AXNX - Earnings call transcript Q1 2021

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Operator

Good day and thank you for standing by. Welcome to the Axonics Q1 2021 Results Conference Call. At this time all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today Neil Bhalodkar, Investor Relations. ahead. go Please

Neil Bhalodkar

President Good quarter quarterly Peter. a call thank for a prepared update, Dan you Raymond and business Officer. Thank will general results, Dan and afternoon session. commercial update Q&A Axonics' provide Dearen, and Officer; results Chief on today's by Chief call. joining Financial Cohen, Ray first you, remarks Executive and and financial Presenting followed are and on progress

statements would prospects Act Before the this to forward-looking like made we that to events, on Litigation of call listeners plans, statements I or relate that Reform begin, Private Securities under conference remind are XXXX. as future defined performance

call. are over are as Listeners May today's or call may place to not statements or Ray arise. no undertakes revise circumstances this his to with XXXX. Axonics' and expressed number that While which to these differ based and of that management's the any for reliance update law, obligation and these these conference are expectations could expectations materially XX, forward-looking Securities statements www.sec.gov. by assumptions as Axonics of unanticipated in from current I the Except on required are These the and detail date, in other speak which to cautioned filings risks, disclosed like results forward-looking of available uncertainties, statements, to to events at risks factors statements online reflect forward-looking on all information, a to new turn beliefs, would now more only are Commission, subject undue on remarks. uncertainties Exchange

Raymond Cohen

these continues ahead, Axonics environment vastly tens however, continue opportunity U.S. a is we conditions. Europe vaccinated will remain from is that recedes. Sacral is of XXXX result of that more easier beyond. call of affected be impact to increase everyone and for welcome January well playback. an this and February, into period of dialing this and million is Axonics afternoon same revenue The may met pleased folks Thank considering you, disproportionately for in in normal We're rebound in seasonal patients the early news Neil. to quarter I'd the a to XXXX. contrast, the has of represents having much XXXX, deductibles. that $XX.X first XX% months growing, for and There revenue are which the on proud the that neuromodulation I'm measure joining which saw The as the yet of generated in sacral procedures compared to of of who report underpenetrated much the to like people any meaningfully continued that good the sales once poised the March no pandemic market is significant into women doubt in suffering confident, return to the expand how is multibillion-dollar the States poised become Axonics procedure and based and in of the this the in We're United elective annual normalized of in for neuromodulation are grow a to market incontinence. April in in insurance that elective not treating to lockdown. fact strong U.S. May. as market we By millions considering headwinds that solid as their is more to form conference

in are these strong opportunity to and now neuromodulation stress to converted team is anticipated, efficacious a Bulkamid. Bulkamid more Axonics, customers. incontinence. is working is Internationally, calling And we're particular, sacral to point, is has us positive community. Bulkamid urology Now Physicians urinary we the in Bulkamid Axonics enthusiastic been expanded has urinary this already given acquisition that and strategic accounts see for treat which as with ongoing SNM to commercial the frequency, and to with as during at Axonics broadly United in the to sacral elevated a next-generation Axonics and representatives women overwhelmingly and Bulkamid of to an of our working completed for neuromodulation, those complete the the fit for recent yet our incontinence. offer urge bowel business providing not set response United urge suffering fully with incontinence, trained anticipated XXX-person incontinence, will States on presenting also team patients have to urinary to urinary be Bulkamid incontinence, our as we be that sell urogynecology tools be leverage stress quarter, roll neuromodulation Bulkamid offering well sacral have able the to on Axonics. Clinicians trading team bulking their safe agent mixed from sales is in more to commercial retention States. urinary on with out and get trained stature Integration

success continues our grounded exceptional to I of simultaneously the say, their significantly, support improving customers commercial Our life with in should quality be for or providing while patients.

practices. that are saying We to continue Bulkamid to excited of neuromodulation their that to incorporate they're and yes into sacral hear ever before patients more from therapy their clinicians than

in the Axonics advances, increased expanding, be As will in technological overall patient that is we growth to matter market neuromodulation driving awareness. the years speak, We clinical believe ahead. driven by strong durable market the sacral cause continue of and for outcomes SNM

fall compared to instituting million revenue in which revenue the approximate XX% we're million, in XXXX. between our we increase revenue represents that for year as for $XXX To year company, history an guidance. Now a public time end, and million of $XXX.X anticipate full first $XXX XXXX, the full to of

that revenue be We the to and more sacral to to XX% of slightly sales than expect neuromodulation attributable Bulkamid. balance

and topics changing of the Now regulatory. on clinical subject

high neurology January the of include to study ever literature. ARTISAN-SNM highest XXXX patient a of evidence enhances and patient and degree neuromodulation outcomes ability neurostimulant past therapy set upgraded official program relief continue responder journal is Axonics implantable in as of by notable reported February, customers parameter postoperatively at Neurourology based of symptom satisfaction which the enhance manuscript, published Moreover, was the the two-year in And the the around and the patient Urodynamics, build In this study International Axonic's embedded a the reminder, adjustments that in remote We system few – pivotal discussing the significant sacral world. neurostimulator. therapy. of clinically reported body day and durable the third-generation give Society. our has modifications device a including from of every selecting third-generation by our interoperative study replicated represent FDA approved make for that clinical on second clinical functionality broader strong experience the body Continence control. participants the a A being to the stimulation ARTISAN-SNM and the The software, items the patients findings. rates of These in were home, quarter two-year pivotal

Now we began week has the shipping in the been and March from first neurostimulator overwhelmingly physicians third-generation both patients the of feedback positive. implantable and

and We also nice study have that a patients enrolling registry study, clip. called implanting ARTISTRY. is a at And now

XX the goal enrolled over approximately patients in our have registry XXX. towards We already of

non-rechargeable development we continue progress or product to front, our the primary-cell on strong neurostimulator. On make

approved the of of States the to in the the FDA over to We review and Dan? And said, we the quarter with first before part are that XXXX. financial are June. United Dan, diligently I'll XXXX in working file call who first in end the and the that can optimistic With expect market product turn will results. have our

Dan Dearen

you, Thank Ray.

XXXX. international total of was year This $XX.X million a million, compared ended one-month Axonics of XX.X% due quarter this in gross net of in closed margin Bulkamid anticipated the $XX.X Bulkamid net output. XXth first XXXX, and of markets first year. quarter $XX.X on quarter million. in Sacral period. of revenue. from was for $XX.X XXXX the for which for to profit international compared which revenue manufacturers XX% we million, million of continued as of and which $X.X XX.X% States Gross for three the and work revenue generated generated the one-day variances, prior accounted to contributing this $XX.X represents contract select quarter in $XX.X included the to million manufacturing to in States $XXX,XXX the manufacturing March revenue The representing United Overall, United generated $X.X States, was decrease is lower was remainder neuromodulation a United as was the increase remainder February contribution margin for with of to rate only For the our overseas. March than the an certain for the the with of absorption markets. XX, million months gross yield our and increase revenue acquisition lower million The was

in XXXX Total expenses figure the gross in variability will some included see one-time mid-XXs advisory the in low fully to in to $X.X XXXX legal, consulting gross operating during expenses the quarter-to-quarter, expect is and of land margins $XX.X million. years. increase few anticipate our million included of compared acquisition. intangibles million, items, million, with to this we While year the year were approximately to quarter $XX margin line first we budget of and $XX.X for is amortization to the operating Also expense Bulkamid expenses headcount In in prior period, period. were acquisition. of ago related expenses the increased reflective operating totaled in related operating of and expenses Adjusting $XXX,XXX these the for next

were net expenses $XX.X in expenses the to the quarter be for loss now $XXX Bulkamid. the to mainly million over to Cash range operating equivalents amortization QX the $XX.X to million I for of cash includes million million, expense Net approximately compared $XX costs and in operating assets. Ray million XX, remarks. the incremental period. $X for year his on XXXX. operating additional a due will $XX turn XXXX This as million prior in We million. estimate of to expect call is the in first March was of loss acquired increase of intangible in $X and This

Raymond Cohen

you, Thank Dan.

would I to a of So number add color like on items. some

over XXXX. half XXth, this in is of field First, than double engaged XXX more our we total headcount. The of in number since Axonics. is have of April as employees at This about employees activities now time

U.S., in salespeople total XXX and Now we a of managers. have the sales

Officer are salespeople XXX marketing one Karen Dr. world's clinical group Noblett. XX Medical education which representing a handful Europe, a sacral the and and they foremost by of Bulkamid's support specialists, specialists salespeople and individuals. professionals, our and field nearly neuromodulation In of and experts – have and five represents have clinical Chief urogynecology, in between We clinical we therapy led specialists,

over the Now stable. And average I the selling three that our in market gross the is been important past to think prices this for comment variation is quarters make, an the first considering quarter. have

in either or ASC, the hospital resulting over are all systems. purchase procedures of are neuromodulation from come and orders our purchase we shifted, hospital performed our has This outpatient from, the local Although to and regional coming system over year. past whilst have is XXX where and of the mix two-thirds national fact accomplished that – orders settings, an are nearly to we've or facilities, originating now in IDNs sacral signed this from supply agreements the from

the licenses As certain past, targets. stated are these mainly with hunting agreements in volume

We Bulkamid of addendum as many agreements. are to an now these adding

about Now more marketing hearing I know advertising. there's direct-to-consumer and been efforts particularly some in interest our

during So ads, of and approximately optimization. Facebook search a paid activities, $X million invested we combination search QX, including engine in Internet

potential tens work to some short reached offices this and from local it Suffice advertising TV are of we've in to physicians seeing thousands and spots. interest we own support into physician and of patients, say, addition, with to print turning now appointments mailings of procedures. In generated hundreds we've leads our some patients, customers their

physicians loyal solutions incontinence or lead types now urge even more We drive will the all to of increase offering Axonics. believe for rates, stress regardless of messaging are patients it's of our cost practices the per Our response this into whether will incontinence. lower also and include who

capital a are XX continue live amount United markets XXXX. we additional States, efforts up markets and and in December in now to these into of We reasonable fourfold will invest XXXX, throughout expand from the more into

I the about years. to We're neuromodulation Now the Bulkamid next patients remarks, bullish some bladder shareholders assure several trust suffering of with grateful placed can in portfolio questions. market work respect closing, every for you leader sacral to And over At have and to the we're and take for our for lives in that outlook this sacral physicians, Axonics. prepared incredibly from the fulfill dysfunction neuromodulation. continue we're happy bowel of time, the mission day diligently we patients being changing and our and to

the turn we'll So to it operator.

Operator

America. Bob Bank you. of Thank the your first comes with [Operator And question from line Instructions] of Hopkins

Bob Hopkins

good strong quarter. on and and afternoon a Great congrats

Raymond Cohen

Thank you, Bob.

Bob Hopkins

questions. clarifying of couple a just Maybe detail. the Appreciate

looks $XXX the neuromodulation On on like the sales million about side. – for guiding year million $XX of you're sacral Bulkamid the to about and

correct? of is First all that

Raymond Cohen

No.

Bob Hopkins

Okay.

Raymond Cohen

not. not, it's It's

million higher – think you're the comments. your about Bulkamid based I $X on on

should be of ledger. into the that side So the sacral neuromodulation put

Bob Hopkins

Okay.

Is guiding Bulkamid? only imply Is improvement mean to I here on monthly you're in So that like you would that have that that from $XX run conservatism… just million. no – rate

Raymond Cohen

just me chance a Bob. about question appreciate and make let Yes, that that, a to clarify. I comment

the any nearly us clearly $X.X I of month revenue So of March. to I don't in overachieved mean, generate think look, million we expected of in March.

States We in in clip, if timed nice you you'd you a things million, difference. right. $X.X such had result going by strong guys are took March. at should Now QX it do not great in be March In but words, to say, other United the three, a here's the wow,

clinical are the that's happening that and salespeople the in are XXX and QX. However, were all product our involved ones those individuals training that, that selling and specialists in that

a really we're selling we're analyst to own comfortable sales $X consensus shy the is bit to $X.X not also out do selling little million resources And diverting time. Bulkamid, this even underscore the around little Bulkamid training. we're force a our in point, neuromodulation about sacral million more So, resources – at just just of because and

We are up and speed. to They QX contribute to XXXX. start in mode of training still the people will in of getting

QX, suggesting And that from as that. category we're let's it numbers, you could by take put So we're number higher into if then the from number, consensus fine, we and overachieved be you over we above okay, increase, saying, that sacral may, saw overall consensus millions and is in in the that neuromodulation. the some Bob, and beyond

this hopefully, So, kind clears story. of the up

Bob Hopkins

but side follow-up Bulkamid does, just one the Yes, then. on it

March? Just monthly in that million and May terms is $X obviously saw of the what versus of in April rate $X.X more sort like early you run in million

Raymond Cohen

Yes.

and I good, but mean, our these weeks not be obviously, in in Just diverted people at can't trained in good. time, resources. May. we've mentioned, They're because, nearly one XX I April as just already right. we've people places two they're And that

of So the that's kind situation.

optimistic, look to historical And I still mean, seen is with which than have their much further, on even desks issue June. internationally until really just better Germany we're was coming Germany. of put middle United in not all lockdown is numbers, finer but just that's, So point much around. in the mean, I under it the everybody UK number a the seeing the under hiding quarter, other it was not almost bigger action in you of is that's The the shape. as from the States, the market any

got so international issue, then people of COVID. really, U.S. And the most them right. in still We've involved that's problems having So we the got training. from markets,

do fine. we So – we'll just

about the people we're I think some but better just respectable, a expect it have provide trying be company sense so will that color to what in short-term. the can really from to

Bob Hopkins

force sales Bulkamid? does When go that happen? sacral does out when that neuromodulation And really market then and

Raymond Cohen

for synergy to the forward. since as I'm comment will one implants. thing demand right like is right. to actually to sales together – highly third higher and all get in neuromodulation happen because really who these benefit just – Bulkamid. won't been now Bulkamid, other I well It's little customers. our to quarter, up product a one one add go direction, on more talking the not until and will significantly engaged to we come thing get we'll specialists, It's lift so clinical some a running this It's people into but heavy sacral more and down we're from a and ability get sounds of product see technical are the it and them go It than the I've

Bob Hopkins

Okay.

such That's last just Okay. core helpful. the unique One terms sacral quick one it's neuromodulation of in given quarter. business, a

we and if was any or how was wondering March for April Just sense get rough whether not better.

Raymond Cohen

good month. solid a Thanks, Yes, Yeah. March really was Bob.

the weeks companies reported. days good this refrain pretty continued month it's looking the even though heard things I new other It first think all good. and quarter. – that that of continued into of are first March, you've first here the pace the from at April have

and being why over this could for QX we in that So suggesting bullish run even short the analyst consensus even are is we're increase see more the run. an short in

great So people things more are and good getting up and it's see vaccinated, to just procedures elective opening forth. so

So month things are better seeing literally getting and definitely improvements incremental we're to now. month

Bob Hopkins

Excellent. the Thanks questions. for taking

Raymond Cohen

Thanks Bob.

Operator

Chris come from Your next Guggenheim. will question with Pasquale

Chris Pasquale

whether you curious I'm couple not the back saw Would group of new get able quarter for to March. could in demand guys, of Ray, the a over that sort to part of pent-up that come scheduled quarter Thanks. procedures Excellent were love the a next early make canceled of months. there's sense then just you in up here whether in patients

Raymond Cohen

you know, did in was were there, QX. nowhere they're put were Chris, cancellations we what problem where in a it a in the out in QX. odd went some January So look canceled as to We there QX, see I survey, like but much that the in not a number think, we period – did it, right, near actually procedures particularly near saw just of as anything XXX that January

So it. really say for to there much us about is

they generate the QX, we think, I numbers themselves. think in speak that I for

we're So product the it a obviously in as optimistic seeing uptake was good incremental continue. And for we quarter us. about of increases

Chris Pasquale

you're then sort be some over feels on dollar is of insignificant, level multi-billion feeling your investments around color customers, it, not in campaign guys the that the to appreciate And script? million it that you of to Are DTC market off but get view nine talked with to call months necessary the taking that? that is what's How of the about standpoint. comments development helpful. your market adoption of so, doing past, the That's you spoke have the work I advance and in on, $X really though a as your experience from or going about is you

Raymond Cohen

think, good very question, I a much And basis, it's a on organic right. of is that I also this Yes, Chris. happening think an

telling say – docs therapy we than said That's what the many our We telling to patients yes ever line are that's continue to us. times, more are often what before. this saying customers are us,

and suggesting there groundswell there a that a The awareness, to and that to action want is is fact technology, more more letters we're something the Facebook happening may competitors particular about organically. interest on our from there that that that talk So a to out this is lot even they are new there going little we back come fact practices, in applaud. in of area, which out and do starting patients

marketplace. all So rising tide to the is going players in help

makeover. So is there even this floor a to getting particularly a Harper's mean happening. about I but PR – subscriber and United that I'm – hear now out should starting look the mean, the topic. not interest a in we world I the there when in pelvic States in say Bazaar, particular there it's you lot of is is how

use, which you're last long longer the and got it about And to entered bottom is comfortable difference. the product. think to more this therapy This going and it's each to This easy a There see standpoint, of happen going to people going physicians here we really So therapy you're is to neuromodulation, is was the lot going other. we've I a lived just better before an big increased great no a resort, that more is talking just but get comes what clinical because a both on, talking it to MRI-compatible it's about being is this with it's When from market. and action sacral is more is result. line. organic awareness, the

And so, what gas on I do moving we're fire is a so And day it's things new put right the think to trying and to just direction. keep here. more in the some speak

showing We to it's a interest their actually for up raised people got tens but to So somebody convert thousands of right. I they're of interested, who've into that procedure, a down long-term don't talking DTC. hand need said, and process be initial

spent a we Medical, hopefully the disclosed at look but mean, think Inspire DTC knows, quite it's multi-year not I I'm And that's in in effort. that's million think So we're the a XXXX everybody if I either. on applaud only and not they – just I great. there that. $XX reporting player this and marketplace We're We yet, they something and

takes way, it investments our be need skis. of we time continued kind this trying and to blocking Chris, So But we're there over and do do before over the to and smart will tackling time. a get in

So little conservatism us. you're a hearing from of think bit I

we're offices, up. We but of to kind DTC, invest landing how money and on will a leads, in continue being how vein want keep they're we try focus how really in to in additional to rational those they're it physicians' processing followed

of So background. heavily of work our of we're kind And return kind on sure investment. operators things getting really in we're make a really these that's how to engaged and we're process because just that we want

Chris Pasquale

Thanks. sense. Make

Raymond Cohen

Thank you, Chris.

Operator

And come your with next Kaila question will Truist Krum from Securities.

Kaila Krum

all the for Thanks taking our questions and guys. detail the guidance. on Hi,

Just the assuming is can about effect the Because a curious halo have Bulkamid one OAB. have both on things I'm patients mean, SUI business? of SNM lot you're and I a how of

today thinking Bulkamid injection? synergies an could guess, how who you're a have the I curious benefit that between patients are from about there Just SNM of Axonics the So, actually implant businesses? some

Raymond Cohen

Kaila. Thanks Yes.

take you're the of the correct. part question first. I'll So technical

that You as incontinence a incontinence patients patients are much maybe urge incontinence. are These of urinary form there correct of group have XX% patients. a mixed are call as stress that urinary we and who

the times we got testing do little greater object urine. maybe urinary techniques And incontinence, you've bothersome lot a many a But things a and which make that's diagnosis, really that it's nature to dynamic patient. of that about Now, I leaking sneezing, try to lifting using and of all more know bit urge the your coughing, the an that and mean, if for differential is differentiation. different bother docs than

worked device who sacral bulking in for the body, of from neuromodulation that maybe getting may in process their in is injections, no up also question patients, benefit that or there urethra. have already Bulkamid their a could So existing

one technical great. not about So by But XXXX, but And Bulkamid, neuromodulation neuromodulation, are we're why did of we you're help these we that's now we can bigger million main camp really this okay. Yes, It's sacral unique completely is is that the crossover part. of is able sell buy to because product. reason do really accounts There gets It's Bulkamid right real-time us asking of another. we in from think the will kind the question to the $XX that we're patients. sacral get in helping Medtronic the They're excited to into believe us and business. – continue more they've terms in that that with Bulkamid been cool.

of them getting the about – with have with them able we been for account on neuromodulation. other shot, them a fact that have started sacral go we professional physician service doing in we product got who that to there, working now of Axonics and them how is we've us I accounts, see already and being in a not that puts in our do, on letting the some we've in we're are will because in Bulkamid and happening it prove the So invited forth neuromodulation it's engenders us and we've and side. fact that you, a things better to those and happening, Kaila, give accounts neuromodulation position sacral us working is on tell their matter to and is, to that that that all so the And open and and of real-time. and business, staff us in they superior that confidence so sacral so can sell customer got

hypothesis is behind acquisition in and out theory very it's the playing the quickly. or happening real-time the So doing

that. the really business our of only about we're in help growth also to So beyond. sacral thrilled And XXXX, going neuromodulation that's but not fuel

Kaila Krum

who Great, to a the heard okay. I of of could XX% market. mean, the a historically go bulking And lot or then, market slings. thinks He least of – did does a we've within lot at SUI surgeon, from

and largely, – So because of Bulkamid. then again,

able your I'm than So sure you've been conversations what's we've as guys. that view Or your to more reaction lot estimate? a again, Thank you with customers there, to.

Raymond Cohen

Yes, thanks. it. about no doubt Thanks. yes, Yes,

So, And with the a women was it's England. stress the actually were but interesting. to I'm right, not treating incontinence. as under and banner a just Bulkamid this And would sling. urinary was dozen of was in respect of study XX% they compared responded not terms other what it hundreds hundreds, is for to what going done in want. as it there people they to that want quote things, a an prefer respondents, their of what operation of who treatment people that was

So was some that give way. basic a you that you go people number, in out, pretty When right. and impressive information responded

exactly going prefer a there to of may be I clear their to may as an But it's can of an XX XX%. about to office point going XX procedure to pretty as what preferences Now, you minute and last these be out severity there efficacious give the – fact people seven patients turned would you So as number. going reasons their some less XX%, in an that the in have XX to that is have opposed we to operation? get a choice, than kind this office, of is be to patients sling, never a on the a to suitable years more adverse that given that of Bulkamid procedure. the events why in symptoms is other injection it's to would recovery opposed may relief as is that's or your XX% but the a choose going material for time, doctor's you're be urethra done talking than doesn't condition. better approaching are. is terms with be but operation five in minute The be And sling and something to with for based are XX never mean, a maybe

the benefits that urinary here mean, continence to to we to in for there the see And patients, and right. think patients stress key in SUI. are I question sea to them example, is seen the explain in I it the thing their get America. with the to there's an change now docs out treated are going of UK any happen as don't the have give a in how already talk care we this option, So is that standard is UK, the

Kaila Krum

Thank you guys.

Raymond Cohen

Thank you.

Operator

will question come Biegelsen your And next Larry with Fargo. Wells from

Raymond Cohen

Hi, Larry.

Lei Huang

about, for cancellations. this my QX, question. from of were there Hi, for bit there actually in that that? resolved Larry. want a you backlog some in Did get some with little a quarter? was calling start benefit it's comment Lei Thanks I made taking to So there was backlog

Raymond Cohen

one of by of tracking name. energy these and a have things not where It's organizational patients spent we lot these

So, of really yet. that population. these at of terms of mean, XX% the we I maybe where Clearly, kind definitive came back but are would – still about of terms. in what I a I say – patients vaccination fair we're you any in if we're them not some number back, think question answer America, can't come have in of

moment. So those been clearly, lot to patients of not still canceled vaccinated are vaccinated and that had a this that not

QX in a cancellations from So that, the was increase I big QX. cannot say over pickup oh,

Lei Huang

it. Got

Okay.

on be whether there maybe demand, procedures it's or like not canceled and rescheduled. pent-up sounds it QX some part based is just early of So QX, from getting may still fully

Raymond Cohen

back. the so allocate resources starting a down Yes, and on that's Institutions Elective so and think to willing come environment, correct statement. procedures forth. to I boils are I and And more it right. think time are really to

is I've draw of not you're many that But the it's in thing. trace that line. follow one of vaccinated and line before, said you people and you'll that think to percentage Axonics if going I see I trend being a States, factors. are United that do So believe combination see, that you the will what a and It's revenue this the

Lei Huang

Got it.

Okay, And that's another question helpful. around just then revenue.

just half you second that sort field SNM reps on revenue Would So are new on the terms the these some the for of versus getting being effect cadence have mentioned QX of off product. in of trained year your training? in reps the that

Raymond Cohen

to going people support in these first, the lab they're be there it, So put training are patients. be initial point to training, to finer wet injections a the doing and going clinical on to our we're are specialists that

our is our sales this clinical much So specialist not staff, so about more people.

job, them can down ones because to the becoming there all rest taking of these the how our going experts people's people be going out have it, about to inject on how become material, and and getting of of and can it product they're schedule cases. not bobbed help we're their but right. are be the this injections. how experts not That's talk not to that the not on to sales support practices to to benefit time are do They We people, sales

the on clinical keep – So obviously the for or wheels to days And are days have coverage. two case a these and on we're people and of to as we that these the focused with three respect bus the ability to specialists, these out the folks are manipulate field time. taking calendars at

we numbers. had gee, we from excuse our not therefore that as that people oh, hear us, and you to train So didn't make this will an

You from hear us. that will not excuse

Lei Huang

it. Got

Okay. end II? your that the the Then device, last plan like potential taking just InterStim the for just competition June. questions. by advantages – the the of bit to over cell talk before primary on Thanks Can file again you a question you about

Raymond Cohen

would in value I this you. this more and think because appreciate happy is for about thank is driver it I is Axonics. that you, detail that really really and this Thank to question, I be a important, huge speak

the which there XX% XX what the different; story it's watershed, The of these So of neurostimulator. device – – are benefit suggest would facts. device to Its average things the patient clinical the device. of in will more It's size device in studies there is for XX%, dozens to might over This out the a little will where years. is about approximately XX say, four different are it's available twice they a of terms will body. about about a about despite last this nominal that, that is is device setting, get years CCs, our The from competition, this compared will here or are meaning what last accrue that's than completely implanted existing All InterStim II. II. thinner profile placing the InterStim our much than the smaller is

three in Some people lasts lucky. aren't so years their or two only for It body.

is couple to technology device. of key the our technology. attractive. So key rechargeable thing use be other current this body. longevity existing same in in the is A constant going points, Size That's uses the we

either we're So we expect And excellent that right? like that give standpoint. be go. same technology, It patients now going way device. direct efficacy from to important or which the with So the have lead thing choice this device, have that same to no I here their think to will would change most goes uses they the able we with as lead to physicians then is

So think about lineup. the

recharge-free be could the in wall. got mean batteries, our and do by plugged remote that? get XX device will need to stimulator to neuromodulation. You body. I in last nonrechargeable first have the don't that system have in What replacement You've years the doesn't doesn't sacral the patient a It recharge

stand connect You the implanted your head stimulator. on it don't to to need to make

be a recharge-free efficacy the on size it's a going constant to And the system. of of That's based going So generate nice got and the technology. terms long-lived, we that's levels footprint shape. in high current got to

I of to dare going big that is we So and those pressure that product is matter. And to the say things anxious be a on specs. are in because lot the that's very a franchise. are put think the this key market we going the this incumbents' get runner And to

Lei Huang

for thanks that So question.

Operator

is question from with And next Polark Michael your Baird.

Michael Polark

veil the I primary been Hi. cell. lifted guess has on Good evening. the

opportunity you on up at using an obviously, So, I thanks in that signed had the the for is, centers SNM. disclosure, last for I Bulkamid Ray. that Mentioned Axonics. call prepared aren't that think to folks is remarks XXX had The question

the or I take think historically. give explain, SNM before, the year year last was, it back or X,XXX XX% of centers volume

not for of result engaging start feet take your fire your the two? Axonics of this, course centers the and with year on internal to but next may your the greatest to what call of over latest hold how Bulkamid a many So these are expectations going or and curious, and SNM as

Raymond Cohen

Yes. to I tell I'll our thank own want them tell we share really define of what want mean our things our And That's you is mean, not we me a all the which going hard philosophy rest for I as until the business. market, for answer. that people, we Michael, question. the fair I you the we to at all. get we're and least question XX%.

at a precise of And make every any kind day. We're it hard it's to term. prediction so And we're it. in at

be That's many and evasive. And on I'm going game applying. important really we're just it's as So as Axonics – as answer. difficult question we to to hypothesis the trying a to to those can. I we're of we can not clearly, it, bring working. we're and But that look accounts fast as is the to

Michael Polark

enough. related plus one, heard the Fair in million in dealer your intangible XQ Dan. the anything amort deal-related Or and of in OpEx amort? XQ, $X.X XQ. that easier appreciate number the expenses you deal-related there really Is is carve-out that. Follow-up, of perhaps expenses for I The #QX? expect like core

Dan Dearen

correct. That’s

operating amortization obviously, if not to on put doing assume million. forward. expecting per is and at $X.X million the anything of mean approximately you in about that run rate of if run QX with $XX Bulkamid add associated one-time the incremental quarter We're planning $XX to excluding the we for expenses, going at I OpEx, And expenses. of not amortization, million and going We million the you Bulkamid, prior to Contura magnitude are $X expect acquisition. to current then expense another then order million, expense see of, the in intangibles $XX those

Michael Polark

Got it. Thank you.

Dan Dearen

Mike. Thanks

Raymond Cohen

you. Thank

Operator

Mike with Company. & Needham from is question Next Matson

Mike Matson

Hi.

a Just the portion. comments want made few Dan's – the clarify to guys during you of during

said think that particular the stable, I by guess I they price changed. unchanged ASP the I change? the mix Or within average maybe Does that – was was caused But Dan's confused not. mean that everything I – you were that of sold with the think was was it but mix means. at the it that to ASPs, you overall what unchanged? look categories, shifted so

Raymond Cohen

maybe two thank same I you the together a for sentence thoughts remark us without So, combined making that clarify and period. in

Okay.

So that. for let me I apologize – so

clarify. me let So

the stable stable are prices been difference over dollars last other I quarters. they have of – quarter-to-quarter. mean, a been average selling three Our the In and literally, words, couple

product kind this – a for So of it's thought because I variability Mike, on we the way that big we don't or make it's people from the non-big they're much deal. I to had think, cycle early depending make, in going when not that margin, want to a you which to XXX% some are something important see you're – gross as quarter-to-quarter on didn't company, the really an things me make a It's way. how was in hiccup stable. that comment given you're is

no sliding our average price. prices sale the So stable, are of

period. Okay,

out orders what hospital purchase – Now systems. get say I did are as we those a of purchase purchase is two-thirds coming that that orders of orders the now company,

hospitals time last kind you said it if half, may, about of and talked between a half and I the split, to was I ASCs. it, opposed As

So given were – trying business to orders just get we're institutions, two now right? those the number from up, So getting those regional coming was of big messages signed national the more IDNs we've that's purchase that IDNs and across. I

Mike Matson

got hands ask helpful. you've I own to now about in your you're That's selling it Thanks. out and wanted then it. And – that there the in Okay. Bulkamid,

of I use of So what kind And premise part here they customers, of reorders are using they'll the you and on that think your the trained was it start kind get to once seeing? own. continue it,

won't way? need You there that your that every I actually have mean, to reps And is out playing case. for

Raymond Cohen

the to get People, and lab, need trained, The idea Mike. be them practice. XXX% there. up don't wet running, do you get get is you we they once a XXX%.

an that touch be do sure don’t that's make are a that and us customers it’s company need there, standpoint. from happy to going as that own buy that the just might they And to next get patients and well, patients support you're you then are you their a whatever we three, it would your You day or things them be. great, some the as those lot, on that with either because helps morning, five, six going are a but are first, light normally pup-in

of brisk So of amazing seeing product. not own and evangelists will and seen pace own this a sales we is on beyond expectations that we that the effusive imagine. a they the very say market, have are sling making well is our that, that even. are we unleashed what I physicians have really our going physicians the think given mentioned, market, This I could nice up experienced about in that force reorders becoming the physician Bulkamid XXXX to possibly this product, hey, XX% Kaila you most is comments take got trained that on said,

conference, publicly willingness the experiences. we're We that urologists previously to referenced a that to that weren't In you're our we speak the to They at place from physicians So these are enthusiasm, our going give session even should listen have people a and Bulkamid, you weren't their which that SUFU, website. using of playback, three previously. customers a on seeing playback even that took colleges customers. about kind can of that Axonics hear

much an view. unbiased of very So they a had

go this of product test for you you set bit a is then injections, And in mean, really on of it cough anyway, patients walk out So dry. quite truly is and it's that's works that these I imagine, could going a a they and to incredible. really do immediately. results well. a and getting I great inject easy is you mean,

see and to friends, lot like loved make a that can on the in who start the the something quality patient it immediately. of doing that's increasing they're the get They a game in right to are So there those reaction. family helping before delayed that of and and There's Doc their the instant day, better, happens no end practices right? the life, the patients goodwill person generated forth the so their see other it The really gratification and of we're the of about experience so practice. patients leaves idea being these to talking patients name from having and physicians going helping to members, satisfied is

patient, So thousand we dollars for XX,XXX for is like people that this to a neuromodulation. all sells right? it's great. a So But in product a remind just sacral compared know, all, you that,

that It's right. selling you're going doesn't meter between quite when do when represents XXX,XXX customer us patients, So XXX which the you're fantastic, move XXX is fast to XXX,XXX is A Bulkamid, for the but and as to at really the good revenue relationships business. long position revenue and sacral our it's up. it for customers. great up lasting with neuromodulation in add adds for said great Having just these our that, the the for way doesn't creating our all marketplace

Mike Matson

to And for I great. Dan, that him have it for mentioned get one in I Okay, actually is him.

was So we've maybe you question. you're just you Are headlines seen given and blue the semiconductor the there to about out Thanks. issue called don't manufacturing gross explain margins, supply then that what sure all this going to that ask have you have Tory to supply that? adequate

Dan Dearen

question. That's a great

So, inefficiencies, in we decrease the as the yield-loss it's through And which I reach see planned. as in and produce products included that margin in to of at more said the manufacturing, and the plan. just these scale. we call, margin work than more the change result target is no There's straightforward for variances, as mid-XXs as had our just still quarter really is we'll improvement

we goods the that we have the the look if If balance you sheet, of particular. you finished at look And increase in at inventory. amount of amount

on of the on the We to plenty we shelf worldwide capacitors, chips, And demand meet to and quite shortage have products continue the for are actually pleased foreseeable given future. resistors.

inventory brilliant the we forward the are the advantage, But saw preparing truth to strategically to for and you rapid And the it shortages were coming a is love growth, people given our this other be experiencing. look, significant of matter which is, and so, looked having result you to I'd going tell of just happens we know, we've that as so pandemic. and were we experienced,

Mike Matson

Thank Okay, great. you.

Dan Dearen

Thank you.

Operator

is question next Your Maeder with Adam Piper from Sandler.

Adam Maeder

Two from thanks Hey, here the taking and for me. the to start a guys nice congrats questions year.

overlooked a the have or First just one been or in long tail past Ray historically. I SNM think bit is who implanters you've growth, on a about potential of accounts maybe a little underappreciated market sacral talked bit

to or how that the new today So then or you market And, much how the this from I'm seeing the opportunity grow group forward is a grill procedure. is wondering we're do contribution think and this of newer going to about follow-up? from had docs

Raymond Cohen

It's a good Adam. Thanks Sure. Okay. question.

into until that. bigger mouse pandemic, back been we moment get the got would you that right. and in tail, they're That's and, a game all just tell right? are these have I customers physicians primarily-up trap long now Everybody's Particularly we coming that a to happening. better are adding the way, the practices out the looking definitely from of at So all down right? some But of

be a people number to we've enthusiastic. So doing we'd them is And which signed are that to the of a like month, those recently. get they dabblers, seem one

or part get the can then up you in of If month them the they're right us. fat for to per two three business

some there's that. So of

pandemic tools that pretty we the training? figure so spearheaded how actually and Now Dr. initiative best and forth. could has we do we've virtually also this virtual tools of to we on and really Noblitt in had through them learned And out particular can have where we bring practices because now train so people with sophisticated

XXXX, and and first for strategy doing the So psycho, only XXXX, was on that were already. I called we that of was very clear in time, no our modulation in this people not part

never a five the it to some got got we've clinical have led professionals to right? didn't it bring modulation initiative, department position now because that Dr. in we're game starting that have to a we tools, done have XXXX, able in to Noblitt. doing physicians before now education we're We've just into people, support who with in before, the Now we be be by now that want psycho whole the

to that forth. some so of going start to to contributing you're So and see the growth

thing, all marketplace. these together to growth of initiatives conspiring So, fuel a not of imagine, you it's right, one Adam, the could help number in it's the types doing of that we're as

Operator

next your Cecilia comes from the Furlong question Stanley. line of And with Morgan

Marissa Bych

This just primary on is go cell for to device wanted to the back I Cecilia. Bych Marissa Hi. progress.

launch launch submit second next month product quarter can the further first have as ramping Is steps ahead that capabilities, Cohen if approval approval. FDA produce FDA - to or be year? Are we the us much. anything to would Sure. after to may or you you We're for tell any or understand plans specific or we're the preparing of able So soon are you as this to there Thank up, see? in so. plan look going to we in commercialize far on as very to more as the next you you prototyping Thanks, trialing of A that immediately FDA Look this Raymond our the we are to Marissa. manufacturing approval. to product need you there

risk, shouldn't but we'll the will So small some revamping facility, of made at play that space also our This by of there's we'll build we're say part comments Dan I in and has because forth. to product, build so mean, manufacturing kind has no in product way a risk I the

in a are little product. bit now, new this So as produce things prepared to flux get we

prototypes We prototypes. per So not with nothing don't has been our people's that would in in go We're put market bodies. that stand philosophy way to our se. don't we –

talking we're put our but that – finished So, that's my product right. a about may I in commercial to comfortable I'd know, mom a corny, sound be you philosophy,

so additional that to Yes, we certainly So some study we now, a will. we'll market. that run said post-market comfort the type can we having provide of

non-rechargeable possible, commitment product, look a, we'll approval FDA to as to, I representative think following roll to been to has we'll look this'll that full-blown to types be way. quickly artistry the of that by which our with and work obviously do some ready but, And product rock of is a of the these well custom, ship commercial as as things. our

that out whether look generation at we it's devices right. you stuff, or off put If we've second third don't write you, generation

it these new we the plan them prepare previous as We out. for it, haven't version We for the, out off writing been and and as models. we, comes sell

So we now. that this feel the we market else again really that, then do put comfortable product everything COVID could but wish about and has the that until best transpired could in the is I we today, given this. that,

this product company we'll impact take on XXXX. in excited And can that and make it about market. the the the we're So

Operator

will SVB Leerink. from Danielle question And your next with Antalffy come

Rebecca Wong

this in your Rebecca can we Difficulty]. sales Bulkamid, for Wong I headcount and back don’t is us update to you [Technical why Hi, on reps Danielle. go

Raymond Cohen

Operator, we Okay. to seem have lost…

Dan Dearen

Rebecca.

Operator

Danny?

Neil Bhalodkar

question. repeat please your Danielle,

Rebecca Wong

then I'm neuromodulation synergies, understand question next on I contribute clinical sales sorry. update in there your headcount third your reps And first you own sales Bulkamid sacral us is; said Bulkamid? Yes. those and reps specialists, sales and are question, to in will potential My you including from can you quarter. got reps the

strategy specialists to you could to business? here? and sales more you What things core us sales the reps distractions deploy your so Thank sacral color drive so much. clinical to is And neuromodulation those without for give

Raymond Cohen

Okay.

So repeat it. Rebecca we remarks, got I'll less support thought dozen XXX clinical some We've salespeople, sales – and the managers prepared clinical In I in we I five. field detailed of very States, almost have and therapy XXX education my a a group a specialists had marketing provided nearly than numbers. United have specialists. half including

we run that's in So or have you those sacral XX And that selling either pretty it neuromodulation. are Europe numbers, Bulkamid quickly. if people up totals

you XXX how get So number. that's the to

Rebecca Wong

you. Thank Alright.

Dan Dearen

Yes.

that – And existing product the think of guidance without screwing how management, sales up terms who real do In the the strong is marketplace answer and question. your introduce and I leadership I run the only business? business. your new you was a from think people professional in

that patient nature $XX,XXX, inherent this salespeople how the as you that is – with job. the focus of energy versus that that's we should around and to resistance a your one – could be why So nature product a they a is that's $X,XXX You good can't say go do professional sells are, least salesperson they right? money, their take that hire path their the at all on news and salespeople

neuromodulation Officer, incentivized, our Al let's they know me we that their they of in Ford, of to at not do time. see volumes. in our out I manage any energy. keeps course cannibalization expect commission on, States let XXX% just where to is or internationally lights understand confident that Chief that's core to So say People managers there any get And expert People sacral United company heavily spend And that they're sales are Commercial our and say my business how to so the this are that our based and what in drop-off That's on the people. paid in am business. speak.

not can happy customers your and that You're into So more more neuromodulation some it's and sell help you in, pretty sacral of the accounts get make product right? make. all you're you for the you Bulkamid straightforward, going the everybody win-win-win can you're that all money and with if way And to around this

Operator

to session hand speakers. now remarks. closing you it now Cohen complete. Q&A Thank I for over will Raymond is the back

Raymond Cohen

And you, get you again Thank on of the with all in to all call, today's Thank We shareholders, we the rest Thank story to for operator. me out. question to really and volunteered who the appreciate you very also we to appreciate you. to your helpful your analysts the confidence company, talking interest. shortly. look forward

all evening. You nice a have

Operator

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

disconnect. now may You

Axonics (AXNX) 9 May 212021 Q1 Earnings call transcript