Silk Road Medical, Inc.

Good afternoon and welcome to Silk Road Medical's first quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. We will be facilitating a question and answer session towards the end of the call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Marissa Beitsch from the Gil Martin Group for a few introductory comments. 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 of Silk Road Medical. Earlier today, Silk Road Medical released financial results for the three months ended March 31, 2022. 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 but include forward-looking statements within the meaning of the federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation and 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, position training and adoption, growth in our organization and reimbursement, market opportunity, commercial and international expansion, regulatory approvals, and product development are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events 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 Risks Factors section of our annual report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2022. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, May 4, 2022. 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. Now I will turn the call over to Erica Rogers, Chief Executive Officer.

Thank you, Marissa. Good afternoon, and thank you all for joining us. At Silk Road, we have set out to compete and win against invasive surgery by establishing minimally invasive TCAR as the standard of care in stroke prevention. We achieved clear progress in the first quarter of the year, treating over 4,000 patients, a record quarterly performance for our company. and recognizing $28 million in revenue, reflecting year-over-year growth of 27%. As we noted on our fourth quarter earnings call, we experienced a challenging operating environment in January, which persisted into February. However, we saw a marked improvement in daily TCAR procedures as we progressed into March and beyond. Alongside TCAR procedure improvement, we have seen very strong clinician engagement returns. as pandemic-related constraints have eased, including fewer COVID-19 hospitalizations. While we remain cautious, we are optimistic toward a continuously improving commercial environment. Commensurate with this outlook, we now expect full-year 2022 revenue to be in the range of $127 to $132 million, reflecting year-over-year growth of approximately 28% at the midpoint of the range. Lucas will provide greater detail on our performance and revenue outlook shortly. Beyond our first quarter performance, we are tremendously excited to highlight that just in the past few days, we received FDA approval for the expanded indication of our on-route trans-carotid stent system to include patients at standard risk for adverse events from carotid endarterectomy. This expansion marks a major milestone for our company, our physician partners, and most importantly, patients with carotid artery disease. The FDA's decision was based on compelling real-world outcomes data on over 20,000 standard surgical risk patients showing that TCAR had statistically equivalent stroke and death outcomes compared to CEA, while showing a nine-fold reduction in cranial nerve injury CNI. These yet-to-be-published results, alongside data on over 18,000 TCAR patients in published peer-reviewed journals, confirm the value proposition of our less invasive approach and its associated benefits, including shorter procedure times and length of stay, routine use of local anesthesia, and other important perioperative outcomes. Our on-route stent was previously approved for use only in patients with anatomic or physiologic criteria that put them at higher risk for complications from invasive surgery, which is a sizable standalone market. As a reminder, current data show that there are roughly 170,000 annual procedures to treat carotid artery disease in the United States, with roughly 110,000 or about two-thirds of those procedures performed in high surgical risk patients. Converting those high-risk procedures from CEA to TCAR has been our core focus since coming to market, and we have made strides in treating this large segment of the patient population. With the expanded indication, we now have access to an even greater immediately addressable opportunity of an additional roughly 60,000 patients per year within our total conversion opportunity of approximately $1.2 billion in the United States. Moreover, we expect label expansion to allow physicians to make clinical decisions in the best interest of all patients, truly leveling the playing field between CEA and TCAR, and further reducing the barriers to procedural adoption. That said, adoption will also rely on our efforts to educate and build awareness in the referring and treating physician community. As such, we will be investing substantial time and resources in marketing efforts specific to standard surgical risk label expansion. We have already educated our sales team and we have updated our messaging, marketing, and education tools. Our direct print and digital communication strategies will highlight physician empowerment to choose what is best for each and every patient. We also intend to initiate more tools aimed at patient education through stories and testimonies of the benefits of a less invasive approach. And as an immediate next step, we are working to expand Medicare coverage for TCAR to include standard surgical risk patients through the national coverage determination. Now, turning back to our primary objective for this year, continuing to drive U.S. TCAR adoption. We remain laser-focused on increasing penetration of the large and still untapped pool of carotid procedure volume. As a reminder, we finished 2021 with a presence in nearly 1,000 hospital accounts that performed the majority of carotid procedures in the United States. with a critical mass of over 2,000 trained physicians served by 58 active sales territories. As we stated prior, we intend to continue building towards 70 to 75 territories and another 200 to 300 physicians trained in 2022. As the impacts of the pandemic recede, this critical mass is bearing fruit, approaching nearly 10% penetration of the U.S. carotid procedure volume. Given the large untapped procedure market opportunity in the US and our new FDA label expansion, our priority is US commercial execution relative to certain international efforts. We continue to pursue regulatory approvals in China and Japan, however, now intend to reduce the significant resources associated with compliance with the European Union Medical Device Directive and the European Union Medical Device Regulation, resulting in a likely lapse of our CE mark. As a reminder, we do not currently assume any contribution from sales in Europe in our financial outlook. And with our enhanced opportunity to drive domestic adoption through standard surgical risk patient access, we are confident that efforts toward sustainable, Double-digit U.S. growth offer the strongest return on investment. Finally, turning to our development pipeline. Additional trans-carotid technologies hold the potential to solve difficult clinical problems in the treatment of complex neurovascular and cardiac disorders. We recently received FDA approval to expand inclusion criteria for our night one IDE feasibility trial related to stroke treatment, effectively increasing our ability to enroll and learn from this study. In addition to our neurovascular efforts, over the next 12 to 24 months, we expect to add new stent sizes and configurations, improvements to our neuroprotection system, and a dedicated balloon catheter purpose-built for TCAR. In summary, we are making strides against our 2022 goals while building upon the foundation for strong, sustainable growth into the years ahead. I will now turn the call over to Lucas Buchanan, our Chief Financial Officer and Chief Operating Officer.