Robert Metzke here at Piper Sandler. Really excited to have privilege to have CVRx with us here this afternoon. From the company, we've got Kevin, who's the CEO. Jared, who's the CFO of the company. Gents, thanks so much for coming. Really do appreciate it. Thanks for having us. So, maybe just start, you know, a little bit, Kevin. You know, you're—I don't know—how many months in now we are, maybe six to nine, something like that. But just your views of the company now that you're in this seat, what have you seen so far that you've liked or some things that maybe need a little bit of tweaking going forward? Yeah. Thank you. It's a pleasure to be here. I appreciate the time, so I would say, you know, as a board member, I was. I joined the board 15 months before I became CEO, not for that purpose, but. Yeah. Because what I saw in this company had the characteristics of other successful ventures I've been involved with, which is a significant market, in this case, a $2 billion annual TAM, a highly differentiated technology, in this case, the only neuromodulation technology to treat a cardiac disease, and third, a huge unmet need, and so I knew those things coming in as a board member and knew them coming in as CEO. You know, what surprised me upon becoming CEO and spending, you know, the first two months in the field with our teams and with physicians is the remarkable impact that the therapy has on the patient's lives. It is almost it's as dramatic as anything I've worked on in my career in med devices, and it is undeniable, and so that was particularly compelling. I found a committed team focused on the patients first and foremost. Yeah. And customers that trusted us and trusted the procedure and the technology. So those were all, really positive confirmations of my decision. Got it. What about on the tweaking side? Was there anything from a selling perspective, reimbursement perspective, anything else like that to call out? Yeah. So that's a good question. So this was, like a number of the other similar stage transitions that I've come in to lead, that this had all the sort of typical, challenges and opportunity that you find in a company that has been commercial for a couple of years, learned some things in the market, tried a lot of different things. So, you know, we are clearly making changes to the way we go to market. I've made changes in the executive team. We're building processes, and metrics around things that early stage companies can't often focus on. So very typical set of both opportunities and challenges, but nothing that has dissuaded me at all. Got it. When do you start to or when do investors start to feel the benefits of some of those adjustments that you've made and those investments that you've made? Yeah. So I think, you know, some of them are even now the five executives I brought in in the second quarter are now starting to leave their fingerprints on the business and on their teams and on the way we're going to market. We're starting to see some early results from those activities, both in the team and their effectiveness on the ground, you know, in the go-to-market side, in the kinds of accounts we're now engaging, in the conversations we're having with them, and in the clinical evidence that we're starting to produce from a bunch of data sets that we had that were late. So we're starting to deliver on that. I predict it'll be another three or four quarters before we really see the fruits of those labors and can really start to connect cause and effect. Got it. Okay. All right. What about on the reimbursement side, which I'm sure you guys are tired of talking about, and I wish it would just be stable and we could just go ahead and run the business, but you know, you just on the final OPPS side, it's gonna be maintained at the current technology code that you're at right now. How does this impact the business next year? I think we were kind of expecting an ASP decline next year. Maybe we don't get that. What are the thoughts on the financial impact of the business from that update? Yeah. So I would say overall in reimbursement, we had a remarkable third quarter with three very significant accomplishments, one of which was the OPPS, the successful defense for the second time of our current reimbursement rate on the outpatient setting. We also succeeded in doubling the inpatient reimbursement from $20,000- $45,000, which plays into that decision next year on OPPS. The third was the establishment of the Category I code or the acceptance of that application for implementation in January of 2026. As it relates to OPPS, you know, for the second year in a row, we successfully defended the reimbursement of this therapy at $45,000. We mounted a significant stakeholder campaign. We had a successful unanimous panel for the second year in a row. We feel very confident that in the long term, we will ultimately be successful in securing a Level 6 code that makes permanent that $45,000 reimbursement. Got it. Next year, unlike this year, we now have an inpatient procedure that reimburses at that same amount, and that gives us an extra level of insurance against the disruption in our ASPs or in our business should there be some unexpected result from CMS. Okay. So sorry, not a reimbursement expert. I think we all know that. Why does the IPPS ruling ensure the OPPS outcome for next year? Yeah. Or give you that confidence? So that's a good question. So up until now, the inpatient, the same procedures was reimbursed at less than half on an inpatient basis than it was on an outpatient basis. Now going forward, those two are reimbursed at exactly the same rate, which means physicians can decide where to treat the patient based on what's best for the patient and not on any economic factors. And so if, for, for example, if we were to end up in Level 5 at $31,000, we would anticipate some of the procedures being done today on an outpatient basis would shift to the inpatient setting, which is now at $45,000. So it's a second front for us. I see. To do the same procedure in the same patient, likely the same physician, same operating room, same hospital, but it gives us some redundancy. Can they still just go home that day because they don't really need to be inpatient or stay overnight? You know, that comes down to how they code and build a procedure. Most of these patients, they're heart failure patients. They're going under general anesthesia. Few of them go home typically the first night. Okay. Just because of their physical state. Okay. Got it. All right. Appreciate that. Just on the, sorry, on the Category I side of things, are you seeing any easing in terms of making the reimbursement process less onerous, you know, since there shouldn't be any more denials? Yeah. So that's a great question. So that's the third sort of success in the third quarter on the reimbursement front. And maybe the most important in the long term, Category I, it will not be effective until January of 2026. Yeah. But it does, in fact, move us from the Category III designation that we have today to a permanent Category I code. And that does eliminate the automatic denials that. Yeah. 50% of our patients get, whether they're commercial patients or Medicare Advantage. There will be other reasons that the insurers find to deny this procedure, but that represents about half of the friction that exists in the prior authorization process. Okay. So the process will become more predictable. Likely more patients will ultimately be successful, and we hope physicians will be more confident prescribing the procedure 'cause they have a better sense that it will actually be covered. Okay. We're not seeing or feeling that yet. We're already engaging with payers. Okay. To make sure they're aware that this is coming. You know, we are seeing some reaction by the MACs already. So on the Medicare side, they see this as a very significant vote of confidence and vote of sort of permanence in this procedure. So they're already in a call early this week. They're aware of this. They've mentioned it. They're covering the procedure, but they know that it is gonna become a permanent part of the landscape for heart failure going forward. So they're getting ready to deal with it on that basis. Could we get an update from some of the MACs on a MAC by MAC basis next year, or is that gonna be more are they gonna do it collectively? Yeah. So we're currently being adjudicated on a case-by-case basis. Okay. For traditional Medicare patients. We don't foresee that changing in the short term. We don't need to change that because it's working quite well. Okay. And then back to the outpatient versus inpatient. With the update that we've seen on the inpatient side, do you think that's an accelerant to the overall business, or is that just another, you know, area of protection in case things were to change on the outpatient side? Yeah. I think it's too early to tell. I'm not sure we would see that as an accelerant. I think our inpatient percentage, which is about 15% this year, was likely suppressed because it was reimbursed at such a low level and was a loss, $15,000-$20,000 loss for the hospitals. Okay. We may see that pendulum swing back towards the middle and see a more balanced, site of service treatment between inpatient and outpatient. Okay. And Kevin, do you think we're in one of these days we'll stop talking reimbursement? I just. That would be great. Sure, when that is. Welcome that day. Yeah. Yeah. It makes two of us, probably three of us. But. Yep. on the physician side of things, because there, you know, we're gonna move to a Category I, do you think more physicians will be compelled to start doing these cases in front of that, or do we need to get it in place before they're gonna say, "Okay"? Yeah. That's a good question. You know, in our case, the surgeon is really not the driver of the procedure. They're a service provider over the course of 45 minutes on the day the patient gets the device, but they're really not involved in prescribing, identifying the patient or prescribing. Yeah. The procedure. Thankfully, physicians have largely been paid handsomely for this procedure, both by Medicare and the commercial and Medicare Advantage payers. So that's not really been an issue. We've been able to recruit surgeons, either vascular or cardiothoracic, to do this procedure without any issues. The adoption, the real adoption work is done with the heart failure specialist and with the community cardiologists that manage heart failure in most communities. Okay. How are things going in terms of these patients and identifying them and getting them, you know, through the process of really being selected for Barostim? Because, to your point earlier, they're doing so well on this. It would just seem like a lot more patients could really benefit from this, you know, but it is a little bit more challenging process to identify them and then kind of get them all the way through the system. Yeah. until they're actually treated by somebody that's not a heart failure specialist. That's a great question. So, you would think it would be easier, indeed, given the data we have and the undeniable impact of this procedure on the lives of these patients. You know, unfortunately, introducing a novel therapy into a disease state, our chief medical officer describes it, getting a specialist to change the way they've been trained to treat a disease like heart failure is like getting them to change their religion. Yeah. They don't. Just some of them are really early adopters and will move more quickly than others, but they're very careful and thoughtful, and they are reluctant to change what has been sort of burned into them as fellows. Yeah. It takes different groups of physicians different amounts of time and evidence and confidence to begin referring patients. And so, you know, we're working on what we think are the three major barriers to adoption for this therapy. The first is awareness beyond the heart failure community in the general cardiology and with the nurses and the EPs. The second is evidence, and it's building out the evidence we have today largely comes from a number of randomized controlled trials. Yeah. But physicians tell us there are a constellation of other benefits from this therapy that weren't reflected in those trials, some of which are now 10 years old. They've said, "You need to really round out the literature and develop a far broader set of peer-reviewed data that describes this therapy and why it works as well as it does." So number two is evidence. Okay. Number three is patient access, and again, making patients more and more confident that if they prescribe this, their patient will actually get it covered. Is there one of those three that you mentioned that's the real gating factor that can turn the spigot on here for a big patient population? Yeah. You know, if you'd asked me that in July, I probably would've said patient access is probably the preeminent of those three. Thanks to the progress we made in Q3, I would say they're now co-equal. And so we're kind of heading into an execution phase where there are not any significant threshold events or threshold pieces of data or reimbursement, you know, policy changes that we need. It's now about continually whittling down those barriers to adoption and moving physicians into their comfort zone so they'll begin to prescribe the therapy. Okay. Got it. What about, on the commercial side of things? I know the strategy changed there, you know, recently. Can you talk about some of the changes there and then how that's gonna influence the business as we get into 2025, 2026? Yeah. So, you know, at the highest level, we have after we learned what we could from this first chapter of commercialization and have implemented really a market development framework in our approach to the market. And that involves the three barriers, as I've described to you, really focusing all of our evidence generation, patient awareness, marketing energy around reducing those barriers. On the sales side, it involves building a world-class sales team. We had a great team already, but our new very senior experienced leader is further strengthening that team. And in doing so, we're getting much more prescriptive about the types of centers that we engage and the process in which we engage them. So again, in the early stages, you're often talking to anyone that'll listen. You're trying anything you can think of to break your way into some of these big centers. Right. We've learned a lot from that, and we're now really telling our team the centers need to look a certain way, come from a list, in fact, that we've developed for you to spend time and energy on them because those are the centers we know can reach a level of sustained adoption that really builds this into how they treat heart failure and move beyond dabbling or tire kicking or, or using the therapy when we remind them to. Yeah. We're really trying to get this to standard of care and make it part of how they treat the disease. So that's a pretty radical change for a number of our sales team members. You can imagine they've been used to, in typical early stage fashion, doing whatever it takes, and now they're getting a much clearer set of instructions that says, "This has worked, and this is what you will do, and we'll pay you to do that and only that. Yeah. So that's a lot culturally. You can imagine executionally, but lots of tremendous progress there, and, and we're excited about the kinds of people we're now hiring and adding to that team. Okay. Well, that's great. I'm not sure if this is for you, Jared, or for you, Kevin, but just talk about some of these centers now that you're targeting. How much volume do they do? How do you get to them? You know, and then how big a contributor can they be over the next couple of years? I mean, how many are there? And then how many do you win, and how many are you trying to kind of target over the next, you know, year or two? You wanna. Yeah. On that one? Happy to chime in on that one. So in total, there's about 5,000 different hospitals that have ORs that can do this procedure either on an inpatient basis or an outpatient basis. In the past, a lot of focus and energy from our team was on centers that were doing large volumes of ICD implants. But like Kevin mentioned, we weren't turning people away. We were willing to work with any of the centers or hospitals that wanted to bring this therapy to their patients, even if they didn't have significant heart failure patient volumes. Now, as we focus our targeting, it really is around centers that have high volumes of patients. So talking about potentials for hundreds over a year or dozens or more per month, that could be treated with this therapy. Also, centers that are interested in implementing newer technologies, whether it be Watchman or CardioMEMS or other examples where they've been willing to take on newer technologies before having decades of experience with, with these types of therapies. When we start to put all of those things and align them together, we get to a center targeting strategy of around 300 or 400 accounts that we're first going after in our tier ones and tier two types of accounts. So now the focus is on each one of our territories, our sales reps, is getting them their list of tier one, tier two accounts and starting to work through those playbooks to activate those centers. Our expectation is that over the next year or maybe even 18 months, we may see some falloff of the centers that were activated in the past but maybe don't have the patient volumes to create a long-term sustainable program, but rather turn that energy towards these centers that could be treating, you know, potentially dozens of patients on a monthly basis going forward. Could that be a headwind as you're turning off some of these centers, or can you more than offset it with the bigger centers? Yeah. It's a good question. So in Q2, as an example, I think the net number of centers went down by one during that three-month period. And what that meant was we had some centers that went more than 12 months without completing an implant. So they were not high-volume centers to begin with and weren't contributing significantly to the amount of revenue we've been generating. So we don't believe by turning our focus towards these high-volume centers that we would see a significant headwind from some of these smaller accounts eventually fading off into the distance. Okay. Jared, how many of the 300 Tier 1 and Tier 2 are you guys already in? Yeah. It's a good question. It's not something that we've disclosed at this point in time. I think it's still an analysis that we're looking at to say, "Is this the right group based on this, this, categorization that we're working on?" It could be something that we disclose in the future, but right now we're just disclosing total number of centers that are active, and those are centers that have treated at least one patient commercially. Okay. And I'm trying to remember my model off the top of my head, but I can't. But it's probably fair to say it's still early innings with that, you know, those 300 centers. Absolutely. Yeah. There is a lot of room to run for the number of centers that could be activated in those 300 or 400 centers. Okay. Got it. Yep. What about utilization among some of your, you know, this is something we talked about, the vintages and everything and the, you know, number of implants per center. The ones that you're strong with, you know, how are those trending versus your expectations, maybe even a couple of years ago? Yeah. So we definitely have some examples of what good looks like, and some of these centers that are tier ones and tier twos and the work that's been done over the last couple of years, we've seen significant volume of patients being treated on a quarterly and on an annual basis. I think it's, like Kevin mentioned, learning from what worked well in those centers to get them activated and start to work with the referring cardiologists around those specialists to then rinse and repeat that program at other centers that are like them that have the same types of patient volumes. So right now we're seeing about two revenue units per average center per quarter. So there is a lot of upside in each one of these centers to drive utilization. That is now our pure focus is going deeper at each one of these centers rather than continuing to add more and more centers around the fringes. Okay. So of the, sorry, I can't do the math that quickly, but. About eight revenue units a year. Yeah. I got that. Yeah. I could do that math. I could do 10 times four. But just, you know, doing eight, 10, something like that, 300 centers, your ASP, you know, of those 300 centers, I mean, can you build this into like, I can't do the math. Is it a couple hundred million-dollar business just focusing on those 300 centers? 'Cause I think some. Yeah. Here 300 and they're like, "Oh, well, that's not that big of an opportunity." But if. Yeah. You look at that opportunity, you know, times the number of patients times ASP, I think it is. Absolutely. Yeah. You get into the hundreds of millions of dollars available to us when we're just going after those first 300 or 400 centers and the patient volume that is truly available there. Again, it's assuming you start reaching higher penetration rates within those centers. Yep. But there is a massive opportunity available. How many reps do you need to focus on those 300 centers? Yeah. We haven't put a cap on the number of reps that we're intending to hire near term, but what we have been doing is adding about three new territories per quarter. We've been doing that pretty consistently since the IPO. Right now, we believe each one of those territories or reps can manage about three or four to five active implanting centers and managing all the education for the referral cardiologists around them. So if you want, you know, our 45 or roughly 50 territories that we have today, they can manage up to 200-250 accounts if they're fully adopted and fully ramped up. Okay. Not every one of those reps is fully ramped. We've just added three last quarter, for example. They might have one or two active accounts at this point in time. So the goal is to continue to add new territories, continue to, you know, build the tenure in each one of those territories to where we can get each one up to about five accounts. Okay. What kind of revenue per rep do you think you can do? Yeah. So we haven't set a cap on what is actually the possibility for each one of these reps as they manage five accounts, but we've more set a forecast or a goal based on what would it take to get this business to cash flow break even. Right now, our goal is each one of these territories manages about five accounts. Each one of those accounts, if they can use one device a month or 12 a year, that means in total a rep would produce about 60 or manage about 60 revenue units. At an ASP of $30,000, that's $1.8 million in revenue. If we can get our average rep producing $1.8 million in revenue, that's about the point where we believe we'd reach break even from a cash perspective as a business. Okay. Okay. Got it. Yeah. And we believe there's, there's a lot more upside there. We believe there is significantly more volume at each one of those centers that these reps will be managing. Okay. Can you talk about the patient population? I know there's been, you know, some evolution there in terms of the types of patients that Barostim can treat, and I can't keep up with all the iterations and the different patient populations, but where are you at in terms of the TAM now, maybe versus the IPO, a few years ago? Yeah. So I think when we started the IPO, we were at about 55,000 new patients per year in the indicated patient population. We took a conservative approach right out of the gate with the IPO because at that time we had six-month qualitative improvement data for these patients. Over time, we've continued to develop that evidence portfolio, including the expansion of the indication and the labeling that was approved by FDA this past December. At that point in time, we increased the annual incidence rate for this market opportunity to 76,000 new patients. So in the US alone, we believe this market opportunity is $2.2 billion per year. Again, incidence rate. If you look at the prevalence pool, it's almost five times that amount for the number of patients that are out there that could be treated today. Okay. And CVRx has been around for a long time. You know, how do you stack up from a patent perspective, an IP perspective, to make sure that you can remain kind of the go-to within this category or you're gonna have competitors come in? 'Cause if the market's really $2 billion, I mean, that's a sizable opportunity for some big players. Yeah. Yeah. It's. One. Yeah. Happy to. So I was. Oh, go ahead. Yeah. I was gonna say, you know what? That's a great question. You know, one of the benefits, so the mechanism of action for this therapy has been studied for 60 years. Yeah. Which is one of its strengths. It is clearly and, you know, the proof behind it is irrefutable. Yep. The bad news is after 60 years of studying the baroreceptor, there's been a lot of IP that's been filed. So we file on everything we can. We have a reasonable position for a market like this one, as mature as this one is from a physiologic standpoint. We continue to look for IP, but I wouldn't consider that one of our greatest competitive advantages. You know, our intention is to become the company that's committed to the heart failure specialists and the treatment of this population who have so few options and to partner with them in doing that most effectively. Okay. Got it. Develop the science and the data we need to support that. Okay. And I would just add to that. I think one of the biggest moments that we've built over the years is the clinical evidence. We know that, you know, in order to get a device approved by FDA, you gotta go through potentially phase I, phase II, and definitely a phase III trial, which can take years, right? Yeah. More potentially 5+ years. At this point in time, we're not aware of anybody studying this mechanism of action with another device. Got it. Okay. Yeah. I was doing some math up here. I didn't have my phone out texting when you say, you know, you wanna get to a million eight per rep and 45-50 reps, and then you get to cash flow break even. That's like $90 million in sales. Is that the way to think about break even? I don't think so. 'Cause we're not stopping our investment in the sales organization. Okay. Our expectation is we're gonna continue to add territories as we grow this business, and so it shouldn't be thought of as a static. We have 45 territories and we're just gonna stay there until we reach break even, but rather that we're gonna continue to grow that number and potentially start to increase it over the years if we feel more confident that we can get these reps to pay for themselves in a shorter period of time. Is it $140 million you need to get to or, I mean, what? It's a great question. Anything else for that? This is where we want flexibility, right? If we see the opportunity to go out and help more and more patients and accelerate growth by adding more reps in the process, we may do that. But that could end up resulting in kicking the can on when we would reach break even as far as that revenue line. Yeah. It makes sense. It makes total sense. Last one here in the last 30 seconds, maybe just talk, Jared, a little bit about the balance sheet, you know, where you stand coming out of Q3 and any capital needs you may need to think about. Yeah. Good final question. So we ended the quarter with $100 million in the bank. We had drawn down $20 million from the debt facility, $20 million utilizing the ATM. We burned $10 million in the most recent quarter. If we change nothing about the business, we have more than two years of cash available to us today. Our expectation is that we will see leverage in this model as our revenue growth rate is expected to be greater than our OpEx growth rate going forward. So we do not believe we need to go out and raise any additional capital at this point in time. But like I said, it's a massive market opportunity and we're gonna do everything we can to help as many of these patients as soon as possible. Got it. Got it. Okay. It looks like we're all out of time, so we'll cap it there. Thanks so much for all the feedback, Kevin. Yeah. Jared, appreciate it.