Q2 2019 Earnings Call
Good afternoon. My name is Shawn told I will be your conference operator today.
At this time I would like to welcome everyone to the numbers second quarter 2019 conference call.
All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session.
If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad, if youd like to withdraw your question press the pound key thank you.
I would like to introduce Ms., Chief Hamlin Harris Investor Relations the number.
Ms. Hamblin Harris you may begin your conference.
Thank you operator, and thank you all for joining us on today's call to discuss the numbers earnings release for the second quarter 29 team a copy of the press release and financial tables, which includes a GAAP to non-GAAP reconciliation can be viewed under the investors tab on our company website at Www Dot Penumbra Inc. Dot com.
During the course of this conference call. The company will make forward looking statements pursuant to the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995, including statements regarding our financial performance.
Commercialization clinical trials regulatory status quality compliance and business trends.
Actual results could differ materially from those stated or implied by our forward looking statements due to certain risks and uncertainties, including those referenced in our 10-Q for the quarter ended June 32019, which will be filed with the FCC August six and then 2019 as well as those described in our 10-K for the year ended December 31, 2018, which was filed with the FCC on February 26, 2019, as a result, we caution you against placing undue reliance on these forward looking statements and we encourage you to review our periodic filings with the FCC, including the 10-Q and 10-K previously mentioned for a more complete discussion of these factors and other risks that may affect our future results or the market price about stock.
The number disclaims any duty to update or revise our forward looking statements as a result of new information future events developments or otherwise.
On this call certain financial measures presented on a non-GAAP basis, a reconciliation of GAAP to non-GAAP financial measures is provided in our posted a press release.
We anticipate the prepared comments on today's call will run approximately 15 minutes, Adam L. sets up an Evans chairman and CEO will provide a business update and then Threeq cluster Raj you as CFO and head of strategy will discuss our financial results for the quarter and the updated revenue guidance range with that I would like to turn over the call to Adam Elsa.
Thank you achieve good afternoon, and thank you for joining numbers second quarter 2019 conference call.
Our total revenues for the second quarter were $134.2 million a year over year increase of 22.4% as reported and 23.8% in constant currency.
We had operating income in the quarter up $12.8 million compared to $9.3 million for the same period last year.
As we finished the first half of 2019, our business continues to have great momentum.
And growing opportunities to help more and more patients.
Our overall revenue growth is being driven by the scheming stroke market as well as our ability to develop new and significant opportunities within the vascular market.
On today's call I would like to focus on two important updates.
First as you may remember on our last earnings call. We spend time discussing the number of patients that could be treated in the United States with peripheral thrombectomy.
When we first launched our indigo system four years ago, we estimated that 150000 patients could benefit from our system.
Now four years later with greater understanding of the variety of cases and with advancements in training and techniques. We believe the indigo system has the potential to address over 350000 patients per year in the United States.
This figure represents the number of patients with COPD in their body work currently being treated I either surgically.
Or intervention.
It will take us time to penetrate this patient opportunity and future technology improvements will be important for us to do so.
In addition, as the procedure improves and has made it easier and easier it is possible that the addressable patient opportunity.
Could grow even higher.
To put this into context for penumbra.
Our current addressable patient opportunity and peripheral thrombectomy is larger than our estimates of the addressable opportunity in a scheme extra.
Taken together, we see the ability for our company to positively impact well over half a million patients each year in the United States alone.
This gives our team a huge amount of motivation.
And the confidence and dedication.
To positively impact is many of these patients as possible.
Neuro franchise.
Last September we launched the number just seven an engine in the United States, which marked the beginning of a new phase of innovation for penumbra in a scheme extra work.
The pin number Jeff seven aspiration catheter when paired with the number engine.
Provides the strongest thrombus removal force available, which we believe increases the ability to quickly removed a blood clot, causing the stroke.
No less than a year later, we are advancing the jet platform with an important novel technology called extra flex.
This technology developed through highly innovative engineering and design.
Substantially improves navigation and tractability, while maintaining the full lumen of the catheter and therefore, delivering the strongest thrombus removal force in the market.
The introduction of the extra flex technology is part of a new series of stroke technologies that we began discussing earlier this year.
It was for showcased a few weeks ago at the society of Neuro Interventional surgery meeting and has received extremely positive feedback on its performance. We're excited by the early success of this new technology and even more excited about our subsequent innovations, which can ultimately transform the procedure and address the critical issues of fast and complete clot removal.
The importance of aspiration as a frontline treatment.
For stroke patients is now clear.
In addition to the strong clinical data aspiration has also been validated by our competitors.
This validation has motivated us have a number as we take on the complicated engineering challenges in order to make the procedure faster and more effective for patients.
We believe that we have the vision experience and multifaceted engineering discipline needed to solve these challenges we are committed to lead the field forward as we moved to new work and more advanced ideas.
While we were at the S. and is meeting we also observed a few consistent themes through the meeting that support our broader view of the future of stroke treatment.
Physicians and hospitals are focused.
On optimizing their stroke systems of care.
There is a broad interest in exploring the expanded use of thrombectomy to treat tangential patient populations.
And lastly, it is clear.
That advancements in technology can play an important role in improving stroke patient care.
In the future.
Along these lines Essen I asked represented the first time that we publicly demonstrated the real system for neuro rehab.
The consistently positive feedback at the meeting further validated the work we have done over the past few years with rehab specialists around the country.
We expect to share more details of our commercial plan later this year.
Before I turn the call over to Sri.
I would like to share an extraordinary patient story from a few months ago.
We have previously shared many uplifting stories about stroke patients, but today's story is different.
A young boy came home one day in interrupted a home invasion.
At that moment.
The unthinkable happened.
And this young boy was shocked from behind by the intruder in the net.
Hi, Ed.
Fortunately the boy was found on rushed to the hospital.
We're dr. Dwayne Anderson of our Lady of the Lake Medical Center in Baton Rouge, Louisiana sub leaving from the boys carotid artery and the arteries feeding his nose.
He opted to use per numbers very specialized pod 400, and pack 400, neuro embolization coils, which are specifically designed to stop blood flow and the arteries as opposed to the more traditional use aneurisms.
Typically dr. Anderson would have used adjunct tools to help stop the flow of blood, but with the quick and successful placement of these coils. He was able to complete the procedure very quickly.
Dr. Anderson skill.
And the use of our specialized coiled helped this young boy come out of this procedure with no neuro deficit at all.
A truly remarkable result.
These are the stories that motivate all of us.
We are grateful to Dr. Anderson.
And his entire staff for their great work on this case.
And for the recovery of this young boy.
I'll now turn the call over to Sri to review the financials.
Thank you Adam.
For the second quarter ended June 32019, our total revenues were $134.2 million, an increase of 22.4% reported and 23.8% in constant currency.
Our geographic mix of sales in the quarter were 64% U.S. and 36% International.
Neuro in vascular represented 61% and 39% of sales respectively.
In the quarter, we saw great momentum across our business, which resulted in sequential growth over an exceptional first quarter.
Revenue from our neuro business grew to $81.5 million in the second quarter of 2019, an increase of 9.9% reported.
And 11.5% in constant currency compared to the same period a year ago.
Our neuro growth was primarily driven by sales of our number system for a scheme extra.
Through the first half of the year, we faced difficult year over year comparisons in neuro.
Particularly in neuro embolization.
Additionally, as you may recall from our fourth quarter of last year with the launch of our peripheral embolization products in Japan, we saw a shifting of revenue from neuro to vascular.
We have seen the stroke market growth and competitive dynamics, both within our expectations.
As we look ahead to the back half of the year. We are encouraged by our pipeline of innovation and the recent introduction of per number jet seven extra flex.
Revenue from our vascular business grew to $52.7 million in the second quarter of 2019, an increase of 48.6% reported and 49.5% in constant currency.
In the quarter, our vascular growth was driven by results from both our thrombectomy and embolization businesses.
We are continuing to see accelerated growth from initiatives to reach new customers to introduce new technologies and to enter new geographies.
As we head into the back half of the year, we expect to see our momentum continue but would normalizing year over year growth rates.
Our gross margin in the quarter was 70% of revenues compared to 65.9% of revenues for the same quarter last year.
Compared to last quarter, our gross margin increased due to favorable revenue mix and lower production variances.
While we are encouraged by our gross margin performance in the quarter, which is the highest that its been since going public in 2015, we do not yet expect this to be a new level.
Given new product launches and further operational expansion initiatives through next year, we would expect our gross margins to remain within our historical levels.
Total operating expense for the quarter was $81.1 million or 60.5% of revenue compared to $63 million or 57.4% of revenue for the same quarter a year ago.
As previously discussed we are actively investing in our growing opportunities, which will result in growth in our R&D NSG and they spend.
Our research and development expenses were $13.5 million in Q2, 2019 compared to $8.2 million for Q2 2018.
R&D expenses increased due to an increase in costs related to development programs within both existing and new areas.
SG and <unk> expenses were $67.7 million for Q2, 2019 compared to $54.8 million for Q2 2018.
Our spend increased primarily due to increases in headcount and related compensation expense.
We had operating income in the quarter of $12.8 million compared to operating income of $9.3 million for the same period last year.
We continue to expect to invest in the growth of our current business and also in the development of potential new areas.
With the update of our second quarter results were formerly increasing our 2019 revenue guidance range.
Revenue guidance to be in the range of $535 million to $540 million.
This new range compares to our previous range of $525 million to $535 million.
As it relates to the third quarter, we typically see summer seasonality and expect our revenues to be sequentially flat to our second quarter results.
And now I'd like to turn the call back to Adam for closing remarks.
Thank you Sri.
As we move into the second half of 2019, we have laid the groundwork for a new chapter of the number of story.
We have confidence in our ability to develop produce and sell market leading devices in our current areas of neuro and vascular diseases.
We have also honing the skills and applied them in new areas, such as neuro rehab.
Just as important as the actual products, we are well underway in evolution and growth.
Of the entire leadership team.
Member.
This starts with the addition of our New Board members, who will be taking over leadership roles at key committees as well as the development and growth.
Of our expansive and amazing management team.
We have leaders in many cases three to five layers deep and specific departments and functions that have developed the maturity and skills that allow us to have the strong conviction that we can continue to scale, our growing business for many years to come.
Our leaders are thriving as they take on new and additional challenges.
With this capacity we are excited to embark on the next chapter of the pin number story.
Thank you and now we'll open the call to questions.
At this time I would like to remind everyone in order to ask a question Press Star then number one on your telephone keypad.
Pause for just a moment to compile the Q and a roster.
Your first question comes from Bob Hopkins with Bank of America. Your line is open.
Oh, great Thanks, and good afternoon.
Great result, overall, a bit more weighted to vascular than than we modeled.
So I just want to ask a couple of questions on neurovascular to make sure I understand the moving pieces.
The year over year neurovascular growth decelerated, a little bit relative to Q1 and it was flat sequentially can you just talk about some of the dynamics in the second quarter Neurovascular result that cause a little bit of a de sell in Q2.
Sure Hey by the tree so.
In the year over year context and growth rate that you mentioned.
Neuro, obviously, theres theres three components within that franchise.
Stroke, neuro embolization and neuro access.
As we mentioned in our prepared comments most of that year over year comp related issue resides in neuro embolization. If you look at the US obviously, we're focused on.
In on stroke, and if you look outside the us in Q4.
We highlighted a pretty substantial shift of revenues.
Related to our Japan peripheral embolization launch so it's really a shifting of revenue doesn't.
Affect the overall level of revenues, but just where it resides and some of that is settling down so really the acute focus in the comp is really around neuro embolization. The other two franchise performed.
With with good momentum.
Okay, and then I'm just curious if you could talk about a little bit about the the feedback from SNS on.
Extra flex aspiration catheter.
Just maybe just mentioned that the early feedback you're getting on the launch and should that lead to perhaps an uptick and kind of neurovascular stroke growth as we look to the back half of the year.
Yes, Bob it's Adam Thanks.
And a good question.
So as I alluded to on the prepared remarks that reaction.
From customers has has really been.
Pretty extraordinary we are done.
A number of cases enough to give us a fair amount of confidence that that that is that that reaction is.
Pretty universal.
And obviously.
As.
You know.
This field is not standing still it's constantly changing and evolving.
But at this moment in time.
With this particular product.
We have a lot of confidence that in the back half of the year.
We can continue to push this field.
Forward with its performance.
Great I'll leave it at that thank you.
Thanks, Bob Evans Bob.
Your next question comes from Larry Biegelsen with Wells Fargo. Your line is open.
Hey, guys. Thanks for taking the question.
So one on peripheral one a neuro so maybe a Adam a little more color on what's driving the growth there from a product standpoint, it sounds like it was pretty balanced with embolization and from back to me maybe you can talk about.
From an indication standpoint from a physician specialties standpoint.
Just a little bit more color on what's driving the pretty extraordinary growth.
In.
In.
Peripheral and then I had a follow up.
Sure on the peripheral side.
Let's touch on the embolization part of the business that continues.
To grow nicely.
As Weve said I think a few times.
As that product, which is its a.
Series of coils.
Gets broader and broader exposure.
We're able to start to.
How physicians think about types of cases that they might not have.
Used traditional coil technology to treat but other types of embolization tools.
And so we think that.
Is potentially sustainable for a while.
As we grow that part of the business on the thrombectomy side.
It really comes down to.
Just the simple math that.
We're incredibly underpenetrated still.
And.
As we get broader.
Exposure and.
More and more physicians are starting to think about cloud and the body differently than they did traditionally.
And sort of embraced the idea of just taking it out.
We think that we can grow that business for for some time as I said on the call.
If the number.
Is 350000 and thats without adding.
Potentially new areas or applications.
I think we're in pretty good shape for growth there for a while.
Thanks, Adam and then an ischemic stroke.
Could you give a little bit of color on the U.S. versus show us the scheme extra growth in the quarter.
And I'll give you an opportunity theres, obviously, some public data from from my Q via showing your U.S. aspiration business is declining in recent months.
It's a sample obviously, but.
It would be useful to hear your perspective on that data.
Thanks for taking the questions.
Larry It's Sri just to touch on on stroke.
So obviously there is a lot of data sources that are that are out there. We obviously are aware of them. All they are all very theyre all buried.
In where they come from the type of information that they survey.
We know our results I think we have a pretty close touch given our our presence and share in the market. We've always contended that the growth of the market is that the bigger factor and sensitivity to our results and when we introduced our guidance early in February we talked about the notion of sort of looking at the last three years of patient growth.
And thinking about six six to 7000 patients more this year that could be treated as a market. So that's high teens growth.
That's in the us.
And we feel like through the first half of the year that that has been consistent with what our expectations and predictions have been I think we feel as we go forward that continues to be our prediction for the year.
As it relates to outside the us.
There is a vast opportunity for us.
To treat stroke patients the populations that incident sort of speak for themselves I think as we talked about in other calls we expect.
Some variability in our outside the U.S. business a lot of that entering new markets a lot of that with distributors. If you look sort of going back to Q4 Q1, and certainly this quarter I think we set the expectation that there would be some variability outside the U.S. and stroke, but I would just wrap all that up by saying our overall stroke risk business is strong it's got great momentum and particularly as we look forward to the back half of the year, we feel quite good.
Thanks for taking the questions guys.
Great. Thanks.
Your next question comes from Jason Mills with Canaccord Genuity. Your line is open.
Hi, Adam Sri can you hear me okay.
Yeah, Hi, Jason.
Good afternoon, I wanted Adam Im sure Youve talked about three topics covered a lot in stroke and thrombectomy I wanted to cover.
Those areas and a little different way and then also gross margin.
On stroke, the set up in the second half year is different than the first half. So you talked a little bit about that given the comp.
And Adam talked about the extra flex launch and more momentum early there can you talk about.
Youre set up.
As a company in U.S. stroke in the second half of the year relative to that high teens procedure volume growth for the market.
Sort of juxtapose to the first half than what you faced without extra flex in the first half.
And then on Triple gone back to me I'm I'm curious.
What sort of color youd be willing to give Adam with respect to growth coming from.
Uptake or utilization increases at existing accounts versus new accounts using thrombectomy that otherwise we're doing drips here Q4.
And then the last part gross margins for you comment on whether that's a phenomenal gross margin.
Should we expect it to go back to the 65% level or.
With volume increases should we should we expect to see that improve overtime. Thanks guys.
Hey, Jason its Sri I'll start with a couple of.
Responses to your questions and Adam.
Can can take a few.
The other ones that you had you had asked related to stroke I think you hit the nail on the head and I think there's going to be I think as you look at the neuro Division number a lot of questions to look into the details of it as I mentioned, there tougher comps in neuro in the front half of the year and as you alluded to the back half of the year.
Changes quite a bit neuro embolization.
You can look at your own.
Modeling of it the comps changed quite dramatically as we head to the back half.
So there is that sort of.
Comp related issue, but if we think about the thing that really matters, which is sort of where the business today. The momentum we have in the business and how it's growing sort of sequentially specifically in stroke.
We are seeing that momentum and with the market, which again, we continue to think it's a bigger.
Driver of our results and also with some of the new things that we've talked about here as I said, we obviously feel.
Like we got great momentum heading into the back half let me just comment on gross margins for a second and I'll, let Adam sort of catch more on the jet seven extra flex and peripheral questions gross margin.
This is the highest gross margin that we've had as a public company so were.
Obviously very enthused about it.
That the expectations, we've set around gross margin is not to be driving that right right. Now so that truly is a very encouraging sign that we could achieve that.
In the current dynamic where we're growing quite rapidly expanding operations in launching new products, but we are in the midst of launching a new product and jet seven extra flex we.
I believe that we will have other new products to be launching and we're in the midst of really growing our capacity.
Not just in Alameda, but also in Roseville, California, as well so I think the right expectation that we would.
Sort of shares is that mid sixtys.
As we're going through this period, but I will say I think we are extremely encouraged.
That we hit 70% this quarter.
And maybe I'll, let Adam touch on that remaining questions.
Yes, Thanks, Jason Let me touch briefly on.
The extra flex launch and how it sort of fits in.
And then I will try to answer the peripheral question on extra flex launch.
So the first half of the year I am extremely proud of the open number team.
We are as you know are constantly facing a new catheters launched in this field and have for many years.
And the team.
Has done a great job of reminding and educating everyone.
It's sort of what matters in this field and it's it's a number of things you need to be able to get the clot out as fast as possible.
And you want to be able to track and navigate your product there, but you also then want to be able to sort of ingest.
The cloud as fast as possible and so with the jet original seven an engine we.
Really push the ball forward with the the part of being able to have the largest catheter with the most sort of thrombus removal force with this update to that product being able to make it even more navigable.
<unk> has really didnt give the team.
A lot of momentum going into the back half of the year.
And.
As we also said that's not the end of the line that's not the the last product out there.
And we feel that there is more to come.
We will continue to move that ball forward. So we're in a really positive and exciting phase as it relates to our strong franchise now.
On the peripheral side, a very specific question around where we're seeing the growth on the peripheral.
Thrombectomy side, either adding new accounts or seeing existing accounts.
Expand the number of patients or the types of patients.
That they're treating and the answer is really both.
We're seeing both happen.
It really depends on when and how.
Those accounts or are sort of coming onboard.
Many times they come onboard specifically focused on one type of disease.
And expand beyond that.
And and so were really the beneficiary of both.
Further penetration by new accounts.
As well as deeper penetration into existing accounts.
Thank you both.
Thanks. Thanks.
Your next question comes from the line of Robbie Marcus with Jpmorgan. Your line is open.
Oh, great. Thanks for the question or two from me first.
Adam at the end of your prepared remarks, you made the comment that you're moving into the next chapter of Penumbra and I know I know you guys are always excited about the business and the products, but I don't think I've heard you guys talk about the next chapter.
For for several years now so maybe you could just give us a recap of why it's the next chapter what what to look forward to and what you're most excited about.
That's a great question, then I'm delighted robbery to be able to sort of attack it.
So we really have three areas that have I think made.
Make up the next chapter first and I never want anyone to did not believe that we care about this because.
We started out really treating stroke patients.
And we are incredibly confident and excited about.
The products that we have now and coming in the future as it relates to our original franchise around stroke.
And I think those products.
Both with flex currently but with the other ones as well provide a real catalyst.
For the future growth.
Of that franchise for us as it relates to our vascular business.
Having the understanding that our.
Addressable market is growing and continue and can continue to grow.
Both.
With our existing products, but with newer technology that will be coming.
In the future as well as.
The extract trial.
That goes into new areas, that's two more catalyst.
In the the upcoming.
Year, plus that will allow us.
To to be very very confident about that part of our business and then finally, when you look at new areas and the reaction.
Broadly too.
What we are doing for neuro rehab and how.
The technology that Weve developed is being viewed.
And reacted to buy the professionals in the field.
It's incredibly heartening I mean, it's really.
Exciting and motivating and that performance or provides yet another catalyst in that in the future. So when you add it all up.
We feel like we're in a really really good spot.
On and I really particularly wanted to highlight not just the product side, but that just extraordinary people that make up the number team.
Because they they are maturing and growing into.
As I said, just amazing leaders and have the capacity.
To to to take this that that far so.
It's a great time.
And we feel particularly excited about.
Thanks, then just to follow up on Larrys question from before Sri I, just want to make sure everybody understands that said its a big sticking point.
For a lot of people.
In terms of the stroke growth and.
I think everyone understands the market is growing in the high teens, we side, even better last year by it so far.
It looks like high teens, just wanted make sure we understand what you're saying is that.
The patients growing or high teens, there's a shift from stent retrievers, two more aspiration offset by some degree of share loss net net you're coming out to that high teens market growth.
That's that's part of the question part B can you give a sense of maybe where you stand in share in the U.S. versus your international markets, if you're willing thanks.
Sure Robbie.
I'll answer this.
To the to the to the best that we can and know that the.
You are looking for.
Some additional color around this.
What I'd say is I think.
That a lot of the parameters that we've outlined before.
Are unchanged and I think thats, an important statement to make I think theres a lot of questions on are things changing in a way that's different than sort of what we've been discussing expecting are predicting let's talk about the market.
As I mentioned the market.
Growth in the us if we sort of focus on that for a moment is.
Moving along the expectation that we had around that six or 7000 patients and.
We see that through the first half and we continue to believe while the foundation is getting stronger that that is sort of the growth.
You know that we're experiencing today.
We are.
Of the feeling that there is a movement consistently towards aspiration as a as a mechanism.
That obviously is a market phenomenon that.
It's hard to measure it's from our experience I think some of our.
Our other folks and peers in the space of have confirmed and validated that point and then the third one which is harder to measure is competition.
And.
People have a couple of things to evaluate their what companies themselves are saying what various market data sources are saying and as I mentioned.
We're aware of the market sources out there I'd say all of them are very different and they all collect information and different methodologies I think they're trying their best to be instructive, but we obviously know our information our data and try to triangulate on that.
It's been our expectation that as this market grows we will face more competitors and as Adam mentioned, none of the tactics and strategies are different than what we've experienced in the last three years.
There are periods, where you you hear about competitive launches from one particular competitor or another those are all things that we have over the last three or four years anticipated and as we look forward.
The biggest thing beyond the market is.
What do we do in our control and Weve outlined.
Our strategy that isnt singular, but it's more comprehensive in terms of how we approach the future and today you've heard of one of those components with the launch of jet seven extra flex.
Internationally I think that's a very exciting topic for us stroke is a global disease much more incidents outside the United States is much more opportunity. Many of those countries are just getting started and they're well behind where.
Countries like our regions like the U.S. and Europe are.
We're excited we're just getting started in some of those regions in Asia, and South America, and it will be just by nature of those markets and our distribution.
A bit.
Varied quarter by quarter, but we think there is a significant amount of growth there to be had and we're on the right track to achieve it.
So I guess, what you're hearing.
Net net is the momentum and the enthusiasm that we have in this business is consistent.
And as we look forward, we're quite confident we have things in place to allow us to capitalize on.
Thanks for the color.
Thanks, Rob.
Again.
To ask a question press Star then number one on your telephone keypad. Your next question comes from Margaret Kaczor with William Blair. Your line is open.
Hi, good afternoon, guys. Thanks for taking the questions.
And maybe the first couple from me and I will probably leave it there is on vascular and so I think you guys said earlier on the call had talked about not having full geographic coverage and I'm not sure. If you guys can give us any metrics in terms of some of that market development work. The coverage that you guys do have versus down and then any sense of kind of account development ad targeting and targeting of accounts or how sticky some of that new account business is that.
Mark Margaret I'll touch on the international piece and I'll, let Adam touched on the your second question on sort of new new accounts.
Vascular for US is predominantly a domestic U.S. business right now and as Weve.
Outline the opportunity.
You can tell we the 350000 addressable patients where the U.S. statistic.
That we introduced on this call.
That is a pretty significant opportunity and there's obviously a lot of growth opportunity for us in the United States. We equally think there is an opportunity outside the United States.
That's going to take some time to develop the first.
Sort of geographic opportunity for us in vascular was in the fourth quarter with our launch of our peripheral coils in Japan.
I think that we mentioned a couple of quarters ago says and that is just starting to get going but we really are are not really.
In many of those other countries, yet, which remains a future opportunity for us and you'll hear about that in the future.
Yeah and.
Margaret is.
The question relates to sort of the maybe the U.S. business.
And house sticky it is we have coverage throughout the us.
But were not fully penetrated in all the accounts. So we have that capacity. It just takes time.
And education and really training.
Physicians.
And their staff to think about clot.
In patients differently than than they thought about and that's been sort of the effort underway.
Now for many.
Years, as we sort of take on that that education process.
The business typically is pretty darn sticky.
I won't say.
It's a 100% stick in every situation there are.
Times, where people may resort back to what they know and have more experience with.
But.
The business I think I answered it.
As it related to.
I think jasons question the businesses.
It's both sticky.
And there is opportunities to gain more and more at the same time in more and more areas.
And diseases.
Types of cloud.
But also there is still a lot of room to go to penetrate.
Okay. So that then brings me to the next question, which was some of the Tam discussion you guys had at the front end commentary and so that increase for domestic I think you took it from 150000 to 350000.
Which is a really nice job add so maybe talk to us about those changes and I assume that's still within PEO TVT DVT excuse me in an AD PE, but are these patients that are already in the channel and proceeding some sort of peripheral intervention or is this more a market development work and new tech development that needs to be done to kind of get to those those addressed thanks, Yeah, I think thats, a really important question and we tried to.
Answer that really so let me be even clearer.
That number represents the number of patients that are being treated.
Today for some form of clot.
In their arteries are veins.
Either strategically or intervention.
And we understand that.
Broader based on the work that physicians have done with our product.
And so.
We have added.
The patients that were surgically treated.
As well as.
Some areas that we Didnt really think we're sort of mainline.
But but our product has done quite well.
And so for that reason.
Just with the experience that we've had with our product we've been able to sort of.
Add those patients to our goal of going after it doesn't include patients.
In which we don't have a specific indication for.
In areas, where we think that number could grow even more.
And those patients we will certainly talk about in the future when it's appropriate.
Great. Thank you guys.
Thanks.
Your next question comes from Joe Edwin with BMO capital markets. Your line is open.
Good afternoon everybody.
Two quick questions can you give us an update on how you're progressing with cat Rx and the coronary effort.
Sure.
So cataract.
It is.
Two things.
Not in.
Those numbers that I just talked about that that is just the peripheral side of our business. So thats.
An additional group of patients.
The product itself is performing quite well.
It's.
It's a little different.
Type of procedure.
Then the vascular side directly in which.
Many times, the clocks really an adjunct to something else.
And the physicians using it in a in a much faster and.
More dynamic situation, then where the cloud itself is creating the issue.
The product is performing credibly well.
We went into that area with no data.
And just the idea that using power aspiration in this form could be helpful. At least for the limited patients that have severe clot burden.
And I think for those people who are.
Our are trying it and seeing that they're they're coming to the conclusion.
The device has done really really well for them.
Thank you.
Second question, you alluded to more information on your stroke rehab effort later in the year.
Is there for that we will get that.
And can you just sort of give us an idea of how to bring the parameter of what that might mean for you. Thanks.
Joanne we've mentioned previously that we expect to share more information on the product.
Outline the market and in our commercial plans or strategy, we haven't yet announced specifically the venue where date, we plan to do that but that will be the the the agenda for that for that for that meeting.
No nothing today.
Thank you great. Thanks.
There are no further questions at this time.
MS Hamlin Harris I turn the call back over to you.
Thank you operator on behalf of the management team. Thank you all again for joining us today and for your interest in Penumbra, we look forward to updating you on asset cortical.
This concludes today's conference call you may now disconnect.