Penumbra, Inc.

Good afternoon. My name is Chris and I'll be your conference operator today. At this time, I'd like to welcome everyone to Penumbra's fourth quarter and year-end 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 withdraw your question, please press star one again. I would like to introduce Ms. G. Hamlin-Harris, Investor Relations for Penumbra. Ms. Hamlin-Harris, you may begin your conference.

Thank you, Operator, and thank you all for joining us on today's call to discuss Penumbra's earnings release for the fourth quarter and year-end 2021. A copy of the press release and financial tables, which include the gap to non-gap 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. Approved results could differ materially from those stated or implied by our forward-looking statements due to certain risks and uncertainties. including those records in our 10-K for the year ended December 31, 2021, which are scheduled to be filed with the SEC on February 22, 2022. 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, including the 10-K previously mentioned, for more complete discussion of these factors and other risks that may affect our future results or the market price of our stocks. including but not limited to the impact of the COVID-19 pandemic on our business, results of operations, and financial conditions. Penumbra 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 that 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 fourth quarter and full year. And Jason Mills, our Executive Vice President of Strategy, will discuss our 2022 guidance. With that, I would like to turn over the call to Adam Elsesser.

Thank you, Chief. Good afternoon, everybody. Thank you for joining Penumbra's fourth quarter and year-end 2021 conference call. Our total revenues for the fourth quarter were $204 million, a year-over-year increase of 22.2% as reported, and 23% in constant currency, and a 7.3% sequential increase from the third quarter. For the full year 2021, our total annual revenues were $747.6 million, which represented growth of 33.4% over full year 2020. In the fourth quarter, we achieved record revenue in both our neuro and vascular businesses. Also, we started making progress toward our goal of building a safe and secure healthcare platform using immersive computing to help a significant number of patients. In the early part of this first quarter of 2022, we navigated the same macro challenges that every company in our field is seeing, including severe staffing issues, particularly in hospitals, supply constraints, rising inflation, and other COVID-related challenges. That said, our team is stronger than ever and able to take on the important work necessary to help the millions of patients that reside within the six large, under-penetrated markets we're serving. During the last two years of the pandemic, The Penumbra team delivered several new paradigm-changing products to our physician customers, and we continue to invest significantly in new innovation within each of these markets, as well as in production to ensure as steady a supply chain as possible. These investments matter to the long-term growth and profitability of our business, And we are also excited about several new important products we expect to bring to our customers within neurovascular and immersive healthcare later this year. Now I'd like to spend a few minutes discussing our team's execution during the fourth quarter. Let's start with vascular. We reported global vascular growth of 30.4% year over year to $113.6 million in the fourth quarter. as we saw strong performances from both our thrombectomy and embolization franchises. Our vascular team has an enormous amount of work to do over the next several years, as the opportunities for growth in both of these franchises are significant. This quarter, the demand for our vascular embolization products accelerated following the prior COVID wave, growing 13% sequentially, which took a lot of our team's attention. We also increased our revenue both sequentially and year-over-year in all four vascular thrombectomy segments, ALI, DVT, coronary, and PE, and are in great position in each going forward. In just the past few years, we have launched paradigm-changing technology into all four of these underpenetrated markets, within which there are over 1 million patients we can help each year, nearly 90% of whom are not yet treated in single session therapy. On the venous side, in DVT and PE, we saw an accelerating number of patients treated with our Lightning 12 technology through the second half of 2021. Notably, the highest number of new physician customers adopted Lightning 12 in the fourth quarter. Not only do we see a long runway continued growth ahead with this technology, we also have new innovation expected late this year for venous patients. Similarly, we continue to expand our leadership position in ALI with Lightning 7, adoption of which has been robust since its launch in the second quarter. Lightning 7 changed the paradigm in the treatment of ALI, and we also have plans to augment this paradigm late this year as well with additional products that build on our proprietary computer-aided innovation. On the coronary thrombectomy side, we presented positive clinical data from the CHETA study in November at the TCT conference, and these data drove increasing awareness of the utility of CatRx for patients with coronary lesions with high thrombus burden. We saw accelerating revenue from our coronary business in the fourth quarter, and we believe we are in the early stages of growth in this market. The positive trends that underlie our strong growth in both vascular thrombectomy and embolization are a testament to our unique products, strong commercial team, and clinical focus. Our best-in-class vascular team added more new thrombectomy customers in the past four quarters than any similar stretch in our history, including a record number of new customers added in Q4. Further, going forward, the team is working with more physicians than our existing accounts to bring our technology to them. This is important given that they serve all three specialties in this field, interventional cardiologists, interventional radiologists, and vascular surgeons, many of whom do procedures in more than one area. We are well positioned as we have invested significantly over the past few years to prepare our commercial team to meet the needs of physicians in all three specialties with continued innovation and clinical focus, including new and relevant clinical studies in DBT, ALI, and PE. Let me now turn to our neuro business. In the fourth quarter, we recorded the fastest sequential growth in nearly three years, excluding the initial COVID quarter, as our neuro business expanded 6.8% over the third quarter of 2021. and accelerated to 13.3% growth year over year to $90.4 million, led by our stroke franchise. Coming off last quarter's 17% sequential increase in our U.S. stroke business, the momentum with the red catheters continued, driving 11% sequential growth in the fourth quarter. The red catheter unit volume has already eclipsed the peak for our previous generation products set in 2019 before the pandemic and recall. Red 72 has become our best-selling product for large vessel strokes, while Red 62 has exceeded all expectations. Not only has Red 62's utilization and distal aspiration been robust, the product is being adopted at a much higher rate than anticipated in large vessel occlusion as a primary treatment as well, in large part because it is the best tracking catheter on the market. We believe catheter trackability will become an even more important trait as we move into the new paradigm in this market in the future. As we look into 2022 and beyond, the REDD portfolio is very important for two reasons. First, we think REDD will continue to drive strong growth and share gain for our stroke business. not just in the U.S., but also in Europe, Japan, and other geographies into which we will be launching these products. Second, red sets the stage for Thunderbolt, which is our most significant innovation in stroke to date. We're even more confident in our decision to conduct a trial in the U.S. for Thunderbolt. We expect this trial will demonstrate the profound benefit of Thunderbolt, which could change the paradigm in stroke interventions. by significantly enhancing the speed and completeness of clot removal. We are also well positioned in neuro access and embolization. More than a year after our US launch, we are still seeing increasing adoption of BMX96 and access with additional innovations slated for later this year. Likewise, we are seeing a renewed interest in our larger neuro coil family, which represents a unique and important product line for some of the most challenging embolization cases. Turning now to our immersive healthcare business, we have made significant progress in the work necessary to build the first platform for virtual reality in healthcare. To build this platform, our work in 2022 is focused on three important areas. First, we are making significant progress innovating on the technical side of building this platform, both in terms of hardware and software. Second, we have begun important conversations with some of the leading companies across more than a dozen healthcare channels within which there are more than 50 million patients who can benefit. And lastly, we are exploring dozens of partnerships with third-party companies who could eventually become a very large source of applicable content for patients on our platform. Moving finally to our international business, we made significant progress in the fourth quarter. growing revenue 19% on a year-over-year basis. With the upcoming launches in several international markets of our red catheters and lightning technology, coupled with continued expansion of our business in China and Japan, we are well positioned for strong growth in our international business going forward. I would now like to turn the call over to Maggie to go over our financial results for the quarter.