CVRx, Inc.

Good day and thank you for your standby. Welcome to the CBRX second quarter 2021 earnings call. At this time, all participants are in listen on the mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. As a reminder, this conference call is being recorded. I would now like to turn the call over to Mr. Mike Valley of Westwick Please go ahead.

Good afternoon, and thank you for joining us today for CBRX's second quarter 2021 earnings conference call. Joining me on today's call are the company's president and chief executive officer, Nadeem Yared, and its chief financial officer, Jared Oshun. The remarks today will contain forward-looking statements, including statements about financial guidance. These statements are based on plans and expectations as of today, which may change over time. In addition, actual results could differ materially due to a number of risks and uncertainties, including those identified in the earnings release issued prior to this call and in the company's SEC filings, including the upcoming Form 10-Q that will be filed with the SEC. I would now like to turn the call over to CVRX's President and Chief Executive Officer, Nadeem Yared.

Thank you, Mike, and thank you, everyone, for joining us this afternoon for our first earnings call as a public company. First, I'm very grateful to all my colleagues at CVRX, to our board of directors, to our partners, our investors, our customers, the healthcare providers, and most importantly, to our patients. You all trusted us. You believed in us. We stood tall on your shoulders, and for that, we will be forever grateful. It has been a long journey to this point from the time I joined the company in 2006, and I'm incredibly proud of the continued efforts of this group, the results of which are going to change the way patients are treated for heart failure. Before providing an overview of our performance during the quarter, I would like to start by giving an overview of who CVRx is for those of you who are not familiar with our story. We are a medical device company focused on transforming the lives of patients suffering from cardiovascular diseases by developing, manufacturing, and commercializing innovative and minimally invasive neuromodulation solutions, which we believe offer a compelling value proposition for large and significantly underpenetrated markets. Our primary focus is on the treatment of patients with heart failure. Heart failure is one of the most prevalent cardiovascular diseases. We estimate that globally, approximately 26 million people suffer from heart failure, including approximately 6.2 million people in the U.S. and 8.6 million people in the five largest European countries. Every year, 1.3 million new heart failure patients are diagnosed in the U.S. and 1.4 million in the five largest countries in Europe. Heart failure usually develops from an imbalance of the autonomic nervous system. Our proprietary platform technology, Barostim, is designed to leverage the power of the brain to address this imbalance. Barostim therapy utilizes a widely accepted mechanism of action. It works by sending electrical pulses to baroreceptors on the carotid artery to signal the brain to decrease sympathetic activity also known as the fight-or-flight mechanism, and increased parasympathetic activity, which is commonly referred to as the rest-and-digest response. Our second-generation product, Barostim Neo, is the first and only commercially available neuromodulation device indicated to improve symptoms for patients with heart failure with reduced ejection fraction, which we refer to as HEF-REF. Baristem is implanted during a one-hour minimally invasive procedure that is typically performed on an outpatient basis. HF-REF patients are treated with guideline-directed medical therapy that often includes three classes of medications, diuretics, beta blockers, and ACE inhibitors. Some HF-REF patients are indicated for cardiac resynchronization therapies, CRT in short, which actually are biventricular pacemakers. These CRT devices have proven to be an effective therapy, but we estimate that the majority of HF-REF patients are not eligible to be treated with CRT, and that is where our device is now an option. Our solution, Veristem Neo, is approved by FDA to address the symptoms of heart failure in the significant population of HF-REF patients not indicated for CRT and whose NT-ProBNP is less than 1600 picogram per milliliter. We estimate that our initial annual market opportunity for HF-Ref is $1.4 billion in the US and $1.5 billion in the five largest countries in Europe. In the second quarter of 2021, we continue to build out our commercial organization, And the early results from our commercial strategy are encouraging. Total revenue in the second quarter was $3.1 million, an increase of approximately 150% over the second quarter of 2020. This growth was entirely driven by continued strong performance in the U.S. and heart failure, which generated $2 million. We are very happy with the early adoption of Parastim by US physicians during the first half of 2021. We have seen a growth in the US coming from new centers that are treating their first patients and from existing centers that are treating more patients than they have in the past. In addition to our strong operational performance, we continue to add talent to the leadership of the organization. In early July, we announced the appointment of Martha Shaden, to our board of directors. Martha brings a long track record of success in helping to commercialize medtech innovations for both startups and large companies. And we look forward to leveraging her experience during this critical growth phase of our business. Our plan is to utilize our first mover advantage to become the global leader in minimally invasive neuromodulation solutions that improve the health of patients with HF-REF, and other cardiovascular diseases. Our main strategic levers to drive growth are the following. One, continue building our commercialization infrastructure with a specialized direct sales force and marketing team in the U.S. to promote awareness among physicians and patients to accelerate adoption of Peristem Neo. Two, continue our innovation of Peristem Neo to enhance our value proposition. Three, expand upon our significant body of clinical evidence. And four, over the long term, leverage our platform technology to expand into new indications and strategically pursue new international markets. Regarding the first lever, a key component of our strategy to drive adoption is the expansion of our commercial infrastructure, in particular, our direct sales force in the U.S. During the second quarter of 2021, we added two new S territories, bringing the total to eight. We expect to have a total of 14 territories by the end of 2021. The territory managers are supported by a group of field clinical engineers whose role is to provide the clinical and technical expertise to healthcare providers. The outpatient barostem procedure is currently mapped to APC 5465, for which the Center of Medicare Services, CMS, reimburses a national average of $29,500 approximately. In addition, CMS granted CVRx a transitional pass-through add-on payment, TPT, to cover the cost of the device for three years, which took effect in January 2021. We estimate that Medicare-covered HF-Ref patients represents 67% of our patient population. For patients covered by private payers, which we estimate to be 19% of our patient population, our market access team has implemented a program to support the prior authorization requests modeled on our industry's best practices. The initial results from this program are encouraging. Regarding our second growth lever, continuous innovation of our product, we are developing a new generation of the implantable pulse generator that has 20% longer battery life on average. This new IPG is expected to be released in the first half of 2022. But the R&D program that I'm very excited about is the development of a new ultrasound-guided implant toolkit that we call BATWIRE. We believe Batwire could potentially expand our addressable patient population by allowing the inclusion of more frail patients. In addition, as a result of this simplified implantation process, we believe more physicians, including electrophysiologists, would be comfortable implanting barostimneo. In June 2021, the first clinical procedure using Batwire was performed here in the U.S., Regarding our third growth lever, the expansion of the clinical body of evidence, we have the post-market study of BEAT-HF. This is a randomized controlled study designed to demonstrate the mortality and morbidity benefit of barostem in the HF-REF patient population. The post-market study has been completely enrolled and has entered the follow-up phase, which allows for the accrual of mortality and morbidity events. We expect to accrue all the events needed for the final analysis by the end of 2022 and unblinded data in early 2023. Finally, regarding the long-term growth lever expanding into new indications, we have received breakthrough designations by FDA for two additional indications, resistant hypertension and heart failure with preserved ejection fraction, or HFPEF. Our focus in the short term is to grow our penetration in HF-REF before we begin our clinical efforts in expanding to new indications such as resistant hypertension or HF-PEF or exploring any potential clinical benefits for arrhythmia or chronic kidney disease. We are incredibly excited about what we have been able to accomplish as an organization over the years. We recognize that our journey has not been a straight line. But the organization and more importantly, our team has shown exceptional resilience to reach this point. It is still early in our U.S. heart failure commercialization efforts, but we are encouraged by our progress during the first half of 2021. We have put a tremendous foundation in place that we believe will allow us to help bring relief to a huge population of heart failure patients who have not had a device-based treatment option before. And now I would like to turn the call over to Jared for a financial review.