Q4 2021 Axonics Inc Earnings Call
Good afternoon, ladies and gentlemen, and welcome to the Astro next quarter for it could you find you and your thoughts conference call I'd like to turn the call over.
To your host MS. Danielle Pallet car you may begin thank.
Thank you Cheryl good afternoon, and thank you for joining <unk> quarterly results and update call presenting on today's call are Raymond Cohen, Chief Executive Officer, and Dan Dearen, President and Chief Financial Officer, Ray will provide introductory remarks on the fourth quarter, followed by Dan discussing in detail financial.
In 2022 guidance Ray will conclude our prepared remarks with updates on sales marketing and product development initiatives, followed by a Q&A session. Before we begin I would like to remind listeners that statements made on this conference call that relate to future plans events prospects or performance are forward looking statements.
As defined under the private Securities Litigation Reform Act of 1095, while these forward looking statements are based on management's current expectations and beliefs. These statements are subject to a number of risks uncertainties assumptions and other factors that could cause results to differ materially from the expectations expressed on there.
This conference call. These risks and uncertainties are disclosed in more detail and Exxon X as filings with the Securities and Exchange Commission all of which are available online at Www Dot SEC Dot Gov.
Listeners are cautioned not to place undue reliance on these forward looking statements, which speak only as of today's date February 24th 2022, except as required by law Exxon ex undertakes no obligation to update or revise any forward looking statements to reflect new information circumstances or unanticipated events that may arise.
I would like to turn the call over to Ray for his remarks.
Okay. Thank you Neil and I would like to welcome everyone, who is joining the conference call. This afternoon.
So we're very proud of our fourth quarter and fiscal 2021 results considering the disruption COVID-19 has had on elective procedures in the health care facilities in the United States and of course around the World. In addition to strong commercial execution, we made important progress on several strategic initiatives that position <unk>.
For durable growth for years to come.
Turning to fourth quarter results <unk> generated record net revenue of $53 1 million representing.
Representing an increase of 53% compared to 2020.
Second no modulation revenue was $44 $4 million in Q4 of 2021, an increase of 28% year over year, and a sequential increase of 11% compared to the third quarter of 2021.
In fiscal year 2021 through a combination of market expansion and share capture our sacral neuromodulation revenue grew by over 40% to $157 million.
Representing over 10000 patients that were implanted during the year.
With tens of millions of Americans affected by bladder and bowel incontinence continued information continued innovation and increase patient and physician awareness for sacral Neuromodulation. We expect this market to grow by at least 15% annually over the next five years and turn into a $1 5 billion dollar category.
So now turning to bulk them at our unique Biocompatible bulking hydrogel for stress urinary incontinence for women fourth quarter revenue was $8 $7 million, an increase of 27% on a sequential basis.
In the 10 months of 2021 that we own this asset bulk commit has improved the quality of life of over 20000 women propelling <unk> into the market leader in this category.
And we're just scratching the surface of what is possible in this large and highly underpenetrated stress urinary incontinence market.
As it relates to the impact Omicron had on our business. We started seeing an impact in second on modulation procedure volumes in the second half of December similar to what you have heard from other companies. The significant increase in the Omicron cases continued into January and early February resulting in cans.
<unk> and deferral of hundreds of sacral neuromodulation procedures.
The impact in February moderated and we are encouraged by the improving trend line and expect this positive momentum to continue into March.
Given this impact from omicron and the normal seasonality from the annual resetting of insurance deductibles, we expect sacral neuromodulation revenue in the first quarter to exploit experienced a decline in the mid to high teens as compared to the fourth quarter of 2021 importantly.
Importantly, we expect cases that were deferred or canceled in December and early 2022 to be rescheduled throughout the year as such our outlook for growing <unk> revenue by 25% in 2022 remains unchanged.
With that I'll turn the call over to Dan for a more detailed review of fourth quarter, 2021, and the financial and financial results as well as 2022 guidance, Dan I'll give you a second.
Thanks Ray.
In the fourth quarter of 2021, as Ray mentioned, Exxon X generated net revenue of $53 $1 million.
This represents an increase of 53% compared to $38 million in the prior year period.
April Neuromodulation net revenue was $44 4 million, 98% of which was generated in the United States bulk.
<unk> net revenue was $8 $7 million, 67% of which was generated in the U S.
Profit for the fourth quarter of 2021 was $35 4 million.
Representing a gross margin of 66, 6% compared to 63, 6% in the prior year period.
Total operating expenses for the fourth quarter of 2021 or 53 $1 million.
<unk> and operating expenses are $6 8 million of stock based compensation expense and $2 $1 million of intangibles amortization.
Operating expenses totaled $33 million in the prior year period.
Net loss for the fourth quarter of 2021 was $15 $2 million.
<unk> to a net loss of $11 $3 million in the prior year period.
Cash and cash equivalents were $229 million as of December 31, 2021.
Turning to fiscal year 2022 guidance, we expect.
Total company revenue of $234 million, an increase of 30% compared to fiscal year 2021.
<unk> revenue of $197 million.
Being an increase of 25% compared to fiscal year, 2021, and bulk of med revenue of $37 million, an increase of 63% compared to fiscal year 2021.
We expect gross margin to increase 200 basis points year over year to approximately 66% in fiscal year 2022.
We expect to benefit from higher fixed cost absorption and purchase price discounts as well as lower cost of goods sold on our new recharged free device, partially offset by higher prices along the supply chain.
In fiscal year 2022, we expect operating expenses to total $260 million, including $35 million of noncash expenses associated with depreciation amortization and stock based compensation.
The increase in operating expenses compared to 2021.
Merrily being driven by investments, we are making in direct to consumer advertising and growth in the head count of our U S field sales team we.
We expect these investments to pay significant dividends in 2022 and the years to come.
I'll now turn the call back over to Ray for additional remarks.
Thank you Dan.
So I'd now like to provide updates on our product development and sales and marketing initiatives.
Suffice it to say, we're very excited about what <unk> has on cap in 2022.
On the product development front, we have engaged with the FDA on an interactive basis throughout our PMA submission for the newly developed <unk> recharge free sacral Neuromodulation system.
We are very close to the finish line and anticipate FDA approval before the end of the first quarter.
We expect to begin shipping the new device within days following FDA approval.
We're confident that the introduction of our recharge free device will continue to drive for market expansion and advance Exxon X on its path to market leadership.
At over 15 years at typical stimulation settings and over 22 years on low energy settings. This new device will have the longest functional life labeling of any non retargeting neurostimulator. The FDA has ever approved.
This recharge free system will have a positive impact on our business since many physicians have only known and implant did non rechargeable sacral neuromodulation systems for the last two decades as.
As we did with the introduction of the first long lived MRI compatible rechargeable sacral Neuromodulation system in late 2019, our new recharge free.
Ines sets a new standard for what is possible in sacral neuromodulation.
The fully recharge free system is full body, one five and <unk> MRI compatible and employs the same stimulation engine along with a wireless patient remote control that unlike our competitors device does not require a communicator, nor does it require recharging or replacement batteries.
In accounts that are loyal to axon ex this new device will allow us to capture business. We previously couldn't service and more importantly, having an SLM portfolio that now includes a recharge free option will allow us to take another crack at competitive accounts that previously didn't come our way because of the physician believed that a non rechargeable system was.
First for their patients.
In order to maximize the potential for an exceptional product launch and market share capture we are ready to go with a full scale market launch that includes running seminars around the United States in the second quarter. These seminars proved exceptionally successful when launching our first generation <unk> system in late 2019.
<unk> and bulk of that in the second half of 2021.
So I would now like to spend a few minutes discussing the large and underpenetrated market opportunities our therapies address for.
So the last.
With our assistance the practices then send mailers to these patients which discussed the availability of a long lived new device that is MRI compatible highly efficacious and easy to use the program has been very successful and is one that provides a tremendous return on investments for both <unk> and our physician customers.
We also reach patients via print advertising radio and a combination of digital activities, including Facebook ads paid Internet search and search engine optimization. These various channels direct patients to Exxon X branded websites with a person registers and then qualifies themselves based on answers to a short.
Online symptom questionnaire.
Now we partner with a third party call center that is staffed by a team of nurses well versed in incontinence and the therapies we offer.
This effort has resulted in over 50000 inquiries last year and a few thousand qualified leads that were provided to physicians that offer Exxon ex therapy.
Now we've taken.
The learnings from the last two years of our direct to patient and direct to consumer efforts. We went to school and what has it hasn't worked for other med Tech advertising campaigns and we are now excited to take the next step in our DTC journey.
Beginning in April we will be airing TV commercials locally and nationally on network television as well as streaming channels.
Television will allow Exxon X to reach millions of women in 2022 and potentially generate hundreds of thousands of inquiries are messaging, our messaging will need not to distinguish between urge stress or fecal incontinence, because we offer solutions for all of these conditions. We believe this will increase our response rates.
<unk> lower cost per lead and drive more patients into practices that offer Exxon ex therapy.
Our Omnichannel strategy will help establish the <unk> brand and allow us to engage patients within continents across multiple platforms with a consistent message that new life changing in continents therapies are available to them.
It will also be cleared of physicians that we are behaving like and plan to be the market leader in.
This category.
To prepare and fully capitalize on the market growth and share capture we anticipate in both the near and long term, we have grown our U S field team to approximately 300 individuals. The team is evenly split between quota carrying sales professionals and clinical specialists that support cases, we're confident that the breadth and depth.
Our team matches the market potential for sacral neuromodulation and stress urinary incontinence treatment for the next several years.
In closing.
We're grateful and humble for the trust physicians patients and shareholders have placed in <unk> and.
And I'd also like to thank our field team and our colleagues in Irvine for their diligent efforts and dedication to fulfilling our mission of improving the lives of adults suffering from incontinence.
So at this time, we're happy to take questions and I'll turn it to the operator.
Thank you, Sir ladies and gentlemen, if you have a question at this time. Please press the star and the number one key on your desk phone telephone is that question has been answered or you wish to remove yourself from the queue. Please.
<unk>.
Your first question comes from the line of Larry <unk> from Wells Fargo. Your line is open you may ask your question.
Good afternoon. Thanks for taking the question and Ray can you hear me Okay. Yes. Thank you Larry.
Great great.
So I wanted to start on the primary cell device.
The information you shared Tonight was interesting on the 15 to 20 year.
Life.
Battery life, if I heard correctly so Mike.
My question is how.
How do you think your device is going to stack up to what we've seen so far from the Medtronic.
Not new non rechargeable device, if they just got approval for.
And are you going to be able to market that 15% to 20 year claim I think you mentioned on this call. If I heard correctly I think they said there is about 10 to 15 years and I had one follow up.
Yes, no problem.
So Larry look I think that.
There's no question.
We're going to be able to market the claim because that's the data that we submitted to the FDA and they have already accepted our longevity claims based on our.
Our robust internal testing and accelerated life testing. So just just to give you a comparison.
To pick a 0.1.
Implant for us is going to get 17, five years out of our device and that's typical.
Settings. So so we're really excited about that we think it's going to compare quite not only quite favorably, but once again as I made in my prepared remarks. This is going to be the longest time in terms of longevity in the body for any non rechargeable neurostimulator.
The FDA has ever approved so we're quite excited about that.
And then of course, the product I think very importantly, it uses the same clinician programmer the same wireless patient remote. It's got the same engine will have the same conditions for MRI compatibility that we have in our existing products. So we think this is clearly is going to set a new standard.
And second to Neuromodulation for what is possible.
And I will just add by saying of course, we're not abandoning by any means our long lived rechargeable device, which could easily get over two decades in the body and currently only requires charging once a month for an hour or so.
Real bullish about this Larry and I think the key thing for us is to be able to offer the <unk>.
Complete line and give physicians choice.
Pending upon maybe the age of the patient or whatever other parameters. They may decide to move a patient in one direction or another we're agnostic.
From that standpoint, we just want them to implant exotics.
That's super helpful. And then just for my follow up on your DTC efforts.
Could you describe how much youre going to spend in 2022, and what gives you. The confidence you won't help your competitor more than yourself given that their share is still higher. Thanks for taking the question. Yeah, you broke up a bit hopefully this line.
It's not broken up Larry can you hear my response well.
I can hear you fine just no no.
No no problem I heard your question so.
Question fundamentally was what gives us confidence that we're not going to be advertising.
For our competitor right.
And and the answer is that we're not advertising sacral neuromodulation.
Our advertising Exxon ex therapy for patients who have incontinence.
So I think that.
That's that's what we're doing so we feel pretty confident about that.
And.
Of course.
The rising tide as we said all along floats all boats right. So.
This helps the category in general we're okay with that.
Where we're being smart about it.
We recognize that there is a competitive offering and so we're purposely.
Reenter our commercials, so that we can pick up patients with any form of incontinence, whether it would be stress or urinary or whatever the case might be we're not going to make those distinctions and besides in a 32nd commercial.
You really can't further to that just to just to give you a complete fulsome answer.
Anytime somebody raises their hand, they are directed to website. They fill out a survey if they're if they're interested obviously that's the first level of qualification and then we have as I mentioned in my remarks, a call center where people.
These are registered nurses, who not only understanding continents, but they understand our offerings and they will call out to those patients.
Speak with them.
Speak with them about their condition, and then offer them an opportunity to get connected to.
Center that is offering <unk> therapy. So this is not about sending people to our website, putting a physician locator on it and letting patients decide who they want to go to Willy Nilly. So we've had a lot of experience with this over the last year and so we feel like we've got that system down and.
We'll be getting the right kind of return on our investment.
Thanks, a lot ray thanks for taking the questions.
Thank you Larry I appreciate it.
Your next question comes from the line of Chris Pasquale from Guggenheim. Your line is open.
Thanks, I appreciate you taking the questions Ray you said, you're just scratching the surface of what you can do with bulk image what else can you do there are there product line extensions or clinical trials you want to pursue that you think could drive more adoption or is it just about touching more physicians.
Thanks, Chris that's a good question, we don't need to do anything I mean this is we have physicians that are evangelizing the therapy based on the results that they're seeing with the patients.
This is a phenomenal alternative that.
Anybody who is coughing sneezing pick up objects exercising and leaking urine I mean, we can get them fixed up in 15 minutes, whether it's in an office ambulatory surgery Center outpatient section of the hospital.
So for US, it's just more about going out there with our team in accessing more of these accounts and giving them access to the product. So this thing is growing like weeds as <unk> seen already and there is no pushback in terms of the quality of the product the ease of administration. The immediate results that patients are getting so we don't have.
Burden to really do anything else other than go out there and offer this product and support these customers. So this thing has got legs.
And I think we've seen that already and we expect.
The revenue just to continue to flow in and obviously provides us with a lot of other benefits. Besides just just the revenue and the margin.
Got it Okay, and then Dan if I heard you right you are guiding to roughly $70 million increase in opex on a call it $50 million increase in revenue.
Certainly it makes sense to invest in the future growth of the business, but that seems like.
Quite a bit of investment or is it a negative leverage this year in particular can you talk a little bit about where that's going and how you think about this level of spending is this a one time investment year.
We start to see leverage as we get into 'twenty three.
I think that's right I don't think I would characterize as one time, but I think at a high level. There is obviously increases across a number of departments as we scale up and have just more activity, but obviously the big drivers that you've called out are the DTC campaign.
In addition to other marketing programs and I think we've glanced off of this on the call that didnt get into but we've also added a number of sales reps and clinical specialists in the U S field sales team.
And the secondaries since you brought up Bakken that we started out with four U S. What we call key account managers, which are the bulk of that risk and we've now increased that to 25, and so what youre, saying is.
Increase in spending across a number of departments, primarily focused on revenue generation and then we are talking about a sizable certainly for us increase in DTC spending its the type of program, we're going to push hard as long as we see return on investment and revenue growth.
Look when we optimize it and regional and local territories, then we'll be able to cut back on some of the bigger expenses and it's the type of program that we don't know if it runs for one year or two years or three years, but at some point the leverage will come in because it will take some patients some time to go through the process and the care pathway to get implanted.
But it's the type of investments that will produce returns for the next one two or three years.
Got it thanks.
Thank you.
Your next question comes from the line of <unk> <unk> from Morgan Stanley . Your line is open you may ask your question.
Okay. Thank you for taking my question I wanted to start with the revenue guidance understanding.
So the dynamics in that.
Our gennum business, but could you just talk about what you're expecting from bulk of mid <unk> and then throughout the balance of 'twenty two as far as how you incorporated.
The launch of <unk> touch screen firemen, and Youre thinking in terms of sequential acceleration in the business through the balance of the year.
Certainly so for for 2022, as we said, we expect total revenue of $234 million and Thats, both sacral neuromodulation as well as bulk of note.
The <unk> piece of the $197 million of that which represents 25% year over year growth.
We're expecting in Q1, a mid to high teens sequential decline compared to the fourth quarter and that's due to seasonality and also the omicron variant which is.
In certain markets hampered electric procedures.
And then as we look forward at quarters, two through four and 2022 when you factor in seasonality, we expect the <unk> revenue in the second and third quarters to have roughly equal weighting of 25% of the total revenue and in the fourth quarter, which is always strongest to be approximately 30% of the total revenue.
On the bulk of that side, what we're expecting to see in Q1 is a slight decrease from Q4 2021 of just a couple of hundred thousand dollars.
And then we expect to see that increase quarter over quarter by approximately $500000 each.
How we get to $37 million in revenue for 2022 for bulk of it.
Okay, great. Thank you and if I could also just follow up.
As you think about the initial launch of the recharge free platform, how youre thinking about either targeting accounts, where you have the majority of sure Medtronic.
<unk> versus those accounts that maybe you've been leveraging boeckman to get into where you haven't had a presence before but just the ability now to have the recharge free platform in your portfolio I'm. Just curious if you could provide some high level commentary around how you think about that initial launch.
Sure sure. This is right now.
It's pretty it's pretty straightforward. So so as we've said before it's not as if our existing accounts.
Are clamoring for a non retargeting device. Okay. I think this is important to say, we've got happy customers. Their implanting our device I mean 10000 of our devices got implanted last year alone 98, 5% of the United States. So.
So there will we get some business on the margin.
Are there some patients that are in <unk>.
<unk> loyalist accounts that.
Still wind up with an interesting too because they may have had one in their body before.
Some of Thats going on and clearly we have some accounts that have been splitting their volume.
So we will see some incremental increase in existing accounts that we have today now as you mentioned to see appropriately.
Our target is competitive accounts.
And we have quite a number that had been waiting right for us to come out with this new product.
That we haven't gotten any business from <unk>.
And so we're going to target them of course, and then a lot of those accounts interestingly enough have started with both of them at so we're already behind the counter so to speak so so it's.
It's a combination of all those activities and as you probably know salespeople are a special breed of cat. They follow the path of least resistance. So that's the guidance, let's get the business, where we can get it.
<unk> tried to light up the scoreboard the best that we can so for us.
We're just very thankful that the pandemic seems to be receding.
Things are opening up nicely around the country.
A little bit of a hangover clearly we got a lot of patients that we're hoping that we'll reschedule their procedures now that are the hospitals and <unk> are open to doing procedures and so we're very optimistic about things and we think that the only thing that's held us back quite frankly has been the pandemic.
And.
With that receding and with the.
The new product offering and additional stuff that we have planned for this year along with the advertising we're quite bullish about what 'twenty to 2022 will offer for <unk>.
Thank you very much for taking the questions.
Absolutely my pleasure. Thank you.
Your next question comes from the line of Adam later from Piper Sandler Your line is open.
Hey, Ray Hey, Dan Thanks for taking the questions and congrats on the progress wanted to start on the primary cell device and <unk>.
Maybe you could just level set us for the market today, how does that split between rechargeable and Nonreturnable therapy.
And then the second part of the question is if you were to look forward kind of 12 months from now.
I mean, how do you think your device mix will stack up recharge versus recharge free and then I had a follow up sure sure sure.
Okay.
I just want to make a point.
We talk about our recharge free system, we're talking about a recharge free system, where neither the IPG, which is implanted in the body or the patient remote needs to be recharged that is not the same.
Offering that our competitor has.
True that you don't have to recharge their IPG, but the rest of the accouterments all need to be plugged in the wall and recharged on a regular basis.
To answer your question backwards, Adam if you don't mind, we would expect that given a year or so from now we probably will see a 50 50 split in terms of.
In terms of our.
Non rechargeable versus rechargeable product and.
Maybe that's not the most enlightened projection, but probably can't be too far off one way or another if we stick with the 50 50 idea.
So that's ultimately I think where this thing goes now your question about what is currently the case in the marketplace.
I think it's important to kind of remind people that the number one selling product in the United States and the world has been the interesting too right. That's the that's the product that we've been competing with it as a non rechargeable device.
We just have not seen much penetration of the competitors rechargeable system.
Have they sold some sure but once again the product that we've been competing with it's been interesting to us.
And.
We're gonna.
And we continue.
We continue to replace those products nearly 15% of our overall volume is still replacements of these legacy products. In these physician offices. So I think we will pick up more of that business as time goes on now that we have a long lived non rechargeable system to offer so.
There aren't two markets I think this is really important for people to understand there is one.
There is a <unk>.
Physician who's communicating with their patients and trying to move those patients in the direction that they can right. So it's not like patients are coming in with a strong preference per se. We've done surveys about this and what the patients tell US is they are following the advice of their physician and that Shouldnt surprise.
<unk> antibody.
Really helpful color I appreciate all that and then for the follow up wanted to ask you about the recent journal publication that talked about.
A higher prevalence than previously anticipated on incontinence.
And how do you think that could potentially benefit therapies like sacral neuromodulation bulk of Mad.
I think the journal article talked about the need for <unk>.
<unk> screening at.
As part of preventative care for all adult women so.
Is this a tailwind for the category.
Is there something that could have a light switch effect is it something that kind of just benefits the category over time, just any color there would be helpful. Thank you. Thanks, Adam It's a good question I wish I could say that anything in medicine is a light switch, but it's not.
As you know things change very slowly.
And.
No.
It's unfortunate.
And I say, it's unfortunate because here's the fundamental problem. We have primary care physicians have no idea about cycling a modulation primary care Obgyn's don't don't don't treat for.
For the most part.
<unk> incontinence right. This is part of the problem. So what we're what we're looking to do here is not just stimulate the urology and gynecology market. These are the docs that are actually offering these therapies, but we also work with our advertising to stimulate the market in general right and we hope that.
Patients are coming into their regular doctor and as you know women, mainly <unk> and if they are walking in these offices and theyre, saying look on the weekend.
And I saw an AD on TV, how can you help me either.
Either that stimulates them to get in the game to do bulk of that or to refer that patient out to where you were going to call. Just as an example, so so.
There are so much blue sky in this category. It is truly unbelievable, we're sitting on top of a unicorn opportunity with a Tam that is really quite unbelievable.
And I think that it's been a quite frankly, a very sleepy corner of our business up into this point, but we aim to change that and given these the prevalence and incidence of these problems.
That exist out there, we think that's creating some buzz out in the marketplace, particularly among.
The potential patients that now are going to hear for the first time Theres actually a solution and I Dare say this is very analogous to what we've seen from inspire.
Nobody nobody knew that there was a neuromodulation device that could treat sleep apnea, but now with the acute commercials furious and CPAP youre thinking Hmm, maybe I should go look into this into this other other product so.
This is a well kept secret we've been banging the drum Dan and I have been talking about this now for eight years and we've been banging the drum and I think now as it's one of those situations, where I think that we're in the right. It's the right time.
Right, we have the right technology now we've got we're going to have the full line of products for people to choose from we don't care what kind of incontinence. You have we can get you treated and I think we've positioned <unk> quite nicely to benefit from additional awareness in the marketplace. So I really appreciate that question. Adam gave me a chance to say a few more things.
I wanted to talk about.
Thanks for the color right.
You bet.
Your next question comes from the line of Mike Matson from Needham <unk> Company. Your line is open.
Yes, thanks for taking my questions.
It seemed like the fourth quarter, there was a bit more of a divergence between your performance and Medtronic I mean, they had been admitted that they lost share in the quarter.
So what I'm wondering is.
Something change I mean did you is it the sales force expansion.
The bulk of mid strategy of cross selling.
Is there something going on there because I know there wasn't any change from a product perspective at least at that point in time.
Mike We got great products, we've got great people, we provide exceptional service.
And it's just a matter of time and I think that.
Look we've only been at this for a short period of time I mean, just to remind people we launched our product in November 2019, we had four months, where we were not impacted by global pandemic ever since that day, Mike we've been under that cloud I think what Youre seeing now is.
Here, we are it's been basically well.
Well not even two full years, but it's been two years since we've been out there calling on these practices and I dare say that.
We're not going anywhere right that we are turning our customers into raving fans of <unk>.
They love our people they love the quality of the product theyre getting better results than they've ever seen.
In this category are Bocom AD product now is being able to literally sure stress urinary incontinence at least for the next five or seven years. After these injection. So I think you're just starting to see the momentum building around the Exxon X brand and people recognizing that we do business in a different way when we talk about.
One of our mantras is no patient left behind I mean this is this is something that really resonates with our customers. They understand that we actually care about these patients we want to make sure that theyre going to continue to do well over time, it's not about selling something and walking away and leaving it up to chance, where we're really committed and we're working very hard with these practices to embed our pea.
People there so that they are confident.
About not only the quality of the products, but to get to know you know.
Our people and their commitment and so forth. So Mike I just think it's quite frankly, it's it's a result.
Our Q4 numbers and the fact that we are making serious progress in the market as a result of a million little things that we've been doing.
Since we launched this product in the United States.
Okay makes a lot then and then.
With regard to the television campaign that you mentioned.
<unk>.
How is that going to be sort of rolled out is it going to I can't imagine you are going to go national all at once or maybe you are in.
What sort of metrics are you going to use to kind of judge the performance.
Well.
Look.
We are going national to start.
We're not we're not playing around with this this is this is a <unk>.
Serious undertaking.
Spent a lot of time and energy on the messaging and making sure that we feel confident about what the AD is going to look like and all the rest and we're going to make a big splash.
With this and so forth now initially the only real metric that you can measure is going to be response rates is going to be how many people are actually.
Going to those specialty websites and qualifying themselves and filling out the survey.
That's going to be the first thing that we're going to be looking at and we have a pretty good sense about what to expect.
But in measuring how many of those so then the next thing we will measure is how many of those individuals can we actually place.
With an appointment into electronics.
Account right, that's going to be the two top metrics metrics that we're going to look at it first and then we're going to have to be a little bit patient because once again. These are people with a problem. We don't know have they taken drugs. If they failed drugs have they tried botox we have not we're going to have no idea. So they're going to have to work their way as Dan mentioned earlier are going to have to work there.
Through the care pathway.
Some people are going to be ready for procedures right away others are going to need to go through the process of being differentially diagnosed and then may be taking some drugs for OE b or having a conversation about stress urinary incontinence and what their options are and so on and so forth. So.
It will take some time and we won't be shy about reporting back out but.
We got to see how it's going to go first.
Nobody's ever done this in this category before so it's kind of a little bit of a brave new world.
Okay, great. Thank you.
Sure.
Your next question comes from the line of David <unk> from <unk> Securities. Your line is open.
Hey, Ray thanks for taking the questions.
Wanted to start off on guidance and just get your thoughts behind their approach to guiding to this $234 million revenue estimate for the year rather than a range.
If I heard you correctly I think in the prepared remarks, you mentioned that there were canceled lesson and procedures that are expected to be rescheduled throughout the year. So I guess my question is.
What level of visibility do you have in the business and how should we read into this guidance number when we think about the level of existing backlog or are those expected to be rescheduled. This year versus those that are newly scheduled throughout the course of the year.
Oh.
Not really exactly sure looking at Dan on how to answer that question other than to say look we gave you. What we think is our best estimate.
We felt that providing a range doesn't provide us with really any any upside because if we if we put the range everybody's going to expect the high end of that number and.
If we come in at the low end of the number then everybody is going to be disappointed. So we just basically put forth. What we think we can do and obviously as is the case with any management team. Our objective is to beat those numbers.
And in terms of.
Visibility.
This is it.
This is a different kind of a pipeline right. We're not we're not selling capital equipment, where you have X amount of prospects.
Youre waiting for the purchase orders and things of that nature. I mean, this is a very fast pace volatile business, where patients walk in the door.
You know what I mean, and then ultimately we got to get them treated so.
It's not.
We have a lot of metrics of course, all our analytics are looking backwards right I mean, that's the key thing.
We have a good sense right.
How many procedures each of our accounts are doing.
<unk> had plenty of surveys that have been done either by ourselves or the analyst community or institutional investors themselves.
So we.
The feedback from our customers is that they expect the market to grow significantly as this pandemic receipts so hopefully.
What we're talking about.
Growing your business, 30% year over year is never that easy it's not like you.
Wake up and just look at the scoreboard.
But we think there's plenty of potential for us to succeed.
What we've put forth.
Okay.
On bulk.
Salesforce they are fully kind of train a bulk of a few quarters in the bag and in the past you will be talked about this as having a halo effect or in your words being cabinet for some of these new SLM account. So I guess my first question is what level of pull through have you seen so far with them. That's what I'm accounts and just second question to that is it possible to think about maybe.
A more material halo effect within the <unk> business bearing fruit in the second half of 2022, if thats in our business is more impacted by kind of the near term and I guess, if I heard asking a different way or their estimate of accounts now that are being activated that were pulled it because of bulk and that that may just not ramp in the near term because of <unk>.
We're staffing shortages that may more materially do so in the second half of the year.
So I think if I simplify the question.
Clearly, we believe the second half of the year is going to be more fruitful, but we're optimistic that the second quarter of this year will be.
As good as we experienced in the second quarter of last year that was probably a good clean quarter for us. So so we don't think we have to wait until summertime.
To see in.
<unk> in the business, we think our customers are anxious to get patients treated and as long as the.
Electric procedures are open.
I don't see any reason why we can't get these patients and get them treated.
There's no question that bulk of it.
Has been contributing to the Halo effect as you referred to it and we've talked about it in the past.
And has gotten into a lot more accounts and I think.
We're going to see.
Really the fruits of that labor, we've seen some already of course.
In Q4, but we're going to we're going to see the fruits of that labor in 2022, that's really where we're going to start to.
How should we say reap the benefits.
Of having this.
Our expanded product line and being able to treat all of these types of patients with incontinence. So.
There is no doubt that it's worked well.
Seminars that we ran for bulk Ahmed last year yielded.
Quite amazing results in terms of the number of physicians that have started we had 328 people attending seminars I think the latest numbers I've seen is that we have about 80% of those physicians that attended are actually treating patients with bocom it already.
And we've picked up a.
A few dozen accounts because of this.
In in places that in accounts that we werent in before and we expect that trend to continue particularly now.
Or as soon as we get the approval on the recharge free system. So.
Hopefully that will start to see the fruits of all of our labor really.
Come to bear in 2022.
All right very helpful. Thanks for taking my questions. Thank you.
Again, ladies and gentlemen, if you have questions at this time. Please press star and then the number one on your Touchtone telephone.
Yeah.
Your next question comes from the line of Dania and Telsey from SBB Leerink. Your line is open.
Hey, good afternoon, guys. Thanks, so much for taking the question.
I just don't have a high level question and then.
Specific question, so high level I think even through the pandemic with HSA. Your U S. Launch has exceeded expectation is there a way to quantify or even qualitatively ascertain how much growth has come from market share gains versus market expansion.
And I guess.
Our market share gains still a meaningful part of the growth story or how much of the low hanging fruit has been had already from a market share perspective.
It's funny Danielle.
Youre asking us about market share when we have there is only one part of the equation that we know which is all right. We don't know what the revenue from the other part and.
The fact that there was a comment about that they gave up market share to axon X in this most recent quarter.
It's not a surprise to us the only surprise was actually readmission.
But we still don't have a number.
And so it's really impossible for me to answer that question. So.
I mean, we've said that we think it'll be a combination right of expansion of the market and market share gains.
And if you decode our 25%, but we've said we think the market will grow at least 15 and will pick up the rest of the market share gains. So I think we've kind of given the answer.
But honestly, we're trying to make.
We're trying to talk about this with with literally one hand tied behind our back because we.
We don't have the other the other numbers, yes, yes.
Going to add is what we're seeing across the entire customer base with an increase in annual unit volume and what not surprising to us, but I think probably interesting to people on the call is.
We're also seeing a number of physicians now that it may be not really been practicing SLM for a long time now asking to get retrained by us and to get back practicing this therapy and so yes.
I'd say if there is any surprise post commercial launch from 2019 it has been.
The market's more underserved and larger than we originally expected and this latest data that ray talked about on the prepared remarks of the 78 million women in the U S that suffer from incontinence.
It's substantially higher than what we were operating off when we went public and so I think the blue Sky. That's in front of the two S and employers.
And this market is going to continue to grow for the next five to seven years.
Yeah got it Okay and then.
Maybe an unfair question because it sounds like it's hard to say, but I was just curious how sticky the market share gains you have made versus medtronic have been and I don't I guess, maybe a way to ask the question Anthony account, where you've gotten traction how sticky has this year.
Medtronic has launched a.
Rechargeable Tonight. Thanks, so much.
Okay.
We.
We just have not had any impact from the.
Competitive rechargeable product.
We cannot ascertain any impact quite frankly.
I am sure that accounts that are loyal to our competitor.
I'm sure they have tried that or to some extent a pen may have tried that product, but it's been a non issue for us.
I think the only time when we saw some accounts go back the other direction was back in 2020.
When the.
Competitive product got MRI compatibility claims right and that was the last time that we actually saw accounts. Some accounts that it started with us that kind of switch back. Since then we just haven't seen that.
So.
Hopefully that's the.
The direct answer to your question so.
Most.
The action that we see is it's like what Dan said, where we've got new people that are wanting to get in the game for the first time and now in 2021 and in 2022, we can train somebody up we didn't have that capability per say back in 2020, when we first launched nor was it a focus of ours.
And then also competitive accounts that want to work with Exxon X because they they've heard from their colleagues about the quality of our products and the quality of our people and the fact that we pay a lot of attention to every account and we're there for every procedure and we make sure that every patient is program well.
And as followed up so that's.
That's the game right now and.
We think we're doing business in the right way and that's going to continue to accrue to our benefit benefit over time.
Thank you very much. Thank you I appreciate the question.
And I'm showing no further question at this time I would now like to turn the conference back to Raymond Cohen for Thank you operator, and thank you for everyone for listening in today. We appreciate all the questions from the analyst community and we look forward to speaking with you all again bye bye now.
Ladies and gentlemen. This concludes today's conference call. Thank you for your participation and have a wonderful day you may all disconnect.
Okay.
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