Earnings call transcript Q3 2022

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Operator

Good afternoon, and welcome to TransMedics Third Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded for replay purposes.

I would now like to turn the call over to Brian Johnston from Gilmartin Group for a few introductory comments.

Brian Johnston

Thank you, operator. Earlier today, TransMedics released financial results for the quarter ended September 30, 2022. press available the website. the of copy release on is company's A

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

future XXXX, accurate live as financial except and because www.transmedics.com. which statements, Exchange projections contains This and our update intention on law, our revise information filed November and XXXX. any on X, of events at our any Commission broadcast, subsequent only to at the with is conference otherwise. Exchange Securities whether uncertainties obligation, X, information or call Form filings by forward-looking the required or available time-sensitive the Commission, the disclaims these of today, Additional TransMedics and regarding heading www.sec.gov risks August new information, as website or or on XX-Q under with appears Risk Factors are Securities and and

Executive to and Officer. call Hassanein, I'll with Waleed the Chief that, now turn President over And

Waleed Hassanein

you, XXXX welcome and TransMedics to Quarter Good Thank Brian. Third Call. Earnings afternoon, everyone,

Officer. me As today always, joining is Financial Gordon, our Chief Stephen

continued transplant us strong in Throughout as US. once enabled fourth in sequential across for trajectory commercial growth period clinical and deliver accelerate heart again our growth. procedures as strength The liver demand continued validates XQ, to momentum OCS NOP the we posted our further grew results record to activity of and year-over-year the

this estimate net revenue of will product includes contra $XX.X Stephen This million was and clinical which on trial $X.X XQ million. a the $XX.X revenue Total of in revenue, million call. favorable adjustment new accrued later detail in

we growth represents and total achieved XX% for year-over-year revenue million, quarter, Year-to-date New revenue than and revenue to in still alone the XXXX, contra adjustment. revenue grow. the of we sequentially. more we third XXX% year-over-year and XXXX, revenue XX% have in growth over in XXX% $XX.X Notably, represents of product have $XX.X 'XX. NOP approximately accounted This QX million excluding or this year full remaining expect US continue to the

will organ section cover detail split his the in call. of Stephen and this

more provide me granular highlights. some let Now

Lung activities quarter-over-quarter. quarter, relatively heart were accelerated For NOP clinical the in sequential third muted and activities liver XQ.

a case US are our of volume we've came as Approximately, NOP. XXXX. long-term working indicated before, throughout revive XX% on we market lung total to However, from the initiative

came of per of liver, approximately from basis, cases of a XX% and organ lung XX% NOP. On approximately approximately XX% heart

the US NOP forward, -- case a to contribution of growing total As high as we cases and move see mid-XXs to remain percent we and revenue. expect to organ US

utilized transplant of by centers We NOP are XQ. also number the growing that TransMedics in very our encouraged

users were For XX transplants, heart, new and remainder centers were which there heart users. frequent that utilized of XX NOP for are the

XX used quarter. the center XX For liver, and frequent throughout were all NOP, users

of terms openings throughout our as programs. users US NOP were This NOP, as of transplant X early which progress of that standpoint. from within a the centers is there repeat lung, is that in huge area a were as validates center relying activity community. widely center critical used new transplant the quarter. becoming well X These For to accepted competitive more it on proves TransMedics positioning their growth operate strategy, centers This are

few Again, part have becoming is of this the despite the workflow, achieved being growth. OCS XQ, growth integral results plan strong our capacity. an in these weeks beyond future and for that to in transplant back US as situation of a NOP we we is order many It programs immediate leverage demand our accelerated for during notable

of clinical supply demand a job to to growth from to and full the schedule. performance, OCS US. the encouraged of demand for across our in by inventory mobilizing achievements revenue of NOP phenomenal XXXX, by minimize launch our quarter very the points acceleration XXX% Overall, compared the a year-over-year did the constraints team full-year the in impact Our meet 'XX ahead we're

beyond. for and let 'XX the remainder of and Now discuss into momentum me 'XX this build to strategies our on

First, our we underway well and are expand production manufacturing capacity. to

of on cleanroom of new existing the by we add track As to our production X end. that year space today, times size is are cleanroom

We securing are FDA cleanroom now focusing on the new space. certification staffing, of training and

a we the the us to current to level the demands. that production expand already shift the our meantime, cleanroom capacity In have in instituted meet will original second space to enable

in and capacity, are We more add well to capacity have XXXX. expanded early we our underway sterilization

addition, material expand to adequate against material near to in have demand continuing of term. supply we to the raw mitigate inventory and meet the growing risks. the meet chain raw our In Currently, we're supply demand

to staff our US. the expand board working we're new to and our opening infrastructure. NOP Second, points launch reach coverage clinical support in the geographical We're expanding and and our expand surgical across capabilities

volumes focused Lung reviving Third, we post-COVID are era. on transplant OCS

for to lung we transplant few initiated partnered national program of to with a 'XX. and are throughout we increase volumes to OPOs in number US Fourth, in this, course over benefit with as US. this each goal as the NOP gradually leading over organ a plan the the continue programs from the to doubling have collaborating We using years. We centers transplant next XXXX. well hope To initiative of do transplant the

dedicated create and transplant sometime and network support to We're beyond. strength NOP next potential drive we level transplant these a capitalize to our it foothold to have several and of adoption. on Finally, expect confident of partners growth OCS network initiatives initiatives the XXXX. and experts fully demonstrated and scalability growth operational in unparalleled our unequivocally To we create accelerate go-forward are activities. above. leverage NOP logistical logistics further with the market to program air we growing dedicated this actively US the to strategy We commercial the in and our engaged have partnering in discussed to ground the with in We're XXXX date, across

[Technical Difficulty] Hello?

Operator

Thank you. [Operator Instructions]

Waleed Hassanein

not done. me. call interrupted some music. with Excuse got We're The

Operator

continue. I apologize. Please

Waleed Hassanein

we date, the program unequivocally strength To growth and our of accelerate have NOP to OCS demonstrated commercial adoption.

leverage strategy on our initiatives expect foothold beyond. We we next drive We level to in and to market XXXX further are scalability capitalize in above. confident go-forward initiatives our growth unparalleled of the and discussed fully these to our in the and

As demand mentioned, forecasted continue finished XQ inventory. results our to outpace goods challenge plans our and

products we shortage aggressively we in that capacity supply finished in term. We OCS expanding the infrastructure, and are production fully experience temporary immediate may our are some as of cognizant

production time that growing to are highest Importantly, to we we the products. proper our allow ensure the training quality with need and staff,

XQ. Difficulty] [Technical find backorder situation process, ramp-up may in in we another ourselves this During

Operator

standby speaker. continue you Today's today's reconnected call your we once and have with Please Thank speaker. today's we reconnect for with whilst patience. try will

conference. Waleed, you're in the now

You may continue.

Waleed Hassanein

Sure. I apologize everyone. about technical difficulties, these

Let continue. will the last repeat me paragraph, and we

our our the and outpace results continue some shortage forecasted to mentioned, as challenge finished capacity production we that cognizant temporary fully plans in aggressively infrastructure, of our term. As expanding may finished in are demand products immediate supply and OCS inventory. We're XQ goods goods experience we

proper growing to our need the that with time we products. production ensure highest are and quality allow staff, to Importantly, the training we

situation we XQ pressures. on During in results find and and this with goods -- year-to-date process, finished expected backorder ramp-up XQ. with said, in ourselves expected based these may our balancing That results the another

XXXX million sequential on million the that up the same guidance to Again, adjustment $X.X of the stress The the million our XXXX. raise based USDXX estimate For represents in guidance raising to This XXX% the million change USDXX over to adjustment we guidance to revenue for annual want are the I phenomenal the excludes quarter. for revenue million, XXX% quarter, USDXX from a growth third USDXX full-year excludes period. raise this the contra $X.X experienced to million QX. in

to that, Stephen the turn to With results me let quarter. financial detailed the for Gordon cover

Stephen Gordon

Thank you, Waleed.

results the other and detail now for quarter. information provide financial some will the on I QX additional

trial payments estimates, phase a impact therefore, As favorable Waleed clinical related to QX to change now paid, we to million we've lower be revenue the our mentioned, accrued see $X.X updated favorable in of was estimate we in several programs. clinical And during of contra amount revenue. in resulting trial that and a expected had a

quarter So on from for quarter the true the of Commercial commercial was increase XXXX. was or XXX% revenue the the commercial million. for an of quarter. for third revenue, the third focus I quarter to the XXXX, gross $XX.X which want This of revenue represents

so XXXX, the XXXX quarter received part XXXX low. FDA As and reported before indication represents million for we revenue most of trials QX a our also was momentum of over was we the sequential the approval, reminder, fairly of good XX% that experiencing. The are the after clinical had QX our growth $XX.X third enrollment period in period for continued a

QX the excluding again, million in revenue This growth $XX.X QX compares $X.X reported $X.X XXXX US The of adjustment, revenue, million. XX% in sequential in million the favorable US, the US. was to that In was only was XXXX. the

$X.X as So and repeat of a the of the was our of and of revenue US, follows. of million liver, $X.X grew heart $X.X on million million XX% in the lung. again; constant basis. million I'll million And lung. $XX.X liver, million currency of organ of US $XX.X that revenue breakdown Outside $X.X heart

and we with movements, our $X.X consideration which was from revenue currency million $X.X This $X.X and includes did reported quarter. However, XXXX, that last taking X% heart consistent QX of lung, into up unfavorable is of of what is fairly million million.

program of again, lower the XX% gradually NOP would third This and program to than success margin performance. we XX% natural of slightly we heart. growing time, of performance XX%. And in Gross this the QX revenue third compared as Over driver excluding The do was, favorable US improve strong key margin XXXX liver evident quarter to was of component. last revenue the and the is our adjustment, expect revenue margins in is the larger The quarter XXXX. adoption efficiency. reflects OCS been of the quarter the in improve NOP gross have the for

primarily XXXX due and in efforts reported million was expenses a and increase particular, QX Total in of a QX US million operating operating investments as The expenses XX% the in our to as slight QX XXXX, $XX.X to NOP increase XXXX. R&D from $XX.X significant commercialization were expense the our in leveled shows to NOP QX as expenses in over expect up growth platform. compared in decrease flat sequential XXXX last the to have we last teams. our than but few growth several were continue next-generation our of spending at that do a The from pace somewhat in the off were quarters seeing fairly slower over quarters. the ramping We we in we see pace well

Operating revenue in loss the in result the third compared in growing the to $X.X of $XX.X of XXXX, quarter quarter business. primarily third million XXXX a million the was of

$XXX.X quarter debt of were for billion financing QX and quarter $X.X result XX, $XX cash XXXX, the compared our in of loss the of equity is XXXX. million September and Cash was third increase third to XXXX. activity the as net of of a in equivalents million Our and XXXX

increase term in sheet. provided we balance million cash our $XX debt In net a which throughout very as we refinanced approximately with execute of equity the we utilization on And loan, about position put $XXX in organ new completed and July, This million an continue raise, the $XX in netted August, TransMedics OCS which million strong to a transplant field. proceeds. strategy our

adjustment of shares. a confirm XX.XX $XX guidance, impact over Weighted that of represents excludes average favorable will for million quarter range were XXX% $X.X finally, which growth of our million, million the which I is to And outstanding to $XX XXXX. revenue million the shares XXX% common the

With turn comments. that, to the closing I'll call back for Waleed

Waleed Hassanein

Stephen. you, Thank

our transplant offering. the that foundation significant space. the to growth just strongly capitalizing on are and OCS the in with performance opportunity pleased we the of very 'XX greenfield we strong the for in leverage established plan created next drive business to that demand XXXX. level NOP we've of our however, our we're summary, we early stages are the for TransMedics We year-to-date in and solid and clinical to experiencing We at technology XQ believe, In

program transplants in integral US. TransMedics' of NOP OCS organ an performing the technology and are becoming part

majority this managing of transplant US. leverage volumes liver on look to annual future our the the is the ensure therapy. transplants, forward are TransMedics, to and in are global that while we transplant heart, thrilled goal vast lung capitalizing growing structure to we our Now, leading the for We're position in and of further

With Operator? call that, turn operator the I now the Q&A. to will for

Operator

[Operator the Morgan. Gong phone comes Instructions] from The of question have of J.P. first we Allen line

Allen Gong

a quarter, on great thanks question. Congrats the and for

So raised guess, came same amount. the you have I clearly backlog even quarter in based above first expectations with you by essentially that the little bit high guidance raise, in is, saw pretty on question around a I and we expectations the third of fourth quarter,

strength seen you've to the the how so in of by obviously is saw have quarter? and influenced far like those guess, October trends the that from So much you in continued third I really just

Waleed Hassanein

October we're we're trends we whatsoever in about finished of acceleration the To in inventory. the has the chain -- contrary, on the the no we're cognizant goods related influence October. seeing to Really, are supply seeing guidance. But concerned

So, QX. for wanted to our prudent estimation we in be

phase if conservatism not is been we ramp-up apply we this is given why guidance the in production in it maybe because it capacity, up were -- our where is, guidance the we ramping -- not have to this are of of So, would are But wanted we some level the phase. what different. growth

Allen Gong

-- like you're lot being conservative, work XXXX. being of Got supply little you a And little sounds the these I should it. by get done think manufacturing you be it into to time but challenges, seem given a

your XXXX in holding that after you're the much about situation reasonable year. fact better revenues momentum on talked you years previously a and that New the you're again and double that, to what You've still be ambitions that to a to, target essentially the that to come do in given you're the even maybe supply Year? similar Is seeing should track in this

Waleed Hassanein

and From of high-level for 'XX would believe the again, iceberg. is in a the yet That's expectations success goal, believe. we 'XX. Allen, not our rapid what on that I tip comment the acceleration we the we've achieved just

always, the is beginning we to in going But the realistic and that do a our will expectation We TransMedics our as are is level, in be of estimation. year. And at of prudent a of and X NOP curve, driven the in the we primarily working from our US initially US in adoption the with. early are organs across innings growth significant the the acceleration high

So that hasn't changed.

we'll results year. the the 'XX next fact, on In comment of 'XX validates that. But guidance early for

Allen Gong

one If I a quick could sneak final in.

timelines concrete the about mention other organs updates? kidney. next in do of you also -- any OCS talking get expectations those additional expect ambitions more You're we And to Should like have system. We've updates preliminary both concrete year? next-gen around for heard you product

Waleed Hassanein

of next discuss year play I a end the 'XX, think generation are role. with towards next the both. generation. leading next might And year, -- to we our going phase That's of the first hopefully expectation, kidney

Next please, Operator? Operator? question

Operator

Stanley. of We Cecilia now Furlong have Morgan

Cecilia Furlong

the to the and start with wanted guidance quarter. thinking I you're how about Congrats on XQ. just Great.

previously constraints. contributions How a And then, You love recently? out? some take thinking just specific what's you're from in really contemplated on is situation about lung recovery, you're either XQ air what would of talked organ kind what that transport seeing in Just broader heart or playing

Waleed Hassanein

even be to transport expect the We early at QX in influence negative Great. air -- in don't all in influence 'XX. or an --

to the expect momentum, as we far As heart that grow.

to liver we lung grow. to expect and expect We grow

rather revenue expect we But from no that air growth, we again, -- risks assume to it's to in lung, we start However, QX I witnessing in QX, that will QX 'XX transport. prudent QX. see than think lung

We to continue heart accelerate. to the momentum expect

and continue hopeful looking in will the liver the start momentum 'XX. think accelerate but expect of that We QX, tangibly, I in the to lung to we're at will and QX QX begin recovery that we

Cecilia Furlong

supply guidance here -- represent Okay. we of And expansion Great. pressures does with thinking our at just could in expansion seeing upside well, DBD heart now and your the end sit in as dynamics, Then I NOP high guidance the where right that today if thinking -- about you're as as we up could up see potentially feeling, heart follow to could potential NOP the really supply just How utilization, supply you're DCD? really XQ specifically. and to wanted looking in you're on arise? further then just follow either about

Waleed Hassanein

first guidance? please, So there question, on the on the part part I'm of of first you repeat to Cecilia, the the guidance? the can -- Is upside the question sorry,

Cecilia Furlong

Yes.

Waleed Hassanein

wanted supply Yes. the We're with a of The Thanksgiving or of We conservative. things short of of New that guidance approximately holiday QX. than other realistic X with we're talking because in were to two dealing dealing with production weeks risks hopeful, and only situation. finished expectations. this it vacation two Christmas made This risk another QX what the risk about. week We're is and goods Year, we in and quarter is, any an to and potential Is backorder between wanted issue. there that prudent we chain is We're inventory don't we dealing see why the be the with we upside? other the see time but be

second The part.

Stephen Gordon

Number of centers.

Waleed Hassanein

as more that number we're we that's sure centers in we're of going in hubs, the and and for the heart are thing the QX. same centers focused number growth of become far generate new centers in we of adding and doing QX of growing that the the making repeat lung. momentum, And new own came to those centers its in the in growing As are centers on QX, hubs and number number the but

of we is significant in big could that number generate with think small is the leverage number adopting from centers, acceleration of that there are revenue. significant metric a 'XX lesson a big regularly small I centers and that learned the

So now, are number increasing we centers. of right the

Now we're utilization from focusing NOP. on repeat driving

we can go to the Operator, question, please? next

Operator

Joshua Jennings We now Cowen. have of

Joshua Jennings

if market strong double-digit quarter. to in on [indiscernible], out October like single-digit in about now read-through Those there US OCS the high new transform databases Waleed least and suggest of and there's to Wanted that I'm to that the know market evidence volumes added OCS kind seems to stated as transplant call. in CMS is are is the transplant just There's any XQ reporting? And Congress quantify asking is contribution low that and ask to Is NOP And Stephen to network? But growing the and OCS Congratulations a impact? any well. the the at that working it? the earnings want been are HHS growth. you reason range way I growing have to as parse market the market. as the that's any in the technology can way an growth

Waleed Hassanein

they US. a we because coming volume? really center The going NOP. donor they to busy, historically, transplant centers doing are procedure surgical the down me definitely meaning I'll donor NOP, that Yes, directly you offer, in are volumes give in the and in of OR centers when are Several multifactorial, from surgeons to comfortable would more from big coming or is you turn the DBD, commented also role from how that QX with that you And us source anecdotal a are historically, the playing source get the ask example. one is Josh. doing a another of either growth offer is busy in the growth, busy. is with in The growth coming transplant it's it's the DCD, grow

NOP from do it it and And stagger they NOP, organ. offer, with time the free it to the the institutions Now the X bring to or not is X I've in keep accept OR the this when organ, donor the procedure. heard across send several back, when transplant organs, team the just allows that procure would overnight

transplant that a accessing either So are growing or yes, volume more more key OCS the organs, to not be historical are programs long that. and logistical while piece NOP playing today, by the that through we they transplant of in normally would not do DCD, DBD think they're procedure, logistical able and are older busy the transplant accept can accessing the that distance, age doing organs another utilized challenges role

address CMS the to HHS. about initiatives from your and national part Now

early we're the think still innings, I in Josh.

they're what's I these focusing keeping just on with going federal think on. big up organizations,

aware hope we I think over them however, addressed expect grow. numbers to more the your I continue as questions. the next year, more to I be and

Joshua Jennings

there National of You follow networking. the kind on restructure published are definitely up to of was the on surgeons some think did. one just Sciences transplant -- some paper And talked how earlier recommendations US that we've with -- to year this Academy a I by

understand interest of as just fruition? the but better expressed any proposals setup One those, unit on that also unit that of establishing Can surgeons donor the up perfusion was that coming in in prospects organ thoughts you a combination. setting and help maybe some to well us

Waleed Hassanein

the drafted you're Josh, States. referring paper NOP was a became before United to, the paper that reality in

and increasing they the do to adds was the stay. can of a keep that sense. to doesn't concept organ knowledge NOP, what It it really unnecessarily. their Today, never centralized is adds the lack where when a their it knowledge in trying NOP So it was of organ of extent believe salvage make it That structure pseudo-type resulted in tried, them transplants. complexity, frankly, create without And location. cost, the given We here of NOP. horizon, trying were something, they time is adds any that to

within current knowing constraints without it for way the The growing the NOP their sitting organ working things happened over they're systems of was rather of their the the where today things doing volume same and the it the several central hours. and working in cases same as the than the centralizing to individual what control in is that middle the shipping night transplant seamless through over US, volume, transplant workflow of most or

particular that's paper. our So, that's our on again, this view vision,

mainstream. with up I NOP to think the paper trying before trying is creative the come the solutions was was to --

we believe grow year. to it continue next NOP the -- to US the in will and is Now mainstream throughout continue we

Operator

We the Plovanic with Canaccord. from question next now have Bill

Bill Plovanic

the Help the is Is side, can't Or to materials? like dig constraint a organ exactly is side? disposable understand, challenges Great. it? the raw just little Is I'd into specific? it side, need solution us kind this guidance we can you what capital the supply that more. more limitations and run the it What in those us and shifts? mitigate is get it what product understand risks you're to just of sterilized. so to those term. You Help are near understand doing

champagne exceeding You that supply. have a demand is problem

and this of rather be so of will get is this end site? of that until a And increased sooner noted, clearance approval kind this -- is won't on the as year, near-term something you problem year, you're resolved linger FDA next Or or you facing and later? resolved which will is on that than dependent capacity have

Waleed Hassanein

don't solutions. situation. have issues any we foreseeable that for XX the months. don't raw -- -- future none. issue me We big dissect let that the with the have any with over We with have issues Zero, next any So material don't issues

XX at to We several have inventory of next us orders for throughout to XX solutions have coming year. last least months we and months,

X full times the time we the old shift. expanding our double get number of big of double to took is shift end on actions peaked of are the the throughput aggressive head production modules. We that big the to its new size took And of the the problem working on or while the the is, It is this problem QX. The footprint floor area cleanroom. cleanroom perfusion at increase in some and to heads, issue of

see now as near We not effect. lingering the the the So or this X be next what term We really a are do quarters. over expect X risks? risks to

do lingering to want hard get the but next not sure within working is are we situation quarters of very this maximum. it We a out X this because once, or we effect can make to X

until dialogue that. the far than be and cleanroom, done, this longer is anything to that certification XX-day we of very fair going done. compared to degree in FDA, As it's active are a not the have XX-day confidence of process But to with the it's we as

So situation. that's our

Bill Plovanic

perfusion for just And modules.

Waleed Hassanein

hardware. The organ, a issue. [prefect] actual unit an perfusion not raw the not disposable It's actual issue. hardware material goes material It's the solution raw not It's that assembly the a part every into with -- sensor It's issue. the sterile not module. of active a really It's issue. not

As far as we've further did for term near on mid the production our and because sterilization we sterilization that working solve even not Bill, term, capacity increased want capacity increasing the and We're forget is sterilization. to concerned, piece capacity. long about

it we're already term. some for achieved So, on efficiencies near the and we

Now of and it's just cranking building the more these disposables. gears

Bill Plovanic

So, -- field. in inventory that you've in disposable earlier all pulled comments, your you've it sounds productive like your the wasn't

You have been higher. shipping and it which are around why your moving COGS it, is probably

OT much trying you're to You run you an and can. out as put as

understand just I'm field the hiccup sucking is kind -- a] point? at line? this concerned I they're can't it and understand kind mouth to get of Why it I just just up you you're hand you wouldn't don't of inventory that a [about longer but your out you think running, down sequentially? why to like were little that be were labor function, the any took mentioned a whatever, Or to in you up and training increase now. folks, trying the

Waleed Hassanein

Yes. Exactly.

this Bill. And hand point, are like hand is to mouth with to we We mouth, don't that. at always And there hiccups.

why mouth. prudent. start to the have quarters we're early And do have reserves strategic couple Right in to literally and used trying over now hand of we that's it's next we QX. QX building what to is to So be like

Bill Plovanic

Got you.

for Okay. granularity. the Thanks

on especially of about all and really that's then for think as as more you X lung. And the guidance. to helpful -- think related it I ask us, that's I'll just

all like to patients get of product. with FDA, almost my you. And full that's big a the luck about, with the the sign-ups slower any Because It's talked you one have the a for study? that's had been to what just post-approval clinical little You been changing that barrier understanding FDA Have a big that was trial any and the in limitations. you. of or running another kind discussions from commercializing

there? expectations with update any FDA the of on kind So, activity and

Waleed Hassanein

with distracted part main that on driver. engaging the even on the we it's post-approval revive not community the being part, lung laser-focused is need of the The in program It's to a the in that are transplantation updating key era. driver this main driver transplant country, of COVID not it main a said, to the post-COVID FDA We're is study national the but lung leading Sure. of transplantation became again initiative lung. transplant as lung get and caused be here. a that That to consolidated. further the lot we from design

apply just get again the and of the achieve no And we seeing have is that to model, on can organs now, and without need a in transplant lung if been US to have they the a their growing it. volume growth their liver same They're we transplant It's the and in concept without NOP needs. longer they results, the as growing success proof of can amount which the a them It's community So, tangible these heart experiencing workload, of of that show back focus the or happening. actually proof growing staffing that. same their vision. hypothesis

even own seeing Some it institutions. of their them in are

are we So, program. approach are revive to two-pronged that the these lung pursuing the

Operator

Oppenheimer. the of Kalia on have line from now question We another Suraj

Suraj Kalia

can Stephen, hear right? me Waleed, all you

Waleed Hassanein

We you just fine. hear can

Suraj Kalia

Perfect. quarter. Gentlemen, nice a congrats on

if is Liver 'XX. if heart And we side. and DCD my out from X just was believe causing seeing these different? sometime is questions me if how we X slope Waleed, -- adoption 'XX heart November right. map Waleed, what you of curves it? liver was of late I QX serves So, adoption, if adoption approval, are What organs? the to the in were so, memory

Waleed Hassanein

at QX. NOP difference here, was that and liver uplift and the difference do all. The the that. year we're on not resulted As in be see difference. We will we saw But sit bandwagon a said, don't a in see quicker of the seeing in when that really heart thereafter we the shortly jumped liver. early We the we

and So, will prove year. other year think statement our original heart true. each end by or to next I catch of be QX will with this Liver of up

Stephen Gordon

is this Suraj, And Stephen.

XX%. number about sequentially, the just sequentially grew So heart sequentially liver about XX%, grew

curves. the the it's which if really trajectory. I pretty slope both approvals utilization driving know is good as as they're these much of the of So, on the don't NOP,

Suraj Kalia

anything I just organ X in isn't. of there Right. like terms versus if Looks the just another. or in curious was was there clinical excitement

Waleed, mentioned so in XX So users, on. XX believe in frequent heart, I fair enough. about liver, you NOP

side transplant clarify And how would what organ if frequent define use little and more maybe them us So the -- frequent? kind user, of granularity NOP use all not OCS what to a month? or NOP just could give when in cause does next is it plus a a you in you do X maybe

Waleed Hassanein

answer to that, going exactly was I question Suraj. the Actually, Sure.

month we OCS we OCS is a what usage center the as user. per X month stop So, a frequent a doesn't center that as over of frequent actually X to for to define using minimum have month. a And qualify

ramp up but that frequent those expect call centers in it centers trajectory. that They not the the the so users the X, did joined we we users like few want So -- to in QX. centers are maybe early centers heart, that same use to the

the during other see centers because we of that the it's on they expect time they don't that And expect staccato happens, these matter trial. onesie-twosies. there a it and these used only seeing momentum and when don't focus won't more are try centers because to don't kind engaged. we we once to that don't back they're If works, to last in of -- we many NOP, are movements -- We see once they region. And they move -- centers when the stop. that centers come on And be are, are

active So, month active our at rate a OCS definition and very user user to -- the are X X that's are of the times definition times of a consistently. active minimum that an centers center that high per quarter throughout An is user. of using an the

Suraj Kalia

Okay. That's great additional information.

right, Waleed, and clarity If in terms HeartWare from remember side. from the a rather you issues, the back, you labor, and of complex quality facility that. cause inspections somewhere Finally, manufacturing right, of And Thoratec, up step have is I this there my days, advisory given notice. of some a Waleed, right? which might start or the I a be pretty a supply field, Waleed, lot all might hiccup, then ramping take

what, Xx, the we need what look quality we Xx, manufacturing up this an eye in weakest know the the for ramp at chain, you you're is link to production in the chain, like, as current OCS that the As control keep current levels? you on

Waleed Hassanein

make other in what have Actually, to we that not mistakes Suraj, it's going done may said. are we the same the past.

One training to quality time of I the the proper adequately need attracting have for us our right reason script, ensuring the being that our to stated in it we floor. for main very highest we them leave is talent, and that prudent to what exactly product give my

corners in going We are of quality our our to product. not cut

stand we process. do our not here, a in see link weak we As quality

I If be I I'm weak that here. to there a standing here know link, don't is deserve and

So, stages. being not every to taken from avoid is the We're triple We're quality for in demanding and the giving time it scale we metrics prudent be are production doing sure the We're them chain very allowing overnight. that appropriate our are to issues team of aspect the to we're quality of. time and these care really happening. sure that making making met. addressed, to the capacity We're them ready

sure Could of? the is release it our proper something everything time, us training, key not again, even making But market. we happen are we're the for the aware the to met product proper quality give that is Yes, metrics before to possible.

So, we're meet not cut to to going corners supply the demand.

to category help sure sustain to of quality it. highest that's is business that this what's our going have grow and product us We make because the

Operator

you. Thank

the on We have questions no line. further

for So, any I'd remarks. final Waleed to hand to like it back

Waleed Hassanein

evening, difficulties. you. Thank much the Thank And about apologize Have so for everybody. technical time. a wonderful you I your

Operator

conclude This today's for Thank you joining. call. does

line. disconnect now may You your

TransMedics (TMDX) 3 Nov 222022 Q3 Earnings call transcript