Inari Medical, Inc.

Good day, ladies and gentlemen, and welcome to Inari Medical, Inc., third quarter 2021 earnings conference call. At this time, all participant lines are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will be given at that time. To ask a question, you will need to press star, then one on your telephone. As a reminder, this call is being recorded. If anyone should require operator assistance, please press star, then zero. I would now like to hand the conference over to your host today, Caroline Corner of Westwick. Please go ahead.

Thank you, Operator. Welcome to ANARI's third quarter 2021 earnings call. Joining me on today's call are Bill Hoffman, President and Chief Executive Officer, and Mitch Hill, Chief Financial Officer. This call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding the markets in which Inari operates, trends and expectations for Inari's products and technology, trends and demands for Inari's products, Inari's expected financial performance, expenses, and position in the market, and the impact of COVID-19 on Inari's operations and Inari's customers' operations. These statements are neither promises nor guarantees and involve known and unknown risks and uncertainties that could cause actual results, performance, or achievements to differ materially from any results, performance, or achievements expressed or implied by the forward-looking statements. Please review ANARI's most recent filings with the SEC, particularly the risk factors described in ANARI's annual report on Form 10-K and in ANARI's quarterly report on Form 10-Q for the third quarter ended September 30, 2021, for additional information. Any forward-looking statements provided during this call, including projections for future performance, are based on management's expectations as of today. Inari undertakes no obligation to update these statements except as required by applicable law. Inari's press release with the third quarter 2021 results is available on Inari's website, www.inarimedical.com, under the Investors section, and includes additional details about Inari's financial results. Inari's website also has the latest SEC filings, which you are encouraged to review. A recording of today's call will be available on the NRE's website by 5 p.m. Pacific time today. Now I'd like to turn the call over to Bill for his comments on third quarter 2021 business highlights.

Thank you, Caroline, and thank you, everyone, for joining us today. Our third quarter was productive and successful, and we again treated a record number of patients. Our execution remains crisp in all parts of our business, and we continue to make significant progress on all five of our growth drivers. We are excited to share additional detail about our performance, but we would like to begin as usual with a patient story that might remind you of the wonderful impact our products and our people have on the lives of our patients. A couple of months ago, at the peak of the most recent COVID surge in Houston, Texas, one of the hardest hit regions in the U.S., a young woman presented to the emergency department of a hospital near her home with shortness of breath and chest pain. She was three weeks postpartum and so fatigued that she was struggling to take care of her newborn. Imaging tests revealed large blood clots in both her left and right lungs. The hospital was full of COVID patients and had no ICU beds available. Thrombolytic therapy, which necessitates an ICU stay, was the only treatment available, so this patient could not be treated. She was sent home that evening on oral anticoagulants, which reduce the risk of developing new clots, but do not eliminate existing clots. The following day, with worsening symptoms and now unable to climb the stairs to attend for her crying baby, she called an ambulance, which took her to a different hospital. This hospital was equally overwhelmed with COVID patients and also had no ICU beds. This hospital had been using Inari devices for more than a year. Inari procedures do not require an ICU stay. Within just one hour of her arrival at the hospital, the physician had already removed the entire clot burden from both lungs using flow treatments. Her symptoms resolved, her vital signs returned to normal, and she was moved to a regular hospital bed. And in less than two days, she was home with her new baby. The profound effect on the life of this young mom is perhaps as obvious as it is beautiful, as is the change in the trajectory of the life of her baby. Although we learn of these patient outcomes and stories like this on an almost daily basis now, we remain mindful of their impact. We are thankful always. the opportunity to pursue this mission and our life's work. This story highlights just some of the reasons we continue to perform well in perhaps the most challenging operating environment of our lifetime. And our procedures are safe, effective, fast, easy to perform, and require limited hospital resource. This is even more important in the current environment with significant shortages of staff, hospital beds, and ICU beds. While COVID might continue to wax and wane, we believe that these resource limitations will persist into 2022. We believe our clinical and economic value proposition will continue to resonate through and well beyond the pandemic. One final postscript to this story. The physician who treated this patient shared the story with his peers and the administrators of the hospital first visited by this patient. And I'm happy to report they now are also using SlowTreater. I'd like now to turn our attention to our Q3 financial performance. Our revenue in Q3 was $72.9 million, up $34.2 million or 88% from the same quarter last year, and up $9.4 million or 15% from Q2. Procedure growth was robust. Our physician customers performed approximately 6,700 procedures, including a modest number of cases from Europe. This procedure count is up from 5,900 or about 14%, from Q2. We believe that COVID associated procedures represented about 11% of the total volume of procedures, similar to the 12% of COVID associated procedures we saw during the previous surge in Q1. Growth in those patients whose VTE is not associated with COVID was 8%. Assuming we see the ongoing abatement of COVID, we anticipate a tempering of the number of COVID associated procedures during Q4. Regardless, We expect to drive robust procedure growth within our core TAM as we have demonstrated throughout this pandemic. Despite the continued questions about COVID and its impact on our business, we have made steady progress on all of our growth drivers, and we have grown in every single quarter since the pandemic began in Q1 of 2020. In fact, during the pandemic, we've completed over 30,000 procedures and nearly tripled our quarterly production of both cases and revenue. We added 500 new customer accounts, hired and trained over 100 new sales professionals, developed our VTE excellence program to drive deeper adoption, created and executed our Clot Warrior Academy online training and education platform, which has now reached over 4,500 customers. We enrolled over 800 patients into our Flash and Cloud registries, published over 100 studies in peer-reviewed journals, initiated our FLAME trial to prospectively study flow treatment for massive PE patients, and announced the peerless randomized controlled trial for intermediate risk PE patients. We drew seven new products, obtained an important new clinical indication to expand our TAM, and successfully launched all of our devices in Europe. And while it has not been our goal, we've accomplished all of this while maintaining positive cash flows from our operations. We believe all of this suggests that our technology has tremendous impact on patients. Our value proposition resonates broadly and consistently, and our team executes regardless of external circumstances. We remain focused on building our company for the long haul, and we believe we can and will continue to execute effectively and grow aggressively. I'd now like to share with you more specific and recent progress we continue to make on all five of our growth drivers. Our first growth driver is the expansion of our sales organization to target new hospitals and physicians. The size of our core TAM is large, as you know, and despite our continued growth, We believe that only about 6% of all patients in the U.S. who can and probably should benefit from our procedures were actually treated in Q3. Our efforts to penetrate this market will require a lot more sales professionals. Earlier this year, we shared with you that we are targeting 180 to 200 territories by the end of the year. We remain on track to comfortably land in the high end of this range. Our second growth driver is building awareness and driving deeper adoption at existing hospital customers. As you know, a high percentage of our target PE and DVT patient populations are currently treated with anticoagulation alone. Education and training of the non-interventional physicians who are often responsible for treatment decisions for these patients is important, and we continue to engage these physicians effectively. We are also working with administrators to establish systematic processes to identify and triage VTE patients consistently to the VTE experts. is to establish systems like those adopted for stroke and heart attack patients. Altogether, these efforts, which we have designated our VTE Excellence Program, are yielding encouraging results. More centers, for example, are establishing VTE coordinator positions every quarter, and penetration rates at targeted centers are climbing. We look forward to providing updates as we continue to execute the program. Our third growth driver is to build upon our base of clinical evidence. We again have a lot to share on this topic. Data from the first 500 patients enrolled into our FLASH registry were presented at the TCT conference last week. This study already represents the largest ever prospective interventional data set in the field of PE. The data confirmed the best-in-class safety profile of flow trigger system, impressive on-table clinical improvement, while the median ICU stay remains zero days. Perhaps more exciting, As we are now reporting patient data out to six months, we believe that treatment with FlowTriever fundamentally changes the natural course of this disease. All-cause mortality at all points of follow-up, as well as the rates of CTEF and CTED, which represent the terrible long-term consequences for survivors of this disease, are orders of magnitude better than those reported in the literature for PE patients treated with conservative medical management. In a separate study recently published in a high-impact peer-reviewed journal, Dr. Buckley and colleagues reported the first-ever comparison of PE patients treated with a thrombectomy device, the FlowTriever, to patients treated with anticoagulation analytics. The results are impressive. Patients treated with FlowTriever showed an 85% reduction in in-hospital mortality and a four-day reduction in ICU stay. Finally, we are pleased to report that a peerless randomized controlled trial comparing Flosraver to catheter-directed thrombolysis remains on schedule. The protocol is complete. Site selection is underway, and we expect first patient enrollment in Q1 of 2022. Our fourth growth driver is to expand our product portfolio. Exciting developments here as well. First, Flosaver has lived up to expectations. As a reminder, Flosaver is a device used to simply return blood aspirated during a flow saver procedure to the patient, allowing virtually bloodless thrombectomy. This is important because it enables the physician to whoosh as many times as necessary without concern for blood loss. Estimated blood loss per procedure, in fact, is down by 80%, even as the number of whooshes per procedure has increased by 33%. Adoption has been brisk. Flow saver has already been used in nearly 2,500 procedures. Bloodless thrombectomy It's highly valuable for physicians and patients, and it sets a high performance bar for both existing and future competitors. Next, we received FDA clearance for the clot-treater BOLD in October. The BOLD is a more aggressive clot-treater system which may allow us to treat older clots and more advanced DVT. In fact, it represents the first in a suite of products we will bring to market over time to treat patients with post-thrombotic syndrome, or PTS. PPS is a horrendous progressive condition that develops in about half of all untreated DVP patients and often results in venous leg ulcers. There are at least one million patients in the United States right now with venous leg ulcers, and PPS is the cause of about 60% of them. We'll have more to say about Clotriever Bold along with the remainder of our robust product pipeline over the coming quarters. Our fifth and final growth driver is expansion. into adjacent and international markets. The operating environment has stabilized across Europe, and we continue to make progress on launching this business. We have successfully established a commercial presence across all major European markets through a combination of direct teams and third party distribution partnerships. Enthusiasm and feedback from physicians remain highly positive, and we are seeing steady increases in our monthly case volumes. In addition to supporting and driving initial cases, We are also gaining clarity and executing on longer-term clinical and reimbursement strategies we will need to help build out our European franchise. Beyond Europe, we're making progress on regulatory paths in both Japan and China, although the approval timelines remain years away. We remain very optimistic about the longer-term potential for our international business, but we believe it will not materially contribute in the immediate term. Finally, I appreciate always the opportunity to close by reminding you that our work here is more important to us than just business. We are committed to a mission. We appreciate you believing along with us in extraordinary possibilities, and we appreciate your continued support. We are just getting started. We believe we can and will grow sustainably and aggressively for many years to come. With that, I'd like to turn things over to Mitch.