Artivion, Inc.

Good day, ladies and gentlemen, and welcome to the Artivian Second Quarter 2025 Earnings Call. Our host for today's call is Lane Morgan, Investor Relations, Gilmartin Group. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. I would now like to turn the call over to your host. Lane, you may begin.

Thanks, Operator. Good afternoon, and thank you for joining the call today. Joining me today from our Artivian management team are Pat Mackin, CEO, and Lance Berry, CFO. Before we begin, I'd like to make the following statements to comply with the safe harbor requirements of the Private Securities and Litigation Reform Act of 1995. Comments made on this call that were forwarded in time involve risks and uncertainties in our forward-looking statements within the meaning of the Private Securities and Litigation Reform Act of 1995. The forward-looking statements include statements made as to the company's forward-management 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 different materials 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 Considini's SEC filings and in the pressure results issued earlier today. You can also find a brief presentation with details highlighted on today's call on the Investor Relations section of the Artivian website. Now I'll turn it over to Artivian CEO Pat Mackin.

Thanks, Layne, and good afternoon, everybody. Please report that our strong business momentum continued through the second quarter as we delivered total constant currency revenue growth of over 14% and adjusted EBITDA growth of 33% year over year. Further, we made continued early progress with our ongoing AMDS launch following FDA humanitarian device exemption approval or HDE approval, and we remain on track with each of our key clinical and pipeline initiatives aimed at expanding our addressable market. During the quarter, we also took steps to strengthen our balance sheet and meaningfully reduced our net leverage by retiring our convertible note due in 2025, which Lance will detail further. Our Q2 performance was enabled by continued growth across our product portfolio with exceptional strength in U.S. ONIX sales. From a product category standpoint, ONIX revenue increased 24% year over year on a constant currency basis as we continue to take market share globally with the only mechanical aortic heart valve that can be maintained at a low INR of 1.5 to 2.0. Based on the proven clinical results of the ONIX aortic valve and the growing body of evidence supporting the use of mechanical valves in younger patients, we maintain our strong conviction that the ONIX is the best aortic valve on the market for patients under the age of 65 and will continue to take market share worldwide. Our U.S. ONIX performance was particularly strong as we benefited from a continued growth in awareness and adoption of our ONIX valves driven by positive new data and cross-selling opportunities from our initial AMDS launch. This cross-selling dynamic in particular has reinforced our conviction in our innovation-driven multi-pronged growth strategy and further strengthened our confidence in both our near and long-term outlooks for growth and profitability. To that end, StentGraph revenues grew 22% on a constant currency basis in the second quarter compared to the same period last year as the U.S. AMDS launch accelerated our growth rate. Our StentGraph portfolio remains a key component of our growth strategy, and we are encouraged by our strong results which are driven by our differentiated portfolio of products focused on the more complex segments of the StentGraph market. Today, the products in our StentGraph portfolio are sold primarily in Europe where we leverage our existing direct sales infrastructure to create significant cross-selling opportunities across our unique aortic product offerings. Our pipeline consists largely of bringing some of these proven products to the U.S. and Japan representing a significant growth opportunity. The first of these products is AMDS. As mentioned, we're pleased with the ongoing U.S. launch of AMDS following our recent H.D. approval in late 24. As a reminder, there are three steps to each center must complete before implanting an AMDS as part of the AMDS launch process. First, each hospital needs to receive a site-wide RRB approval except in the case of an emergency use. Second, we need to have AMDS approved by the Hospital Value Analysis Committee or the VAC. And third, surgeons must be trained on this device. Reception to the launch has remained extremely encouraging with more hospitals progressing through the IRB and VAC approval process. As expected, AMDS revenue grew meaningfully on a sequential basis in Q2, reflecting strong early demand and revenue from initial stocking orders. Meanwhile, feedback from physicians already using the device has been overwhelmingly positive. Overall, we're encouraged by the early commercial traction of AMDS as we begin to tap into what we estimate to be 150 million annual market opportunity with limited competitive alternatives. In addition, BioGlue grew 4% on a constant currency basis compared to the same period last year, and we continue to see growth with the product in all of our major markets. Lastly, tissue processing, which has been the category most heavily impacted by last year's cyber event, increased 3% year over year on a constant currency basis in Q2. As a reminder, a significant portion of our tissue revenues come from our synagogue pulmonary valve for which demand outstrips supply every quarter, and therefore we hold no inventory. Due to extended lead times for tissues that were in process to receive during the period impacted by the cyber security event, there is a backlog of product that has not yet been released. Since last quarter, we've continued to make progress in reducing the backlog and remain on track to clear it by the end of the third quarter. Looking ahead, we are confident that our tissue business can be a -single-digit grower for the full year of 2025 and over the long term. I'll now turn to the pipeline. In July, we received an investigational device exemption approval or ID approval from the FDA to begin our U.S. Pivotal Trial for Arcevo LSA. This is our third generation frozen elephant trunk used to replace the entire aortic arch. The trial will evaluate the safety and effectiveness of Arcevo in the treatment of acute and chronic arch pathologies and will enroll 132 patients in up to 30 sites. We are optimistic that the trial will be successful, which is supported by the positive clinical results from our current generation frozen elephant trunk called Aveda Open NEO. We look forward to providing additional updates on future calls as we prepare to launch the trial by year end. While the HD enabled us to commercially distribute AMDs in the U.S. prior to receipt of the PMA, we continue to focus on securing the PMA for AMDs. Last quarter, we were pleased to have been informed by the FDA that it completed its review of our manufacturing and quality management system modules. To date, we've already filed three of the four modules and we're keeping our, this keeps us on track for an FDA approval in mid-2026. Lastly, on our pipeline, assuming we acquire EndoSpan, Nexus remains on track for approval in the second half of 2026. As I spoke about during the Q1 call, EndoSpan presented its late breaking 30-day data from the Nexus USIDE trial at AETS in early May. This is the first FDA trial for an endovascular treatment of chronic dissections in the aortic arch focused on patients at high risk for open surgery. The data indicated the trial would meet its protocol-defined primary endpoints of a 63% reduction in major adverse events relative to the comparators. In our conversations with physicians at AETS, surgeons were generally impressed with the 30-day result and were extremely positive. Surgeons were particularly pleased with the performance across stroke and renal endpoints, which was quite favorable compared to published data for alternative endovascular treatments. Overall, it was a great quarter. We accelerated our top-line growth rate for both onyx and stents to over 20%. We hit another significant milestone in our pipeline execution with our CYD approval, and we significantly improved our capital structure by eliminating approximately $100 million of convertible debt. We're excited about our progress to date in 2025 and are confident in our ability to deliver sustainable double-digit revenue growth, drive EBITDA margin expansion, and grow adjusted EBITDA twice the rate of constant currency revenue growth. With that, I'll now turn the call over to Lance.