Neuronetics, Inc.

standing by, welcome to the Neuronetics second quarter 2021 financial and operating results 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 your speaker today, Mark Klossner. Please go ahead.

Good morning, and thank you for joining us for Neuronetics' second quarter 2021 conference call. Joining me on today's call are Neuronetics President and Chief Executive Officer Keith Sullivan and Chief Financial Officer Steve Furlong. Before we begin, I would like to caution listeners that certain information discussed by management during this conference call will include forward-looking statements covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. including statements related to our business, strategy, financial and revenue guidance, the impact of COVID-19, and other operational issues and metrics. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business. For a discussion of risks and uncertainties associated with Neuronetic's business, I encourage you to review the company's filings with the Securities and Exchange Commission including the company's annual report on Form 10-K and the Form 10-Q, which will be filed later today. The company disclaims any obligation to update any forward-looking statements made during the course of this call, except as required by law. During the call, we'll also discuss certain information on a non-GAAP basis, including EBITDA. Management believes that non-GAAP financial information, taken in conjunction with U.S. GAAP financial measures, provide useful information for both management and investors to by excluding certain non-cash and other expenses that are not indicative of trends in our operating results. Management uses non-GAAP financial measures to compare our performance relative to forecast and strategic plans to benchmark our performance externally against competitors and for certain compensation decisions. Reconciliations between U.S. GAAP and non-GAAP results are presented in tables accompanying our press release, which can be viewed on our website. With that, it's my pleasure to turn the call over to Neuronetics President and Chief Executive Officer Keith Sullivan.

Good morning and thank you for joining us. I'll begin by providing an overview of our second quarter performance, followed by an operational update. Steve will then review our financial results, and I will conclude with our thoughts for the balance of 2021 before turning to Q&A. Starting with the review of the second quarter, Total revenue was $14.2 million, up 46% from the second quarter of 2020, driven by strong year-over-year growth in treatment session revenue. Our U.S. treatment session revenue was up 65% over the second quarter of 2020 as a result of three things. One, the increased impact from the work of our NPCs are doing in the field to train our existing accounts. our patient education programs, and three, the continued growth in our installed base. As a result of these initiatives during the second quarter, the number of treatment sessions utilized has increased 62% over the quarter of 2020. As previously noted, our goal for 2021 is to have treatment session revenues approach 2019 levels by year end. I'm happy to report that we have already exceeded this goal through the first half of the year. In the middle of May, we experienced a dip in average daily treatment sessions. As you know, we monitor this metric weekly. The start of this movement coincided with the CDC announcement removing masks and social distancing requirements for those vaccinated. Many of our larger customers saw this same trend as people opted to travel for the first time in 18 months. rather than begin treatment. We believe that this was transitory, as we have seen the daily average rebound back to 3,000 treatment sessions per day level we mentioned on our last call. Unless this new strain of COVID causes more disruption, we believe our utilization will continue to grow as our accounts grow their participation in the Precision Pulse program. On the capital equipment side, U.S. Neurostar Advanced Therapy System revenue increased by 10% over the second quarter of 2020 and grew by 47% sequentially over the first quarter of 2021. The year-over-year and sequential growth is a positive indicator of the return of a more normalized capital environment bolstered by strong customer demand for new systems. We had mentioned in our last call that we expected our capital team to gain traction in the second quarter. As expected, our BDMs were able to close several of their leads from the first quarter and continue to generate high-quality opportunities. We expect them to be increasingly more productive through the balance of the year. During the quarter, we hosted a unique business development event, the Neurostar Summit, with a large group of potential customers and several existing ones. The event was held in Austin, Texas, and over 80 physicians and practice managers from over 50 different accounts were present. Attendees were highly engaged throughout the event, which focused on providing prospective customers an in-depth understanding of the Five Stars to Success program, which is our prescriptive program that educates our customers on the value the Neurostar team brings to them. As a reminder, STAR-1 is our clinical protocol. STAR-2 is reimbursement and office support needs. STAR-3 is training staff on how to best educate patients. STAR-4 is marketing within the practice, and STAR-5 is marketing outside the practice. The immediate results were very encouraging, as we closed a number of capital sales at the event and several subsequent to it. To date, the results of the event have been extremely favorable, and we believe several additional systems will close in the coming months. Given these positive results, we are planning on hosting other similar events in the third and fourth quarter, where we expect strong turnouts. Events like these are just one of the areas we are investing in to increase awareness and better educate physicians. The second quarter represented continued progress towards the commercial transition we initiated in early 2021. We remain focused on executing on the initiatives to build awareness and motivate patients with depression to request NeuroStar. We are accomplishing this by training our customers on the best practices to educate patients who are searching for an alternative to drugs by showing the benefits of NeuroStar. Beginning with our marketing campaigns, we continue to successfully leverage our digital and social media channels to educate patients and connect them with physicians in their area. During the quarter, we generated over 41 million ad impressions, and our ongoing emphasis on these campaigns have driven a 34% increase in year-to-date website visits. Not only are we engaging with patients in the right channels, but our refined messaging is resonating with these patients. The number of people who have requested an appointment with a NeuroStar provider through our website is up over 100% year to date. A significant percentage of these patients requesting appointments with NeuroStar are being routed through our concierge call center. The call center has ramped quickly since its launch, and we saw more than a 30% increase in the number of accounts who are qualified to receive leads over the first quarter of 2021. We continue to be excited by the strong response rates from our campaigns, which not only validate our approach and our messaging, but highlight the strong demand for an alternative treatment to drugs. This influx of interest is a great opportunity for us to work with our customers to help as many of these patients as possible beat their depression with the NeuroStar Advanced Therapy for Mental Health. If you recall, our initial market research results demonstrated aided awareness of NeuroStar as a non-drug alternative in patients with depression was under 9%. After six months of our DTC marketing, our most recent research reflects an aided awareness of NeuroStar at 15%. We are encouraged by this trend. turning to an update on the Five Stars and the Precision Pulse program, which are designed to make sure that our customers are able to assist as many patients as possible. The adoption of the Five Stars program continues to be extremely high, as our NPCs continue to educate existing customers on its benefit. At the end of the second quarter, nearly 100% of our customers were participating in the program and progressing through the various levels. We also continue to see strong interest in the Precision Pulse Program. The number of participating accounts grew by 40% during the quarter, and currently 42% of accounts have joined the program since we rolled it out this February. We expect to see more customers participate as we progress through the year. Encouragingly, accounts in the Precision Pulse Program, on average, increase treatment session utilization by 17% in the second quarter compared to the first quarter. Overall, these programs are garnering high levels of participation and are leading to increased awareness and high levels of treatment session being delivered. Lastly, I wanted to provide an update on our clinical and regulatory strategy. At this year's Clinical TMS Society meeting in June, we had a major presence, which included sponsored presentations poster presentations, and a strong presence on the podium. The energy at the event around the company and our technology was high, and the event served as a great opportunity to reengage with many of the society members, physicians, key opinion leaders, and customers who we had not interacted with in person for over 18 months. Importantly, some key pieces of new data were presented during the conference. Dr. Harold Sackheim, a thought leader in TMS, presented an analysis based on data from our industry-leading patient outcome registry. This analysis found that in patients completing a course of therapy, the results in routine clinical practice were more effective than in the original sham-controlled trials. In Dr. Sackheim's analysis, he found Neurostar delivered an 83% response rate and a 62% remission rate. This is a large improvement from the early clinical trial, which produced a 58% response rate and a 37% remission rate, and continues to be a massive improvement over the results achieved by medication. Dr. Salkheim's data demonstrated that NeuroStar has the highest published response and remission rate in the industry. As it relates to our regulatory strategy, we continue to have a productive dialogue with the FDA to explore pathways to label expansion and clearances for additional indications. Our previously scheduled meeting with the FDA has been rescheduled a few times due to internal conflicts within the agency. While we are disappointed with the delay, we are working with the staff to get a meeting scheduled as soon as possible. In advance of this meeting, we recently received a letter from the FDA acknowledging our prior submission and suggesting they would consider use of our real-world data to support a clearance for a label expansion. The letter had a number of questions that we will discuss with the FDA once we are able to meet. But overall, we view the communication as positive. We look forward to continuing our dialogue with the FDA to help clarify our path forward. Overall, I am pleased with our performance during the first half of the year. The continued early execution by our commercial organization and the positive response in the market from both customers and patients reinforces that what we are doing is resonating. I am confident that we are focused on the right initiatives to execute on our growth strategy as we seek to expand upon our market leadership position and bring relief to more patients suffering from mental health disorders. I'd now like to turn the call over to Steve to provide a financial overview. Thank you, Keith.