Artivion, Inc.

Greetings, and welcome to Artivion's fourth quarter and full year end 2022 financial results call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Johnston, Vice President at Gilmartin Group. Thank you. You may begin.

Thanks, Operator. Good afternoon and thank you for joining the call today. Joining me from our TIVIANS management team are Pat Mackin, CEO, and Ashley Lee, CFO. Before we begin, I'd like to make the following statements to comply with the safe harbor requirements of the Private Securities Litigation Reform Act of 1995. Comments made on this call that look forward in time involve risks and uncertainties that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include Statements made as to the company's or management's intentions, hopes, beliefs, expectations, or predictions of the future. These forward-looking statements are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from these forward-looking statements. Additional information concerning certain risks and uncertainties that may impact these forward-looking statements is contained from time to time in the company's SEC filings and in the press release that was issued earlier today. With that, I'll turn the call over to Pat Mackin.

Thanks, Brian, and good afternoon, everyone. Our strategy, which I've discussed with you over the past few years, in which we further detailed in March of 2022 at our Investor Day, is to create significant shareholder value by driving sales of our innovative products, expanding within and into new geographies, and developing our pipeline of innovative products to substantially increase our addressable market. As you will hear today, we are doing just that. I'm pleased to report that our business continues to perform well as we closed out the full year 2022 with just over 9% constant currency revenue growth compared to the full year of 2021. I'm also pleased to report that we made significant progress on the regulatory front. We received the BioGlucy eMark under the new MDR framework, and based on our recent conversations and interactions with the FDA, we are confident we will receive approval for per-clot. You'll also hear that we continue to remain on track to deliver our revenue and EBITDA commitments with 2023 expected to represent a major step forward. Starting with our year-over-year revenue performance for the fourth quarter, we saw strong top-line constant currency growth in Stentgrass, which grew 16%, and Onyx, which grew 11%. For the full year, our constant currency basis, Stentgrass were up 20%, Onyx was up 13%, Tissue Processing was up 8%, and BioGlue was down 5%, all compared to full year 2021. As anticipated, fourth quarter 2022 constant currency revenue growth of 5% was strong, but slightly below the quarter growth delivered through the first three quarters of the year. As we mentioned on our Q3 call, we expected some deceleration in the fourth quarter because our EU customers had accelerated approximately 1.5 million of BioGlue purchases into the third quarter that they otherwise would not have made in the fourth quarter. This was done to protect their supply of BioGlue for the fourth quarter in the event the company was unable to obtain BioGlue derogation extensions beyond October 31st. If customers had not made these increased BioGlue purchases in Q3, our total growth for the fourth quarter would have been around 7% on a constant currency basis compared to the prior year. We believe this BioGlue purchase was a one-time occurrence now that we have the CE mark for BioGlue, and we anticipate our customers will return to regular ordering patterns in the EU and in those countries where commercialization is based on CE mark. As you will recall, at our investor day in March of 2022, we committed to delivering compounded double-digit constant currency revenue growth through 2024 through three key initiatives. First, we'll continue to drive our growth in aortic stent grafts and onyx. Second, we'll continue to benefit from our investments in commercial channels and new regulatory approvals in Asia Pacific and Latin America. And third, we will benefit in 2023 and beyond from PMA approvals in the U.S. for Perclot and Proact Mitral. As mentioned previously, StentGraph revenues rebounded in the fourth quarter, increased to 16 percent on a constant currency basis compared to the fourth quarter last year. We finished the full year with 20 percent year-over-year growth compared to 21 on a constant currency basis. Demand for our StentGraph portfolio remains high, We've also made significant progress in hiring at our German manufacturing facility, which is now operating at nearly full staffing. As a result, we believe this will improve production significantly over time, which will serve as a catalyst to continuing to drive growth in our StenGraph portfolio. As for ONIX, revenue grew 11% on a constant currency basis in the fourth quarter of 22 compared to the fourth quarter last year, and 13% full year compared to 21%. We remain confident we will continue to take market share globally. We're the only mechanical aortic heart valve that can be maintained in INR between 1.5 and 2.0. We are also executing very well on our next initiative to expand our presence in Asia Pacific and Latin America through new regulatory approvals and commercial footprint expansion. APAC in Latin America had fourth quarter constant currency revenue growth of 21% and 12% respectively. and 30 percent and 38 percent for the full year, respectively. We continue to expect these regions to be important growth drivers over the coming years. Regarding our third initiative, based on recent discussions with the FDA, we are optimistic that we will receive a PMA for our per-clock product. Upon approval, we will receive approximately $19 million or $15 million net of amounts owed to a former partner, and we will then commence shipping our product to Baxter. As for Prolick Mitral, we are maintaining interactive dialogues with the FDA and look forward to a potential approval in the second half of this year. We do not believe that securing this approval is imperative as it relates to our ability to achieve our near and longer-term revenue growth forecasts. And we've not included the potential approval in our outlook for 2023. In addition, our progress in each of these three initiatives, we continue to make progress in our pipeline, which includes the AMDS clinical trial and the Nexus Persevere trial of our partner. We've enrolled 25 patients in our PERSEVERE trial, which is a non-randomized clinical trial of up to 30 centers in the U.S. with 100 patients who've experienced acute type A aortic dissections. The combined primary efficacy and safety endpoints of this trial are reduction of all-cause mortality, new disability and stroke, myocardial infarction, new onset renal failure requiring dialysis, and re-expansion of the true lumen of the aorta. We now anticipate completing full enrollment in the second half of this year, following a one-year follow-up period, and assuming the trial meets its endpoints, we anticipate we would receive FDA approval for AMDS in 2025. In addition, as I previously stated, our partner, Endospan, is making progress on the USID called Triumph for its Nexus Aortic Arch Stent Graph System. In that trial, there were approximately 32 patients enrolled and treated, and a total 47 patients enrolled and approved for treatment. Endospan estimates enrollment completion in mid-2023 with a PMA approval in 2025, again, assuming the trial hits its endpoints. To reiterate, if these PMA trials succeed as anticipated or proceed as anticipated, we expect FDA approval for AMDs and Nexus in 2025. At that time, assuming we exercise our option for end of span, these products would increase our addressable market opportunity by an estimated $700 million. With that, I'll now turn the call over to Ashley.