Greetings, welcome to the CVRx Q1 2023 Earnings Call. At this time, all participants are in 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 than zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Vallie. Thank you. Please go ahead, sir. Good afternoon. Thank you for joining us today for CVRx's first quarter 2023 earnings conference call. Joining me on today's call are the company's President and Chief Executive Officer, Nadim Yared, and Chief Financial Officer, Jared Oasheim. The remarks today will contain forward-looking statements, including statements about financial guidance. The statements are based on plans and expectations as of today, which may change over time. In addition, actual results could differ materially due to several risks and uncertainties, including those identified in the earnings release issued prior to this call and in the company's SEC filings, including the upcoming Form 10-Q that will be filed with the SEC. I would now like to turn the call over to CVRx's President and Chief Executive Officer, Nadim Yared. Thank you, Mike, and thanks to everyone for joining us. I'll begin today's call by providing an overview of our first quarter performance, followed by an operational update, a review of our financial results by our CFO, Jared Oasheim. I will conclude with our thoughts for the rest of 2023 before turning to Q&A. We are thrilled with our first quarter performance, which demonstrated solid execution on multiple fronts. We were able to share the preliminary data from the BeAT-HF study during the quarter and continue to grow our U.S. heart failure business. This is a testament to our team's ability to accelerate adoption of Barostim through the increased capabilities of our commercial organization and our marketing and awareness efforts. At a high level, our Barostim therapy continues to gain traction. The feedback from physicians at active implanting centers is extremely positive, with many reporting meaningful impact on the quality of life for their patients suffering from heart failure. Let's dive into the details of our performance. Starting with the review of the first quarter, our worldwide revenue for the quarter was $8 million, an increase of 96% over the first quarter of 2022. The U.S. heart failure business generated $6.8 million of revenue, an increase of more than 132% over the first quarter of 2022. This accelerating top-line performance in the U.S. was highlighted by March, which was by far the best single month in the company's history. While we don't know how much of the revenue performance in March is attributable to the announced unblinding of the BeAT-HF study in February or to our commercial execution over recent quarters, we can definitely say our strategy is working. We are also seeing these strong adoption trends continue into April. Turning to an update on the operational progress we made during the first quarter. Starting with the continued expansion of our commercial infrastructure. During the quarter, we added 3 new territories, bringing the total to 29. We remain excited with the quality of sales talent we have been able to attract and look forward to continuing to build upon that quality in 2023. During the first quarter, we made significant progress with our marketing initiatives, including our direct-to-consumer and patient education programs. We will continue to optimize these campaigns to improve cost effectiveness and evaluate the broader rollout to capitalize on the accelerating momentum in our business. Moving to our next area of focus, the expansion of our clinical body of evidence. I want to provide an update on our ongoing interaction with FDA regarding our potential label expansion following the post-market BeAT-HF data we recently announced. We have started an interactive discussion with FDA to ensure that our submission is designed in a way that is most effective for their review process. Based on the data collected so far and guidance from our executive steering committee, we remain optimistic that we will receive a label expansion. However, please keep in mind that our 2023 guidance showing significant growth does not assume any positive impact from a label expansion. We look forward to reporting our progress over the coming months. Wrapping up the quarter, I want to express my gratitude to our team and thank everyone for their continued support. We had a strong first quarter with impressive revenue growth, particularly in the U.S., where our heart failure business performed exceptionally well. We remain confident in our business to help bring relief to many patients suffering from heart failure. I'll now turn the call over to Jared to review our financials. Jared? Thanks, Nadim. In the first quarter, total revenue generated was $8 million, representing an increase of $3.9 million or 96% compared to the same period last year. Revenue generated in the U.S. was $6.9 million in the current quarter, which is an increase of 127% over the same period last year. Heart failure revenue in the U.S. totaled $6.8 million in the current quarter on a total of 225 revenue units, compared to $2.9 million in the first quarter of last year on 99 revenue units. This increase was primarily driven by the continued expansion of the U.S. heart failure business into new sales territories, new accounts, and increased awareness among physicians and patients about Barostim. At the end of the current quarter, we had a total of 122 active implanting centers compared to 56 on March 31st, 2022 and 106 on December 31st, 2022. We also had 29 sales territories in the U.S. at the end of the current quarter, compared to 17 at the end of Q1 2022 and 26 on December 31st, 2022. Revenue generated in Europe was $1 million in the current quarter, an increase of 2% compared to the same period last year. Total revenue units in Europe increased from 50 in Q1 2022 to 52 in the current quarter. At the end of the current quarter, we had a total of six sales territories in Europe. Gross profit for the 3 months ended March 31, 2023 was $6.7 million, an increase of $3.5 million compared to the 3 months ended March 31, 2022. Gross margin for the current quarter increased to 83%, compared to 77% for the same period last year. This increase was primarily driven by a decrease in the cost per unit as a result of the increase in production volumes. Research and development expenses for the current quarter were $3.4 million, reflecting an increase of 51% compared to the same period last year. This change was primarily due to increased compensation expenses, non-cash stock-based compensation expenses, and consulting fees. SG&A expenses for the current quarter were $15.4 million, representing an increase of 43% compared to the same period last year. This increase was mainly driven by higher compensation expenses due to increased headcount, as well as increases in travel expenses, non-cash stock-based compensation expenses, and marketing and advertising expenses related to the commercialization of Barostim. Other income net was $1.1 million in the current quarter compared to a net expense total of $57,000 in the same period last year. The income in the first quarter of 2023 was primarily driven by interest income on our interest-bearing account. Net loss for the current quarter was $11.4 million or $0.55 per share, compared to a net loss of $10 million or $0.49 per share for the same period last year. Net loss per share was based on 20.7 million weighted average shares outstanding for the current quarter and 20.4 million weighted average shares outstanding for the first quarter of 2022. At the end of the current quarter, cash and cash equivalents were $103.3 million. Net cash used in operating and investing activities was $10.5 million for the current quarter, compared to $10.9 million for the same period last year. During the current quarter, we also drew down $7.5 million of debt on our current credit facility to further strengthen our financial position. Turning to guidance. For the full year of 2023, we now expect total revenue to be between $35.5 million and $38 million. Gross margin is now expected to be between 80% and 83%. We continue to expect operating expenses between $76 million and $80 million. For the second quarter of 2023, we expect to report total revenue between $8.2 million and $8.8 million. I would now like to turn the call back over to Nadim. Thanks, Jared. These are very exciting times at CVRx. We continue to see exceptional execution across our business. Revenue is accelerating. Our margin profile continues to improve, and our cash burn is decreasing. Simply put, our model is working as we expect it to. We have continued to see strong performance in the business through April and as a result are raising the low end of our full year revenue guidance and increasing our full year gross margin guidance. We look forward to continuing to build on the momentum we have created and successfully execute our growth strategy throughout the remainder of 2023. Now I would like to open the line for questions. Operator? Thank you, sir. Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star and then one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and then two if you would like to remove your question from the queue. Again, if you would like to ask a question, please press star and then one now. The first question we have is from Bill Plovanic from Canaccord Genuity. Please go ahead. Great. Thanks for taking my questions and congrats on the quarter. Just really two questions really on the M&M data. One is, your discussion of the interactive discussion with FDA, can you give us, you know, your thoughts on the label, kind of how we should think about this as like, what are you going for at the high end? What are you going for at the low end? Kind of frame that discussion for us, if possible. Secondly, you know, your commentary on a very strong March. Not sure if that's commercial or the M&M data. You know, any anecdotal feedback from the physician community would be great there. Thanks for taking my questions. Yeah. Hello, Bill. Very nice hearing from you and great questions. Let me start with the question about the interactions with FDA. As you know, there are two ways of filing a PMA supplement. One is... Apologies for that. The first approach is to prepare the clinical report, submit it, and then wait to hear back feedback from FDA. The second is do it more interactively. We selected the second pathway. This interaction would allow us to optimize the clinical report to ensure that we basically are providing the information in a way that is the most useful to FDA to make that assessment. The labeling we're going after, as I've said it previously, is a treatment effect. We would love it if FDA agrees with the opinion of our executive steering committee that is made of five key opinion leaders, where they stated that, in their opinion, the totality of evidence from BeAT-HF supports this therapy as a treatment for patients suffering from heart failure. Whether, you know, through the interaction with FDA, we could augment that labeling or decrease it's still a little bit early right now to assess that. We're at the beginning, at the early phases of these interactive discussions with FDA. In regard to your second questions and anecdotal evidence, we've had few interactions with physicians since we unblinded the data. I just want to remind everybody here, while answering your question, Bill, that we as a company and as sponsor of the trial, we are not allowed to market the data yet. All we can do is answer questions. If a physician asks a question, we can answer it. If they don't, we cannot provide the information. You know, the information I have in front of me, about half of the physicians that we are either working with or interacting with have not asked any question about the M&M data. They may not be aware of the unblinding of the data. The remaining half, those that are aware, the range of feedback varies widely. What we can say right now is we have not seen any slowdown due to the data or any physician saying, "Well, I'm disappointed with this data. I don't believe anymore what I've seen in my own patients, therefore, I am going to slow or stop treating patients with Barostim." We have not seen that. It's a double negative. Apologies about this. So far I would say I am very satisfied here with the reaction that we have seen in the marketplace to the data for those physicians who have been exposed to the data. Thanks for taking my questions. Thank you, Bill. The next question we have is from Robbie Marcus from J.P. Morgan. Please go ahead. Hi, this is Lily on for Robbie. Thanks for taking the questions. You beat by a good amount and guided for the second quarter ahead of the street. You only raised the low end of the guidance by $500,00 which implies a slightly softer back half than what we had been thinking. Can you talk through your thinking there, and why isn't the full year range moving up more? Hi, Lily, this is Jared. Happy to take your question. Yeah, we were really happy with what we saw in the 1st quarter. I think Nadim mentioned it in the 1st part of the call, just talking about how we really saw some nice results in the month of March, allowing us to beat the top end of that range that we had put out for the 1st quarter. We saw some of those trends continuing into April to allow us to put out some pretty solid guidance here for the 2nd quarter. We don't necessarily wanna move too quickly on the full year guidance after just 1 quarter results or just seeing, you know, a really strong March and seeing a few positive trends into April. If we see the trends continuing after Q2, that's something we'd look at at that point. Got it. That's helpful. Maybe just a follow-up. You know, can you talk about how you're thinking about growth in the U.S. versus internationally? What does it take to get the international business ramping from here? Is the focus for the foreseeable future really on the U.S. and driving adoption there? Thanks so much. Listen, great question. We've asked ourselves this question almost on a quarterly basis. We have limited resources and limited capability in growing, right? It's not about throwing money and hoping what sticks on the wall. We need to invest judiciously in here. As I mentioned in previous calls, the cone of possibilities that would allow us to reach cash flow break even without raising additional money is wide but not too wide. We don't have too much margins in here of throwing money and hoping for the best outcome. In our opinion right now, the best ROI right now is for us to invest it in sales and marketing in the United States. This situation will change in the future as we start increasing our penetration in the United States. Right now, with the growth that we're seeing in the United States, any dollar we can spend in the U.S., we are spending it in the U.S. When we talk about Europe, yeah, we... You know, it's multiple countries, right? Every country is different. Even within a single country like Italy, there are 13 regions, each have their own reimbursement paradigms and so forth. Right now, our focus in Europe is in Germany. We only increased the headcount in Germany to support steady slower growth that we have because what we've experienced previously about a year ago was that if we maintain our presence flat in Germany, actually it decreases, and it became an anchor around our worldwide growth. We hit that sweet spot where we can grow it enough so that becomes a value added, but we don't have the ability right now to invest faster in Germany to grow it as fast as in the United States. For the short term, for the foreseeable future, and as our penetration is still super low in the United States, our best return on investment is in the U.S. We're focused on the U.S. Great. Thank you. Thank you. Next question we have is from Matt O'Brien from Piper Sandler. Please go ahead. Hi, this is Sam on for Matt. Congrats on a great quarter. I guess, a question we had is about Barostim's utilization since announcement of the BeAT-HF trial. Are you seeing anything change, or is it staying mostly the same? Also, what kind of questions are you getting from physicians since this readout? Thank you. Yes, great question. In terms of utilization, I'm assuming that we mean here is a treatment of new patients with a device. We're not talking here about programming more or replacement of batteries for patients who received the therapy five years ago. In terms of de novo patients receiving the therapies, which correlates with the revenue, we've seen a super strong March, and we are very happy with it. That trend continues in April. What we don't know yet is how much of that can be attributed to the data that was basically we issued a press release in middle to late February, around the twenty-first of February, or it's just execution. We know we have a great team. We've done fantastically well, and we've been growing our business in the United States approximately 100% year-over-year. maybe that's only the result of just superb execution, and maybe it's both. So all we can say at this stage is that we have not seen a slowdown. It's a double negative. The acceleration that we're seeing is a bit too early to say it is due to the data that was unblinded. Great. Thank you. Just the last part on, kind of what questions you're getting from physicians. Oh, yes. Oh, thanks for reminding me about the second question. Physicians questions, I'm assuming it is based on the data. The largest question that we received at THT was about one component of the primary endpoint. I don't know if you've seen the data, but we had that chart that Dr. Zile presented, and I actually summarized it that same evening in our press conference. That chart had all of the points, all of the dots on the right side favoring the device with the exception of one dot which was close to the center with a wide error bars, but on the other side of that segment. That was the heart failure morbidity. Those are the hospitalization due to heart failure. What Dr. Zile presented at the symposium at THT was that in his analysis, 2020 was a very different year. The rate of heart failure hospitalizations in the control arm were about one-fourth of the same rate of hospitalizations in the same arm in the other years. The P-value is off the chart how different 2020 was for this specific group as compared to any other year. That led us to consider and ask the question, "What would the data look like if 2020 was not there? If 2020 did not exist, if we did not have a pandemic in 2020?" Instead of filling 2020 with fake numbers, we said, "All right. What if 2020 did not exist?" We went from 2019 directly to 2021. He, Dr. Zile presented additional data at the German Congress of Cardiology known as DGK at Mannheim, where he did that analysis and it shows concordance of the data. All of those dots on that chart now are on the right side favoring Barostim. That was a direct answer to the biggest question we kept hearing, "How can you explain that you have such a dramatic effect on reducing mortality, but yet you're not reducing morbidity?" That analysis, ignoring the data from 2020, answered that question. Sam, that's I would say what was the If there was one single feedback, I would summarize it as such. Great. Thank you so much. Thank you. The next question we have is from Margaret Kaczor from William Blair. Please go ahead. Hi, this is Macaulay on for Margaret. Thanks for taking our questions and congrats on the strong quarter. I guess one on the DTC campaigns. You've obviously mentioned you're monitoring and testing a variety of different channels. Just wondering what you've seen from those and if kinda just any notable increases and awareness following those results and following the readout. Yeah. No, excellent question, Macaulay. Nice hearing from you again. It was great seeing you last month. Listen, in our opinion, based on the data that we're looking at, our direct-to-consumer efforts appears to be paying off. We started expanding to new geographies, but only to the areas where we have active implanting centers. We're very happy with the results that we saw in the first quarter. We're super happy with the results we saw in April in regard to the effect of DTC to drive utilization. In terms of different channels, we will keep testing new channels. You know, right now we are present on Facebook, we are present on Google Ads, we are present on some TV channels. I'm not going to go through this in details, but many of you, if you happen to be in this area, if you happen to be above a certain age and possibly suffering from symptoms similar to heart failure, or if you have somebody in your family or your friends having those symptoms, Facebook has probably you know, shown you one of those ads. Awesome. Thanks. Just a quick follow-up on the BATwire trial. Is there any more color you could give there on adding more sites and patients? Just wondering, if we could get a bit more detail on how that's progressing and potentially how many of the estimated 400 patients have been enrolled? Thanks for taking that question. Yeah, I will not comment on the sites that we're adding at this stage. All I can say is, Macaulay, we are a very small team at CVRx and, particularly our clinical team. Right now at this stage, at this moment, our focus is the analysis of BeAT-HF data, the mortality-morbidity data, and the discussions with FDA and the filing of the PMA supplement, and that is taking precedence over anything else. Now, BATwire is continuing in the background, but that has not been our focus in the past couple of months. If we have any update to provide, we'll do our best to include it in the next quarterly release. Great. Thanks again. Thank you, Macaulay. Have a good night. The next question we have is from Alex Nowak from Craig-Hallum Capital Group. Please go ahead. Okay, great. Good afternoon, everyone. I want to continue off that last question there. You know, now with BeAT-HF being read out, the FDA is going to wanna do. You know, it'll do whatever it wants to do there. Obviously your team is going to be focusing on getting BeAT-HF, you know, good to go and submit to the FDA. I guess what other studies, you know, small or big, do you want to go ahead and green light here in the, in the upcoming quarters? What's next? Hey, Alex. How are you? Great question. Here is what we have disclosed in the past. We do have the post-market study that just completed with BeAT-HF. Right now, unless if FDA asks us to do yet another post-market study, it will be our own initiative. We have currently a large registry that is currently enrolling in the United States. It's called REBALANCE, and our objective here is to try to collect as much data as possible within reason. Obviously, we don't want to create additional burden on hospitals where we know they have still staffing shortage. That's number one. Number two, we don't want the cost to CVRx to be an overburden. That REBALANCE registry, it's ongoing as we speak. The second element is we have opened up the door to academic investigators at institutions who have an experience with Barostim to submit a request for a study to CVRx. We have an independent adjudication committee that looks at the scientific merit of the study, and if it's positive, then we help with some of the funding of these studies. We call this program the BIIR, Barostim Investigator Initiated Research. Those are the ongoing elements. Of course, we've got BATwire. I just answered a question previously on this topic. Finally, we have been accepted in a new program at FDA, which is called TAP, the Total Life Cycle program. It's an advisory program. This program is in a pilot phase at the FDA. They would accept up to 15 projects this year only in cardiovascular. I'm happy to say that our project proposal was accepted by FDA on January the 6th. I believe we are the first pilot project within TAP. We are looking at expansion of the market that we're going after. This obviously would require a new trial. It's a bit early in the analysis phase. We are working with FDA. The essence of TAP is very intriguing and exciting. It is only for programs that have a Breakthrough designation. If you recall, we have a Breakthrough designations for hypertension and the other side of heart failure, which is the preserved ejection fraction. The essence or the promise of the TAP program is for FDA to work with the sponsor and include other stakeholders such as payers or patients or patient advocacy groups or physician groups, physician societies, and so forth, to ensure that the future trial that will be conducted answers all of the requirements of all of the stakeholders. It's a little bit early. It is still a project. We don't have a plan yet to start a trial. It would take months of work in here with all of these stakeholders to design a trial, and then we'll have to make a decision when is the appropriate time for CVRx to invest in this trial. It is a little bit premature right now to discuss the details of the trial is because we don't know yet the details of the trial. I'm very happy here to disclose to you and, you know, everybody else that CVRx has been selected as part of this pilot project with FDA, and we are super excited with the weekly interaction we are having with FDA and with the other stakeholders on this topic. Okay. Very exciting. Excited to hear what comes of that. With regards to BeAT-HF being submitted to the FDA, I know the discussions are underway now as part of the Breakthrough designation. What is the latest timing internally for submitting that package for label expansion? It will depend. Usually, one would say if it's the classical road that we're following, usually it takes company about 3 months to assemble the PMA submission and submit it to FDA. I've seen companies taking 1 year or 15 months to do. In our case, since it is a PMA supplement, the product is already approved, so it's more, you know, focused on the clinical report of the post-market phase of it. The 3 months seems to be a good approximation if we're following the traditional way, and then FDA would have 6 months to provide their feedback on it. Think of it, Alex, as being, you know, end of the year situation. In our case, we may take more time upfront as we are working this interactively with FDA, with the hope that the review process by FDA will be faster and more predictable. Okay. Understood. That makes sense. Just one more clarification just for Jared. The step up in inventory, did you mention what that was for? It looks like you either may be worried about supply chain issues or you're getting ready for some pretty big demand. Just the step up in inventory, what we could pause there. Yeah. Hey, Alex. Thanks for the question. We did see that jump up in inventory from the end of the year. Part of this was us building up some finished goods towards the end of 2022 and getting that finished up here in early 2023. Part of that was trying to get some more inventory over into Europe with a lot of question marks around MDR. We obviously were able to kick the can on that MDR deadline with some of the updates that came through in the industry over the last couple of months, couple of weeks. It's less of a concern there. Also part of it is just supply chain, right? We had a lot of supply on the shelf. We were able to build out that finished goods. It doesn't hurt to have some more goods available so that we're able to sell the units if there is the demand there. Yep, 100%. Makes sense. Thanks for the update. Appreciate it. Yep. Thank you, Alex. Thank you. The final question we have is from Frank Takkinen from Lake Street Capital Markets. Please go ahead. Hey, thanks for taking the questions. Wanted to follow up with one more on the utilization question. In the past, you guys have spoke to in the first couple of months, a facility may treat one or two patients, and they may wait three to six months before reinitiating treatment for additional patients beyond there. Did that dynamic play out at all in the strong March and April months that you called out, maybe where you have a bolus of clinics going from that or post that three to six-month evaluation period, getting comfort with the technology and then accelerating use within their patient pools? Hi, Frank Takkinen. This is Jared Oasheim. I'll take that one. Yeah, I think what we've seen is a lot more of the same from those same types of groups. We just have more centers that are now reaching that point of being with us for or being active for more than 24 months. As they cross that threshold, we're seeing them treating almost 1 patient a month on average. That's that long-term goal that we are pushing all of these sites to reach. The growth that we saw in March and continuing into April, I think, is seeing new sites being activated, treating those first few patients, also seeing all of those other sites continuing to treat more and more the longer they're with us. Okay, that's helpful. Maybe just for my second one. As it relates to the BeAT-HF data, my assumption is it's gonna go in the process of FDA communications, submission, hopefully label expansion. At the same time, is there anything you can be doing with the guidelines to start having any conversations about how you could be positioned within the guidelines once we get through the FDA communications and hopefully label expansion? Yeah, Frank, this is an excellent question. In my understanding, companies have very little influence with the guideline committees. The guideline committee, in general, they are proud to be super independent without any conflict of interest. Therefore, the only thing that sponsors of trials can do is provide the peer-reviewed manuscript with the data and ensure that the guideline committee has seen them. There is no lobbying that is allowed before that, and we're limited here to just sending them an email with a manuscript when the manuscript is published. Now I want to, Frank, to answer your question in here and give a little bit more color. I just want to make sure that I reiterate one point, and I don't think I've made that enough. Our model that has this path to getting us to profitability without raising additional cash is based on the current labeling we have. This is by no mean a lack of confidence in us getting additional label, but it's more about us being super confident with our model based on what we have today in our hand and not needing anything else to get to the cash flow break-even point. The same can be said about payment levels and reimbursement. Based on what we have today on our hands, we have a clear path to get to profitability. Anything above this, and in our opinion, we will get a label expansion, will be an upside, i.e., getting us to that cash flow break-even earlier or allowing us more flexibility in terms of investment in our future. Make sense, Frank? Yep, that's perfect. Good context. Appreciate me taking the questions. Fantastic. Thank you so much. Thank you. That concludes the question and answer session. I would like to turn the floor back over to Nadim Yared for closing comments. Please go ahead, sir. Thank you, operator. Thanks everyone for joining us for our first quarter earnings call. We appreciate your ongoing support, we look forward to updating you on our progress on our next update. Good night. Thank you, sir. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your line.