Shockwave Medical, Inc.

Good afternoon, and welcome to Shockwave's first quarter 2023 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. Please go ahead.

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 Trinh Phuong, Vice President of Finance, who is standing in for Dan Puckett while he's out of the country on a much-deserved family vacation. Earlier today, Shockwave released financial results for the quarter ended March 31st, 2023. 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, other than statements of historical fact, are forward-looking statements. All forward-looking statements, including without limitation, statements relating to our sales and operating trends, business and hiring prospects, financial and revenue expectations, reimbursement proposals, Future product development and approvals and integration of NeoVASC and its technologies into our business are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties, including the impact of macroeconomic conditions and global events, such as 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 the SEC and available on EDGAR and in our other reports filed periodically with the SEC. StockWave 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, May 8, 2023. 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 first quarter of 2023. The year started out well following a strong end to 2022. First quarter revenues of $161.1 million represented a 72% increase from the first quarter of 2022. All areas of the business contributed to our growth in the quarter, with U.S. Coronary, U.S. Peripheral, and International each delivering solid sequential double-digit growth in the quarter compared to the fourth quarter of 2022. Later in the call, Isaac will provide additional details from the commercial side of our business, but first I want to highlight some recent accomplishments. Last month, we announced the full U.S. commercial launch of our L6 peripheral IVL catheter on the heels of the limited launch of the product. As a reminder, L6 was developed specifically to expand the capabilities of our peripheral portfolio, and in particular to address difficult-to-crack calcification in larger vessels such as the ILIAX. The customer response to its performance and initial demand for L6 has exceeded our expectations, and it appears to offer broader utility than we had anticipated. The L6 launch also comes following a very successful launch and transition to M5 Plus last year, which continues to perform well in above-the-knee applications and increasingly is being used in below-the-knee vessels. C2 Plus, our next-generation coronary product, began a full launch in international markets during the quarter and will be showcased next week at EuroPCR in Paris. C2 Plus offers up to 120 pulses, a 50% increase from C2, and early feedback has also been very positive on this product. We have seen C2 plus being used in long calcified segments within all ranges of calcified morphologies and complex lesion types. Our team has reported that over 70% of the cases done with C2 plus have used more than 80 pulses, which indicates that the additional pulses are being used quite regularly. We are optimistic that this will lead to increased adoption of coronary IVL. We plan to launch C2 Plus in the U.S. early in the fourth quarter of 2023. We also added a new future growth platform last quarter by acquiring Neovasc and the Reducer system. The transaction just closed a few weeks ago, and our team is quickly getting integrated into the commercial, R&D, and Casira II trial activities. Our general manager of the Reducer program led the transaction and has deep experience in leading high-performing teams in the cardiovascular arena, and our clinical group is leaning in aggressively to help the legacy NeoVASC team accelerate trial enrollment. We are not yet ready to update our revenue or enrollment forecasts, but our commercial focus for now is to understand what will be required to create a market for the reducer so we are ready when we have data from COSIRU2, much as we used our early international launch of C2 to prepare for the broader global and U.S. launches. I will say that the feedback we have received from European customers who use this device commercially has been consistently very positive. And as a result, we are more bullish now than we were when we announced the transaction. More to come. EuroPCR will not only serve as the public launch meeting for C2+, it will be a venue for multiple IVL and reducer presentations. And we will also be celebrating the five-year anniversary of the launch of coronary IVL. We have come a very long way in a relatively short period of time. We'll be sponsoring several symposia and training villages at PCR, where we plan to further educate physicians on IVL, in addition to covering refractory angina, and how our newly acquired reducer product plays a role for these no-option patients. And while many of us will still be busy in Paris, the Society for Cardiovascular Angiography and Interventions, or SCI, conference will be kicking off in Phoenix. A highlight for us at SCI will be the presentation of our CAD3 post-approval study from the CAF PCI registry, which will reflect the real-world safety and effectiveness of coronary IVL. Lastly, on the scientific side, we had great attendance at our CRT symposium back in February, where the main IVL focus was the impact of calcified nodules on two-year clinical outcomes after IVL-assisted coronary stenting. As our data matures, it continues to demonstrate that IVL is equally effective across the full spectrum of calcified lesions, whether circumferential, eccentric, or nodular. And as we continue to generate compelling data that supports broader use of IVL, our R&D team keeps paving the way for future growth with our expanding pipeline. We have discussed our intention to launch two new products per year, and we have also talked about our plan to have seven different devices by 2026. We plan to lay out our product roadmap in a bit more detail later in the year at our investor innovation event, which we'll be holding on October 23rd in San Francisco during TCT. And finally, on reimbursement, CMS issued its proposed fiscal 2024 inpatient prospective payment system, or IPPS, document for hospital inpatient procedures in April. The proposed rule included three new DRGs specific to IVL. Two of the new DRGs would pertain to coronary IVL cases involving the insertion of a stent with and without core morbidities, and the third new DRG would cover all coronary IVL cases that do not include a stent. The proposed dollar values associated with these new DRGs seem entirely appropriate given the resource intensity of treating the extremely complex calcified anatomies that comprise the universe of patients' IVL addresses every day. We look forward to the final inpatient rule likely later this summer, which will then become effective October 1st, 2023. Our strong first quarter performance suggests that we will deliver results in a higher range than our prior guidance. We now anticipate top line revenue in the range of $700 million to $720 million for the full year of 2023, representing growth of 43% to 47% from 2022. This guidance does not contemplate any revenue contribution from the reducer, which we expect will be less than $5 million for the balance of 2023. With that, I'll turn the call over to Isaac to provide more color on the commercial front. As Debbie noted, Dan is on a long-planned and well-earned vacation with his family, and we are delighted to have Trinh with us today to discuss the details of our financial results after Isaac. Isaac?