Silk Road Medical, Inc.

Good day, and thank you for standing by, and welcome to the Silk Road Medicals 2021 Second Quarter Earnings. At this time, all participants are in a listen-only mode. After the speaker's remarks, 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 is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Caroline Paul, Investor Relations. Please go ahead.

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 three months ended June 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, physician training and adoption, growth in our organization and reimbursement, market opportunity, commercial and international expansion, label 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 quarterly report on Form 10-Q filed with the Securities and Exchange Commission on May 10th 2021. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, July 29, 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.

Thank you, Caroline. Good afternoon and thank you all for joining our second quarter 2021 earnings call. Joining me today is Lucas Buchanan, our Chief Financial Officer and Chief Operating Officer. At Silk Road, we have set out to compete and win against invasive surgery and establish TCAR as the standard of care. We are back on offense and doing just that. The body of evidence supporting TCAR as a clinically proven, less invasive treatment option continues to expand, including for the first time into standard surgical risk patient population. Over the last year, we took significant procedural share from carotid endarterectomy, and we also became the number one share leader in both units and revenue for carotid stents by a significant margin. As we continue into the second half of 2021 and beyond, we are exceptionally well positioned to leverage our robust base of clinical evidence, proven TCAR efficiencies, trained physicians, and committed commercial organizations to drive TCAR adoption and advance our impact on the lives of patients at risk for stroke due to carotid artery disease. Our primary strategic objective in 2021 is U.S. commercial execution, and our second quarter performance resulted in roughly 3,650 TCAR procedures. Importantly, in each of our physician segments, our efforts aimed at increasing adoption are gaining traction. Procedures per physician were up 17% sequentially in the quarter, coming back to pre-pandemic levels across a significantly larger trained physician base. Additionally, initiatives aimed at driving adoption among physicians newer to TCAR bore fruit, as nearly 300 physicians from our recent training programs performed procedures in Q2, most of whom who had not performed a procedure in the prior quarter. Additionally, the time to the 1st and the 10th key car cases post-training continue to shorten. Overall, we are seeing improved adoption trends across each of our physician segments. Driven by the improving healthcare backdrop and growing utilization, we achieved total revenue of $26.5 million in the quarter, reflecting growth of 75% year over year. On an adjusted basis, total revenue increased 92 percent compared to the same period of the prior year when excluding the recognition of $1.3 million in deferred revenue in the second quarter of 2020. Based on the positive trends we are observing in the field, we are raising our full-year revenue guidance to $104 million to $109 million. Turning to our second strategic objective for 2021, we advanced our preparations for a potential standard surgical risk label expansion. As a reminder, the on-route stent is currently indicated for patients considered at high risk of adverse events from traditional carotid endarterectomy or high surgical risk. Though the high surgical risk population is a very large opportunity for us, Unlocking access to the additional subset of standard surgical risk patients would increase our US TAM by roughly 50%, and more importantly, put us on a level playing field with CEA. We are pleased to highlight that an analysis comparing TCAR versus CEA in standard surgical risk patients utilizing real-world evidence from the Vascular Quality Initiative will be presented by Dr. Patrick Leong of Beth Israel Deaconess in a plenary session on August 18 at the upcoming Society for Vascular Surgery Annual Meeting, or VAM, in San Diego. This is the first ever presentation of outcomes for TCAR in standard surgical risk patients. The abstract shows compelling outcomes and is viewable on the VAM website. We expect significantly more details around the data will come in the presentation and ultimate publication, and we look forward to sharing those details as they become public. The data to be presented at VAMP are similar to the data provided to FDA in our Q1 2021 PMA Supplement Submission, with slightly different statistical analyses to meet regulatory objectives. The submission of real-world evidence in the filing followed multiple collaborative pre-submission interactions with the FDA to refine our regulatory strategy and statistical approach. Overall, we are pleased with our progress with the FDA, including productive interactions since filing, which have largely centered around statistical programming questions. Given the progress in the quarter, we are currently refining our standard surgical risk launch strategy, engaging with CMS regarding coverage, and anticipating FDA post-approval study requirements. Please note that our current 2021 revenue guidance does not assume any contribution from treating standard surgical risk patients. In addition to our focus on our top two 2021 strategic objectives, we continue to invest in additional long-term growth drivers, including new and improved TCAR products, expansion into international markets, and new trans-carotid therapies in neurovascular and carotid disease states. For example, we are making progress on a new trans-carotid guidewire and a new trans-carotid balloon catheter that we could see approvals in 2022. Stay tuned on these initiatives that we believe are beneficial for continued penetration of TCAR into the market. On the international front, We're pursuing regulatory approvals in both Japan and China. In the second quarter, we filed our shown in applications with PMDA in Japan for both the en route neuroprotection system and the en route stent. And we submitted to NMPA in China for the stent with the NPS system already under review. We have also begun to take preliminary commercial steps in both countries. and have advanced our discussions with potential distribution partners in both Japan and China. We remain committed to exporting TCAR globally, and these steps mark the first phases of unlocking our global total addressable market of $5.1 billion. As a reminder, we do not expect any revenue this year from Japan or China. Turning to our neurovascular acute ischemic stroke program, we are in the process of initiating sites for our NITE1 feasibility study, which as a reminder stands for neuroprotection in transcarotid embolectomy. The FDA approved this IDE during the first quarter, and we expect the study to begin enrollment this year. In summary, we are thrilled with the progress that our team is making on U.S. commercial execution, preparation for standard surgical risk expansion, long-term pipeline development, and international expansion. The second quarter marked a noticeable overall elevation of our organization, driven by operational improvements, a new facility in Minnesota, expanded leadership capabilities in regulatory, clinical, quality, and R&D, and the continued addition of top commercial and sales force talent. With that, I will now turn the call over to Lucas Buchanan, our Chief Financial Officer and Chief Operating Officer.