CRY - Earnings call transcript Q2 2021

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Operator

Greetings and welcome to the CryoLife's Second Quarter 2021 Financial Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I will now turn the call over to Brian Johnston from the Gilmartin Group. may you and you begin. Thank

Brian Johnston

afternoon Thanks, the you joining thank today. Operator. Good call for and

Joining CryoLife's today Ashley me from Lee, CEO Pat CFO. and Mackin, management team are

Reform XXXX. the to as to forward-looking Before involve beliefs, I'd Securities materially risks differ include Securities in are to cause and the this are statements the Litigation predictions Private XXXX. that forward-looking risks these requirements make call comply estimates of Private with hopes, forward-looking Act from and of the made statements future. the uncertainties, or of may we uncertainties Act actual intentions, subject the the and like The results of number meaning that statements time following statements. Comments begin, statements to Reform These forward-looking to that harbor safe forward of statements company's Litigation within on made or expectations, a for management's assumptions look

and may press release in issued risks filings the the in certain time concerning today. and earlier uncertainties company's to forward-looking information impact statements that contained time that Additional SEC from is these was

to I'll the Pat Now, Mackin. turn CEO, CryoLife's over call

Pat Mackin

good QX 'XX a was and against of COVID-XX. performed pleased joining. thanks we performance and it believe by results meaningful report results, we of even business, compare and in recently to well our quite pandemic. In the the had QX progress impacted performance evaluating is more because substantially Thanks, for newly of to and XXXX solid XXXX QX Brian, our afternoon as products quarter I'm acquired introduced face the

of our TMR in This returned currency growth XXXX revenue has shows periods we in of our was growth. 'XX QX comparing X.X%. that growth XXXX. TMR performance, when QX returning QX constant to excludes momentum against revenue of not sold we of business both and as but This are QX forma So, pro XXXX

the that affected that is which been to cardiac you even mentioned result, supply and valves the issue, previously more not resolved. tissue the of of that will declined our FDA write-off the confirmed a the the impressive distribute, inadequate quarantined as safe 'XX of in consider tissue tissue weeks, few were quarter to we $X as due last by when any now X% the In was we tissue the Tris that a result QX performance with has Tris Our cardiac issue. of million quarantine

should now extra release As of a our result we the of impact working on second tissue going tissue revenue through news, process, positive have which quarter have an of we've positive begun this and XXXX. half into

in impact our confidence our notwithstanding our of second from business, US, half we the COVID-XX of particularly business, XXXX. are the issuing continued outside for guidance Given on the

a increase million will with forma and a basis half forecasting the and revenues constant XX% up to year are end result second exclude XXXX on PerClot XXXX. in versus currency million. We Baxter pro as X% which revenues approximately will transaction This between $XXX full $XXX of will

launches and product in Valve performance US. in Our business strength the new particularly from On-X benefited this our quarter our through Aortic

QX has currency grew vaccines Nexus I revenues the also number basis in number a of growth available On-X of OPEN it revenue operating our substantially, Since basis. Aortic with people traditional which is in EMEA workflow in On-X in the hospitals XX% more America, XXXX. last E-vita the example, NEO North increase. the outstanding increased the currency COVID a and XX%, XX% also continues call, grew quarter to to E-nside the led wanted in XXXX constant For forma further contagious due XX% had we to has of our of Both AMD to versus markets a the of increased XXXX to world Delta in are grew of various XXXX, Valve on increase and of market pro and second XX%, in our outbreaks second the revenue. constant wasn't on XXX%, factors approved quarter highly highlight each seeing as compared a around normalization increase. Unfortunately, variant. an sequential grew these

this while Europe better do experience this the of a renewed like significant not to Latin and be to COVID and said, to the first the headwind foresee a we will second Asia-Pacific conditions as year. XXXX return or well experience performance 'XX, of impact XX come, US in months COVID may infections, continue certain of the continue spike believe to While be than our revenue from COVID-XX. to in early of year in areas we starting half America That as that are half

Ashley more outlook will commentary for provide QX later the in on our call.

in surgery. it our customary cash PerClot to outstanding channels product aortic an is position allows broader our more From remain products quarter focused some repair, our on as focused line PerClot you portfolio to addressable PerClot on provide call strategic to of improves strengthen I standpoint, vascular on commercial of Baxter. point sheet. cardiac moving and for know, our our provide the Before of our selling color of cardiac balance our to outside product, a surgery sale on and most vascular announcement opportunity PerClot a and second simultaneously to recap want this morning the progress, is of but expanding regarding market our divesting

of United PerClot result Baxter distributing to sell manufactured us Baxter will SMI will another US two outside this manufactured from years take while the manufacturer. CryoLife over PerClot a for approximately PerClot manufacturing of transaction, States transfers and approval As PerClot post

for half revenue for to approval we the XXXX in we product in assumptions, we Under growth PerClot contribute the be US to second in will to and and will approved on Baxter, current PMA expect which continue the our generate XXXX in PerClot manufacture XXXX Baxter's US the We pursue should behalf. of rate.

and is line our this 'XX. a product of and clear divestment 'XX the strategic growth result, contributes to in benefit a As revenue

our the in review quarter. second on of progress Moving to

call, our in explained is initiatives. with to As accelerate near-term growth plan revenue last three main our

includes and products E-vita three in E-nya. five NEO, stent-graft Europe. Our products, first NEXUS, OPEN and E-nside, aortic JOTEC to new initiative This the next-generation is commercialize AMDS, stent our our

initiative approvals continue secure to is initiative is major to the to markets for Mitral and in US, regulatory third America. in in expand US, our Latin Asia-Pacific in and commercialization second you And Our forward. PROACT of enhanced items BioGlue of PerClot in stent through update new our the walk portfolio these aortic of review grafts. stents Starting will China. I each on of going the the an and with

world's very performance optimistic remodeling and acute device. of aortic we're about dissections, is arch A First the hybrid this to treat this the with first aortic AMDS, device type used

noted a million, where I we basis posted earlier, forma increase revenues a an have in XX% second AMDS As regional on majority of during the over lockdowns sales. $X.X quarter was currency despite XXXX. Europe constant of of pro our of This we the occurred quarter, second growth which

also marketing the markets. which We authorizations well these approvals, world, with position for around regulatory expect pandemic to continue secure revenues, further secure to us markets dissipates increases additional in we particularly as key in AMDS the in

'XX. these increase not quarter believe not revenues the revenue in second NEXUS constant of posted to portion second and basis renewed approved Second, Europe of travel was products, for XXX,XXX, a of as for NEXUS quarter XXXX. We the have XX% COVID-XX the compared been on the quarter. of of an in currency restrictions better would NEXUS well during a as for results lockdowns if our other second

see prospects NEXUS and continue for upcoming months to the optimistic regarding We for this cases technology. our scheduled weeks and remain

newest device is endovascular E-nside, device, to thoracoabdominal in our third treat with aneurysms Our our grafts. portfolio stent

the is OPEN release, include move elephant include our which from over XXXX. OPEN to are constant E-nside full XXXX. product grew Plus product E-vita and this category newest This XX% later fifth market is limited currency arch. to in expecting line, aortic Our a E-nya, aneurysms grew device stages The category, compared basis of and fourth early QX NEO line, which and if Revenues in QX revenues OPEN of when basis E-xtra to the a on release our in a NEO. to currently a you dissections compared this treat XXX% frozen we currency constant XXXX. market used which in to on product is DESIGN trunk to The E-vita of the

of This will increases. We expect to to as number Europe continue a products as build in products vaccinated are well these the these people five demand accelerate pandemic for for adoption as market as subsides.

improved the source In efforts inventory addition, we resulting selling a to second JOTEC from benefit expect internal from supplier. on-boarding own our of and

Latin expansion products in commercial existing for expansion international through initiative, these Pacific be next well regulatory new our in Asia America. footprint This our of done as and to will as regions. approvals Moving

anticipate that basis quarter will these Latin in second America We in and additional by both Our X% regions second the 'XX. results that both COVID-XX gain and to feel hampered revenues a were on in APAC our in the both currency increased Pacific and pro 'XX X%, the marketing quarter of forma continued decreased revenues and constant in we subsides growth Asia the of accelerate compared pandemic America. Latin authorizations the as impact

achieving submit approval PROACT pursue third our PerClot we major progress on initiative, FDA PMAs make BioGlue. markets. Regarding regulatory continue for to expect to three the Mitral we continuing quarter, and while to this specifically, More for approvals in Chinese

also is mitral submit On-X capability. our This specialties well in submission approval For QX PMA for as surgery in expect valve. PerClot, for submit across XXXX, large-scale indications Aortic manufacturing to to as On-X INR to we our Similarly, QX low we similar PMA label as a label XXXX for multiple our for for well open the Valve. intend for INR lower laparoscopic as

patients Valve. X.X. valves. at to clinical rather for INRs care maintained patients of be market benefits run X.X be As valve mitral patients. mechanical to approval On-X us lower like the that On-X to On-X the new implanted this mechanical patients significant which has a Valve with share X.X to valves, Aortic approve, will over to X.X versus we've with This On-X doses lead enable it's market our valves to will standard will only reminder, be X.X. lower significant competitive compared would from can valves share would to valve We significant be mitral to all that If X.X the our advantage valve competitor labels on with of than aortic experienced On-X The X.X FDA-approved clinical Aortic on at Coumadin for take other able our the gains X.X believe a mitral is of

engaged it when accelerating in actively China, near-term forward our Lastly, for update an revenue not regulatory timeline on or of approval look China BioGlue we to have In approval we meaningfully relates as growth further clarity. remain described earlier. in opportunity does with NMPA view, our and BioGlue impact approval providing adversely to I

very are make this currently to to In mid-term These clinical progress US clinical progress products good three initiatives, to our we continued trials that addition we these expect PROACT year. in key three which later ones, products trials are with NEXUS in on AMDS. Xa, and US our also start pipeline are

the trial. We on continue significant our to enrollment PROACT make progress Xa of

valve leader by we If the can On-X can determine Valve we in in believe on this from currently should Feedback Our surgeons approval, XXX and versus successfully Aortic Aortic late we and the patients approval for prospective trial Valve aortic remains XX. this and enrolled FDA become be indication an in for new share the we On-X endpoints, randomized trial of headwinds very 'XX. pandemic maintained such 'XX have age trial the early safely still or positive. participating patients study. if We obtain believe under clinical the with meets this warfarin. effectively its patients assuming Despite Eliquis market market patients achieve

Endospan known to In addition PROACT continues on partner TRIOMPHE for trial NEXUS its good progress the US to the trial. trial, make ID our Xa as

begin now are we on turn FDA on if approval $X QX at we will market With AMDS If billion we PROACT to time. us additional 'XX, the these opportunity for Xa, AMDS, by trials AMDS submitted, get the which, which in submit year-end. anticipate that, to IDE call to clinical would company our trial expect, as our late Ashley. over for an early As XXXX that 'XX, proceed put and in by track I'll NEXUS track

Ashley Lee

X%. increased the US, for basis XXXX. Thanks, increased in good graft of XX% XX% XXXX On-X and XXXX, aortic aortic XX%, came currency a and to pro constant million our quarter guidance quarter, a than revenues stent quarter relative to pro tissue constant second on of improving America volumes a XX% increased XX%, inventory vaccination addition XXX%, XXXX, of a Revenues revenues revenues year-over-year stent and currency XX%. all increased position, revenues Pat GAAP revenues XXXX. increased XX% increased and company tissue basis, increased NEXUS XXXX. all of in increased stent processing quarter BioGlue graft on in the quarter afternoon, the a of second $XX.X On-X graft stent and XX% basis, quarterly On eased quarter improved up the rates up in basis XX% increased procedure revenues increased XXXX processing America JOTEC Latin the second forma increased and compared during increased due quarter. and EMEA everyone. America Total were second in of XX%, volumes revenues revenues and On-X reflecting compared basis to On a second reflecting a in revenues of XX%, currency revenues less in second pro adoption On Asia-Pacific forma QX North On and revenues compared QX increased to XX%, and procedure the and North ahead compared constant the XX%, improved basis, as increased forma aortic Latin of increased lockdowns increased revenues increased increased and the to of second XXX%, pro of basis of quarter the revenues the EU. increased forma the improving BioGlue revenues stent in XX% X% XXXX. BioGlue to XXXX, Asia-Pacific regional On AMDS compared September XX% Europe increased decreased stent EMEA and XX%, to procedure second XX%, America currency constant volumes

for million second $XX.X XXXX. of XXXX. the second in expenses Our for XX% gross of second to the margins the $XX.X were compared of were and XX% G&A quarter the second quarter in XXXX quarter million quarter

XXXX charges of includes million, acquisition-related AMDS $X.X quarter to related of non-recurring the fair acquisition. other charges second to The value and primarily related

of non-recurring includes million interest extension of expense related to quarter debt, expense million of X.X of related Second $XXX,XXX interest to and B foreign related expense Loan cost. of origination the million our facility, Term unrealized $X.X million and in approximately to Loan approximately realized convertible $X.X QX X.X in B, our our translation credit amortization currency Other includes debt Term $XXX,XXX in revolving gains. and

per per the million $X.X of fully share. On approximately $X.X the or bottom income share net line, Non-GAAP in GAAP second million we net loss reported diluted was $X.XX quarter. or $X.XX

for translation income earnings non-GAAP Additionally, include gain to GAAP Reconciliation approximately pre-tax share this $X.X EPS in of related million non-GAAP press or that of issued per the and are $X.XX to gains. in we the included foreign GAAP currency and operating second release expense, $X $X.X charges quarter XXXX. backs income. amortization Adjusted second to was of Adjusted of operating million XXXX operating for charges of income reflects acquisition-related income afternoon. million the other the to non-recurring compared add quarter

our for these at about approximately and our stood million results, XXXX. results net million had XXXX available to the $XXX leverage a information Please $XX.X do our full under EBITDA compared second for second at quarter of credit the including GAAP from for facility, quarter the was press These the revolving now $XX.X times cash, reconciliation and our leverage, XX, million stood of sale million debt, include $XX June our X.X credit Adjusted in defined XXXX And times. our to $X for additional metrics the of of by proceeds not results. Gross of million refer as PerClot. non-GAAP release we As X.X in facility. to outlook.

our quarter confidence we mentioned, the this providing in to due revenue business. Pat increased are now As guidance

performing to supply AMDS, the a operated first Tris now well. the Our issue We has product that and and E-nside without due launches, year OPEN tissue resolved. NEO are of normal in of half NEXUS, all E-vita new issue been the

to expect and Asia-Pacific pandemic as also in second performance We for half, the Latin improved the see subsides. America

$XXX at XX% up 'XX XXXX X% approximately of versus rate on XXXX, resulting million basis result, a we constant half $XXX year PerClot exchange second to between a in our As be of excludes and in to forma million which pro X.X. a are Euro-USD currency full forecasting revenues

are PerClot XX% be also in impact approximately on we in being our Asia remains fact are challenge million. $XX $X.X lockdowns into and COVID-XX business, quarter we globe. regarding of America taking in generated significant revenues reflects the the are the that over revenues to new current the significant million under half though and just of We COVID-XX on of will million as that the are taking Pacific. We consummated. Baxter finally, implemented, SMI around remainder the first account Latin and $XX based the we the for between and revenue XXXX over and anticipate improvement restrictions Even the the third a COVID-XX North And forecasts guidance our Europe and anticipated and is generated of half These fact XXXX PerClot distribution forecast and America revenues the minimal, in the of of the be generated COVID-XX have in overseas. second seen in PerClot transaction US manufactured state

that Latin over Regarding invest fund fuel will investments channels, without I to additional back particularly debt our as our will Asia-Pacific that America these continue investments to his comments. we these we well and having investments can for R&D in closing service to through pipeline. Pat comfortably believe the capital. commercial raise and our ongoing to to our turn operations and ongoing in designed our make We we call be growth, future as able intend in to

Pat Mackin

Yes, thanks, Ashley.

the second the employees quarter. around efforts closing, performed you've to the I well pandemic, world. despite once global this heard the in afternoon, outstanding our as give again the during quite credit So of business our

variant to say on difficult and it at continued the uncertainty of vaccine the what the about But make least regarding adoption forward, predict over couple Delta the our can exceptional uncertainty quarters. growth confidence our business we product levels, Going impact with return treatment of I When normalized impact the double-digit to on pandemic offering largely to and subsides the expect none second is basis. in volumes is year-over-year deliver that to procedure disease. products aortic a of next

several in we not XXXX XXXX. did catalysts have have in We that

earlier, explained and As I initiatives that three between drive 'XX. will 'XX we growth have

aortic we and 'XX, see five NEXUS, growth in in our new stent First, grafts; E-nya. E-nside, and should AMDS, continued NEO, stents

channels from we'll upside our further anticipate our the Latin and both regulatory and also And for we filing PMAs PerClot be mitral approvals Asia our America. third, investments valve. On-X in Second, in and new

catalysts our All on back of continue deliver leave I'd operator. said, turn open and as With in of for us these line ever our it prospects. goals outlined previously, to expectation supported strong confident optimistic financial these to to to future as like position, the about questions and over the that our by the

Operator

& Thank is question. Mike with question Please you. Company. Instructions] [Operator Needham Matson proceed first Our with your from

David Saxon

Yes, for first Hi Pat sale Saxon on for Baxter. for the Mike. just David and taking Ashley, one PerClot the Thanks this is My is questions. on

understand it's upfront $XX As about to to it, going you. be million I

thinking wondering these might prioritizing it like potential smaller of milestones of just kind like is debt, M&A reserve deals be some to you have mostly down come for your you're out going that Ascyrus. about some some that, any doing how So of maybe paying for or

Pat Mackin

$XX made. we we IDE get Yes, got the million just coming submitting once last up, regardless IDE that two we which cash, we this one think you I I mean of so milestones We've approved about, the for was actually put mean, we Ascyrus, weekend. and are I talked comments do, where the

be in will anticipating half approved we're of year. that this the So second IDE

$X and XXXX, first a milestone until XX% upfront. for of a public trial. happening million be that's of that that So million another outside We $XX enroll anticipate obviously once it don't of would we've but for their NEXUS got of chunk they then the

David Saxon

for us size Okay that got I high profile margin the and On-X. talked gross opportunity, can think similar wondering expect was you've Valve lower the know mean then, if we the aortic it. should Aortic margin of of a And I to I the help about I&R label mitral. US, gross about the so just you the pretty On-X within On-X something has

Pat Mackin

mitral the valve In aortic around the similar XX%. so the a Yes, it's profile has to US, margin a standpoint. from gross

conservative where that probably gross is about at part this of kind second we also haven't is product $XX we opportunity market just being of margin so math actually is a about and surgical think those kind go the out an and XX% million. aortic seen mitral the talking we the get the to opportunity in used up mechanical mitral The and even the in There opportunity, when as come opportunity $XX we I we've it's just for mechanical valves, numbers approved with million overall once markets. That's this tissue valves, are the On-X us. with cannibalized have to after we that all

David Saxon

sounds And last tissue Okay, guess that's issues the are like helpful. for me, I then I it mean resolved.

So so preservation how much. about the half? services should back Thanks think we in

Pat Mackin

call Yes, positive, and actually year. we news all level we quality worked - we it through the expect. issue and caught was the at very think We the highest tissues so good this because of of and quality testing it the back the the the to you submissions if beginning

kind $X are were in going it out bunch the an to in freezer. million not right tissue, that write we very by off is quarter beginning any positive, extra in freezer or quarantine really the and I It in of said, we off going summer of, said year of extra we're have of we So, the have writing a the this of we like turns and tissue now. to tissue

to shifts and of a actually the processing through our it getting out procedures. tissue kind process now going quality and So

to just we tissue, the get out a door. got So we've got it lot of

it's a a next half. to that XX So the the tissue compared it of but bullish kind to we how first flow, exactly you to tell pretty have you in will I months feel what going tailwind can't saw over

David Saxon

quarter. and Thank congrats Great. you the on

Pat Mackin

Thanks.

Operator

question. with with your Our Morgan next from comes Furlong Stanley. Please proceed Cecilia question

Cecilia Furlong

if Pat, On-X is and in wanted seen heart strength few afternoon market, seeing basis over questions. an the to start over on you're the growth you that you more color Good really what's past of valve quarters. few just just quarters. more specifically, for recently past could provide the this on underlying US that On-X in thanks you've about on the Could terms talk the mechanical driving Great. what I taking

Pat Mackin

Yes, hey the for Cecilia. Thanks question.

kind You know, tell in had today talked think in surgeons, they a person less anticoagulation, valve Coumadin only a hundred I've than On-X, spoke, looking a months. and it's and use and that last person all coagulation lower an that opportunity believe we're last to Eliquis. I more can out We're I to the of XX the at studying and the top was the centers I can And of in only when probably have the is cardiac you, I of, the the we six at every story. valve institution to

brand in either center So go new or accounts. centers to it's were and bringing it bringing swell every on users just around on a literally kind of I new those actually ground

guidelines, to just this a only it's kind paying are the with the continued which lot I it's in. So It's think the attention and and think combination a XXX of the of people trial, story. low enrolled we've ones INR in I now of the patients having momentum

but exactly strong several to last it's it So, I it's is down obviously the growth hard over very pin quarters. been what think

Cecilia Furlong

what COVID are of recognize color, that terms contemplated standpoint, there from parts, bit you more you but a in I issues. still just Okay, of got guidance a in well, Thank versus of it. moving geographic are undergoing lot Americas geographies other you. And provide as just could terms XQ

Pat Mackin

without last of about the think Obviously, kind of put we in feel of and even up is is the so months very momentum. QX. Yes, Delta tissue. - world. a XX had a it dynamic impacted in that's heating got positive. our all I a growth worth the mean one nice talked even moving X.X% a target this clearly learned I of we this Particularly, has we've obviously last tissue, lot it's cardiac started week. variant a We We've quarter's up We things

together So, we and with year kind we the know - put for you first forecasts wanted and knew the the out at come time being with full half. to guidance we half what the already second of give these

more said, account being little we we into few negative. everything things days, starting knew that the take out that we learning started to obviously the So tried in last knowing a

having I pretty we've shot second at think got good a half. good So, a

things - I have fall ball going not comes Now, like look else, don't the with a if go next, what's crazy Delta sure anybody crystal like I'm variant. what this to

So, I know what out put confident feel we the with pretty forecast think mean, given I we we there, today.

Ashley Lee

the is the fourth Europe always that we no Hey reason sequentially with there due think at look too last Cecilia, that this we of experience quarter that in and a see third other in won't year. I something very lot has to seen add second that, and season you that you've quarter. this few And mean been as we to that to that heavy is the quarter sequentially would historically, holiday Ashley. to strong our is is years, The the only follow that similar thing I that always if business a back down compared to

another was that that consideration guidance. we into factored So our

Cecilia Furlong

the Great. Thank you for color.

Operator

question next question. Our from is Suraj with your Oppenheimer from & Please proceed Kalia Company.

Suraj Kalia

Ashley, afternoon. right? all you hear Good can me Pat,

Pat Mackin

you Suraj. we Hey, Yeah, hear fine.

Ashley Lee

Yes.

Suraj Kalia

again; I seeing variant the or variant could little impacting specific Delta congrats are you talked start me be once Pat, more the signs US? any Delta I maybe initial know your of Pat, a out, geographically, Ashley, any proctoring quarter. and sessions of let great about you So

Pat Mackin

manager day-to-day had will they proctor Yes, that they give it's, cases. get started pushing an an literally started off country had and example, We a this is like a email from that case a our NEXUS with situation. a part Suraj I I scheduled canceled. I it's Spain that down, where was mentioned got locking elective in to

is absolutely January, the it had got I ago, more that patients they hospital a right. in Florida proctoring. affecting about message than their Two somebody So days in from hospital has in a

in. there just like is new comes So, every that it's day news

the saw it we is back. cases weight saw in going to this and I not running COVID untethered point what We're think or our variant the had of predict issues in on the been just where so type still a There cases has Latin in they in with in hotspot. hotspots about particularly a a our quarter quarter, it's obviously and not at hard. hit be great locked is had can Australia we're is canceled. do are in the America locked down. some all way up is putting There it, the nothing and continue Asia-Pacific Delta do. spot, you getting US, they But that, tough growth - tons pretty We're fully of numbers, But moved Malaysia expectations we're for things. Missouri UK those say will have Florida to managing Spain the had I are. hot will job been to also has will think seeing a go. I know still where has we've a down. particularly even. - COVID Now, lot places gets a guess like do issues can't in we been done Europe, we and of Brazil impact and I hospitals canceled and the

Suraj Kalia

PROACT Xa, any Got move enrollment. which on More center let topic, in this favorite terms specifically, of my XXX patients it. QX. concentration enrolled is And to me Pat, in so

Pat Mackin

the an enroll where is you in name of I'm gets center, who've in talked this enroller. the going we've - had not trials, logistics is trial of the done and we extremely This been This about. as if have country, trial. going On-X just in be available are case. center of trials has because well of than got is appropriate, the had and not but had which kind particular, lot most different it's patients We've to the in one then massive surgery not to This do question. a highest-profile a to the and we've one this XX,XXX is actually not the that's the that we've globe, a patients have back a good Yes, They - they valve.

finding centers patients, patients excellent had to On-X see handful those trial. interested XX,XXX We in consented, an in and getting have that to job. sent of just lot of bringing participating a they're a letters in them So going them is if out done and the this we've existing

lots expecting We're having trial investigator momentum we're even I to pick think up meetings, the as but we're this we learning So for go. of from here.

Suraj Kalia

you my don't of mind enrolled at arm average in Xa? if in talk, On-X patient Pat, the if age what either asking, liberty is to you're PROACT an

Pat Mackin

for pulled to Yeah. pull back data on. I I'd get Yes, have that the you. actually

Suraj Kalia

age, on By I mean On-X.

Pat Mackin

I actually valve knew I ask. Yes, XX% yes. patients the that had were going because for less the you have About you a to in of Oh, pulled year. than

Suraj Kalia

it. Got

Pat Mackin

XX% have year. had it more than a

Suraj Kalia

Ashley, I'll question. Pat, Got for both plug question of you, it. and one One and together. Final for them

push moderate your than age So Pat, for the means into AS leader than being comments patients heart your More Pat, attention that by your you, That's tripling square companies market the comments can less valve my XX at Pat. with you about for more asymptomatic years On-X that and of TAVR because you're AS. caught specifically, looking market.

even is PerClot Ashley, look our QX, a bit Gentlemen, completely once though as of for think kind and and out, how margins. PerClot included, just taking again, gross gross questions. once estimates help us was out, my QX shy thank we to should and we about were you margins flesh forward congrats of

Pat Mackin

your I'll Suraj. first, go. take question I'll Yes,

do a market we Xa We year So approved. gets follow-up research and we've of on gets assuming trial. trial the the was enroll - done and comment approved PROACT my as bunch two around the it

So done guidelines of bioprosthetic in of happens. big is there patients group currently that kind even - up there to there to that obviously have of of a up would make share that percentage and that between or is tissue is XX our as for valve. of a you Eliquis valve have if it XX, a get still XX move the patients kind valve higher research shows between valves age number from market you with come the research as kind taking XX be but would to the And that's decision a market would to a that shows much we The you down opt mechanical a that to we closer is XX. of On-X

the On-X in you Eliquis. everyone trial if the that under with saying, And under saying leader Ashley, to his gross market an gets segment. not it's all XX, would approved, if It age this of get going patients XX So be is then at look we take is the to you question. that want margin

Ashley Lee

routinely margins than bit bit evaluate is, a but Yes. lighter was than anticipated, Suraj, normally yes, our our inventory obsolescence the little what and even driving is. quarter that little point, was it were for we to the a we higher quarter your

some few not manufacturing is, of The in in second other the hit year, made COGS issues, second quarter. decided recurring this that inefficiencies way that inefficiencies the manufacturing of the in we P&L quarter the thing their we any but had indicative

If or depending half to and be of take margins on going points product in range, few the basis a the lot to the think XX% gross you mix. on a our either look second we and XX.X% geographic at give year, are like

Pat Mackin

just I Yes, we've that, waiting regulatory would I inventory of a hit. up pandemic - standpoint from thing is, think approvals, add some to kind the commercial the have and we then built for for other

volumes your that will quarter, stuff you off XX%, have when expire. by drop a for XX% So

plan had the demand are write-off, we supply seeing a from the bit little out. and a some kind went So, - the of when down effect of expiring of stuff I ripple some of a normal just pandemic we think a

will that think I forward. So going reverse

Operator, Okay. questions? other any

Operator

time. Mr. further are questions at this no Mackin, there

over management So I'd closing comments. for the floor to turn like to back

Pat Mackin

the Well, the a I both call, bottom line. in first think, and thanks from you of strong again really had, all, we quarter, the as top joining for call heard and

resolved. We're IDE is Our been PROACT the quarter. is delivering. Tris We're has submitting both for Mitral new well PMAs, submitting the enrolling. PerClot products as two are this as Xa NEXUS enrolling. this The PROACT issue quarter. AMDS

the worth quarter got off tissue going million. to the extra resolved. not have starting take an issue $X stride and door. We're here pipeline now to the to We write we've is really So Tris the get out

which all-in-all half pretty think play the notwithstanding how I So variant and confident are going of that's second us feeling Delta we none know out. to this about

forward look updated for we're joining. and progress. to Thanks on charging you again keeping our forward So,

Operator

concludes conference. today's This

at lines your disconnect time. Thank this you for may your You participation.

Artivion (AORT) 1 Aug 212021 Q2 Earnings call transcript