Shockwave Medical, Inc.

Good afternoon and welcome to Shockwave's third 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. You may begin.

Thank you all for participating in today's call. Joining me today from Shockwave Medical are Doug Gottschall, 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 September 30th, 2022. Copy of the press release is available on the Shockwave website. Before we begin, I would like to remind you that management will make forward-looking statements during this call 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 a list 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 SEC and available on EDGAR and in our other reports filed periodically with 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, November 7, 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 third quarter of 2022. We are pleased to share the results of another strong quarter delivered by our global team. Sales in the third quarter of $131.3 million represented an increase of 102% from the third quarter of 2021. The team delivered these results despite some of the macro headwinds that have been described by others in our sector. Fortunately, our team and our customers have become very nimble in their ability to adapt to the changing circumstances around them, and to remain focused on optimizing patient care. We continue to witness strength across the entire Shockwave franchise, which reflects the widespread appeal of our technology and bodes well for the long-term health of the business. In the U.S., coronary and peripheral sales both more than doubled from the third quarter of 2021. Internationally, our progress was also quite impressive, with sales up 68% from a year ago. The direct investment we have been making is paying off nicely, and our international sales and marketing team now stands at 53. Later in the call, Isaac will provide additional insights from the field, but I would first like to share some commentary around recent progress across the Shockwave organization. I will start with a few updates on some of the new products in our portfolio. We were pleased to be granted CE Mark of our C2 Plus coronary product in Europe in late August. C2 Plus adds 50% more pulses, going from 80 to 120. Since our initial launch of C2 in Europe, our customers have often wished they had more pulses so they could deliver more energy to a particular lesion or treat additional lesions identified during the procedure. The additional 40 pulses should go a long way towards satisfying our customers and further enhancing outcomes. We started a limited market release in Europe, and if all continues to go well, we'll move forward with the U.S. regulatory process. We also received FDA approval of our L6 peripheral catheter, a bit ahead of schedule, and are about to commence a limited release of that product. L6 offers two new features, larger diameters and more concentrated power. Our customers have expressed interest in larger diameters for the larger vessels above the SFA, and in response, L6 has 8, 9, 10, and 12 millimeter diameter versions. We positioned the six emitters in L6 closer together than in our other catheters, which concentrates the power and will enable delivery of the sonic energy over a greater distance. This approach will enable L6 to maintain the superb efficacy in large vessels that our customers have become accustomed to in smaller diameter vessels. Next, M5 Plus continues to perform extremely well, and we are encouraged to see an increasing use of the 3.5 and 4 millimeter sizes which indicates an increasing use for below the knee lesions. The longer shaft of M5 plus enables it to be used below the knee, whereas the original M5 was generally unable to reach those lesions. M5 plus offers a 50% longer treatment zone than S4, which is attractive for longer lesions. And we see the expansion of M5 plus into the BTK segment as a first step towards a more sophisticated below the knee portfolio. We are also continuing to invest in data generation to both support and expand the use of IVL in different patient populations. At TCT, we announced the initiation of EmpowerCAD, which will be the first ever prospective coronary intervention study consisting entirely of female patients. Historically, females with coronary artery disease tend to have less favorable outcomes than males, particularly when using atherectomy. Our existing data have consistently shown similar safety outcomes for IVL in both sexes, which caught the attention of our investigators and motivated us to explore a female-only study, which will include a broader set of real-world lesions than were studied in our earlier trials. There were multiple IVL datasets presented at TCT this year. The session that seemed to have the most significant impact was our symposium entitled Controversies in Calcium, an open-minded debate on approaches to nodular calcium. As we have mined the data from our trials, the results across our studies confirm that IVL delivers consistent results in terms of stent expansion, minimum stent area, and procedural safety regardless of the presence or absence of nodular calcium within these target lesions. These findings have been very well received by our customers at large, and we are anticipating a publication in the not too distant future. Lesions with calcified nodules account for roughly 20% of the problematic calcified lesions, and we see a meaningful opportunity to move these nodular cases into the IVL camp now that we have such compelling data from our trials to help our customers make the right choice for their patients. And the final point on the clinical front, we were fortunate to be accepted for a late-breaker presentation at Viva for the third year in a row with the results from our PAD observational study presented last week. This study included over 1,300 patients, which is the largest number of severely calcified vessels treated in a core lab adjudicated peripheral study. Those present at the meeting were impressed by our commitment to generating robust data in the peripheral space. The key takeaways we heard from the attendees were that our results are remarkably consistent in terms of the efficacy of our therapy, regardless of which vessel is treated, and that IVL continues to demonstrate extraordinarily low adverse events in a very complex population. These data capped off an overall strong shockwave showing at Viva. And lastly, a quick reimbursement update. We were pleased last month to be granted a Category 1 CPT code for coronary IVL, which means that physicians will receive an additional professional fee when they use C2. This process now gets turned over to the RUC committee to determine payment level, which will be memorialized in the final rule about a year from now and will become effective January 1, 2024. We are also pleased to have recently been granted reimbursement for coronary IVL by the Ministry of Health, Labor, and Welfare, or MHLW in Japan, at a level of 429,000 Japanese yen, which equates to about 3,000 U.S. dollars given current exchange rates. Our C2 system will be officially reimbursed in December, and our current plan is for our team to launch C2 in January in Japan. We expect that the Japan launch will start slowly but will become a meaningful contributor to our business starting in late 2023 and will be a great complement to our other growth engines. Our global customers continue to adopt IVL across a wide spectrum of their patients, which has enabled us to deliver consistent results despite external speed bumps like staffing challenges and exchange rates. Given the various internal and external considerations, We now anticipate delivering top line revenue in the range of $483 to $488 million for the full year of 2022, representing growth of 104% to 106% from 2021. With that, I will turn the call over to Isaac, and then Dan will share more detail on the broader business and financial results. Isaac.