Q1 2025 CVRx Inc Earnings Call
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Good day, everyone and welcome to today's C V. Rx Q1, 2025 earnings call.
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Speaker Change: It is now my pleasure to turn the conference over to Mike Vallely from ICR Health care. Please go ahead.
Mike Vallely: Good afternoon. Thank you for joining us today for <unk> first quarter 2025 earnings conference call.
Speaker Change: Joining me on today's call are the company's President and Chief Executive Officer, Kevin <unk>, and Chief Financial Officer Jarrett Ocean.
Speaker Change: Our remarks today will contain forward looking statements, including statements about financial guidance. These.
Speaker Change: These 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 include.
Speaker Change: Those identified in the earnings release issued prior to this call and in the Companys SEC filings.
Speaker Change: I'd now like to turn the call over to <unk>, President and Chief Executive Officer, Kevin. Thanks.
Kevin: Thanks, Mike Good afternoon, and thank you for joining us for our first quarter earnings call revenue in the quarter was $12 $3 million, representing 15% growth over the prior year quarter consistent with the preliminary results shared in early April.
Kevin: While we continue to make significant progress in driving borough seem to become the standard of care for heart failure or revenue performance fell short of expectations due to two factors.
Kevin: The first and primary factor was our sales force realignment.
Kevin: Following the change in sales leadership in mid 2024, our new Chief revenue officer utilize the back half of the year to evaluate the team and the company's commercial effectiveness, concluding that we needed to strengthen our sales team.
Kevin: Ultimately the depth of these necessary changes was more significant than initially anticipated and resulted in 25% of our current territory managers being hired between December and March.
As with any organizational transition of this magnitude the productivity ramp for new hires will vary significantly depending on the sales reps background and experience as well as whether the new hire is entering a new territory or an existing territory with established accounts.
Kevin: These transitions can also cause disruption at the account level, especially in Dabbler accounts that have a high degree of relationship dependents and impact it was more difficult to manage in Q1 than was anticipated.
Kevin: We're thrilled with the quality of the talent that we've been able to attract and we expect to see productivity improvement and account stabilization throughout the year as these representatives gain traction and experience.
Kevin: The second factor impacting the quarter was seasonality.
Kevin: And each of the last three years, our first quarter was impacted by exogenous factors, including Covid material clinical data releases and management changes, which masked a typical medical device seasonal trend.
Kevin: This year, we observed this seasonal pattern, where the first quarter typically represents the lowest quarter of the year.
Kevin: Even though our barrels Tim implant isn't something that can be pushed out indefinitely. We now believe that patients and customers are actively scheduling procedures around insurance coverage and deductibles.
Kevin: Moving forward, we expect to see this seasonality, which is similar to other medical device companies, where Q1 takes a step down from the prior year's fourth quarter.
Kevin: Despite these headwinds we continue to be very encouraged by what we hear from customers on a near daily basis. We remain confident that barrels team has a remarkable therapy with a large market opportunity and that has the potential to significantly improve the lives of heart failure patients and create significant long term value.
Kevin: As a reminder for 2025, we are executing on three key strategic priorities.
Kevin: First we're continuing to build a world class sales organization focused on developing sustainable barrels 10 programs with deep therapy adoption. This.
Kevin: This includes recruiting sales representatives with strong therapy development backgrounds, strengthening our training and onboarding programs and aligning our incentives to support program oriented sales processes.
Kevin: We introduced a new compensation plan in late January that aligns with our program focused selling approach and.
Kevin: That has generated strong enthusiasm and driven positive behavior change among our sales team.
Kevin: Second we are targeting centers with the highest potential to develop sustainable barrels can programs. We plan to systematically replicate the elements present in current barrels from centers that have achieved the deepest levels of adoption speed.
Kevin: Specifically, we're targeting centers that demonstrate three key characteristics large heart failure patient volumes proven adoption of a novel heart failure diagnostic devices and a track record of successfully leveraging new cardiovascular therapies to strengthen their cardiovascular service offering.
Kevin: In these centers, we will collaborate with the clinical champions and administrative leaders, who understand the potential positive impact of barristan therapy, and we'll work with them to build a network of committed advanced practice providers or a P pes and community based reefers as well as heart failure specialists.
Kevin: We've already seen an increase in the number of centers qualifying as sustainable barrels can programs in Q1.
Kevin: Third we will continue to address the fundamental barriers to adoption by improving patient access to the therapy, increasing education and awareness among physicians and patients.
Kevin: And developing a more robust portfolio of clinical evidence.
Kevin: On the reimbursement front, we've continued our work with a coalition of companies focused on appropriate payment for technologies like Barristan spin.
Specifically, we've requested that CMS create a level six neuro stimulator a P C within the outpatient prospective payment system or O P. P. S.
Kevin: The proposed <unk> PPS rule is now in review with the office of management and budget and is expected to be released in July.
Kevin: Analysis of the current CMS data used for rulemaking demonstrates continued and growing rationale to support our request.
Kevin: We believe that given the data and procedure volumes CMS will either proposed the creation of a level six neuro stimulator APC or will have the technologies remain in the new Tech APC 15, 80 for 2026, which would allow for continued appropriate reimbursement of approximately $45000 for.
Kevin: <unk> in the outpatient setting.
Kevin: Also in connection with our expected transition from a category three to a category. One code in January of 2026, we are awaiting the proposed Medicare physician fee schedule that will include the category, one numeric codes descriptors and proposed physician payment.
Kevin: We expect to see both of these proposed rules in early July.
Kevin: As it relates to site of service, we've continued to see an increase in the percentage of procedures being performed in an inpatient setting based on our internal reporting.
Kevin: As it relates to awareness, we had a presence at three major conferences during the quarter Th T. I S. H L T and the American College of Cardiology, where CVR ex sponsored well attended educational and awareness events.
Kevin: The company also sponsored the creation and distribution of our barrels Tim Infographic by the ACC did point to approximately 50000 cardiologists and a P. Pes.
Kevin: As part of our previously discussed strategic plan, we've significantly increased our education and outreach efforts focused on a P. Pes, who manage the bulk of heart failure patients in the community on a daily basis, and we're encouraged by their engagement and interest in the therapy.
Kevin: Turning to our efforts to generate additional clinical evidence we are particularly excited to highlight the data presented as a late breaker at the th team meeting in February and published simultaneously in the journal of cardiac failure.
Kevin: This analysis was based upon data from the Premier healthcare database, a large all payer database, including more than 1300 institutions.
Kevin: It demonstrated large and statistically significant reductions in hospital visits and length of stay in patients after barrels came implantation.
Kevin: The analysis showed an 85% reduction in heart failure hospital visits and 84% reduction in cardiovascular hospital visits and an 86% reduction in all cause hospital visits in patients following implantation.
Kevin: These compelling results add to our growing body of evidence supporting the clinical and economic benefits of barrels can therapy.
Kevin: Our increasingly robust evidence base and recent compelling real world morbidity results have been well received by physicians and payers. This positive reception has encouraged us to further advance our clinical evidence strategy.
Kevin: Based on a year long effort that started when Dr. Phil Adamson joined CVR acts as our Chief Medical Officer in May of 'twenty 'twenty four we've identified a number of areas for further evidence development.
Kevin: One such area involves a pragmatic randomized controlled trial design that would include patients with an ejection fraction of up to 50% and in NT Pro BNP of up to 5000 through a category B E S.
Kevin: As part of our ongoing discussions with FDA and CMS, we intend to request that CMS cover the cost of the procedures involved in the trial should we move forward.
Kevin: In order to determine CMS coverage eligibility it will be necessary to submit the proposed trial design to Clinton trials Dot Gov, which we expect to do in the second quarter.
We will then await their decision and would only proceed if CMS degrees to cover these costs.
Kevin: As currently contemplated this trial would enroll between 1002 thousand patients at 100 to 150 centers.
Kevin: We believe that this trial could create significant long term value for C V Rx, allowing us to not only significantly expand our total addressable market.
Kevin: But to also obtain more data about the benefits of <unk> therapy and are currently indicated <unk> population.
Kevin: Our preliminary estimates suggest that the net cost of this trial would be approximately $20 million to $25 million spread over five to seven years with the annual cost, peaking in 2029% or 2030, we will share more details about our plans for this potential trial in the future as we gain clarity around CMS coverage.
Kevin: <unk>.
Kevin: In summary, we remain confident in our strategy and the fundamental strength of our business.
Kevin: We have a clear path forward with our strategic priorities are talented and increasingly experienced sales force and compelling clinical evidence demonstrating the value of <unk>, including significant reductions in hospitalizations as.
Kevin: As our newer sales representatives gained traction in their territories and with continued execution of our program focused selling strategy, we expect to see a return to higher growth.
Jared: Now I'd like to turn the call over to Jared for a financial review.
Jared: Thanks, Kevin the first quarter of 2025 total revenue was $12 3 million for the three months ended March 31, 2025, an increase of $1 6 million or 15% over the three months ended March 31, 2020 for revenue generated in the U S was $11 2 million for the three months.
Jared: <unk> ended March 31, 2025, an increase of $1 4 million or 14% over the three months ended March 31, 2020 for heart failure revenue in the U S totaled $11 1 million and $9 7 million for the three months ended March 31, 2025, and 2024, respectively heart failure revenue.
Jared: It's in the U S totaled 353 and 319 for the three months ended March 31, 2025, and 2024, respectively.
Jared: 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 <unk>.
Jared: As of March 31, 2025, the company had a total of 227 active implanting centers in the U S. As compared to 223 as of December 31, 2024 active implanting centers are customers that have completed at least one commercial heart failure implant in the last 12 months the number of sales territories in the U S decreased by three.
Jared: To a total of 45 during the three months ended March 31 2025.
Jared: Revenue generated in Europe was $1 1 million for the three months ended March 31, 2025, an increase of $200000 or 23% over the three months ended March 31, 2024 total revenue units in Europe increased to 59 for the three months ended March 31, 2025% from 44%.
Jared: The prior year period, the number of sales territories in Europe remained consistent at 5% to three months ended March 31, 2025 gross profit was $10 3 million for the three months ended March 31, 2025, an increase of $1 2 million or 13% over the three months ended March 31 2024 gross.
Jared: Margin was 84% and 85% for the three months ended March 31, 2025, and March 31 2024, respectively.
Jared: R&D expenses decreased $500000 or 18% to $2 $5 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2020 for this change was driven by a zero point $4 million decrease in consulting expenses and a 0.1 million decrease in noncash stock.
Jared: Based compensation expense.
Jared: SG&A expenses decreased $7 1 million or 25% to $21 2 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2020 for this change was primarily driven by an $8 $6 million decrease in noncash stock based compensation expense.
Jared: Partially offset by a $1 $6 million increase in compensation expense, mainly as a result of increased head count.
Jared: <unk> $8 4 million of the noncash stock based compensation expense for the three months ended March 31, 2024 was related to the previously disclosed modification of stock options held by the former Chief Executive Officer in connection with his retirement in the first quarter of 2024.
Jared: Interest expense increased zero point $5 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, driven by the increased borrowings under the company's term loan agreement.
Jared: Other income net increased zero point $1 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This increase was primarily driven by increased interest income on our interest bearing accounts net loss was $13 8 million or <unk> 53 per share for the three months.
Jared: And at March 31, 2025, compared to a net loss of $22 2 million or $1 <unk> per share for the three months ended March 31, 2024 net loss per share was based on $25 9 million weighted average shares outstanding for the three months ended March 31, 2025, and $21 2 million weighted.
Jared: Shares outstanding for the three months ended March 31, 2024 as of March 31, 2025, cash and cash equivalents were $102 7 million net.
Jared: Net cash used in operating and investing activities was $12 9 million for the three months ended March 31, 2025, as compared to $11 $8 million for three months ended March 31, 2024 for the three months ended March 31, 2025, the company issued 543462 shares.
Jared: A common stock for the gross proceeds of $6 $7 million under its at the market offering.
Jared: Now turning to guidance for the full year of 2025, we now expect total revenue between $55 million and $58 million. We continue to expect full year gross margin between 83% and 84% and we now expect operating expenses between $95 million and $98 million for the second quarter of 2020.
Kevin: Five we expect to report total revenue between $13 million and $14 million I would now like to turn the call back over to Kevin.
Kevin: Thank you Gerrit before we open the line for questions I'd like to share our outlook for the remainder of 2025 despite.
Speaker Change: Despite the disappointing revenue performance in the first quarter, we remain optimistic about our long term prospects.
Speaker Change: While there is a significant amount of macroeconomic uncertainty at the moment, we do not expect these trends to materially impact our business our exposure to the negative impact of tariffs and changing trade policy is low we are not exposed to NIH funding cuts and we are thankfully not experiencing significant changes in our working relationships with FDA or <unk>.
Speaker Change: Yes.
Speaker Change: While the realignment and strengthening of our sales force has created some short term headwinds we're already seeing positive signs that validate our approach. We believe our focus on attracting high quality sales representatives with strong therapy development backgrounds will pay dividends as these representatives move through their productivity curves and gain more experience.
Speaker Change: And their territories.
Speaker Change: Our strategy to focus on driving deep penetration within high volume accounts is showing encouraging preliminary results at the account level.
Speaker Change: These centers have the patient volumes infrastructure and clinical expertise necessary to develop sustainable barristan programs.
Speaker Change: We're entering the remainder of 2025 with several key advantages improving reimbursement landscape and momentum increasing patient and physician awareness and a growing body of compelling clinical evidence that demonstrates both the clinical and economic benefits of <unk> therapy.
Speaker Change: The recent real world evidence showing an 85% reduction in heart failure hospitalizations is particularly compelling to both clinicians and hospital administrators, who are focused on reducing readmissions and improving outcomes.
Speaker Change: As we continue to execute on our three strategic priorities throughout 2025. We believe these focused efforts will drive increased adoption of embarrassed him and help us fulfill our mission of improving the lives of patients suffering from heart failure.
Speaker Change: Now I'd like to open the line for questions operator.
Speaker Change: At this time, if you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: You may remove yourself from the queue at any time by pressing star two.
Speaker Change: Once again that is star one to ask a question, we will pause for a moment to allow questions to queue.
Speaker Change: Okay.
mcaulay Kilby: We will go first to mcaulay Kilby with William Blair. Your line is open. Please go ahead.
Speaker Change: Hi, everyone. This is mccauley on for Margaret Tonight, Thanks for taking our questions.
Speaker Change: I appreciate some of the commentary around the sales force during the quarter.
Speaker Change: But was wondering if we could get a bit more detail on how much of that was self inflicted versus natural turnover was any of that a result of the new compensation plan that was implemented during the quarter.
Speaker Change: And you mentioned a significant number of new hires.
Speaker Change: And I guess is there more hiring to be done or have you recovered all of those territory managers already.
Matt: Yes, Thanks, Matt I appreciate the question.
Matt: Yes in short the the vast majority of these changes were initiated by the company. This was the result of our Chief revenue officer, joining us last July and taking two quarters during which turnover returned to normal levels, but over the course of those two quarters really taking a look at.
Matt: Our current organization the selling challenges we faced in the long term skills and experience we needed in that organization to be successful we initiated that wave of changes late in December and into January and ultimately as you heard me mentioned ended up.
Matt: With a more substantive set of changes than we'd anticipated by the end of Q1.
Matt: It had nothing to do with the comp plan and in fact, the comp plan now as it is a true strength of this organization and sales culture and has has allowed us to attract extremely strong talent as backfill for these roles that we made changes in <unk>.
Matt: The last point I'd make is while we're not entirely through that process, we would expect.
Matt: Turnover to return to more typical levels within the next few quarters.
Matt: Okay.
Speaker Change: That's really helpful. And then maybe just as a follow up Jared in terms of the guidance.
Speaker Change: I appreciate the update for the full year and Q2 here, but.
Speaker Change: Looking at that 2025 guidance now I guess, what does that imply in terms of the factors between.
Speaker Change: The New center adds is that high single to low double digits still the right number.
Speaker Change: As well as just overall utilization as we move through.
Speaker Change: Hopefully you start to get more productive thanks for taking my questions.
Speaker Change: Yeah. Thanks, Matt Yeah. So I mean, as we look to update guidance, obviously, Kevin mentioned, we made some pretty significant changes within the sales organization and it was a bit more than what we had anticipated would be necessary going into the year.
Speaker Change: At the end of the day, we're really playing the long game here right, we want to get the right people on the bus and we're really thrilled with the quality of the new sales hires that we've been making but it's going to take some time for them to get fully productive. So as we adjusted the annual guidance. We looked at the results for Q1 and are really setting that as our new base.
Speaker Change: This line from which we're planning to grow from there. So as we move forward into Q2 with the guide of $13 million to $14 million and then for the full year guide of $55 to 58. It is continuing to expect on average we'd see new center adds in high single digits low double digits, but it's going to be a wide range right. We're still.
Speaker Change: Sunsetting some of the old accounts that were more relationship driven.
Speaker Change: Spending a little bit less time, there and really spending more time at those centers that are have the ability to drive deeply penetrate deep penetration deep adoption at those centers, where this therapy can become standard of care. So for the centers I think high single digits low double digits as far as territories go I think we're <unk>.
Speaker Change: <unk> to add to the bench, we've already rebuilt a good portion of that already to where we believe we can get back on track to adding around three territories per quarter as we go throughout 2025.
Speaker Change: And then the revenue units per center I think the expectation is that we will continue to see that number tick up.
Speaker Change: But part of that is really dependent upon how many of the centers, we are able to sunset over the next couple of quarters, the less productive ones because that will have a direct impact on what that utilization number will come out each quarter.
Speaker Change: Very helpful. Thanks again.
Speaker Change: Thanks.
Speaker Change: We will go next to Frank to Kennon with Lake Street Capital markets. Your line is open.
Nelson: Great Hey, guys as Nelson docks on for Frank Thanks.
Frank: Thanks for taking the questions I guess first wanted to start with kind of following up a little bit.
Frank: How much of the help us parse out a bit more how much of the softness in the quarter was related to typical seasonality versus challenges on the rep side or would you say it was related primarily to a slower ramp slower rep ramp, but any other any other additional color you can provide there would help us think about the impact of these separately.
Frank: Sure. Thanks, Nathan I'll take that I think the vast majority of the softness that we saw was related to the disruption in the sales team it was not likely.
Frank: Ah seasonality impact that played a role for sure but it was really the fact that we had to.
Frank: To make a more deep set of changes than we had anticipated even in January and the fact, probably secondarily, we assumed I assumed that we could maintain.
Frank: Territory and account level performance. Despite the changes that we were making and that turned out to be much more difficult than we expected in part because in some territories. There were a lot of these dabbler accounts, who are difficult to predict and who are often.
Frank: They've adopted the therapy, because it relationships are more vulnerable to turnover because a lot of their engagement was due to a particular relationship and so in those cases, especially even putting a relatively experienced bench TM into that territory or bringing in a very experienced new hire and putting them directly into that territory.
Frank: That was not enough to sustained momentum through the quarter and what we saw interestingly are perhaps not surprisingly was that in the group of accounts that had a TM turnover they were half as likely to have increased their business in Q1 versus Q4 and twice as likely to do.
Frank: Decrease their business in Q1 as they had in Q4 and so obviously, we changed a lot we changed in more places than we thought we would and that was really the driver of the business.
Frank: Got it Okay. That's helpful and then.
Speaker Change: I think it might be helpful to understand the current mix of the rep tenure today a bit more.
Speaker Change: If I heard you correctly the comment was 25% of territory managers were hired between December and March.
Speaker Change: Any other color you can provide just on the remainder of the sales team.
Speaker Change: And the tenure there.
Speaker Change: Hi, Nelson, Yeah happy to cover a bit more on the 10 year. So as Kevin mentioned in the prepared remarks about 25% of the current territory managers were hired from December to March another 25% were hired in the earlier months of 2024, and so you have about 50% of.
Speaker Change: The total territory managers on staff today that were hired in the last 15 months. The other 50% are the folks that are in the more tenured buckets have been here for at least the 15 months, sometimes multiple years and are obviously, the most productive of the people on the team at this stage.
Speaker Change: Got it okay. Thanks, guys I'll hop back in the queue.
Speaker Change: We'll go next to Chase Knickerbocker with Craig Hallum. Your line is open.
Speaker Change: Good afternoon.
Speaker Change: Thanks for taking the questions.
Speaker Change: Kevin I wanted to get kind of granular here for Ken just so you can make sure we kind of understand all the specific moving pieces.
Speaker Change: If we look at it at like the Rep specific and kind of their account specific level.
Speaker Change:
Speaker Change: When when rep turned over.
Speaker Change: Is it mainly that most of some of their accounts decreased utilization.
Or did they stop.
Speaker Change: You know, giving <unk> as a treatment.
Speaker Change: Altogether or was it a mix just kind of a little bit more specific on kind of what we saw at that granular level.
Speaker Change: Sure. Thanks, Jason I would say, we don't I don't know of a single instance, where an account.
Speaker Change: Completely abandoned the therapy the.
Speaker Change: The numbers, we have would suggest that the utilization was down or stalled in accounts that are only doing a few a year if.
Speaker Change: If they miss if they missed an implant or they're not as productive as they typically are than you really feel it.
Speaker Change: But we do not have the sense that we lost accounts because of the turnover. We just believe it was at a decrease in productivity.
Speaker Change: So if we kind of look at the established accounts right. I mean is there anything else, we can do from a call.
Speaker Change: Called the <unk>.
Speaker Change: Medical education perspective too.
Speaker Change: Kind of have the.
Speaker Change: <unk> device have a little bit more traction where the.
Speaker Change: You can you can kind of lead with.
Speaker Change: Some additional clinical evidence that you've generated till recently I mean is there any any kind of thought there as to why these dabbler accounts kind of stay dabbler accounts, having after having some experience with the device.
Speaker Change: Yeah. So I think you have to look back to a typical behavior in the early stage of a of a therapy like ours.
Speaker Change: And this is and this is very typical that you often start centers anywhere and everywhere that you can and you do not necessarily have yet enough knowledge to to identify tiers 1234 like we have now. So there are a lot of accounts, who may have initiated <unk> therapy with a single champion and without any of the <unk>.
Speaker Change: Elements around them that we know make for deep adoption.
Speaker Change: And that single champion May have continued to try to support our therapy on their own perhaps because of our relationship with one of our team members.
Speaker Change: In a lot of debt.
Speaker Change: A fair number of those accounts. So those are the accounts on some level if they don't if they don't happen to fit our tiered approach. If we don't think they have long term potential some of those accounts were going to allow to just sunset because we're not sure the opportunity cost of supporting those tablets is worth it and.
Speaker Change: There are other dabbler. However that in fact are potentially tier one centers that haven't been developed the right way because we didn't yet have the playbook or the recipe that helped us understand how to develop a productive deeply adopting center. So in the case of those adlers, we are approaching them with a full court press and we are going back to them now with the knowledge we have.
Speaker Change: On what works and how you build a sustainable program and how important the network around that initial champion is we're re engaging them with the hope that we can make them much more productive than they have been so sort of a tale of two cities to some degree.
Speaker Change: No that makes a lot of sense. Thank.
Speaker Change: Thank you for that that does close some things up.
Speaker Change: And then just as far as kind of what we're looking forward with the right kind of Rep profile I mean, maybe just kind of what your head of sales saw.
Speaker Change: In the reps that did need to be turned over.
Speaker Change: And exactly.
Speaker Change: Who he is putting in that seat from a standpoint of kind of qualities.
Speaker Change: Yes, that's another good question and again I think not specific to <unk>, but in general in the early stages of these therapy development efforts or any new medical technology.
Speaker Change: You need reps, who have relationships, who can get themselves in the door with a brand new therapy that may not yet be fully understood or appreciated or reimbursed right. So it's a certain sort of profile that is very necessary in those early stages.
Speaker Change: We've moved beyond that stage and we now know that what we need are our sales reps that understand how to introduce novel therapies. That's a very different process than a relationship cell or a slightly better peripheral vascular catheter. For example, we need reps that understand how you build a coalition of <unk>.
Speaker Change: <unk> and administrators in an account how you deal with reimbursement in coding and billing complexity, how you grow awareness in a community around an account that's a different set of skills. So increasingly the folks we are now recruiting and attracting to the venture have that program or therapy development experienced many of them also have cardiovascular.
Speaker Change: <unk> experience and bring some level of relationships to our company.
Speaker Change: But even so they need to understand and learn our business and that's why even a really good new hire with a cardiovascular background and perhaps relationships on the ground. They don't understand our therapy or our technology or our clinical data or our reimbursement well enough to be productive in the first six or even nine months so even.
Speaker Change: Those really strong hires who will ultimately be very productive.
Speaker Change: Take a similar amount of time to sort of get.
Speaker Change: To understand what's happening in their territory refresh relationships and understand how to best support our particular therapy.
Speaker Change: Got it and just as we expect as we kind of model sales territories.
Speaker Change: Has that has turnover.
Speaker Change: Normalized already at this point or are we still turning over some territories.
Speaker Change: Should we be kind of modeling be modeling from here kind of three territories per quarter.
Speaker Change: Yes, I think we you should begin modeling three territories per quarter. There is still some level of change that I would anticipate but we're through the bulk of it.
Speaker Change: Again, we had to go deeper.
Speaker Change: Deeper than we expected, but a lot of that has played out and we think that the turnover levels have returned to normal over the next few quarters.
Speaker Change: Got it thank you guys.
Ross Osborne: Our last question comes from the line of Ross Osborne with Cantor Fitzgerald. Your line is open.
Ross Osborne: Ross Osborne. Your line is open. Please go ahead.
Ross Osborne: Hi can you guys hear me.
Speaker Change: We can.
Ross Osborne: Oh great.
Speaker Change: I guess starting off as you work to deepen utilization in existing centers are there specific case types or patient segments, where barristan adoption is starting to show good signs of penetration.
Speaker Change: No. That's a good question I would say no. We are the data we have generated in support of the therapy.
Speaker Change: <unk>.
Speaker Change: He is undifferentiated if you meet the indication you can expect a 94% responder rate and a 97% freedom from complication. There are certainly differences in some centers where depending on physician.
Speaker Change: Conservatism, they may wait longer to prescribed barrels, Tim and try harder to make the medicines work.
Speaker Change: In other cases physicians that understand there is actually a very interesting consensus statement published late last year by the heart failure Society of America that for the first time.
Speaker Change: Put a time domain around when you should give up on medical therapy and consider.
Speaker Change: Implantable device like <unk> and they said if after three to six months a patient is not.
Speaker Change: <unk> is still symptomatic on guideline directed medical therapy, it's time to consider an intermediate heart failure device like <unk>. So.
Speaker Change: There is some difference there in terms of conservatism and the degree of patient.
Speaker Change: <unk> on meds, but really no difference in the type of patient themselves, it's more of that type of physician frankly.
Speaker Change: Got it that's super helpful color and then just one more from me on the on our potential RCT would you just remind us of what the near term timelines would look like for that and then.
Speaker Change: Can you just remind us about the expected patient enrollment numbers as loss centers. Thank you.
Speaker Change: Sure yes so.
Speaker Change: As I mentioned, it's sort of a two part process part one and were materially engaged in part one is the discussion with FDA around the potential protocol of trial design and the populations that we would include and so we are mean.
Speaker Change: Meaningfully involved in that process, we hope that we would reach an agreement if we can in the next month or two and that we would then have a trial design that we could take to CMS part two of the process is petitioning CMS to reimbursed patients reimburse hospitals for the procedures that are done on pace.
Speaker Change: <unk> is part of the trial and you can't do the second without the first so we're talking about it today, even though we haven't yet.
Speaker Change: Committed to running the trial if in fact, we have FDA approval in the next few months, we will post that document on clinical trials Dot Gov.
Speaker Change: So that we can then engage CMS and we didn't want to surprise the investor community with that information out of the Blue in advance of our next earnings call.
Speaker Change: So that's sort of the process, we would expect in <unk>.
Speaker Change: Answer from CMS and the ability to make a decision on moving forward later this calendar year.
Speaker Change: What we did communicate was the size of this trial given the populations of interest and frankly the statistical.
Speaker Change: Plan necessary to deliver a successful trial wed expect it to be north of a 1000 patients maybe as many as 2000 patients.
Speaker Change: And to enroll that many patients you need to engage a 100 to 150 centers based on commonly seen enrollment rates. So this will be a sizable trial it will be a landmark trial in many in many.
Speaker Change: Instances, we think it demonstrates our continued commitment to developing evidence to support this therapy to leading the.
Speaker Change: The adoption of devices in this forgotten middle population and it'll be a great way for us to raise our profile and engaged centers that up until now may not have yet had experienced with barristan therapy.
Speaker Change: But again, we need to get through both part one and part two before we make that decision and decided to move forward.
Speaker Change: Yeah understood. Thanks for taking my questions guys.
Speaker Change: Thank you.
Speaker Change: This does conclude today's question and answer session I will now turn the program back over to Kevin <unk> for closing remarks.
Speaker Change: Thank you operator, and thanks again to everyone for joining us for our first quarter earnings call. Today. We appreciate your ongoing support and we look forward to updating you on our progress at our next update thank you.
Speaker Change: This does conclude today's program. Thank you for your participation you may disconnect at any time.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: Hum.