Hi, good morning, and welcome to the Sidoti Company May Investor Relation, May Virtual Investor Conference. The next company to present is Orchestra BioMed, with us is CFO Andy Taylor. Just 30 minutes for the presentation. There should be time for Q&A at the end of the 30 minutes, so if you do have a question, you can type that into the Q&A tab at the bottom of your screen. With that, it's all yours. Hi, actually, my name's David Hochman. I'm the Chairman, CEO, and founder of Orchestra BioMed. Good to be with you today. Happy to present our story. We trade on NASDAQ under the symbol OBIO. Orchestra BioMed was founded to bring a proven business model from biopharma into the medical device space. That business model is leveraging partnerships with globally established market leaders to drive commercialization of products that we develop in collaboration. We believe this model can accelerate our innovations to patients and ultimately allow us to build an exceptionally profitable business since we'll generate our revenues and cash flows from significant long-term revenue shares with our partners. We have two platform technologies that have lead and then a pipeline program that I'll talk about today. Our lead program, called Atrioventricular Interval Modulation, or AVIM therapy, targets the treatment of high blood pressure or hypertension in older, higher-risk patients. We believe the addressable market for this therapy is upwards of $17 billion worldwide. As you'll, as I'll talk about, we have very strong, statistically significant efficacy data from our previous studies. Think of this as our phase two double-blind studies. We're now running the BACKBEAT Global Pivotal study in enrolling patients. We recently were awarded Breakthrough Device Designation by the FDA. Our partner is the dominant global leader, the really fundamental, foundational company in pacemakers, Medtronic. Our therapy is delivered as programming to a standard dual-chamber pacemaker. Having the global market leader as our strategic partner, having a double-digit revenue share, we think is very exciting and offers a clear pathway to the future commercial success of AVIM therapy. Our pipeline program is called Virtue Sirolimus Angio-Infusion Balloon, or SAB. Here, we're targeting an initial market of, established initial market of upwards of $4 billion annually for the treatment of coronary and peripheral artery disease. Similarly, we have strong efficacy and safety data, from our multi-center pilot study, and we recently got updated IDE approval from the FDA to run the Virtue trial, which will be our U.S. coronary pivotal study where we'll randomize our product against the recently approved, now market leader, Boston Scientific's Agent Paclitaxel Coated Balloon. We also have Breakthrough Device Designation, actually, for three different indications for Virtue, and our partner is the largest globally, largest global Japanese headquartered medical device company, Terumo. Also, we have a double-digit revenue share with Terumo. Ultimately, our business model focuses on making money through royalties while outsourcing commercialization to our partners and allowing us to have multiple shots on goal. Our goal is to impact patients faster while leveraging ours and our significant expertise of our partners. Our partners need us because, like all of their peers, Medtronic, Terumo, and other medical device companies, need to drive future growth but have limitations on the ability to spend money on R&D. Medtech companies actually spend a lot less money as a percentage of revenue than their biopharma peers. In pharma, it's about 20% on average, and medtech, it's 7%. Our business model allows our partners to see and control future growth while outsourcing development work and cost to Orchestra BioMed. I'll talk about this in more detail, but our programs, as I said, are platforms. Our partnership with Medtronic focuses now on uncontrolled hypertension in the pacemaker population, but our Breakthrough covers a much broader population, and you'll see the characteristics of both populations in terms of hypertension and risk are the same. We have a pipeline program in heart failure. Our Virtue product, and our partnership with Terumo covers coronary and peripheral indications for which we have Breakthrough designation. The lead indication, as I'll talk about, is coronary in-stent restenosis, patients that had treated, were treated with a stent that now need to be retreated. Our technology, though, we think, has much broader applications and potential for future partnerships. Very proud of our team. Our company is small, 70 employees, with a big concentration on clinical execution. Our leadership team that I'm very proud to lead are all people with over 25 years' experience developing products and bringing them to market. Many of us have worked together over the years. We have an exceptional board, made up of independent directors. I am the chair of the board. Our independent directors all have extensive experience in biotech, medtech, the public markets, as well as running significant businesses. I am gonna dive into our lead program called AVIM Therapy. As I talked about here, we are targeting the unmet needs associated with high blood pressure in patients with increased risk. Hypertension is really the number one medical problem in the world. It is the leading global risk factor for death, affecting over 1.2 billion patients. Our focus, though, is on older, higher-risk patients where blood pressure can, in the very near term, drive heart attacks, stroke, or progression to heart failure. What we have in AVIM Therapy is a novel, always-on programmable treatment that really is delivered in novelty as an upgrade to a standard pacemaker. Really, firmware in the commercial device, but it is actually software in the clinical trial. We do not change the device, the implant, where the electrodes or leads go. The therapy is device-designed, and you will see, to immediately, substantially, and persistently reduce blood pressure. As I mentioned, and I will talk about in more detail, we recently got FDA Breakthrough Device Designation for a broader population that includes our beachhead, which is the pacemaker patients that already have hypertension, but the Breakthrough Device Designation goes way beyond to millions of additional patients that have hypertension and increased cardiovascular risk. When we think about the market for AVIM Therapy, the highly addressable market, I guess the immediate market is treating hypertension in patients that already need a pacemaker. They are already getting the device that our therapy can be delivered through. That market represents an annual opportunity of 750,000 patients. That is 70% of the 1.1 million patients that get pacemakers every year. It is an over $2 billion opportunity, really, to recapture existing reimbursable dollars that have been commoditized out of these devices in the way they are sold. We are treating the same patients with the same implant. There are thousands of physicians around the world that know how to do that implant. Ultimately, the reimbursements are stable, but to lock in market share, companies like Medtronic sell those devices often at a discount. What our therapy would allow Medtronic to do is have high clinical impact, something that is patented and novel and exclusive to them, where they can recapture those dollars. We will participate heavily alongside them. In the expansion opportunity, which I'll talk about in more detail, we've really looked at the narrow-most addressable patients. This is 1/3 of 1% of the overall global population, so 3.7 million patients, of which over a million are in the U.S. that are very similar to, in terms of their age, demographic, and health, the pacemaker population, where we believe a device that can affect blood pressure the way our therapy does can be very attractive. It's gonna be the same device, but only running AVIM therapy. Mapping that to existing reimbursement and the pricing we would see for the, the pacemaker opportunity, we see an over $15 billion market opportunity for our therapy, for which we and Medtronic are the only companies pursuing this opportunity. Our partnership with Medtronic is a key to our future success, but it's good for everyone to understand what we and what they bring to the table. Our team developed AVIM Therapy as part of work we did previously. It became a wholly owned asset of Orchestra BioMed when the company was founded in 2018. We own all of the intellectual property. We recently updated what is a very significant, updated the street on what's a very significant patent estate. Over 120 issued patents globally just for hypertension. We have further patents on heart failure. Our team conducted all the prior studies. I'll talk about MODERATO II, our double-blind randomized pilot study. We're the sponsor, both operationally and financially, for the now-enrolling BACKBEAT Global Pivotal study. We have a lot of help from our partner, Medtronic. In the future, when Medtronic commercializes AVIM-enabled devices, we stand to make between $500 and $1,600 on every device that they sell, assuming they are sold under existing reimbursement. There is upside to that that we would participate in. The $500 represents the outside-the-United-States per-device minimum. The U.S., Japan, and China has a much higher outs, per-device minimum. The up to $1,600 reflects that we can participate as Medtronic decides to increase the pricing of the device. Just to put that in perspective, if we pick the low-mid- point of $1,000 represented, looking at the 750,000 patient opportunity, that could be a royalty stream of up to $750 million a year at that average price. We see upside to that. Medtronic already controls about half the global market for pacing. So half of those patients are getting Medtronic pacemakers. Medtronic was founded around the pacemaker. It's a core business that generates upwards of $2 billion in annual revenue. They control over 55%, we estimate, of the U.S. market. Our therapy is already being integrated by Medtronic as a download for our clinical study, and it is go and that's a download into existing commercial devices. They're building a commercial device for launch. They'll have exclusive rights. They have exclusive rights in the pacemaker population. They have a right of first negotiation to expand our deal with them to the non-pacemaker population. When we did this deal and last raised capital, which was several years ago, Medtronic participated by investing $50 million of equity in the company, holds all their shares, about 15% ownership in the company. They paid around $10 a share for their original equity investment. I talked about Breakthrough Device Designation. It was a recent milestone. Actually, it happened on April 22nd. What's important is it really reflects what we think is the impact our therapy can offer to older patients that have what's called hypertensive heart disease. On this chart here, you can see 300,000 patients is the annual market for hypertension and pacemakers in the U.S. The Breakthrough Device Designation, though, reflects a much broader population of patients that have hypertension despite being on medication. They have increased cardiovascular risk and preserved left ventricular ejection fraction or cardiac function. Within that population, and I'll talk more about this, are over 2.4 million patients that are older and have what's called isolated systolic hypertension and diastolic dysfunction, two conditions that combine to really drive heart failure. Amongst this is also about a million and a half patients that have heart failure but also have hypertension that's driving progress. We are excited about the Breakthrough Device Designation because we're already enrolling patients that have all of these conditions. The data we think will be important not just to the pacemaker-indicated patients, but beyond. That's what we're doing with our BACKBEAT Pivotal study. How does our therapy work? Atrioventricular interval modulation is really the key mechanism that describes what we're doing. By pacing with that approach, we're able to reduce blood pressure by targeting really the three things that drugs also target. We can affect, by modulating or shortening the timing of the contraction of the atria and the ventricle, cardiac preload or filling, and immediately lower blood pressure. To sustain low blood pressures, we modulate that AV interval so that we can control the autonomic nervous system response to lowering blood pressure, the baroreceptor reflex, and by doing that, modulate the nervous system response and the peripheral resistance or afterload. These are the three things: preload, afterload, and autonomic tone or sympathetic tone that drugs target. We do it all through pacing in conjunction with meds, reduce blood pressure chronically while also reducing intracardiac volumes and pressures, making the heart more efficient without impairing its ability to contract and meet demand for oxygenation in the body. Our therapy works with traditional and what are rapidly emerging conduction system pacing, techniques. We are excited about this overlay of a program onto an established device and therapy. We started work on developing this therapy back in 2012, both animal and clinical work. We've run two prospective studies, including MODERATO II, which I'll describe in more detail. That data drove the partnership in 2022 with Medtronic. We worked together on integration and planning what we're now enrolling and started last year, the BACKBEAT Pivotal study. MODERATO II was our pilot study run with our Moderato pacemaker before our Medtronic partnership. This was run as a multicenter randomized controlled double-blind study in Europe. These are patients that got our pacemaker that also had uncontrolled hypertension despite being on medications. The primary end-point was measured with the gold standard approach in clinical trials to evaluate blood pressure. These are patients that wore a device measuring their blood pressure for a full day, and these are the average results for that full day. At six months, which was the primary end-point, you can see that AVIM therapy treated patients saw a reduction on average of 11 millimeters of mercury, actually over that, which was highly statistically significant, better than the control group. That data matches up with the office or traditional cuff data that we had, long-term follow-up. These are blood pressure reductions that really, in this population, would represent an upwards of 30% reduction in risk of things like heart attacks, stroke, and progression to heart failure. The safety profile was excellent. We saw no major adverse cardiac events in our treatment group versus a rate of 14% in the control group. We saw also compelling data in the high number of patients, almost 90%, with isolated systolic hypertension, very difficult to treat. We showed in the crossover of our control patients that over six months, the control patients saw cardiac volumes increase despite no change or actually a slight increase in blood pressure. When they crossed over to our therapy, blood pressure went down and volumes went down as well, really remodeling or reverse remodeling the heart. We also saw that about 2/3 of our patients had what's called diastolic dysfunction when the ventricle over time develops more tissue, becomes stiff, doesn't relax, and passively fill. Not only in these patients do we reduce their blood pressure, but we improve the relaxation and passive filling of their heart. All of these things are factors in driving and hopefully preventing heart failure. We're now conducting the BACKBEAT Global Pivotal study in partnership with Medtronic. This is a 500-patient global pivotal study that we will run in over a hundred, actually up to a hundred sites in the U.S. and Europe. We currently estimate completion enrollment in the first- half of 2026. We've scaled up what essentially was a very successful pilot study, to a level that even goes beyond what's required. We think to have high confidence in our statistical success. Really, we see this study as establishing potentially a new standard of care for blood pressure, pressure management in the pacemaker population and potentially beyond. The primary endpoints are the same change in 24-hour ambulatory systolic blood pressure, but here measured at three months. Essentially, most drug studies are 8-12 weeks. FDA wanted a shorter study with a primary safety endpoint that's novel but ultimately very appropriate. We know after 60 years of pacemakers what the anticipated serious adverse device events are, and we need to see freedom from an unacceptable rate of those device events in our treatment group. We're really excited about this study. The study allows us to enroll patients who both have recently been implanted or will be implanted. There's a setup of the therapy in all patients before randomization, but it's true double-blind. Ultimately, the therapy has to work in all patients, but then they get randomized blindly to either treatment or control. With this, I'm gonna shift and do a quick overview of our second program, Virtue Sirolimus Angio-Infusion Balloon. Here, we're focusing on one of the other biggest medical problems in the world, the treatment of coronary artery disease. The treatment there is going through a massive paradigm shift. An established $4 billion market is moving from drug-eluting stents to drug-coated balloons, principally paclitaxel-coated balloons. Boston Scientific had the first of these approved in the U.S. last year. What we're developing is a highly differentiated Virtue Sirolimus Angio-Infusion Balloon, a non-coated balloon that we believe has sustainable advantages, versus the competition. What enables our product is a proprietary, encapsulated extended-release formulation of sirolimus called SirolimusEFR that I'll show you gets enough drug through the critical healing period at exceptional doses. Our device is a non-coated balloon that protects drug delivery in transit and delivers ultimately a large liquid dose of our proprietary sirolimus. And the data we have so far really is best in class in terms of the key measures of clinical safety and efficacy. We just got approval and are now planning to move into our U.S. pivotal study head-to-head, versus, the market leader, Boston Scientific. We think this is the best way to ensure the likelihood of regulatory approval as well as differentiation for market adoption. We believe we can take advantage of what Boston Scientific has done really well, which is secure enhanced reimbursement upwards of $6,000 per balloon for these products. It's an established market where patients are getting treated every day. We're looking to take advantage of the shift in care and penetrate that market with a best-in-class product. What is the opportunity? Ultimately, the drug we're using was proven to be superior to the paclitaxel drug in a large array of randomized and other clinical trials, which drove essentially paclitaxel out of the market for stents. The drug, though, works in a different way where it needs to be available at a minimum dose for at least 30 days to do its job. However, that's really challenging for that drug to achieve with a coated balloon. So we have paclitaxel-coated balloons, not because it's a better drug, but because it's easier for the construct of a coated balloon. Fundamentally, a coated balloon has challenges. It has limitations of high dosing. You create particulate and you lose a lot of drug in transit. We developed this encapsulated sirolimus and our microporous balloon to overcome all of these challenges. Our data from publications in large animal series shows that we achieve the most important element of success: very substantial drug delivery well above the known required tissue concentration. What doesn't go to the vessel goes throughout the body in very low doses, below the level of detection by a few days. Our device is fundamentally different. Physicians can take their time 'cause they don't lose drug in transit, don't generate particulate, and essentially they see the back of the catheter almost like a syringe. They deliver the drug as an inflation of the balloon, delivering a large liquid dose. Our drug delivery compares quite favorably to what is the published established drug profile of proven drug-eluting stents. Cypher was the first stent. Xience is the market-leading stent. You can see they have very similar drug-eluting profiles. Virtue, a balloon that doesn't leave anything behind, only in the body for about 60 seconds, delivers almost tenfold as much drug. That's really been key to our clinical results. The measurement of clinical results, and this is the treatment of our lead indication, coronary ISR, is what's called target lesion failure. You're looking for the lowest possible number. What the number reflects is, did the patient in the first year need retreatment or did they have a major adverse event? 2.8%, our result is an exceptionally low result. After a year, we saw no need for retreatment, had great angiographic follow-up. Just to put it in context, this is Boston Scientific's single-layer restenosis cohort from their pivotal trial. Green is their results. Gray is plain balloon angioplasty. Their results were statistically better than plain balloon angioplasty, driving approval. This is now becoming, in our view, the new standard of care for treatment. If you look at their results compared to ours at one year and you look at their two-year results where TLF goes up, the margin between the two products narrows, we think going up, running our pivotal study against Boston Scientific is the right approach to ensure the best chance of regulatory approval, but also to allow us to showcase the potential advantages of Virtue in a head-to-head study. Success is non-inferiority, but this study has a secondary superiority analysis. Numerical differences drove really that phenomenon of sirolimus stents, you know, being the dominant. We think this is a study that can really position Virtue for long-term success. We have a great partner in Terumo, a high royalty rate, a high revenue share. Similarly, we developed the technology. We'll run the first study. They're a significant player in the market where this can be a flagship therapy. They paid $30 million upfront, their milestones, they invested equity. We are mediating certain elements of the contract that we'd like them to move faster on and hope to resolve that in the time ahead. In summary, Orchestra is a company with a novel business model, an exceptional lead partnered program. It's enrolling already our pivotal study. Medtronic is our partner, and we're excited about both the present and future opportunity. Our partnered program, our second pipeline program is now approved and ready to go into a pivotal with significant near-term milestones. Our business model is designed for capital efficiency and potential exceptional profitability in the future. We're really proud of our biggest, our key shareholders, which include not only Medtronic, but RTW and Perceptive, two of the most respected fundamental healthcare funds, operating in the U.S. With that, Jim, if there's any time for questions, I'd love to answer anything you might have. Yeah, just, for the AVIM therapy, you know, focus on that first. Right now most of those patients are treated with beta blockers or other types of drugs, which have significant side effects. You know, what are the side effects for the AVIM therapy? We really haven't seen side effects. Patients, once again, the patients we're treating already need the device. They don't feel the therapy when it's activated. We haven't seen side effects with the therapy that you would see with, let's say, drug therapies. Okay. Is it, let's say the FDA doesn't give you an add-on payment for the therapy, is it still worth it for Medtronic to implement the therapy just to gain share in that market? Sure. First off, CMS determines, you know, reimbursement. Absolutely. Everything we talked about in our presentation, all of our market estimates, everything assumed no change to reimbursement. One of the great things about pacemakers are there are well-established reimbursement pathways in the U.S. and everywhere. There is a lot of room within reimbursement for higher pricing of the devices, but essentially these devices unfortunately have often been commoditized. Medtronic has two or three competitors, Abbott, Boston Scientific, Biotronik. What they all do is they contract and lock in share by doing negotiated discounting with the hospitals. When one of those companies can offer something different that they have that the others do not, pricing can actually go back to the level of reimbursement, you know, thousands of dollars higher. One, there's value in our therapy regardless of pricing and reimbursement, but ultimately what Medtronic and we see is an opportunity for AVIM therapy to drive obviously very significant clinical impact. Because we're exclusive with Medtronic and we have very substantial patent protection, and right now there's no one else developing a program at all, there could be years and years where Medtronic has something that physicians and patients want, hospitals want, payers want, already covered by reimbursement, where now they can price within reimbursement at thousands of dollars higher. Huge upside for Medtronic and the whole community. We participate, once again, remember we have minimums, but every incremental higher dollar they charge, we participate and that's where the upside comes. Hopefully that makes sense. Yep. Yep. With the Virtue, the drug-coated balloon, the initial trials are gonna be coronary, but is there an application in the peripheral systems? Sure. The lead indication for which we have breakthrough designation is treatment of artery disease below the knee. This is an area of very high unmet medical need. These are patients that often that leads to what's called chronic limb ischemia and can lead to amputation, very common in the diabetic population. There aren't great treatments for below the knee. Drug-coated balloons have been looked at amongst other things. We believe we have similarly best-in-class product. The device we'll use below the knee may look different than the coronary product because once again, we decouple drug delivery from the balloon and we may use a different device. We're actually excited that the opportunity for our technology below the knee might be quite profound. Obviously that'll happen in the future. We're focused now on the coronary indications. Timing-wise, you think AVIM therapy is ahead of the, the balloon? Yes. Our goal is to finish the BACB trial next year, hopefully have the primary endpoint data next year, and then look at 2027 for the long-term follow-up and the regulatory process with the target of 2028 being, you know, full commercialization for Medtronic. The Virtue program, just by the nature of not yet starting the trial, is at least a year behind that. I think you mentioned that you have milestone payments in the contract with Terumo. Are there similar type payments with Medtronic? No, Medtronic, when we agreed on really trying to keep this off their P&L, where our focus was having the highest participation in future success, they obviously provided a very sizable investment, initially in the company and continue to be supportive. Really designed to take advantage of the off-P&L elements while giving us the biggest upside alongside them long-term. All right. I just wanna say thank you, David Hochman, for the time today, the presentation. Also, I know we've kept you pretty busy with more awards. No, we're having fun today. Thanks so much, Jim. It's always good to work with you guys. Take care. Have a great rest of your day. Thank you. You You too. Bye-bye.