TMDX - Earnings call transcript Q2 2021

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Operator

Good afternoon, and welcome to TransMedics Second Quarter 2021 Earnings Conference Call. At this time all participants are in a listen-only-mode. After the speaker’s presentation there will be a question-and-answer session [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Mr. Brian Johnston from Gilmartin Group, for a few introductory comments. ahead. go Please

Brian Johnston

Earlier quarter operator. the released results website. financial release Thank June today, XX, the company's the ended available of XXXX. for is you, on TransMedics A press copy

relate These like future we and products and/or this expectations, XXXX Private expenses Safe of Harbor growth contained and to Reform forward-looking during or our actual anticipated expectations include for federal regulatory results our margins or to place on and various to to Before should cause our guidance potential laws, that I'd remind that that are make Act forward-looking are including, call that the of examination this reimbursement, Litigation the upon Accordingly, results those statements. events from you and are management these within current for gross include statements uncertainties operating and are of operating statements statements, assumptions. the expectations statements reliance of performance the and which in events, provisions Securities you Any statements. forward-looking forward-looking securities of differ statements not in future revenue, without materially by or will meaning estimates pursuant predictions begin, which organization, approvals our in could these implied based undue for risks made financial limitation, commercial material trends, statements. call XXXX. or expectations involve All opportunity

quarterly intention except or Risk XXXX. description revise on today, broadcast update any as This and filed please our Hassanein, TransMedics Factors and Officer. Exchange XX-K by because and the to X, President Commission of turn and risks as with call call now Waleed our live accurate disclaims Executive with business, on future or Form a law, that, With uncertainties otherwise. only to is statements of and X, obligation, any the report forward-looking Securities of list or XXXX. or required Chief the associated sensitive May August section conference of refer I'll time financial today, whether the information, events, to new contains information over projections For

Waleed Hassanein

Good quarter to and welcome Brian. earnings you, afternoon, call. second XXXX TransMedics Thank everyone,

Chief today is Officer. Stephen me Joining Gordon, our Financial

indication. expected, we panel our with in strong be transformative year achieved shaping in support is As XXXX the very a in OCS for of quarter up year, the regulatory year significant Building vote from Liver to of another TransMedics. earlier momentum on second milestone this a the

and forward both outcome, FDA are looking Given QX of the panel OCS approvals in to and now QX, we Heart Liver early indications respectively.

is addition program. that It saw revenue of product contribution continued in success to completion Net XXXX. quarter with growth CAP was OCS revenue $X.X compared Liver our achieved XXX% due any this the to XQ also the we XQ our pipeline, was growth for second to representing commercially. to traction million, note without In important liver

Now across strategic let me initiatives. key our summarize our progress

PMA. DBD Heart OCS the First,

team. post-approval we're Following our discussions now vote up the wrapping labeling review positive with and panel April, in program

within confident are several heart towards that we position, we current of proceeding DBD the the our Given indication are approval weeks. next

the DBD FDA Second, review the now program. supporting the OCS to approval labeling vote of OCS In a we post-approval We're unanimous for Liver engaged with positive nearly PMA. and actively Liver secured July, both the DCD panel team and finalize indications.

towards before that OCS are the we Liver year-end. proceeding of confident approval are We indications

in to from of QX transformative in added total seven is active wasn't Our San continuing the bringing to would from the initiated the underscore region. New able procure, Tampa, region this One have targeted the new are meet is infrastructure We way regions -- year-end. several ensure cases several This XX England this had long-term example success nature to to program. -- transport surgically the the we all We're expand of resources National to build the goal before truly continuing the lungs of ensure if and third regions Florida, that to necessary Francisco the it Meanwhile, activation region We're donor manage regions. the successful one that program. to of we're potential initiative and on-track OCS never OCS pair manage for long-term success National Program. and to been feasible program.

add early clinical OCS through the after we indications expect approval and XXXX and We Heart Liver. this of FDA new continue to as

Heart OCS will continue As particularly we to revenue for growth our important portfolio stated be of continuing enrollment in OCS before, DCD are the heart indication. additional transplants we driver XX the the our to comprehensive National Program expand in and an OCS OCS US, we utilization believe CAP of we that transplant We as early program completed indications. an in the QX. advance DCD Fourth,

of QX are We and with date the the on-track we DCD line are filing readout the coordinating FDA this to new PMA results supplement for now the be of team. year, in review top

this FDA in are will approval optimistic this that early DCD XXXX. indication We Heart of support

Finally, our United the Lung FDA product us solution a enables in for in transplantation lung most donor we to This This the received US. business lung competitive to us clearance preservation States. portfolio of lungs. grow comprehensive significant the advantage for of cold provide OCS our gives

thoughts OCS on significant transform me to a trajectory the three confident will enable Heart make OCS on all are will a and tremendous OCS will products of and to TransMedics forward our approved point Liver, therapy. of transplant mission growth our XXXX for be step of expectations by focused finish summary let This Now both organ that we FDA. with and products be a FDA achieving and on XXXX. with ending our inflection approvals remainder We're

is this drive time or limit lines access current continued leverage receiving to QX. may ability CAP revenues While near-term approval programs our the our importance, utmost of programs to in

in heart for or QX not we're given imminent approval initiating and Specifically, decision liver the programs FDA any timing. CAP

lines, current we such, guidance for As the issue financial XXXX. not time will given FDA

currently have I'd that slightly on macro Finally, remained any Chief generally that, a and comment year. momentum to Officer, impact our full financial variant above situation organ that of from transplantation. would Delta transplant pre-COVID. negative what the while the detailed the like unaffected for Delta be the to COVID Financial our and were We're the they potential will at perspective, or are variant quarter activities to With that monitoring Gordon, limited US, turn cautiously is and gaining in I hope the call Stephen review results also

Stephen Gordon

year. quarter the additional you, Thank now on details QX information and other and I the Waleed. some financial provide results in will the

increased second that $X.X from performance FDA from and was gross US net revenue increased did quarter all that revenue from overview. onset any million was the early revenue gross highly was completes XXXX. $X.X product by the this was not That concluded has $X.X while XXXX, COVID revenue of include US, would In million. program Net For revenue quarter net net was second and quarter our in of clinical revenue million. OCS of the Liver impacted quarter was second of the revenue XXXX. million I $X.X as XXX% the a the by XXX% And pandemic. that the revenue note activity

the in Lung $X.X revenue up US million of the on $X.X second detail, sales million For included of US, breakdown strong of million first, is million million was revenue OCS and outside the XXXX. $X.X OCS net organ quarter XXX% in drivers our was This $X.X the million were; Heart. Lung. $X.X XXXX, OCS performance or of QX and further $X.X Lung of OCS key from And and revenue of OCS of Heart The that QX US.

As both US acquisition of Program. recovered, seen transplants OCS and the have direct National lung our increased OCS have we use through

the Heart-DCD COVID, margin we XXXX strong saw back compared it's was similar CAP pre-COVID. equivalent that trial sales as international we for XX% XX% the levels Second, of were quarter enrollment. with some XXXX, finally, OCS during was revenue second to for US XX% XXXX, to were drivers Gross our of from and there National Total was this QX last program sequential completed our of for heart COVID, to also addition in recovery commercial QX which of quarter to OCS sales from up unusually we growth XX% saw expense up quarter last increase This XX% quarter. it the and in low million. to is quarter. were operating steady several $XX.X investment. and for expenses due And which is And

stock from expense grown compensation about $X.X of First, to XXXX significantly has $X.X quarter. in million QX million this

this communication, second $X.X level programs this in continue investments quarter. solution development. FDA the finally, throughout excluding market. and development And $XXX,XXX one-time quarter in said Having continue higher to commercial expenses to the necessary in panel net the compared second XXXX. that, second will support as Secondly, of we approximately solution $X.X panels second million and three second million XXXX the we $XXX,XXX with was to in quarter in preparing to of for close level XXXX a had US R&D or panel the of of of preparation million, be was $XX.X to to our Operating amounted quarter $X.X about to greater related loss XXXX, loss related line prep, the previous charge, in the XXXX of million spending and is we compared quarter make all to the expense for to two

commented, lines a as reduction securities we of million. quarter June weighted were $X.X common million as of balance cash, were current the from $XX.X of million to are stating And XX, guidance FDA, Finally, not XXXX, average at XXXX. Waleed QX for time cash end equivalents equates marketable outstanding for the which shares XXXX. to And and of the due $XXX.X

for Now like back I Waleed, turn call the comments. closing to would to

Waleed Hassanein

Thank you, Stephen.

drive for transplant approvals markets simultaneously operator of future products in approval our we now like will to I'd market. ever the portfolio The OCS Q&A. years three call growth and trajectory position in now and for year With United to turn shift surgeons transformation a how This to huge this be Operator? on many closing, OCS to advancement transplant patients. that, We're the users, Liver product approved the come. broad of once for for having US comment to will expected significant TransMedics. all OCS will TransMedics are again the uniquely indication to the than I'll commercial our fundamentally closer excited Heart use States. of the three Before These

Operator

Stanley. the of from comes question line first Your Morgan Cecilia of Furlong Instructions] [Operator

Cecilia Furlong

Great. Good in wanted the you recent off questions. afternoon. performance Waleed, for to just taking with start lung the U.S. Thank I the

the ground saw around on could lung leveraging unfolded able model through, that and talk see to you with what what QX you kind quarter the just of just traction? as been the as service awareness you've the platform driving If terms of, then And during really and well, in overall?

Waleed Hassanein

Thank you Cecilia.

acquisition and direct business national So in lung in driven program. really growth by the the the was the QX both

before, As there. of active we as drive national to only they national stated we also centers more become and of aware and more a to adoption program national the a program driver, not lungs, the stimulus through the program lung be for expect the OCS the adoption of capabilities but lung

So the the And being program, successful from to the acquisition Again, of for never the awareness, accumulate, addition that spread. delivered national is in and are the momentum both by to that's program of and that would far national more community new awareness the adoption been starting within in regions regions, program. seeing actually both, QX. have the the even the to really nothing the drive than direct combination OPO cases created starting product lung driven OPO delivered this significant that distance,

momentum As us franchise. we to see continue that's continue, lung expect and to expect and our that we that exciting to very national growth we increase, program forward, for the move to in

Cecilia Furlong

could investment planned half your of Thank year the you back through outlook you. program, half walk with walked you. continue through Great. that back of of just I you this what year. resources areas can program But national around about and the just through talked investment, your as Thank really OpEx you incorporated if that And the in for key the you building well well? as

Waleed Hassanein

Thank you. Cecilia.

coordinators, at are That's coordinators, cardiothoracic major in verticals; clinical in primarily So missions that all managing, we're monitoring, United to we're every capabilities is each States, are teams clinical Program. organ support region, coordinators OCS that three as for for making National three procurement, and as surgical that quarterbacking active support the level, surgeons the support the and capabilities capabilities regionally across verticals high specific well in in logistics screening donor transplant in. the involved investing that a the are the communicating investments

Cecilia Furlong

you. Thank Okay.

Operator

comes question of from Next of Josh the line Jennings Cowen.

Josh Jennings

and better just hoping Thanks the afternoon. Waleed, taking Liver U.S. setup Good questions. Heart Hi. for to indication launches for understand I the my the was in

or lung us that the launch or the is you they indication And help If resemble why wouldn't either of just similar could think previously? through, why why different?

Waleed Hassanein

you, Sure. Josh. Thank

resemble expect to launch in We Lung it or expect to and we we it not hope, shape the make -- form. anyway,

and the Heart months clear, in programs the the the Let XX for say the at I that? of When OCS me and have centers Lung, center the few months PROTECT. and United using ago program literally liver active with In Liver we to that XX for we case launched we in least we're CAP be the the XX lung have months. XX product, a heart Liver, didn't do why actively the to and CAP products up the for single DCD a States

And complex design, remember, several it. it centers at we that's to Josh, and one. So through the local if you different the Number IRBs IRBs for post-approval get and the like. Lung took very two, a months, the rationale that understood was number registry

the to Lung. exist probably National both, numerous registry And is seven with Heart the have us the ending of we're into on. These in is the that clinic, top the two and with then to will new, that to to in setup. Program post-approval you add design Our while the the are the get approved, on to Lung. registries regions, are towards strong significant position significant rapid major on upfront data launches time of continuing changes that focusing require that, start and on Heart initiative gives differences a doesn't time completely the the streamlined active Heart the the didn't both of new that facilitate leverage the year whole fashion and deployment for of regions very the by active we that more And commitment capturing a Liver, Liver have the while Liver incorporated grow product

Josh Jennings

actually And Thanks OCS Liver, of mentioned for have Liver both the walking been Great. -- number through, my But of color hanging interest And can you investigator in levels approval. how both for Heart, to that sites? active that from you those us. fruit us is? sites low on in sense Heart, OCS of demand the a Thanks maybe taking indications and indications questions. give more investigator prior or markets, for

Waleed Hassanein

not group. you an Josh. of indication that even user in Actually, you, the give sites are Thank I'll

"Can and centers we Heart. be that to call, date over and just can, centers the have I And to are approval. approved. As we I the finished them said, mentioned start the in of centers centers, once as the we waiting with centers XX us that XX pipeline prepared initiated or The OCS CAP. the additional And that and previous we product the the is high. XX responsibility. as the again?" XX the centers, additional DCD prior XX is centers the and surgeons anywhere active to in call a Liver between heart very Liver In active the liver to So with in take in are are XX the to above working using had make liver after panel momentum with interest we degree congratulate centers us this high again, our to was

commercially. them in approval on a is back in once we order smooth fashion product and an to can program the So And in move but the quickly, organized initiate get fashion, the hand, track. get

Josh Jennings

those Great. Thanks answers. for

Operator

question John from line Next Plovanic from the comes of Canaccord.

Bill Plovanic

here. Plovanic Bill Yes,

thanks questions. So, my taking for

the you Lung net? Stephen, quarter, OUS but First for I number can of kind and question I'm missed remind us sorry, U.S. is, this, the

Stephen Gordon

was $X.X -- Lung just million. the U.S. Yeah, OUS. was $X.X million OUS $XXX,XXX number

Bill Plovanic

the QX, for obviously, CAPs Heart without or we it think what the DCD, in see if about as And Liver we basically, Liver And in Heart, kind will obviously, approval. U.S. the nothing the be. we get of is Okay. don't

that, confirming Just right?

Waleed Hassanein

correct, That's Bill.

Bill Plovanic

Okay. label, for granularity And you Heart discussions. the on thank of then, FDA the terms the in

very I helpful. think that's

because would for and submission in original there that there or data we different sit kind panel the anything from be about have that's Heart? next heard label, from the discussions is the the point, think we As of would what

Waleed Hassanein

we be resemble it But the And specifically And comment as optimistic of Bill, know, with am label it I meet active you -- reasonable, will meet will be discussions, that on discussions some FDA, label. will expectation. the may our around on our do will date. not heard data-driven. panel we've not the

Bill Plovanic

of I questions percent a the ask as Lung know could spread my And then, business, switch what understand I non-OCS of kind two -- of Lung for of the last non-CAP, was answer very between One And Great. What's in U.S. And is, jump is that? can question then you're is, number. of it's OCS the mean, if you I'll willing to the that I and especially just business? tough preservation the in those of share non-CAP that discussions. and lungs. more what's us those significance kind on Lung If the questions, what over OCS strong U.S.? cold kind off. you're to and solution help the

help Just us why matters. questions. that taking Thanks my through for walk

Waleed Hassanein

Thank you, you capital so question. equipment how Thank are said, not versus million CAP. of understood first that talking you. disposables, But Bill, the I'm were you -- I or about, much $X.X sure,

Bill Plovanic

sorry. U.S. I be Yes, wouldn't CAP, apologize. the I'm Yes.

Lung So US? Yes. how much driven Is US by of versus is is kind non-OCS? OCS --

Waleed Hassanein

All that There's revenue. no in million the $X.X OCS are non-OCS number. all revenue

Bill Plovanic

the matched? Has I'm sorry. it been Program, National Yes,

Waleed Hassanein

to in acquisition. between two I And The direct think and expect next XX% bulk we is quarters. the that case be somewhere the National XX%. is Program the

to a going up. the as business is we our at seeing new to Program competitive competitive start OCS huge we completely of sale region, a will resources, kind from revenue gap Program think cold in presence region, is that we center XXXX is as advantage to we're as number OCS That's up our gives XXXX. I we the throughout centers we look competitive for are early using question that, but the also OCS your drive of It new lever Center, us question our volume a solution staff increasing me into the OCS, that a turn advantage. National of up strategic our to Until OCS existing having acquisition. cold enable XXX% Lung related we that cold today. And for we in the and expectations. the And if I a creating advantage having the changing solution. as fill I'm around addressing and between think as call please integrated center increasing to add And are I'm we for preservation. a a preservation, OCS wrong. Program using lung second us preservation, start that though, National National the significant direct as far growing can that ramp not leveraging or It's seeing fully point the catalyst through everything and unified the not correct Bill, But strategic

Bill Plovanic

Thank perfect. was you. That

Operator

of next line Your Ott from of comes question Instructions] Mike [Operator the Oppenheimer.

Michael Ott

on -- answered, that Liver Suraj, at PROTECT maybe today. panel month. on expand our presented more Liver A more can one been the you lot have last Curious, data? to if reaction already physician questions any of the data, but

Waleed Hassanein

extremely It's positive.

most of out I Mike, abstracts than the where the and at actually, data the Liver American Congress, won impactful saw reaction, data, more the think Liver presentation Transplant presentations. we that, XX,XXX

all. it says that So

positive. extremely So

the they into OCS now shows Liver. case, but And this calls said, we that next Heart, that's throughout excitement. and the congratulatory three just the again. where it to not on that some the people As the thought and and drive the obviously, of products, Lung start with panel, day using after about approval of we're the are could got into XXXX an and approved year end momentum And excited we move I

Michael Ott

but That's far? so you what ongoing to discussions limited they're with if can to hear. Excellent. great the kind say in on while say expectations just And realize your FDA can tracking of labeling, you're you

Waleed Hassanein

like relationship I collaboration to and think both supportive I am and results data-driven, achieved want confident be again, comment respect on FDA, will be our it Mike, but be I -- to to with of and want I trials. the those, optimistic I cautious. it in think, that don't I will very

that's So and confident. say. I could all I'm optimistic, I'm But

Michael Ott

much. so Okay. That’s perfect. Thanks

Operator

to [Operator any don't over Waleed turn any Instructions] I remarks. time. I at this closing see questions for will it back

Waleed Hassanein

and thank you for and have much call, Again, you afternoon. wonderful in joining next much, report. so operator. earnings very to we're quarter you, our us this looking Thank forward a Thank

Operator

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

You may now disconnect.

TransMedics (TMDX) 8 Aug 212021 Q2 Earnings call transcript