Inari Medical, Inc.

Good day and thank you for standing by. Welcome to the NARES fourth quarter 2021 earnings conference call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during a session, you need to press star one on your telephone. Please be advised that today's conference is being recorded. And if you require any further assistance, please press star zero. I would like to hand the conference over to speaker today, Caroline Corner, Investor Relations. Please go ahead.

Thank you, Operator. Welcome to ANARI's fourth 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 ANARI operates, trends and expectations for ANARI's products and technology, trends and demands for Inari's products, Inari's expected financial performance, expenses, and positions 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 four looking statements. Please review Inari's most recent filings with the SEC, particularly the risk factors described in Inari's annual report on the Form 10-K for the year ended December 31, 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 fourth quarter and full year 2021 results is available on Inari's website. www.anarimedical.com, under the Investor section, and includes additional details about Anari's financial results. Anari's website also has the latest SEC filings, which you are encouraged to review. A recording of today's call will be available on Anari's website by 5 p.m. Pacific time today. Now I'd like to turn the call over to Bill for his comments on fourth quarter 2021 business highlights.

Thank you, Caroline, and thank you, everyone, for joining us today. We delivered a productive and successful fourth quarter. As some of you saw in our pre-announcement last month, we again treated a record number of patients and grew revenue aggressively. We executed our plan and made progress on all of our growth drivers. We'll share some detail about all of this shortly, but we'd like to start now, as we always do, with a patient story to remind you of our mission and illustrate the impact our products and our people have on the lives of our patients and those who care about them. Early last month, a 52-year-old man presented to the emergency department of a small hospital in rural North Carolina after fainting at his home. He had been suffering from shortness of breath that began 10 days earlier, just after ankle surgery. Imaging revealed large blood clots in both his left and right pulmonary arteries. While syncope, or fainting, has many non-significant causes, it is an especially dangerous finding when caused by pulmonary embolisms. The treating physicians recognized the high-risk nature of this man's PE and immediately arranged for him to be life-flighted to a center with significant experience in treating PE. Within one hour of arrival, physicians used flow treater to extract multiple large blood clots from his lungs. After about the second or third whoosh, the patient asked, what did you do to me? I can breathe. The physician then used flow saver to return extracted blood to the patient, which allowed him to whoosh again and again a total of 10 times until he had extracted all of the clots. The patient recovered quickly and uneventfully and was discharged from the hospital the very next day. He never received expensive and dangerous thrombolytic drugs and he was never admitted to the ICU. High risk or massive PE carries a mortality rate of up to 50% while residual clot or clot that remains in the lungs conveys high rates of morbidity over time for patients who do survive. This patient is very much alive, of course, and because the physician was able to whoosh without concern for blood loss because of Flow Saver, he has no residual clot to cause devastating long-term complications. The life of this man, just 52 years old, and all who care about him, is changed in extraordinary ways. We are thankful always for the privilege to serve our patients in this way and to pursue this mission, which remains so much more important to us than just business. This case also illustrates the value our devices carry for hospitals, both in this time of significant resource strain and, we believe, well beyond. The patient was treated with a simple, fast procedure in the cath lab, and despite being sick enough to warrant life flight to the treating center, he was discharged from the hospital the very next day without ever having been in the ICU. I'd like now to turn to our Q4 financial performance. Our revenue in Q4 was $83.2 million, up $34.6 million, or 71% from the same quarter last year, and up $10.3 million, or 14%, from Q3. Procedure growth was also strong. Our physician customers performed approximately 7,700 procedures, including a modest number of cases from Europe. This procedure count is up from 6,700 procedures, or about 15% from Q3. Our revenue in 2021 was $277 million, $137.3 million or 98% from the prior year. Our physician customers performed approximately 25,700 procedures in 2021, up 95% from 13,200 procedures in 2020. Just a few thoughts now about the impact of COVID on our procedures in Q4 and our plan forward. We believe that COVID associated procedures represented about 10% of all total procedure volume, down slightly from Q3. We are especially encouraged that more than 90% of both total procedures and sequential procedure growth came from treating non-COVID patients. Regardless of future COVID surges, we are confident we will continue to successfully penetrate our core TAM, and this will serve as the foundation for our continued growth. I'd like now to share with you the recent progress we've made on all of our growth drivers. Our first growth driver is the expansion of our sales organization. The size of our core TAM is large, and despite our commercial success, our penetration remains low. In fact, we have some important updates here. Our existing market size estimates date back to data sets as far back as 2016. Over the past several months, we completed a rigorous, bottoms-up assessment of the total addressable markets in the US for both PE and DBT. This work included input from an outside consultancy, triangulation across multiple updated third-party claims data sources, and updates to the underlying incidence growth rates. Based upon this work, we believe these markets to be meaningfully larger than we've communicated in the past. We now believe the total annual incidence of patients diagnosed with intermediate to high-risk PE in the U.S., using the same definition we've always used, is 280,000 patients compared to our previous TAM estimate of 200,000 patients. We now believe the total annual incidence of patients diagnosed with iliofemoral DVT, again using the same historical definition, is 430,000 patients, up from 262,000 patients in our previous DVT estimates. Combined, this represents 710,000 total addressable VTE patients in the U.S., and with our historical average selling price, the total new TAM is $5.8 billion. This is 53% larger than our previous TAM estimate of $3.8 billion. Based on these new TAM estimates, we believe in 2021, only about 4% of all the patients who could benefit from our devices were actually treated. In addition to better understanding our TAMs, we completed similar work to understand the total number of hospitals with cath labs and interventional suites. We now believe there are over 2,000 hospitals that could potentially perform our procedures. The bottom line is our markets are even larger than we thought and we remain very early in the stages of penetrating these markets. All of this serves to underscore the need for a larger sales organization. We ended 2021 with just over 200 territories, slightly above the range to which we guided earlier in the year. We expect to add territories in 2022 at roughly the same cadence we've demonstrated in the past and finish the year with at least 275 territories. We continue to believe that our sales organization, when fully built out, will be the largest in the peripheral space. Our second growth driver is building awareness and driving deeper adoption at existing hospital customers. Most VTE patients continue to be treated with anticoagulation alone and, in fact, a large percentage of these patients never even see a physician who is a VTE expert. We continue to drive awareness of the benefits of NRE procedures with non-interventional physicians and we continue to work with hospital administrators to install more systematic processes to consistently identify and triage VTE patients to the physicians who best understand the disease state. We are supporting these efforts by building centralized capabilities our field team can leverage, including a health economics and market access team, a national accounts team, and the Inari Solutions Group, a team of former hospital administrators who can share best practices on disease state program building. These efforts, which we have designated our VTE Excellence Program, are yielding encouraging results. For example, at least 50 centers now have installed VTE coordinators, and we believe a significant percentage of our total procedures and growth are a direct result of our VTE Excellence efforts. Our third growth driver is to build upon our base of clinical evidence. We have several important updates here as well. First, we recently enrolled the 500th and final patient into our CLOUT program. Allcomer DVT registry. Both safety and efficacy results have been best in class in the earlier data cuts, and we expect to see similarly excellent results when the full patient cohort of CLOUD is presented later this year. Moving to PE, we enrolled the 800th patient into our FLASH Allcomer PE registry. This completes the enrollment of the US arm of the registry. FLASH was already the largest ever prospective interventional data set in the field of PE, and this latest milestone serves only to widen that gap. We will share data from the complete U.S. patient cohort when it is presented later this year. Finally, we are pleased to share that we have enrolled our first patient into the Peerless randomized control trial. Peerless is a 550-patient study designed to show superiority of FlowTriever compared to catheter-directed thrombolysis for intermediate high-risk patients. PE patients. We will provide updates on enrollment from time to time going forward. We believe that the high quality, large volume, and consistent cadence of clinical evidence we are producing continues to raise the bar for both existing and future competitors in the VTE space. Our fourth growth driver is to expand our product portfolio. Exciting developments here as well. First, we completed our limited market release on PlotTrieber Bold and have moved to full market release BOLD is a more aggressive version of our original clot-treater device. We believe BOLD removes even more clot with fewer passes, making cases faster and more efficient. We expect BOLD to replace the original clot-treater device in many acute, subacute, and chronic clot cases. We are excited also about the potential for BOLD to treat long-term DVT patients who may be suffering from a horrendous complication called post-thrombotic syndrome, or PTS. These patients have limited and poor options and Bold may open a large new market. Next, just a quick update on FlowSaver. FlowSaver is enabling physicians to whoosh as many times as necessary without concern for blood loss to remove all of the clots, as described in the patient story earlier. FlowSaver has been used in over 6,500 procedures since full market release in Q3, and is now used in more than 80% of all flow treatment procedures. We believe that nearly bloodless thrombectomy is both important for patients and not easily replicated by competitors. Beyond bold and flow saver, our product pipeline is robust, and you can expect several additional product clearances and launches later this year. Our last growth driver is expansion into international markets. Despite a challenging operating environment, we have now successfully established a commercial presence across all major European markets. We continue to see steady increases in our monthly case volumes, and since launching in early 2021, we have successfully treated several hundred patients. We are also executing on the longer-term clinical and reimbursement strategies we will need in order to grow rapidly in these markets. We recently gained approval, for example, for an NUB in Germany for FlowTriever. This provides a pathway for hospitals to seek enhanced reimbursement for a specific new medical technology. We are making progress in other international markets as well. We recently hired dedicated general managers in both the Latin America and Asia Pacific regions and completed cases in both regions in Chile and Singapore specifically. We are making progress also on the longer term projects we have underway to gain approval in both Japan and China. We remain highly optimistic about the longer term potential of our international business, but it will not contribute materially in 2022. In summary, Our markets are large. The unmet patient needs are spectacular. Our growth drivers have never been more compelling, and our resources are great. We sense as much responsibility as we do opportunity, and we are going to invest even more aggressively to do better for these patients, to access these markets, and to grow rapidly. We could not be more excited about our prospects moving forward. We love every second of this work, and we appreciate your support as we pursue this mission. With that, I'd like to turn things over to Mitch.