Q2 2022 Silk Road Medical Inc Earnings Call

July 26, 2022

Yeah.

The conference will begin shortly to raise your hand during Q&A you can dial star one one.

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Ladies and gentlemen, thank you for.

And welcome to Silk Road Medical's 2022 second quarter earnings Conference call. At this time, all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session to ask a question. During this session you will need to press star one one on your telephone.

I would now like to hand, the conference over to Marisa Baisch with Investor Relations.

Okay.

Hi, Thank you and thank you all for joining today's call.

Joining me are Erica Rogers, Chief Executive Officer, and Lucas Buchanan, Chief Financial Officer, and Chief operating Officer.

Earlier today <unk>.

Medical released financial results for the three months ended June 32022.

A copy of the press release is available on the company's website.

Again, I'd like to remind you that management will make statements during this call that.

That include forward looking statements within the meaning of the federal Securities laws, which are made pursuant to the safe Harbor provision of the private Securities Litigation Reform Act of 1995.

Any statements contained in this call that relate to expectations or predictions of future events results or performance are forward looking statements.

All forward looking statements, including without limitation, those relating to our operating trends and future financial performance.

<unk> management expectations for hiring and growth in our organization physician training and adoption market opportunity and penetration commercial and international expansion regulatory approval reimbursement competition and product development are based upon our current estimates and various assumptions.

These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements.

Accordingly, you should not place undue reliance on these statements.

Karla, let them description of the risks and uncertainties associated with our business. Please refer to the risk factors section of our quarterly report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2022.

This conference call contains time sensitive information and is accurate only as of the live broadcast today July 26 2022.

I'll start medical disclaims any intention or obligation except as required by law.

State or revise any financial projections or forward looking statements, whether because of new information future events or otherwise.

Now I will turn the call over to Erica Rogers Chief Executive Officer.

Thank you Marisa good afternoon, and thank you all for joining US we are pleased to share. Our recent performance with you today and highlight a series of significant achievements at Silk Road medical in the second quarter of the year.

First and foremost we drove strong T car adoption marked by $33 $2 million in revenues and 4700 procedures for the quarter, reflecting 25% and 29% year over year growth respectively.

Before reviewing our results in greater detail, let me expand upon our successful efforts to widen our reach and impact of minimally invasive T car across all eligible patients.

Early in the second quarter, we received FDA approval for the expanded indication of are on route Trans carotid stent system to include patients a standard risk for adverse events from carotid endarterectomy or standard surgical risk. This approval opens our currently addressable market opportunity to the entire U S carotid.

Murray procedure market of approximately 170000 annual procedures.

More importantly, this expansion levels, the playing field between T car and CEO as physicians now have the discretion to treat any eligible patient with a T car procedure.

As captured in a recent press release by the society for vascular surgery. The data supporting T car use in standard surgical risk patients offers compelling reason for clinicians to more widely adopt T car technology as it has demonstrated both safety and efficacy and presents an X.

<unk> alternative to CEO .

Within weeks of FDA approval. We also received expanded Medicare coverage for <unk> in standard surgical risk patients under the national coverage determination within the <unk> surveillance project, ensuring that all corrado patients who require treatment have the opportunity to benefit from a minimally invasive approach.

We're grateful to the teams at FDA CMS and the society for vascular surgery for their valuable contribution and partnership and recognizing the weight of real world evidence supporting <unk> in this expanded patient population and the significance of preventing the debilitating impacts of stroke.

On individuals their families and the health system as a whole.

Lastly, we formally announced roadster three in June our post approval study designed to assess the real world treatment of standard surgical risk patients with T car.

This prospective single arm study will enroll a maximum of 400 patients across roughly 60, leading clinical research sites and the primary endpoint is a composite of major adverse events, including death stroke or myocardial infarction through 30 days post procedure plus Epsilon.

Lateral stroke from day 31 to $3 65 PISCES procedure.

We are excited to add prospective data to the already compelling real world clinical evidence for key car in standard surgical risk patients and we look forward to updating you as the study progresses.

We are now investing substantial time and resources in marketing efforts specific to standard surgical risk label expansion.

With a focus on incorporating our patient first mentality, including updated sales and marketing materials direct print and digital communications and patient stories and testimonials all as part of our broader primary strategic priority of U S commercial.

<unk>.

On that note I am pleased to review our commercial progress in the second quarter in greater detail.

As evidenced through our Q2 results, we are making steady progress toward penetrating the large and still untapped pool of carotid procedure volume.

Exiting the second quarter, we are well on our way toward reaching our year end goals of 70 to 75 active territories and 200 to 300, new physicians trained.

Our efforts to drive more frequent and deeper customer engagement are yielding strong results.

Meaningfully increasing procedures per trained physician across our sales territories.

Based on our strong first half U S T car procedure growth and our outlook over the remainder of the year. We are pleased to raise our 2022 revenue guidance to $128 million to $133 million.

Reflecting year over year growth of 29% at the midpoint of the range.

We continue to expect the vast majority of our 2022 revenue to come from T car procedures, and the legacy high surgical risk patient population.

With the gradual layering effect from standard surgical risk expansion into 2023 and beyond.

That said, we view our opportunity Holistically and do not intend to distinguish our expectations by patient sub population in the future.

As we like to say, 100% of these patients are at risk for stroke from their disease process, and 100% or at risk of complication from invasive surgery, and we expect to continue to take share from CEO .

Lucas will provide greater GDT detail regarding our financial outlook shortly.

In summary, <unk> is finding a prominent place in the carotid treatment continuum.

In fact, we're excited to share that we recently celebrated our 50000 T car procedure performed to date and incredible Testament to our impact on the lives of patients and their families.

We know that stroke risk does not stop and patients need to be protected from it's devastating consequences consequences, regardless of the broader healthcare operating environment.

We are executing well against the substantial opportunity ahead of us as we continue to progress initiatives to expand our business over the longer term looking at both complementary and tangential opportunities.

We're looking forward to providing updates on these longer term initiatives over the next several quarters.

With that I will now turn the call over to Lucas Buchanan, our Chief Financial Officer, and Chief operating Officer.

Thank you Erica revenue for the three months ended June 32022 was $33 2 million.

25% increase from $26 5 million in the same period of the prior year growth was driven primarily by growing CCAR adoption.

Number of CCAR procedures in the quarter was 4700, representing a 29% increase from the same period of the prior year.

For the past three consecutive quarters, we have seen sequential growth in procedures per trained physician. Despite the dilutive effect of adding newly trained physicians to the denominator of that metric each quarter and we expect this trend to continue to be the primary driver of our growth in periods ahead.

Our business continues to benefit from the increasing tenure and experience of our physicians.

Demonstrated by our physician base with three and four years of CCAR experience, whose procedure rates continue to increase.

Gross margin for the second quarter of 2022 was 73% compared to 75% in the second quarter of the prior year.

As a reminder, we are incurring manufacturing expansion costs in our new Minnesota facility as we invest in our business.

Validation activities at this facility are nearing completion, which should lead to commercial unit production. Starting later this year.

We continue to expect a slightly lower full year 2022 gross margin as compared to 2021.

Total operating expenses for the second quarter of 2022 were $38 $4 million or 29% increase from $29 8 million in the second quarter of 2021.

R&D expenses for the second quarter of 2022 were $10 $7 million compared to $7 3 million in the second quarter of 2021.

The increase in R&D spending was driven by growth in personnel and stock based compensation as well as continued investments in new and ongoing R&D programs.

Sales general and administrative expenses for the second quarter of 2022 were $27 $7 million compared to $22 5 million in the second quarter of 2021.

The increase in SG&A spending was driven by growth in personnel stock based compensation and a modest year over year increase in physician training and travel expenses.

We continue to expect modest sequential increases in total operating expenses into Q3 and Q4.

Net loss for the second quarter was $15 4 million or a loss of <unk> 44 per share as compared to a net loss of $10 5 million or a loss of <unk> 31 per share for the same period of the prior year.

We ended the quarter with $108 $9 million of cash cash equivalents and short term investments bolstered by our bolstered by our debt financing in late May which provided us with access to up to $250 million and additional capital on very favorable terms.

$75 million of which we have drawn down.

The loan facility provides substantial flexibility as we invest for continued short and long term growth along our path to profitability.

Turning to our commercial progress as Eric mentioned earlier, we are proud to share that we recently eclipsed 50 T car procedures globally.

We are on track toward our goal of $70 to 75 territories by the end of the year.

Coupled with an improved operating environment, we expect deeper and more frequent engagement with our trained physician base.

We exited 2021 with roughly 2100 trained physicians and are on track toward our goal of training two to 300, new physicians in 2022.

With a continued drumbeat of compelling clinical evidence broad FDA labeling and Medicare coverage, a compelling economic value proposition and.

And increasingly tenured trained physician base and a world class commercial organization.

We are well equipped and laser focused on driving procedures per physician growth as we establish <unk> as the standard of care.

I would also like to highlight are our operational initiatives and progress with the addition of our Minnesota facility to augment our California activities, our manufacturing and distribution capacity is well positioned to meet T car demand over the foreseeable future and achieve our quality cost and risk mitigation.

<unk> objectives.

We are fortunate to have not experienced major disruptions in our supply chain. This year, despite the macro environment safe.

Save for longer lead times from some of our vendors.

Our ops teams are working hard to manage through the turbulent environment with solid results. Thus far. We're also pleased that we continue to attract talented people to help us deliver on our near and long term operational goals.

Closing with our 2022 revenue guidance as Eric mentioned, we now anticipate revenue to be in the range of $128 million to $133 million representing year over year growth of 29% at the midpoint of the range.

Understanding the potential for some vacation seasonality, we continue to expect an acceleration into the back half of the year, we remain confident.

Confident that our physician base will perform over 17500 procedures by year end.

Implying double digit penetration into the total U S carotid procedure market.

I will hand, it back to Erica for her closing comments. Thank you Lucas.

We are pleased by our team's accomplishments in the second quarter, which reflect a culmination of years of efforts to establish an on matched physician partnership through a rigorous training engagement and engagement with them in the management of carotid artery disease are diverse employee base is now.

And for their carotid clinical acumen and their deep commitment to driving better outcomes for patients and providers to this and we are excited to highlight that silk Road medical was recently certified as a great place to work for the second year in a row via is a great place to work Global engagement survey results show that.

92% of employees at Silk Road, Medical's say, it's a great place to work compared to 57% of employees at a typical U S. Based company. We are particularly pleased in conjunction to be listed by Fortune magazine in the in the top 30 best workplaces in the Bay area in <unk>.

22 in the small and medium workplace category.

We are incredibly proud of the team we have built and the high quality of talent that continues to come through the doors with that we will open the line to questions operator.

Thank you.

As a reminder to ask a question you will need to press star one one on your telephone please standby, while we compile the Q&A roster.

Okay.

And our first question comes from the line of Robbie Marcus with JP Morgan.

Hi, This is actually <unk> on for Robbie. Thanks, So much for taking the question.

First could you talk a bit about how youre thinking about standard risk ramping over the course of the year.

And what sort of timeframe, we should be keeping in mind for more meaningful revenue contribution.

Yes, hi, Louise Thanks, so much for joining us.

I'll take that one or the first part of that at least which is look the near term focus for US is on training and education around standard surgical risk is building awareness among our customers our physician community that the label exists and that coverage has been broadened to include standard surgical.

Risk.

And as we've said before influencing the hearts and minds of our customers takes time and as one physician at a time, we continue to believe that with time and experience that translates into higher adoption and probably more rapid adoption into the standard surgical risk.

Patient population and so for all of those reasons. We continue to believe that there is a kind of gradual layering effect of increased utilization across all patients that will start to see in the latter half of this year, but more importantly into 2023.

Got it that's really helpful.

And then on guidance.

By $2 million in the quarter the range by just $1 million. So is there any change to your expectation for the back half of the year and why not raise by the size of the beat thanks. So much.

Thanks for the question Lilly this is.

The combination of factors that inform our guidance, obviously, we look at kind of the pace of inputs in terms of.

Sales territory expansion and physician training.

And it's always been a back half loaded year in that context, and obviously, we had kind of omicron still around in Q1 in January and February .

We always factor in Q3 seasonality, which which takes the form of vacations.

Vacations and kind of the front half of Q3, typically and then and then Thanksgiving and the holiday season in Q4.

And look we've got some great anecdotes and a little bit of data points around.

The impact of standard surgical risk not just for that patient population, but for kind of leading into CCAR more broadly whether you are a new physician or kind of middle of the road and your experience or deeply adopted at this point.

So we're confident but it's too soon to extrapolate the pace of that until we get a few more quarters under our belt. So those are all the things we think about obviously.

The business is performing well in the hospital environment, we're in which is on the path to normalization theres still friction in the system.

Varying degrees regionally, but.

We're pushing through that as we have been.

Yes.

Thank you.

And our next question comes from the line of Rick Wise.

Stifel.

Good afternoon to you both.

I also.

<unk>.

I would like to focus on guidance a little bit.

I mean, hey, its great to see a good quarter.

Expected quarter.

And like the previous questioner.

So sort of affected by your.

Beat by two raised by one at the midpoint kind of mindset and maybe thats.

Lucas you take us through just thinking about it from another angle I was thinking about the 4700 procedures.

If we assume a 100 more.

Third quarter 100, more in the fourth quarter.

That seems fairly modest to me.

And I apologize for pushing on this little bit but.

When we've done our DUC survey work and ongoing conversations.

The the experienced T car doctors, we talk to.

Frankly talk about.

Taking a more meaningful step up in their procedure volume.

Risks and reimbursement in hand, how.

How am I not thinking about it correctly I mean I appreciate your conservatism in your careful approach to guiding us but.

I don't know that sounds cautious based on what we're hearing and what you've just done.

Yes.

Certainly appreciate the question Rick I'm not sure I have much more to add I mean, we're all trying to predict human behavior and adoption curve fundamentally.

Asps remain stable and strong so its all about procedures per physician and it's also about kind of the ordering patterns of hospitals, and we think there's probably a little bit of conservatism on how many units they're ordering just in the kind of macro.

Environment.

That all gets reflected in kind of our revenue divided by procedures metric. So all of that is going in we obviously.

Are you hearing the same very positive anecdotes that you're hearing.

We want to see the talk translated into action.

And if things change, we'll update our guidance accordingly, but we.

We think it appropriately accounts for the risks and opportunities ahead as we sit here today with with not a lot of data yet obviously.

For the.

Trends that will drive that metric.

Influenced by the recent news on standard risk.

And Rick I'll, just I'll just jump in and say look I will now talking to customers as they always do and the enthusiasm is high youre, absolutely right and I think what we're hearing is.

This approval and the expansion of coverage really legitimizes T car as a therapy that can stand against carotid endarterectomy and so what youre seeing in the guidance is just it's early days here. We're just a few weeks in for all practical purposes on coverage and so yes.

We want a little more time go by to make sure that this rising tide effect.

That will actually observe that.

Gotcha.

Makes sense.

And I know it's.

Right.

Couple of things I want to make sure I understood a little better.

I missed it and I may have did.

Did you mention the number of docs trained in this quarter.

And just to get a sense of maybe as you answer that you can tell us.

Is it more challenging is it getting easier to train people given the complicated environment, we're living in and maybe just last for me I'll. Just go ahead and jump ahead.

Yeah.

Better understand.

Just maybe give us a little more color on the territory expansion.

Remind us what you're doing and how long it takes and when you dig.

How long it takes to get those.

Territories productive.

When you think that will also be more of an accelerant for <unk>.

For Silk road for CCAR adoption. Thank you very much.

Thanks, Rick I'll take the front end of that question no. We did not mention the number of physicians trained we don't typically talk about that.

On a quarterly basis, we exited last year with roughly 2100 trained we our guide is two to 300, we said we're on track I would say physician training.

Demand has always been strong and continues to be and probably even more so with the recent news. So we're we're servicing that demand.

Yeah, and just rounding out some color on that.

Overall, Rick it's easier just in the sense that the.

The COVID-19 sand in the gears on getting people together in person to train.

That has gotten better we are taking full advantage of our brand new gorgeous innovation center in Minneapolis, we're bringing physicians together in that facility for the didactic and the hands on those training sessions are going extraordinarily well the feedback from physicians has been just terrific on.

On the models and the facility itself now the second part of your question was on territory expansion that is going as planned.

We're on track to get to the 70% to 75 active territories you asked how long does it take for these reps.

To become effective and the good news is we're not really opening de Novo ground anymore. These are territories that have had a silk road sales professional and by splitting these territories that we are increasing the touch points, we're going deeper and more frequent into these.

Hospital accounts and with our physician customers, we continue to invest in world class training and our sales professionals and we take our time to make sure they're fully prepared as you heard Rick in my remarks, My prepared remarks, we are renowned for our clinical acumen and expert.

Our teams in the field, we are considered unmatched clinical partners in the in the treatment of carotid artery disease.

So we're not going to let up on the quality of the training of our sales professionals and we hand them the keys to the territory. When we believe they are ready.

To participate as a sales professional at that level. So this is all to say that.

That all of these things are known to us they are factored into our guidance there factored into how we think about accelerating in the back half of the year.

Got you. Thank you so much.

Thank you.

And our next question comes from the.

Okay.

Research.

Yes.

Hey, good afternoon. Thank you for taking the question.

I was hoping for a quick reminder, on the.

Ed.

The physicians that have been using teacart for say three or four years.

Where are those levels of productivity today, I'm, just kind of interested in that.

Dated view.

That northstar.

Mike I'll take part of that question.

Good to hear from you so.

If you look all the way back to kind of pre pandemic. The end of 2019, we had.

Roughly just shy of 500 docs trained back then so that that's kind of.

Starting to get real tenure from from the Docs trained to 2019 in 2018 2017, and the point of my comments in the prepared remarks are that there's no kind of saturation theres no.

They don't hit a wall they continue.

As a cohort kind of climbing up the adoption curve and they've gone through a lot of noise over the last couple of years obviously.

All of that experience has been solely in the high surgical risk patient population.

But even with all of that its steady progress.

It is just a function of time, there are more and more physicians that are reaching 123 and four years from their initial training we've always said.

Training of the new physician is not an immediate driver of the business is to an investment in the long term and I think the point is.

We're starting to yield the fruits of some of those investments we've made two three and four years ago and physician training and so we like the trends we see as the main takeaway.

Yes.

I appreciate that color Lucas.

Maybe one follow up down the P&L.

The comment about the gross margin expectation down a little bit this year as you ramp the Minnesota facility and give that.

Cypress commercial production volumes by the end of the year I guess, we're just to remind me is the expectation that that facility.

Scales.

We're headed back to the prior high watermark on gross margin and potentially beyond just can be framework.

Where we are headed and over kind of what sort of glide path in the next two to six quarters.

Yeah. So it all starts with pricing, obviously and our commercial team.

It continues to do an excellent job at the kind of product pricing level.

And then with Minnesota, it's both making sure that we have augmented capacity, but also risk mitigation in order to build to be able to build the same product in two locations and so even though we've got significant capacity in California, we wanted to augment that with Minnesota.

But as I said that that facility second facility is about to come online and then we will we will benefit from <unk>.

Volume over time against the fixed overhead across two sites.

And we've got CEA.

Hard working teams looking at <unk>.

Cost reduction through design and through other efforts over the long term.

But we're happy with the investments we've made on kind of the quality and capacity side of the house.

Thank you for taking the questions.

Thank you.

And our next question comes from the line of Joanne Lynch with Citi.

Hi, This is Anthony on for Joanne Thanks for taking our questions and congrats on a good quarter.

My first is I just wanted to zoom out first second and maybe focus on macro impacts are you seeing any headwinds still sort of hospital resource shortages staffing nursing shortages contrast dies shortages sort of any of those headwinds.

Yeah I appreciate the question and thanks, so much for joining us and yes, we're super excited about the quarter for sure.

So to answer the question.

Look there continue to be.

Wrapping shortages there continued to be that continues to be SaaS operated by.

The Abercrombie five variant, which it takes people out of pocket and they can't go to work when they're infected obviously.

But I think it's safe to say that we are seeing normalization return in pockets and we like the trends that we're seeing.

As it relates to contrast shortage.

There was some of that in the quarter.

But luckily with our procedure it was not only prioritizes and severity of carotid disease, but there are ways to kind of get around using a whole lot of contrast anyway and that does feel like an issue that is largely behind us and so while I think it's too soon to say we're back to a fully normalized operating environment in health care.

The labor shortage still persisting, we like the trends.

Great and then my second just a few updates first on the regulatory processes in China and Japan.

And then I don't think I heard an update this quarter on one studies. So if there's anything there to call out that would be helpful.

Yes, good observation look I think the short answer is.

The real meaningful meat of the second quarter, whereas the commercial performance, which we're incredibly proud of we did make progress on both 91, and Japan and China regulatory and we're pleased with the progress we've made in both and we look forward to more substantive updates.

In the quarters to come.

Great. Thanks.

Thank you.

And our next question comes from the line of Adam <unk> with Piper Sandler.

Hi, Erika Hi, Lucas congrats on the quarter and thanks for taking the questions maybe.

Maybe to start Lucas just one on the P&L and Opex spend.

I heard the commentary where do you expect a continued ramp.

In the back half of the year, but if we were to look out a little bit further.

How should investors think about pathway to profitability and how are you planning to prioritize topline growth versus leverage and then I had a follow up thanks.

Thanks, Adam for the question. So so so topline growth is the path to <unk> because of the operating leverage potential we have and I've talked about this on prior quarters.

We are largely built out kind of functionally and a lot of the kind of functionally and a lot of the commercial infrastructure to support growth from <unk>.

<unk> training to Med affairs to marketing.

Obviously still a little bit of work to do as Eric mentioned to build out the sales team same.

Same thing on the G&A side, we've been investing across the board to support HR, It finance et cetera, and we've touched on the manufacturing side. So a lot of those investments are behind us and we expect kind of the overall.

Opex to be more modest sequentially, whether it's quarters or years going ahead.

There's always variability on the R&D line, but that team is also.

Well built out now in terms of the number of people and programs to do the multiple things we want to do across short mid and long term drivers and so we're really set up for for operating leverage.

And continue continuing to be able to grow revenue that durably high rates, but.

But significantly modulating the cost growth so we're kind of at that.

Position as we sit here today.

Our opex as a percentage of sales has been picked.

Going down over the last couple of quarters.

We're focused on that we're focused on contribution margin per territory.

Et cetera et cetera.

Got it that's very helpful color Lucas I appreciate that and then maybe for the follow up just wanted to switch over to the.

Clinical data side.

This is a little bit of a two part question, but the first is there was a Kaiser paper that was published a few weeks ago looking at medical therapy for stroke prevention.

Patients with asymptomatic disease.

Just curious if you had any thoughts on that particular paper and then as we look ahead crest too.

I think clinical trials dot Gov as a primary completion date of December 22, So what are your expect expectations for that study.

Is a study that can inform clinical practice or do you see it not being particularly impactful. Thanks, so much for taking my questions.

Sure Adam Thanks, so much for being on the call I'll start with the Kaiser paper I think you're referring to Chang at all from Jama and the first thing to say about this paper is that this is a very old topic, the debate about whether or not to treat asymptomatic disease versus best medical therapy has been ongoing since.

The dawn of time there've been multiple randomized controlled trials on this topic of course, it was the topic of crest one.

And there have been even broader larger more comprehensive publications beyond this one that you are referencing and even the last 12 months that had very different conclusions than what Chang at all are concluded.

So we have great respect for the others here, but I think there is some fundamental flaws in the design I mean first of all it's a very it's a very contained patient population across Kaiser.

But the real flaw.

The paper kind of reflects clinical decision, making the patients who've got corrupt pension deserve them in need of them in the patients who did not and there were observed over medical therapy were deemed to have not needed an intervention in the first place and so that is a fundamental flaw.

Sure.

This retrospective analysis across patients in Kaiser and the utilization of a carotid intervention is about at the same rate as it is across all of the United States in other words, when we look at our 170000 patients per year treated against the patients diagnosed with carotid artery disease.

The percentages are about the same.

And there are a number of other flaws in the paper and so for all of those reasons.

The short answer really is this will be minimal to zero impact on our business and will hardly be noticed quite frankly.

So thats the Kaiser paper on crest too we've been talking about Chris to four eight years.

This study has been enrolling for a very long time at a very slow rate and the reason for that Adam is there are real challenges in this study design as you know it's two RCT is embedded in one comparing CEO that's medical therapy.

<unk> and transfer Macao is the best medical therapy, and the real challenge in enrolling is that you have to first believe that Theres equipoise in those two things before you can randomize, a patient which means again as we talked about and Shang at all.

If you firmly believe as a clinician the patient needs to be treated based on the progression of disease or severity of disease, you are not going to randomize them.

And so what that really means is the patients that are hitting randomize the patients in whom.

Whom we'll do well on optical optimal medical therapy to begin with.

So I think it's going to be highly criticized for that reason when all is said and done and of course, the technology around carotid artery stenting, namely T car has massively evolved in the eight years since the beginning of this trial.

While the website is suggesting a closure date at the end of December our estimates put it out much longer than that based on the current kind of enrollment rates and I do want to remind Adam just a follow up period is four years and the reason for that is if youre trying to discern the difference between medical therapy.

And treatment you have to run it out for years and so that four years from the last patient enrolled before there will be a definitive answer on this question. There may be some interim short term data on the 30 day outcome, but that's utterly meaningless in the medical therapy arm.

Yes.

Thanks, So much Eric very helpful response, I appreciate the color.

Thanks, Ed.

Thank you.

I'm showing no further questions so with that I'll turn the call back over to CEO , Eric Rogers for any closing remarks.

Thank you very much and again I want to reiterate how proud we are of our team at Silk Road medical Thanks, very much gentlemen. This concludes today's conference call Ladies and gentlemen. This concludes today's conference call. Thank you for participating and you may now disconnect.

Okay.

The conference will begin shortly to raise your hand during Q&A you can dial star one one.

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Ladies and gentlemen, thank you for.

And welcome to the Silk Road Medical's 2022 second quarter earnings Conference call. At this time, all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session to ask a question. During the session you will need to press star one one on your telephone.

I would now like to hand, the conference over to Marissa <unk> with Investor Relations.

Yes.

Alright, Thank you and thank you all for joining today's call.

Erica Rogers, Chief Executive Officer, and Lucas Buchanan, Chief Financial Officer, and Chief operating Officer.

Earlier today Silk Road medical released financial results for the three months ended June 32022.

A copy of the press release is available on the company's web site.

Before we begin I'd like to remind you that management will make statements during this call.

And that include forward looking statements within the meaning of the federal Securities laws, which are made pursuant to the safe Harbor provision of the private Securities Litigation Reform Act of 1995.

Any statements contained in this call that relate to expectations or predictions of future events results or performance are forward looking statements.

All forward looking statements, including without limitation, those relating to our operating trends and future financial performance.

These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements.

Accordingly, you should not place undue reliance on these statements.

Carla listen description of the risks and uncertainties associated with our business. Please refer to the risk factors section of our quarterly report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2020 Q.

This conference call contains time sensitive information and is accurate only as of the live broadcast today July 26 2022.

Also our medical disclaims any intention or obligation except as required by law.

Date, or revise any financial projections or forward looking statements, whether because of new information future events or otherwise.

Now I will turn the call over to Erica Rogers Chief Executive Officer.

Thank you Marissa and good afternoon, and thank you all for joining US we are pleased to share. Our recent performance with you today and highlight a series of significant achievements at Silk Road medical in the second quarter of the year.

First and foremost we drove strong key car adoption marked by $33 $2 million in revenues and 4700 procedures for the quarter, reflecting 25% and 29% year over year growth respectively.

Before reviewing our results in greater detail, let me expand upon our successful efforts to widen our reach and impact of minimally invasive T car across all eligible patients.

Early in the second quarter, we received FDA approval for the expanded indication of are on route Trans carotid stent system to include patients at standard risk for adverse events from carotid endarterectomy or standard surgical risk. This approval opens our currently addressable market opportunity to the entire U S curve.

Robert artery procedure market of approximately 170000 annual procedures.

More importantly, this expansion levels, the playing field between <unk> and CEO as physicians now have the discretion to treat any eligible patient with a T car procedure.

As captured in our recent press release by the society for vascular surgery. The data supporting T car use in standard surgical risk patients offers compelling reason for clinicians to more widely adopt T car technology as it has demonstrated both safety and efficacy and presents an X.

Solent alternative to CEO .

Within weeks of FDA approval. We also received expanded Medicare coverage for <unk> in standard surgical risk patients under the national coverage determination within the <unk> surveillance project, ensuring that all carotid patients who require treatment have the opportunity to benefit from a minimally invasive approach.

Visuals their families and the health system as a whole.

Lastly, we formally announced roadster three in June our post approval study designed to assess the real world treatment of standard surgical risk patients with CCAR.

Lateral stroke from day 31 to $3 65 perceived procedure.

We are now investing substantial time and resources in marketing efforts specific to standard surgical risk label expansion.

With a focus on incorporating our patient first mentality.

Including updated sales and marketing material direct print and digital communications and patient stories and testimonials all as part of our broader primary strategic priority of U S commercial execution.

On that note I am pleased to review our commercial progress in the second quarter in greater detail.

As evidenced through our Q2 results, we are making steady progress toward penetrating the large and still untapped pool of carotid procedure volume.

Exiting the second quarter, we are well on our way toward reaching our year end goals of 70 to 75 active territories and 200 to 300, new physicians trained.

Our efforts to drive more frequent and deeper customer engagement are yielding strong results.

Meaningfully increasing procedures per trained physician across our sales territories.

Based on our strong first half U S T car procedure growth and our outlook over the remainder of the year. We are pleased to raise our 2022 revenue guidance to $128 million to $133 million.

Reflecting year over year growth of 29% at the midpoint of the range.

We continue to expect the vast majority of our 2022 revenue to come from key car procedures and the legacy high surgical risk patient population.

With the gradual layering effect from standard surgical risk expansion into 2023 and beyond.

That said, we view our opportunity Holistically and do not intend to distinguish our expectations by patient sub population in the future.

Lucas will provide greater GDT detail regarding our financial outlook shortly.

In summary, CCAR is finding a prominent place in the carotid treatment continuum.

In fact, we're excited to share that we recently celebrated our 50000 T car procedure performed to date and incredible Testament to our impact on the lives of patients and their families.

We know that stroke risk does not stop and patients need to be protected from it's devastating consequences consequences, regardless of the broader healthcare operating environment.

We're looking forward to providing updates on these longer term initiatives over the next several quarters.

With that I will now turn the call over to Lucas Buchanan, our Chief Financial Officer, and Chief operating Officer.

Thank you Erica revenue for the three months ended June 32022 was $33 2 million or.