All right, we're going to get going here. My name is Adam Maeder. I'm one of the med tech research analysts here at Piper Sandler. Very pleased to introduce the management team from Shockwave Medical. With us, we have Doug Godshall, President and CEO. Doug, thanks so much for joining us. Thank you. M aybe to start, let's touch on Q3. Solid Q3, but maybe not the same magnitude outperformance that we're used to seeing from Shockwave, and no guidance raised this past quarter. You talked about a couple new headwinds that emerged during Q3, Aetna prior auth for claudication patients, and then some fallout from the China anti-corruption initiatives. I wanted to start on US peripheral reimbursement and Aetna. What, you know, what's the latest thinking there? How are you seeing cases with those payers trend? Any new learnings? How long is this a headwind, et cetera, and I'm sure I'll have a bunch of follow-ups. Yeah, so Q3 was sort of following its normal pattern, slow July and August we always anticipate a really strong rebound in September, a nd we saw that with coronary, a little bit of a slowness July, August, and a nice bounce back in September. Peripheral was a little slower than maybe we had modeled in July and August, so it probably would have been a somewhat soft quarter relative to at least consensus. W e also didn't see the bounce back in September. It was largely flat versus August, which is very atypical. So come sort of October, when we still weren't seeing much of a bounce, we started to really dig into what's going on. We had been hearing a bit from physicians that after Aetna announced that they were requiring prior authorization on all peripheral procedures, not IVL, but all peripheral, that physicians were starting to talk about a backlog of patients. Not everywhere, not every physician, but if you had more Aetna patients, you had more of a backlog. If you had fewer, you had less of a backlog. W e started canvassing our physicians, doing some surveys to try to understand, would this explain the phenomenon we saw or the lack of bounce back phenomenon? It does seem to have continued through October, that Aetna's downward pressure was affecting volumes because they're, you got to keep appealing to Aetna. They want you to send the patients for sort of six weeks of an exercise protocol to see if their intermittent claudication subsides. And we've heard enough now from sort of peers in the industry that this is a, this is a phenomenon that's working its way through the peripheral space while physicians push back and medical societies push back. And what's a little hard to predict is, is this going to result in sort of a three-month delay and the patients all come back, four-month delay? When do you start seeing sort of the, the patients who were denied in October, when do they get treated? And so we're confident that it's, it's going to be transient. It's just sort of the length of the transient phase that we're assessing. We don't think many patients are going to, after a lifetime of not complying with exercise protocols and smoking cessation protocols, we don't think they're suddenly going to get better and actually comply with protocols. So, the unknown is at what juncture does Aetna sort of relax and stop this sort of resistance to the overall peripheral procedure? We assume it's a when, not a if. I got it. That's a very helpful color, and maybe just to jump in with some follow-ups. I guess the first question, I'm thinking out loud here, Doug. The Aetna pressure, I think, went, you know, the change in actually enforcing the prior authorizations went into effect in September. So I guess my... If it's six weeks, are you starting to see some of these Aetna patients kind of come back yet or- You know- Not so much. It's since we don't track by patients, we more track what do physicians say, and some are saying, "I'm figuring out the methodology, and I'm now outsource." Like, they spent, we're spending, a lot of doctors are spending a lot of time trying to get to the medical directors at EviCore and Aetna to try to get them to release their patients. Now more and more of them are finding another or somebody on their staff to do these phone calls, so they're not consuming their valuable time appealing these decisions. W e hear some docs say, "I'm kind of figuring it out," other docs saying, "I'm still struggling with it." So it's still sort of working its way through this, through the system, and it's hard for us to know, like, this patient treated on November thirtieth would have been treated on September fifteenth. So it's, it's a little hard for us, so it's more the sort of physician noise that we, we respond to. I see. It makes sense. Y ou know, a couple of questions that I sometimes get from investors. The first is just level of confidence that this issue is really ring-fenced around Aetna, that this doesn't spread kind of more broadly to other payers. I mean, what—Doug, what's your response to that? This is now almost three months since it was announced on September first, and we're not seeing it spread. There is some Michigan, where the New York Times article was centered around one particular physician. There seems to be more rigor in Michigan, but we don't see it spilling out anywhere else at this juncture. So we're pretty... I can't be certain, but we're pretty confident. Yeah. Okay, that's helpful. And then just one, one last question on this topic. You know, if we were trying just ballpark the percentage of your U.S. peripheral business that's impacted or that has exposure to Aetna. I know there's a commercial side, there's also a Medicare Advantage side as well, but can you kind of help frame that for us? Yeah, we don't know, just like we don't know which patient is inpatient and which patient is outpatient. We don't know which patient is Aetna, Cigna, et cetera. Upwards of 20%, but it's probably less than 20%. Maybe 15% is Aetna, 10%-15%. So we don't know the exact numbers, because you do have the private and the Medicare Advantage combo. When you're saying 10%-15%, maybe up to 20%, that's of? Of the potential Shockwave patients. So clearly it's not a lot of patients are still getting through, even the Aetna patients, or we would see it, we would have seen a more dramatic impact on our business. I got it. Okay. Perfect. Let's transition to China and spend a couple minutes here. You know, there's been a lot of enthusiasm about China. Obviously, everyone knows what's going on with, you know, that geography and some of the anti-corruption initiatives. And it sounds like, you know, some of the challenges you're seeing in that region is more about opening new accounts versus volume trends at existing accounts. But I would just love to kind of flesh that out. What are you seeing today? How do you think about that going forward? Yes, we're encouraged that the procedure volume in sites that have already been launched with Shockwave have trended positively over the past few months. So there was a lull when the anti-corruption effort was announced, as everybody tried to figure out how do they not get noticed and in trouble with the Politburo. Now that a lot of sites have sort of been investigated and seem to be in the clear, they're back to doing procedures at the rate or better than the rate that they were in the spring. What we aren't seeing yet is sites that are comfortable bringing in new technology, like new capital equipment, or in our case, new sort of new stocking orders of IVL. W e're encouraged that our JV partner is able to start working through the inventory that they had accumulated, thinking they were going to be launching new accounts. Where, as yet, they have not indicated that they think they can start opening new sites yet. We don't know if that's going to happen first quarter, second quarter. We think eventually it's going to get to a place where they can start opening new sites again. Okay, that's helpful. I have to ask the prerequisite 2024 question. So I have the street at- You don't have to. Oh, I feel obligated to. You want to. I have the street at $919 million for 2024. That's 26% growth year-over-year. I think you previously said you're comfortable with that figure. I wanted to confirm that that's still the case, just in light of China and in light of the prior authorization dynamics in peripheral. Yep, it is. Okay. M aybe just puts and takes, Doug. You know, as we look across your business, things that you'd call out as tailwinds to the business versus headwinds. Yeah. W e're in an incredibly fortunate position to be in right now. We have three fairly significant tailwinds in our coronary business, which is where we've really directed our sales and marketing efforts right now. We're launching C2+. So far, so good. Doctors love the extra energy and the ability to treat a broader spectrum of lesions more effectively. We just received a significant uplift in payment for inpatient procedures with new DRGs that pay on average $8,000 more than comparable DRGs for PCI procedures. We think that removes a lot. As we socialize this and educate our customers about this, it seems to be relieving some of the resistance to increased Shockwave utilization that comes from administration. It's an effort to educate the full sort of constituencies at a hospital, both the cost side in the cath lab and the revenue side and the CFO office. So that is well underway. And then we have a tailwind that is hard for us to really know how significant it's going to be. We think it's going to be quite meaningful, which is a physician fee CPT code that will go into effect in January. That results in about a 30, roughly a 30% increase in physician payment, either RVUs or direct pay, if they're private practice, when you use Shockwave in a PCI versus just a standard PCI. We've never had a CPT code before in our business, so we don't have direct experience to know sort of how rapidly that's going to affect our business. But, for the next nine months, really, we are all about coronary with sort of maintaining peripheral growth, but bias towards the focus on executing these two reimbursement changes and C2 Plus. And then in the back end of next year, we start to shift to, sort of below-the-knee, focus with E8 followed by Javelin in 2025, and then we shift back to coronary at the end of 2025 with Arrow, our next generation coronary device, and then Javelin for coronaries in 2026. I t's sort of like coronary for 9 months, below the knee for 9 months, coronary again for 9 months, and then we'll shift back again to peripheral. So we sort of highlight one of our franchises in a really focused way for a period of time, and then we highlight the next franchise. Sort of keep it fresh with our customers. Yep, that's great color. And wanted to stick with the 2024 theme... and this time talk about leverage. You know, I, I have the street at, I think, 23.5% or so operating margin for next year. Wondering if you have any reaction to that figure at this point in time, and, you know, I know Dan's not up here on stage, but asking you to fill in for him, any puts and takes on the margin level? Yeah. W e gave—we guided a three-year, 500 basis point improvement in operating margins starting sort of end of this year, so 2024, 2025, 2026. That's going to be biased towards sort of 2024 into 2025 into 2026. Not that we won't see some leverage next year, but it's, it'll... We have a lot of clinical trial activity to do. We're going to be spooling up for all these new products that we're going to be launching. And we're going to continue investing in R&D. We'll be expanding our sales force, but at a somewhat slower pace, so we may see some leverage there, but we're not going to try to hit a number at the expense of growth, recognizing just with the expansion of our business, we should see some modest improvement next year versus where we're going to end this quarter. And then that should continue to cascade through 2025 and 2026. Okay. No comment on the $23.5 at this point? We have not guided a margin number for next year yet. Okay, perfect. You know, I guess I wanted to ask about reimbursement. And, you know, you talked about the favorable MS-DRGs that went into effect October 1, 2023, for inpatient coronary, but wanted to ask about outpatient coronary. Mm-hmm. You know, you have your transitional pass-through payment that's going to sunset middle of 2024. And, you know, you're going to have a little bit of a disadvantage from a reimbursement standpoint for coronary outpatient in the back half of 2024. Mm-hmm. What type of impact, if any, do you think that's going to have on your business next year? Then, you know, one question I sometimes get from investors is, you know, just what assurances can you give me about getting this reimbursement gap fixed effective January 1, 2025? So I'd be curious to get your response. I know not every investor believes this. We really don't think it's going to have this gap. We really don't think it's going to have an effect on utilization. You've got these three tailwinds I just talked about: new product, inpatient reimbursement, which is about half the patients and physician fee, plus three years of habit forming, addiction to IVL. That happens when you use IVL enough in the coronaries; you just don't want to stop using it. I t's almost unfathomable to us that a physician would say, "Well, I'm going to now treat my patients less well because for six months I don't have a transitional pass-through." By the time they even sort of comprehend and the hospitals comprehend that the TPT is gone and that the new APC hasn't happened yet, by the time they even figure it out, the new APC will be in effect. O ur confidence in landing in the highest APC, so middle A- APC, the stent code is $10,000, the highest is $17,000. No matter how we cut the data, no matter when we cut the data from the time we've launched, we always clear the line very comfortably that CMS would use to determine what APC to put us in. We're always in that 17,000 when you do the, sort of, you look at the mean cost of the procedure relative to the payment level. They did not move us up this year because the transitional pass-through is still in effect, and they almost always, other than one example that you found, to your credit, every other time, they just wait until the year that the TPT sunsets, and then that's when they make the adjustment. We asked them to do it early. They didn't do it. We asked them again to do it early. They said they still didn't do it early. So, our level of confidence is incredibly high that we're going to land at that, in that higher APC, because it's just math. They just like they do with our DRGs, they created four new DRGs sort of out of whole cloth because their cost data that they were able to accumulate from our NTAP dictated that the existing DRGs were not enough, and so they created new DRGs, which is a really heavy lift for them. Moving us into the appropriate APC is not a heavy lift. That's just sort of ordinary course, and the data are sort of unimpeachable, that we... The $10,000 payment is just not sufficient for these complex patients that Shockwave treats. Yeah, that's great color. I wanted to ask about coronary on the international side, which, I don't remember the exact number in Q3, but it was north of 100% growth year-over-year. Just a fantastic number. I think Germany and Japan were nice contributors there. Y ou know, I'll ask the question this way, you know, how far are we into launch with Japan and Germany? You know, and I think you started to talk about account numbers in Japan. Curious, how many accounts are you in today? How many accounts are there to eventually tap into? And I'd have the same question for Germany. Japan, 300-ish. We're in 700 by the end of the next year, is what we're thinking. Although my country manager would probably tell me 550, just so he could beat his number, but it's probably closer to 700. And then there are lots of small accounts in Japan, so we will keep adding from there, but so the ones that matter are in that 600-700 range. Germany, not too dissimilar, although you have more big centers in Germany than in Japan and fewer small centers. We've been commercial in Germany for longer. Right. W e were essentially doing market development activity, just trying to generate enough cases so that InEK, the sort of government agency, could collect enough cost data, like the U.S., to determine whether we should be in a higher DRG or not. They just finally this year moved us into a higher DRG, and we were about 1% of PCI volume at the end of last year. We're already in over 2%. In the U.K., we're at 6% or 7% of PCI, and that's without any reimbursement. So like in Japan, with reimbursement, we're pushing 10% in the hospitals we launch. Germany should be Japan or better. And there are over 300,000 PCIs a year in Germany, so it's an even bigger unit volume than Japan. The ASP in Japan is a little bit healthier than in Germany, so Japan will be the bigger market. But those two should be number one and number two, for us, for the foreseeable future, particularly now with China going through this sort of, anti-corruption sort of, pause. Yep. That's helpful. Want to be cognizant of time, five minutes left. Y ou had your inaugural Innovation Day meeting last month. O ne of my takeaways is the cupboard is very full, both as it relates to more products coming down the pike in peripheral and coronary, and then also new market adjacencies in the back half of the decade. I'll ask the question this way: If you were to kind of outline two to three kind of product launches over the next, let's call it two to three years, which do you think would be most impactful? Next two years, Javelin, because it's so novel, and we think it's going to be an incredibly enabling technology, both for coronary and peripheral. So I'm going to cheat, and one from two products, but both are going to enable us to physicians to cross lesions and deliver therapy while they're crossing the lesion more safely and more effectively than they can with any other tool today. I think it's going to make us, if not the standard of care, certainly the premier below-the-knee technology provider, particularly when coupled with E8 that we'll be launching. So I'll say Javelin one. Arrow, if you ask physicians, the two issues they have with our coronary product today is they wish reimbursement was better, like, check, we're taking care of that now, and they wish it was more deliverable. T hey routinely tell us, "I would use your product more if I didn't have pressure from administration because of reimbursement." So that'll go away. "And I just, I have to use something else because I just can't deliver C2." So, middle of 2025, we'll have Arrow, and we think a demonstrably better, more deliverable product. And if I extend beyond that, then you start moving into new markets. First product should be a Reducer, and we're increasingly enthusiastic about that. We just had 60 physicians in the UK attend an event for a day, and we were pleasantly surprised by the level of engagement and enthusiasm for a product that is still in a sort of very preliminary commercial phase. That's great color. Maybe to ask a question on new market adjacencies. Carotid, I think, is slated to be your first adjacent market for IVL. I think you put out a 2027 US timeline, if I'm remembering right. Anything you can share at this point, Doug, on regulatory pathway forward? You know, when should we start to see first in human work, followed by maybe a more substantial trial? Is this PMA? Is this 510(k)? Just what can you share with us in terms of process to bridge us to 2027? Yeah, it'll be a PMA. It's carotids, so safety is paramount. We are agnostic as to whether you want to go transfemoral or TCAR approach, which is good but challenging in terms of how we need to structure a clinical trial, because we think we will need data in both arms, both a transfemoral arm and a transcarotid arm. So we'll, we are gearing our clinical strategy around that assumption, is that we'll have to have two arms to that, to that study. I think it's an exciting time for carotid, so I like, I like sort of when we're going to show up. You'll have both Silk Road as well as at least a couple of intriguing new stents that are going to be entering the market. It looks like they'll have both transfemoral and transcarotid themselves. So, everyone's trying to serve both the cardiologist and the surgeon and not pick sides. Y et, the main one of the main reasons that TCAR patients get referred to surgery is because of calcium. O ne of the main challenges post-procedure is if you didn't accurately assess the calcium and you can't fully expand the stent, you immediately increase the risk of stroke for a patient. So, we don't care whose stent you use, we think you're going to you will benefit substantially from Shockwave. W hen the market really starts to mature in 2025, 2026, we'll be showing up soon thereafter in 2027, and enable a lot of patients who would otherwise go to surgery, get treated with stent. Good color. One minute left here. I figured I'll ask about capital allocation priorities. You know, you did a large convertible offering this summer. You know, it sounds like there is some potential interest in external M&A, but you also have a very high bar that must clear. You know, just latest thoughts there. I mean, it. We talked through kind of the internal program. The cupboard is pretty full. How are you thinking about M&A at this juncture? We have a long list of things that we are unwilling to do, and a very, very, very narrow window for things that we think are good enough for us to allocate capital to. Because we want to make sure it is sort of accretive to our long-term growth profile, and is something like we think we found with Reducer and like we have created with IVL, where we're only interested in highly differentiated opportunities that meaningfully improve patient outcomes. We think we're going to prove that with Reducer, with the COSIRA-II study that we're doing. We think we've done that with IVL. W e're not interested in commoditized, multiplayer markets where we're going to enter with a 10% market share position just to put stuff in our sales bag. That's just not exciting or interesting to us. W e thought that it was really the right time to raise capital, given valuations in the private sector. It gave us strategic flexibility at this time, and we didn't want to be looking back, having missed an opportunity just because we didn't have the capital. That said, we love our portfolio, and if at the end of this decade, we're selling only things that we have created, we think we love our prospects to have a sustained growth platform. But if we can find growth assurance by finding something on the outside that we didn't invent, we're open to doing that. We're out of time, unfortunately, but, I think that's a great place to stop. Doug, thanks again for joining us. Yep. Appreciate it.