Pulmonx Corporation

Good day. Thank you for standing by. Welcome to Pulmonic's third quarter 2021 earnings conference call. At this time, all participants' lines are in a listen-only 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 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Mr. Brian Johnston. Thank you. Please go ahead, sir.

Thanks, Operator. Good afternoon, and thank you all for participating in today's call. Joining me from Pulmonix are Glenn French, President and Chief Executive Officer, and Derek Sung, Chief Financial Officer. Earlier today, Pulmonix released financial results for the quarter ended September 30th, 2021. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. All forward-looking statements, including without limitation, those relating to our operating trends and future financial performance, the impact of COVID-19 on our business and prospects for recovery, expense management, expectations for hiring, growth in our organization, market opportunity, guidance for revenue, gross margin, and operating expenses, commercial expansion, and product pipeline development are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the risk factors section of our public filings with the Securities and Exchange Commission, including the quarterly report on Form 10-Q filed with the SEC on August 10th, 2021. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, November 2nd, 2021. Belmonix Corporation disclaims any intention or obligation except as required by law to update or revise any financial projections or forward-looking statements whether because of new information, future events, or otherwise. And with that, I'll turn the call over to Glenn.

Thanks, Brian. Good afternoon, everyone, and welcome to our third quarter 2021 earnings call. Here with me today is Derek Sung, our Chief Financial Officer. The third quarter of 2021 proved to be yet another demonstration of the resilience of our business as we navigated the unpredictable course of the pandemic. Despite significant and unexpected headwinds from the Delta variant, We generated $13.3 million in worldwide sales in the third quarter, our highest revenue results to date and another consecutive quarter of record sales. Our strong results were driven by accelerating performance in regions less impacted by COVID, highlighting the strong underlying demand for our Zephyr Valve procedure. In the United States, despite experiencing significant impact from the Delta variant, we were still able to grow third quarter sales sequentially over second quarter and set a new high of $6.9 million of U.S. revenue. We saw strong acceleration of Zephyr procedures in areas that were less affected by COVID, such as the Northeast and the Midwest. This contrasted with sales deceleration of similar magnitude in regions hard hit by COVID, such as the South, where we experienced prolonged procedure delays due to hospital capacity constraints. Outside the U.S., sales were strong in Europe as hospitals reopened to procedures with COVID cases receding across the quarter. Though procedure volumes were geographically mixed, we saw clear evidence of the growing demand amongst patients and physicians for our Zephyr Valve treatment. In the US, we added 18 new treating centers, an indication of the continued desire for new hospitals across the United States to bring our life-changing treatment to their patients. We now have a total of 198 treating centers in the U.S. and expect to easily surpass our target of establishing at least 200 Zephyr Valve Treating Centers in the U.S. by year end. We also saw continued patient interest in the procedure with sustained momentum in Stratix volumes across all our geographies and an increase of both patient calls directly into our US treatment centers and patient engagement via our website and social media channels. In terms of milestones, I'm pleased to say that this demand and growing awareness of Zephyr valves has translated into the treatment of over 25,000 patients worldwide. We've also cultivated a social media community of over 125,000 followers worldwide, enabling patients to share stories and experience of how Zephyr valves have transformed their lives. Turning to our commercial expansion plans, we have completed our planned Salesforce expansion for the year with 54 total territories now active across the U.S. and 34 active international sales territories. We expect to continue to expand our commercial team throughout next year and will provide greater detail on these plans during our next quarterly call. On the reimbursement front, we extended our string of policy wins with a major positive coverage decision from Anthem Blue Cross Blue Shield, the largest family of Blue Cross Blue Shield plans covering 34 million lives across multiple states. We also secured wins with Blue Cross Blue Shield of Michigan and Horizon Blue Cross Blue Shield of New Jersey, which together cover an additional 10 million lives. These policy wins continue to validate the clinical acceptance of our technology and reduce the prior authorization time for patients waiting to receive our Zephyr Valve treatment. Furthermore, outside the US, national treatment guidance documents in China, Spain, and Denmark were updated to recommend our procedure for patients with severe emphysema. These recommendations together with those already in place in the UK, Germany, and France will support our efforts to penetrate these markets further. Finally, our longer-term growth initiatives remain on track. We remain excited about AeroSeal, the solution that we are developing to treat severe emphysema patients who are not currently eligible for Zephyr valves due to collateral ventilation. Enrollment in our multicenter international clinical trial studying the use of AeroSeal to convert patients with collateral ventilation into Zephyr valve eligible patients has picked up as the impact of COVID on our European trial sites has waned. In addition, our efforts to introduce Zephyr valves into Japan continues to progress, and we expect to submit our application for regulatory approval to the Japanese authorities before the end of this year. All told, we remain confident in both the near and long-term prospects of our business, despite both the lingering impact of COVID and indications of increasing hospital staffing challenges. As we look ahead, we maintain our strong conviction in the underlying demand for Zephyr valves and believe we are building the foundation necessary to deliver sustained growth in the years ahead. With that, I will now turn the call over to Derek to provide a more detailed review of our third quarter results.