlando.
As it relates to the call point.
Obviously that call point as interventional cardiology.
I think all of you know interventional cardiologists do a significant number sometimes people estimate of up to around 25%.
Of the peripheral work.
Legislation that you were rude into North Carolina did that.
And so I'm I'm I'm, feeling pretty optimistic that as we move into this next phase.
Of the pandemic, we're starting to see a little more momentum.
And as you heard in my prepared remarks, you know the our neuro team are is really engaged there's so much energy and momentum you saw that in the sequential growth in the U S and.
It's a really really exciting time to push the technology for us at the same time, we're coming out of a really difficult coupla years.
Thanks for taking my questions.
Thank you.
Our next question comes from the lineup probably Marquez from J P. Morgan.
Oh, great. Thanks for taking the questions and congrats on a great quarter.
There's a doctor every.
Maybe to start Adam is spokeo about a lot of different new product launches lightning Seth and there's some of the red products, He talked about China and some of the adoption there how do we.
Think about the impact it had to sales in the corner and what you're expecting and I was hoping the next six to 12 months also throw in coronary you know you don't break out products or or the different sub line items for those businesses. So how do we think about you know where we're seeing that the biggest.
Incremental dollar growth.
Yeah, no. It's it's a it's a great question, where we do obviously breakout neuro vs. Vascular so you'll you'll see the the benefit of the Red series and future product you know I hope over the next.
Six months to a year pretty clearly in in our narrow business as it relates to the vascular business, It's and I said this in my prepared remarks, it's all working we saw really successful growth both on P E.
And Venus and arterial as well as coronary so.
We're we're lucky Ah.
Have the ability to really positively impact patients on all four of those categories. I I think it would be it's unnecessary sort of breakout which is more because they're all working and successful right now and.
And and that's I think one of the the really huge opportunities as the field starts to really digest and accept the idea of single session treatment. It's.
It's no longer just a thing that people who are thought about philosophically, it's now becoming a lot more rooted in the viewpoint.
Of physicians because in some part because of the pandemic and the need to free up ICU beds.
They're finding success.
Particularly with the lightning theories in P E Venus.
Venus and arterial and then and being exposed to.
Cataracts Ah.
In their daily practice and with Cheetah I think.
We'll see we'll see but I think that can continue I'm pretty dramatically. So.
Where we retired to break it down in a in a way to say, which is contributing more because all of the teams focused on all of them and all of it matters and all of its contributing and that gives us I think the confidence that you hear in her voice that we have a lot of growth to come or are we just a follow up a little bit on that going back to some of our.
[noise] prepared remarks.
Obviously, when folks look at our lightning seven and Lightning 12 products those are speaking to arterial and venous to a large extent.
And transfer and we did talk about double digit growth.
Sequentially in both of those obviously, we this quarter anniversary in the year ago quarter, which was pretty nearly a full quarter of the initial launch of Lightning 12, just a couple of other things.
Just pointed out and remind.
We talked about the U S stroke business was up 17% sequentially, that's obviously because of the.
Receptive receptivity of the Reds series of catheters, an overall in the United States peripheral thrombectomy being up.
10%.
Cuts across all four of those areas, we talked about arterial p/e Venus and coronary.
Great. Thanks for that and maybe a quick follow up and.
It's been awhile since we got some east to give out details on how many procedures. He thought were happening in in the U S and outside the U S narrow thrombectomy markets.
If you have any sense of maybe where the U S and Europe is on track for procedures. This year and if there's any way to to gauge how just the business performance in those markets have been since the recall last year would be really helpful. Thanks a lot.
Yeah, I don't think it's fair to give out specific numbers, because they're a little harder to track. During this phase will certainly try to do that going forward as best we can.
But you know to throw out numbers sort of without having this sort of confidence.
Is a little bit harder.
You know there are lots more players in the field and everything it makes it a touch more difficult I I will reiterate what I said I do think you know the.
The last.
Almost two years not quite a year and a half has been relatively first obviously went down dramatically at the very beginning of the pandemic and sort of recovered.
I do see and and and again just.
Purely anecdotal at this point, so I wouldn't want to.
Be more aggressive than that but I do see in here.
Optimism around growing the number of patients and that's really started a month or two ago, and then I think North Carolina.
Just a good example of sort of the energy that's still out there in order to sort of do this work and drive those patients. So it's a good it's a good question.
We'll try to do <unk>.
More to give you as much specifics, but I don't want to just throw out numbers, we want to be as accurate as possible.
Alright, if I could squeeze in one one quick one.
China, I know that that used to be all a a predominantly medtronic market any sense of the impact your making marriage, that's still real early days or how how do we think about the impact your saying thanks.
Yeah, I mean look trying to large market and and to qualify quantify the impact.
To their business is hard because it's hard to know that from here I will tell you that from from the conversations I've had there's an awful lot of interest in moving that market to aspiration based technology. The positions. They are known about it for.
For awhile they are excited to get.
The products that can do that work 868.
The product it was more recently launched and we're we're seeing.
Some real success in those cases, so I think again very early days significant opportunity.
And as we've said in the past were using technology. There that's that's a touch older.
Then the technology, we have here so.
When you look at that between now and the future where we can continue to bring the most current stuff I I have a lot of confidence that we're going to continue to do quite well in the China market going forward.
Great. Thanks, a lot.
Yeah, Thanks for Ivy.
Yeah.
Next question comes from the lineup Hopkins fan Bank of America.
Oh, Thanks, and good afternoon.
Alright.
Hey, guys and maybe I was wondering if we could dissect Q3, just a little bit more.
You, maybe I'll ask two things about the third quarter, you said that job growth accelerated over the course of the quarter. I was just wondering if you could put a little more call around that in terms of how to pronounce that was and then secondly about the third call I was wondering if he could talk about just just the impact of Kobe because.
In some regards with an obvious I mean, obviously, it's a negative because of the drop into hospitals, but then the then the nature of Covid is at its prothrombin <unk> and so there's also a positive aspect potentially to your business and one of your competitors calls out on a quarterly basis. So just wondering if you could provide a little more color in Q3 around though.
Two topics the acceleration over the course of the quarter and then you know how COVID-19 impacted your your numbers in terms of that said headwind until one perspective.
Yeah, I I really really good question, let me, let me take a shot at doing it as best we can without just sort of guessing so R.
The first part about the quarter quarter.
Looked.
Surprisingly normal in the trajectory of the quarter for a third quarter.
And that's what we were trying to say.
Most quarters do accelerators, the quarter goes, particularly in the third quarter, where you start out in.
In July and this looked.
You know relatively normal.
And that's what we wanted to point out we knew Covid was there we saw spikes, particularly in parts of the little later in the quarter.
But it didn't have an impact.
In for US now why is that the case was that.
Patients that would not otherwise have had thrombus, but had it because they got COVID-19.
We've done a little bit of sort of anecdotal conversation with people on that and we don't think that was the majority of you know or even a significant part of the growth. We think that that really pass that most of those patients are being treated earlier.
And so they're not showing up with the kind of thrombus that needs to be removed and a mechanical setting.
And a lot of it is is really just new physicians being.
Being exposed to the technology overtime going it's time to switch either from another tool that they're using or from teeth.
Tpa and they're learning the benefit of the lightning bolt again on the arterial side and N P E and a particularly in Venus as well. So I I think it was really just sort of.
The normal growth of a really really about important product that does really really.
Good work for patients and that's what gives us a lot of confidence that we will see this continue for awhile.
Okay. That's great and then just one quick follow up on you mentioned, 10% sequential growth and vascular throw them back to me.
And I know you know I know all of the components of that seem to be doing quite well between P. E N Venus on arterial and coronary, but what what is the range around that 10% sequential I mean are there some of the one of those four growing 20 or 30 or you know in some low single digit or is it more bunched up around 10, just wanted to get a sense for the the the range of <unk>.
Formats within the four franchises.
Oh yeah.
Yeah, well, they're really.
Three because it's hard to really know with any kind of specificity within lightning 12 cases, whether lightning is being used.
N P E R in Venus.
<unk>.
We have a feel that we're doing well and and and both of them, but I can't give you with any kind of certainty that the difference there because it's the same product.
But but I can tell you that that all of them are doing well I think we called out lightning specifically.
Newer there there's more work to be done.
Between that and cataracts lightning did particularly well.
Again, we will.
We'll pick this conversation after Friday.
Going forward, but.
Again, it's.
It's a it's a good spot to be in.
Where all of it is contributing to our growth right now.
Yeah. Thank you is just to reiterate what I said a bit earlier, we did say.
10% growth was a U S group numbers sequentially. So just making sure you heard it there that and then we did also called double digit growth for both lighting, seven and 12 franchises, respectively, and obviously consistent with what Adam said, it's hard to tell me DVT versus Pee on that front and then just as a.
A quick addition to your first question.
You talked about the paradigm of whether it's prothrombin iodic or not I think it's Ah.
We would just pointing to a different paradigm, which is the paradigm of a single session therapy certainly resonating.
More and more and obviously what goes along with that is.
The and single session therapy, you're obviously not using up the resources from an intensive care unit perspective that you might otherwise and that is is a paradigm that we're seeing in probably continues.
Okay, great. Thank you very much.
Thank you Bob.
Our next question comes from dying of Margaret Fox.
<unk> from William Black.
Hi, everyone. This is Brandon for Margaret Uhm first wanted to just kind of focus within <unk> still <unk> is it really nice quarter, especially within the U S for stroke.
I appreciate maybe you don't have specific numbers for market share, but is it a fair characterization to say, 17% sequential growth is maybe above the market and I guess, what I'm trying to get it is.
You know after a somewhat period, maybe disruptions in a little bit of recall, you kind of feel like with the Red series of catheters here, you're you're on the offensive now and you're taking chair as you're heading into into next year.
Yes, absolutely.
[laughter], Okay simple enough Oh, I can tell you more yes [laughter].
And we're very excited about it [laughter] there. There's no question we're in a great spot right now the the Red series is just doing amazingly well and.
And there's just not enough time in the day to to get it out there as fast as we want but.
This this is not this is not even a full full quarter and we're seeing a lot of success. So yes. It is a really really it's.
It's heartening, it's exciting morale is high.
And physicians are are are <unk>.
Really reacting positively to it.
Got it.
And then the market did not like the market did not likely grow 17% that is Jerry.
Right.
And Adam maybe just in a broader sense you you had hinted at increased investments or just maybe a focus on market development efforts uhm, maybe within vascular that that's especially important given how large the market is and there's maybe more for you to go. After just curious if you could talk about what kind of market develop.
<unk> efforts, you're all investing in getting.
Getting from 10% to 20% penetration and beyond maybe requires some of that so what what are the things that you're investing in and how important are the two.
<unk> can maybe the next like 12 months ago.
Yeah. It's a great question. So there's again similar to stroke, you know where.
We spend time with communities and in the hospital systems doing outreach to make sure patients were getting to the right place here. The outreach is a little different but with.
With folks and physicians, who.
Ah believe in single session and want to continue that there's <unk>.
Local outreach to make sure that the referral patterns are in place and that patients are getting.
To see the physicians, who who are already sort of committed to treating them in a single session. So so there's definitely work to be done and we are engaging in doing to do that the other area courses in clinical work we're running.
Some studies right now.
But but really importantly is the studies that.
We're starting to really think about it and frame up.
Debt, particularly in in certain areas like P. E. You can think about really going after all of the other patients that aren't even getting tpa, but but are just.
Just getting medical management, and how one would attach those we've talked about that in the past.
But you know we've always wanted to be sure and learn a lot more and I think as we continue here, we're starting to understand.
More and more of the benefits of the product and technology.
And starting those conversations so.
Again lots of head.
Pretty exciting time.
To bring this technology to more and more people.
Got it and then if I could just ask one last one the new hires internationally, where we're interested in clearly an area that you're investing in is there anything that this may be signals to new strategies is there have you reached the level, where you kind of need to tweak how you're approaching those markets and.
What could that mean for 2022 growth in the international markets. Thanks.
Yeah look where we've always as a company look to continue to hire the best people that we can possibly higher that know things, we don't bring huge expertise in areas that that we can continue to learn from them and.
And the two international hires Fred and Joan are just that.
To really extraordinary people, who can just bring a ton of experience and and.
Bolster.
With their experienced things, we don't know as well.
So yeah, I I do expect that.
That we can continue to see growth in international and in the years ahead and.
And it's exciting happen, they're they're great addition to the team.
Thanks Brandon.
Our next question comes from the lineup, Steve the grass caught kantrowitz cavity.
Hey, Hey, guys. Thanks for taking my question first I guess and I go for some that can be segment.
There's there's been somebody else M&A in the space that we've seen with some kind of a large are diversified med tech companies over the past couple of months or so and I guess you know how do you think about the competitive landscape shaping up here I mean do you see a competitive advantage for some of these turned back to me products to be within a portfolio along alongside some other a complementary <unk>.
And addressed the vascular space.
We're just we're just like to get some stuff done how you're thinking about the positioning for increased competition going forward.
Yeah look I I have been really really.
Happy to see particularly some of the big companies acknowledge that removing clot in the body and a mechanical thrombectomy tool without tpa and other stuff is the way to go that is a huge sort of statement to the whole field that that we're on the right track and and and.
People are starting to really pay attention to this is the future.
So I I I I think it is all incredibly important and and not unexpected that that would happen.
In the back it's happening now I think is perfect.
As it relates to technology itself, we have a lot of confidence in our sort of computer aided lightning thrombectomy system. It.
It works really really well we know the other technology is pretty well.
And just as we are we're in really good shape, but we also as you know don't ever stay still.
And when you add in the the innovation coming in this field.
We are working on we have a lot of confidence that as the market continues to switch from Tpa drip to thrombectomy, we're gonna be right, where we want to be to capture a lot of those patients and do really really well.
For those patients.
Okay. That's that's helpful. I guess just following up on any kind of some of the commentary that you talked about and market development within the purples and back to me stagnant I mean, it seems like there's been some some competitors specifically within within pulmonary embolism. Instead of you know some some head to head or C. T trials, So I guess what.
And I know in the past that you you you've kind of comment on or expressed at least an interest in doing some kind of had to had studies with within the Venus segment. So I guess, what what's the strategy here or at least the overall thoughts behind potentially either having or not having some kind of had to had data and and you know if you don't have it or if you don't necessarily kind of inverse.
That's like when I mean, how do you think about kind of the dynamics between you know growing the market as opposed to kind of gaining market share with them that segment.
Yeah, No I, it's a really really good question and I'm glad you asked it so I I alluded to it just in my last answer, but but maybe I'll be more clear.
So P E, which is really what you are talking about.
Is today the smallest segment of patients in the U S. If we're talking to U S numbers that are actually treated.
With some form of intervention the majority being tpa dripping tpa over a period of time.
And it's only about 20000, it's it's a significant but it's a relatively small group compared to the the number of patients on Venus sort of DVT, an arterial side that or intervene dawn.
The real opportunity is to go after the much larger group of patients that aren't intervene on that or just given medical management, but could likely they have a massive or masterpiece and could potentially benefit.
Earlier, rather than waiting until those become quite acute.
So that's the study that that would open up the field that would grow the field.
The studies that are going on now no judgement on them, but they're really market sort of share type studies and that's less interesting for us given this sort of size of the growth that we're experiencing an opportunity. We think are our product is gonna have so we're really focused on really.
Kind of study, we haven't announced it but were as a alluded to we're starting to understand enough to have those dialogues with some of the the physician leaders as to what would really open up the market in a more significant way. The randomized studies that are currently going really are focused on the same realm.
To the small pool of patients.
Okay. That's that's helpful. Thanks for taking my questions.
Yeah My pleasure. Thank you.
Again, if you would like to ask a question first try the the number one your telephone keypad.
Next question comes from the lineup Challan rinse from kidney research.
Yeah.
Hi.
Hi, and thanks for taking my question.
It looks like two questions. One is on grass margins it looks like the new manufacturing site that you have it's beginning to weigh on that.
How do we think [laughter] excuse me how do we think about that I've just for the fourth quarter of an inch next year.
Yeah Joanne Thanks for the question, so uhm as to our investment in a row still say impacted our margin I mean, I want to I mean I would.
[noise] market say that it is they're all intentional investment I mean.
We celebrate the investment.
Wait a bed.
All because I'll projection of how long term volume growth, so uhm as with any investment in in setting up manufacturing say the.
The impact the short term margin impact will be a little bit choppy.
But it will continue to to supply margin expansion.
Activities after out of here and I just want to also act that.
At this point, we have not seen material impact on margin because south.
<unk> supply chain and inflation area, but we actually believe that are these productivity investment is going to help us to offset some of the macro impact in a long time.
Okay. My second question has to do with real revenue.
<unk> revenue from the real system, that's got another way.
How do we people will have this already in their models from what I can tell I mean based on what I can piece together.
For next year ranges anywhere from 3 million to 26 million uhm, which could be the difference between you meeting or beating consensus can you just help us get our head around that so that were set up right. Thanks.
Yeah, So <unk> we're not.
Let me try to address it as best I can without going into guidance or numbers for 2022.
We're just not doing that on this call and I want to be clear about that.
The opportunities in immersive healthcare, we think are as you know from our Investor day really huge significant it will take us time to do the work that we laid out in the Investor day. The work is.
A number of things we have to continue to work on the the platform itself and and doing the work to build that capacity. So that we can host and have.
Developers.
Working with us.
In terms of content, we also have to do the work too.
To provide a viable business by getting a pretty significant installed base all of that is in the earliest stages of of doing the work so whether or not the revenue is significant will give you a decent amount of guidance.
When we start talking about our 2022 guidance, but.
The goal is to sort of lay that out do that worked.
Not chase the sort of short term revenue next year or.
As we sort of do this that that is important that being said, we have a lot of excitement because after investor day, where it was then.
Public and we can start to talk about it we've had a lot of conversations with healthcare community, who would be in effect participating as buying this utilizing this with their their patients with their their residents and so on and I got to tell you that as I said in my.
Prepared remarks, the interest the excitement the need to have one company trusted company in healthcare provide this where it's all clear it's all contained data secure.
It's Ah it's Ah Ah.
Sort of a proper.
Use of this great technology that level of interest.
Frankly is is.
Is I won't say, it's surprisingly I knew there, but it's really heartening to see that it it's coming after those discuss that sort of public discussion. So stay tuned we'll we'll do our best to give you specific numbers.
As best we can in the future, but uhm.
I think we're well on our way here.
Thank you.
Thank you thanks Joy.
There are no further questions that go five Ms Hamelin hats, I tend to call back over to you.
Thank you operate on behalf of them excellent team. Thank you all again for joining us today and for your interest and cannot that we look forward to updating on a fourth quarter call.
This concludes today's conference call you may now disconnect.
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