Q4 2021 Inari Medical Inc Earnings Call
Good day and thank you for standing by mobile to say now is fourth quarter 'twenty 'twenty earnings conference call. At this time all participants are in listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question during this session.
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Over to speaker today.
Warner Investor Relations. Please go ahead.
Okay.
Thank you operator, welcome to <unk> fourth quarter 2021 earnings call.
Now on today's call are Bill Hoffmann, President and Chief Executive Officer, and Mitchell Chief Financial Officer.
This call will include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, all statements made on this call that do not relate to matters of historical facts should be considered forward looking statements, including statements regarding the markets in which <unk> operates trends and expectations for <unk> products and technology trends and demands bernard's product and RF.
The financial performance expenses and positions in the market and the impact of COVID-19 on <unk> operations and the various customers operations. These statements are neither promises nor guarantees and involve known and unknown risks and uncertainties that could cause actual results performance or achievements to differ materially from any results performance or achievements.
Best or implied by the forward looking statements. Please review in our most recent filings with the SEC, particularly the risk factors described in <unk> annual report on the Form 10-K for the year ended December 31, 2021 for additional information.
Any forward looking statements provided during this call, including projections for future performance are based on management's expectations as of today and already undertakes no obligation to update these statements except as required by applicable law.
And I always press release with fourth quarter and full year 2021 result is available on <unk> website www dot into already medical Dot com under the investors section and includes additional details about <unk> financial results and our website also has the latest SEC filings, which you are encouraged to review a recording of today's call will be available on and always Webster.
By five P. M Pacific time today, now I'd like to turn the call over to Bill for his comments and fourth quarter of 2021 business highlights.
Thank you Caroline and thank you everyone for joining us today.
We delivered a productive and successful fourth quarter.
As some of you saw in our pre announcement last month, we again treated a record number of patients and grew revenue aggressively.
We executed our plan and made progress on all of our growth drivers.
We'll share some detail about how all of this shortly.
We'd like to start now as we always do with a patient story to remind you of our mission and illustrate the impact our products and our people have on the lives of our patients and those who care about them.
Early last month, a 52 year old man presented to the emergency Department of a small hospital in rural North Carolina <unk>.
And at home.
<unk> been suffering from shortness of breath that began 10 days earlier just after ankle surgery.
Imaging revealed large blood clots in Bush's left and right pulmonary arteries.
Well syncope or fainting has many non significant call. It it is especially dangerous finding when caused by pulmonary embolism.
The treating physicians recognize the high risk nature of this man's P.
And immediately arrange for him to be life Flighted Swiss centre with significant experience in treating p/e.
Within one hour of arrival physicians use flow trigger.
Multiple large blood clots from his lungs after about the second or third wash the patient out what did you do to me I can breathe.
The physician then use flow safer to return extracted blood to the patient, which allowed him to wash again and again, a total of 10 times until you extracted all of our clients.
The patient recovered quickly and Uneventfully. He was discharged from hospital. The very next day, he never received expensive and dangerous thrombolytic drugs and he was never admitted to the ICU.
High risk or massive p/e carries a mortality rate of up to 50% while residual clot plot that remains in the lungs conveyed high rates of morbidity over time for patients who do survive.
This patient is very much alive of course.
And because of the physician was able to wash without concern for blood loss because of flow saver.
He has no residual clot to cause devastating long term complications the life of this man just 52 years old and all of them care about him is changed in extraordinary ways.
Things will always for the privilege to serve our patients in this way its pursuit of this mission, which remains so much more important to us and just business.
This case also illustrates the value our devices carry for hospitals. Both in this time of significant resource drain and we believe well beyond the patient was treated with a simple fast procedure in the cath lab and despite being sick enough to warrant lifeflight to the treating center.
He was discharged from the hospital the very next day without ever having been in the ICU.
I'd like now to turn to our Q4 financial performance. Our revenue in Q4 was $83 2 million up $34 $6 million.
71% from the same quarter last year, and up $10 3 million or 14% from Q3.
Procedure growth was also strong.
Physician customers performed approximately 7700 procedures, including a modest number of cases from Europe .
Procedure count is up from 6700 procedures or about 15% from Q3.
Our revenue in 2021 was $277 million up $137 $3 million or 98% from the prior year, our physician customers performed approximately 25700 procedures in 2021.
95% from 13200 procedures in 2020.
Just a few thoughts now about the impact of Covid on our procedures in Q4 and our plan forward.
We believe that Covid associated procedures represented about 10% of all tool procedure volume down slightly from Q3.
We are especially encouraged that more than 90% of both total procedures and sequential procedure growth came from treating non COVID-19 patients regardless of future Covid surges.
Confidence, we will continue to successfully penetrate our core Tam and this will serve as the foundation for our continued growth.
I'd like now to share with you. The recent progress we've made on all of our growth drivers are first growth driver is the expansion of our sales organization.
Size of our core Tam is large and despite our commercial success our penetration remains low in fact, we have some important updates here our existing market size estimates.
Get back the datasets as far back as 2016 over the past several months, we completed a rigorous bottoms up assessment of the total addressable markets in the U S for both PE and DVT. This work included input from an outside consultancy triangulation across multiple updated third party claims data sources and.
So the underlying incidence growth rates based upon this work we believe these markets to be meaningfully larger than we've communicated in the past. We now believe the total annual incidence of patients diagnosed with intermediate to high risk <unk> in the U S. Using the same definition. We've always used is 280000 patients compared to our previous.
<unk> Tam estimate of 200000 patients.
Similarly.
We now believe the total annual incidence of patients diagnosed with Healy ephemeral DVT again, using the same historical definition is 400 and about 430000 patients.
From 262000 patients in our previous DVT estimates combined this represents 710000 total addressable <unk> patients in the U S and with our historical average selling price.
The total new Tam is $5 8 billion.
This is 53% larger than our previous Tam estimate of $3 8 billion.
Based on these new Tam estimates, we believe in 2021.
Only about 4% of all the patients who could benefit from our devices were actually treated in.
In addition to better understanding our Tam we completed similar work to understand the total number of hospitals with Cath labs and interventional suites.
We now believe there are over 2000 hospitals that can potentially perform our procedures. The bottom line is our markets are even larger than we thought and we remained very early in the stages of penetrating these markets.
All of this serves to underscore the need for a larger sales organization. We ended 2021 with just over 200 territories slightly above the range to which we guided earlier in the year.
We expect to add territories in 2022 at roughly the same cadence we've demonstrated in the past and finished the year with at least 275 territories.
We continue to believe that our sales organization when fully built out will be the largest in the peripheral space.
Our second growth driver is building awareness and driving deeper adoption at existing hospital customers, mostly TD patients continues to be treated with anti coagulation alone and in fact, a large percentage of these patients never even see a physician who leave ETE expert.
We continue to drive awareness of the benefits of an already procedures with non interventional physicians and we continue to work with hospital administrators to install more systematic processes to consistently identify and triage <unk> patient to the physician to best understand the disease state.
We are supporting these efforts by building centralized capabilities, our field team can leverage, including a health economics and market access team our national accounts team and then the <unk> solutions group a team of former hospital administrators, who can share best practices on disease State program building. These efforts, which we have designated our <unk> excellence.
Ram are yielding encouraging results for example at least 50 centers now have installed BTG coordinators, and we believe a significant percentage of our total procedures and growth are a direct result of our <unk> excellence efforts.
Our third growth driver is to build upon our base of clinical evidence we have several important updates here as well first we recently enrolled the 500 and final patient into our cloud all comer DVT registry.
Safety and efficacy results have been best in class in the earlier data cuts and we expect to see similarly excellent results when the full patient cohort of cloud is presented later this year.
Going to pay we enrolled the 800 patient into our flash all comers registry is complete the enrollment of the U S arm of the registry.
Flash was already the largest ever prospective interventional datasets in the field of P. E and this latest milestone serves only to widen that gap, we will share data from the complete patient U S patient cohort when it is presented later this year.
Finally, we are pleased to share that we have enrolled our first patient into the peerless randomized controlled trial.
Peerless is a 550 patient study designed to show superiority of flow treater compared to catheter directed thrombolysis for intermediate high risk PD patients, we will provide updates on enrollment from time to time going forward.
We believe that the high quality large volume and consistent cadence of clinical evidence we are producing.
To raise the bar for both existing and future competitors in the <unk> space.
Our fourth growth driver is to expand our product portfolio.
Writing developments here as well first we completed our limited market release on cloud Schriever bold and have moved to full market release bold is a more aggressive version of our original cloud fever device. We believe bold removes even more clients with fewer passes making cases faster and more efficient we expect bold replace.
The original cloud Traver device in many acute sub acute and chronic clot cases.
We are excited also about the potential for bolt treat long term DVT patients who may be suffering from a horrendous complication called post thrombotic syndrome, or Pts these patients have limited and poor options and bold may open a large new market.
Next just a quick update on flow saver.
Hello, Saver is enabling physicians to wash as many times as necessary without concern for blood loss to remove all of the clot.
As described in the patient story earlier flow favorite has been used in over 6500 procedures since full market release in Q3. It is now used in more than 80% of all flow treatment procedures.
We believe that nearly bloodless thrombectomy.
He is both important for patients and not easily replicated.
Our competitors.
Beyond bowls and flow favor our product pipeline is robust.
Can expect several additional product clearances and launches later this year.
Our last growth driver is expansion into international markets. Despite a challenging operating environment. We have now successfully established a commercial presence across all major European markets. We continued to see steady increases in our monthly case volumes and since launching in early 2021, we have successfully treated several one.
<unk> patients.
We are also executing on the longer term clinical and reimbursement strategies, we will need in order to grow rapidly in these markets. We recently gained approval for example for <unk> and you'd be in Germany for flow trigger. This provides a pathway for hospital to seek enhanced reimbursement for a specific new medical technology.
We are making progress in other international markets as well, we recently hired dedicated general managers in both the Latin America, and Asia Pacific regions, and completed cases in both regions in Chile, and Singapore specifically.
We are making progress also on the longer term projects, we have underway to gain approval in both Japan and China, we remain highly optimistic about the longer term potential of our international business, but it will not contribute materially to 2022.
In summary, our markets are large unmet patient needs are spectacular or.
Our growth drivers have never been more compelling and our resources are great.
We sense as much responsibility as we do opportunity and we're going to invest even more aggressively to do better for these patients to access these markets and to grow rapidly.
We could not be more excited about our prospects moving forward. We love every second of this work and we appreciate your support as we pursue this mission with that I'd like to turn things over to Mitch.
Thank you Bill and good afternoon, everyone.
<unk> revenues for the fourth quarter of 2021 were $83 2 million compared to $72 9 million for the prior quarter and up $34 6 million or 71% from $48 6 million for the same period of the prior year <unk>.
Compared to Q4 of 2020, we have expanded our sales force open new customer accounts and achieved deeper penetration of our products into existing accounts.
Revenue was split between our two products as follows 30% of our revenue is derived from the sale of tubular products during the fourth quarter of 2021, compared with 36% in the fourth quarter of 2020, and 70% was derived from the sale of slowed fever during the fourth quarter of 2021 compared to 64%.
In the fourth quarter of 2020.
During Q4, the vast majority of our revenues came from procedures are stocking revenue was consistent with the level. We saw during Q3 of 2021 due to the broad acceptance at several of our newer products.
We expect our stocking revenue as a percent of total revenue will decrease over time.
Gross margin was 91% for the fourth quarter of 2021, compared with 92, 4% in the fourth quarter of 2020 the.
The decrease was primarily due to the absorption of higher overhead as we completed our move to a much larger manufacturing facility in the fourth quarter of 2021.
Operating expenses were $73 2 million in the fourth quarter of 2021, compared with $37 9 million for the same period of the prior year.
R&D expense was $18 7 million in the fourth quarter compared with $6 5 million in the same period of 2022.
The $12 2 million increase in R&D expense was primarily driven by an increase in head count as well as product development and clinical evidence development costs.
SG&A expense was $54 5 million in the fourth quarter of 2021.
Paired with $31 4 million for the same period of the prior year.
$23 1 million increase was primarily due to personnel related expenses because of increased head count across our organization.
Higher travel expenses in Q4, 'twenty, one compared to unusually low levels of travel in Q4 of 'twenty and higher facility related costs and marketing costs as.
As you heard from Bill we expect to incur increased operating expenses targeted towards driving growth expanding our commercial effort building additional clinical evidence and developing new products.
Net income for the fourth quarter of 2021 was $1 1 million compared with 7 million for the same period of the prior year, the basic and fully diluted net income per share for the fourth quarter of 2021 with <unk> based on the weighted average basic share count of $50 2 million and 55.
$6 million, respectively. These compared with the basic and fully diluted net income per share of <unk> 14 says in 13.
Based on a weighted average basic and diluted share count of $48 7 million and $55 2 million respectively for the same period of the prior year.
I would now like to update on our full year 2021 financial results.
Revenue was $277 million for the full year 2021, representing an increase of 98% over revenue of $139 7 million in 2020.
<unk>, 32% of our revenue is derived from the sale of <unk> products in 2021, compared with 37% in 2020, and 68% was derived from the sale of <unk> 2021 compared to 63% in 2020.
Gross margin increased slightly to 91, 1% for the full year of 2021 compared with 96% in 2020, due primarily to the higher percentage of 2021 revenue from flow Trevor.
Our higher margin product offset slightly by a recent move into a larger manufacturing facility.
Operating expenses were 241 4 million in the full year 2021, compared with $108 2 million in the prior year R&D.
R&D expense was $51 million for the full year 2021, compared with $18 4 million for the same period of 2020.
The $32 6 million increase in R&D expense was primarily driven by a significant increase in head count as well as product development and clinical evidence development costs.
SG&A expense was $194 million for the full year 2021, compared with $89 7 million for the prior year.
107.
<unk> 7 million increase was primarily due to personnel related expenses because of increased head count across our organization.
Higher travel expenses in 2021 and higher marketing costs.
Net income for the full year 2021 was $9 8 million compared to $13 8 million for the prior year the.
The basic and fully diluted.
Net income per share for the full year 2021 was <unk> 20, and <unk> 18 based on the weighted average basic share count of $49 8 million and $55 6 million respectively.
These compare with a basic and fully diluted net income per share of <unk> 43 in 2007.
Based on a weighted average basic and fully diluted share count of $32 million at $51 6 million, respectively for the same period of the prior year.
Moving on to the balance sheet, our cash of $92 8 million in investments at $87 3 million at the end of Q4, 2021 total $181 million compared to $168 6 million at the end of the third quarter of 2021.
Our cash flows provided by operating activities were $25 5 million for the full year 2021, compared to $1 9 million in 2020.
I'll close my comments by addressing <unk> financial guidance for the full year 2022, we are guiding Q3 hundred $50 million to $360 million in revenue.
With that I'd like to turn the call back to the moderator for questions.
As a reminder to ask a question you will need to press star one on your telephone.
To withdraw your question press the pound key.
<unk> bylaws compile the Q&A roster.
Our first question will come from the line of Cynthia for loan from Morgan Stanley You may begin.
Great. Good afternoon, and thank you for taking the question I wanted to start with 2022 guidance. If you could walk through just what you've contemplated from the Covid procedure impact as well as as you think about just headwinds from Covid procedures that you called out in 2021 balanced by perhaps cases.
Patients that were treated as a result of Covid could you just walk through how youre thinking about those two dynamics as we think about growth in 'twenty two.
Yeah. Thanks cilia.
Just let everyone know I'm joined here by Mitch of course, who.
You just heard from and also drew Heights, our COO and Tom <unk>, Our Chief Medical Officer.
Look the 'twenty two.
2022 guidance.
There's a lot to unpack, there and I'm not sure I'll do it justice to the kind of the puts and takes but I will say this we we felt really good about the execution generally in 2021 facing exactly the same sets of.
Headwinds that all of our peers have communicated repeatedly over the last two years really staff shortages in <unk>.
Resource limitations access issues I'm alike.
So we feel really good about executing in this environment and I suspect we might even have another gear just in terms of the Christmas of our execution as the operating environment returns to some.
Pumping a bit more constructive and I think we might even be seeing some of that right now knock on wood hopefully to a sustained period of more constructive operating environment. So there's lots of puts and takes but I think generally speaking, we do not want to get over the tips of our skis here, we feel really good about.
About the guidance that we provided to get about 28% year.
Year over year increase compared to 2021, so we feel pretty good about it.
And again, we've established.
Capabilities of executing and in both Colby surges and not so I think we're down in good shape. This facility and maybe I can just add quickly that you heard bill comment in Q4, 90% of that procedure growth was basically attributed to non COVID-19 patients.
As we've gotten into 2022, I think you've probably seen the same data, we're seeing that perhaps as many as two thirds of the population of the U S has now had cobot and Theres some states such as California, where the percentages up to about 80%. So it's almost becoming a factor that can't be used to.
Wish anymore, because it's almost like everybody has had it.
Great. Thank you and I wanted to ask also just about quite cheaper bold.
What you've seen.
In the aluminum market or at least your outlook around.
Transitioning to the full market release.
Where do you see the utilities, specifically in cases and replacing the original quite cheaper and then you have longer term, but just how youre thinking about.
Further expanding our ability to address Pts and thank you.
Yes, so a couple of things all wrapped up their Cecilia. So first of all I think the court.
<unk>, we werent, 100% sure exactly where where it fit.
Into the into the mix here, we were really excited to see it probably has.
A very positive impact on the number of passes required probably fewer passes because it engages the clauses a bit more.
A little bit more aggressively fewer passes means shorter cases, and so for that reason alone our physicians really seem to be.
Appreciate that.
Changes in the benefits.
So we'll see we think it has a pretty good pretty good chance to two.
<unk> to replace a high percentage of our existing kind of old original cadre of her cases, we'll see how that goes as we get into a much broader audience here just kind of just starting right about now.
With regard to.
These are <unk>.
Pts patients I think there is a multi faceted challenge here right first of all it's a really complex disease states and these patients do not present.
To the hospital or to anybody in the same way that normal or acute sub acute DVT and PE patients presenting in the emergency department or they may tend to emerge inside the hospital after surgery for example.
These pts patients have had DVT at some point in the past and have been probably told Theres nothing more that we can do so there is at least as much of a commercial lift another market development effort.
As well as a.
Totally a series of tools that will make us better and better at addressing the disease states. So as far as the tools are concerned we will have more to say about those as they as they come to market and we'll give we'll give updates from time to time about our progress in the market I would say in the next couple of quarters. The impact of of Pts is certainly not going to be material.
Compared to the much greater than the size of our.
Acute sub acute market.
Great. Thank you.
Our next question will come from line of Danielle and Telsey.
Seb Leerink your line is open.
Hey, good afternoon, guys. Thanks, so much for taking the question.
Just one question on the Tam expansion great to see I. Appreciate you guys did a lot of work I'm wondering if you can give a little bit more color on sort.
Sort of where the confidence is behind these numbers I don't know if its a way to like.
Is it claims data is how confident are you in these much higher numbers now.
The first part of the question and then I have one follow up.
Drew you want take that one sure.
So Danielle we spent.
Several months kind of digging into the Tam estimates as you heard Bill described.
The previous estimates data all the way back to 2016, so those numbers, we're getting pretty stale, we reset to 2018 2019 numbers, we wanted to avoid any noise from COVID-19 .
In the 2020 one numbers.
We used three different.
Datasets claims datasets from three different third parties to really triangulate on a better understanding of the total addressable markets for both DVT and PE.
We certainly had good insight into the Medicare patient population, but for the first time, we're really able to sharpen our pencil and get much better insight into the private pay segments of the two respective markets.
And then we roll forward from the 18, and 19 timeframe with a modest 2% assumption around incidence growth population growth a little better diagnosis. So you put all that together and it resulted in the numbers you heard Bill described 280000 target addressable patients for <unk> 430000 on <unk>.
We think we're someplace in less than 4% penetrated into those two Tam so plenty of runway out ahead of us.
And we feel pretty confident about those estimates we spent a fair amount of time as you heard me describe so we feel pretty good about.
The amount of work, we did and the resulting estimates that came out of that.
Yeah, no that makes total sense and just if I could add to that and then I do have one more question I'm, sorry, but just on.
On the diagnostics I mean, it's.
That are part of the story here long term to there is an opportunity. So we're talking prevalence numbers and then you have 2% incidence growth or what have you, but with higher better diagnostic capabilities potentially.
Even higher incidence growth is that is that the is that a fair way to think about it or am I getting too optimistic.
Sure.
Yes, no I think that's a fair way to think about it. If you didn't think the 96% was compelling enough and you're looking to.
North of that I do think awareness for sure is.
Leading to more diagnosis.
As well as potentially better diagnostic modalities better approaches to understand disease. So I think all of that's factored in but I think.
No matter, how you slice it there's clearly a huge market here, even larger than we had appreciated in our previous forecast and were just barely scratching the surface I think that's true no matter, how you slice it.
Got it Okay and then another thing I was curious about.
It's really how the V T Excellence program works at the hospital level. So appreciate it.
At a high level, what you guys are doing out there, but if you could give us a little insight into what actually happens at a hospital. When you guys are implementing this program. Thanks, so much yes.
Yes, Thank you and I'll get started and which room filling the blank from a detail you're asking I think the first thing to recognize about <unk>.
About this.
About ETE multi and DVT.
It's a lot different from stroke for example, where.
There is a really important time component time is brain and all of that there's this is not an ischemic events. So we don't have the same sort of time component except for a small percentage of the.
The PS.
With that the massive piece, where time is really important.
The more important difference, though is that we don't have to go outside of the hospital to find them I think there is actual education.
Techniques, taking place education efforts, taking place in stroke too at the county level right down to the ambulance drivers to make sure that patients get to the right centers and so forth.
Patients in the most maddeningly simple way or at the hospital, that's where they're diagnosed they are at the hospital and at the same time.
At the same time hospitals in many cases have designated a group of experts called Park. For example, that's a hospital designated P experts patients or their hospital experts and we somehow failed to connect those dots. So the BT excellence.
It's around that problem the simplicity of that problem is maddening.
Execution as always is the case.
Key to success here or do you want to dive into the detail, yes, sure. So Danielle maybe I'll just describe what that work kind of looks like at the account level and I think that will get it at your question. So if you think about our 1200 closing in on 3500 active accounts now they're all in some stage of evolution towards what we have.
<unk> will become ultimately a center of excellence for Vijay the vast.
Majority of our active accounts are still in the early days of that evolution and we call that phase the engage phase the kind of work we're doing in the earliest phase of this <unk> excellence for those engage accounts is really focused on building the foundation.
Getting the product through Vac approval getting inventory purchased on the shelf initial in servicing for the interventional team getting solid initial outcomes. We've got a group of health economics and market access professionals that can make sure the account understands the coding and billing information that go along with our procedure.
<unk>.
And as a result, all of that work the penetration into the Tam at the account level. In this first group. This first phase is in kind of modest single digits. So just getting started and building the foundation from there we move to a second phase of <unk> Excellence, we call. This group the empower phase and this is maybe a.
Couple of hundred accounts across our account base.
This is where we really began to do a lot of training and education and awareness building not only for the interventional list, but the noninterest nationalist stakeholders that health care for these patients. So the ER docs the Pulmonologist intensivist all of those other caregivers, making sure they're aware.
These new treatment options, we have a group of national account managers that in this phase engaged with the administration at the hospital to make sure. They understand the health economics and outcomes research they understand the economic value proposition and are hopefully beginning to actively invest in program building for Vijay <unk>.
The result of all that work.
Ends up with penetration rates into the Tam at the account level someplace in the double digits and then the final phase of this work under VT Excellence is with a group of accounts that have begun to actually emerge as centers of excellence for BTG.
And that group we call Excel. This is an area where began trying to proactively support the placement of BTA coordinators. As you heard Bill described we've got 50 some of those now established across the country. This is where we leverage our <unk> solutions group, which our formal hospital administrators, which can come in and do benchmarking.
Best practice sharing about algorithms and care pathways in order sets. This is really where the treatment of ETE begins to feel like a quality initiative at the hospital and ensuring that all of these patients are being identified and treated in a consistent manner. That's really the flavor you get in that final group of accounts and we've got a couple of dozen accounts that have.
Made it to that stage of evolution and the Tam penetration in that group of accounts Encouragingly is 50, maybe even 60% of the potential patients that could benefit from <unk> treatment clutch river. So lots of encouraging signs we're on the right path here, we have a systematic approach to all this.
But even at our most penetrated accounts, obviously still quite a bit of runway to continue to drive penetration even further.
Excellent color. Thank you so much guys.
Thanks Danielle.
Our next question comes from the line of Larry Big Olson from Wells Fargo, you may begin.
Hi, its lei, calling in for Larry Thanks for taking my question.
So your guidance for 2022 can you give some color on what you're assuming as far as.
Pvt, P/e procedure volume mix volume mix for cloud <unk> versus <unk> and any color you can give on pricing assumptions.
Key assumptions for the year.
Yes.
Sure.
Thinking about 2022 pretty consistently with the way the business operated in two.
2021, there could be some reversion to the kind of prior mix in terms of procedures and also revenue having to do with a little bit more DVT mixed in as you know during the past couple of years, there has potentially been more.
And the mix due to Covid and some other factors that were kind of related to the hospital conditions. So that's kind of the way I would respond to the procedure mix and the revenue mix question.
And then with respect to.
I'm just trying to think theres anything we can out there about.
Other aspects of the guidance for 2022.
I don't know that the pricing.
Is really expected to change in a significant way during 2022, we've been successful as you know, adding new products to the flow tree per price per procedure. So on that score we've actually kept the price very stable because we've added a lot of value to that.
<unk> toolkit, if you want to think about it that way over the past couple of years and we may be looking at some additional tools for the DVT.
Toolkit, if you want to think about it that way as well. So we're looking for stable pricing in 2022 and Thats been.
Something as you know based on the hospital economics that drew was talking about earlier.
We have a pretty good experience.
Talking through the economic story of our two products with the hospitals.
By avoiding the use of thrombolytic, we keep the patients out of the ICU and whenever as you know the patients end up in the ICU with a thrombolytic products and that is a loser for the hospitals and we're pretty successful telling that story and helping everybody understand it.
We'd like to say the patients love it the physicians love it in the hospital.
Okay.
That's helpful. Thank you and just continuing on your in your guidance any color you can give on the Q1 seasonality I mean historically your revenue obviously grew in Q4 to Q1, I'm pretty sizable steps up step ups.
As we look to Q1 'twenty two.
That Kobe component, 10% to 11%.
Since the last couple of quarters.
That goes away or declined significantly.
I guess, how do we think about that seasonality if that continues into Q1 this year.
Yes, there's a few things wrapped up there.
Thank you so.
So first of all we came off of a Q4 was a really strong quarter in number of different ways.
I think that's the that's the comparator so tough.
Tough comparator, there has been a little bit of.
The staff shortages of all the things that peers have reported we face also in the early part of the early part of the quarter and as I said earlier I think we may already be seeing an improvement in the operating environment. So I think youll see Q4 or Q1 VR.
Leased.
The lowest growth in Q1, and we will accelerate throughout the year. So.
Again, a few puts and takes there, but we feel pretty good about sequential growth.
Throughout the year.
Perfect. That's helpful. If I may just squeeze in.
One more on the clinical side.
On the <unk> trial.
Any thoughts on how long it will take to enroll the patients are we talking 12 to 18 months longer.
Ultimately is this something that youre looking to add to the label.
Thank you Mike Thanks.
Thanks for the question so first of all.
Lift is being run for no specific regulatory purpose. This is really.
To provide data that we feel will move this space forward.
It's 550 patients randomized one to one flowed through her versus catheter directed thrombolysis Theres also a separate registry arm for 150 patients who may have absolute contraindications politically.
Enthusiasm in the customer.
Customer base for this trial is in tests, we are seeing a lot of excitement about it we think enrollments will be high I think the estimate that you gave 12 to 18 months.
Seems quite reasonable given what we're seeing here.
Thank you so much.
Our next question comes from the line.
Marie Thibault from.
From BTG you may begin.
Hi, yes, thank you for taking the questions and congrats on the strong end of the year.
Wanted to ask a little bit about your territory expansion, adding close to 75 territories or so in 2022.
Help us understand.
How much of that is actually adding.
Our focus on new centers, and increasing your hospital count and really splitting up existing territories and kind of try to dive deeper within existing.
Counts.
Yes, I can help with that one Murray so it's true.
I think by and large the focus of these territory adds at this point is much more on driving adoption and penetration as opposed to necessarily adding.
New accounts into the mix.
As we split territories and at this point essentially all of our new.
Sales professional adds inherit some type of territory splits so they're inheriting some group of accounts from an existing in our territory and hopefully building from there.
Some number of new centers as well, but as we complete those splits the idea is to position.
Both the legacy and the new reps and to smaller and smaller territories fewer and fewer accounts. So that then they have bandwidth to do the kind of VT excellence work that you heard me describe earlier Thats really the focus of these territory splits, yes, we're going to continue to add new sites.
The updated estimate that we have of the number of target accounts in the U S. As high as 2000 and so we've got.
Middle innings to go still on new account adds so yes, there will be new account adds but the real story here is on driving penetration adoption and positioning our reps to do the kind of VTS excellence work that you've heard us talk about.
Okay, that's really good to hear.
And I have another question I'd like to ask sort of spending and priorities there on the opex side, but before I get to that I did want to ask really quickly.
And recently received a question.
About large bore catheters and their use in severe pulmonary hypertension patients.
I'm aware of the IFC you that's out there, but haven't heard anything more so at the risk of AST.
Ignorant here I wanted to ask you what am I missing on that front any anything on that topic.
It's Tom here I don't think Youre missing a whole lot we've heard a little bit of noise about this recently and quite frankly I'm quite surprised by it.
We are the leaders in the pulmonary embolism space and we've identified patients with severe pulmonary hypertension as requiring special care special considerations in general no matter what therapy. You use these are patients that are sicker than most and require.
A great deal of contemplation on the part of physicians, So all of our education, including the <unk> disc.
Scripture that you mentioned really are focused about educating about the disease state. There is no specific device related safety concern that.
We are raising there in fact, if you look at our flash registry, we have over a third of our patients in flash being treated who happen to have severe pulmonary hypertension and their clinical results are excellent. We treat these patients every day, we treat them safely. So we think that.
The.
This is it sounds like a lot of competitive noise.
Sorry to digress, a little bit, but frankly, I think our competitors who are raising this know that because they've excluded those patients specifically from their clinical studies. So they know they're higher risk patients and I think to bring it up is a little disingenuous.
Okay. Okay. Thank you for that Tom and just to be clear, it's competitive noise, but it's not having an impact in the marketplace.
Not at all.
Okay, that's reassuring.
I ask my last one here quickly.
On spending priorities.
Youre expanding territories it sounds like you've got a lot R&D in the pipeline what should we be thinking about in terms of how youre prioritizing step here Anthony Thank you.
So maybe I can start on asking one more detail maybe Mitch can fill in the blanks here.
I think.
I think I wouldn't.
<unk> characterized it is prioritizing spend we like all of our children. The same these growth drivers are all in the infancy of.
The potential impact on patients and on our growth rate. So I think you'll see we've communicated more specifically about how we will invest about me.
On the first two growth drivers in terms of new sales professionals to keep in mind our.
Investment in new sales professionals have actually probably produced rather than consumed cash in the past we've been very very efficient.
On the productivity of our sales professionals early in their early in their tenure so we'll continue to aggressively.
First there along with some infrastructure on our sales organization as we described in the prepared remarks and as drew described for ETE excellence.
I think youll see an increase in the spend and probably increase in the percentage of spend on both.
R&D and clinical.
Again those growth drivers, we think are really really important, especially over the long haul and we continue to build out our.
International.
International commercial organizations for all the reasons, we described in the prepared remarks as well. So I don't I don't know that I'd say, we're prioritizing one over the other but I do think youll see an increased spend we are really really aggressive we are.
Again, so early no matter, how you slice and dice the big.
The size of our Tam we are in the very early innings, and it's going to require.
Some investment in all of these growth drivers.
Penetrated and marine maybe I can just quickly add.
Ben I believe operating income positive in say six of the past eight quarters.
Odd for a CFO to say something like this but it's almost been by accident.
Been funding very very productive and we've been funding our own growth, which is kind of puts us in a class of one of one in terms of the med Tech universe doing that bill talked about the areas, where we are planning to invest.
Very aggressively and I think as I mentioned during my comments.
In the script, we're planning to even.
The foot down on the gas more in 2022. So we are very excited about the opportunities to come.
<unk> to distinguish the company in those areas and to pursue growth.
As Bill described.
Alright, thank you so much.
Okay.
So a question Star one our next question comes from the line of Bill <unk>.
<unk> from Canaccord you may begin.
Hi, it's John on for Bill Tonight, Thanks for taking our questions I just wanted to start on O U S. What countries do you have an initial commercial infrastructure in place and what countries do you have adequate reimbursement today in those countries do you think actually need some more improvement in priority in terms of reimbursement.
Yes, John it's true I can.
To help get started on that one so.
We've got a commercial footprint built out now across all of the major western Western European markets.
So, France, Germany UK switch.
Switzerland, Australia, Italy, Spain, the Nordics Benelux.
We've got either a combination of direct indirect or hybrid commercial infrastructure built out across all of those markets. We've done that over the last year and a half.
Despite operating with all the headwinds associated with Covid.
And we've seen really nice sequential growth month after month quarter after quarter. Good enthusiastic feedback from the docs same kind of unmet need that we see.
Here in the U S clearly same dynamics internationally and particularly in Western Europe .
We've got some more work to do and some of the markets relative to reimbursement you heard Bill described.
Positive news, we got recently on the end you'd be in Germany, you May know <unk> and.
An important reimbursement mechanism that allows for enhanced reimbursement so we've got.
That established in Germany, we've got good reimbursement in Switzerland, We've got some more work to do in France for instance, and Benelux for instance.
So that is associated with the long term.
Reimbursement.
Foundation between here and there in some of those markets, where we do have additional work to do we will be able to access.
Local level budgets hospital level budgets regional budgets in a way that will allow us to continue to get commercial activity and commercial traction in those markets as we work towards that longer term more established market wide reimbursement that you heard me describe.
Great. Thanks, Joe and probably also a follow up retail and that's one but.
What percentage of cases today, it's close to it.
And are you seeing any adoption outside the core markets.
Yes.
<unk>.
I'm not sure I, even have a number its fairly modest.
It is part of our purpose ctrip priced package within.
The flow Traver case mix, so it's available for use.
We do see.
A modest amount of flow stasis being used in our core p/e cases, some in DVT as well.
We haven't necessarily made a big commercial push.
For its use outside of our own procedures.
But there are obviously other large bore venous access procedures, where flow stasis does fit nicely.
And we do see some of that use alongside our own procedures as well.
Great. Thanks for taking my question.
Thanks, Sean Thanks, John .
Thank you.
<unk> concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.
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