Q2 2024 CVRx Inc Earnings Call

Ladies and gentlemen, good afternoon and welcome to the CVRx Second Quarter 2024 Earnings Conference Call.

Mike Vallie: 2nd quarter, 2024 Owning's conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

Operator: 2nd Quarter 2024 Earnings Conference Call At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Vallie.

Speaker Change: At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and zero on your telephone keypad.

Operator: If anyone should require or pray to assistance during the conference, please press star and zero on your telephone keypad. As a reminder, this conference is being recorded.

Mike Vallie: It is now my pleasure to introduce your host, Mike Vallie. Please go ahead, sir.

Speaker Change: As a reminder, this conference is being recorded.

Speaker Change: It is now my pleasure to introduce your host, Mike Vallie. Please go ahead, sir.

Mike Vallie: Good afternoon. Thank you for joining us today for CVRx's 2nd quarter, 2024 owning's conference call. Joining me on today's call are the company's President and Chief Executive Officer, Evan Hykes, and Chief Financial Officer, Jared Oasheim.

Mike Vallie: Good afternoon. Thank you for joining us today for CVRx's second quarter 2024 earnings conference call. Joining me on today's call are the company's President and Chief Executive Officer, Kevin Hykes, and Chief Financial Officer, Jared Oasheim. The remarks today will contain forward-looking statements, including statements about financial guidance. The statements are based on plans and expectations as of today, which may change over time. In addition, actual results could differ materially due to a number of risks and uncertainties, including those identified in the earnings release issued prior to this call and in the company's SEC filing. Including the upcoming Form 10-Q that will be filed with the SEC. I would now like to turn the call over to CVRx's President and Chief Executive Officer, Kevin Hykes.

Mike Vallie: Good afternoon. Thank you for joining us today for CVRx's second quarter 2024 earnings conference call.

Speaker Change: Joining me on today's call are the company's President and Chief Executive Officer, Kevin Hykes, and Chief Financial Officer, Jared Oasheim.

Kevin Hykes: The remarks today will contain forward-looking statements, including statements about financial guidance. The statements are based on plans and expectations as of today, which may change over time. In addition, actual results could differ materially due to a number of risks and uncertainties, including those identified in the earnings release issued prior to this call and in the company's SEC filing, including the upcoming Form 10-Q that will be filed with the SEC.

Speaker Change: The remarks today will contain forward-looking statements, including statements about financial guidance.

Speaker Change: The statements are based on plans and expectations as of today, which may change over time.

Speaker Change: In addition, actual results could differ materially due to a number of risks and uncertainties, including those identified in the earnings release issued prior to this call and in the company's SEC filings.

Kevin Hykes: I would now like to turn the call over to CVRx's President and Chief Executive Officer, Kevin Hykes. Thanks, Mike. Good afternoon, and thank you for joining us. I'm pleased with our solid 2nd quarter results, driven again by encouraging strength in the U.S. Heart failure business. We delivered total revenue of $11.8 million, an increase of 24% over the 2nd quarter of 2023. I remain enthusiastic about the team we're building and the impact Barostom Therapy is having on patients.

Speaker Change: including the upcoming Form 10-Q that will be filed with the SEC.

Speaker Change: I would now like to turn the call over to CVRx's President and Chief Executive Officer,

Kevin Hykes: Thanks Mike. Good afternoon, and thank you for joining us. I'm pleased with our solid second quarter results, driven again by encouraging strength in the U.S. heart failure business. We delivered total revenue of $11.8 million, an increase of 24% over the second quarter of 2023. I remain enthusiastic about the team we are building and the impact Barrow-Stim Therapy is having on patients. One of my key priorities in the second quarter was to deepen and strengthen our leadership team to drive our market development priorities.

Speaker Change: Thanks Mike. Good afternoon and thank you for joining us. I'm pleased with our solid second quarter results driven again by encouraging strength in the U.S. heart failure business.

Speaker Change: We delivered total revenue of $11.8 million, an increase of 24% over the second quarter of 2023. I remain enthusiastic about the team we are building and the impact Barrowston Therapy is having on patients.

Kevin Hykes: One of my key priorities in the 2nd quarter was to deepen and strengthen our leadership team to drive our market development priorities. To head our U.S. sales team, we recently announced the appointment of Robert John as our new Chief Revenue Officer, who brings over 25 years of sales leadership experience in the medical device industry. Robert has a strong reputation within the heart failure community and has significant experience building sales organizations, launching novel heart failure therapies, and delivering results. Robert officially started on June 27th and has seamlessly assumed leadership of our sales team from Paul Varostro, our interim sales leader.

Speaker Change: One of my key priorities in the second quarter was to deepen and strengthen our leadership team to drive our market development priorities.

Kevin Hykes: To head our U.S. sales team, we recently announced the appointment of Robert John as our new Chief Revenue Officer, who brings over 25 years of sales leadership experience in the medical device industry. Robert has a strong reputation within the heart failure community and has significant experience building sales organizations, launching novel heart failure therapies, and delivering results. Robert officially started on June 27th and has seamlessly assumed leadership of our sales team from Paul Verastro, our interim sales leader. I would like to thank Paul for his leadership and commitment during this transition period. Paul was able to quickly unify and stabilize the team, confining the disruption that we experienced to the first quarter.

Speaker Change: To head our U.S. sales team, we recently announced the appointment of Robert John as our new Chief Revenue Officer, who brings over 25 years of sales leadership experience in the medical device industry.

Speaker Change: Robert has a strong reputation within the heart failure community and has significant experience building sales organizations, launching novel heart failure therapies, and delivering results.

Kevin Hykes: This allowed us to hit our numbers and open three new territories in this most recent second quarter. While Robert is obviously still early in his tenure, we're confident in his ability to build upon the solid momentum that Paul initiated and look forward to Robert's contributions to driving our market development priorities. In addition to our new sales leader, we've also filled four other key executive roles, including Dr. Phillip Adamson as Chief Medical Officer and Bonnie Hanke as Senior Vice President of Patient Access, Reimbursement, and Healthcare Economics.

Speaker Change: Robert officially started on June 27th and has seamlessly assumed leadership of our sales team from Paul Verastro, our interim sales leader.

Kevin Hykes: I would like to thank Paul for his leadership and commitment during this transition period. Paul was able to quickly unify and stabilize the team, confining the disruption that we experienced to the first quarter. This allowed us to hit our numbers and open three new territories in this most recent 2nd quarter. While Robert is obviously still early in his tenure, we're confident in his ability to build upon the solid momentum that Paul initiated and look forward to Robert's contributions to driving our market development priorities.

Speaker Change: I would like to thank Paul for his leadership and commitment during this transition period. Paul was able to quickly unify and stabilize the team, confining the disruption that we experienced to the first quarter.

Speaker Change: This allowed us to hit our numbers and open three new territories in this most recent second quarter.

Speaker Change: While Robert is obviously still early in his tenure, we're confident in his ability to build upon the solid momentum that Paul initiated and look forward to Robert's contributions to driving our market development priorities.

Kevin Hykes: In addition to our new sales leader, we've also filled four other key executive roles, including Dr. Philip Adamson as chief medical officer, Bonnie Hankey as senior vice president of patient access, reimbursement and healthcare economics, and Jennifer England as senior vice president of global clinical research. And in order to help accelerate and support our rapid growth, we hired the company's first Chief Human Resources Officer, Tanya Austin. The quality of these hires and the speed with which we were able to attract such talent underscore the value of the opportunity ahead of us.

Speaker Change: In addition to our new sales leader, we've also filled four other key executive roles, including Dr. Phillip Adamson as Chief Medical Officer, Bonnie Hanke as Senior Vice President of Patient Access, Reimbursement, and Healthcare Economics,

Kevin Hykes: Jennifer England as Senior Vice President of Global Clinical Research, and in order to help accelerate and support our rapid growth, we hired the company's first Chief Human Resources Officer, Tanya Austin. The quality of these hires and the speed with which we were able to attract such talent underscore the value of the opportunity ahead of us.

Speaker Change: Jennifer England as Senior Vice President of Global Clinical Research

Speaker Change: And in order to help accelerate and support our rapid growth, we hired the company's first Chief Human Resources Officer, Tanya Austin.

Speaker Change: The quality of these hires and the speed with which we were able to attract such talent underscore the value of the opportunity ahead of us.

Kevin Hykes: These additions complete our senior team and provide the resources to allow us to now fully focus on expanding the adoption of Barostim for patients with heart failure. These new hires reflect our focus on addressing key barriers to the adoption of Barostom, which include improving patient access to the therapy, increasing education and awareness among refers and patients, and developing a more robust portfolio of clinical evidence.

Kevin Hykes: These additions complete our senior team and provide the resources to allow us to now fully focus on expanding the adoption of Barostim for patients with heart failure. These new hires reflect our focus on addressing key barriers to the adoption of BarrowSTEM, which include improving patient access to the therapy, increasing education and awareness among referrers and patients, and developing a more robust portfolio of clinical evidence. Starting with an update on patient access, I'd like to discuss some recent reimbursement developments.

Speaker Change: These additions complete our senior team and provide the resources to allow us to now fully focus on expanding the adoption of Barostim for patients with heart failure.

Speaker Change: These new hires reflect our focus on addressing key barriers to the adoption of Barostim, which include improving patient access to the therapy, increasing education and awareness among referrers and patients, and developing a more robust portfolio of clinical evidence.

Kevin Hykes: Starting with an update on patient access, I'd like to discuss some recent reimbursement developments. On July 10, CMS released its proposed rule changes for the 2025 Hospital Outpatient Prospective Payment System. The OPPS notice of proposed rulemaking includes a potential change to Barostom's reimbursement status that would decrease the overall payment to hospitals for outpatient procedures from approximately $45,000 on average in 2024 to approximately $31,000 in 2025. This proposed change involves moving Barostom from its current placement in new technology APC 1580 to APC 5465. While disappointing, the proposal remains subject to comment before it can be finalized.

Speaker Change: Starting with an update on patient access, I'd like to discuss some recent reimbursement developments.

Kevin Hykes: On July 10, CMS released its proposed rule changes for the 2025 Hospital Outpatient Prospective Payment System. The OPPS notice of proposed rulemaking includes a potential change to Barrow-Sim's reimbursement status that would decrease the overall payment to hospitals for outpatient procedures from approximately $45,000 on average in 2024 to approximately $31,000 in 2025.

Speaker Change: On July 10th, CMS released its proposed rule changes for the 2025 Hospital Outpatient Prospective Payment System.

Speaker Change: The OPPS notice of proposed rulemaking includes a potential change to Barrow-Sim's reimbursement status.

Speaker Change: that would decrease the overall payment to hospitals for outpatient procedures.

Speaker Change: from approximately $45,000 on average in 2024 to approximately $31,000 in 2025.

Kevin Hykes: This proposed change involves moving Barostim from its current placement in New Technology APC 1580 to 2APC 5465. While disappointing, the proposal remains subject to comment before it can be finalized. Over the 90-day comment period, CMS will solicit feedback from hospitals and physicians on the merits of creating a Level 6 Neurostimulation APC, as well as on the impact of placing Barostim in APC 5465. As we have successfully done in the past, we are actively engaging with CMS and hospital stakeholders during this period to advocate for maintaining Barostim's current placement in the new technology APC for at least another year or for the creation of a level six neurostimulation APC.

Speaker Change: This proposed change involves moving Barostim from its current placement in New Technology APC 1580

Speaker Change: 2APC 5465

Speaker Change: While disappointing, the proposal remains subject to comment before it can be finalized.

Kevin Hykes: Over the 90-day comment period, CMS will solicit feedback from hospitals and physicians on the merits of creating a level 6 neuro stimulation APC, as well as on the impact of placing Barostim in APC 5465. As we have successfully done in the past, we are actively engaging with CMS and hospital stakeholders during this period to advocate for maintaining Barostim's current placement in the new technology APC for at least another year, or for the creation of a level 6 neuro stimulation APC. The value Barostom provides to patients in health care systems is confirmed by outcomes data, and we will work with physicians, hospital administrators, and our industry colleagues with similar advanced technologies to ensure fair and appropriate reimbursement.

Speaker Change: Over the 90-day comment period, CMS will solicit feedback from hospitals and physicians on the merits of creating a Level 6 Neurostimulation APC.

Speaker Change: as well as on the impact of placing Barostim in APC 5465.

Speaker Change: As we have successfully done in the past, we are actively engaging with CMS and hospital stakeholders during this period to advocate for maintaining Barostim's current placement in the new technology APC for at least another year.

Speaker Change: or for the creation of a Level 6 Neurostimulation APC.

Kevin Hykes: The value Barostim provides to patients and health care systems is confirmed by outcomes data, and we will work with physicians, hospital administrators, and our industry colleagues with similar advanced technologies to ensure fair and appropriate reimbursement. We'll provide any updates on this process on our third quarter earnings call in advance of the publication of the final rule in November.

Speaker Change: The value Barostim provides to patients and health care systems is confirmed by outcomes data, and we will work with physicians, hospital administrators, and our industry colleagues with similar advanced technologies to ensure fair and appropriate reimbursement.

Kevin Hykes: We'll provide any updates on this process on our third quarter earnings call in advance of the publication of the final rule in November.

Speaker Change: We'll provide any updates on this process on our third quarter earnings call in advance of the publication of the final rule in November .

Kevin Hykes: While we navigate these reimbursement rulemaking processes in the outpatient setting, we have a potentially favorable development on the inpatient side. The Inpatient Prospective Payment System proposed rule released earlier this year proposes to reassign Barostim to MS-DRG276 to better reflect clinical severity and resource use. The result of this change would be an increase in payment to hospitals from approximately $23,000 to approximately $43,000. We look forward to the release of the final inpatient rule, which is expected in August.

Kevin Hykes: While we navigate these reimbursement rule-making processes in the outpatient setting, we have a potentially favorable development on the inpatient side. The inpatient prospective payment system proposed rule released earlier this year proposes to reassign Barostom to MSDRG276 to better reflect the clinical severity and resource use. The result of this change would be an increase in payment to hospitals from approximately $23,000 to approximately $43,000. We look forward to the release of the final inpatient rule, which is expected in artists.

Speaker Change: While we navigate these reimbursement rulemaking processes in the outpatient setting, we have a potentially favorable development on the inpatient side.

Speaker Change: The Inpatient Prospective Payment System proposed rule released earlier this year proposes to reassign Barostim to MS-DRG276 to better reflect the clinical severity and resource use.

Speaker Change: The result of this change would be an increase in payment to hospitals from approximately $23,000 to approximately $43,000.

Speaker Change: We look forward to the release of the final inpatient rule, which is expected in August . Our second initiative is increasing education and awareness amongst referrers and patients in the community as to the benefits and role of Barrel Stim in the treatment continuum.

Kevin Hykes: Our second initiative is increasing education and awareness amongst refers and patients in the community as to the benefits and role of Barostim in the treatment continuum. While our primary focus is on the 1,400 heart failure specialists who manage 24% of our indicated patients, we're also expanding our outreach to general cardiologists and their advanced practice providers who see 44% of our target population. We're also continuing to invest in our highly effective direct consumer marketing efforts, which are a key part of our Barostim Connect program, providing education and prior authorization support to prospective patients.

Kevin Hykes: Our second initiative is increasing education and awareness amongst referrers and patients in the community as to the benefits and role of Barrel Stim in the treatment continuum. While our primary focus is on the 1,400 heart failure specialists who manage 24% of our indicated patients, we're also expanding our outreach to general cardiologists and their advanced practice providers, who see 44% of our target population. We're also continuing to invest in our highly effective direct-to-consumer marketing efforts, which are a key part of our Barrel Stem Connect program providing education and prior authorization support to prospective patients.

Speaker Change: While our primary focus is on the 1,400 heart failure specialists who manage 24% of our indicated patients, we're also expanding our outreach to general cardiologists and their advanced practice providers who see 44% of our target population.

Speaker Change: We're also continuing to invest in our highly effective direct-to-consumer marketing efforts, which are a key part of our Barrel Stem Connect program, providing education and prior authorization support to prospective patients.

Kevin Hykes: Our third focus is on developing a more consistent stream of clinical evidence supporting Barostim therapy to strengthen the clinical literature with a more comprehensive representation of the positive real-world clinical outcomes that physicians are achieving with Barostim therapy. During my time at CVRx so far, I've repeatedly heard from physicians that the benefits they observe in their Barostim patients exceed those described in the literature published to date. Because of this, they continue to encourage us to support further publications on the wide range of benefits that their patients experience with Barostom. We are also focused on publishing additional scientific evidence, more fully describing Barostom's mechanism of action.

Kevin Hykes: Our third focus is on developing a more consistent stream of clinical evidence supporting barostim therapy to strengthen the clinical literature with a more comprehensive representation of the positive real-world clinical outcomes that physicians are achieving with barostim therapy. During my time at CVRx so far, I've repeatedly heard from physicians that the benefits they observe in their Barrowston patients exceed those described in the literature published to date. Because of this, they continue to encourage us to support further publications on the wide range of benefits that their patients experience with Barostim.

Speaker Change: Our third focus is on developing a more consistent stream of clinical evidence supporting barostim therapy to strengthen the clinical literature with a more comprehensive representation of the positive real-world clinical outcomes that physicians are achieving with barostim therapy.

Speaker Change: During my time at CVRx so far, I've repeatedly heard from physicians that the benefits they observe in their Barrelston patients exceed those described in the literature published to date.

Speaker Change: Because of this, they continue to encourage us to support further publications on the wide range of benefits that their patients experience with Barostim.

Kevin Hykes: We are also focused on publishing additional scientific evidence more fully describing Barostim's mechanism of action. This involves further explaining the physiological and hemodynamic mechanisms that underlie the effectiveness of the therapy and that help illustrate its mechanism of action. These publications will provide a more comprehensive scientific foundation for Berestim's impressive results.

Speaker Change: We are also focused on publishing additional scientific evidence more fully describing Barostim's mechanism of action.

Kevin Hykes: This involves further explaining the physiological and hemodynamic mechanisms that underlie the effectiveness of the therapy, and that help illustrate its mechanism of action. These publications will provide a more comprehensive scientific foundation for Barostom's impressive results.

Speaker Change: This involves further explaining the physiological and hemodynamic mechanisms that underlie the effectiveness of the therapy, and that help illustrate its mechanism of action.

Speaker Change: These publications will provide a more comprehensive scientific foundation for Barristim's impressive results.

Kevin Hykes: Turning the sales, the work that we have done during the sales transition and the preliminary observations of our new leaders are bringing additional insights into the performance of our account base, specifically the characteristics of the most successful Barostim programs. From a sales strategy standpoint, we are increasing our focus on accounts where our therapy is integrated into the treatment continuum and supported by multiple heart failure physician champions and surgical partners. These accounts have demonstrated deep and sustained therapy adoption, leading to high utilization. We believe that building Barostom programs like these will best support our plans for long-term growth.

Kevin Hykes: Turning to sales, the work that we have done during the sales transition and the preliminary observations of our new leaders are bringing additional insights into the performance of our account base, and specifically, the characteristics of the most successful Barrow-Stin programs. From a sales strategy standpoint, we are increasing our focus on accounts where our therapy is integrated into the treatment continuum and supported by multiple heart failure physician champions and surgical partners. These accounts have demonstrated deep and sustained therapy adoption leading to high utilization.

Speaker Change: Turning to sales, the work that we have done during the sales transition and the preliminary observations of our new leaders are bringing additional insights into the performance of our account base.

Speaker Change: Specifically, the characteristics of the most successful Barrowstin programs. From a sales strategy standpoint, we are increasing our focus on accounts where our therapy is integrated into the treatment continuum and supported by multiple heart failure physician champions and surgical partners.

Speaker Change: These accounts have demonstrated deep and sustained therapy adoption leading to high utilization.

Kevin Hykes: We believe that building Barrowston programs like these will best support our plans for long-term growth. I want to emphasize our continued optimism about Barostim Therapy, our market opportunity, and the strength of our organization. The changes we're implementing are improving near-term execution, as well as our focus on the key drivers of adoption. Our broadened leadership team is already making strides in aligning our commercial and scientific resources to drive long-term adoption of Barostim in the HFREF market, to deepen our evidence base, and to explore additional indications.

Speaker Change: We believe that building Barrowstown programs like these will best support our plans for long-term growth.

Kevin Hykes: I want to emphasize our continued optimism about Barostim therapy, our market opportunity, and the strength of our organization. The changes we are implementing are improving near-term execution, as well as our focus on the key drivers of adoption. Our broad leadership team is already making strides in aligning our commercial and scientific resources to drive long-term adoption of Barostom in the half-ref market, to deepen our evidence base and to explore additional indications.

Speaker Change: I want to emphasize our continued optimism about Barrow-Stem Therapy, our market opportunity, and the strength of our organization.

Speaker Change: The changes we're implementing are improving near-term execution, as well as our focus on the key drivers of adoption.

Speaker Change: Our broadened leadership team is already making strides in aligning our commercial and scientific resources to drive long-term adoption of Barostim in the HFREF market, to deepen our evidence base, and to explore additional indications.

Kevin Hykes: We're developing a comprehensive long-term vision and strategy, which we'll share in the future, aimed at driving growth in 2025 and beyond. Barostom's potential to transform the treatment paradigm for millions of people suffering from heart failure and other cardiovascular diseases is inspiring, and it's a privilege to be leading the company at this time. Our goal remains clear: to drive our therapy towards becoming standard of care. With our innovative technology, expanding market presence, and strengthened leadership team, we're well-positioned to make a meaningful difference in even more patients' lives.

Kevin Hykes: We're developing a comprehensive long-term vision and strategy, which we'll share in the future, aimed at driving growth in 2025 and beyond. Barosim's potential to transform the treatment paradigm for millions of people suffering from heart failure and other cardiovascular diseases is inspiring, and it's a privilege to be leading the company at this time. Our goal remains clear, to drive our therapy towards becoming the standard of care. With our innovative technology, expanding market presence, and strengthened leadership team, we're well positioned to make a meaningful difference in even more patients' lives. Now, I'd like to turn the call over to Jared for financial review.

Speaker Change: We're developing a comprehensive long-term vision and strategy, which we'll share in the future, aimed at driving growth in 2025 and beyond.

Speaker Change: Barosim's potential to transform the treatment paradigm for millions of people suffering from heart failure and other cardiovascular diseases is inspiring, and it's a privilege to be leading the company at this time.

Speaker Change: Our goal remains clear, to drive our therapy towards becoming standard of care.

Speaker Change: With our innovative technology, expanding market presence, and strengthened leadership team, we're well positioned to make a meaningful difference in even more patients' lives.

Jared Oasheim: Now I'd like to turn the call over to Jared for a financial review. Thanks, Kevin. In the second quarter, total revenue generated was $11.8 million, representing an increase of $2.3 million or 24% compared to the same period. last year. Revenue generated in the US was $10.7 million in the current quarter, reflecting growth of 29% over the same period last year. Hard failure revenue in the US totaled $10.5 million in the current quarter on a total of 339 revenue units, compared to $8.3 million in the second quarter of last year on 265 revenue units. The increases were primarily driven by continued growth in the US Hard Failure business, as a result of the expansion into new sales territories, new accounts, and increased physician and patient awareness of Barostim.

Jared Oasheim: Thanks, Kevin. In the second quarter, total revenue generated was $11.8 million, representing an increase of $2.3 million, or 24%, compared to the same period last year. Revenue generated in the U.S. was $10.7 million in the current quarter, reflecting growth of 29% over the same period last year. Heart failure revenue in the US totaled $10.5 million in the current quarter on a total of 339 revenue units compared to $8.3 million in the second quarter of last year on 265 revenue units.

Speaker Change: Now, I'd like to turn the call over to Jared for financial review.

Jared Oasheim: Thanks, Kevin. In the second quarter, total revenue generated was $11.8 million, representing an increase of $2.3 million, or 24%, compared to the same period last year.

Jared: Revenue generated in the U.S. was $10.7 million in the current quarter, reflecting growth of 29% over the same period last year.

Speaker Change: Hard failure revenue in the U.S. totaled $10.5 million in the current quarter on a total of 339 revenue units.

Speaker Change: compared to $8.3 million in the second quarter of last year on 265 revenue units.

Jared Oasheim: The increases were primarily driven by continued growth in the US heart failure business as a result of the expansion into new sales territories, new accounts, and increased physician and patient awareness of barostim. At the end of the current quarter, we had a total of 189 active and planning centers compared to 140 on June 30th, 2023 and 190 on March 31st, 2024. Active and planning centers are customers that have completed at least one commercial heart failure implant in the last 12 months.

Speaker Change: The increases were primarily driven by continued growth in the U.S. heart failure business as a result of the expansion into new sales territories, new accounts, and increased physician and patient awareness of barostim.

Jared Oasheim: At the end of the current quarter, we had a total of 189 active and planning centers, compared to 140 on June 30th, 2023, and 190 on March 31st, 2024. Active and planning centers are customers that have completed at least one commercial hard failure implant in the last 12 months. We also had 42 sales territories in the US at the end of the current quarter compared to 32 on June 30th, 2023, and 39 on March 31st, 2024.

Jared Oasheim: We also had 42 sales territories in the U.S. at the end of the current quarter compared to 32 on June 30, 2023, and 39 on March 31, 2024. Revenue generated in Europe was $1.1 million in the current quarter, representing a decrease of 6% compared to the same period last year. Total revenue units in Europe increased to 63 for the three months ended June 30, 2024, from 56 in the prior year period. The number of sales territories in Europe remained constant at 6.

Speaker Change: At the end of the current quarter, we had a total of 189 active implanting centers compared to 140 on June 30, 2023 and 190 on March 31, 2024. Active implanting centers are customers that have completed at least one commercial heart failure implant in the last 12 months.

Speaker Change: We also had 42 sales territories in the U.S. at the end of the current quarter compared to 32 on June 30, 2023, and 39 on March 31, 2024.

Jared Oasheim: Revenue generated in Europe was $1.1 million in the current quarter, representing a decrease of 6% compared to the same period last year. Total revenue units in Europe increased to 63 for the three months ended June 30th, 2024, from 56 in the prior year period. The number of sales territories in Europe remained consistent at 6 for the three months ended June 30th, 2024. Gross profit for the three months ended June 30th, 2024 was $9.9 million, an increase of $1.9 million compared to the three months ended June 30th, 2023. Gross margin was 84% for each of the three months ended June 30th, 2024, and June 30th, 2023.

Speaker Change: Revenue generated in Europe was $1.1 million in the current quarter, representing a decrease of 6% compared to the same period last year.

Speaker Change: Total revenue units in Europe increased to 63 for the three months ended June 30th, 2024, from 56 in the prior year period. The number of sales territories in Europe remained consistent at 6 for the three months ended June 30th, 2024.

Jared Oasheim: Gross profit for the three months ended June 30, 2024 was $9.9 million, an increase of $1.9 million compared to the three months ended June 30, 2023. Gross margin was 84% for each of the three months ended June 30, 2024 and June 30, 2023. Research and development expenses for the current quarter were $2.8 million, reflecting a decrease of 16% compared to the same period last year. This change was driven by a $0.4 million decrease in consulting expenses and a $0.1 million decrease in compensation expenses.

Speaker Change: Gross profit for the three months ended June 30th, 2024 was $9.9 million, an increase of $1.9 million compared to the three months ended June 30th, 2023. Gross margin was 84% for each of the three months ended June 30th, 2024 and June 30th, 2023.

Jared Oasheim: Research and development expenses for the current quarter were $2.8 million, reflecting a decrease of 16% compared to the same period last year. This change was driven by a $0.4 million decrease in consulting expenses and a $0.1 million decrease in compensation expenses.

Speaker Change: Research and development expenses for the current quarter were $2.8 million, reflecting a decrease of 16% compared to the same period last year.

Speaker Change: This change was driven by a $0.4 million decrease in consulting expenses and a $0.1 million decrease in compensation expenses.

Jared Oasheim: SG&A expenses for the current quarter were $21.1 million, representing an increase of 28% compared to the same period last year. This change was primarily driven by a $2.6 million increase in compensation expenses, mainly as a result of increased headcount, a $1 million increase in non-cash, stock-based compensation expense, a $0.4 million increase in advertising expenses, a $0.2 million increase in travel expenses, and a $0.2 million Interest expense increased $0.5 million for the three months ended June 30, 2024 compared to the same period last year.

Jared Oasheim: SG&A expenses for the current quarter were $21.1 million, representing an increase of 28% compared to the same period last year. This change was primarily driven by a $2.6 million increase in compensation expenses, mainly as a result of increased headcount, a $1 million increase in non-cash stock-based compensation expense, a $0.4 million increase in advertising expenses, a $0.2 million increase in travel expenses, and a $0.2 million increase in consulting expenses. Interest expense increased $0.5 million for the three months ended June 30th, 2024, compared to the same period last year. This increase was driven by the interest expense on borrowing's under the loan agreement.

Speaker Change: SG&A expenses for the current quarter were $21.1 million, representing an increase of 28% compared to the same period last year. This change was primarily driven by a $2.6 million increase in compensation expenses, mainly as a result of increased headcount.

Speaker Change: A $1 million increase in non-cash, stock-based compensation expense. A $0.4 million increase in advertising expenses. A $0.2 million increase in travel expenses. And $0.2 million increase in consulting expenses.

Jared Oasheim: This increase was driven by the interest expense on borrowings under the loan agreement. Other income net increased $0.3 million for the three months ended June 30th, 2024, compared to the three months ended June 30th, 2023. This increase was primarily driven by greater interest income on our interest-bearing account.

Speaker Change: Interest expense increased $0.5 million for the three months ended June 30, 2024 compared to the same period last year. This increase was driven by the interest expense on borrowings under the loan agreement.

Jared Oasheim: Other income net increased $0.3 million for the three months ended June 30th, 2024, compared to the three months ended June 30th, 2023. This increase was primarily driven by greater interest income on our interest-bearing accounts.

Speaker Change: Other income net increased $0.3 million for the three months ended June 30th, 2024 compared to the three months ended June 30th, 2023. This increase was primarily driven by greater interest income on our interest bearing accounts.

Jared Oasheim: Net loss was $14 million or $65 per share for the three months ended June 30th, 2024, compared to a net loss of $11.6 million or $0.56 cents per share for the three months ended June 30th, 2023. Net loss per share was based on $21.6 million weighted average shares outstanding for the three months ended June 30th, 2024, and $20.7 million weighted average shares outstanding for the three months ended June 30th, 2023. As of June 30, 2024, cash and cash equivalents were $70.4 million. Net cash used in operating and investing activities was $10.2 million for the quarter ended June 30, 2024.

Speaker Change: Net loss was $14 million, or $0.65 per share, for the three months ended June 30, 2024, compared to a net loss of $11.6 million, or $0.56 per share, for the three months ended June 30, 2023.

Speaker Change: Net loss per share was based on $21.6 million weighted average shares outstanding for the three months ended June 30, 2024, and $20.7 million weighted average shares outstanding for the three months ended June 30, 2023.

Jared Oasheim: [inaudible] As of June 30, 2024, cash and cash equivalents were $70.4 million. Net cash used in operating and investing activities was $10.2 million for the quarter ended June 30, 2024. This is compared to net cash used in operating and investing activities of $11.8 million for the three months ended March 31, 2024. Now turning to guidance. For the full year of 2024, we continue to expect total revenue between $50 and $53 million.

Speaker Change: As of June 30, 2024, cash and cash equivalents were $70.4 million.

Speaker Change: Net cash used in operating and investing activities was $10.2 million for the quarter ended June 30th, 2024. This is compared to net cash used in operating and investing activities of $11.8 million for the three months ended March 31st, 2024.

Jared Oasheim: This is compared to net cash used in operating and investing activities of $11.8 million for the three months ended March 31, 2024.

Jared Oasheim: We continue to expect full-year gross margin between 83% and 85% and now expect operating expenses between $95 million and $98 million. For the third quarter of 2024, we expect to report total revenue between $12.7 and $13.7 million. I would now like to turn the call back over to Kevin. Thank you, Jared.

Jared Oasheim: Now turning to guidance. For the full year of 2024, we continue to expect total revenue between $50 and $53 million. We continue to expect full year gross margin between 83% and 85%. And now expect operating expenses between $95 million and $98 million. For the third quarter of 2024, we expect to report total revenue between $12.7 million and $13.7 million.

Speaker Change: Now turning to guidance. For the full year of 2024, we continue to expect total revenue between $50 and $53 million. We continue to expect full year gross margin between 83% and 85%. And now expect operating expenses between $95 million and $98 million.

Speaker Change: For the third quarter of 2024, we expect to report total revenue between $12.7 and $13.7 million.

Kevin Hykes: I would now like to turn the call back over to Kevin.

Kevin Hykes: Thank you, Jared. Before we open the line for questions, I'd like to reflect on my first six months as CEO. My interactions with physicians and patients have provided valuable insights into the real-world impact and benefits of our therapy. These experiences have only strengthened my belief in Barostom's potential to transform lives. Our team's dedication to improving patients' lives continues to impress me. We've built a strong, focused group of professionals who are committed to our mission. I recently spent a full day with our expanded leadership team and could not have been more pleased with how quickly and collaboratively the team has worked together to identify opportunities and to begin executing on our three focus areas.

Kevin Hykes: Thank you, Jared. Before we open the line for questions, I'd like to reflect on my first six months as CEO. My interactions with physicians and patients have provided valuable insights into the real-world impact and benefits of our therapy. These experiences have only strengthened my belief in Barrow-Stim's potential to transform lives. Our team's dedication to improving patients' lives continues to impress me. We have built a strong, focused group of professionals who are committed to our mission.

Speaker Change: I would now like to turn the call back over to Kevin.

Kevin Hykes: Thank you, Jared. Before we open the line for questions, I'd like to reflect on my first six months as CEO . My interactions with physicians and patients have provided valuable insights into the real-world impact and benefits of our therapy.

Kevin Hykes: These experiences have only strengthened my belief in Berestim's potential to transform lives.

Kevin Hykes: Our team's dedication to improving patients' lives continues to impress me.

Kevin Hykes: I recently spent a full day with our expanded leadership team and could not be more pleased with how quickly and collaboratively the team has worked together to identify opportunities and begin executing on our three focus areas. My optimism is also bolstered by the momentum that we built in Q2 and which we are now seeing continue into the third quarter. We look forward to keeping you updated on our progress in the coming months. Now, I'd like to open the line for questions. Operator?

Kevin Hykes: We've built a strong, focused group of professionals who are committed to our mission. I recently spent a full day with our expanded leadership team and could not have been more pleased with how quickly and collaboratively the team has worked together to identify opportunities and to begin executing on our three focus areas.

Kevin Hykes: My optimism is also bolstered by the momentum that we have built in Q2 and which we are now seeing continue into the third quarter.

Kevin Hykes: My optimism is also bolstered by the momentum that we have built in Q2, and which we are now seeing continue into the third quarter. We look forward to keeping you updated on our progress in the coming months.

Kevin Hykes: We look forward to keeping you updated on our progress in the coming months.

Operator: Now I'd like to open the line for questions. Operator? Thank you.

Kevin Hykes: Now I'd like to open the line for questions. Operator?

Operator: Ladies and gentlemen, we will now be conducting a question-and-answer session. If you would like to ask a question, please press star and one on your telephone keypad. A confirmation tone will indicate your line is in the question Q. You may press star and two if you would like to remove your question from the Q. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while we pull for questions.

Operator: Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star and 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Ladies and gentlemen, we will wait for a moment while we poll you for questions. Our first question comes from the line of Robbie Marcus with J.P. Morgan. Please go ahead.

Speaker Change: Thank you.

Robert Justin Marcus: Oh, great. Thanks for taking the questions. Two for me, maybe the first one.

Speaker Change: Ladies and gentlemen, we will now be conducting a question and answer session.

Speaker Change: If you would like to ask a question, please press star and 1 on your telephone keypad.

Speaker Change: A confirmation tone will indicate your line is in the question queue. You may press star and 2 if you would like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: Ladies and gentlemen, we will wait for a moment while we poll for questions.

Robbie Marcus: Our first question comes from the line of Robbie Marcus with JP Morgan. Please go ahead.

Speaker Change: Our first question comes from the line of Robby Marcus with J.P. Morgan. Please go ahead.

Robbie Marcus: Oh, great. Thanks for taking the questions. Two for me.

Robert Justin Marcus: Oh, great. Thanks for taking the questions.

Robbie Marcus: Maybe the first one. There's been a lot of changes at the organization. Revenue's came in line with the street op-x guidance, moving up just to touch here. I would imagine on the new hires.

Robert Justin Marcus: There have been a lot of changes at the organization. Revenues came in line with the street, and OPEX guidance moving up just a touch here, I would imagine, on the new hires. You know, maybe walk us through the pathway to profitability here, and how do you get revenues high enough or expenses low enough to start generating free cash flow? And when do you think that might happen?

Robert Justin Marcus: Two for me. Maybe the first one.

Speaker Change: There's been a lot of changes at the organization.

Speaker Change: Revenues came in line with the street, OPEX guidance moving up just a touch here I would imagine on the new hires.

Jared Oasheim: You know, maybe walk us through the pathway to profitability here and how do you get revenues high enough for expenses low enough to start generating free cash flow?

Speaker Change: You know, maybe walk us through the pathway to profitability here and how do you get revenues high enough or expenses low enough to start generating free cash flow and when do you think that might happen?

Jared Oasheim: And when do you think that might happen?

Jared Oasheim: Hi, Robbie. This is Jared. Thanks for the question. Yeah, I'm happy to take that one. So, as you know, the model has been built to where we're adding more individuals out into the US sales force, training them up over time, having them activate centers and getting them more and more productive with more and more experience. and so while we haven't drawn a line in the sand to say when we will reach break even, our models are still built to show that we will continue to see increased productivity out of each one of these sales territories that we continue to add on a quarterly basis to allow us to reach that break even points before we would have to go back and raise capital.

Jared Oasheim: Hi Robbie, this is Jared. Thanks for the question. Yeah, I'm happy to take that one.

Speaker Change: Hi Robbie, this is Jared. Thanks for the question. Yeah, I'm happy to take that one. So, as you know, the model has been built to where we're adding more individuals out into the U.S. sales force, training them up over time, having them activate centers, and getting them more and more productive with more and more experience.

Jared Oasheim: So, as you know, the model has been built to where we're adding more individuals to the US sales force, training them up over time, having them activate centers, and getting them more and more productive with more and more experience. And so while we haven't drawn a line in the sand to say when we will reach breakeven, our models are still built to show that we will continue to see increased productivity out of each one of these sales territories that we continue to add on a quarterly basis to allow us to reach that breakeven point before we would have to go back and raise capital.

Speaker Change: And so, while we haven't drawn a line in the sand to say when we will reach break-even, our models are still built to show that we will continue to see increased productivity out of each one of these sales territories that we continue to add on a quarterly basis.

Speaker Change: to allow us to reach that breakeven point before we would have to go back and raise capital.

Jared Oasheim: The reason we haven't drawn a line in the sand to talk about what level of revenue we cross that threshold is because we want the opportunity to make decisions as we grow this business, whether to invest at a faster pace and hire more reps to result in more territories added on a quarterly basis or continue with the same pace where we're adding about three territories on a quarterly basis. So while we had, you know, a bit of a step back in the first quarter, we viewed it as a bit of a push from Q1 to Q2 to be able to go and deliver the revenue levels that we did here in the second quarter.

Jared Oasheim: The reason we haven't drawn a line in the sand to talk about what level of revenue we will cross that threshold is because we want the opportunity to make decisions as we grow this business, whether to invest at a faster pace and hire more reps to result in more territories added on a quarterly basis or continue at the same pace where we're adding about three territories on a quarterly basis. So while we had, you know, a bit of a step back in the first quarter, we viewed it as a bit of a push from Q1 to Q2 to be able to go out and deliver the revenue levels that we did here in the second quarter.

Speaker Change: The reason we haven't drawn a line in the sands to talk about what level of revenue we cross that threshold is because we want the opportunity to make decisions as we grow this business, whether to invest at a faster pace,

Speaker Change: and hire more reps to result in more territories added on a quarterly basis, or continue at the same pace where we're adding about three territories on a quarterly basis.

Speaker Change: So while we had, you know, a bit of a step back in the first quarter, we viewed it as a bit of a push from Q1 to Q2 to be able to go out and deliver the revenue levels that we did here in the second quarter.

Jared Oasheim: And then when I think about the reimbursement changes, you know how do you want us to model revenues going forward? Should that come down in line with the percentage change of reimbursement, or are there other ways that you think you can offset that to not have the ASPs go down. Thanks.

Jared Oasheim: And then when I think about the reimbursement changes, you know, how do you want us to model revenues going forward? Should that come down in line with the percentage change of reimbursement? Are there other ways that you think you can offset that? to not have the ASP. Yeah, I'm going to take a moment and

Speaker Change: um

Speaker Change: And then when I think about the reimbursement changes, you know, how do you want us to model revenues going forward? Should that come down in line with the percentage change of reimbursement, or are there other ways that you think you can offset that?

Jared Oasheim: Yeah, I'm going to take a moment and just step back and remind people where we've been on the reimbursement landscape before I kind of dive into that second part of that question, Robbie. So if everybody remembers about a year ago, the proposed rule came out for the outpatient setting in July of 23, and they had us mapped in this exact same spot where we would be coded to APC 5465 at the beginning of 2024. Which would then turn reimbursement to the hospitals to be about $30,000 January 1st, 2024. Once we received that proposed rule, we took the steps to gather the data, understand the average cost being submitted to CMS for this specific procedure, and brought that in front of a CMS panel of physicians in mid to late August last year.

Jared Oasheim: Yeah, I'm going to take a moment and just step back and remind people where we are on the reimbursement landscape before I kind of dive into that second part of that question, Robbie. So, if everybody remembers about a year ago, the proposed rule came out for the outpatient setting on July 23, and they had us mapped in this exact same spot where we would be coded to APC 5465 at the beginning of 2024, which would then turn reimbursement to the hospitals to be about $30,000 on January 1st, 2024.

Speaker Change: to not have the ASPs go down. Thanks.

Speaker Change: Yeah, I'm going to take a moment and just step back and remind people where we've been on the reimbursement landscape before I kind of dive into that second part of that question, Robbie. So, if everybody remembers about a year ago, the proposed rule came out for the outpatient setting in July of 23.

Speaker Change: And they had us mapped in this exact same spot where we would be coded to APC 5465 at the beginning of 2024, which would then turn reimbursement to the hospitals to be about $30,000 January 1st, 2024.

Jared Oasheim: Once we received that proposed rule, we took the steps to gather the data, understand the average costs being submitted to CMS for this specific procedure, and brought that in front of a CMS panel of physicians in mid to late August last year. As part of that process, there is a non-binding vote where physicians make a recommendation to CMS where the individuals or where the procedure should be mapped from a payment perspective. And the result of that non-binding vote was 5-0 in our favor to be mapped to a New Tech APC 1580. The final rule was released in November of 2023 that did exactly that.

Speaker Change: Once we received that proposed rule, we took the steps.

Speaker Change: To gather the data, understand the average costs being submitted to CMS for this specific procedure.

Speaker Change: And brought that in front of a CMS panel of physicians in mid to late August last year. As part of that process, there is a non-binding vote where the physicians make a recommendation to CMS where the individuals or where the procedure should be mapped from a payment perspective.

Jared Oasheim: As part of that process, there is a non-binding vote where the physicians make a recommendation to CMS where the individuals or where the procedure should be mapped from a payment perspective. And the result of that non-binding vote was 50 in our favor to be mapped to a new tech APC 1580. The final rule was released in November of 2023 that did exactly that. They had us mapped to APC 1580. Reimbursement on average to hospitals in an outpatient setting was then $45,000 starting January 1, 2024. Now, as we move into 2024, the data around the cost being submitted to hospitals is as good or better than what we had seen in the past: same levels of costs, just with higher volumes.

Speaker Change: And the result of that non-binding vote was 5-0 in our favor to be mapped to a NewTek APC 158-0.

Speaker Change: The final rule was released in November of 2023 that did exactly that. They had us map to APC 1580 reimbursement on average to hospitals in an outpatient setting was then $45,000 starting January 1, 2024.

Jared Oasheim: They had us mapped to APC 1580. Reimbursement on average to hospitals in an outpatient setting was then $45,000 starting January 1, 2024. Now, as we move into 2024, the data around the costs being submitted to hospitals is as good or better than what we have seen in the past. The same levels of costs, just with higher volume.

Speaker Change: Now, as we move into 2024, the data around the costs being submitted to hospitals is as good or better than what we had seen in the past. The same levels of costs, just with higher volumes.

Jared Oasheim: So while a little surprised by the proposed rule, we now know the process that we went through last year to bring this data back to the physician panel group and then hopefully end up with a more positive outcome again as we get into November. As far as the long-term model goes, we're gonna hold off on making any changes to our models at this point in time. We believe the costs being submitted to CMS do support us being mapped to NewTek APC 1580 for at least another year, if not the creation of a level six NeuroSTIM code that would reimburse about the same level.

Jared Oasheim: So, well, a little surprised by the proposed rule. We now know the process that we went through last year to bring this data back to the physician panel group. And then hopefully end up with a more positive outcome again as we get into November.

Speaker Change: So, while a little surprised by the proposed rule, we now know the process that we went through last year to bring this data back to the physician panel group and then hopefully end up with a more positive outcome again as we get into November .

Jared Oasheim: As far as the long term model goes, we're going to hold off on making any changes to our models at this point in time. We believe the costs being submitted to CMS do support us being mapped to new tech APC 1580 for at least another year. If not the creation of a level 6 neuro stem code that would reimburse about the same level. So I think once we see the final rule in November, then we can have more conversations about what impact it could have to the long term model. But you know, in general, we've seen other neuro stem devices pricing their products in the mid 20,000s when mapped APC 5465.

Speaker Change: As far as the long-term model goes, we're going to hold off on making any changes to our models at this point in time.

Speaker Change: We believe the costs being submitted to CMS do support us being mapped to New Tech APC 1580 for at least another year, if not, the creation of a Level 6 NeuroSTEM code that would reimburse about the same level.

Jared Oasheim: So I think once we see the final rule in November, then we can have more conversations about what impact it could have on the long-term model. But in general, we've seen other NeuroSTIM devices pricing their products in the mid 20,000s when mapped to APC 5465.

Speaker Change: So, I think once we see the final rule in November , then we can have more conversations about what impact it could have to the long-term model, but, you know, in general, we've seen other NeuroStim devices pricing their products in the mid-20,000s when mapped to APC5465.

Robbie Marcus: Great. Thanks. Thank you.

Matthew O'brien: Our next question is from the line of Matthew O'Brien with Piper Sandler. Please go ahead.

Speaker Change: Great, thank you.

Operator: Our next question is from the line of Matthew O'Brien with Piper Sandler. Please go ahead.

Speaker Change: Thank you. Our next question is from the line of Matthew O'Brien with Piper Sandler. Please go ahead.

Matthew O'brien: Afternoon, thanks for taking the questions. I don't know if this is for Kevin or for Jared, but just the back half guide here assumes a pretty nice step up, Q2 to Q3, Q3 to Q4, better than what we've seen in the past. Just talk a little bit about the comfort level in getting to that guide, especially, and I think, Kevin, what you're kind of saying is, we're going to circle the wagons, we're going to really focus on existing centers that we do well with versus expanding into new ones. You know, is that the message? And, and, you know, how do we think about your ability to, again, hit these guidance numbers if you're?

Matthew O'brien: Thank you. Thanks for taking that question.

Matthew O'brien: I don't know if this is for Kevin or for Jared, but just the back half guide here assumes a pretty nice step up. Q2 to Q3, Q3 to Q4, better than what we've seen in the past. Just talking a little bit about the comfort and getting to that guide, especially, and I think Kevin what you're kind of saying is we're going to circle the wagons. We're going to really focus on existing centers that we do well with versus expanding into new ones. You know, is that the message, and, you know, how do we think about your ability to, again, hit these guidance numbers if you're kind of doing that?

Matthew O'brien: Afternoon, thanks for taking the questions. I don't know if this is for Kevin or for Jared, but just the back half guide here assumes a pretty nice step up, Q2 to Q3, Q3 to Q4, better than what we've seen in the past.

Speaker Change: Just talk a little bit about the comfort in getting to that guide especially and I think Kevin what you're kind of saying is

Speaker Change: We're going to circle the wagons. We're going to really focus on existing centers that we do well with versus expanding into new ones. Is that the message? And how do we think about your ability to, again, hit these guidance numbers if you're kind of doing that?

Kevin Hykes: Yeah, no, thank you for that question, Matt. You know, we are in fact focusing more certainly this quarter, and I think through the rest of the year, driving utilization in our existing accounts, doing more of that and doing it better. And perhaps less so on opening new accounts in the short term.

Kevin Hykes: Yeah, no, thank you for that question, Matt. You know, we are, in fact, focusing more, certainly this quarter and I think through the rest of the year, driving utilization in our existing accounts, doing more of that and doing it better, and perhaps less so on opening new accounts in the short term. Maybe to give you a little bit of color, I'll take just a step back for some context here. You know, we're making a pretty typical transition here at CVRx from sort of an early stage, first chapter of commercialization into one that's more widespread and one that's more informed by what we've learned.

Kevin Hykes: Yeah, no, thank you for that question, Matt. You know, we are, in fact, focusing more, certainly this quarter, and I think through the rest of the year, driving utilization in our existing accounts, doing more of that and doing it better, and perhaps less so on opening new accounts in the short term.

Kevin Hykes: Maybe to give you a little bit of color. I'll take it just a step back for some context here. You know, we're making a pretty typical transition here at CBRX from sort of an early stage, first chapter of commercialization into one that's more widespread and one that's more informed by what we've learned. And that's one of the reasons that I was brought here by Nadeem at this point, given that’s something I've done throughout my career. And so we're now, with the help of our new executive team, to be a very careful look at what we've accomplished and what we can learn from that first chapter.

Kevin Hykes: Maybe to give you a little bit of color, I'll take just a step back.

Kevin Hykes: There's some context here. You know, we're making a pretty typical transition here at CVRx from sort of an early stage.

Kevin Hykes: And that's one of the reasons that I was brought here by Nadim at this point, given that it's something I've done throughout my career. And so we're now, with the help of our new executive team, taking a very careful look at what we've accomplished and what we can learn from that first chapter. And, you know, it's often the case. We tried a lot of things, as we should have. We tried, we approached a lot of different types of positions, a lot of different types of accounts to understand how this therapy would best be supported and ultimately adopted.

Nadim: first chapter of commercialization into one that's more widespread and one that's more informed by what we've learned. And that's one of the reasons that I was brought here by Nadim at this point, given that's something I've done throughout my career. And so we're now, with the help of our new executive team, taking a very careful look at

Kevin Hykes: And, you know, this is often the case. We tried a lot of things, as we should have. We tried; we approached a lot of different types of positions, a lot of different types of accounts to understand how this therapy will best be supported and ultimately adopted. So now, as we dig through that and understand what makes the good accounts really good and what causes differences in utilization across the different types of accounts, that's really important. So we're applying that now as we head into the path of a year and think we're starting to see some patterns and an understanding of why adoption is really strong in the best of our accounts or commitments to do more of that in lieu of approaching a significant number of new accounts at least in this period.

Nadim: at what we've accomplished and what we can learn from that first chapter. And, you know, this is often the case.

Nadim: We tried a lot of things, as we should have, we approached a lot of different types of physicians, a lot of different types of accounts to understand how this therapy will best be supported and ultimately adopted.

Jared Oasheim: So now, as we dig through that and understand what makes the good accounts really good and what causes differences in utilization across the different types of accounts, that's really important. So we're applying that now as we head into the back half of the year and think we're starting to see some patterns and an understanding of why adoption is really strong in the best of our accounts. So our commitment is to do more of that in lieu of approaching a significant number of new accounts, at least in this period.

Nadim: So now as we dig through that and understand what makes the good accounts really good, and what causes differences in utilization across the different types of accounts.

Nadim: That's really important. So we're applying that now as we head into the back half of the year and think we're starting to see some patterns and an understanding of why adoption is really strong in the best of our accounts. So our commitment is to do more of that.

Nadim: In lieu of approaching a significant number of new accounts, at least in this period.

Jared Oasheim: And maybe Matt, I'll just kind of add on to the first part of your question as well is, you know, the guide that we put together for the third quarter and then, you know, for the full year at this point, it was really based on some of the investments we've made in the first half of the year with Kevin coming on board, seeing stabilization of the sales force through the interim leadership and the new leaders that we've been adding. We feel like we have a lot of assets that have been added in the first six months.

Jared Oasheim: And maybe Matt, I'll just kind of add to the first part of your question as well. The guide that we put together for the third quarter and then, you know, for the full year at this point, it was really based on some of the investments we've made in the first half of the year. With Kevin coming on board, seeing stabilization of the sales force through the interim leadership, and the new leaders that we've been adding, we feel like we And now we're feeling pretty good about our ability to go out and see utilization pick up at some of these high potential accounts in the back.

Nadim: And maybe Matt, I'll just kind of add on to...

Matt: to the first part of your question as well is, you know, the guide that we put together for the third quarter and then, you know, for the full year at this point, it was really based on some of the investments we've made in the first half of the year with Kevin coming on board, seeing stabilization of the sales force through the interim leader leadership and the new leaders that we've been adding. We feel like we have a lot of assets that have been added in the first six months.

Jared Oasheim: And now we're feeling pretty good about our ability to go out and see utilization pickup at some of these high potential accounts in the back half of the year.

Speaker Change: And now we're feeling pretty good about our ability to go out and see utilization pick up at some of these high potential accounts in the back half of the year.

Matthew O'brien: Okay, fair enough.

Matthew O'brien: Okay, fair enough. And then just to take Robbie's question to, I guess, the next step, and Kevin, you're kind of introducing this inpatient opportunity. If the proposed outpatient rule comes back in, they're really saying no, we're sticking with this $31,000 reimbursement rate. Is there an opportunity to shift quickly to the inpatient side and not see as much pricing pressure as a result of that? Or is that just... far too aggressive?

Matthew O'brien: And then just to take Rob, these questions to I guess the next step in Kevin, you're kind of introducing this inpatient opportunity. If the proposed outpatient rule comes back in there, they're really saying no, we're sticking with this $31,000 reimbursement rate. Is there an opportunity to shift quickly to the inpatient side and not see as much pricing pressure as a result of that, or is that just. Just far too aggressive. I don't know mechanistically how easy it would be to do something like that. Sure, well, you know, thanks.

Speaker Change: Okay, fair enough. And then just to take Robby's question to, I guess, the next step. And Kevin, you're kind of introducing this inpatient opportunity.

Speaker Change: If the proposed outpatient rule comes back and they're really saying, no, we're sticking with this $31,000.

Speaker Change: Reimbursement rate. Is there an opportunity to shift quickly to the inpatient side and not see as much pricing pressure as a result of that? Or is that just just far too aggressive? I don't know mechanistically how easy it would be to do something like that.

Kevin Hykes: I don't know mechanistically how easy it would be to do something like that. Sure, that's a great question, Matt. You know, the short answer is we cannot and will not influence the site of service. So we cannot ourselves shift or even wink or nod where physicians might treat patients. Our goal is to make sure that the therapy is and the hospitals and physicians themselves are appropriately reimbursed, whether they choose to do it in the inpatient setting or the outpatient setting.

Kevin Hykes: That's a great question, Matt. You know, the short answer is we cannot and will not influence side of service. So we cannot ourselves shift or even wink or nod where physicians might treat patients.

Speaker Change: Sure, you know, thank you. That's a that's a great question, Matt. You know, the short answer is we we cannot and will not influence site of service. So we cannot ourselves

Kevin Hykes: Our goal is to make sure that the therapy is and the hospitals and physicians themselves are appropriately reimbursed, whether they choose to do it in the inpatient setting or the outpatient setting. It's a little paradoxical that the inpatient rule would have us moving from 23,000 up to 45 or 6,000 at the same time that there's this noise on the OPP side. But, you know, we would support physicians in their decision making regardless of where they would choose to treat a patient if that results in a shift in the mix. We're ready to support it, but certainly we wouldn't want to influence that.

Speaker Change: shift or even wink or nod where physicians might treat patients. Our goal is to make sure that the therapy is and the hospitals and physicians themselves are appropriately reimbursed, whether they choose to do it in the inpatient setting or the outpatient setting.

Kevin Hykes: It's a little paradoxical that the inpatient rule would have us moving from 23,000 up to 45 or 6,000 at the same time that there's this noise on the OPPS side. But, you know, we would support physicians in their decision-making regardless of where they would choose to treat a patient. If that results in a shift in the mix, we're ready to support it, but certainly we wouldn't want to influence that.

Speaker Change: It's a little paradoxical that the inpatient rule would have us moving from 23,000 up to 45,000 or 6,000.

Speaker Change: At the same time that there's this noise on the OPPS side, but, you know, we would support physicians and their decision making regardless where they would choose to treat a patient. If that results in a shift in the mix, we're ready to support it, but certainly we wouldn't want to influence that.

Operator: Thank you. Our next question is from the line of Margaret Karcher Andrew. Please go ahead.

Margaret Kachau Andrew: Our next question is from the line of Margaret Kachau Andrew. Please go ahead.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question is from the line of Margaret Karcher Andrew. Please go ahead.

Margaret Kachau Andrew: Hi, good afternoon, guys. Thanks for taking the question. I wanted to maybe go a little bit deeper in utilization per count to the extent you can give it maybe on a monthly basis or like at our conference in June. You said you saw some good month-over-month improvement in May. Have you continued to see that improvement in July?

Malgorzata Maria Kaczor Andrew: Good afternoon, guys. Thanks for taking the time to answer the question. I wanted to maybe go a little bit deeper on utilization per count to the extent you can give it maybe on a monthly basis. I think at our conference in June, you had said you saw some good month-over-month improvement in May. Have you continued to see that improvement in July? And then, again, taking that a step further into guidance throughout 2024, what is the implied Q4 utilization per center that you guys are adopting? And how does that lead into 2025?

Speaker Change: Hi, good afternoon guys. Thanks for taking my question.

Speaker Change: I wanted to maybe go a little bit deeper in utilization per count to the extent you can give it maybe on a monthly basis. I think at our conference in June , you had said you saw some good month-over-month improvement in May. Have you continued to see that improvement in July and then, you know, again, taking that a step further into guidance throughout 2024, you know, what is the implied Q4, you know, utilization per center that you guys are adopting?

Margaret Kachau Andrew: And then, you know, again, taking that a step further into guidance throughout 2024. You know, what is the implied cue for, you know, utilization per center that you guys are adopting, and how does that lead into 2025, I guess.

Speaker Change: And how does that lead into 2025, I guess?

Jared Oasheim: Hi, Margaret. Yeah, I'm happy to kind of break down that the two buckets here. So first, you know, we talked about the momentum we had seen starting in March, carrying through into the second quarter. And then again in Kevin's prepared remarks, talking about seeing some continued momentum in the month of July. All of that's obviously factored into the guidance that we put together for the third quarter and then for the full year guide that, you know, we put out again. We reiterated just today. And so when we look at utilization, when we look at account ads, we know the vast majority of the revenue generated is from the existing account base, with some new accounts coming on board, treating a couple of patients and then kind of sitting back and waiting, seeing the results.

Jared Oasheim: Hi Margaret. Yeah, I'm happy to kind of break down the two buckets here. So first, you know, we talked about the momentum we had seen, starting in March, carrying through into the second quarter. And then again, in Kevin's prepared remarks, talking about seeing some continued momentum in the month of July. All of that's obviously factored into the guidance that we put together for the third quarter and then for the full year guidance that, you know, we put out again, and we reiterated just today.

Speaker Change: Hi, Margaret. Yeah, I'm happy to kind of break down the two buckets here. So first, you know, we talked about the momentum we had seen starting in March, carrying through into the second quarter. And then again, in Kevin's prepared remarks, talking about seeing some continued momentum in the month of July .

Kevin Hykes: All of that's obviously factored into the guidance that we put together for the third quarter and then for the full year guide that, you know, we put out again, we reiterated just today.

Jared Oasheim: And so when we look at utilization, when we look at account ads, we know the vast majority of the revenue generated is from the existing account base, with some new accounts coming on board, treating a couple of patients, and then kind of sitting back and waiting and seeing the results. So when we look at the guide for Q3, specifically, we're looking at utilization rates increasing back to levels similar to what we saw in 2023 on a per account basis.

Speaker Change: And so when we look at utilization, when we look at account ads, we know the vast majority of the revenue generated is from the existing account base, with some new accounts coming on board, treating a couple of patients, and then kind of sitting back and waiting and seeing the results.

Jared Oasheim: So when we look at the guide for Q3 specifically, we're looking at utilization rates increasing back to levels similar to what we saw in 2023 on a per account basis. So revenue units per AIC outstanding. As far as for the fourth quarter, I think again, you know, without getting into the specifics, we're talking about all of the positive momentum that we've seen in the positive assets that we've added in the first half of the year. That gives us confidence that we're able to go out and continue to grow this business and see some pretty good results in that final quarter of the year.

Speaker Change: So when we look at the guide for Q3 specifically, we're looking at utilization rates increasing back to levels similar to what we saw in 2023 on a per account basis. So revenue units per AIC are outstanding.

Jared Oasheim: So revenue units per AIC outstanding are calculated. As far as for the fourth quarter, I think, again, without getting into the specifics, we're talking about all of the positive momentum that we've seen in the positive assets that we've added in the first half of the year that gives us confidence that we're able to go out and continue to grow this business and see some pretty good results in that final quarter of the year.

Speaker Change: As far as for the fourth quarter, I think again, you know, without getting into the specifics, we're talking about all of the positive momentum that we've seen in the positive assets that we've added in the first half of the year.

Speaker Change: that give us confidence that we're able to go out and continue to grow this business and see some pretty good results in that final quarter of the year.

Malgorzata Maria Kaczor Andrew: Okay. And so, you know, I have two follow-up questions. One, you know, in that scenario, are you going to keep adding the accounts that you've kind of referenced in the past still, you know, something in that kind of 13, 15 plus account or new center per quarter range? And then, you know, one of the other things we've spoken about is the interest driven by the new C-suite edition. So maybe that's part of the thought process.

Margaret Kachau Andrew: Okay, and so, you know, if I guess to follow questions one, you know, in that scenario, are you going to keep adding the accounts that you've kind of referenced in the past, still, you know, something in the in that kind of 1315 plus account or new center per quarter range. And then, you know, one of the other things we've spoken about is the interest driven by the new C-suite addition. So maybe that's part of the thought processes. You guys are also saying a lot of interest external age is to be brought in in the CMO, you know, new head of sales, et cetera.

Speaker Change: Okay. And so, you know, I guess two follow-up questions. One, you know, in that scenario, are you going to keep adding the accounts that you've kind of referenced in the past still, you know, something in that kind of 13, 15 plus account or new center per quarter range?

Speaker Change: And then, you know, one of the other things we've spoken about is the interest driven by the new C-Suite edition. So maybe that's part of the thought process. You guys are also saying a lot of interest externally, just as you've brought in a new CMO, you know, new head of sales, etc. And can you give us some metrics around that?

Malgorzata Maria Kaczor Andrew: You guys are also saying a lot of interest externally, just as you've brought in a new CMO, you know, new head of sales, etc. And can you give us some metrics around that as a leading indicator for that?

Margaret Kachau Andrew: And can you give us some metrics around that? as a leading indicator into 25. Yeah, so we do still have a funnel of accounts that are going through the activation process. We've always talked about the uncertainty of when they would actually treat that first patient and actually become an active account. But I think back to Kevin's prepared remarks; our focus is really turning towards driving utilization at a lot of these active centers, especially the high potential centers that have already treated patients and are already on contract.

Jared Oasheim: Yeah, so we do still have a funnel of accounts that are going through the activation process. We've always talked about the uncertainty of when they would actually treat that first patient and actually become an active account. But I think back to Kevin's prepared remarks, our focus is really turning towards driving utilization at a lot of these active centers, especially the high-potential centers that have already treated patients and are already on contract.

Speaker Change: as a leading indicator into 2025.

Kevin Hykes: Yeah, so we do still have a funnel of accounts that are going through the activation process. We've always talked about the uncertainty of when they would actually treat that first patient and actually become an active account. But I think back to Kevin's prepared remarks, our focus is really turning towards driving utilization at a lot of these active centers, especially the high potential centers that have already treated patients and are already on contract. So when I think back to what we've seen historically for new account ads on a quarterly basis,

Jared Oasheim: So when I think back to what we've seen historically for new account ads on a quarterly basis, I don't know that we're necessarily setting an expectation for a significant number of net new ads for the rest of this year, but rather turning our focus towards driving utilization at the active accounts. That being said, there are accounts in the funnel going through the process to be activated. It's just the vast majority of the revenue that we're going to be generating here in the third and fourth quarter are from the accounts that are already active.

Jared Oasheim: So when I think back to what we've seen historically for new account ads on a quarterly basis, I don't know that we're necessarily setting an expectation for a significant number of net new ads for the rest of this year but rather turning our focus towards driving utilization at the active accounts. That being said, there are accounts in the funnel going through the process to be activated. It's just that the vast majority of the revenue that we're going to be generating here in the third and fourth quarters will be from accounts that are already active.

Kevin Hykes: I don't know that we're necessarily setting an expectation for a significant number of net new ads for the rest of this year, but rather turning our focus towards driving utilization at the active accounts.

Kevin Hykes: That being said, there are accounts in the funnel going through the process to be activated. It's just the vast majority of the revenue that we're going to be generating here in the third and fourth quarter are from the accounts that are already active.

Kevin Hykes: And maybe I could, Margaret, I can, I think address what your second question is. You know, obviously we're, as you heard in my prepared remarks, thrilled at the quality and strength of these new executives and particularly pleased at the speed with which they've engaged. And, you know, I don't know that we could put a number on the sort of the impact that, you know, Dr. Adamson, our chief met law officer, or Robert John, our new sales leader, they've both been in the heart failure space for many, many years. There's almost no one that they don't know.

Kevin Hykes: And maybe I could, Margaret, I can, I think, address your second question. You know, obviously, we're, as you heard in my prepared remarks, thrilled at the quality and strength of these new executives. And I'm particularly pleased at the speed with which they've engaged. And, you know, I don't know that we could put a number on the sort of impact that, you know, Dr. Adamson, our Chief Medical Officer, or Robert John, our new sales leader, have both been in the heart failure space for many, many years. There's almost no one that they don't know.

Kevin Hykes: And maybe I could, Margot.

Kevin Hykes: And maybe I could, Margaret, I can I think address what your second question is. You know, obviously we're, as you heard in my prepared remarks, thrilled at

Speaker Change: Unknown Executive, Mike Vallie, Kevin Hykes

Speaker Change: You know, Dr. Adamson, our Chief Medical Officer, or Robert John , our new sales leader, they've both been in the heart failure space for many, many years. There's almost no one that they don't know.

Kevin Hykes: So the qualitative response has been very positive and overwhelming at certain points, which I would imagine is obviously going to help our business in the long term. You know, what I would also say, so I couldn't put a number on that, but the other piece that's, I think, very helpful is Bonnie Hankey, who joins us from a very, very senior role at Medtronic, has deep relationships in Washington and within the industry and is bringing a whole new level of access and influence to our efforts on the reimbursement front. So, again, hard to quantify that, but obviously a net positive in terms of moving this therapy forward. Okay. Thanks, guys.

Kevin Hykes: So the qualitative response has been very positive and overwhelming at certain points, which I would imagine is obviously going to help our business in the long term.

Speaker Change: So the qualitative response has been very positive and overwhelming at certain points.

Kevin Hykes: You know, what I would also say, so I couldn't put a number on that, but the other piece that's, I think, very helpful, Bonnie Tanki, who joins us from a very, very senior role at Metronik, has deep relationships in Washington and within the industry and is bringing a whole new level of access and influence to our efforts on the reimbursement front. So, again, hard to quantify that, but obviously in that positive in terms of moving this therapy forward.

Speaker Change: which I would imagine is obviously going to help our business in the long term. You know, what I would also say, so I couldn't put a number on that, but the other piece that's, I think, very helpful, Bonnie Hanke, who joins us from a very, very senior role at Medtronic, has deep relationships.

Speaker Change: in Washington and within the industry and is bringing a whole new level of access and influence to our efforts on the reimbursement front. So again, hard to quantify that, but obviously a net positive in terms of moving this therapy forward.

Margaret Kachau Andrew: Thanks, guys. Thank you.

Bill Plohaneck: Our next question is from the line of Bill Plohaneck with Canacor General VT. Please go ahead.

Speaker Change: Okay, thanks guys.

Operator: Our next question is from the line of Bill Plovanic with Canaccord Genuity. Please go ahead. Ladies and Gentlemen, the line has been dropped. We move on to our next question, which is from the line of Frank Takkinen with Lake Street Capital Market. Please go ahead.

Speaker Change: Thank you. Our next question is from the line of Bill Plovanic with Canaccord Genuity. Please go ahead.

Operator: Ladies and gentlemen, the line has been dropped.

Frank Taken: We move on to our next question, which is from the line of Frank Taken with Lake Street Capital Market.

Speaker Change: Ladies and gentlemen, the line has been dropped. We move on to our next question which is from the line of Frank Takkinen with Lake Street Capital Market. Please go ahead.

Frank Taken: Please go ahead. All right. Thanks, taken the questions. I was hoping we can talk about sales work just a little bit more. I don't know if you guys have disclosed this in the past or are comfortable in doing so, but maybe talking to the mix of more senior reps. I don't know how you define that exactly. Maybe with the company one to three years, fully scaled versus maybe some of the newer reps, and we'll define those as maybe less than with the company for less than six months. What's that mix look like? And how is that ramp of new reps been trending since Q1?

Frank James Takkinen: Alright, thanks for taking the questions. I was hoping we could talk about Salesforce just a little bit more. I don't know if you guys have disclosed this in the past, or you're comfortable doing so, but maybe talking to the mix of more senior reps. I don't know how you define that exactly, maybe with the company one to three years fully scaled versus maybe some of the newer reps, and we'll define those as maybe less than with the company for less than six months. What's that mix look like, and how has that ramp of new reps been trending since Q1?

Frank James Takkinen: Alright, thanks for taking the questions. I was hoping we could talk about Salesforce just a little bit more. I don't know if you guys have disclosed this in the past or you're comfortable in doing so, but maybe...

Speaker Change: Talking to the mix of more senior reps, I don't know how you define that exactly, maybe with the company one to three years, fully scaled.

Speaker Change: versus maybe some of the newer reps and we'll define those as maybe less than with the company for less than six months. What's that mix look like? And how is that ramp of new reps been trending since Q1?

Jared Oasheim: Hi, Frank. Thanks for the question. Yeah, we don't typically disclose the tenure of the reps as they've come up to speed. We did mention that we had some people have taken over territories in the first quarter and getting them up to speed.

Jared Oasheim: Hi Frank. Thanks for the question. Yeah, we don't typically disclose the tenure of the reps as they've come up to speed. But we did mention that we had some people taking over territories in the first quarter and getting them up to speed. I think the thing we'd like to highlight is that the reps that we are hiring here in 2024 are really high-quality individuals, getting up to speed and getting through their training programs at a really quick pace, to the point where they can get out in the field and start making a difference here as we get to the back half of this year. But yeah, we typically don't disclose the tenure or the breakdown of the different reps.

Speaker Change: Hi, Frank. Thanks for the question. Yeah, we don't typically disclose the tenure of the reps as they've come up to speed. We did mention

Speaker Change: that we had some people taking over territories in the first quarter and getting them up to speed. I think the thing we'd like to highlight is really the reps that we are hiring here in 2024 are really high quality individuals.

Jared Oasheim: I think the thing we'd like to highlight is really the reps that we are hiring here in 2024 are really high quality individuals getting up to speed and getting through their training programs at a really quick pace to the point where they can get out in the field and start making a difference here as we get to the back half of this year. But yeah, we typically don't disclose the tenure or the breakout of the. Okay, fair enough.

Speaker Change: Getting up to speed and getting through their training programs on at a really quick pace To the point where they can get out in the field and start making a difference here as we get to the back half Of this year, but but yeah, we typically don't disclose the the tenure or the breakout of the different reps

Frank James Takkinen: Okay, fair enough. And then maybe switching gears a little bit and talking about Medicare Advantage or commercial coverage or commercial coverage, maybe talk about those two initiatives, maybe what's in the works there from an investment perspective to start establishing some of those policies? And how could we see that impact the reimbursement landscape in 2025?

Frank Taken: And then maybe switching gears a little bit and talking about Medicare Advantage or commercial coverage or and commercial coverage. Maybe talk about those two initiatives, maybe what's in the works there for an investment perspective to start establishing some of those policies and how could we see that impact the reimbursement landscape in 2025? Yeah, so thanks, Frank. It's Kevin.

Speaker Change: Okay, fair enough. And then maybe switching gears a little bit and talking about Medicare Advantage or commercial coverage or and commercial coverage, maybe talk about those two initiatives, maybe what's

Speaker Change: what's in the works there from an investment perspective to start establishing some of those policies and how could we see that impact the reimbursement landscape in 2025.

Kevin Hykes: Yeah, so thanks Frank, it's Kevin. So obviously, Bonnie is rolling up her sleeves after five or six weeks on the job. We have begun a significant outreach effort with the commercial payers through her team to try to establish more consistent coverage. So that's in its early stages, but we're pleased at least with the reactions we're getting. You know, as it relates to supporting Medicare Advantage or commercial prior authorizations for that matter, we have a very robust in-house prior authorization function that's part of the Baristim Connect program that has had, I think, surprising success both with commercial payers and with Medicare Advantage in supporting and appealing and ultimately winning patient prior authorization requests.

Kevin Hykes: So obviously, Bonnie is rolling up her sleeves after five or six weeks on the job. We have begun a significant outreach effort with the commercial payers through her team to try to establish more consistent coverage. So that that's in its early stages, but we're pleased at least with the reactions we're getting. You know, as it relates to supporting Medicare Advantage or commercial prior authorizations for that matter, we have a very robust in-house prior authorization function that's part of the Barristan Connect program that has had, I think, surprising success both with commercial payers and with Medicare Advantage supporting and appealing and ultimately winning patient prior authorization requests.

Speaker Change: Yeah, so thanks Frank, it's Kevin. So obviously Bonnie is rolling up her sleeves after five or six weeks on the job. We have begun...

Bonnie Hanke: Significant outreach effort with the commercial payers through her team to try to establish more consistent coverage.

Bonnie Hanke: So that's in its early stages, but we're pleased at least with the reactions we're getting.

Speaker Change: As it relates to supporting Medicare Advantage or commercial prior authorizations, for that matter, we have a very robust in-house prior authorization function that's part of the Baristim Connect program.

Bonnie Hanke: that has had, I think, surprising success both with commercial payers and with Medicare Advantage.

Bonnie Hanke: supporting and appealing and ultimately winning patient prior authorization requests. So, you know, I think we're pleased with what we're seeing. We're bringing newfound experience and

Kevin Hykes: So, you know, I think we're pleased with what we're seeing. We're bringing newfound experience and engagement to bear on both those sides, as well as our interactions with Medicare and the MAX. So, we're pleased at what we're seeing.

Kevin Hykes: So, you know, I think we're pleased with what we're seeing. We're bringing newfound experience and engagement to bear on both those sides, as well as in our interactions with Medicare and the MAPS.

Bonnie Hanke: Engagement to bear on both those sides as well as our interactions with Medicare and the max. So we're pleased at what we're seeing

Frank Taken: Perfect, I'll stop there. Thanks, Jane.

Frank James Takkinen: Perfect. I'll stop there. Thanks for taking the questions.

Frank Taken: The question. Thank you.

Bonnie Hanke: Perfect. I'll stop there. Thanks for taking the questions.

Bill Plohaneck: Our next question is from the line of Bill Plohaneck with Canakor Generity. Please go ahead. Great. Thanks. Good evening.

Operator: Our next question is from the line of Bill Plovanic with Canaccord Genuity. Please go ahead.

Speaker Change: Thank you.

Speaker Change: Our next question is from the line of Bill Plovanic with Canaccord Genuity. Please go ahead.

William John Plovanic: Great, thanks. Good evening.

Bill Plohaneck: You think I'd be able to work a phone at this age. So, my question is just one: you know, you obviously, your accounts went backwards, and I'm just curious if that is due to lots of sales coverage? What have you? You know, in terms of the sales force, has that fully been stabilized? And it's all ads here, or since the last call, did you see that?

William John Plovanic: You'd think I'd be able to work a phone at this age. So my question is just one, you know; your accounts obviously went backwards. And I'm just curious, is that due to loss of sales coverage? What have you? You know, in terms of the sales force, has that fully been stabilized? And are all ads here? Or, since the last call, did you see more turnover? And then I just want to follow up on the R&D strategy.

William John Plovanic: So my question is just one, you know, you obviously your accounts went backwards and I'm just curious of is that due to loss of sales coverage, what have you?

William John Plovanic: You know, in terms of the sales force, has that fully been stabilized and it's all ads here, or since the last call, did you see more turnover? And then just, I have a follow up on the R&D strategy.

William John Plovanic: Sure. Thanks, fellas. Kevin, I'll take that.

Kevin Hykes: I'll take that.

Kevin Hykes: So, you know, maybe in reverse order, you know, thanks to Paul Varostro stepping in without missing a B, he was quickly able to stabilize our sales team and to limit the disruption largely to the first quarter. As I mentioned at a public event in early June, we had turnover down to zero in the early part of the quarter. And while there were a few more heads that left, turnover is still well below what we would have expected for a company of our size in the stage. So, we're pleased that what we're hearing from the team, they're energized and excited about their new leader who brings, you know, 25 years experience, building teams from scratch and deep, deep relationships.

Paul Verastro: Sure, thanks fellas. Kevin, I'll take that. So, you know, maybe in reverse order, you know, thanks to Paul Verastro stepping in without missing a beat, he was quickly able to stabilize our sales team.

Kevin Hykes: So, you know, maybe in reverse order, thanks to Paul Verastro stepping in, without missing a beat, he was quickly able to stabilize our sales team and limit the disruption largely to the first quarter. As I mentioned at a public event in early June, we had turnover down to zero in the early part of the quarter. And while there were a few more heads that left, turnover is still well below what we would have expected for a company of our size and stage.

Paul Verastro: and to limit the disruption largely to the first quarter. As I mentioned at a public event in early June , we had turnover down to zero.

Paul Verastro: In the early part of the quarter and while there were a few more heads that left, turnover is still well below what we would have expected for a company of our size and stage. So we're pleased at what we're hearing from the team. They're energized and excited about their new leader who brings, you know,

Kevin Hykes: So we're pleased at what we're hearing from the team. They're energized and excited about their new leader, who brings, you know, 25 years of experience building teams from scratch and deep, deep relationships. So I feel really good about the morale within that team and the strong sense of momentum.

Kevin Hykes: So, I feel really good about the morale within that team and the strong sense of momentum.

Paul Verastro: 25 years experience building teams from scratch and deep, deep relationships. So I feel really good about, um, the morale within that team and the strong sense of momentum.

Kevin Hykes: To your first question, which is whether that affected the active implanting accounts dynamic this quarter, the short answer is no. Those are accounts that, by definition, have not implanted in over 12 months. And so there are different reasons for that, but they go back, you know, nine to 12 months from now and really weren't part of that most recent dynamic in sales.

Kevin Hykes: To your first question, which is whether that affected the active implanting accounts dynamic this quarterly, the short answer is no. Those are accounts that, by definition, had not implanted in over 12 months. And so, there's different reasons for that, but they go back, you know, nine to twelve months from now and really weren't part of that most recent dynamic in the field. Thank you.

Speaker Change: To your first question, which is whether that affected the active implanting accounts dynamic this quarter, the short answer is no. Those are accounts that, by definition, had not implanted in over 12 months. And so there's different reasons for that, but they go back.

Speaker Change: You know, nine to 12 months from now and really weren't part of that most recent dynamic in the sales team.

William John Plovanic: Okay, thanks. And then just on R&D, I think when you joined on the last call, we talked about taking a hard look at the longer-term strategy and where you go from here. Anything you're willing to share with us since you've been on board a while?

Kevin Hykes: Just on the R&D, I think when you joined on the last call, we talked about taking a hard look at the longer-term strategy and where you go from here. Anything you're willing to share with us since you've been on board a while? Yeah, another good question. So we are looking very carefully both at our clinical and our product development strategies. You know, the good news is we have a new SVP of Clinical and Chief Medical Officer who are hard at work, certainly on the clinical side, understanding how we build the right evidence base to support the therapy and how and whether we may at some point pursue another prospective multi-center trial.

Speaker Change: Okay thanks and then just on the R&D I think when you joined on the last call we talked about taking a hard look at the longer term strategy and where you go from here. Anything you're willing to share with us since it's you've been on board a while?

Kevin Hykes: Yeah, another good question. So we are looking very carefully both at our clinical and our product development strategies. You know, the good news is we have a new SVP of clinical and chief medical officer who are hard at work, certainly on the clinical side, understanding how we build the right evidence base to support the therapy and how and whether we may at some point pursue another prospective multicenter trial. So that work is underway.

Speaker Change: Yeah, another good question.

Speaker Change: We are looking very carefully both at our clinical and our product development strategies. You know, the good news is we have a new SVP of clinical and chief medical officer who are hard at work, certainly on the clinical side, understanding how we build the right evidence base to support the therapy and how and whether we may at some point pursue another prospective multi-center trial. So that work is underway. It's a little early to

Kevin Hykes: So that work is underway. It's a little early to report on what we will decide to do ultimately, but there's a lot of new energy, and I think insight going into both of those questions. And the R&D product development piece is part of that as well. So I would say stay tuned if you would, but we've got some fresh eyes looking at it and a lot of experience. I think they brought to bear.

Kevin Hykes: It's a little early to report on what we will decide to do ultimately, but there's a lot of new energy and, I think, insight going into both of those questions. And the R&D product development piece is part of that as well. So I would say stay tuned, if you would, but we've got some fresh eyes looking at it and a lot of experience, I think, being brought to bear. Okay, great.

Speaker Change: report on what we will decide to do ultimately, but there's a lot of new energy and I think insight going into both of those questions. And the R&D product development piece is part of that as well. So I would say stay tuned if you would, but we've got some fresh eyes looking at it and a lot of experience I think being brought to bear.

Frank Taken: Okay, great. Thanks. Thanks for taking my questions.

William John Plovanic: Okay, great. Thanks. Thanks for taking my question.

Frank Taken: Thank you.

Speaker Change: Okay, great, thanks. Thanks for taking my questions.

Chase Nicoboco: Ladies and gentlemen, our final question comes from the line of Chase Nicoboco with Craig Hallem Capital Group. Keith, go ahead.

Operator: Ladies and gentlemen, our final question comes from the line of Chase Knickerbocker with Craig Hallam Capital Group. Please go ahead.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen, our final question comes from the line of Chase Knickerbocker with Craig Hallam Capital Group. Please go ahead.

Chase Richard Knickerbocker: Good afternoon, guys. Thanks for taking the questions.

Chase Nicoboco: Good afternoon, guys. Thanks for taking the questions. So just one more on the lower sequential center's number. Kevin, is it fair to think of this as kind of the first sign of that new strategy if you guys going deeper rather than wider? You know, in the near term if, you know, it's not because of the sales turnover or why we had that lower number, or was it just kind of an uncharacteristic number of dropouts in the active and center number? Yeah, no, I think it's the former, and this is a result of us really doubling now with a new leader and a fresh set of insights and a new level of discipline, and really looking at how we can make even more of our current centers look like the best of them.

Chase Richard Knickerbocker: So, just one more on the lower sequential centers number. Kevin, is it fair to think of this as kind of the first sign of that new strategy of you guys going deeper rather than wider, you know, in the near term if, you know, it's not because of the sales turnover or why we had that lower number? Or was it just kind of an uncharacteristic number of dropouts in the active and center numbers?

Chase Richard Knickerbocker: Good afternoon guys. Thanks for taking the questions. So just one more on the lower sequential centers number

Chase Richard Knickerbocker: Kevin, is it fair to think of this as kind of the first sign of that new strategy of you guys going deeper rather than wider? You know in the near term if you know it's not because of the sales turnover or why we had that lower number Or was it just a kind of an uncharacteristic number of dropouts in the in that active incentive center number?

Kevin Hykes: Yeah, no, I think it's the former, and this is a result of us really doubling down with a new leader and a fresh set of insights and a new level of discipline and really looking at how we can make even more of our current centers look like the best of them. And that, by definition, then has us spending a little less time looking for new centers. But We're pleased with what we're seeing.

Speaker Change: Yeah, no, I think it's it's the former and this is a result of us really doubling down with a new leader and a fresh set of insights and a new level of discipline and really looking at how we can make even more of our current centers look like the best of them.

Chase Nicoboco: And that, by definition, then has us spending a little less time out looking for new centers. But we're pleased with what we're seeing.

Speaker Change: And that, by definition, then has us spending a little less time out looking for new centers, but we're pleased with what we're seeing.

Chase Nicoboco: Then just one more on reimbursement; you know, in the worst-case scenario in which we remain, you know, mapped to the level 5 nursing code. Should investors think about there being anything different from an expense perspective for your customers, you know, about your procedure rather than, you know, the other kind of products that Jared mentioned that were in that mid-20s ASP that were also mapped to the level 5 code, or those kind of a good proxy for us to think about, you know, the amount of meat that you guys need to leave on the bone for this to be a profitable procedure for your customers.

Chase Richard Knickerbocker: And just one more on reimbursement, you know, in the worst case scenario, in which we remain, you know, mapped to the level five neuro stim code, should investors think about there being anything different from an expense perspective for your customers, you know, about your procedure, rather than, you know, the other kind of products that Jared mentioned, that were in that mid-20s ASP, that were also mapped to the level five code, or those kinds of Transcribed by https://otter.ai

Speaker Change: And just one more on reimbursement, you know, in the worst case scenario in which we remain, you know, mapped to the level 5 neurostim code

Speaker Change: Should investors think about there being anything different from an expense perspective for your customers, you know about your procedure Rather than you know, the other kind of products that Jared mentioned

Speaker Change: that were in that mid-20s ASP that were also mapped to the level 5 code. Are those kind of a good proxy for us to think about, you know, the amount of meat that you guys need to leave on the bone for this to be a profitable procedure for your customers?

Chase Nicoboco: Yeah, Chase, I think that's right, right?

Kevin Hykes: Yeah, Chase, I think that's right, right? If that's the outcome, and we end up being mapped to APC 5465, then you know, we will have to look at our model. And, but in either case, we're confident that we can evolve towards a sustainable business model, right? And, so, with our ability to manufacture this device and having an understanding of what the cost structure looks like, we still believe that, you know, we could have solid gross margins even in that scenario on a go forward basis.

Jared Oasheim: You know, if that's the outcome and we end up being mapped to APC 5465, then, you know, we will have to look at our model, and but in either case, we're confident that we can evolve towards a sustainable business model, right? And so I think with our ability to manufacture this device and having an understanding of what the cost structure looks like, you know, we still believe that, you know, we could have solid growth margins even in that scenario on a go-forward basis. Got it.

Speaker Change: Yeah, Chase, I think that's right, right? You know, if that's the outcome and we end up being mapped to APC 5465, then, you know, we will have to look at our model. But in either case, we're confident that we can evolve towards a sustainable business model, right? And so I think

Speaker Change: With our ability to manufacture this device and having an understanding of what the cost structure looks like, we still believe that we could have solid gross margins even in that scenario on a go-forward basis.

Chase Richard Knickerbocker: Got it. And then just the last two for me.

Jared Oasheim: And then just last two for me, can we get your current mix of kind of inpatient versus outpatient, just so we can kind of think about the, you know, magnitude of kind of both of those changes potentially?

Speaker Change: Got it. And then just last two for me. Can we get your current mix of kind of inpatient versus outpatient just so we can kind of think about the, you know, magnitude of kind of both of those changes potentially?

Chase Richard Knickerbocker: Can we get your current mix of kind of inpatient versus outpatient just so we can kind of think about the magnitude of kind of both of those changes potentially? And then Kevin, kind of what's your expectation from a standpoint of all these new reps that you guys have hired over the last couple of quarters as far as when they should be fully productive? Is your expectation six months, nine months? Just how should we think about that? And thanks, guys.

Jared Oasheim: And then Kevin, kind of what's your expectation from a standpoint of all these new reps that you guys have hired, you know, over the last couple quarters, as far as when they should be fully productive, you know, as your expectation, six months, nine months, just how should we think about that? And thanks. So, Chase, I'll get the first one; Kevin can grab the second one since he directed that one to him. So, roughly the breakout is roughly 10 to 15% are being treated in an inpatient setting today, and so 85 to 90% in an outpatient setting, and that's been pretty consistent over the last couple of years.

Speaker Change: And then, Kevin, kind of what's your expectation from a standpoint of all these new reps that you guys have hired, you know, over the last couple quarters, as far as when they should be fully productive? You know, is your expectation six months, nine months? Just how should we think about that? And thanks, guys.

Jared Oasheim: So, Chase, I'll get the first one. Kevin can grab the second one then, since you directed that one to him.

Jared Oasheim: So, roughly, the breakout is roughly 10 to 15 percent are being treated in an inpatient setting today, and so 85 to 90 percent are in an outpatient setting. And that's been pretty consistent over the last couple of years. Yeah, I guess as it relates to the reps, Jared mentioned we we've been really pleased with.

Speaker Change: So, Chase, I'll get the first one, Kevin can grab the second one then since you directed that one to him. So, roughly, the breakout is roughly 10 to 15 percent are being treated in an inpatient setting today, and so 85 to 90 percent in an outpatient setting, and that's been pretty consistent over the last couple of years.

Kevin Hykes: Yeah, I guess as it relates to the reps Jared mentioned, we've been really pleased with both the Q1 and the Q2 classes of reps. These are. I think the highest quality and, importantly, most appropriately experienced reps we've yet hired. And, as I mentioned, you know, we're kind of going through a transition here from the early chapter where you try a whole bunch of different things, including a bunch of different rep profiles, and you start to understand what really works well. And I think we have gotten better and better at choosing reps who don't just have a roll of decks necessarily or don't just happen to know cardiac anatomy.

Kevin Hykes: Yeah, I guess as it relates to the reps Jared mentioned, we've been really pleased with both the Q1 and the Q2 classes of reps. These are, I think, the highest quality and, importantly, the most appropriately experienced reps we've yet hired. And as I mentioned, you know, we're kind of going through a transition here from the early chapter, where you try a whole bunch of different things, including a bunch of different rep profiles, and you start to understand what really works well.

Speaker Change: Yeah, I guess as it relates to the reps, Jared mentioned we've been really pleased with both the Q1 and the Q2 classes of reps. These are, I think, the highest quality and, importantly, most

Speaker Change: appropriately experienced reps we've yet hired.

Speaker Change: And as I mentioned, you know, we're kind of going through a transition here from the early chapter where you try a whole bunch of different things, including a bunch of different rep profiles.

Kevin Hykes: And I think we have gotten better and better at choosing reps who don't just have a Rolodex necessarily, or don't just happen to know cardiac anatomy, but who have built programs and who've worked in a market development environment and launched a novel therapy like this with all that comes with that. So, you know, our new leader is bringing a new approach to onboarding, certainly to sort of hiring and the hiring profile, but also to onboarding and training.

Speaker Change: and you start to understand what really works well. And I think we have gotten better and better at choosing reps who don't just have a Rolodex necessarily or don't just happen to know cardiac anatomy, but who have built programs and who've worked in a market development environment.

Kevin Hykes: But who have built programs and who worked in a market development environment and launched a novel therapy like this, with all that comes with that. So, you know, our new leader is bringing a new approach to onboarding, certainly to sort of hiring and the hiring profile, but as well as onboarding and training. So, you know, I can't tell you that the time to productivity will change materially as today. But our intention is to launch these new reps into these territories with, you know, more background and support than they've ever had, and hopefully then make them productive that much faster.

Speaker Change: and launched a novel therapy like this with all that comes with that. So our new leader is bringing a new approach to onboarding, certainly to sort of hiring and the hiring profile, but as well as onboarding and training.

Kevin Hykes: So, you know, I can't tell you that the time to productivity will change materially as of today, but our intention is to launch these new reps into these territories with, you know, more background and support than they've ever had, and hopefully, then make them productive that much faster.

Speaker Change: So, you know, I can't tell you that the time to productivity will change materially as of today, but our intention is to launch these new reps into these territories with, you know, more background and support than they've ever had, and hopefully then make them productive that much faster.

Chase Nicoboco: Thank you.

Kevin Hykes: Ladies and gentlemen, this concludes our question-and-answer session.

Operator: Ladies and gentlemen, this concludes our question and answer session. I would now hand the conference over to Kevin Hykes for his closing comments.

Speaker Change #100: Thank you.

Kevin Hykes: I would now have the conference over to Kevin Hikes for these closing comments. Thank you, operator, and thanks again to everyone for joining us for our second quarter earnings call. We appreciate your ongoing support, and we look forward to updating you on our progress in our next update.

Speaker Change #100: Ladies and gentlemen, this concludes our question and answer session. I would now hand the conference over to Kevin Hykes for his closing comments.

Kevin Hykes: Thank you, Operator, and thanks again to everyone for joining us for our second quarter earnings call. We appreciate your ongoing support, and we look forward to updating you on our progress at our next earnings call. Thank you.

Kevin Hykes: Thank you, Operator, and thanks again to everyone for joining us for our second quarter earnings call. We appreciate your ongoing support, and we look forward to updating you on our progress at our next update. Thank you.

Operator: Thank you.

Operator: Thank you. The conference of CVRx has now concluded. Thank you for your participation. You may now disconnect your lines.

Operator: The conference of CVRX has now concluded. Thank you for your participation.

Speaker Change #101: Thank you. The conference of CVRx has now concluded. Thank you for your participation. You may now disconnect your lines.

You may now disconnect your lines. Thank you.