Inari Medical, Inc.

Good day, ladies and gentlemen, and welcome to the Inari Medical, Inc. First Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. At the end of the company's prepared remarks, we will conduct a question-and-answer session. As a reminder, this call is being recorded and will be available on the company's website for replay shortly. I would now like to turn the conference over to John Hsu, VP, Investor Relations. Please go ahead.

Thank you, operator. Welcome to Inari's conference call to discuss our first quarter 2024 financial performance. Joining me on today's call are Drew Hikes, President and Chief Executive Officer, and Mitch Hill, Chief Financial Officer. This call includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements, including statements related to INARI's estimated full-year 2024 revenue, operating loss, or profitability expectations, and the expected operating performance and potential strategic benefits of LINFLO. These statements are based on INARI's current expectations, forecasts, and assumptions, which are subject to inherent uncertainties, risks, and assumptions that are difficult to predict. Actual outcomes and results could differ materially from any results performance or achievements expressed or implied by the forward-looking statements due to several factors. Please review INARI's most recent filings with the SEC, particularly the risk factors described in our latest Form 10-K 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. On today's call, we will refer to both GAAP and non-GAAP financial measures in announcing our Q1 2024 results. Please refer to today's press release for reconciliation of the non-GAAP measure discussed on this call and referred to in the press release. The press release and slides accompanying this call are available on our website at inarimedical.com. A recording of today's call will be available on our website by 5 p.m. Pacific time today. With that, I'll turn the call over to Drew.

Thank you, John, and thank you all for joining our call today. We're pleased with our performance in the first quarter, achieving record revenue of more than $143 million, reflecting over 23% growth. Our performance was driven by consistent, crisp execution and strong contributions across the Inari portfolio. I would like to thank the team for driving strong adoption of our market-leading PE and DBT therapies, executing on our plans to diversify into sizable new patient populations, and continuing to expand internationally. In addition to strong top line growth, we continue to make progress on our path to profitability, and we are reaffirming our expectations to reach sustained operating profitability in the first half of 2025. As we look ahead, we are as committed as ever to the strategic objectives that support our continued strong growth. These objectives reflect the ethos and goals that have long been core to Inari's culture and have guided our commercial and operational progress. Our first objective is to continue to scale the adoption of our highly differentiated, purpose-built toolkits across large, attractive markets. This year, this includes our plans to drive deeper adoption within our existing U.S. account base via our VT Excellence Initiative, gain access to new accounts across our emerging therapies portfolio, and expand internationally, including commercially, into Japan and China. In addition, we remain committed to ongoing portfolio expansion to address unmet patient needs in venous and other diseases. These initiatives have yielded strong growth, as reflected by the rapid adoption in our emerging therapies portfolio in the first quarter. This early success follows years of purposeful investments. We are encouraged by the progress we are seeing across emerging therapies and see huge opportunities to continue to drive meaningful growth. As always, our innovation strategy is to target unmet patient needs with purpose-built tools, and in conjunction with that, to protect our leadership by leveraging our strong and comprehensive IP portfolio. Next, we'll continue to lead the way with high-quality, market-impacting clinical data. To that end, we remain on track to showcase our peerless data in the second half of the year. As a reminder, peerless is the first of our three RCTs, and we recently completed the 550 patient enrollment. The study will evaluate patient outcomes using our FlowTriber device as compared to catheter-directed thrombolysis. Peerless will generate high-quality clinical evidence that will move the field forward and further establish FlowTriber as the optimal interventional therapy for intermediate-risk PE patients. Meanwhile, enrollment is progressing well in our two other RCTs, Peerless 2, comparing FlowTriever to anticoagulation alone, and Defiance, comparing ClotTriever to anticoagulation alone. Our registry data also continues to move the field forward. Last month, Dr. David Dexter presented interim two-year follow-up data from the Clout Registry, the largest prospective multi-center data set generated since the ATTRACT trial. These results confirm the excellent safety, low rethrombosis, and effectiveness of the clot-truber system for the treatment of DVT. In fact, in the long-term follow-up from clout, patients treated with clot-truber demonstrated a significant and sustained improvement in post-thrombotic syndrome at rates that were one-third to one-half those seen in historical DVT studies. We continue to believe high-quality clinical evidence is critical to maintaining and expanding our leadership position and growing the markets. Indeed, the robust underlying market growth in VTE today is in large part due to the data Inari has already generated and the commitment we have made to developing this market. Our next strategic priority is to continue to leverage our powerful commercial engine. The size, quality, and expertise of our team are meaningful differentiators for our business. We have the largest VTE-focused sales force in the industry, and we'll continue to hire reps and split territories at a measured pace to support our growth. Today, this team is driving VT Excellence initiatives to increase the use of our solutions within existing accounts. We're also having growing success engaging hospital administrators at the IDN level to facilitate the adoption of VT Excellence across multiple hospitals within their network from a top-down perspective. Taken together, our efforts are yielding great results. As an example, in some of our most advanced accounts, we are now seeing TAM penetration rates above 50%. This is a testament to the fact that our VT Excellence Program is working to catalyze positive adoption patterns. But much work and opportunity remains. Over time, we are confident this team of experienced professionals can continue to move the needle from our current high single-digit TAM penetration to strong double-digit penetration and beyond. With the benefit of high-quality data and updated guidelines, we believe mechanical thrombectomy for VTE will ultimately exceed the TAM penetration rate seen today in acute ischemic stroke and could one day approach the TAM penetration of PCI for the treatment of STEMI. We aim to accomplish these strategic objectives while delivering a premium financial profile characterized by strong, durable growth, best-in-class gross margins, and increasing operating leverage. We know that the strength of our financial profile is founded, first and foremost, on the success of our three growth pillars, our VTE franchise, emerging therapies franchise, and our international business. We're market leaders in a $6 billion town for venous thromboembolism technologies in the U.S., and we're continuing to drive adoption within this substantial, underpenetrated opportunity. In Q1, our global VTE revenue was $137 million. up 20% versus the prior year, supported by our ongoing commercial expansion, market development, and evidence generation efforts. We continue to see strong underlying growth in USVT procedures and expect that this market, defined as mechanical thrombectomy alone, can and will continue to grow in the neighborhood of 20%. From a market position standpoint, although we anticipate continued competitive activity in this large and high growth market, we remain highly confident in maintaining our leadership position and continuing to deliver robust VTE growth. All of this is factored into our guidance, which you'll hear from Mitch later on. Turning to our global emerging therapies business, in Q1, emerging therapies revenue was $6 million, up 185% versus the prior year. This segment consists of four distinct patient populations outside of VTE, together comprising a $4 billion TAM in the U.S. alone. In chronic venous disease, RevCore continues to perform well, the first mechanical thrombectomy device to treat venous-dense thrombosis. We're also excited to be executing the limited market release of VenaCore, our second purpose-built tool within the CBD toolkit, which will unlock another portion of this significant TAM. We hope to bring this technology fully to market in the second half of the year, and we'll have more to share then. As a reminder, we believe the addressable market for CBD includes an annual incidence of approximately 100,000 patients, representing a $1 billion U.S. TAM alongside a substantial prevalence pool. Turning to CLTI, we have made great progress integrating the Limflow business into Inari and driving the early U.S. launch. Limflow offers new hope and new options to the 55,000 patients per year suffering from no-option CLTI. translating into a $1.5 billion U.S. TAM. We're highly encouraged by the progress we have made to date in accessing this patient population. For Limflow, we continue to view 2024 as a year of foundation building and remain focused on physician training, VAC approvals, thoughtful patient selection, and deliberate wound care follow-up. We are successfully navigating VAC approvals today, and we have completed an initial and growing series of commercial cases. We're seeing good traction and enthusiasm from physicians and have already completed our first two commercial training programs. In addition, we're pleased to highlight that earlier this month, CMS proposed a new technology add-on payment, or NTAP, for lymph flow, as we had anticipated. The proposed NTAP would add up to an incremental $16,000 to the hospital's existing DRG. We expect to see a final ruling from CMS later this year. The third market addressable by our emerging therapies portfolio is acute limb ischemia, a $600 million U.S. TAM characterized by tremendous unmet needs and a lack of purpose-built tools. We remain on track to initiate a limited market release and commercialize our second-generation Arctic system later in 2024. In our fourth and final emerging therapies market, InThrill for the treatment of AV fistula clot continues to effectively address unmet needs in this large and underserved patient population. We're working on a second-generation InThrill platform and look forward to bring it to market next year. Finally, I would like to discuss our international progress. Q1 was a very strong quarter internationally with revenue of $9.5 million, up 120% versus the prior year. Growth in Q1 also reflected the largest sequential dollar increase we've ever had in international. Strength was primarily driven by adoption of our solutions in Europe, but we also saw strong performance across Latin America, Canada, and Asia Pacific. We're pleased to see the investments we have made over the past several years in establishing our international business begin to translate into meaningful commercial traction in these markets. Although international still represents a relatively small part of our overall patient impact, we continue to expect international sales will count for at least 20% of revenue over time. Before I turn the line to Mitch, I'd like to share, as always, a story about the incredible impact of our technology on patients. Last month, a 29-year-old postpartum woman was just one day post-op for an emergency C-section at a university hospital in Germany. Due to severe hemodynamic instability, this young mother was put on ECMO, scanned, and diagnosed with a pulmonary embolism. Thankfully, the physicians at this hospital were well-trained to utilize FlowTriever and the entire Supporting Inari toolkit. Ultimately, her physician team utilized four of our devices, Entry24, T20 Curve, FT2, and FlowStasis to rapidly and effectively treat her condition. The immediate result was substantial clot removal, and the return to a normal heart rate. After several days of further improvement, this patient was discharged to her family and newborn baby and made a full recovery. She is just one of the many thousands of European patients whom we have been able to serve with our technology in the three years since we introduced our toolkits to the region. We're honored to help such patients return to their families. Such patient stories motivate us to continue our efforts to offer Inari products throughout the world. In closing, We're pleased with our Q1 performance and confident in our outlook into the remainder of 2024 and beyond. We often say that we are just getting started at Inari, and despite being several years into our commercial journey, this remains more true today than ever. With that, I will turn the call over to Mitch.