Silk Road Medical, Inc.

Good day, and thank you for standing by. Welcome to Silk Road Medical's 2024 First Quarter Earnings Conference 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. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Marisa Bish with Gil Martin Group. Please go ahead.

Great. Thank you for joining today's call. Earlier today, Silk Road Medical released financial results for the three months ended March 31, 2024. 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 the 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, expense management, expectations for hiring and growth in our organization and our business, position training and adoption, market opportunity and penetration, commercial and international expansion, Regulatory approvals, reimbursement, competition, 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 to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, we 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 factor section of our latest report on Form 10-K filed with the Securities and Exchange Commission. Additionally, Silk Road Medical refers to adjusted EBITDA, a non-GAAP financial measure. A reconciliation of adjusted EBITDA to net loss, which is the most directly comparable GAAP measure, is included in our press release, which is available on our website. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, April 30, 2024. 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. With that, I will turn the call over to Chas McConn, Chief Executive Officer.

Thank you, Marissa, and thank you all for joining us today. I'm excited to share a strong start to 2024 at Silk Road Medical. marked by first quarter revenue of $48.5 million, reflecting 21% year-over-year growth, supported by more than 6,700 procedures. Our growth was driven by deepening TCAR adoption among trained physicians, as well as encouraging early uptake from our tapered stent launch. We continue to see healthy demand and encouraging adoption trends for TCAR as the tenure and experience of our commercial team grows, our innovation efforts bear fruit, and the marketplace responds to expanded Medicare coverage. We look forward through 2024 and beyond with great optimism about our ability to continue growing into the market opportunity in front of us. While it's only been two months since our last update, our efforts to deepen adoption and strengthen the position as the leader in carotid treatment are yielding progress. Our sales representatives and therapy development specialists in combination with our medical affairs team and reimbursement specialists, remain hard at work strengthening relationships and continuing to educate the more than 2,800 TCAR-trained physicians, as well as their staff and referring networks. We are having important conversations with our customers to understand their individual practices and the most important factors in driving toward a TCAR-first approach to carotid disease treatment. Our customers consistently speak to the dedication of our commercial team and the quality of their support all of which contribute to positive provider experiences and outstanding patient outcomes. We are also seeing the benefits of a rising tide of awareness across physicians adopting TCAR, their referring physicians, and patients themselves. We've spoken extensively about the pull behind TCAR, best-in-class clinical outcomes, a short learning curve, broadly applicable patient pools, and clear economic advantages. Today we're also observing a strengthening push dynamic, reflecting another side of the same phenomenon, The physician community is, understandably, deliberate in their transition to any new therapy in such a sensitive disease state. Increasingly, referring physicians and patients are more likely to recommend or seek out providers who offer the most patient-friendly solutions. And we are pleased to see an increasing push and pull effect supporting continued adoption in the field. Clinical evidence remains a critical driver of those push and pull dynamics. And in that vein, I'd like to highlight a recent editorial published in the Annals of Vascular Surgery by Dr. Jeffrey Jim, an accomplished vascular surgeon and chair of vascular and endovascular surgery at Alina Health. The title of the editorial is, quote, Should TCAR be accepted as the standard of care in carotid revascularization? Dr. Jim offers an insightful overview of carotid treatment history, and ending in his conclusion with, and I'll quote him, quote, I do believe that TCAR should be accepted as a standard of care in carotid revascularization. I am simply doing what I always do in my overall vascular practice, review all the available data, pick the best treatment among all available options, and monitor my outcomes. The deliberate choice to use the language standard of care when referring to TCAR by an experienced and respected surgeon in a high impact factor journal is powerful in and of itself. The article also represents a great example of how expanded awareness for effective carotid treatment and a comprehensive review of the data can lead physicians and their patients to a TCAR-first approach. Earlier, I mentioned the marketplace response to expanded Medicare coverage. And on this topic, I'm pleased to share that we're seeing renewed awareness for carotid treatment from last year's national coverage determination, which is catalyzing healthy conversations around the benefit of safe, patient-friendly intervention in carotid artery disease. The bottom line of this decision was access, namely access for more patients to be treated with the intent of stroke prevention, and the decision to include an emphasis on empowering the patient to make a treatment decision in their best interest. Towards that end, as TCAR expands and awareness expands with it, we are increasingly focusing our marketing efforts on patient education and awareness for the benefit of TCAR among referred physicians. The findings of our market research team highlight the benefits to TCAR from Medicare's decision. In a very recent double-blind survey with data collected by a third-party provider, 75 high-volume vascular surgeons were asked to describe the impact of the national coverage determination on their carotid treatment referral volumes since the decision was enacted in October last year. On average, these very busy vascular surgeons have seen a net increase in their crowded referral volumes as a result of the expanded NCD. Beyond our marketing efforts, we are supporting this rising tide of awareness through continued clinical evidence creation. This year, we will exceed 100,000 cumulative patients treated with TCAR, an incredible accomplishment for an entirely new endovascular therapy category that was driven by the efforts of a single company. Importantly, this 100,000-patient milestone creates a unique opportunity to communicate the fact that TCAR is, in fact, no longer new. TCAR has arrived, and it deserves its place as the standard of care treatment in carotid artery disease. Importantly, in three recent publications, TCAR demonstrated best-in-class outcomes compared to both carotid endarterectomy and transfemoral stentsing. The first one we previously highlighted, and it's a 2022 publication in the Journal of Vascular Surgery by Hicks et al. that looked at 125,000 patients in the Vascular Quality Initiative, stratified by CMS surgical risk criteria. After adjusting for baseline demographics and clinical characteristics, the odds of perioperative stroke were lower for TCAR versus CA in high-risk patients and similar in standard-risk patients. A recent analysis by Ramsey et al. of perioperative outcomes in TCAR, CEA, and CAS from a review of roughly 370,000 procedures captured in the National Inpatient Database demonstrated best-in-class outcomes across stroke, death, and myocardial infarction for TCAR. The authors concluded with a clear takeaway that TCAR is underutilized relative to other revascularization techniques despite having favorable outcomes compared to CEA and CAS. And then thirdly, in October of 2023, there's a review in the Journal of Vascular Surgery of roughly 1,700 carotid revascularization procedures across seven hospitals in the Memorial Hermann Health System, which yielded perioperative stroke rates that were lower than CEA. And so collectively, these three publications demonstrate a perioperative stroke rate from TCAR that is below the historical gold standard CEA. And they are just beginning to be appreciated by both the referring and treating community. Furthermore, we anticipate that the robust body of clinical evidence in favor of TCAR will continue to grow. We are advancing Roadster 3, our post-approval study investigating TCAR patients at standard risk of adverse events for CEA. Roadster 3 will enroll up to 400 patients with the primary outcome being major adverse events within 30 days post-treatment, as well as ipsilateral stroke within 31 and 365 days post-procedure. The study is progressing well. We remain on track for enrollment completion in the back half of 2024. And following enrollment completion, we look forward to the investigators sharing 30-day outcomes data, followed by the one-year outcomes data down the road. Now I'd like to shift gears to discuss how we are expanding our competitive mode in carotid disease treatment through our product innovation. Last year, we launched a dedicated TCAR balloon, the inflate balloon, which continues to track well to utilization expectations while maintaining a premium pricing strategy in the marketplace. More recently, we launched the tapered version of our on-route transcarotid stent to offer additional options to fit individual patient anatomy. We initiated the full market release of our tapered stents ahead of plan in early March, and we are encouraged by the initial interest and uptake from customers. Lucas will offer more details on the uptake in his remarks. The OnRoot stent is the only carotid stent on the market that is available both in standard and high surgical risk indications, as well as both tapered and cylindrical configurations. And finally, in early April, we announced the release of our next generation OnRoot Transcarotid Neuroprotection System, or NPS+, This fourth-generation device builds upon the prior en route transcarotid nerve protection system to deliver smoother arterial sheath insertion, greater flow protection, and a simplified prep experience for endovascular teams, all while maintaining exquisite flow reversal nerve protection during the TCAR procedure. In initial cases with the NPS+, customers have noted the improved ease of use and faster case prep. These features help further improve confidence in achieving an excellent outcome in patients undergoing TCAR and support continued progress along the adoption curve. And all three product launches are a direct result of carefully listening to feedback from our customers and delivering next-generation solutions to enhance the TCAR experience. Beyond our efforts to bolster our core product offerings, we are investing in additional long-term drivers of growth for the business, including international expansion. Our initial efforts have been focused on China and Japan, where we've received regulatory approvals for Enroute Stent and our Enroute NPS, and recently signed distribution agreements with respected regional market leaders with local expertise and capabilities. Regulatory efforts to support clearance of the Enroute NPS Plus are underway in both markets, as are market access, launch prep, and post-market study activities with our distributor partners and their provider and payer stakeholders. We will continue these efforts through 2024 and look forward to sharing more over the course of this year. Before I turn the call over to Lucas, I'd like to touch briefly on our efforts to deliver a strong, sustainable financial profile. We are pleased with our strong first quarter and the long-term growth trajectory that we see for the business. We are also pleased to be driving operating leverage after years of significant investment. As progress was reflected in our first quarter, adjusted EBITDA loss of 3.9 millions. which is a significant improvement year over year, as well as a modest sequential improvement. We remain confident in our ability to drive full year 2024 adjusted EBITDA improvement relative to 2023, and also in our ability to reach profitability with the capital we have on hand. And with that, I'll now turn the call over to Lucas Buchanan, our CFO and COO, to review financial results for the quarter.