Silk Road Medical, Inc.

Good day and thank you for standing by. Welcome to the Silk Road Medical's 2021 Third 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. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Marisa Bach, Investor Relations. Please go ahead.

Thank you, and thank you all for joining 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 September 30, 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 provision 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 August 6, 2021. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, November 9, 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 Rogers, Chief Executive Officer.

Thank you, Marissa. Good afternoon, and thank you all for joining us. I would like to start by acknowledging the immense efforts of the Silk Road team and our physician partners as we continue driving adoption of TCAR forward. against the headwinds of the COVID-19 pandemic. The third quarter was a difficult period for the U.S. hospital system and specifically for elective inpatient procedures like TCAR. As we signaled in mid-September, the COVID-19 Delta variant drove capacity constraints, staffing shortages, and overall disruption in a significant percentage of hospitals across our sales regions. Despite these challenges, we recognize $24.7 million in revenue for the quarter, reflecting 23% year-over-year growth. The pandemic and its consequences have created a more complex environment and a greater impact to our business than we had expected back in July, which carried over from Q3 into Q4. As a result of these dynamics, we are revising our 2021 revenue guidance to a range of $99 million to $102 million. Lucas will discuss our full results and provide more commentary on our financial outlook shortly. As we look at our business, we are confident that the headwinds we have been facing are overwhelmingly pandemic-related and, in our view, transient. In regions where vaccination rates are high and hospitals have capacity, patients are presenting and we are executing on our strategy. In fact, despite COVID hospitalizations soaring during the recent Delta wave, the total number of physicians performing a TCAR in Q3 was in line with Q2. Even in the hardest hit areas of the country, trained physicians continued to perform TCAR albeit fewer procedures. Our regional utilization data also allows us to analyze the relationship between TCAR procedures and COVID hospitalizations across specific parts of the country. This analysis shows a stark contrast between the rate of procedures in less impacted versus harder hit regions during the third quarter. For example, in Southern, and Midwestern regions, both heavily impacted by the Delta variant, procedures per physician fell roughly 13% in Q3 versus Q2. In the Northeast, Mid-Atlantic, and Western regions, areas with higher vaccination rates and fewer hospitalizations, procedures per physician grew roughly 10%. In totality, this analysis offers an encouraging view of the performance of our business and the prospects for future growth as the pandemic wanes. On our last call, we said that our business was back on offense, and today we remain just as excited about our underlying opportunity for growth and penetration over the coming year as we did three months ago. We are hopeful for a future in which COVID-19 is endemic and managed without the severe spikes in hospitalizations that we have seen over the last 18 months. As of now, and as we have throughout the pandemic, we are investing confidently in the people and programs that will drive our growth in 2022 and beyond. We remain as committed as ever to establishing TCAR as the new standard of care in carotid artery disease. With that, our number one strategic priority for 2021 is US commercial execution. Today, we are pleased to announce that we are on track to exceed our goal of training at least 200 new physicians by the end of the year. We are also on track to exceed our territory expansion target of at least 50 sales territories by the end of the year. Importantly, As measured by time from training, procedures per physician continues to grow overall and across each utilization quartile, despite continued growth in the denominator of trained physicians. This remains true even against the pandemic's dampening effects on carotid diagnoses and procedures and the overall healthcare system. We are actively building relationships across physicians and hospitals to bring to fruition the long-term value of TCAR, a value unshaken by COVID, and we are reducing the risk of stroke and its devastating impact for patients every single day. We remain well-positioned to increase our procedural share versus CEA, given expansion of our field team, initiatives to drive physicians up the adoption curve, physician training programs, and the continually growing base of clinical evidence for TCAR. Moving on to our second strategic priority for the year, preparing for standard surgical risk expansion. At the 2021 Vascular Annual Meeting in August, an independent propensity-matched analysis in over 20,000 standard surgical risk patients illustrated equivalent risk of perioperative stroke, death, or MI plus ipsilateral stroke through one year in CEA versus TCAR, with cranial nerve injury risk significantly reduced with TCAR. Conclusions of the study were clearly outlined. TCAR should be expanded for use in standard surgical risk patients. The study affirms what we already understand at Silk Road. Safely preventing stroke while delivering benefits from a less invasive approach is possible across a broad range of patients, anatomies, and disease morphologies. TCAR's clinical and patient satisfaction benefits paired with its proven efficiencies over CEA give us confidence in driving adoption and advancing our impact on the lives of patients at risk for stroke due to carotid artery disease over the long term. Importantly, we are making progress toward receiving FDA approval to expand indications for TCAR into the standard surgical risk patient population. In October, the FDA requested that we provide them with additional data. We have since submitted that additional information as an amendment, and we believe that we are still on track to receive an FDA decision by the second quarter of 2022. Our teams and the physician community remain enthusiastic about the opportunity for standard surgical risk label expansion, bringing TCAR to a level playing field with CEA, and we continue to prepare for commercial launch. This includes planning for a post-market study, engaging with CMS on reimbursement coverage, supply chain preparation, and augmenting our training and marketing programs and materials. Regarding our additional long-term growth drivers, we continue to make progress on objectives to introduce new and improved TCAR products, expand into international markets, and innovate new trans-carotid therapies in neurovascular and carotid disease states, cardiac disease states, excuse me. For example, we are active in site initiation processes for our Neuroprotection in Transcarotid Embolectomy, or NITE1, feasibility study. Our R&D headcount, programs, and capabilities continue to grow. We remain committed to extending and deepening our significant lead in developing the TCAR market in the U.S. with numerous product and clinical initiatives. while working to unlock the $5.1 billion TAM associated with exporting TCAR globally. We expect to provide further updates on many of these initiatives on our future earnings calls. In closing, we were surprised by the speed and the severity with which the Delta variant impacted the U.S. hospital system in Q3. And we acknowledge that our second half revenue results will reflect the challenges in our operating environment. However, we are encouraged by the fundamentals of our business as the environment begins to clear. As we sit here today, we are seeing early signs of improvement, which we continue to closely monitor. We also intend to remain transparent regarding the ongoing pandemic and its impact to our expectations. We are incredibly proud of Silk Road's response to the challenges posed by COVID, and our excitement for the opportunity to re-accelerate into 2022 remains unhindered. Most importantly, our dedication to the long-term value of TCAR for patients and hospitals alike remains stronger than ever. With that, I will now turn the call over to Lucas Buchanan, our Chief Financial Officer and Chief Operating Officer.