Silk Road Medical, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Silk Road Medical's 2020 Fourth Quarter Earnings Call. At this time, all participants 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. Please be advised that today's conference call is being recorded. And if you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Ms. Caroline Paul of Investor Relations. Thank you. Please go ahead, Madame.

Thank you, and thank you all for participating in today's call. Joining me are Erica Rogers, Chief Executive Officer, and Lucas Buchanan, Chief Financial Officer and Chief Operating Officer. Earlier today, Silk Road Medical released financial results for the full year ended December 31st, 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, physician training and adoption, growth in our organization and reimbursement, market opportunity, commercial and international expansion, label expansion, and product and 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 quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November 16, 2020. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, March 1st, 2021. Silk Road Medical 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 will turn the call over to Erica.

Thanks, Caroline. Good afternoon, and thank you for joining our fourth quarter year and year-end 2020 earnings call. Joining me is Lucas Buchanan, our Chief Financial Officer and Chief Operating Officer. While 2020 was marked by unprecedented challenges, we would prefer to reflect on the strength and tenacity of our team here at Silk Road Medical and the accomplishments that have paved the way for growth in 2021 and beyond. Throughout the year, we continued our momentum in the United States, expanding our sales team, training new physicians in innovative ways, and meaningfully moving physicians up their adoption curve. These efforts were reinforced by tremendous strides in published clinical evidence, with over 7,000 TCAR procedures' worth of data in peer-reviewed publications. Exiting 2020, physicians performed more than 26,500 TCAR procedures worldwide, with over 10,000 in 2020 alone. We also made meaningful progress on multiple long-term growth and market-expanding initiatives. As part of these endeavors, we recently submitted our PMA supplement for the en route transcarotid stent system, intended to expand indications for use to include the treatment of patients at standard risk for adverse events from carotid endarterectomy. In other words, standard surgical risk. Coming into this year, we are well positioned with a solid commercial, clinical, and financial foundation to focus on the opportunities within our $5 billion addressable market. Turning now to our Q4 results. As we indicated in January, we entered the fourth quarter of 2020 aware of the potential for a resurgence in the pandemic, and that came to bear in the latter part of the quarter. With hospital resources pressured, specifically staff labor and ICU beds, we started to see constraints on elective procedures. That said, for patients with severe carotid artery disease, stroke prevention can only be delayed so long. All in, this translated into solid fourth quarter results in spite of the worsening environment. 2020 revenues were $75 million, up 19% year-over-year, with fourth quarter results of $21 million and year-over-year growth of 13%. Through the year, we expanded our active sales territories from 33 to 40 by year-end and began the first quarter of 2021 with 43 territories. Despite the significant dip in physician training efforts in the second quarter, we were able to train over 350 new physicians in 2020 to reach approximately 1,800 total physicians trained. We also expanded our hospital account base from roughly 640 in the beginning of the year to just over 800 by year end. As a result of our commercial efforts, our growing physician base performed just shy of 2,900 procedures in the fourth quarter and over 10,000 TCAR procedures for the full year. Over the course of 2021, we expect to see continued momentum as the healthcare operating environment normalizes. The key factors governing a return to normal growth are, of course, hospital resources and patient behavior. These are in turn impacted by the pace of virus transmission, the impact of variants, and vaccination efforts. We're cautiously optimistic that normalization will begin in the second quarter, although there are clearly several unknowns. With these caveats in mind, our expectation is for 2021 revenues to be in the range of $102 to $108 million. As we usher in the trans-carotid era, We continue to be focused on U.S. commercial execution with an increasing bias towards driving deeper adoption within our trained physician base. As always, this entails a relentless focus on patient outcomes as we seek to push TCAR towards the standard of care. Over the past five years, we have meticulously built the market's only dedicated carotid commercial infrastructure. amassed an enviable clinical evidence base, and trained a large cohort of physicians. We look forward to leveraging this collective infrastructure as we exit 2020 with just 6% penetration into the estimated U.S. treated patient population and only 2% of the annual diagnosed population. As such, our top two strategic priorities for 2021 are, number one, Continue to focus on U.S. commercial execution and driving the adoption curve. And number two, preparation for a potential standard surgical risk label expansion for the en route stent. At the same time, we are also investing in our long-term growth drivers, which encompass new indications, new products, new therapies, including acute ischemic stroke and international expansion. With respect to our first priority, 2021 marks the third year in a row with U.S. commercial execution as our number one priority, and this is unlikely to change for years to come. We have proven that we can compete and win where so many others have failed in the past against what is now an almost 70-year-old standard of care in carotid endarterectomy. In fact, In a study just published in JAMA Network Open, the authors found the availability of TCAR in a hospital is associated with a significant decrease in the likelihood of major adverse cardiovascular events at 30 days after carotid revascularization, whether TCAR or carotid endarterectomy. In other words, having a less invasive option like TCAR allows for better patient care. Regarding our opportunity to continue moving physicians up the adoption curve, over half of the physicians we've trained through 2020 were trained within the prior eight quarters. As of the fourth quarter of 2020, when we normalize time from training and we look at our top quartile, We are moving physicians from about 1.4 procedures per quarter up to 5.2. We are encouraged by the meaningful progress we have made over a short period of time, and the future is very bright as we look to leverage the foundation we have built. We remain the only TCAR company in the market as we execute towards this Blue Ocean multibillion-dollar opportunity. With respect to our second priority, We've been focused on architecting a regulatory strategy around the standard surgical risk patient population and ensuring we meet the needs of key stakeholders. While there is still plenty of opportunity within the high surgical risk market, we have previously discussed our desire to unlock the remaining one-third of the currently treated U.S. patient population. After careful consideration with key constituents, we are pleased to have recently submitted our PMA supplement for the en route stent intended to expand our indications for use to the standard surgical risk patient population. This is an important first step on our journey to address the full patient population with severe carotid artery disease. From physician training to commercialization efforts to a likely post-market study if the PMA supplement is approved, we will be prepared. to enter an era where TCAR is on an even playing field with carotid endarterectomy in terms of an addressable patient population. With our two top priorities in mind, we enter 2021 with a desire to further accelerate investment in our commercial organization. Going forward, we expect to shift more of our hiring emphasis towards new sales professionals or area managers, who will continue to leverage our strong base of therapy development specialists. In a few moments, Lucas will share more details on our commercial strategies designed to best serve the ongoing interest in TCAR. Turning now to our other long-term growth drivers. With respect to markets outside the U.S., we recently highlighted a conservative international market opportunity of $2.3 billion. which together with the $2.8 billion U.S. market derives a global opportunity of over $5 billion. To put that in perspective, the U.S. is only 10% of the global stroke burden. International expansion remains on the horizon as we make regulatory progress in geographies such as China and Japan, and as we evaluate go-to-market strategies. We are excited about the opportunity to bring TCAR to other corners of the globe where there is both awareness and demand in the physician community. Regarding further development of our pipeline, we remain committed to expanding our proprietary trans-carotid technologies, most notably to address the neurovascular market segment, where we see opportunity for improved clinical outcomes. We are pleased with the progress we are making in acute ischemic stroke and other areas, and we look forward to sharing more details in the future. Finally, we would like to provide a brief update on our voluntary recall of certain lots of our en route transcarotid stent systems, which are manufactured by our partner, Cordis. As we discussed previously, our team reacted swiftly to mitigate risk by recalling the impacted units and launching a comprehensive investigation, and testing effort to identify the root cause. At this point, there have been no reported strokes, deaths, or long-term patient sequelae associated with these units, and we have not received any new complaints related to this issue. Cordis is ramping up its production to replenish our inventories. So, in summary, we remain focused and excited about our potential to drive the UST car market forward as the sole player while we continue to progress our other long-term growth initiatives. With that, I will now turn the call over to Lucas Buchanan, our Chief Financial Officer and Chief Operating Officer.