Abiomed, Inc.
Q4 2016 Earnings Call Transcript

Published: 3 May 2016

[Operator:]

Good day, ladies and gentlemen, and welcome to the Abiomed Incorporated Fourth Quarter 2016 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Ms. Ingrid Goldberg. Ma'am, you may begin.

[Ingrid Goldberg:]

Thank you. Good morning and welcome to Abiomed's fourth quarter of fiscal 2016 earnings conference call. This is Ingrid Goldberg, Director of Investor Relations for Abiomed, and I'm here with Mike Minogue, Abiomed's Chairman, President and Chief Executive Officer; and Mike Tomsicek, Vice President and Chief Financial Officer. The format for today's call will be as follows. First, Mike Minogue will discuss strategic highlights from the fourth fiscal quarter and then turn to our key operational and strategic objectives. Next, Mike Tomsicek will provide details on the financial results outlined in today's press release. We'll then open the call for your questions. Before we begin, I would like to remind everyone that this presentation includes forward-looking statements about the company's progress relating to clinical, regulatory and commercial matter, as well as government regulation, litigation matters, capital and other expenditures and financial performance. Each forward-looking statement contained in this presentation is subject to the risk and uncertainties that could actual results to differ materially from those projected in such statements. Additional information regarding these risks and uncertainties appears in the heading Forward-Looking Statements in the press release we issued this morning, our Annual Report on Form 10-K for the year ended March 31, 2015, and in subsequent Form 10-Qs. The forward-looking statements in this presentation speak only to the date of this presentation, and we undertake no obligation to update or revise any of these statements. Thank you for joining us. I'm now pleased to introduce Abiomed's Chairman, President and Chief Executive Officer, Mike Minogue.

[Michael R. Minogue:]

Thank you, Ingrid. Good morning, everyone. In Q4, Abiomed had another strong quarter, signifying the continued adoption of the Impella family of devices, with $94 million in revenue and 39% in revenue growth. U.S. patient utilization increased by 45% and was driven by robust growth in both Protected PCI and emergent patients. For the full fiscal year 2016, Abiomed generated $330 million in revenue, with growth of 43% and overall U.S. patient growth of 49%. This exceptional growth highlights the creation of new treatment paradigms for high-risk heart failure patients around protecting and recovering heart muscle. Our impressive performance validates Impella as the new standard of care and Abiomed as one of the fastest-growing GAAP-profitable medical technology companies. Abiomed continues to have no debt, increased our cash position by $80 million to $213 million this year, and has grown top-line revenue double digits year-over-year for 26 straight quarters. Our company has amassed three FDA approvals, 346 clinical publications, and 225 patents with an additional 212 pending. Fiscal 2017 is positioned to be an outstanding year as we continue to execute our plan. I am proud of our dedicated employees and grateful to our customers that have enabled our company to create a new era of medicine focused on the field of heart recovery. For today's call, we will highlight three topics

[Michael John Tomsicek:]

Thanks, Mike, and good morning, everyone. Today I'd like to share details on the impressive results we posted in the final quarter of our fiscal year 2016, and then turn attention to guidance for fiscal 2017. Abiomed's growth is encouraging, and we are well-positioned to continue building our technological and commercial capabilities. Our investments during fiscal 2016 have led to our success, and we will further expand the reach and application of the Impella technology to the benefit of patients and caregivers around the world. Fiscal fourth quarter revenue increased 39% to a record $94 million. U.S. Impella revenue rose 42% to a record $81.8 million, driven by a 45% increase in patient utilization. Protected PCI and emergent patients were the foundation of our growth in the quarter, representing year-over-year growth of 58% and 48%, respectively. Outside the United States, Impella revenue totaled $6.9 million and was up 21% on a constant currency basis. Worldwide service revenue of $4.4 million was up 19%. As of the end of the fourth fiscal quarter, the Impella 2.5 had been placed at 1,039 of approximately 1,400 targeted hospital sites for a penetration of 74%. Impella CP has been placed at 826 hospital sites for a penetration rate of 59% of total hospitals. Impella 5.0 has been placed at 408 sites for a penetration of 29%. Impella RP was added to nine hospitals, bringing the total number to 80 sites for a penetration rate of 6%. Our approach of gating the rollout of RP continues, with focus on rigorous training, publications and sharing of best practices to create training centers that support eventual full launch of this critical technology. Reorder performance was very strong for Q4, with U.S. reorders at $76.9 million and growing 49% versus prior year, and our reorder rate was again 100%. Average combined Impella 2.5 and Impella CP inventory at hospital sites was 2.88 units per site, unchanged versus prior quarter and up slightly versus 2.71 units in the prior year. Abiomed is maintaining its system where customers stock pumps for immediate use and rely on rapid replenishment direct from Abiomed. Gross margin for the quarter increased to 84.4% compared to 84% in the same period of the prior year. As in recent quarters, margins were helped by favorable euro exchange rates and strong product volume and yields during Q4. R&D expense for the fourth fiscal quarter totaled $14.2 million and was approximately 15% of revenue. The bulk of the increase comes from program investments in technological product enhancements, the global cVAD Registry, manufacturing processes that will further capacity and efficiency, and new product development. Recent investments in manufacturing infrastructure allow us to produce pumps at nearly double our current sales pace, and we can achieve this output quickly as needed. SG&A expense for the fourth fiscal quarter totaled $45.3 million, up 31% from the prior year. Most notable here is the expansion of our U.S. commercial team, where 11 employees were added this quarter to a total of 214 professionals. Our plans for fiscal 2017 include substantial investment in this industry leading commercial team, with an increase of 10 employees per quarter expected. The addition of more clinical and commercially focused staff allows us to go deeper in existing accounts and support the use of Impella for all appropriate PCI and AMI shock patients. Operating profit for the fourth fiscal quarter was $19.8 million or 21% operating margin compared to $12.4 million or 18% operating margin in the prior year. GAAP net income for the quarter was $11 million or $0.24 per diluted share. This result is difficult to compare to the same quarter last year, as those results were impacted by a onetime $86.5 million adjustment related to the release of the valuation allowance on most of our deferred tax assets. For a better comparison basis, GAAP income before taxes for the fourth quarter of fiscal 2016 was $20.2 million, a 63% increase versus $12.4 million prior year. The balance sheet remains in excellent shape, and we ended the quarter with cash and marketable securities growing $16.9 million to a balance of $213 million. Our top priority for use of cash is to support our organic growth. The company has approximately $57 million in deferred tax assets primarily due to NOLs. I'll close my review of results with a few observations on a record-setting fiscal year 2016. Total year sales were nearly $330 million, an increase of $100 million to the top line and growth of 43% from prior year. Gross margins improved by 2 points versus the prior year, ending at approximately 85%. Operating expenses increased as we invested for growth. However, we still increased operating margins by 6.6 points to 19% compared to 12.4% in 2015. Finally, we remain debt-free and grew cash by nearly $80 million to $213 million during the year, all impressive results. Turning to guidance. As noted in our earnings release, we expect our fiscal year 2017 revenue to be in the range of $430 million to $445 million, delivering 30% to 35% growth on the year. This guidance is based on the following conservative assumption

[Operator:]

Our first question comes from the line of Raj Denhoy with Jefferies. Your line is open.

[Raj Denhoy:]

Hi. Good morning.

[Michael R. Minogue:]

Good morning, Raj.

[Raj Denhoy:]

I wonder if I could maybe start a little bit with the shock approval recently. I'm curious if there's anything in the label we haven't seen yet that references intra-aortic balloon pumps and any of the data around the shock studies and how balloon pumps might even be contraindicated for that population.

[Michael R. Minogue:]

Raj, thanks for the question. There's nothing in there that specifically talks about the data around intra-aortic balloon pump. Our submission had to do with all of our information also going back to the original Bridge to Recovery approvals in 1992 by the surgical device BVS, as well as the AB5000 device in 2004. However, in our label, it talks about being able to utilize the Impella support, whether an intra-aortic balloon pump is being utilized or not being utilized. So, essentially, the sites can either replace the balloon or skip the balloon as the step but, of course, they're expected to follow the normal progression, which has to do with inotropic use and proper judgment.

[Raj Denhoy:]

Okay. You also made the comment that shock has been growing quite well. You've already seen very strong adoption in that category. With the approval in hand now, is it reasonable to expect that you can see better than the 40%-plus growth you've been seeing in that indication to date?

[Michael R. Minogue:]

So, Raj, two things on that question. First off, the market results are showing that the rate of cardiogenic shock has been increasing. It's actually doubled per the reporting metrics over the last 10 years in the United States, as well as if you look at just as CMS population, that's increased 50% over the last four years. And remember that many of these shock patients are much younger and less than 65. Relative to your question about our growth, we do expect a bump in growth primarily in the second half of this fiscal year and certainly over the next five years since we're only in 5% of this population. However, this may not be as dramatic in the short term because we're already experiencing such strong growth of, as you see, greater than 40% year-over-year. So with the addition of the approval, the big issue is we'll be able to market and educate directly for it. And again, a lot of these patients are already in the hospital and already being treated for hemodynamic instability.

[Raj Denhoy:]

Just one last one on shock and I'll drop. You give these metrics around hospital adoption of the Impella, 1,039 hospitals in the quarter. Is it fair to assume that if a hospital has adopted the Impella that they're using it both for high-risk PCI and shock, or is there some segment that have yet to adopt it for shock in that number?

[Michael R. Minogue:]

Raj, that's a very good question, and one of the things that we track as far as the type of patients that the hospitals are supporting. As a general training phenomena, we usually start with the Protected PCI patients in the elective or urgent setting that allows us to be there to proctor and to train the technologists and to be there with the physicians. However, once we start providing that support for Protected PCI, usually all of them immediately will transition over to more of the emergency patients as on a needed basis.

[Raj Denhoy:]

Great. Thank you. Nice quarter.

[Michael R. Minogue:]

Thanks, Raj.

[Operator:]

Our next question comes from the line of Danielle Antalffy with Leerink Partners. Your line is open.

[Michael R. Minogue:]

Good morning, Danielle.

[Danielle J. Antalffy:]

Thanks. Good morning, guys. Good morning. Congratulations on a great quarter. Mike, I was wondering if you could comment on the language from FDA around Impella's ability in shock. And you touched on this, for sure, in your prepared remarks, but around recovery and what that can mean – how that resonate with physicians, first of all. How recovery is fitting into the paradigm of care, which is what you touched on, but what that means for the long-term market trajectory and the shift to Impella to standard of care over time.

[Michael R. Minogue:]

Danielle, thanks for the question. First of all, on the label and the PMA approval, this now makes Impella the only percutaneous hemodynamic support device that is FDA-cleared for safe and effective for treating cardiogenic shock. Prior to this label, the Abiomed products, the BVS and AB5000, were the only two surgical products that were approved for Bridge to Recovery. So the mission and the foundation of our technology has been always focused on heart recovery, and it's really around protecting the heart muscle or recovering the heart muscle. And that's what makes our solution unique compared to other innovative technology such as stents, which is really the plumbing or the coronaries of the heart; the pacemakers, which is the electricity of the heart; the valves, which are the door to the ventricles. But we're really the only company that is focused on helping the heart muscle and even the innovative technology around the Bridge to Transplant devices or LVAD, they do a very good job of sustaining a person to enable them to get through a transplant. However, by coring out a hole in the left ventricle by by-passing the coronary flow, what you're really doing is preparing the body for a new pump or a new transplanted heart. So what we do is already very unique, and as you mentioned, this is significant because now we'll be able to go educate the broader community about what's the science around unloading the left ventricle, what happens with the pressure volume loops, what happens to the wall tension and what happens to the coronary flow when you can put an actively unloading heart pump like Impella into the left ventricle, which allows the heart to work less, it allows the coronary flow to increase, and it allows the muscle itself to not require the same level of blood or oxygen to sustain life. So this is an exciting new field. And if I can just kind of end it – your question with one kind of real world case of an Impella patient. It's a story of a gentleman named Mike Glennie, and he's one that we haven't really been able to speak about before this approval to our physician community. In 2010, Mike -- he was a full-time firefighter in Arizona. He had a massive heart attack and collapsed in the street and a passerby gave him CPR. He ended up at the hospital and he received Impella support. Prior to his revascularization, they supported him through their procedure and for multiple days. And four months after his event, his heart was functioning at near full capacity, and that gave him the ability to not only be discharged but go back to work. And so, six years later, Mike is retiring this year after 42 years as a firefighter in the Phoenix department. So, he did not go on to more surgeries followed by a potentially transplant device followed by a heart transplant if he's eligible, which then requires immunosuppression drugs and several other things to recover from. So that's one of the points on heart recovery is not only is it the best for the patient, but it absolutely reduces costs. So it's probably the most cost-effective application or at least one of the most cost-effective applications in med-tech and in all of heart failure.

[Danielle J. Antalffy:]

That's great. That's a great story, Mike, thanks for that. And a follow-up question, just as you mentioned sales force training and a specific focus on that in the first half of the year. How do you avoid any disruption on the existing PCI indication while you're training the sales force? Just if you could give some color on how you're going to manage all that. Thanks so much.

[Michael R. Minogue:]

Danielle, we will manage it by focusing on both the Protected PCI population in the education, as well as driving protocols and working and partnering with hospitals to find ways to identify cardiogenic shock. We really do believe that by partnering with the hospitals, Abiomed and our very talented team in the field will be able to improve patient outcomes. I think that's a big mission and a great goal for any company. And as we improve outcomes, we tend to reduce the length of stay at the hospital, we tend to reduce the readmissions, which is very important to hospitals, and we get a better outcome for the patient. So really, it's an execution story as you heard from Mike. We are continuing to invest in our personnel and in our infrastructure, and we will plan to slightly accelerate our hiring to approximately 10 people per quarter if they're the right people, but we're really in a good position to execute on both Protected PCI and AMI shocks.

[Danielle J. Antalffy:]

Perfect. Thank you.

[Michael R. Minogue:]

Thanks.

[Operator:]

Our next question comes from the line of Chris Cooley with Stephens. Your line is open.

[Chris Cooley:]

Good morning, gentlemen.

[Michael R. Minogue:]

Good morning, Chris.

[Chris Cooley:]

Hey, good morning, and let me just add my congratulations to the record quarter. My first question, you had just a phenomenal quarter there in terms of growth, but I think equally impressive is the leverage you're starting to realize down to the P&L. And when we look at the cash balances, I realized you said you're just going to expand a little bit here in terms of sales and marketing and the like, but how should we think about the level of cash that you actually need at this point in time to support organic growth, the number one use of cash? Because it really looks like by my math here, cash flow is about 21% of revenue now in the most recent quarter. How much cash do you need to support organic growth and then maybe how do you think about the rest of those cash balances? And I've just got a quick follow-up. Thanks.

[Michael John Tomsicek:]

Yeah. Thanks, Chris, and this is Mike Tomsicek. We still consider the cash position we have as small as a percentage of our market cap. And I think before reconsidering, we would get closer to 10% of our market cap held in cash. As you mentioned, we are very focused on the organic growth opportunity and we're investing in it, and we do have sufficient funds to that. We also have sufficient funds to defend ourselves from a patent position and to focus on small early-stage technological advancements that will make the product that we are selling today easier to use and more broadly adopted in the marketplace. So, we'll make smart choices with our cash, but we still consider the cash position we have right now to be relatively small compared to the strategic size of the business.

[Chris Cooley:]

Understood and appreciate those comments. And then if I may, Mike, you mentioned in your prepared remarks a little bit on STEMI and we really didn't get into that as, obviously, you have a phenomenal opportunity with shock, but could you maybe just update us on your thoughts just regarding the timing and moving forward on that patient population as well? Thank you.

[Michael R. Minogue:]

Chris, as we've mentioned at a couple of our other presentations, we believe that the STEMI population's so different than today's AMI cardiogenic shock or post-surgery cardiogenic shock approval population. We believe that the use of Impella for STEMI patients will have the ability to improve their recovery, and we are planning to start a pilot study this coming year, and we'll be giving more details around the timing and what are the specifications of the study. But to give kind of a high-level kind of review of this population is to think about what happens to the survivors. And even for cardiogenic shock survivors, the acute incident subsequently, it causes an area of dead heart muscle, which is called an infarct, and that results in the majority of these patients becoming part of the growing epidemic of heart failure. So as a person has a heart attack and the hospitals treat them appropriately with door-to-balloon time and potentially revascularization through stenting, what happens is they live through the process, but per multiple publications, around 75% become heart failure patients within five years. And within five years, 45% of the women and 35% of the men will die. So this is another population, it's 200,000 plus patients in the U.S., where we believe that the unloading with the Impella pump will have a clinical benefit in helping to prevent these patients, these survivors from becoming future heart failure patients.

[Chris Cooley:]

Thank you.

[Operator:]

Our next question comes from the line of Jayson Bedford with Raymond James. Your line is open.

[Jayson T. Bedford:]

Good morning. Can you hear me okay?

[Michael R. Minogue:]

We can, Jayson. Good morning.

[Jayson T. Bedford:]

Good morning. So just a couple of quickies. The 38 new CP hospitals is a bit lower than we're looking for, and I understand this is not linear, but I'm just wondering does the AMI shock indication accelerate demand for CP and what should we look for in terms of new adds in 2017?

[Michael R. Minogue:]

The way we look at the rollout each quarter, Jayson, is managing the growth and the training resources. We do not allow new sites to start with the CP because we like to have the rigor and the control and manage the training of the first several patients, and many of those patients are Protected PCI. Over time, we will have the ability if we'd like to increase the number of new CP sites, we can choose to do that. And I certainly think now that we have the AMI cardiogenic shock indication that the Impella CP may have the ability to accelerate as we decide to open up more sites and focus on that patient population directly.

[Jayson T. Bedford:]

Okay. Looking at the operating margin guidance for 2017, I'm assuming that gross margin is flattish, which then implies a sizable increase in spend, which I fully understand given the opportunity out there. But outside of the new reps, can you give us some metrics or some detail on where the incremental spend is directed? And then, I guess just as a follow-on, I think there was a very clean packaged message with Protected PCI, which I think had a big impact. Are we going to see a similar strategy with the new indication?

[Michael John Tomsicek:]

Well, I'll handle the question on investments and then I'll leave the strategy and the indication at the end. As far as investments are concerned, we listed a number of them. We'll continue to invest in the cVAD Registry. We'll make substantial investments there to collect information about the use of our products in a way that will be supportive of indication that we could gain going forward, a number of which we've mentioned on this call and, again, those investments can be meaningful. We've talked a lot about growing Japan. The expense associated with Japan could approach $10 million this year, given the way we're intending to build the team there and the investments that we'll need to make in the regulatory process. Those are two examples. We will make investments in marketing outreach. We talked a little bit about referrals, getting Protected PCI patients off the sideline and continuing to fuel that growth will be worthy of some investments. And we've talked about a number of new products during the course of the call today, 5.5, Bridge to Recovery, the ECP product that will really kind of lay the groundwork for growth in future years and need investments now, and those investments will expand the over 200 patents and over 200 patents pending that we have. So as you mentioned, I think now is the time to keep our foot on the gas on these important things that open new markets, new indications and introduce new products to the marketplace. There is a second question there, Mike, about how we would approach shock as opposed to Protected PCI from a launch standpoint.

[Michael R. Minogue:]

I think the answer is on the shock that the key thing to remember is many of these patients are already in the hospital. So really, what it comes down to is a lot of education, partnering with the heart failure community to develop protocols, to identify shock, to try to stop the cardiogenic shock spiral early, and to try to look for and promote myocardial recovery. And at a high level, as a company, we're always focused on appropriate use with experienced high-risk operators to get the optimal or best patient outcomes.

[Jayson T. Bedford:]

All right. Thanks. I'll get back in the queue.

[Michael R. Minogue:]

Thanks.

[Operator:]

Our next question comes from the line of David Lewis with Morgan Stanley. Your line is open.

[Scott S. Wang:]

Good morning, guys. This is actually Scott Wang in for David. Two quick ones from me. First, can you discuss your expectations for Japan? I know you're not expecting any revenues in fiscal 2017 or any material revenues, I should say, but any sense of how the adoption curve in Japan will compare relative to how it looked in the U.S.?

[Michael R. Minogue:]

Scott, thanks for the question. We believe that there's a tremendous demand and comprehension of the ability of the Impella to provide a solution of heart recovery. To remind our investors in Japan, they do not necessarily do heart transplants. The patient population is relatively small, so they don't do well with most of the implantable technology. And culturally, they're opposed to transplants and sternotomies, so you're looking at a minimally invasive type of environment. The interventional cardiology community in Japan does some of the highest-risk patients. They do longer procedures, and having hemodynamic support definitely is something that they have a clinical need for today. And it was acknowledged years ago that the clinical societies reached out to Abiomed directly and then wrote into MHLW to request that Impella be brought to Japan because their belief that it would save many lives. It is the second – Japan is the second largest medical device market, and we think that the growth rate will really be a combination of education around training, data and time, as well as our focus on how fast we want to grow it to ensure that we continue to get the optimal outcomes that's required with the technology.

[Scott S. Wang:]

So, it sounds like you're saying, Mike, that the adoption curve will be probably better than the U.S. for Impella?

[Michael R. Minogue:]

What I'm saying, Scott, is the adoption curve will really be paced on how much and how fast we want to go. But again, we believe that the best way to roll out a transformational technology is to go at a controlled pace to get great outcomes, to share best practices and to publish the results. Many companies sometimes can get ahead of themselves and that can tarnish their reputation, and what we want to do in Japan is really ensure that we're just maximizing the patient outcomes.

[Scott S. Wang:]

Fair enough, Mike. I guess one more from me. Does Abbott's pending acquisition of St. Jude change your long-term strategic thinking as it relates to kind of competition or in terms of anything related to market development? Thank you.

[Michael R. Minogue:]

The short answer is no. There's no change. The longer answer is any company that is interested in this space validates the size. And given that our number one priority is education, we feel that any effort by either St. Jude or Abbott towards educating a community on the benefits of hemodynamic support is advantageous. We don't think that there's really any change whether it's St. Jude or Abbott as it pertains to Abiomed, and it will not meaningfully changed our business strategy in any way. Based on the initial PHP clinical results, we feel very confident in our technology and our clinical advantages.

[Scott S. Wang:]

Got it. Thanks again. Congrats on a great quarter.

[Michael R. Minogue:]

Thanks, Scott.

[Operator:]

Our next question comes from the line of Brooks West with Piper Jaffray. Your line is open.

[Brooks E. West:]

Hi. Thanks for taking the questions. Mike, I wonder if I could just try to tie it together some of the questions around the shock launch. And I'm wondering if you could give us a little bit more mechanics in terms of, is it safe to assume that you're doing shock cases in every hospital. And I'm wondering to the extent you see penetration into the ER, again from kind of a percentage opportunity standpoint, how much opportunity is there to get into the ER? You clicked off intensivists and heart failure cardiologists. Can you just give us a little bit more mechanics around the scale of penetration opportunity? And then, secondly, I know you lead with the complex PCI for new accounts, but are there accounts to just push you into new U.S. accounts that you're not currently doing business maybe leading to shock? Thanks.

[Michael R. Minogue:]

Thanks for the question, Brooks. The intervention cardiologists will remain our primary call point. But with this FDA approval, we'll be expanding our education to reach the other specialties, as you mentioned, for example, ER physicians, the intensivists and also heart failure cardiologists. And emergency patients that present to the cath lab are from different areas of the hospital, so that's why it's important to touch the various clinicians, and this is not something we've been able to do prior to the approval. But again, to reiterate, with the approval, this is the first time we're able to work with all the physicians, and one of the key tools is to identify cardiogenic shock. And by doing that, we'll be able to be in helping them develop protocols and tools. And so, there is a plan if I were to go through kind of the laundry list of the tools. There is direct education now for that broader population in plan. As you mentioned, ER physicians are one of them. We also will be educating the broader community on the science of unloading the left ventricle, something that's been published and documented for over 15 years. Number two is another – is just the protocol development. We can now partner with hospitals on looking at these protocols for early recognition of shock and how do you track and find myocardial recovery. So that's something we've not been able to do, and I think you'll see several publications from leading centers. On an education perspective, we can now work with the physicians to create educational slide, decks which are underway. In the future, we'll have websites that talk about cardiogenic shock. One will be cardiogenicshock.com, and that'll be primarily for clinicians. Another one will be heartrecovery.com, and that will be for patients. And then we'll be continuing to have clinical dossiers on just the summary of all the clinical data going back since 1992 on all of the science and the engineering around unloading the left ventricle to optimally get heart recovery. So long answer but a very good question.

[Brooks E. West:]

Okay. Thanks, Mike. And then maybe if I could just follow up, I'd like you to speculate a little bit on the RP launch, which sounds like it could come on the expanded launch, which sounds like it could come in about maybe 12 months to 18 months. Shouldn't that be actually a bigger opportunity than what you're talking about here with shock? And I'm just wondering as a transition from an HDE to a PMA, how do you might approach that market opportunity. Thanks.

[Michael R. Minogue:]

From a patient population perspective, the AMI cardiogenic shock population is the largest and our biggest opportunity in general. However, many of the profound shock patients end up suffering from left and right side failure. So, as the field progresses and we start treating more shock patients and improving outcomes, one of the important components of survival has to do with if a patient has right side failure. There's some recent publications out of Europe demonstrating that many of these patients that are in profound shock ultimately need right side support to recover, and we're going to be working with that protocol as well. On the specific and individual right side failure, that has multiple types of patients from failed transplant to biventricular failure to post-LVAD implantation. So, it has a selection of several types of patients. And that's why the training and the protocol development is so important. And we will be having more of a broad launch in that timeframe you mentioned in the future years, so that we can really start to develop and build out the individual protocols for those more of the what you'd call kind of the orphan indications that are not as prevalent as overall cardiogenic shock.

[Operator:]

Thank you. Our next question comes from the line of Ben Andrew with William Blair. Your line is open.

[Ben C. Andrew:]

Good morning. Thanks for taking the questions. The line I guess I was going to take is a little different from where we've been talking about protocols and the ramp. Mike, talk about kind of your efforts to build the economic case to kind of protect that flank, if you will, over time as the volumes grow and as the impact on the system grows. And so, does cVAD have an economic component? Are you guys looking to do any additional post-market sort of data collectioning? I know there's been a fair bit historically published, but just talk about how you thinking about that effort going forward.

[Michael R. Minogue:]

Thanks for the question, Ben. There's two very important elements of our approval for heart recovery. The first is this patient population, as I mentioned, has one of the highest mortality risks in a hospital. So when you think about treating and solving clinical problems today, being able to improve survival is something that not many companies or products have the ability to do. So that's really – and first and foremost, that's our number one priority, not only to use our current technology to attain the results, but really work with the hospitals to improve outcomes, and we'll be publishing, documenting and tracking those outcomes with two methods. Number one is we use salesforce.com to track all the patients. And so, that information is at a high level, but we'll be able to turn back a report to our hospitals to tell them based on the data we've collected, how they are doing against their peers and be able to compare and contrast their technique, their protocols to other sites, whether their other sites have better or worse outcomes. The second element is to go even deeper with our cVAD Registry, which is a global registry now for Impella use, and we'll be able to look at a lot of details that we collect using definitions that we've had in our FDA studies with an independent data collection and independent eco (57

[Ben C. Andrew:]

Okay. And then I guess as a follow-up. As you do restart detailing the broader groups within the hospital, what sort of feedback do you get? Do you get any pushback? And where are the points of focus? And obviously, it's an evolving situation but just maybe the early experience both for shock and then as you ramping up now with ProtectePCI for the last four quarters, five quarters?

[Michael R. Minogue:]

Ben, I think the answer to our focus really revolves around this kind of mantra that we've used, which is training, data and time. And when it comes to pushback, it's usually based on the training or the data. And so, to go through that point at the time, on the training, it really have to do with ease of use, making sure that the nurses, the ICU, the folks that are treating the patients feel comfortable and are trained. And for that, we have our onsite support as well as our 24x7 call center, so that we're able to talk to them and help them as they're treating patients. And on the data, we're certainly going to continue to publish clinical benefits, as well as cost-effectiveness benefits, but obviously having an FDA approval is probably the gold standard relative to talking to customers about the validation of your data.

[Ben C. Andrew:]

Great. Thank you.

[Michael R. Minogue:]

Thanks, Ben.

[Operator:]

Thank you. I would now like to turn the call back to Mr. Minogue for closing remarks.

[Michael R. Minogue:]

Well, thank you, everyone, for your time today. Again, I'd like to thank our investors for their support, and we will be available if anyone has any additional questions. Thanks again for your time today.

[Operator:]

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone have a wonderful day.