Shockwave Medical, Inc.

Good afternoon and welcome to Shockwave's second 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 today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Debbie Castor, Vice President of Investor Relations at Shockwave, for a few introductory comments.

Thank you all for participating in today's call. Joining me today from Shockwave Medical are Doug Dodschill, President and Chief Executive Officer, Isaac Zacharias, President and Chief Commercial Officer, and Dan Puckett, Chief Financial Officer. Earlier today, Shockwave released financial results for the quarter ended June 30th, 2022. A copy of the press release is available on Shockwave's website. Before we begin, I would 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 statements related to our sales and operating trends, business and hiring prospects, financial and revenue expectations, and future product development and approvals are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties, including the impact of the COVID-19 pandemic 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 lists and description of the risks and uncertainties associated with our business, please refer to the risk factors section of our annual report on Form 10-K on file with the SEC and available on EDGAR. and in our other reports filed periodically with the SEC. Shockwave 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. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, August 8, 2022. And with that, I'll turn the call over to Doug.

Thanks, Debbie. Good afternoon, everyone, and thank you for taking the time to join us to review Shockwave's results for the second quarter of 2022. We are pleased to share the results of another strong quarter delivered by our global team. Our customers continue to witness the significant benefits of using IVL to treat their patients, which help mitigate the headwinds represented increases of 116% from the second quarter of 2021 and 29% from the first quarter of this year. We witnessed growth across almost every sector this quarter. U.S. peripheral once again demonstrated strength, up 35% from the first quarter of 2022. U.S. coronary and our international business grew sequentially at 25% and 26% respectively over the first quarter. The solid performance and contribution from each of these areas is a compelling testament to the strength of our business as a whole. Perhaps the most meaningful statistic for our team is that we were able to help improve outcomes in over 35,000 patients across the globe last quarter. Later in the call, Isaac will provide additional details regarding market dynamics, but I will begin with some commentary around the quarter. Our footprint outside the U.S. continues to expand. In fact, our international revenue has more than tripled since our IPO in 2019. We are now commercial in over 60 countries, and though most of our international revenue comes from Europe, we are seeing early signs of how our Asian expansion will be able to contribute meaningfully going forward. On the heels of the approval of Coronary IVL in Japan in March, our Chinese JV was granted approval for both our peripheral and coronary products in China in May. There are over 1.5 million PCIs and over 270,000 peripheral procedures performed in China each year, both of which have been growing in double digits. And despite the significant prevalence of calcium, the utilization rate of existing calcium modification devices is extremely low in China, under 1% for both coronary and peripheral procedures. Clearly, this represents a great opportunity for Shockwave and for our physician partners in China to improve outcomes for their patients. There have already been multiple events promoting IVL, including an initial virtual launch event that had an audience of 1,500 physicians. One of the other highly impactful events was the China Interventional Therapeutics, or CIT, conference in June. CIT is the largest scientific congress in Asia dedicated to interventional cardiology, and it was fortunate that the conference was held just The team was able to engage in person with over 100 leading Chinese KOLs and over 10,000 online participants who were able to observe live shockwave cases, demos, symposia, training, workshops, and in-depth interviews. As with so many things in China, the scale is quite remarkable. Moving to Japan, one of the largest interventional meetings of the year, PVIT, was held in Tokyo in July, and IVL carried the day. The meeting was 90% remote, but the room for our symposium was packed. The physicians are eager to have access to IV health, and we are now fairly certain that MHLW will be granting us reimbursement in the December cycle. Turning now to our near-term pipeline, we have spoken briefly in the past about the L6 catheter, which will offer even larger diameters than our M5 plus catheter, with 8, 10, and 12 millimeter diameter sizes. The goal was to create a tool that further enhances outcomes in the complex calcified disease beyond even what the M5 Plus can address, such as the more severe common femoral lesions and the transition into the ileocharcification. We are in discussion with FDA regarding the regulatory pathway and will provide an update on expected timing once we have a bit more visibility. We also continue to generate and disseminate high-quality clinical data supporting our products. During the quarter, we had multiple publications and presentations, and a particular note were the one- and two-year results of the DISRUPT PAD3 randomized clinical trial, which were presented at the SCI conference in Medi. These data confirmed that IVL's unique mechanism of action delivers significantly more luminal gain with lower dilatation pressures and a significantly lower rate of dissections versus PTA. While we achieved statistical significance in both the predefined primary and secondary endpoints, one of the additionally intriguing aspects of the results was to see the Kaplan-Meier curves continue to diverge in two years, suggesting that the benefits of IVL may actually improve over time. This certainly resonates very well with our customers and correlates with their anecdotal observations. Taken together, the successful achievement of our primary and secondary endpoints confirms that IDL provides superior vessel prep versus PTA and excellent long-term outcomes in calcified vessels while preserving future treatment options. Our commercial efforts received most of the attention, but none of this would have been possible without key strategic decisions and the nearly flawless performance of the teams behind the scenes in operations and quality. As a result of their great work, We've been fortunate enough to avoid being impacted by supply chain issues. Rather remarkable given the extraordinary growth we have witnessed and the current macroeconomic challenges around the world. Continuing the approach of getting out in front, we just broke ground in Costa Rica and have signed agreements to build our own facility there, which will substantially increase our capacity and will complement our current Santa Clara and contract manufacturing volumes. We expect to be online sometime in 2024, And when it is up and running, we will use that location to manufacture our established and more mature products. We believe this operation strategy will position us to continue to deliver new products to market faster and to more effectively manage our cost of goods, and will also facilitate our future growth and scaling. Given the results we have witnessed in the first half of the year, we now anticipate delivering top-line revenue in the range 175 million for the full year of 2022, representing a growth of 96% to 100% from 2021. With that, I will turn the call over to Isaac. But before I do, I want to take a brief moment to recognize what he has contributed since joining us over four years ago. Anyone who has followed our story closely is likely aware of how instrumental he has been in driving commercial execution. Behind the scenes, Isaac has been a tremendous strategic partner for me and the rest of our leadership team. In acknowledgement of his significant impact, I was pleased to be able to promote him to president, chief commercial officer, a couple of months ago. I look forward to continuing our partnership as we seek to improve outcomes for patients globally and to creating a compelling, sustained growth business for years to come. Following Isaac's comments, Dan will share more details on the broader business and financial results. Isaac?