ABIOMED, Inc.

Hello and a warm welcome to today's Abiy Ahmed fiscal year 2022 fourth quarter earnings call. My name is Emma and I'll be coordinating the call today. You will have the opportunity to ask a question at the end of the presentation by pressing star followed by the number one on your telephone keypad. If you change your mind, please press star followed by the number two to count for your request. It's now my pleasure to hand today's call over to Nicole Nath, head of investor relations to begin. Over to you, Nicole.

Good morning, and welcome to Abbeymed's fourth quarter fiscal 2022 earnings conference call. This is Nicole Knapp, Manager, Investor Relations, and I'm here with Mike Minogue, Abbeymed's Chairman, President, and Chief Executive Officer, and Todd Trapp, Vice President and Chief Financial Officer. The format for today's call will be as follows. First, Mike will discuss fourth quarter business and operational highlights, and then Todd will review our financial results, which were outlined in this morning's press release. After that, we will open the call to your questions. During the call, we will discuss certain financial information on a non-GAAP basis. This non-GAAP information is provided to enhance your overall understanding of our current financial performance. The presentation of this additional information should not be considered in isolation or as a substitute for results or superior to results prepared in accordance with GAAP. Reconciliation between GAAP and non-GAAP results are presented in the tables accompanying our earnings release. Finally, I would like to remind everyone that today's call includes forward-looking statements. The company cautions investors that any forward-looking statements involve risks and uncertainties and are not guaranteed in the future. Actual results may differ materially due to a variety of factors identified in our earnings press release and our most recent 10K and 10Q filed with the SEC. We do not undertake any obligation to update forward-looking statements. With that, let me turn the call over to AbbeyMed's Chairman, President, and Chief Executive Officer, Mike Minogue.

Thank you, Nicole, and good morning, everyone. In the fourth quarter, AbbeyMed delivered a company record of $270 million in revenue of 12% year-over-year, with record revenue across the U.S., Europe, and Japan. To note, this was a record quarter following a record Q4 last year with 17% growth and a record Q3 last quarter with 13% growth. despite COVID and hospital labor shortages. In addition to reaching another record revenue month in March, we supported more patients than ever before by executing our AbbeyMed 2.0 playbook. For the full fiscal year 2022, we delivered $1.032 billion in revenue of 22% year over year and delivered yearly record results in a challenging environment. We achieved top-tier gross margins of 82 percent, revenue growth and operating margins of 22 to 25 percent, while investing $163 million in research and development, an increase of 34 percent from the prior year. As a result of our ongoing investment in innovation, our IP portfolio increased to 1,408 Impella patents with 1,416 patents pending. Our balance sheet also strengthened, and we ended the year with $979 million in cash and maintained zero debt, while funding multiple strategic investments. In fiscal year 22, Abium had invested at record levels in innovation, advanced clinical evidence, and further strengthened our premier commercial field team. Operationally, we received regulatory approval for Impella technology in three countries, were granted breakthrough device and Category B designation from the FDA for the Impella ECP, and saw the guidelines for the treatment of cardiogenic shock patients with Impella upgraded to Class 2A by the European Society of Cardiology. We also generated 279 Impella publications, enrolled over 200 patients in RCTs, and early feasibility studies, and opened 646 sites globally with Impella Connect. Commercially, we hosted 20 live cases in the US and Europe through our world-class interactive training platform, Camp PCI, trained over 3,000 customers virtually and in person, launched our patient therapy awareness initiative, and added 278 employees to our company. Abiomed has remained on course to become the global standard of care for circulatory support. I am proud of our customers and employees for their grit and dedication. They are the source of these impressive accomplishments during fiscal year 22. At Abiomed, we're helping to solve a healthcare crisis for the heart, lungs, and kidneys while helping to minimize the disruptions caused by COVID variants, and hospital labor shortages. For today's call, I will highlight our leadership and innovation to create the field of heart recovery and our fiscal year 23 strategy and goals. So first on innovation. The Abimed product portfolio and pipeline has never been stronger. I will cover highlights on Impella 5.5, Impella ECP, Impella RP, and our newest heart pump, Impella BTR. We are expanding a number of conditions and patients we can treat as we simultaneously increase the number of physicians utilizing our technology in the cath lab, surgery suite, and ICO. First, the Impella 5.5 is a breakthrough product that grew 95% in the year and transformed our relationships with heart surgeons and heart failure cardiologists who are embracing this technology around the world. We recently announced the first Impella 5.5 with smart assist procedure in Japan at Osaka Hospital when an 82-year-old man suffered cardiogenic shock but recovered thanks to the Impella 5.5. In addition, we hit our 5,000th Impella 5.5 milestone when Dr. Tamar Atiyah at Emory University Hospital in Atlanta used Impella to treat 5.5 to treat a 41-year-old woman with cardiomyopathy and help successfully bridge her to heart transplant. Impella 5.5 with Smart Assist and Impella Connect has changed how we are able to support cardiogenic shock in cardiomyopathy patients who would otherwise have less of an option for heart recovery. We also received FDA approval for the Impella Bridge to Recovery or Impella BTR early feasibility IDE study. And I'm happy to announce that the first patient in the world is currently being supported with this breakthrough technology. The Impella BTR will provide patients a minimally invasive, forward flow, smart heart pump with the potential to allow home discharge and durability of over one year. Between the Impella 5.5 and BTR, AbbeyMed projects a $4 billion U.S. total addressable market based on an additional 100,000 U.S. patients. Impella ECP is another breakthrough technology. Its nine French size may enable more physicians to provide critical hemodynamic support to coronary artery disease patients, enabling safer PCI procedures and more complete revascularization with an ultimate goal of improving their ejection fraction or heart function, now shown in PROTECT-1, PROTECT-2, PROTECT-3, and RESTORE-EF, as well as other papers and studies in Italy, Germany, and other parts of Europe. As a reminder, our investor event on Impella ECP, including presentations from Dr. Amir Khaki and Dr. Chuck Simonton are now available on our investor websites. Turning to the right heart support, earlier in the year we launched Impella RP with Smart Assist in the U.S. This smart pump is the next generation of our FDA approved right heart device with dual sensor technology and exclusive weaning capability. Within the quarter, we also filed a PMA supplement for the Impella RP with insertion through the internal jugular vein or IJ in the neck. This insertion technique allows patients to get up and walk while on support, also called ambulation, which improves outcomes and thus is preferred by heart surgeons. Like a flywheel, the excitement and energy from our innovation drives momentum and interest in our products and their clinical data. We have exciting clinical trials underway, including Protect4 and STEMI DTU. PROTECT-4 will be the most extensive study ever done in the cath lab, not just on high-risk PCI, but on PCI overall, and will lay the foundation with success for a class one guideline. Each year, there are over 100,000 patients in the cath lab that are staged for multiple PCIs or receive incomplete revascularization or suffer acute kidney injury or are readmitted to the hospital within 90 days. Additionally, there are over 300,000 patients in the U.S. each year that are turned down for CABG surgery and not referred to an interventional cardiologist or PCI. In a 2020 study published in Circulation Heart Failure, authors reviewed testing for coronary artery disease in older patients with new onset heart failure and found that 61% of patients hospitalized with this condition did not receive testing for coronary artery disease either during the index hospitalization or in the 90 days before or after admission. This data highlights an opportunity to improve care by identifying appropriate candidates for optimal CAD medical therapy and revascularization. As a reminder, our Protect 2 and Protect 3 patients on average are 70 years old, so relatively young and many years ahead that can benefit from the quality of life improvements with an improvement in ejection fraction. We believe data generated from Protect 4 in combination with educational efforts direct to patients and physicians opens up a $9 billion U.S. market opportunity for for Impella-supported high-risk PCI. Finally, I would like to highlight some of our goals for fiscal 23. First, we will continue to innovate smaller, smarter, and more connected devices to improve outcomes and ease of use. To be clear, the reason smaller devices are important is because they lower the risk of bleeding and vascular complications, which we believe will increase Impella utilization, especially with the late majority. Second, coming out of COVID, we plan to accelerate enrollment in key clinical studies, prioritizing EMPALA ECP Pivotal, STEMI DTU, and PROTECT IV. And last, in leading the field with clinical publications like PROTECT III and RESTORE-EF that add to our extensive prospective database of real-world evidence. PROTECT III and RESTORE-EF demonstrate that the new tools and techniques that physicians with expertise utilize allow for a proven improvement in their clinical outcomes with a improvement in their injection fraction at 90 days. Lastly, we remain focused on commercial excellence, including engagement with the heart team, physician education, and patient identification for multiple FDA-approved indications. Our Patients First culture remains the foundation of our success. So before concluding, I'd like to share a patient story. Bobby Goins, 31, a father, husband, and sales representative from Conway, Arkansas, lives an active lifestyle. When he's not working at his computer, Bobby can be found renovating his home, riding bikes with his three kids, and playing on his men's softball league. Bobby tested positive for COVID-19 in early January 2022, and within days, he experienced shortness of breath and chest pain. He called 911 and was transported by ambulance to the local hospital. Medical teams evaluated Bobby and determined his heart was severely weak. He was transported to St. Vincent in Little Rock, Arkansas for escalated care. Upon arrival, physicians identified that Bobby was in cardiogenic shock due to myocarditis with a severely low ejection fraction of below 10%, a life-threatening condition. Dr. Thurston Bauer implanted Impella 5-5 to support his heart and allow it to rest. Bobby's condition improved and he was able to walk in the unit while on Impella support. After eight days, Impella was weaned and removed. Bobby returned home to his family and today has normal heart function. Bobby is back at work and enjoying time with his wife, Carly, and their children. Just months after this life-threatening condition, I got to meet Bobby as he visited Abiumed headquarters in early April as a guest speaker to share the story of heart recovery to all our employees at our global annual company meeting. In conclusion, as we start fiscal year 23, Abiumed has flywheel momentum. Our innovation has never been better. Our clinical evidence is established, and we have the premier commercial organization. Our AviMed 2.0 playbook allows us to adapt and execute and lead and manage and focus on improving patient outcomes as we pursue the ultimate goal of being the global standard of care. I am thankful for our employees' and customers' courage, dedication, and leadership during fiscal year 22. I will now turn the call over to our CFO, Todd Trapp.