SILK - Earnings call transcript Q2 2021

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Operator

Good day, and thank you for standing by, and welcome to the Silk Road Medical's 2021 Second Quarter Earnings. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Caroline Paul, Investor Relations. Please go ahead.

Caroline Paul

Thank you, and thank you all for participating in today's call.

Rogers, and Officer Chief Erica Chief Lucas are Officer Financial Operating me Chief and Executive Buchanan, Joining Officer. XX, Earlier financial today, June results released XXXX. for the Silk three months Road Medical ended is of copy the the release A available press company's on website.

and for of expense market adoption, in and estimates our recovery, organization training upon to Act and begin, our Reform statements predictions are that future management, statements, are Any forward-looking future current those based safe should management expectations commercial these of expansion, COVID-XX to and events, include will business relate statements. you performance, and All reimbursement, and These differ those we on are risks hiring, or by trends limitation, physician involve product pipeline the growth statements. international our and development financial performance Litigation the call label XXXX. relating within Private expansion prospects the provisions meaning this in contained operating for during to opportunity, or Before material or events could place not of expectations from securities on that reliance these various assumptions. forward-looking statements. of remind implied call made actual or laws, to and statements without forward-looking to our which this including, that results harbor cause the like I'd that you statements statements materially make Accordingly, of undue uncertainties anticipated federal Securities results pursuant impact forward-looking

because only business, XX, call please Exchange of the Factors statements XX-Q over the the broadcast financial of Commission otherwise. the that, report obligation, XXXX. future events filed update or accurate and revise risks with forward-looking a as of as or contains and disclaims today, will uncertainties or section on any on description with quarterly or July Silk Risk and And projections For law call to is information except turn intention conference to live by May new XX, whether information, list our Form Medical associated time-sensitive Erica. XXXX.This refer Securities any Road required with to the of our and I

Erica Rogers

for and Caroline. call. you, Good you afternoon, quarter all earnings thank our XXXX second joining Thank

Buchanan, Joining and Financial me Silk today as is compete At win set Chief against Operating care. we of Officer. establish the invasive out and Officer Lucas are surgery our and Chief Road, standard to TCAR

just the to We risk less a are TCAR that. first doing for as back proven, on evidence into expand, offense clinically including standard time continues of option treatment and supporting population. surgical body The invasive patient

the last the year, for carotid share also endarterectomy, Over became share stents we significant #X procedural we margin. significant both units and and in carotid a leader revenue from by took

and we risk to disease. of trained and the As carotid lives half we beyond, for leverage exceptionally evidence, our continue committed positioned robust into to to artery well of organizations XXXX base TCAR on the advance due our impact adoption TCAR of physicians, drive commercial and efficiencies, clinical patients stroke second at are proven

procedures. execution, X,XXX commercial quarter our U.S. is roughly and performance XXXX in objective strategic resulted primary in TCAR Our second

to Importantly, traction. base. the per physician Procedures trained in increasing significantly each physician aimed efforts larger were up segments, XX% coming of sequentially at adoption are physician quarter, our our back a gaining levels in across pre-pandemic

from quarter. TCAR the to who aimed a had prior training among of XXX at as recent QX, most adoption programs in performed initiatives bore Additionally, not our procedure procedures physicians fruit driving nearly whom performed in physicians newer

basis, year by raising our million total year full revenue we across preparations health when observing of guidance segments. care the the Based improved we our physician million Additionally, the of standard the of time XXXX, in XX first growth to in objective second trends to are strategic the Driven an recognition XX% quarter, the to the our the increased in of we million.Turning seeing period -- excluding $X.X XX% on same TCAR the post-training in $XX.X the prior trends positive revenue each field, total we revenue continue quarter cases label advanced expansion. reflecting adjusted $XXX $XXX achieved to our XXth second compared are million deferred growing to backdrop and of Overall, a year-over-year. are utilization, the we and On potential improving for shorten. of for risk XXXX. revenue to surgical adoption

to high-risk Though is the at a of currently patients adverse risk high indicated a additional unlocking or would roughly CEA. for traditional the the high us risk stent of by U.S. very our more opportunity from endarterectomy for importantly, level population surgical increase And subset patients large put As a XX%. surgical standard access us, playing events considered with carotid ENROUTE on field reminder, risk. surgical is TAM

an Israel risk highlight to risk versus Society upcoming compelling surgical is San a and viewable website. VAM Vascular VAM The plenary Surgery presented from that for Meeting Liang Annual CEA be Diego. in or This Beth on of utilizing evidence abstract ever Deaconess for is shows in standard on pleased first in will TCAR standard in patients, the initiative real-world the vascular session at Dr. Patric quality of the comparing outcomes patients. presentation outcomes TCAR are surgical the analysis by We August XX

we collaborative progress productive questions. programming regulatory have evidence pre-submission filing around which our real-world in to data analyses expect The Overall, XXXX interactions to significantly we pleased ultimate the details look of FDA data those statistical different slightly data approach. strategy come are FDA, submission, PMA are to around sharing provided the with meet be details presentation they interactions multiple the publication, supplement refine centered since followed objectives. the become QX with at in our with to We with to statistical FDA including our more as and submission largely and statistical public.The presented will filing, and to regulatory similar forward the in the VAM

note FDA quarter, XXXX in Given study post-approval patients. progress surgical refining with launch revenue standard our the risk and assume guidance regarding standard are requirements. risk treating currently surgical not any does our the current that anticipating from coverage contribution strategy, Please engaging CMS we

addition we strategic products, in international into In and disease therapies continue to X our XXXX drivers, top expansion TCAR focus states. objectives, and long-term invest Transcarotid new new to carotid improved on growth additional in neurovascular our including and markets

into a are For are we XXXX. new beneficial Transcarotid a market. making Stay believe guidewire we balloon tuned initiatives example, TCAR we continued penetration see Transcarotid approvals that and could on for that catheter on these progress new in the of

pursuing and under both with and the our NPS to Japan the PMDA submitted In in ENROUTE system second And we international the review. front, China for with this quarter, we we're regulatory Japan China. ENROUTE the NMPA filed in Stent. System the in approvals both already stent Neuroprotection On shown-in applications for

preliminary committed begun also unlocking first China. steps globally. countries have and market have addressable exporting to And partners with take billion. of to both discussions Japan We total these commercial We both and our of our phases $X.X advanced steps distribution the TCAR global remain in in potential mark

do from Japan As not year expect China. this revenue or a any we reminder,

program. Turning acute ischemic neurovascular stroke to our

year. progress with our execution, risk this for summary, to begin first on is the as the Transcarotid reminder, feasibility in U.S. FDA-approved and process study, Neuroprotection a in thrilled for team pipeline are that stands standard during expansion, quarter, of which, In The preparation we sites this We and international our making expect for the enrollment Embolectomy. initiating NITE-X we surgical expansion. long-term the study commercial are IDE development

facility Operating second and that, in The Buchanan, elevation leadership noticeable call our quarter by the continued turn to marked With capabilities expanded Financial a Officer Officer. Minnesota, Chief leadership and commercial Lucas and driven the a force clinical, and talent. our and will organization, regulatory, improvements, over and sales top overall I of new quality of addition operational Chief now R&D,

Lucas Buchanan

trained active months Thank Growth XX, and of XXXX, you, June the driven accounts, hospital XX% physicians a territories. increased the was expanded by for base an in three million, prior same $XX.X the of was $XX.X of year. sales TCAR increase Erica. from period million adoption Revenue across ended

for to sales sales provision of the with the of includes in deferred the to historical prior revenue million shelf trend due XXXX with revenue related coupled a shorter Our for downward recognition a return rate. in the our in life, second returns certain quarter $X.X decrease

increased Excluding XX% prior of quarter the in compared to contribution prior XXXX same of second year. XX% of the second to revenue the year.Gross period quarter of the the XX% $X.X second million, compared in the the quarter for XXXX margin was

COVID-XX. our in the of unfavorable XXXX variances production a to the declined primarily growth driven second expenses growth of second The XXXX. impacted was quarter million were was temporarily trade was manufacturing in operations as were administrative ongoing million The a and XXXX. the expenses $X.X expenses gross of of for June XXXX. travel, million in of to compared second by million increase programs. related of quarter impacts the Total margin well from $XX.X million reminder, general, personnel expenses of XX% by $XX.X three XXXX, to $XX.X the increase team operating were XX, and in driven in ended the XXXX the quarter to $XX.X idle As investment second new second quarter Sales, $X.X to of due expenses increase the show COVID-XX second commercial and million, R&D and for for of XXXX quarter second by XXXX. resumption in months attributable compared the as other to quarter R&D as in compared primarily the quarter

the initiatives $X.XX million expect the for was with in XXXX loss equivalents a as same loss growth Net We share period and loss of expand continued per in Minnesota. year. share, to ended quarter million, short-term we presence compared our team, the the the expenses of investing expand in million per of of commercial cash as R&D of new cash, $XX.X We in a second or prior $XXX.X quarter further second net $X.XX of $XX.X continued half for operating investments. to and equating loss our a

recently our of Minnesota, Minneapolis we a broadening Paul to team continue to XX,XXX temporary footprint, excited have foot in region. we operations As part square Plymouth, St. our include and broader expanded facility are the

of This a we Valley. Silicon a moving technological serves and history which also building to initiated into has growing great square-foot have continued in innovation a XX,XXX as Plymouth, complement our on larger talent expect and presence year. to construction We rich early next region pool in begin

to Lastly, XX% are to our as $XXX XXXX over guidance million. we million growth of $XX.X of raising representing revenue million, Erica XX% $XXX mentioned, to

to like driven the and prices back selling new demand procedures the closing physician At I continued and tenured. for training, for is turn in new the progress organization in comments. physician, our by per confidence pace this commercial and point, average in would trends continued Our Erica and call hiring to of strong both

Erica Rogers

Thank you, Lucas.

we asset the Entering the Directors. across like our the nonprofit Before second profit TCAR of new leadership I healthcare esteemed and important Carino forward how are the to standard we highlight of system health have governmental, bolstered performance business Board in an a towards are and Dr. that indications, close, overall. in years seeing drive new half Her positions efforts trends and experience would of Carino Dr. expert for care to to over of we policy as expansion. be with our year, therapies by we delivery our and we push widely insights global recently added XX for sectors. is Tanisha healthcare are will honored

the to that, in advancing to years We are up in and the it of With difference are we drive therapies making open new now who questions. a physicians to indications the ahead. and patients growth real new committed we will them, lives treat significant and

Lucas today and Davis. portion our me Commercial Officer, call our is the Joining Buchanan for Andy of Chief question-and-answer Operator?

Operator

have first of We Robbie from Morgan. with JP the coming Instructions] question [Operator line Marcus our

Lilly Lozada

Robbie. for Lilly actually is This

any back both ask Was regards million And you And two gives variant catch-up the The of third the the sustain with volumes that to And about quarter. what Delta So it's tied you're the trends in are $XX at to quarter? level increasing be there able third a comfortable quick to them to step-up a concerns that is you over Is that upfront. and have streak backlog? year? second, the you'll that in ones, nice utilization. the for of half hear confidence with? I'll that in in procedure any utilization

Lucas Buchanan

take I'll of one second that first Lilly. one. the and maybe of part Sure, the part

lot third is and vacations discussion physicians that of the there's case typically as swing quarter, all In taking a certainly, the tough terms we affected that's the a and is just of half school seasonality behind know, third quarter and quarter, year by and to the us. gets this in back change be vacations form year, around as in patients tends back a loaded of and after

of those of Obviously, cognizant Delta the that's of So the are trends it. country. part certain a impacting lot variant we're of parts and how

I that, our more even think, So to back QX QX. of on and thinking be influences all normalization to hope in

Erica Rogers

Thanks utilization of emerge backlog. is your take procedures influence it's and most where And Erica. back QX, place Lilly, in were that really elective is half can for for say part. I think joining COVID started schedule this of to which the safe question a Look, the there, potential on the I the to us. back to we

focus, business pandemic. And last part larger up sustain driven a back procedures can denominator, more to were is the because we are larger to base want your to question, level just the to all per is about. per our are I part, by on the believe that returned that XXXX for like in to any that so remarks, that's that driven in Lilly, backlog adoption back But trained. we confident the in we most we getting physicians And more moving second the our per of is point procedures And prepared in yes, procedures growth to do business of the and continuously And but physician effect as physicians answer year, the a out prior this don't of curve. we for by prevention. quarter, that physician stroke where physician the said we what were medicine a of we looked that the

Operator

the coming have our with We Rick Stifel. next question from line of Wise

Dylan Haas

comments TCAR you the I of you on it think there's one converting what terms TCAR, incremental risk, the ask Dylan subset more standard adopt? about to doing to actually a in more And is smaller way do for terms of are see launch using either opportunity playing in wanted or in to thinking risk docs docs, where a prepare trained patients doing strategy? leveling Haas to Rick. readily you on This the just standard for more to frame or not currently in field, on on

Erica Rogers

Sure. Yes.

and joining Let me and then very think guy that answer much thanks take to some I that, the is really Davis for best Andy of of us. Dylan, most

you a some fanfare you what I'll of talk of we the that, We're of launch the terms of procedure have imagine, I Andy, back type think about kind a that. launch. going bolts physicians, label get you labels quite done to materials, and big new the launch. be the can We And for really packaging let about that that a make like I risk. it, just as In to things that marketing nuts change do is with new materials, And potential can TCAR consider as strategy, include it's that there educational new about it in surgical consider to basic think this we're are expansion. and imagine. to will But thinking way the conversation with how most high half obviously, for importantly, and changing the as ready take

Andy Davis

Sure.

risk. risk high But don't necessarily is mentioned, Erica years the that surgical language. is been the the conversations learned the As that a what high having that between surgical we've that vascular patients differentiation aren't course potentially in several of and surgeons we've physicians with speak over

to on is So indication, standard playing that choose field then all referenced, as they will risk able best patient. an it we what even with for put feel doctors the can as Erica of surgical relates how be onset to patients label

higher that their come of adoption the high lot have doctors adoption own they taken along -- particular own table. now levels on of adoptions will that their a as the that practices. adoption this very their TCAR on every again, everybody towards own TCAR So has to at off of doctor been march be with else, they are their based -- to in distinction as experiences. relates And we of will But it ones those individual have physicians, will levels move

So it's ahead current our of we be to still is in population. a the and still that have going of us opportunity surgical risk high -- market, lot patient addressable

working levels So to the of very indication doctors short-term those where that them hard those really But achieved adoption with we're keep going movement along label to we'll in higher already the move this curve. is with see have adoption. upon physicians

but this a encouraged an to do have way by we being we're long go, even very take field still playing indication. we once So

Dylan Haas

way the new to territories another incremental Is in long just had in sales territories start a they to those terms procedures? adding accounts force territories. expansion driving new on new of on how those and provide Great. And opening there I new color of timing and take

Lucas Buchanan

Yes.

half last active had Let some excess in And guided year. end We XX. of XX XX me take that. to we've additional by the ended in about We talked front historically of year with towards the sales this territories, of building training. reps obviously,

Our hiring biased. half this slightly calendar second year is

And relatively and design in year strategically XX. entering training about I'll he becoming some again, active Andy territories more concentrated in that grow docs building so reps in how thinks so will as group and and on towards territory more comment some we let QX that we QX of next be have additional a hospitals. over with

Andy Davis

And course a deep of go number create in smaller, that of territories territories spent continue really we've is way as our and of drive referenced, efficient again, -- trained Erica we optimized. over are achieve more to months, of can, time do to last size that what trying we're size base. that user accounts, the optimization to adoption, market. of some to the doing of our is on lot can we efficiency territories, And the addressable several have We studies total

really So we to higher shares, driving benefits smaller, aggressively market been as we're XX where on we pace territories, more marching see are penetration. territory where that achieve are we're have deeper to we target, and the the very a towards optimal starting efficient able

examples of dividends. early where process we've paying -- to several have to in and able We this get in this huge it's been level that

for go we drive So we'll in to continue our have with trained with territories over reps time very and reps, to when focus that time, confident XX be to more able more penetration I'm higher deep. full

Operator

We have Citi. the Joanne line our next coming question of with Wuensch from

Unidentified Analyst

Joanne. on This is Anthony for

is is So height that does in How the months physicians is utilization around my to utilization. TCAR of to how break on -- their that trained the experience of And further, And comparing utilization XX first about then have it one how I that belts? were comparing follow-up. were a ago this a down that to then trained pandemic year physicians quarter? pre-pandemic their utilization their bit had under of

Lucas Buchanan

touched little pandemic, on share has general, the was bit think and we this against down overall prepared during carotid if Erica took Yes. for remarks. in repair you Well, about CEA. a the her volume But procedural

overall depressed. was as volume share taking So procedural procedural -- national the

And back and during base. And to she those physicians relatively the the a pre-pandemic ability we peaks have also trained larger second do from those there like -- physician the as coming mentioned, to So pandemic across marching were efforts there trained metrics. recently real on cases as upward was much that in quarter we're didn't bore some targeted levels and efforts of fruit.

answers if question. encouraging trends, are So your most those all of of that things

Unidentified Analyst

Yes, And that's on is second NITE-X then helpful. trial. one my the

or treatment neuroprotection inclusion about that? retriever. the as Or stent as of transfemoral? the patients guessing transfemoral about think One [ENROUTE] failed patients we second-line therapy, thinking have I'm once how is should be we seen a which Should aspiration system is failed that criteria

Erica Rogers

that Well, paying to thank I question, and details attention in really you study. look, appreciate the posted for

of first doing this method looking procedure. transfemoral all, time, we're just stroke a So is for this while of a really first failed the at the feasibility thrombectomy is therapy, this because neuroprotection, trial really

to failed much the patients set And attempt you a mean of -- and a and It don't it's up The very the potential really feasibility broad, front end. definition want very lots different is you does necessarily why is transfemoral before meant. reasons so you this in we're not of of on And for kind failure there can failure failed failed be walk was it because run. said a attempt. it the really what -- phase,

read into wouldn't too means. I much that what So

understanding this failed about this this benefit of and beachhead really the therapy it's of transfemoral the So to which considering as from therapy, sort expand.

Operator

coming Piper question Maeder from of We have Sandler. our Adam line next the with

Adam Maeder

sense in a in Lucas, trying it from Erica, Just even more And nice for quarter. have Maybe if to you're past ask Delta out? on July by willing follow-up. and momentum excellent and to just and give QX weeks? congrats if a the to about bit little start, seeing progression to impact any better played the wanted recent a month get trajectory you're then I variant early the how

Lucas Buchanan

think into the some but patient And Adam, perfectly the call XXXX keep talked with we'll least. business for are quarter heading for our linear those be all strong and the the think and the trends in at march year, for they this I behavior we'll I underlying and QX the and comments what's in of and all not the a just happening linear. fundamentals stats meantime. But set beyond. of We to on They've Delta continue and another tone linear the won't been we're had not rest QX. things and probably really not time, QX. about the confident up navigating is Things

Erica Rogers

to up on we're think is the best I offense. sum Adam, back way sentiment our

Adam Maeder

Got it.

in a physician launch bit then In you about engaging talked little this a force the opinion, VQI is It's guess first, surgical behavior to Okay. standard just patient abstract risk. refining it sea risk. standard release non-inferiority cohort? in with then project, that TCAR surgical clear. next on and this in surveillance showed CMS. And was question. question multipart strategy remarks the I your also CEA to in crystal is there an a from But And maybe enough prepared change

about additional you on Just reimbursement you're pathway color things? there any thinking can how wondering and shed if

Erica Rogers

Adam. Sure,

me time let as against to and years carotid CAS death stroke stroke up frame against as good without First, was first to question you long-term days. course, this back days? death said, stroke trying everyone's go take XX-plus mind CEA is, up, which in on transfemoral when just endarterectomy, is it if is the first ago over in live protection in first in the protect a or creating XX you has the of the the that in Can failed expectation. to transfemoral And that a XX to

in as the as this publication. in the that rest. presentation is And to expect will so likely VAM days? past, ultimate what all question and infarction surgical any is, the risk TCAR comparison carotid that abstract, other foremost measure. to all is is do CEA ever first in things on a length matched it artery first Adam, don't that propensity see to added of first and that and equal discharge, in such published at that myocardial of did stay, What abstract, patient is as such in modality how such of the nerve you the group the you in home disease And get the color be abstract cranial particular And the the in at has standard population in which XX injury, include in that the we saw

patient expect are this will to most in in every superior have in that We population CEA so in don't measure. new population change And population. other difficult we surgical the patient that risk we shown the high patient

ongoing. been approval. Regarding risk. risk follows part in beginning, the first high our standard CMS surgical working your reimbursement, second, since are strategy FDA opening and second Those conversations of on up all on with very we've and typically long-term the surgical along question, conversations Coverage of

update you details on to we'll so more approval. we closer get And as

Operator

next Leerink. We question of our line have with coming Rebecca SVB the from Wang

Rebecca Wang

to Hi, question. Antalffy. Rebecca, for I the on wanted utilization is, follow-up on Danielle this

for So [indiscernible] Are first were perform you XXX some number trained? results after from recent or there XXXX XXXX early in didn't new trained TCAR think, to quarters. late before physicians guys time we they pandemic physicians which with have in of you procedures the physicians Now pandemic the I say in QX, early immediately higher the than were and physicians that should starting the is saw we is, trained as procedures ease perspective? utilization a do that

Lucas Buchanan

take Rebecca, this is Lucas. that. I'll

a time you're one slightly exactly We it's particular trained bolus of period, when physicians prepared Erica's misinterpreting in think I not a necessarily folks quarter. comments. give those were and didn't

have every deciles, way way single you filter to sorts progress, that that. through we analytical way of tenure, about the think progress segment it, noise this year. we to year trained Every ways which COVID, in we of ways. talked all right? And think XXX making But to different excess have the we've and on at is I focus they're quartiles, if the behavioral, all just with as training entered we've this physicians, another look do the X,XXX we of about but made in we X,XXX,

X,XXX efforts $XX could working. we're different you okay, and said, So And math X a roughly the those at QX That's $X,XXX. and we of to if simplified just physicians our get single do of segments in -- over over targeted revenue. the procedure revenue per and incremental million docs programs a to it's of building procedure and take them year course incremental

So of maybe a is organization lot base small away improvements focused. we're incremental And off all procedures to physician the trained a large where growth. quarter That's doc one from of per tenured yield clinical assets evidence, of great and the across well we and but docs, indications hopefully the products, territories, really given trained new see have we positioned trends COVID products we're the new noise, coming. finally

Operator

I the call back now over questions will this There turn at Rogers, are to CEO. no time. further Erica

Erica Rogers

call the very attending today. all for you much Thank

Operator

This participating. concludes today's conference for call. Thank you

You now disconnect. may

Silk Road Medical (SILK) 31 Jul 212021 Q2 Earnings call transcript