TMDX - Earnings call transcript Q4 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, and welcome to TransMedics Fourth Quarter and Full Year 2021 Earnings Conference Call. [Operator Instructions].

As a reminder, this call is being recorded for replay process. I would like to turn the call over to Brian Johnston from Gilmartin Group for a few introductory comments.

Brian Johnston

Thanks, operator. financial the released XXst, ended TransMedics XXXX. today, results quarter for December Earlier the available release website. copy press A of is on company's the

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

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

Waleed Hassanein

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

commercially Gordon, growth today me strategic Officer. beyond. TransMedics for year Financial X and We secured PMA X and Stephen end in we U.S., is one Heart our markets. successfully FDA achieving goal the thus critical the catalyzing a our achieved XXXX Systems transplant and to XXXX launched Chief access with our Joining for approvals OCS was to every our Liver commercial potential the goals, year as of milestone

commercial an filed all QX while XX% the fully revenue, We launching representing believe the and growth for the a the for in results towards quarter themselves. now first supplement commercial goals. step from for XXXX for our QX covers National XX XXXX indication contributed Program, speak our regions. X marked technology, DCD results OCS our also our OCS products OCS heart which U.S. expanding and for our major which to PMA growth quarter We growth XXXX $X.X XX% year. first representing over Net our and million, revenue Net these revenue $XX.X was year XX% from growth full was fourth strong achieving XXXX. QX prior million, represent commercial

through to XXXX. As catalysts we from key expect move forward, we several benefit

data, at overview trial OCS EXPAND the standard Lung highlighting Perfusion Heart structure follow-up U.S., These XXth X-year X-year in scientific will the Lung at follow-up held and the National TransMedics will finally, in first-ever readouts and catalyst Program ISHLT. Lung TransMedics be meeting, XXXX the OCS-related Boston vision for our Trial in and major from approved, be OCS would Heart presentation and data, that of to the the April the outcome benchmarked upcoming and X-year will volumes lung the the EXPAND an full a OCS U.S., feature clinical International Society several Annual meeting Registry OCS plan society in OCS leverage how Meeting first strategic a The presentations Transplantation the we for DCD Program and hosting technology, Trial potentially This the strategic criteria to to results be of the presented transplant U.S. XXth. National presentations be and against will Heart Heart symposium or to heart share the clinical indications OCS data increase Heart hearts outcomes,

database. FDA-approved donor Heart pool indication in XXXX only the in as DCD supplement to rapidly U.S. to second DCD and catalyst transplantation. midyear. note are important submitted according PMA November indication. XXXX approval national DBD overall position the XX% the heart the It's donors expected expect the the represented for Our and be our will technology DCD OCS will XXXX, that continue by DCD both States of This the in transplant for They We the growing OCS of the indication to in approval FDA we United

reminder, will Heart a dataset in OCS the from And results unveil very trial As QX. line full as the upcoming at we top meeting. our mentioned DCD ISHLT strong announced above, we

Our third will the our be of OCS National Program expansion or catalyst further NOP.

schedules program. the allowing thus performed programs spend the transformative the in of enabled catalyst than its the remind U.S. in to middle to resource emergent major transplant the of transplant potential business, The this to of our to value for that vision minutes programs transplant an better high such service time, as TransMedics end-to-end in allow ischemic their procedure removing eliminating you to by manage be Given major frictions few the morning the program by as transplant clear volumes procurements. NOP programs become their an transplant The represents constraints. national distance, the From transplant the by U.S. logistical powerful. and historical critical grow rather NOP procedures in significant a value providing night, within to for programs a transplant to donor also clinical NOP and of barriers level, to and and the allowing organ NOP enabled proposition technology me to solution is partner centers a The are transplant

these Finally, at potential for thereby alleviate transplant and In and balance help utilizes NOP. the adoption of attraction to the institutions, that at resource programs will technology. the staffing surgical these clinical totality, facilitate rapid OCS believe the some and talent NOP staff drivers central curves, these retention we concerns of and work-life the clinical reduce help which maximizes value learning unparalleled constraints facilitating has

these end of date, It will to provide in United OCS the to technology, regions recipients expectation either organs potentially NOP outside of within to from XXXX. broad terms across throughout In donors XXXX, anywhere that States almost our expand of with or procure States. for clinical regions This the important established coverage represents United the point technology each approximately NOP XX launching by a region regions progress staff XX we to procurement and one to the to of the OCS note perform using is donor region. to

in of that This organs initiated addition, will should to program cases starting maximize and early requesting adoption directly the that and to can national procure transplant or XXXX, the program deliver their be the NOP TransMedics program. In expand by efficiency NOP. NOP enable

further Program CMS, to across National presentations planning U.S. awareness major Program TransMedics to in campaign in has our conferences commercial expand To across As the transplant include National educate procurements platforms. about is a the broad transplant several and heart the the transplant campaign we to expansion, by awareness ahead, OCS OCS facilitate that look XXXX X OCS launched key major Program. our OCS we're expand liver transplant broader to community programs, and of goal To at adoption players end, National this the to making the drive

be major and OCS the overall the driver for are confident As growth United will before, States. I've transplant a growth OCS Program stated we in that National commercial

we OCS Following DCD the on -- our commercial may infrastructure the impact We're and this significant the to to as on looking track of that OCS in use most XXXX success and key new our some approval the indication, adoption metrics we catalyst indication DCD forward for see now NOP Shifting NOP throughout the growth commercial forward. the background monitoring XXXX. to potential OCS beyond. commercial moving initiatives FDA provide of Heart

focused the infrastructure, as On for the increases. the OCS demand technology commercial infrastructure will following on initiatives key through X be we XXXX, --

internal for increasing the First, surgical expertise NOP. the

We supported by surgeons have X already contract States. established X a world-class of team of are consultants full-time cardiothoracic expertise strategically surgical which the surgical composed United across distributed

expect to to demand. We continue meet cardiothoracic to team the grow our

capabilities group. surgical On we've started our cardiothoracic out the to the build Liver match the of side,

expanding clinical OCS above. XX perfusion ended regional NOP; discussed covering active Second, we our perfusion XX XXXX support regions specialists with the for OCS

we're the open production meet actively this expand Liver NOP We our add mid- up expand demand regions. and Manufacturing to new our anticipated infrastructure; for through to program capacity team and expect and product. XXXX further as to long-term working to the cleanroom we Heart

in the on our initiated Finally, first an XXXX, next-generation of through long-term OCS we emphasis upgrade; phase will development electronics, which with technology, OCS chain. program improving XXXX continue supply technology our

to the generally, Let's U.S. of execution going better potential To commercial to XXXX additional earnings the metrics we our new the move and provide impact cases on intend reporting program QX track starting commercial the now traction NOP to measure forward. the OCS information on in call.

background. provide me some Let

that further OCS planning towards timeline. We organ, NOP less the flexibility report hope on through centers total provide further contribution beyond, As potential and given to revenue the the allow clarity any to the this commercial OCS the per process the our afforded traditional program. tracking NOP expands NOP We're historical the utilization use detail of business in XXXX transplant U.S. our U.S. additional of will per progress without the in become program the by the maturing way may and relevant initiation quarter. to to

our briefly The QX views negatively that QX, COVID and impact Omicron uncertainties heart obvious me in in impact let the we on so most potential see COVID on pandemic. in Now Based us of performance transplant trends. may XXXX. on far minimal our headwinds and liver discuss is and

new impacted or stated we lung COVID will variants. as any be always waves However, disproportionately before, by

chain issues. supply global the Finally,

particularly the done our impacts far, has semiconductors. from job chain in our supply of good So shortage team mitigating a managing network,

area throughout cannot impact However, this XXXX. control that negatively an and always us is we may

look momentum sequential me finish 'XX QX with first let commercial represent this expectations very We through to Now believe our start. encouraging building XXXX. and our of on in We quarter-to-quarter and fully quarter thoughts deliver results XXXX growth. a a forward summary for

ability are the all transplant drive OCS National and to and We our in heart variants indications significant compared new impact liver. any and will COVID technologies, disproportionately transplantation the OCS negatively extremely Program. X broad leveraging lung growth to approved, confident FDA-approved always

our of after Heart Liver and we As more resilient is the OCS business stated the commercial launch before, today technologies.

above between opportunities even we excited we of results, laser-focused million revenue in are transformative XXXX. business. Chief making our results I much Financial on growth we the range truly Stephen activities, year potential a for for XXXX the over range the commercialization full providing the are phases XX% and detailed on and financial call and will turn represents As to XX% commercial $XX and an we're million about review for full the to early still of to quarter as success XXXX annual a are headwinds Based to year that guidance given $XX year. bigger With that our Officer, Gordon, solid XXXX. the full This

Stephen Gordon

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

for an million. primarily U.S., fourth revenue from revenue. from the the XX% to OCS XXXX U.S. quarter quarter margin last quarter. up lung million. transplant This increase last of was from an XX% full revenue was sequential volume QX. the and which OCS in expenses increased Gross sequential quarter. was XX% in of net revenue OCS up OCS on National the both million net $X.X Liver Lung the For FDA as by of is offset million, traction our trial the the U.S. the The breakdown was all the Lung, R&D million And revenue $XX.X quarter The by and XXXX, XX% XXXX, our our infrastructure In of the commercialization, and was quarter was XX% growth of our making of fourth spending the of reminder, approved QX in that of reflecting Early Liver the as net million OCS commercial due transition quarter fourth from XXXX QX and of company. and commercial low from is from XXXX organ on $X.X of XX% and Program, That's fourth approvals $X.X quarter fourth of expenses well our at total operating ex-U.S. for driven in revenue clinical Liver. XXX% XX%. was the COVID partially revenue $X.X XXXX, OCS on also was in revenue And operating XXXX driven OCS quarter in the included products QX Heart $X.X including and performance investment first the QX late million recent a our million. QX Omicron and PMA was quarter X of of million in QX Heart. Systems to OCS impact situation the This our predominantly by XXXX we of and as with $X next-generation had a Heart up increase scale Heart, technology of was surge OCS spending OCS time. OCS of U.S. $X.X very throughout XXXX above $X.X COVID

was in loss XXXX quarter cash end fourth XXXX. And to the loss December fourth common for at million. million was of And $X.X the December of QX quarter XXXX. from of XXXX at securities $XX.X reduction of were the million million $XX.X of the outstanding the equates XXst, to fourth the million XXXX. $XX.X Our a our average million finally, quarter net in of Weighted of which million fourth operating cash, in as balance XX.X of compared to XXXX, quarter $XX.X quarter compared were equivalents, and for the $X.X end the shares marketable --

fiscal Now the let full results. detail on XXXX me year share some

for year million, million was U.S. million $XX.X of increase U.S. in the XX% in over and expenses U.S. XXXX. $XX.X was full U.S. full the Lung, $XX.X Gross and transitioned $X.X on was in year breakdown the compared to million was we commercial XXXX. extremely and TransMedics in was XXXX from year $X.X and revenue which loss million XXXX an net year, our full an $XX.X million loss XXXX, organ for XX% focused pathway year, from a the prior trials fully operating in full $XX.X total net XXXX multi-organ important were Overall, $X.X full the for in margin was: the $XX.X Lung compared our the clinical million Operating year million business And to million was XX% for million regulatory $XX Liver, Heart, XXXX. to compared XXXX, For outside to $XX.X $X.X year million one business. for in up in XX% XXXX of in and the and Heart. million

continue and the grow XXXX expect X/X to XXXX the we range around we realizing would purposes, XX% to XXXX. As revenue Waleed in further are mid-XX% XX% modeling year And of discussed, our of we over in this rate $XX forward for annual gross represents expect XXXX for XX% commercial likely to business are million to to range, $XX grow, to XX% the providing the margin expect looking growth to XXXX, expenses in in million revenue. fiscal of and and and or exit also, to guidance we

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

Waleed Hassanein

we significant In performance, and drive transplant now and our Thank catalysts commercial operator Stephen. will term. in QX the throughout near on call several expectations ability achieve leveraging catalysts forward with the success look in that, to I growth confident for we're you, XXXX remain in these momentum With markets. Q&A. X summary, XXXX, to all to regulatory pleased key to the particularly Operator? We across turn our to build our given clinical our this and

Operator

[Operator Instructions].

Bill first Canaccord. of from from Plovanic comes question Your the line

William Plovanic

a First question just question. guidance is

in said the impact sequential the with we quarter. you -- first even Waleed, should think, COVID expect of I

QX Just U.S. negatively into QX taking be be account will above back that internationally? even impacted both lung in to the to and

Waleed Hassanein

Yes.

William Plovanic

Okay.

Second traction. stronger question, seems we getting the than It much U.S. expected. heart number you're was like

Just curious metrics is don't I quarter. some the was clarity. that wondering the NOP you if could just went But you initially, Lung I or change yet. I think NOP Heart mentioned per us out on provide you the will and know organ and program as to

the How initial out, this expect rolling do then roll how Liver? Liver NOP out is that to Just and -- that we of Heart for when and kind about concentrated? both and is starting Or on commercialization? broad how many same was you question Heart of think for should just centers fully kind

Waleed Hassanein

Very in but it's you, the we Thank roll there to still stated or -- in and Heart Bill. in fact, important early question. QX It's the as NOP early. We liver in early contribution small I in both obviously XXXX, last Liver to that in, in previous quarter's out was, days, call QX. call my XXXX. and in expected expected roll Heart NOP, from in In QX, we

we're trends larger look So QX these at metrics at sample us forward. where can can be there starting going going that looking size, to that broader size we that sample will in start give believe meaningful we some

activities first of that. QX do Heart concentrated the Liver throughout we do but So and to that it answer program. XXXX. to the was year. We're number already centers Heart continue of we commercial expected in that When both both Liver, QX the That the we doing for question, and had first quarter And we fronts. part to in that will expect on international of

William Plovanic

how if these long could, a And long again? understand up scaled just them centers have how and -- lot get it back to some the I I to were does for get mentioned hand what's just circumvent as back your since out to national people their I'm all of But experience prior then. you there, and program you that. raising then approval experience, And of this take you but go curious, may just these

Waleed Hassanein

mix. some direct process. acquisition their some Bill. through and national have It's facilitates The program done you, a Thank

between question. streamline the the -- it's facilitates bullish to stuff. in we wonderful include all a program that that to forecast mix. in through going but X and And quicker was It's but it's expect too I supply processes QX, But And a the hospital national that national helped So processes, direction supply mix more are take, that's early the kind the results, in initiation internal than think we that's the still and -- going a XXXX. lot the center the to answer it agreements throughout of which chain, it to program. we

that front. continued we on So hope see to traction

Operator

[Operator Instructions].

of the Your next comes line question from Oppenheimer. Ott Mike from

Michael Ott

on believe expectation for today all I X in Congrats that PMA. approval whether your FDA quarter of can I a you with that's wondering panel. nice indications. of just regardless not there's reiterated was first Waleed, confirm a mid-'XX the you or

Waleed Hassanein

That Mike. is correct,

Michael Ott

dialog Okay. so Heart? how And then been far the around FDA has DCD

Waleed Hassanein

been better. any have Couldn't

Michael Ott

That's tend you the current great. that an how quarter? But question, sequential staffing And then Omicron most Lung COVID, ground guess? how to you 'XX. first prior XQ I over by the impacting still is today, scene a understanding characterize be and you mentioned is growth impacted your the Obviously, expect both to answer would in on

Waleed Hassanein

That's question. Michael. you, an important Thank

the discussing much QX. by likely these Bill, a over It's May. I in sequential and no to here in Omicron. business, lung The looking long-only expect business. business. we longer be a And to keep heart QX stated driving And liver less behind QX. we're As impacted a business, it's commercialization are heart driver growth forward we'll hopefully, And it's results a liver be momentum to

which only the compared here is The of more sit will always as is within staffing of today, out disproportionately major X But lung, helping shortage to lung impacting we processes to some institutions. impacted the improved transplant our is programs. be harder. So drivers Omicron NOP at alleviate growth, X

close of of but helping to revenue the a bit from and lung we're little So is gap have commercial impact and heart that fortunate the Omicron. activities the access NOP also liver, to

Michael Ott

we That's be attention that anything anything hear. focus more then or oversight a paying out investors Washington question. you're to? big outcomes great OPO of tracking picture on and of to should to else And either finally, Is there that related or

Waleed Hassanein

engaged are now. Washington-based heart, utilization really Thank can all of and or increasing engagements of you, is important not donor and all increasing kidney. that in an utilization The sometime it organ of interactions some these driven with Washington transplantation. technologies for share lot. There's lung, just right is have or biggest to of the meaningful ones on a a transplantation. Mike. organs That's impact on lot hope And goal stakeholders transplant by There's heavily CMS, on liver, that XXXX meet and into for in educate the just late will organ the importance focused across a that necessarily very transplant the initiatives transplant. stakeholders question. key we ecosystem expanding continue I TransMedics OPO to and are new initiatives It's oversight. That's the these focusing

is in Washington transplantation So by driven organ significant the focus of we're Congress, and yes, in CMS the engaged there above. heavily and a all on in U.S.

Michael Ott

to great That's hear.

Operator

Your from Cowen. next comes the of with line question Jennings Josh

Bryan Bergin

This Josh. the per for from NOP I how utilization you program. 'XX? about of assumption come Bryan you to expect And the organ revenue by do Maybe of the ask here Do much to per national is in that you NOP will vary an wanted have quarter organ? that referenced. percentage to start on metric

Waleed Hassanein

Bryan. you, Thank

percentage to organ yes. hoping to at be to it XX% going probably XX% revenue per We Is our -- by from organ? NOP, Initially, vary approximate end year-end. to coming approximately of XXXX are by

program Some the more than national organs to are others. amenable

we're to historically, these of different most lung by is it probably we to, XXXX. there going conservative liver, by throughout looking start into of then being in the are XXXX. the at and expect markets momentum speaking, that liver overall program. XX% penetration national if lung, will will end beginning, end it, by and heart, we that Heart that seeing process. to it's for it's still cases year, catch in are the year teams, from separate we And by hopefully up and that probably programs a be to example, year, very be the But and That's liver going and over the revenue challenging variable. necessarily not is heart followed For because team. XX% many the procured beginning same But the coming target between and going followed the the be roughly of our liver led by

Bryan Bergin

understood. sounds Maybe It have to helpful. about [indiscernible] there, amount liver physician just of where and ask generating And readouts? upcoming a you like out awareness expect That's Okay, data April. and data. be heart, I of good the do your coming after you'll to wanted in clinical data these data just

Waleed Hassanein

awareness. So, Bryan, about we're satisfied never the

that national again, continue call. national fronts. data, ISHLT, And In awareness and the at hopefully, of these reimbursement we're fact, many call. that engaged next and throughout talk announced the But will them program will direct for XXXX lot at clinical next those the many the initiatives broad increase on the there awareness TransMedics right are position, to and of working on in will continue always be program process can we the at programs ISHLT, many, a discuss at to our maximizing those awareness. We'll of talk we'll about be now, about campaign a also

Operator

are further There this to at conference the to Hassanein for questions turn further no like would now comments. back Waleed time. I

Waleed Hassanein

everybody Thank Thank QX want the and a results. forward to evening, We wish to for again I to a this speaking on you. you, this evening, call thank we're everybody. joining looking pleasant evening. you operator. us wonderful Have announce

Operator

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

You may now disconnect.

TransMedics (TMDX) 24 Feb 222021 Q4 Earnings call transcript