Intersect ENT (XENT) 10 May 212021 Q1 Earnings call transcript

Good morning, and welcome to Intercept First -- I mean Intersect ENT, First Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Randy Meier, Executive Vice President and Chief Financial Officer. Please go ahead.

Kate. you, Thank and everyone, for in participating And thank call. today's welcome you

President is, of today me and Tom Joining West, CEO Intersect ENT.

growth, our Before include, new remind forward-looking disclaim which a detailed force risks risks you, and differ materially products, forward-looking sales would indications file statements, and we timing obligation like as and will assumptions, upon Actual clinical any those are without our and performance, herein. SEC. update events undertaking securities I uncertainties, or reports, other which as guidance from any meaning and making could codes with the federal the reimbursements the statements for we be time or and those as studies, approval well revise estimates within anticipated results current result the to of law. procurement time forward-looking from contained limitation of of that We financial coverage, based which begin, we of the of to statements in such in

will over turn call to the Tom. I Now,

you thank all joining ENT First the and Quarter today. XXXX Randy, Thanks Intersect Earnings Call for

As more the unmet continuum now more fully that globally. seeks ENT billion significant large the a chronic of exist market satisfy, across rhinosinusitis, in that is Intersect needs care a company, growing to and than $XX

in from one top costly for conditions which and US most a among XX fact, chronic rhinosinusitis condition the is In US employers adults is eight suffers.

ambulatory of and center, a clinical regardless clinic. the of and effectively, significant cost focus physicians, company, needs hospital of office on care, or meaningfully to sufferers rhinosinusitis address and centers OR, setting Our motivation the surgical as opportunity chronic the their

despite, reflect through into are continue need and navigate our to to the results progress This in lingering on executing this quarter COVID-related we market, our most the quarter penetration strategy. first recent Our making in the continued challenges.

our core continued by growing the PROPEL SINUVA Intersect revenue of and $XX.X franchise our million, momentum strength revenue resilience was First highlighted in and ENT the quarter business.

EXPAND sales market Cube for navigation the dilation. this early first, real-world both prospective economic products, In There navigation Balloon developments our to addition, with our and the a we of launch highlight our include, second, final were of towards benefits PROPEL VenSure implant, establish were initial the our SINUVA; would third, the localized in of several national and coding evidence planned, combined positive implementation delivery businesses CMS to the feedback balloon longitudinal and acceptance July progress Contour Fiagon-acquired performance year. further use of and following of important initiation XX-month as trial as PROPEL analysis; we OMX exciting sinus formal well. of balloon of from pleased trial, clinical health drug as and PROPEL These QX

our components Let's business. break the down of

early we February, year. on adversely our was impacted fourth quarter As end the and slowdown quarter clear call, of of as the was at it especially stated the core to but XXXX, the of this first COVID into this and sinus our elected in improvement quarter impact year last showed by felt of Relative signs procedures January the cases increase closed. business PROPEL to due hospital of

to future benefits the near sustainable in to giving term We to office-based representing did our the the hardest by a will likely found towards with demand our occur dilation PROPEL pent-up sinus office, for especially procedures, Much with advantage in broadening and not the such taking in previously and be second the of quarters Moreover, benefit third we normalizing continue rebound, certain balloon of are procedure expect a opportunity, care procedures business, ASCs sinusitis continued growth in drug sinus also the and from chronic decentralization additional as in hospital localized surgical of clear portfolio. incremental the from delivery. as growth of rates hospitals care, in orientation positioning the increasing procedure hit shift office XXXX. setting to of some PROPEL office will

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to evidence other But have over in offerings XXXX. to the we in steady business cost from our mid-term expanded contribution globally, a contributions behind a and Europe we at new our evidence PROPEL expect to businesses growth the on positive our pre-COVID our use in of to we are expectations OUS near news in coming new affected As support conditions investing PROPEL and growth modest see support PROPEL macro health said, ensure investments to of existing revenue and To years. long-term cadence impact will previously economic significant from of PROPEL products. with return current EU, XXXX PROPEL the more

data for in longitudinal standard of providers that that PROPEL benefit work Endoscopic analytics data and is health to have our not month, The just analysis longitudinal, interventions has comparable one the Sinus supporting procedures period, need found care FESS reduces completed FESS been full in a business subsequent lacking significantly following Surgery, payers procedure Specifically, which with recent asking. include costly surgery OMX XX for PROPEL. the and that has and a care in in payers year potentially company the Functional been of produced segment. X.X-year the our the FESS versus statistically use did real-world This using PROPEL patients, and evidence, the

demonstrated we forward, broadly. use greater in value product need services FESS for unlock access, of to expect surgery the the health health in of care use Going our reducing PROPEL provider and in to order economic penetration

In to addition, we American Otolaryngology and working with registry the evidence. further are additional Academy to of AAO's of procedures the insight analyze OMX sinus and database gather

publications steps sinus-related presentation this evaluate to findings endeavor, the medical which potential this and continue announcement next include of year. and peer-reviewed the We at detailed in later our conferences important

the settings evidence a of and in is will and for become all care. economic health access goal PROPEL ultimate payers benefit messaging of to This evidence support with greater use Our unencumbered latter positive to to of policies and integral on our it to we access year communication part provider in and beginning begin coverage XXXX. payer will impact this in the believe bear

develop reimbursement out, changes. additional we to evidence further plan to support Looking

is PROPEL on work for central products increasing onus data evidence will and strategy our support the but the to us to we long-term health to Altogether, be Our PROPEL. it. revenue provide outlook to our real-world believe economic growth

Now turning SINUVA. to

first sustain assertion performance SINUVA to in confident doubling in the more in quarter. of momentum remain versus continue We revenue with than XXXX. [ph] XXXX our SINUVA revenue We

coverage lacks strong as the by sequential in and with first down cold the benefit, of hub our co-pays clinical season seasonality years QX a supported QX trial, and an or reset on clearly and allergy model, the a provider Year. is patient versus quarters the strong business, and in quarter go-to-market procedure as of QX. to the of best-in-class the the performance pharmacies of New SINUVA better clearer supported and the come beginning expanded basis consistent network deductibles see enhanced Moreover, slightly as in beginning at payer onset down specialty QX, flu the and We and growth catalyst coding, of While vehicle our in the of distributors. by increased season

and patient important delivered a accounts an and payer. ASC to antibodies the SINUVA SINUVA strong patient, cost appealing to savings of and self-injections for environment of overall A view also benefit Correspondingly, win agent. overall clear regular surgery for provider office the with the or easily in We return the a economic sound clear surgery a as be for and to revision implant SINUVA clinical is can the coverage. to monoclonal economics our sinus to autoimmune as systemic alternative alternative payers an conveniently

buy-and-bill we there is stated, specialty attractive and previously pharmacy establishing work viable of as As ENT in and assignment still benefit product are the to access done as space. for we be avenues

reimbursement in well time, enable benefit accuracy claims of in growth. and the positioned new trial office and resolution increased sites for that We to support clear product and and our expanded growth physician payers provide coverage, especially evidence adjudication. now payment Coding each payment coding place. is corporate of manifesting coverage The changes before. and demonstrate However, we are SINUVA single further announced for and follows and and seamlessly and contribute especially and that are is ongoing our ASC distinct to use March and will Separate billing access, provided modalities of meaningfully and patient confidence CMS use. the coverage repeat believe ENT and will and into to all PROPEL contribute service, clarity more confident falling is triumvirate strong. ever SINUVA comfort to at positive greater for revenue physician than any coding, dedicated And of code support The SINUVA both with providers With improve and a codes finally adjudication optimized. are revenue speed and in procurement momentum. to in these that

and and further products of Now balloon, Fiagon added near-term registration diversifying complete. to navigation We on balloons sequential tools now and support our US our July sales with We navigation sinus Commercial as The and as in Levita effective Officer Magnetics. positive product most excited we which Alley and at of in leader serving Gen prelaunch settings shots evaluations growth portfolio launch and globally. force and revolutionary XXXX. into portfolio. VirtuEye with revenue the relevant Of procedures progress half and products navigation a portfolio in of provide trial switching on and next-generation and to Most no-contact expanding in us to of added further together VenSure This to launches, our for formally Cube recently XXXX commercial with than years registration have range enhancements we is VenSure consumables a second include full products new to to X, surgical proven track navigated more growth. have XX appointed care. Cube these note, see navigable activities Balloon and success, release newly the of Sales in our VenSure specialist integration XXXX effectively in goal are on are multiple Chief all VirtuaEye sales device extensions developing Mark Vice navigation. of across Mark are drivers the accessories photo surgical Cube President sales growth support will Fiagon notably, these medical US and high-precision of commercial surgical Balloon and tool remain photo today.

and ENT as all ENT direct Mark and segments on Acclarent many Mark force knowledge extensive Spirox experience Importantly, has commercial throat stalwarts Medical, physicians, technology VP of at well the deep space. has in and Stryker across his the ear we societies serve. as of of space connections Entellus sales based at and nose and customers as to the medical our time broadening leadership Sales

initiated have This trial using balloon single to completed sinus will patients experience be enroll study. to recently prospective be procedures by VenSure To assessed PROPEL PROPEL followed dilation various our controlled Patients enrollment support seeks measure character with week clinical the portfolio, throughout to to assess final someone of in a with the treated benefit sinus when Contour up to follow-up starting six sites to study will US at approximately excited benefit Contour. to intervals in randomized compared XX, balloon alone. integrate months intrapatient this blind at study incremental from our broadening and as are enhanced leadership year-end. our join implant by with balloon team. The XX the Mark's sinus US EXPAND dilation caliber, and our we and We of

where economic PROPEL endpoints dilation in In could PROPEL outcomes results this to dilation strong Contour. patency a the results expansion inflammation pathway PROPEL trial also the clinical patients clinical consider trial only from evidence saw label studies balloon positive benefits. only and improved cohort, of surgery. a study's was for fetch receive to health Contour additional expand addition with as use the from to to of the collection our support Contour there valuable sinus demonstrating for Positive opposed data of reduced that in the durability We provide of Contour balloon procedures. balloon cohort full in company original patient-reported of Based and conjunction we small are upon confident and PROPEL

to present XXXX with and in second of data results reading expect the We half XXXX. out results in preliminary full longer-term

now NSAI the for XX citing suspension we notified clarity PROPEL deficiencies would provide Ireland on our body audit the following policies an National April announcement Authority of Mini. a regarding press on facilities. update our I April and our release European to CE letter in Importantly, like PROPEL mark of by and in one and processes and at of nine received today's On certain an the XX, Standards

standards products remain to to of available our Importantly, these and the production without which in recall. quality pertain deficiencies manufactured did distribution the and not for adhere safety applicable EU

response the and Mini for been the our remediation conducting submission going deficiencies. in marks CE filing activities identified pending to which have successful to of complete we notified outlining inspection, the our the body suspended culminated the today NSAI commitments PROPEL a completed with actions However, the Since PROPEL forward.

as of so response from hired part and and in knowledge, our specialists the meet regain can evolving possible. a timely a to consulting we process, regulatory actions received and that expect compliance of And we positive our all on EU original this in inspector. to and well-regarded we manner. and expeditiously time the audit we As according remain with as feedback that standards acknowledged have requirements filing best At

marking ability reiterating NSAI's suspended, Mini inventory. sell markets and EU full both to products for worth with PROPEL are the understanding CE Importantly with maintain to and we in the continue our although the available PROPEL

do business -- products, regulations. this US we such, Fiagon on impact As near-term Moreover not our anticipate or impact revenues. a related does our our our decision business not US

feedback NSAI expeditiously will reflects our original they we the as week urgency NSAI and clear, received respond Lastly and the today that with matter the formal have from filing and the positive and that to over NSAI expect committed. it this of be Auditor. they response constructive be weekend expressly we last we and recognizes will the

grateful growth. we despite are portfolio collaboration presence expanding In and with and standing we in by achieve are with increasing evident progress solidify first internal continued headwinds NSAI's long-term as We with them. pleased we standards COVID overall us summary, market product to our capitalizing the are for making the our quarter, on sustainable

growth our of we to range full that confident impact are We and revenue $XXX million, outlook to potential by revenue and evidenced volumes our can formal increase reflective is decision drive in COVID. to year meaningful anticipated elective as guidance of the procedure current million of which the $XXX

reflects the belief also progresses. that accelerate, as guidance will Our growth year our

long-term Cube With integrating settings for on time, to VenSure I all Moving our momentum sustainable you we Randy, place continued in now SINUVA to achieve forward building product focus take expanding to turn are financial the and to increasing of remains and product our achieving XXXX, At care, value expanding growth. will PROPEL on presence, drivers our well in results, and market over behind our call positioned through Navigation portfolio record lines. and results. Balloon capitalize numerous this

to statements. Tom would $XX.X $XX.X little XX% with Thanks In million financial then top-line good of period reported prior on morning, to sales XXXX, financial the the and more like ENT same an the increase summary of of net a Intersect the results everyone. compared a of our of start overview and provide first year. million I quarter detail XXXX, in from our

accessories. products, VenSure SINUVA implants, Navigation recovery a continued the in that increase a contribution Balloon reflected global acquired in Cube implants, include from and and improvement Fiagon significant solid sales surgical PROPEL our Our

the quarter model of our SINUVA more X% and compared product quarter clinical For million, PROPEL doubled relationships. expansion reflecting with increasing in increase of quarter a office-based the distributor family our reimbursement, were were million first $XX.X access revenues improvement first procedures to the further of XXXX, from first than XXXX, market XXXX. revenues $X.X of benefit, and comfort the

Partially nicely XX%, at mix generating first -- was PROPEL Product approximately revenue. revenues a in product XX% quarter unfavorably million with XX%. quarter quarters was the and year the Fiagon was X% Cube was QX, in represented PROPEL $X.X of per contributed for domestic for offsetting collectively by VenSure, per $X.X intangible capacity. portfolio in first PROPEL to a quarter, with Gross the global SINUVA XX%, ago. normal recent of margin The with amortization was up Mini consistent first Gross approximately million. compared million accessories costs, with production-related margin returned unit in $X,XXX was that family Our of unit ago. PROPEL per up from as Contour the at lower X% project and period volumes $X manufacturing of production unit, PROPEL the at from quarter same costs, assets, margin to a period Overall, XXXX was impacted XX%, year in ago. gross decline ASP in year XXXX $XXX ASP the

and have impact margin the X%. the would higher of production-related costs, the approximately gross amortization quarter Excluding for by been

expanded ahead Looking now $XX.X of XXXX. the result were for $XX.X the an expect ago, Fiagon see The million in XX%. year marketing increases addition we was in the meaningful believe demand improved clinical XXXX, the initiatives, of of volumes expenses and the same expenses and our product of balance anticipation XXXX which in are operating period to inclusive complete. increase of integration costs, quarter largely first increase activities year versus million a due expenses in half margins Total in which for and to of portfolio, second operating of increasing the in production will expanded we the for beyond,

to of the the $X.XX of net diluted $XX.X quarter are in a embedded reconciliation million, fair loss, of with a net value of share loss For per of loss our and the a, intangible the share details release. compared integration $XX.X table per XXXX. The million, assets million, million of the the $XX quarter $XX.X operating or loss impact of million of press or of loss product the operating included per amortization share. excluding or a of first of the $X.XX recorded of is $X.XX, Fiagon first adjusted in loss diluted the of XXXX, the loss adjustments costs of $XX.X net derivatives, associated The we

cash $XX equivalents sheet. XXXX. million March short-term XXXX, turning December cash, $XXX.X as compared to million, Now to was as and cash of balance our and restricted investments XX, of Total balances XX,

As a result non-current position, and deferred as XX, adequate with operate cost the Fiagon current XXXX. revenue the into management of March provides of totaled $XX.X to related We our ongoing with combined acquisition, acquisition believe our XXXX, continued capital considerations initiatives and million. well our company growth cash

and Looking guidance COVID-XX our our from shifting situation, broader volumes, portfolio, recovery market procedure improvement on ahead elective the in and overall the and outlook, based comfortable product informal for are more now penetration XXXX. we initial the procedure ongoing of improved providing

guidance As $XXX to the full range. Tom revenue XXXX by range year year be in to for mid-XX% indicated, to targeting to are $X million $XXX million full raising million and a the of low our we margin gross

the Tom. call turn I’ll Now back to

Randy. Thank you,

growth quarter and the our We that value results with that our term received proprietary the and SINUVA sinus differentiated well localized we are PROPEL believe be of and with drug EU material to of execute near be performance proposition We delivery to pleased strategies our in offerings. underscore PROPEL the regulatory position in implant very first as filing unimpeded no our for impact. continue a will will

performance balloon VenSure our Cube We feedback with sinus are of early the recent navigation. on additions and portfolio the pleased

elective in XXXX ENT Encouraging improvement for year we Intersect through a sequential to positive commercial bright. evidence, beyond. on and year. execution as to year XXXX full procedures, Intersect the product plan office-based we predictable second and ahead, growth indicators trends longer throughout to return first as a is for performance, after for Looking combined sinus expanding positioned relative grower and double-digit clear business meaningful company our and well macro term the and establish Based our the the with quarter portfolio clinical ENT quarter anticipate believe future

I and Before employees, like thank to would customers patients closing our shareholders.

to you like open call to Kate, over back the I'd would for Now, the questions. operator turn call please your open the the and lines?

session. from now will [Operator ahead. first Our JPMorgan. Instructions] is Robbie the We Marcus begin Go question question-and-answer from

Great. quarter. Thanks on and congrats a nice

Thanks, Robbie.

to well recovery here, guidance, or at formal just quarter Maybe how The million which your second to track currently I with recovery about feel comments? and second quarter strong you about to quarter start going third Does wanted sits. see back in Street is $XX where that

second Yes. we the we're we feel and sure made we that being or to that change good to position other comfortable like slight are momentum would feel where have than feel to we and we the the feel say, expectation. experiencing not quarter, the we not feel we be on about I are there. have the specific good I'm to good formal recovery able in meet guidance uptick put But and

call then the thought incorporating the you color and the the more little of different business quarter subcomponents as the maybe comments sure how just a to And on make trend. you to CE gave those I Okay. fourth mark, would on want

you to Thanks PROPEL to how be trend still within going lot. around like Europe respect any with a Sounded SINUVA range to helpful. other that color would million $X table? and provide really your on the million. could Is $X was And guidance be

Robbie. first the to Relative of did the we business, the quarter Yes. European in over just Thanks, size in Europe. XXX,XXX

to not the right regulatory of some a we're of that relative piece So big challenges business experiencing today it's now.

the clear quickly. continue ability We our on be expect impact a material able line that. as to we a result to that don't expect of product, ship to revenue to given And

PROPEL and be kind to second million this once to have we comfortable hurdle feel we in million than we fourth and the as as the your work it, guidance that more for this we clear we out previously would clear growth we a question business a return and in comfortable XXXX. that the for with XXXX nicely $X full business are that very objective still tracking of the quarter and come double once SINUVA coming to We're in call looking should to where of So we indicated $X PROPEL that for do but Relative and on of part relative of we the on we feel would the in impact Europe to year see whole, hurdle range our that that in and against range. SINUVA COVID.

So in for feel again hard think solid we guidance are change and we I and across board the the we've that made that on working exceed to footing that. are execute to of course

Great. one if squeeze could I more in. And

in You How had of going forward? some on first control rather was new Thanks. that really normal a nice quarter. expense pullback much than expense a

Robbie, this Randy. is

I management and year see just to of we out the expectation the broader as the continued growth platform. think and to this continue across launch a the we portfolio roll -- into July had in of good

incurred As fourth in started integration we of that mentioned, quarter. I wind-down to few think, we the the costs of we a a see

it an integration think increase a increase in transaction bit operating little as of operating slight just rather the XXXX expenses suggested on some to abnormal. relative of track we've year of we're than was to those I and costs a over terms So full in XXXX a and of expenses. But more overall the reduction anything

Great. Thanks a lot.

ahead. from SVB from Our Richard Leerink. Newitter is next Go question

are guys my taking you Tom, the -- a have bit for Thanks Hi. could I put together. little longitudinal maybe that was you talk more hoping questions. data about

impact later can to going formal plan a it more that's insurer or the reveal you setting? a at and around be on carve-outs publish that a biggest the said care going data that and them of significant My give in just kind Maybe what fashion the color have your at and to correct? least in the strategy the conferences to going could aimed be this towards where of and more discussion exactly give timing to just business to later a to it's you year. more year was think us to is secure going I data basis. outpatient and can a maybe in Is probably take? And statistically you more sense setting as that that the understanding sets first little one-by-one hospital surgery you

Yes. in of little at first, excited Great the terms of question, encouraged say, but let had are that of This data. has and the unpacking preliminary bit, Rich. it the we're data us partners that real-world a longitudinal evidence trial. caliber we've still kind the read me We're by OMX is with findings And the very there. our a

code place. directly whether them, a to take that endoscopic effective to implant providing room in statistical that a PROPEL So operating our as data database for OR sets to a the cohort a go payers to in ASC functional that patients full from code a PROPEL at is make S it's over sinus opportunity we did separate of or PROPEL with the of as the case an is is a therefore establish the cost and cost coverage surgery going for setting drawing To full procedure the we have from would where most that think and utilization basis going It leveraging is long-term And But be statistically do allows really we accesses. represents important that's hospital supply services that FESS a a us can utilization. receive to additional in and care which procedure an data. overnight not down end health reduced following this following is And of see who use significantly PROPEL. real which the post PROPEL in XX-month look us cycle health FESS, broader the registry by build this on PROPEL of very basis That's the period had the and getting savings because is OMX those where significance. the not support by in X,XXX growth point arm derive care that the and that to be utilization payers received versus each require cohort speaking what cohort reevaluation. a able think that implied is the giving individuals for sizable a with chance your to we payer the by us of will exactly FESS PROPEL we code

think it's setting, the a it's economics procedure the is in traffic which to but expensive in most be ASC because drive setting. I to less incentive impactful actually payer where generally an are where going to conduct has a ASC where tightest, is the

to ASC order partner to you would add PROPEL, the in motivated were benefit we environment. with the to and if Now would economic to by health drive payers we care reducing health use into utilization traffic be

More in about work that year we kind work excited our to is terms but and on to of the we're of will something to well there out and strategy, in remainder presentation this we the think of be refining as years able this spool come. So be it. done publication through

helpful. the And hospital in can outpatient That's to code as just the be S ASC clarify well setting the correct? Okay. used as

it can. Yes,

average great. code, really you then there this just down PROPEL with any that the SINUVA share have just impacted may been? on how incentive in trends, SINUVA that kicked areas in of Okay, utilization bifurcation quarter reimbursement in payment anecdotal that and I'm us all J the have structures And given changes come of light at has what and some the the can reimbursement cases if curious using levels during between for

Yes.

we're This we access preparing new fairly ENT single well to for office-based a coding J dedicated So SINUVA an it with of getting dedicated I And product. X, code in coverage I We've systems. and number as each of that product. payers business. we terms a as final as and see both continuity in code see the S of went reconciliation understood market it recognized we the the it in they're is as without kind being where the tremendous staff clarity that got to for payers a which change the dedicated by to with this a effect hiccup. that dispute of that our office-based amount also clearly you codes. of of well PROPEL. more the adjudication for clarity because what of and exactly credit clarity promise comes honored went was noted utilization rapid that in at dedicated business and April I change, the is seeing market being reloaded want are is as we effective adjudication seamlessly We Intersect this is point, in of give immediate team having background of to single a code And individual each seeing of at the any terms that just the think and into is

right coding position that a in up now, that utilization been for providers an is had place among something but path in a point. pretty impediment to we're got and to to it's are marketplace, where of much get provide the we we that and the basis So arduous a clearer confidence and in greater been this feel we've to a experience which

Thanks, Tom. shift And could then I of last just pharmacy the one and submissions? one in submissions SINUVA if between it squeeze Any Thanks. specialty percentage buy-and-bill in.

a nice of J are of C-code. have utilization We a a did people be also that the the pass-through a that incremental can It is used population terms pass-through. pickup awkwardly in see now to separate as the single they Medicaid setting. as in access encompasses in and code realizing the of Medicare business somewhat We shift. Yes. the again a on source bit code, which using pass-through Not SINUVA pickup ASC little this a material of

our so, a but a expand benefit of and towards pharmacy remains ASC as to And as authorization business, also we a bit pickup of attractive shift buy-and-bill of incremental continue benefit.

clarity all go that will I clean a use of the serve forward. we year all, bill and of terms So, improved particularly and as and remainder expanded us well, pretty think in understanding the of in in health

you. Thank

Zimmerman question Go from is next from ahead. BTIG. Our Ryan

questions. Tom, Good come for PROPEL a my Thanks office morning. I the saw in last I the if bit taking stronger. really think PROPEL and back, recall we on quarter,

to about reimbursement we this that talk Fiagon quarter, Thank we're PROPEL, drive Here, you. And to forward? really the PROPEL that going think especially back adoption office-based have place business how this Can I as that a took just channel quarter. in April after seeing little proceed the of And changes follow-up. X. of business some about and maybe the the SINUVA a you -- bit then

on remain the PROPEL in Ryan. very Sure. Thanks We office. bullish

probably where better versus So, in better XXXX more office COVID. XXXX of terms doubled. a of comparator noise again did relative because of than a there to than was lot that lot QX, PROPEL year, a It

to office So, and it real is a reason demonstrate the with again, the and dilation. to real following go is us to dilation, radial for takes it incremental trial in the said -- that we And with sinus grower. my be had expansion small stent to prepared continues has of to deliver use place PROPEL the forward increasingly EXPAND provides that improve able than PROPEL a a be Contour opportunity original that which a benefit trial. prospective setting, opportunity to much cohort in end in I comments, insight greater the the anti-inflammatory an prompted that to And balloon

that able office VenSure in growth, with and and think we have business. of very business. a health PROPEL that to And behind enable growth that to in balloon the incremental one the PROPEL benefit growth hospital and we we upon get business. it increased Balloon ASC the PROPEL recovers is It's will core So, expand with get as continue and of dilation about we're surgical will our think And in navigation. deliver core us we'll to excited in growing pandemic grow. then that piece one what economic combined post own setting can and elements Cube back of we the that in PROPEL build to SINUVA to how evidence we its It's should it be setting, the as business

the think if launch by versus it Okay. legacy VenSure year? would you And a guess disappointed to then, broader about we Fiagon you the And you're this Balloon longer off VenSure next I generating follow-up be quarter. itself, on guys revenue do as term, more going weren't

I absolutely. Yes. mean

VenSure together. the and they opportunity the Cube come the for US navigation think in the Balloon in I and really long-term

that PROPEL what represents opportunity see that VenSure for sizable us the dilation a kind and Contour available And us. element And of products. the appropriate excess then potential into the very that is of hard Fiagon the if combine two. we to growth is the clearly, million market oftentimes business total compliantly distinguish But that it's which for done. for the legacy in of Balloon there as So model you enter placement with of consumable of significant had US, balloon and of a could in the $XXX of aspect bundling business lease-to-own navigation, Cube new our own you beyond represents a

I would absolutely, with assertion. agree So, your

Okay. it I’ll Thanks question. there. leave for the taking

quick a launched basically fourth quarter. just just Ryan, VenSure clarification. was in the

Fiagon, a tool. the probably So, won't any is of year-over-year other transition Last just variety a and you growth see comparison. not navigation at given Cube year the relative the probably to and good things

So it's sustainable looking, comparison that XXXX see platform confident more you're very forward. of that probably we'll we really a going growth throughout but feel that

Thank you Randy.

Our is from Piper Sandler. Go next from ahead. question Adam Maeder

to Randy. Hey guess, environment. Tom. here. Thanks on a for the questions I Hey start picture procedure question taking just I wanted bigger with

Just over was April? helpful. course Thanks. But could and I be there had follow-up or through just how additional Feb. color of think put a finer any you talked point and on early you business QX if two. in I then I would And progressed the wondering January super some the challenges about a

Yeah.

You hit the the nail in head.

that were aware States and end the we everyone to of December, started year we the a in see not either. United last As new spike at spared is in in COVID

last good of very and started And several see early recovery so is to February. that carried January showed up December news normal. a and The weeks and return through that to we more into in the

and we're for As we through into sure. March April, moved that we seeing as head

hospital the in acutely setting that business most endoscopic more and is the expect the hospital formalized sinus us the rebound the to of and we shows procedure functional business, nicely. up a core surgery for ASC. So And where in the

with our prepared to in third-party side has remained I I'm business into that said of terms ASC seen and would even report business February the the happy in we even be to So and to my That expect then QX January through office softness trending in part some the the though period potential that recover of recovery QX hospital continuing. saw able the office-based within that the where in as down surgical-based visits and in to we've of March the are begin But contribute in and and to pent-up QX. demand quarter we And further in through latter steady notes, more April. its was is measures. of full

over we that able follow-up you more have follow-up. helpful quarters? two And really should Are out That's there. a about quick pent-up maybe it. demand? the the how to And And or quantify think backlog I next Got Tom. one playing then Thanks. just

go to Yeah. July. a an to at in wave saw looking around one is pent-up in exact from demand. the get we our Difficult are number bounce What XXXX. back we perspective back We

in of back bounce of July and second Texas, In that XXXX. XXXX, October. saw hit versus California XXXX. through pattern in wave fact, of in that we a XXXX a of similar growth Southern We where September Arizona August a Florida, had October and actually bit We got

to see a to quarter. or this latter quarter So but that nice again rebound beginning part of growth not expect potentially hockey-stick the again in we next contributor huge would a of

hard it. to but against put there, optimistic number concrete we're a So

that's makes and That than I wanted ask enough. guys, in then the for last start Fair better with just to Okay. early question Fiagon. sense. to expected QX nice a about some adoption It off like sales And just QX. seems

how Just is to question late many Cube July for how this the frame, time And launch so the Thanks July taking selling my understand the could potentially the trying or at trajectory formal there? So then go do that's are you I many point in hands VenSure think folks products time? shift the how with much questions. revenue into? and said

Sure.

and the the while launch ramp of we to and for in ready understanding take right that we the been sure right to kind in training post-COVID ourselves opportunity in that it, are together teams First get regimented terms of as fulsome to able support is done a make appropriate to have of we kind more in frankly far, successful we them in all bring up very terms we've of sure number the behind a and production our make business, want capability and train the properly environment. marketplace, of be thus accounts of the the to we've on what order

out terms it we're we point. of today, proscribed it's wish limited of hands our touching to because So accounts that behavior this go the And in that's to by to. limiting number really

As going them bringing be of expose July and guns every our Meeting of Society to be it in Rhinitis July to we Allergic one it advance and That's blazing full the to sales say is line. that in selling them will to train force not going Austin, be will hard. out middle in order together of product of the

SINUVA place compensation able the we reps on generate at will to want. for have majority both that message specialists who VenSure But that trial will premium the and PROPEL and Balloon. are continue on higher our focus we to We of and the than we carry a evaluations will and

navigation the it's behind a see selling half and I stronger think though we back a set to balloon expectations longer growing while and momentum business, Fiagon cycle.

the with it of in navigation. messaging a aren't evaluation that that that I your as fits for physicians and answers it where But practice you're we selling determine in in question. their overnight in And continuum we continue chronic we dialogue hope way, have in across very to grower a of element As have we understand be what and fits will is providers most us. a that complementary complementary steady with to our business the stick and rather piece with capital, to the physicians navigation We it an rhinosinusitis. in to see cycle periods the believe but businesses as particular setting in it consistent and their overall. own PROPEL. capital be to strength using not within conjunction capital Again, hockey care office and allow individuals, you're where

Tom. Thanks, Very clear.

we've technicians evaluation early been physicians the on giving from found I tremendous technology. other that thing and the the that think we've a doing feedback is are sales the us

of have products Very feel nice to as a for we've perspective number growing that of able that allow positive be sense confidence us here will well. a to we some sustainable years. got that So growth from

is question Chris from Guggenheim. next Our ahead. from Go Pasquale

changes the was focused quarter. there, for SINUVA still COVID after headwind. you curious to a past environment points are good quarter this made continue all Thanks. you've to as normalizes, number Tom, sure remaining help see what is most the to product that on the biggest friction and what process the you this But macro improvements another had you I'm ramp? I'm adoption?

the It's that of It's model initiating getting inherent that's something is It very benefit of the not office. just familiar just the question. a community. of – matter physicians great go-to-market different with ENT comfortable in is really drug therapy Chris, authorization buy-and-bill nature in of of doctor's to the

not to healthcare. we've new As it's the said before, world of

return quickly of their that a now in but buy-and-bill able those the certainty to can coverage through has some And really begun and be having trial, and done to environment. not out fair have experience fill goes new with it's You bit it that for fact with actually reimbursement to procedure them particular gaps. and were enabling they whole, we by improved see they payer that early group of think And guaranteed. it effectively candidly, a but lot was physicians. wasn't is what the repayment in other with I rheumatology, our have very slow. expanded And on this a burned it for coding done for question come office economically generating the only getting The ophthalmology, segments mechanism oncology,

that's It's of I place getting the inherent and now coding a where go-to-market that very simplicity model in just changes it. with think to last I they're mechanism are and think convinced. And round the the this comfortable CMS, docs trial. clinically really there all and steps now a essentially assurance now reps which there's that of comfort provides the that drive and further out in a to providing payment listed, us fact it's on are go our ASP minimum and

million is you I And updated $X to Thanks. the assumed Fiagon guidance That's $X this for think originally, sorry if million. I'm the then, what year? contribution said I missed but helpful. this,

still this if XQ that of business just the midpoint in given the flat seems that sales probably that Europe COVID unlikely and of a headwind stay at track fact levels. on was were And quarter. at significant the You're to the normal pretty seasonality

haven't -- you up? Randy, pick don't I broken to out that Yes, specifics. want we one the

I Yes. increase there just don't was us I going was item say, to think guidance. single confidence that to gave no

seeing has the as recovery of parts the and just and the the launch in indicated, successful across we're in for platform. forward. portfolio the the moving potential strong future the half the in the of incremental recovery Obviously, we the think, environment here COVID I operate look a products. confidence world continued just other anticipate the United very Fiagon again, in second where in for Tom States continues the year execution us breadth at to gave we And of

Thanks.

is Go ahead. from Our Ravi Berenberg. next Misra question from

Hi, good morning, Tom. Good Randy. morning,

another just So on one SINUVA.

value there. management perspective proposition the antibodies would clinical set of of seem being reimbursement your And and kind The against force You a mentioned kind to building monoclonal with of of it kind kind from set as there. well feet on Street you're

bit a Just quickly, where what kind little around awareness the that Was product details, provide the margin need to wondering, or kind little be on more gross and the than that you the just other the like think of you doing Just overall bit right. either kind you else margin? your of amongst OP heard I a is just to then be if patient pacing advantages those doctor I therapy? there. Street calibrated the to was to drive correctly Randy. first sure, margins and gross our really guess make bit the lot commentary a higher The came we've It you need going little second sounds of And models a second guys. the of one to Thanks margin half versus there. of curious expenses just if want I maybe below around And

And social to a the where time folks greater comment opportunity mass We're And drive doesn't to awareness. think, That and excited that I'll media people and from a is about very are to aware demand lot advertising, information. other the first self vehicles you prospects degree gross that necessarily begin of very to who part awareness ensure around but and direct-to-patient think a didn't initiate made very on over to use the web are that office, and rhinosinusitis So is comfortable that. chronic of seeking ways efficient make being to therapy of aware to payment over mean to Randy, there otherwise them. there media the opportunity traffic available suffer without held We effective doctor's incremental I But relative reimbursement the off mechanisms. drive into We've a on able doctors were SINUVA. with I'll I maybe, margin. the well to want question. that and take let points

more effective they element immediately ample to alternative up area, a comment dial ENT in otherwise to to that's that among us that -- opportunity so be I'll what make margin. you Randy, to to we've grow conjunction development. by them patient. within As think to our which in will sometimes some that of a over drive of business we large demand basis, on done gross can think order I there's that help begin effective primary another selected an And might becomes time. practices begin solidified, to direct local let an considering. I for as market patients aware on And But with avenue

Yes.

tail probably sustain gross the what see up production the We of at the the end we quarter. is, normal to back I that see got We'll a On margin first that levels. continue in characterize we production ramping year. throughout side, part think the as of easy to our

of So, absorption through -- you'll begin to benefit see and that the again.

the So spikes I along of wouldn't expect to see any sort way.

year. item you'll of improvement gradual potentially think the balance see other a One I the two. or for

be And give adjustment bit the incremental and the so investments to exclude going visibility providing price sustainability an into achieve are in call, in We're you making that Going little talked just amortization purchase forward, some quarter about. we've area some we from to we that will as this of prior that. the of calculation. a to we mentioned

fairly our XXs. be are we return longer And move quarter. we we're this legacy as will in we'll margins to on a more forward some the again, very nature costs But and back term XX% confident back in But products onetime seeing gross high prescriptive were the to that getting as up. of

Our next Suraj Go question Oppenheimer. ahead. Kalia from is from

Tom, Randy. all you Can me morning, Good hear right?

you. Got Yes.

the Perfect. Tom, was missed what I this the maybe in but SINUVA quarter? Randy number, commercial contribution

revenue? of terms In

way? either percent Revenue,

$X.X quarter. was in Revenue million the

commercial the the no component of No, million? $X.X

question. maybe misunderstanding Guess, the I'm

is I want Medicare the what So to just make commercial proportion? sure versus

don't We going of that Okay. level granularity -- provided we forward. haven't

and in high level public think provided a both XXs just average the payer I the we've low to we've what again very public broader comfortable. think by private market. private I XXs believe is of and market the the payer payers. I we're of from past upwards And said about that XX%

And so percentage typically revenue with But we're very comfortable reimbursement environment. the the from of broken haven't we who's paying. down

believe of Got OpEx to would be would said update it. XXXX. Randy you QX terms higher you the FY than XXXX the in on guidance, it guidance? FY call care I

wondering given I QX was could if your guidance. it's you passed Just update in where OpEx out

in probably aggregate the characterized, XXXX north $XXX about level our of spending million. bit of, little sort in We've a

we're our both were indicated in where areas been in probably a which $XXX as little areas will making our speaking with north production some up in in a will investments our which in be the there manage on of associated be basis about As the is with of IT it Again in we've guiding growth slightly mentioned about the some folks. and more ability levels we've million operating And incremental pretty we've our that. spend mid-XXXs. total future some But sustainability relatively European consistent then platform. from certainly XXXX in to

Kyle Rose from is question from next Go Canaccord. Our ahead.

today. taking the questions Good you for morning, everybody. Thank

been has two asked end towards wanted I here. to a Just the just ask lot but

now? of could the Thank second how just headcount commercial for right and you. give the is update on the any the And QX and quarter-over-quarter then far the one OUS for kind where just that then give expectations basis a ask an the stands US overall one, US year? as And just is all you So I'll additions maybe in upfront both full maybe on maybe update go-forward And account the just in then where an opportunities? cross-selling now? team as grew in given my base us just the us plans

of in that number taking on too can we is momentum accounts terms in that Kyle, as number the PROPEL out accounts actual Yes, positive sales office the like. we haven't the the and the same-store of tell done are haven't business. see that that accounts of What We there's broken I that. environment previously you and certainly in expand

terms So of of a the the we the business growth business. post-COVID see of healthy expansion recovery general as the as in well

set about I we so feel the broken numbers. of where that not have are of And we specifics good that out

may back down were force In where COVID. terms in commercial at time been of both in we built where our still some pre-COVID. direct the we force, traditional sales We've too lean. to terms of territories expanding back of We reduction our to have of relative and a took that areas we're felt we that

order added to specifically folks evaluations. back. are train support navigation ensure and to in able we around very So the navigation capability field we've Cube and be and We've of experts capability our also that are have some prepared in built the to who that

has to order performance, in organization been expansion an appropriate feel we've capability specialist ensure now. that our in of but very an a overall So selling domain we that got right

to the terms looking the of normal the access sales with size force post-COVID hospital new We towards at of what be will in are environment. actively really a the lens

our utility but and the efficiency may will recovery return, have look of time think to value and And lens we for our looks environment we managers up add how spent about in and of their obviously, grows expect the I and the is feel and pattern the what we What portfolio will will like pre-COVID, then XX% to as therefore, that like. that in necessary gowned we're expansion business as say requires. the appropriate. that terms OR. in look We we present invest deploy, so, terms clearer of much of a But and being we an were looking the commercial our we you that as as as don't constrained don't do the is in are where territory to OR. post-COVID of able behind what that of complexity that as time we If

conference concludes closing This for our to question-and-answer session. back I like remarks. to the West over would turn Tom

interest our much excited your on feel We're business to you Thanks for extremely constant and and for our and prospects our prospects modest even in thank our first to Again, for reflected our of diversified foremost, as the And So, navigation improved for received We're over we million momentum ability for as delighted million the on using we've We and sites expanded everybody. with colleagues, our confidence the increased about year. to take across in performance portfolio. we attention codings excited clarity Putting that raise how we the see longer-term overall in care of have in come. guidance our confident our care. your of FESS comes very system and in VenSure all on potential attention. years health reduce and Board that That it evidence environment Intersect that PROPEL taken our to also I much interest particular their the with and lines the evaluation deliver support. Balloon that by the utility already to see limited the our we see to year, all together the continued we've ENT. Take and post my again growth number and in health and encouraged from and XXXX our we multiple our that our SINUVA is office expenditure. Cube continued confidence in build and surgery reimbursement. want the shareholders marketplace about been We're $XXX full out potential the and have to economic in stems our PROPEL more in $XXX QX thank our and thanks very under. to full

now presentation. The conference for attending has today's you Thank concluded.

may You now disconnect.