Silk Road Medical (SILK) 8 Nov 232023 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Silk Road Medical Third Quarter 2023 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Marissa Bych with Gilmartin Group, Director of Investor Relations. Marissa, please go ahead.

Great. today's joining for you call. Thank Road Earlier the financial for released months today ended Silk X September results Medical XX, XXXX. A available on press release website. the copy the of company's is

will or Act of like statements for and All that our forward-looking provisions penetration, include competition XXXX. within and assumptions.These by of these Any and approvals, safe performance, are the of federal you in Before or contained results made call call expectations to should without growth business, the forward-looking statements and limitation, those statements. Reform statements. to implied or various are of results management, and product our on uncertainties statements anticipated and reliance relate materially regulatory statements. the differ and laws, upon financial begin, Accordingly, during those this our Private I'd events that undue in this performance we harbor commercial management opportunity securities make training current meaning organization actual cause involve expense not and pursuant statements forward-looking market you or to development estimates reimbursement, physician expectations that relating the remind these Litigation could and predictions including, forward-looking from that events, future which to hiring Securities international are trends operating to expansion, adoption, our risks place future based material statements,

latest any on XX-Q otherwise.I of now Commission.This Board Securities information, any because information the accurate Factors with business, call obligation, events conference of Directors. the turn disclaims forward-looking and to our contains over today, list report or and as Risk to law, update and the by associated Form to projections time-sensitive description our Chairman or as XXXX. of will of November financial call please of future whether For live risks of Medical's the or intention only Medical new with Exchange Road uncertainties broadcast and a revise is Jack filed except Lasersohn, section refer required Road or Silk X, statements, the Silk quarterly

for thank setting expanding the at instrumental mission-focused Rogers cultivating journey positions Most and to guided apart. her and to appreciate and XX,XXX of are artery have we Boston at like first, to served recently, contributions the that had. leadership Intersect company past at over company's I team wish substantial President to look the strong of & To strategy Lucas experience Johnson.We're Silk thrilled mission, to her treat roles incredible benefited would But has has welcome gastrointestinal the carotid in Silk best drivers industry McKhann to Officer, joining since and Road by afternoon, infrastructure, and the you that Officer.I Officer Chas Chas and for he am to Lucas executing today company. leverage our smooth device and the XX commercial C-suite led offering CEO Road ENT with have the recent remains skilled welcoming Silk was will us over Under team of for McKhann, been conditions. and At excitement of businesses. further invasive and our and alongside positions We Medical thank year. of Johnson commercial on Operating to us Medical Chas as the on alongside my than Executive to transformational a the commercial the review and medical for as the Silk Scientific the I a leadership our Chairman years and Chief turn the Chas a line over the patients of performance Financial us. our in our XX confident TCAR Erica XX the body company and the has tremendous that officer the start wanted clinical years Scientific values which for Chief impact and full the with Chas speaks Apollo more our the his forward I patients. Good more well and today Previously, patients to bariatric call the as line held Director for on Boston shortly than everybody, new procedure, over to future Chief building founding. and vision Apollo, evidence disease. from scaling years. right for is to Board leader same XX transition company. by business. this company Road is Buchanan, minimally team to in years. created leadership, leadership committed Lucas growth April and looking and the Erica We technologies her enduring culture very been Chas forward.Meanwhile, acquired Road and date, its of continue at impact have Chas take the Endosurgery, with in here which Torax

growth quarter over faces company in third this in to the turn substantial I'll trends to that, business. and Thank market we performance line will Lucas and review the opportunity, continue adoption under-penetrated of Our to and you. context.With the a prioritize TCAR

Jack. Thanks,

third growth XX% As revenue communicated TCAR in of representing X,XXX million, our procedures, preannouncement, and representing year-over-year growth. approximately $XX.X we year-over-year XX% quarter achieved

driven primarily offset by growth Our were adoption, results pockets and volume. procedural strong TCAR weaker-than-anticipated of by

coverage year.I coverage continue decision final in build standard consistent of in would for upon relationships to that commercial the treating the performance, with Chas and revenue prior where seen for decision CMS expectations of and at for months.For coverage touch have the variability. diagnoses greater this with CMS proposed XX% adoption the for now Our our The surgical representing coming digging see time risk extending commercial shift our our XXXX, was perspective time. high- dynamics. was physician stenosis. procedures. unchanged. business into remain released of comprehensive XX% our $XXX we The including we than year our Early and decision procedures growth ruling, awareness drivers a $XXX of more with physician areas full million quarter, adoption million, expect July both I carotid artery line fourth spend national the like to the over carotid stenting behavior importance an or is team either substantial review from across over access. the plan on their to to asymptomatic access to implications briefly likely today patients more and hard in on proposal underserved patients stenosis takeaway trends approximately carotid symptomatic as XX their disease coverage to indicator and strengthen of in to including are and trends with screening, of yielding invasive and largely to territories is and XX% greater to work underdiagnosed with disease, XX% with than populations.We options over expanded less primary Broader interest impact and The final

initiated is initiatives. and decision. large proposition progress we we our the dedicated this patient built performed stent procedures a are TCAR's to TCAR that ROADSTER patients launched the carry care born product Last year, the body over commercial and achieved X, of to Balloon, and the generated vast, post-approval risk ENROUTE balloon FDA XX,XXX label in our TCAR from to called tracking study we date, coverage this to experience we believe expansion excited our population. about for is the yield which to carotid data will confident standard is fifth and standard FDA will the pipeline portfolio, in surgical long this significant Enrollment procedure run.Shifting the procedure. of in opportunity value our the last study. prospective disease Earlier incredible With for CMS' our arteries labeling, broad are year, TCAR only helped to are carotid broad just purpose of infrastructure support which We few expectations, in in reimbursement Enflate evidence industry's our years the in and we that proud clinical only

and we upcoming of when configurations system of ahead, sharing launches market more have our pricing tapered entered as strategy forward stent and to detail well We appropriate. continues the neuroprotection as with planning the ramp.Looking for utilization next-generation to our are premium a look

for Our R&D our and extend and other ongoing greater the progress as position carotid results organizations disease.Lastly, continue clinical in maintain to review to in detail. quarter financial new our and leaders I will the programs

TCAR the of As mentioned, quarter to investments. in expenses loss of the XXXX. was period as $XX.X the quarter a net demand. $X.XX XX% of prior higher a million, $XX.X growth of XXXX XXXX. year. costs continued million, in for driven XXXX. the XX, costs of XXXX in commercial standard or million over for September of of the a $XX.X Gross million were third to of period third compared in or TCAR quarter for expenses by third associated third personnel the $XX.X decrease compared million from same per administrative and revenue in ended X,XXX, period, margin prior procedures operating months loss as XXXX, with third quarter XX% period the well X of XXXX. operational prior from million increase $XX.X million million expansion.Net share was procedures approximately was increasing share cash from quarter for Sales, R&D increase year. $XX.X compared cash, same and the XX% were and the The and was of in period driven quarter the the number a quarter general to the increase $X.XX $XX.X of the and $XX.X prior million in a X prior loss of quarter over million revenue the for year by were per equating a facilities of expenses loss manufacturing the compared the the for to same The by XXXX.Total largely personnel-related a were XX% quarter in ended quarter manufacturing with third driven revaluation of year $XX.X third Growth quarter third of of was We which in quarter third the $XXX XX% million was The margins, XXXX the benefited as in equivalents having for fully year. XXXX in the of to the $X.X expenses third increase

our pathway current can We our are confident current echo Jack's that objectives, remarks. including executing organizational our growth accomplish on to with I'll profitability and we capital.Finally,

on delivering incredibly have together we and for are looking to providers Chas and patients, are board, excited shareholders. forward We to

brief a TCAR penetration. meaningful value the steadfast, I'll drive that can in over remains belief to Chas deeper value Our for and turn long-term through we that, the introduction. of confident are we With line

my and innovative one warm the personal family us invasive his departments potential Jack, a the you, of arguably from you I've Over today. all improve role truly is here appeal. in to commonality also at businesses Neurology patient starting brain for the of was one XXXX. physicians. back several my like me, Chairman XX-year to a more pleasure very Silk he end here. It markets.But in career the career into My and CEO lead that leading and minimally Silk an Johns of me is Thank neurology why for Road. in states in world. Lucas came tech. been in a outcomes, large for dramatically one Hopkins, is fortunate the to inspired XX come than Road has very joining And and really colleagues therapies especially reasons highlight I of Medical that welcome, for I disease at And built the founding the med and step and years, has thank honor throughout to I'd father

in a a his My is at neurosurgeon course, bit biased. I'm Columbia. Of followed brother and little footsteps

Had of have father brain very starting an has candidate from our may years experienced in series family I and for been much later ago, TCAR part years. the been health about been stroke strokes as debilitating believe he a caregivers. So suffered many, really and available, life, my But patients for we XX many of XX procedure. to excellent

with I as artery very Silk am to into the of in for meaningful standard and Medical's innovation of is opportunity so diving the make for to I stroke care TCAR patients, that look to personal over reduce unmatched this to And mission carotid has the growth forward the benefits we with ahead.I because admired a journey Road me.In Stacy ahead. of addition the can broader team I and the the and and role Road to for Lucas, have risk impact TCAR more. to Jack, created very and still to connecting team the that achieved disease. Silk our have it you tremendous we'll choose And with years, take excited procedure the to I the impact establish strength as many us, leadership decade the Road have past that, that well are happy unique of business, as months immense leadership as we the significant Lucas business and ahead back of and them. to the There opportunity and the the address as over the rest over well the company questions, Lucas culture operator the of here in and turn and Board over that front is and Silk the of of Erica,

first question comes Our Wise Rick from of Stifel. [Operator Instructions]

] Rick I the wanted out here. sequential step why what's that on going of today. the to better I XX-Q in you're another and into the and get to sales into [ force half start expecting sort with that the that fourth called This the -- of want quarter, and facing disruptions next a just the guidance to sense down versus some is year. disruption to of on want for quarter better sales a of filing with continue half first It's John you first off third 'XX. continue you're you're expecting force

that. John. Thanks, I'll take

we're the in and the this we built commercial expand this we've in get for broad now. lot to many take is going all physicians team. where that to time, new year this Really on trying At over therapy. same We've presence team expanding to adoption. point that building a Just our And clinical leveraging a back over years step the market to establish many footprint moment. been really and of really years pivot commercial continue deepen a

learnings strengthen choppiness, preference But that attrition. referral with understand same patient takes team, are the We're we've around we have We're and wins make territories we're as of and doing market successful. tremendous to allied care gained right, evolution We're expanding we really So strategy. initiatives. as time and to this health professionals. go-deep And our at that some lots that got promotions restructured those we be work what it executing networks. doing engaging territories come normal new and

of going area commercial to going and our are Chas double really lot of is with to of a down our which guidance mentioned, as and the stride. on learn I leaders forward this what's so working where And hit and well and persist expect reduce spend time focus from and our choppiness marketing until for we've and little you time other will mitigate in we the seen, a bit we Q, per the

your want sense Lucas. the what Coming a bit helpful, to of vision be. and you optimizing That's focus one want get Chas, of force, new what about. areas I this where company your just you. get investing is about sense for And better of just a sales talked technologies. are of in I priorities your to a going for you're maybe into are the to sense Silk, in excited where

to truly No, into over John. a It at I this time recent I'm about iterate, the thanks, Really, going dig forward and -- forward, updates moving that growth point, I as have. a that. lot of today. -- the homework, some build except clearly, excited for really Yes. And we detail the not we dig that's but launch, the X of day my with me results appreciate opportunity get happened did said, back, to take of we is Lucas I'm tremendously question. into into come now on since very and kind to and impressive of step know the just need kind I

the getting at time many So area then VEET week, we forward. to to on. business, We're of what's point the time in to customers spending to of customers. top made then focus going a And [ areas successful going this know that, next going to with meeting at up one digging and to be be need of time obvious so us beyond the in team, lot to will getting I'm know spending do the ] focus to to and our which on learn spend the

comes Our next question from Robbie of Marcus JPMorgan.

[ is actually for Rohan This ] Robbie. on

working Just say new forward with look the you. to want we and to congrats Chas on role,

maybe anything ask another you than off excites come is to can about I'd Obviously, generally about what very significant. is to Just just question, well. move But Silk share piggybacking obviously different pretty though, to like of to of you there the last just off the the company? kind you Apollo one. probably as making start It's

at the just talk why just and about you're about maybe could you leverage the ways this Apollo your behind Silk maybe some of here. So opportunity at experiences then so excited drivers

thanks Yes, the for question. Sure.

still care of benefits patients As talk patients, inclusive the I industry TCAR when benefits I physicians, treated take are with the to world on the incredibly a of and the have XX,XXX and that. of It's benefits throughout that did back, to you knowing real the you lot evidence and to that to combination people now the with homework. benefits of customers over have as procedure health room step And compelling. for in I said, out to support my others, of rare a a run that system lot we

my said team It's all what a the and for they've Erica credit so built. I'm great excited about Lucas And to here and I that. comments, And organization. in

it. of is care changing -- across you my behavior really inertia the And to And mentioned Apollo, and an I've opportunity. be like the health in There's like background, I of so hard, I so right? also enjoyed -- a lot challenges part system. in really the but a it's honor

of thinking and call patient and different things, done things I've whether so and And that of education I And stuff. my team a background all I think tools on. programs all use, training great through got clear, can we can already different be lot here it's of has range in of a lot the that to the the

adding from can is I team. clear it. so and after adding So this stakeholders. what about go is enhancing that good we a And already commercial to heard I'm to opportunity. loud that different excited very really many that, But and

slowdown I kind that sales of some what And to the for XXXX. going reasonable was some of highlighted? for outlook year in more puts Great. should the led with in in the quarter, choppiness exit second in Obviously, out given of likely and growth light question you a just that more takes you're And single-digit think of around we it's kind force, seasonality I remainder had the guess and beyond, growth. in of how see of you the and rate pronounced about around baseline these fourth third And quarter. kind XXXX obviously, called to is

question. the for Rohan, Thanks, follow-up

I on days X the the puts in guidance dig job before of Obviously commented meaningfully on I than some XXXX really to takes. think about Chas just we'll and and more give the XXXX. talk we

we tenured get adoption together and as transition that assembling lot the conviction again, of these adoption penetration years really early about And the team to to over our being drive benefits many goal the is think growth sales broadening now, I our in steadfast. for come. remain for long-term patients durable to a customers from this assets and make required our increasingly deepening of very market,

comes of next from Citi. Our Joanne question Wuensch

My on of mentioned I with in Anthony you appreciated. types more? bit you remarks geographies? pockets or a first Just some maybe more these be certain would Joanne. in elaborate weakness Lucas, there for just demand. certain were doctors Are Can any is prepared granularity think This of your

Yes.

territory. XX physicians the we've there and per recently in roughly in territories So about which is we at QX XX math kind QX X,XXX QX, talked of stand XX where now and about physicians in

of going have the territory and metrics expectations. to per folks of at look expectations physician per So we understand below that expectations, kind what's are on or at per performing for ahead ability account,

we've forensics, docs behind buckets, as So of ahead, expectations. Territories and/or have each done that and/or are at, we or those hospital those right? accounts

X.XX opportunity a incrementally miss some is context for some the kind if because or right? there's this disruption missed, in local procedures comments. so procedure across positive $XXX,XXX and That's that a in of X really territories. some color opportunities XXX we that's where business for that in of And revenue a procedures And per XX change or business or sort and way. about moves territory, we is the And so my at are X of there level, the

you Japan. on then Helpful. can China and in you where just update are give an And

reimbursement appreciated. Japan, I about you just think in on be you color any would just the last submit said earnings call additional but were to for

Yes, substantive we call really mention is there on because update. didn't no the

products, the as which reminder, Just a as pathways multiple regulatory pathways means reimbursement TCAR It also as multiple well is countries. different multiple channel means discussions. across X

markets themselves And so as those make the we fronts on good changing. and progress dynamic continue are all to

but And quarter, to no progress. substantive update make this so continue

question next Maeder Piper from comes Our of Sandler. Adam

are heard we role. a details can mean kind have congrats but I Where headcount be more just the bit on Do territories, wanted we or to more on and you head any the are just open? standpoint? at would the -- the understaffed to double willing Chas, you where a territories count? disruption give just Just today from I of you start, issue any in were share beginning of little sales click there understand year? I I the commentary to are Maybe appreciated. new that

take I'll Adam. that. Sure,

addition. have territory in and million roughly are sales rep X QX $XX one were on and specialist a remember, a So is And obviously spot mentioned we sales XX, And and I where you QX then just on management clinical for this a layer territories, average. with was us exited XXXX we call. in XX as may similar then which we we

team doing over attrition time, time, and given promotion. normal We're promoted. at who've reps There's expanding in always this splits. either point or backfilling And in so territory territories been of we're been because open as we've attrition building any

entire kind that's and the commercial so we background but where our existence, that's And of over stand always today. in happening

I what the kind month. the about place from you're sharing last into trends? just on all? with the hearing NCD or referral carotid they up new chatter would seen follow your any I'm that of change they that NCD, base guess Have may And to any be went curious customer be volume the pathway you

Yes.

general there's physicians think whole. talking this, about a referring thing about I think talking excitement, innovators talking physicians for the I and this market about a this, and good companies all is as

in evidence, already to that invasive and every product happened rising and so products, measured has in time. the we expansion awareness minimally of hasn't As after we label, stenting many on right, as transfemoral on at And the at see the market years our almost really We expanding. we potentially the that map over procedures a the invasive effect remarks, we minimally broaden of think in carotid era to clear And could have and interest the by is putting TCAR market position prior history are beginning other And and stenting I said the my stenting, prepared see invasive on. carotid goals We experience, invasive which of to right? vessel, blood surgical commercial leads as leader access. think are one Medicare expertise and and the more category, changed. stated, this procedures broad minimally this, following, by of

about era. this we're next excited So

Stewart Kristen CL King. of from comes question next Our

there. XQ Chas, embedded you that disruption you congratulations little role. on the could was a there's from what assumptions bit any for would deeper in if just dive the to expectations new into the expect of sort NCD I wondering your extent

variable, Well, new I think it's certainly Kristen. a

to has something that. be that's for considered So

Some time as really of and out the year. has our as some it is into sure the where Chas of commercial just business dig organization to making is, we close is kind the it of I mentioned,

just help Okay. And I then sort question, you wondering sequentially. going us forward. and step follow-up back about what They in should if think margins. was expectations on just of could gross take came and a as we improved a see

Yes.

So that across it relative was are facilities the fully clean gross volume quarter kind on to operational. X margin strong front a manufacturing of our

so we to up some And And as fixed inflationary product we to well that pressures face and headwinds. volumes performance over that supply also the unit chain the things the cost of obviously perform of underwrite leverage help on future. drive really level in expect that overhead we've obviously other ASPs continue out that getting the continued service

for moment One question. next our

Our next & comes Kalia of from Oppenheimer Suraj question Company.

you Chas, new congrats all on role. the best. the Wish

reduce to background churn forth, So forgive to shift improve just utilization. force either Torax, change back be due and incentives unfair, comments new a at look me, diligence with sense might know Silk. so this you Apollo, and you so to you're question -- when of Chas, on I on your and/or I about just any I doing such structural happens, do want but think sales off makes sort tee on your it When

Okay.

You're detailed on Suraj. me, getting real

me Forgive --

until since the to Look, I launch. time look commercial in what's that, looking dig and so, again, And to? done appreciate business build going working nowhere happened terms going being from some may able And here to learn me that's say job chance going growing has fantastic that. we're we do at we've and a enhance collectively already need a let are areas year, we question. context, just do at various want to place I we of had to near might are What But on the am we we What adjust aspects forward. question that great? in answer what the in what to and the into as spend the the that's broader all say, of it exactly together of team right? do this We're

in of so coming more to I we're heading. really got work. the coming to we a first, do where much look But this And forward-looking do to group months on with commentary forward the back

given how Fair to physician here, enough. -- about hop I'm your physician. better curious the any What mentioned do NCD, changes and prepared newness of about, is in behavior, enough in points actions? I'm have paraphrasing. Hey, to engage I'll corrective Lucas, one the Lucas I'm follow-up mine you queue. question mining we see make behavior hence any and remarks Again, for data paraphrasing the back to physician In you,

the for Suraj. Thanks question,

has I to state. disease reimbursement it in with less think do this

always we've wrong intended major heart the is go stroke injury. end which is in is nerve As a incredibly here, the could a future organ unforgiving attack, procedure prevent what permanent said, and stroke, to prophylactic death, cranial brain

behavior has to And lot physician So the saying they long high. of say way time. performed when are a procedure that's we in a a do stakes stake. confidence is of with it. the confidence And that really another for of derivative inertia And their CEA, what's at

confident we've that physicians that's done first that of of chasm so gone TCAR it right, have And confident, to the the that's is we've got type good a And we and confidence could same patterns. entry lot because we'll do the adoption highly we TCAR. not to crossed have know type news ultimately from of barriers really in around same build and and their reflected

working continue in and working really end confident business we variables to to adoption what's look this at and so state about other what's drive not key in behavior, we evolve so well us well, disease the really to how And do when change talk trends it's and with organ. that this allow

This question Wolfe of Research. from Polark Michael comes

balloon you to for One, willing the year-to-date? me. would how numerically balloon, up frame be contribution X Lucas, much

Mike. question, the Thanks for

our say those So related. expectations. obviously, slightly we're expectations are things slightly on X ASP utilization And ahead I'd on behind and our

a accounts so room in lot that procedures. the terms And -- and and driving still balloon more of utilization of to more is there's run

good making we're But level Mike. progress. out break we detail, don't product So no,

again X days Chas and that's in, maybe a unfair. The for maybe question follow-up

the way? bigger there's engages nuances at But look job, interventionalists principally of in Silk at and addition a in So I this that's NCD a continuing And but field I doing know customers the if ahead saying high kind yes answer, look the there's the playing with with diligence with are to I path serve really to surgeon Silk that's at answer. multiyear interventionalists. where guess the vascular do here, here and you the surgical the a level levels you to as your lens, community community think of this

want we I a whole options time, you over of going be broadly discussions. of to we're time, range multiyear. appreciate are lens over And the going have look those to take we at, question, strategic and where to if a

So right and there's that experience But to now spend as team well going. and the time on to like then we creates focus a allow with as really back, we new that of I be understanding growth me for prepared way, the and fact a the But to be internally. that to adjacent other plans. of go by like sort focused like, or company, it also keep opportunities done opportunities that date pretty got the I could to opportunities. it are stake international ground. this looks this, what not in put fair I'm work a already down could line been point, that And at the amount

and robust go to guys we're where more to you So about that, plan. where learn thinking I'm from back then to come comprehensive a with going understand

comes to from it are like further question Neil turn remarks. Chatterji McKhann no to over Chas questions, Riley. back of B. I'd for Seeing there Our closing

standard all as because aspire benefits artery has team evidence really as support the changed pull today. at in disease. you physicians -- outstanding final achieving of space. thoughts, objective leave as some carotid Road, of we the of care we to truly well Thank really care that, a to of as And Silk us company with And is procedure. the the hasn't you Yes. quarter. have all of we we an and joining reporting treatment this The health TCAR this lot of proven from in establish robust progress that system patients, unmatched for clinical on The the at for TCAR over a time, is of the patients the just towards and made back especially just benefits believe I strong in deserve therapy. this that and place. want

all for the we're all going into today. to your of we very deliver much joining you times, Going business more dig that promise forward and and our forward, To look investors, really coming a to on Thank us the therapy. to work months. as mentioned sharing in of this few appreciate support I

today's conference. does your This Thank participation you for program. conclude the in

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