Penumbra, Inc.

My name is Katrina and I will be your conference operator today. At this time, I would like to welcome everyone to Penumbra's first quarter 2021 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to retry a question, press the pound key. Thank you. I would like to introduce Mr. Stephen Dobson, Investor Relations for Penumbra. Mr. Dobson, you may begin your conference.

Thank you, Operator. And thank you all for joining us on today's call to discuss Penumbra's earnings relief for the first quarter of 2021. A copy of the press release and financial tables, which includes a GAAP to non-GAAP reconciliation, can be viewed under the Investors tab on our company website at www.penumbrainc.com. During the course of this conference call, the company will make forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial performance commercialization, clinical trials, regulatory status, quality, compliance, and business trends. Actual results could differ materially from those stated or implied by our forward-looking statements due to certain risks and uncertainties, including those referenced in our 10-K for the year-ended December 31, 2020, filed with the SEC. As a result, we caution you against placing undue reliance on these forward-looking statements, and we encourage you to review our periodic filings with the SEC and including the 10K previously mentioned, for more complete discussion of these factors and other risks that may affect our future results or the market price of our stock, including but not limited to the impact of the COVID-19 pandemic on our business, results of operations, and financial condition. The number disclaims any duty to update or revise our forward-looking statements as a result of new information, future events, developments, or otherwise. On this call, certain financial measures are presented on a non-GAAP basis A reconciliation of GAAP to non-GAAP financial measures is provided in our posted press release. We anticipate the prepared comments on today's call will run approximately 20 minutes. Adam Elsesser, Penumbra's Chairman and CEO, will provide a business update. Maggie Ewan, our Chief Financial Officer, will then discuss our financial results for the first quarter. And Jason Mills, our Executive Vice President of Strategy, will discuss our updated 2021 guidance. With that, I would like to turn over the call to Adam Elthusser.

Thank you, Stephen, and I appreciate you filling in for Chi while she is on maternity leave. Good afternoon, everybody. Thank you for joining Penumbra's first quarter 2021 conference call. Our total revenues for the first quarter were $169.2 million, a year-over-year increase of 23.2% as reported and 21.5% in constant currency. For the first quarter of 2021, we recorded operating income of $13.5 million, or 8% of revenue, compared to operating income of $0.6 million during the same period last year. Our vascular business produced outstanding growth again this quarter, with revenue expanding 50.5% year over year to $89.2 million. and we believe we are just getting started in vascular. Our neuro business exceeded our expectations in the first quarter, posting total revenue of $80 million, up 2.5% year over year. Our neuro team's extraordinary work following the Jet7 ExtraFlex recall in mid-December sets us up well throughout 2021 and beyond as we prepare to launch important new products. Further, we continue to make progress with our real, immersive therapeutic platform, and we are increasingly excited about the growing opportunities to help patients. And lastly, we saw solid trends in our international business, especially in China. Our first quarter results show that our products are positively impacting more patients than ever before, yet we are driven every day by the number of patients we can still help We have been purposeful in building a true portfolio of innovative products that has provided us the base to produce durable growth. Now I'd like to briefly discuss our innovation and portfolio breadth across each of these franchises. Let's start with our vascular franchise. Our proprietary lightning technology, coupled with our latest catheter innovations, CAT 7 and CAT 12, once again drove strong growth in our peripheral thrombectomy franchise this quarter. The effectiveness, speed, and value of our technology in both these vascular beds is resonating with our physician customers, driving increasing adoption of these tools to help patients suffering from clot in their bodies. Lightning 12 continues to be incredibly successful at removing blood clot in single sessions from the veins and pulmonary arteries. And with the recent PE indication cleared by the FDA and the upcoming launch of RapidAI's artificial intelligence PE platform, we continue to think our Lightning franchise will drive a strong growth for Penumbra in the Venus space going forward. On the arterial side, we launched Lightning 7 to our customers toward the end of the first quarter. The feedback has been extremely positive. CAT7 utilizes our proprietary hypotube lumen-maximizing technology, which provides to physicians treating arterial clots a catheter with a smaller outer diameter without materially compromising on the inner diameter. Plus, it incorporates the significant benefits of our proprietary lightning technology for blood saving and ease of use. With both lightning 12 and lightning 7, We now have the opportunity to help a significant number of arterial and venous clot patients among both current and new customers. Bringing this technology to all interventional radiologists, vascular surgeons, and interventional cardiologists will not happen in one or two quarters. It will take time, but we understand the benefits for patients, and our team is committed to this mission. Turning to our coronary thrombectomy system, cataracts again posted record results, and it still has a very long runway in a market we estimate is approximately the same size as the U.S. stroke market. The Society of Cardiovascular Angiography and Interventions updated their guidance late last year to include cataracts as a viable option for treating large thrombus burden and saphenous vein grafts. and we are investing in further clinical work to expand Catarex's presence in this relatively large field. Our peripheral embolization business also had another record quarter in the U.S., growing nearly 20% year over year. Not only do we have a unique portfolio of products in this area, but we continue to invest in innovation here as well. For instance, one of our newest products, Ruby Low Profile, or LP, once again contributed meaningfully to our peripheral embolization growth this quarter. Overall, within this franchise, we are seeing both new physicians gravitate to our products and increasing utilization by our existing customers. In sum, the continued strong performance from both peripheral thrombectomy and peripheral embolization highlight the extraordinary important work our vascular team is doing in this field. Now let me turn to our neuro business, starting with our neuro access franchise, which had its best quarter ever. We are seeing increasing adoption of BMX 96 as nearly double the number of our neuro physician customers used BMX 96 during the first quarter as compared to the fourth quarter when it was initially launched. BMX 96 is being used not only in stroke cases, but across all neuro vascular cases. Indeed, our access franchise produced double-digit growth in the US alone. We still have a long way to go with this product in the US, and also internationally, where we have not yet launched it. BMX96's early success is a good example of why we put so much emphasis on both innovation and portfolio. Products within our vascular and neuro franchises are not only unique, but are also interconnected with other products within each respective portfolio, giving physicians a comprehensive solution set to help as many patients as possible. Looking forward, and with a continued focus on both innovation and portfolio, we believe we are very well positioned for future growth across all of our neuro franchises. Stroke, access, embolization, within which our smart coil line had its best quarter ever, and also neurosurgical. Speaking of our neurosurgical business, which we don't talk about as much, we had one of our best quarters ever with the Artemis system. It is worth noting that we are investing in the development of important clinical evidence that we believe is necessary to open up this therapy to many more ICH patients in the future. Turning to our stroke franchise, our business in the U.S. exceeded our expectations. Our neuro team did extraordinary work demonstrating strength, resilience, and expertise in a field we were instrumental in helping create over a decade ago. We focus on a few things we think are critical in this field. The importance of offering stroke physicians a full portfolio of innovative products, commitment and service to our customers, and most importantly, the best end-to-end solutions to treat stroke in both large and distal anatomy. Looking forward, We are excited to bring to customers our newest stroke catheters, the Red Series. In the next several months, we hope to introduce Red 62, which will be an extraordinary step forward in stroke intervention for the distal anatomy, optimizing trackability and maximizing thrombus removal. We believe that there are still a disproportionate percentage of treatable strokes in the distal anatomy that are not treated because of limitations on technology We think REDD62 will be a cornerstone product, helping physicians treat more stroke patients going forward. Further, we look forward to launching additional catheters within the REDD series soon thereafter. And we are also excited by the work we are doing to introduce a new paradigm in stroke intervention as well. I'd like to now focus on the real platform. Our vision for RIO continues to expand as we learn more and identify additional opportunities to help patients within the realms of both physical rehabilitation as well as mental and cognitive wellness. We are fully aware of the unique opportunity we have to do something groundbreaking in virtual reality for healthcare. We will leverage our proprietary technology for fully immersive mobile experiences to make the real immersive therapeutic platform available in all settings in which we believe patients can benefit from virtual reality therapy. There is already a significant amount of clinical evidence showing the benefits provided by virtual reality for both rehabilitation and mental health applications, and we have plans to build on these data, working with some of the world's foremost VR experts in healthcare. We have a lot of work to do and a lot to prove with real in the VR field. But each day we see the potential to help a great number of people. Later this year, when it is safe to congregate physically, we plan to host an investor meeting focused on our real platform. We will update everyone over the coming months. Now let's turn to our international markets. Our business in China. Augmented by the new multifaceted agreement we signed with Genesis MedTech Group last quarter, performed very well again in the first quarter, and we are optimistic about additional growth opportunities going forward. In Japan, we continue to expect solid growth in 2021 and beyond. We also made solid progress in Europe, Latin America, and Asia Pacific, notwithstanding some impact from the pandemic. and we expect to see growth in these regions going forward. I'll now turn the call over to Maggie to go over financial results for the quarter.