Artivion, Inc.

Good afternoon and welcome to the Art of On third quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A brief 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, Lane Morgan from the Gilmartin Group. Thank you. You may begin.

Thanks, operator. Good afternoon, and thank you for joining the call today. Joining me today from our TIVIANS management team are Pat Mackin, CEO, and Lance Berry, COO and CFO. Before we begin, I'd like to make the following statements that 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 and 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. 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, Lane, and good afternoon, everyone. I'm pleased to report another strong quarter of financial and operational results in which we delivered total constant currency revenue growth of 16% and adjusted EBITDA growth of 39% year over year. Further, we continue to make good progress in each of our key clinical and pipeline initiatives, which we believe will drive continued growth in the near-term, medium-term, and long-term. Our Q3 performance was enabled by continued growth across our product portfolio with StentGraphs and ONIC valves acting as significant growth engines. From a product category perspective, StentGraph revenues grew 31% on a constant currency basis in the third quarter compared to the same period last year. Continuous sequential growth was, again, driven in large part by AMDS, as we benefited from growing early adoption and initial stocking orders. We see our StentGraph portfolio as a foundational component of our growth strategy, and we are encouraged by these strong results with AMDS. Looking ahead, we intend to replicate our proven strategy by bringing additional StentGraph products that are already generating revenue in Europe. to the U.S. and Japan, unlocking a meaningful expansion of our total addressable market. Relative to the AMDS U.S. launch, we're very pleased with the market enthusiasm since we received the HDE in late 2024. Feedback from early adopters remains exceptional, and we're seeing more and more customers moving through the three-step process, including IRB approval, VAC analysis, and company-required surgeon training prior to implanting an AMDS under the HDE. Our early success reflects both the dedication of our existing sales force and the still growing body of positive clinical data validating the unparalleled clinical benefits of AMDS. With respect to new clinical data, we were very pleased to see two late-breaking science sessions highlighting the favorable data regarding our AMDS technology at the recent EACS annual meeting in Copenhagen in October. Late-breaking data from our AMDS PERSEVERE trial highlighted the positive benefits of AMDS beyond the region treated by the stent for the subset of patients with preoperative visceral and renal malperfusion. The results continue to demonstrate the benefit of patients with malperfusion even in subsets of malperfusion. Also at EACS, late-breaking data from our AMDS PROTECT trial reported real-world outcomes from our European and Canadian multicenter registry, demonstrating excellent three- to six-month results consistent with those from AMDS-Persevere and the DART studies. Notably, there were no occurrences of paralysis, periparesis, aortic rupture, myocardial infarction, as well as over 95% of the patients showed positive remodeling with the true lumen diameter increasing or remaining stable in zone one to three. These data build upon our prior positive findings and further support the lifesaving nature of AMDS. Lastly, on AMDS, we're very pleased to see that CMS recently established a new MS-DRG, DRG 209, specifically for complex aortic procedures. This code was made effective on October 1st, 2025, and reflects a meaningful increase to the reimbursement available to healthcare providers for these procedures. We believe this improved rate more actively reflects the clinical necessity and complexity of these cases, as well as the hospital resources required to deliver lifesaving treatments such as AMDS. We expect this will strengthen our economic value proposition even further, improve patient access, and act as an incremental tailwind for already adopting these trends. Overall, we're encouraged by the early commercial traction of AMDS, our expanding base of clinical evidence, and the reimbursement updates, and an even stronger value proposition for this lifesaving technology. We're excited to continue growing AMDS revenue as we further tap into what we estimate to be a $150 million annual U.S. market opportunity, the vast majority of which is already unlocked through the HDE with limited competitive alternatives. Alongside AMDS, ONF continues to be another major growth factor in 2025. In Q3, we delivered exceptional results in our onyx business, with revenue growing 23% year-over-year on a constant currency basis. Growth was driven by continued global market share gains supported by onyx unique clinical profile as the only mechanical aortic heart valve that can be maintained at a low INR of 1.5 to 2.0. Based upon the proven clinical benefits of the onyx aortic valve, as well as the growing body of evidence supporting the use of mechanical valves in younger patients, we maintain our strong conviction that ONIX is the best aortic valve on the market for patients under the age of 65 and will continue to take market share worldwide. In the U.S., we are benefiting from expanding awareness and adoption of our ONIX valves, driven by positive new data, as well as cross-selling opportunities from our AMDS launch. This dynamic in particular reinforces our conviction in our innovation-led, multi-pronged growth strategy and further strengthens our confidence in both our near and long-term outlooks for growth and profitability. In line with that strategy, in anticipation of continued growth, we've taken meaningful steps in the third quarter to expand our ONIX operational footprint. During the quarter, we entered into two real estate agreements to purchase two facilities in Austin, Texas, The first facility, where we currently lease and occupy, serves as the basis for our onyx manufacturing operation and includes about 75,000 square feet of combined manufacturing, administrative, laboratory, and warehouse and office space. Meanwhile, the second adjacent facility allows us to expand our footprint in Austin as our capacity needs continue to rise in the coming years. We expect these facilities provide long-term capacity for the onyx business. Ultimately, we remain confident in the growth trajectories of our StentCraft and Onyx businesses, where we continue to focus our investments on maximizing and sustaining our growth momentum. Beyond these growth engines, we also are maintaining a strong position across our highly differentiated and highly defendable base businesses, tissue processing and BioBlue. In Q3, tissue processing revenue increased 5 percent year-over-year on a constant currency basis. As a reminder, a significant portion of our tissue revenue comes from our Cinegraph pulmonary valves, for which demand largely outstrips supply every quarter, and therefore, we hold no inventory. At this point, we believe tissue processing volumes have normalized following the disruption caused earlier this year by the 2024 cybersecurity event. As a result, we expect four-year 25-tissue revenue to be relatively flat compared to 2024, with mid-single-digit revenue growth expected for the full year of 26 and beyond. Meanwhile, BioGlue grew 1 percent in Q3 on a constant currency basis compared to the same period last year. As we've discussed previously, we expect to see some variability in the growth rate of BioGlue quarter over quarter, driven by the significant amount of stock and distributor business in this product line. On an annual basis, we expect BioGlue to grow in the mid-single-digit range. In summary, we're encouraged by our third quarter commercial performance, driven by our unique portfolio of highly differentiated PMA-approved products. Looking ahead, we're advancing a robust pipeline of high-margin innovations that we expect will unlock approximately $1 billion of incremental market opportunity over the next five-plus years. Our nearest term PMA opportunity is for AMDS. While the HDE enables us to sell AMDS in the U.S. before obtaining the PMA, We are focused on securing the PMA for AMDS. To date, we've successfully, we've already filed three of the four modules, keeping us on track for FDA approval in mid-2026. As for Nexus, Endospan is expected to present its one-year data from its US IDE trial triumph for the Nexus device at the upcoming STS annual meeting in late January. Assuming the data shows the trial endpoints have been met, Nexus remains on track for approval in the second half of 2026. In Q3, we took strategic steps to strengthen our balance sheet in anticipation for a potential end of span acquisition by refinancing our existing credit agreement to extend its maturity to 2020-31. We also secured more favorable interest rate and gained access to a new $150 million delayed draw term one facility. Lastly, on our pipeline, I'm pleased to announce we recently enrolled our first patient in our pivotal trial called Artisan. As a reminder, in July we received investigational device exemption approval, IDE, for the FDA to begin our U.S. pivotal trial, Arcivo LSA, which is our third generation frozen elephant trunk used to replace the entire aortic arch. The trial will evaluate the safety and effectiveness of our SIVO in the treatment of acute and chronic ARG pathologies and will enroll 132 patients in up to 30 sites. We are optimistic that the trial will be successful, supported by the positive clinical results from our current generation frozen elephant trunk, Aveda OpenNeo. In conclusion, we believe our accelerated top line growth at 16% constant currency the positive new late-breaking clinical data presented at EAX for AMDS, the establishment of the approved DRG 209 for AMDS, all serve as clear validation of our strategy and the strength of our unique, innovative product portfolio and pipeline. We look forward to continuing to build on our momentum as we close out the year and remain confident in our ability to deliver sustained double-digit revenue growth while growing adjusted EBITDA at twice the rate of constant currency revenue growth. With that, I'll turn the call over to Lance.