Good afternoon. We're moving nicely through the afternoon panel on the first day of the 46th Annual TD Healthcare Conference. I'm Joshua Jennings from the TD Cowen Medical Devices research team, and we are in the presence of leaders in the transplant space, the executive team from TransMedics, CEO Waleed Hassanein and CFO Gerardo Hernandez. Gentlemen, thanks for making it south a little bit from your headquarters, and actually your new headquarters are gonna be even closer, so you won't have an excuse next year not to show up. Exactly. But, Exactly. Great to see you guys in person and appreciate the time today. Same here, Josh. Thank you so much for the invitation. Absolutely. We've had, I mean, our team has noticed some significant enthusiasm coming from your camp around next-gen OCS, particularly this OCS Kidney initiative. As we've learned more, we're kind of understanding better why you have that enthusiasm and an outlook for it to be a big contributor as you reach for your targets of 10s of thousands of OCS runs in transplant cases. Love to just kick it off just to asking about the OCS Kidney value proposition. I know there's a lot to it, and we'll dig a little bit deeper, and into the opportunity and also the margin expansion potential. Great. Thank you, Josh, for the question. We're extremely excited about the kidney program, for a variety of different reasons. First, we believe the OCS Kidney program is going to be the largest program ever done by TransMedics just by the sheer number of transplant procedures. We've always been asked, "Oh, kidney seems to be a hardy organ. It doesn't really need improved preservation." I think that's a huge underestimation of what really is happening in kidney transplantation. Let me give you examples. Today, kidney transplant post-transplant complication rate that requires the patient to go back on dialysis, that costs CMS up to $50,000-$60,000 per occurrence, called delayed graft function, is at all-time high at an incident of approximately 55%-60%. When I started TransMedics in 1998, that DGF rate in kidney transplant was between 20%-25%, so it has been significant increase in the incidence of DGF. The second is another very, very alarming rate, which is kidney discards or utilization of kidney donors. In the United States today, kidney utilization is at all-time low of approximately 60%. Again, back in 1990, it was in the 90%-92%. This is huge, huge needs, clinical needs in kidney transplant that we think by using OCS Kidney, we'll be able to at least reduce DGF by 50% and significantly improve the utilization of kidney donors. Let me give you one example. In 2025, there was approximately 9,000 donor kidneys, DBD donors, perfect donors from an age criteria, from a medical condition, that were not transplanted due to 1 clinical reason, prolonged ischemic time. With OCS Kidney, ischemia will be a thing of the past. That's just a low-hanging fruit of 9,000 potential kidneys that we could add into the national volume. That's over and above the current 25,000 deceased kidney transplants. We're very, very excited about the kidney. We can't wait for the kidney development team who's working around the clock to get the device ready and to roll it out into the clinical arena, hopefully, late this year, beginning of 2027. Understood. That's helpful. Just thinking about the setup here for TransMedics and my understanding that there's some perfusion technology that are used in kidney preservation today that's different than the experience for lung, heart, and liver, 'cause OCS introduced perfusion preservation, machine perfusion-based preservation. technology into those indications. Is that a better setup for you just because perfusion technologies are more common in the kidney transplant sector? Or, I mean, maybe just help me think through that. Sure. Well, I guess, you're right, Josh, as there's a lot of kidney perfusion being done, but that's called a non-functioning ischemic kidney model. All the results that I shared, all the clinical issues that I described earlier were all a result of cold ischemic perfusion. What we're bringing to kidney transplant is for the first time ever, a kidney will be the closest to a living donor or ischemia-free kidney transplant as humanly possible because the OCS will be at every donor. Kidneys will be procured, placed on OCS, perfused, oxygenated, monitored, evaluated, assessed from donor to recipient around the clock. Yes, there are perfusion technologies. Yes, it exists, but it has huge drawbacks, which is the ischemia-reperfusion injury that we are very familiar with. Again, we can't wait to get the OCS Kidney in the clinic and start experiencing and showing the results and impact of reducing ischemia on kidney transplant. Just in terms of the dynamic that you described in terms of discard rate for donor kidney organs, increasing dramatically over the last decade plus, what's driven that? Just help us. Com- frame it a bit. Complexity of the donor pool, the average age of the donor, the increase of DCD donation. All that subject the kidney into additional challenges that we have to overcome. Is there a percentage of DBD versus DCD kidneys today that represents an opportunity with as you introduce OCS Kidney similar to the dynamics of DCD opening the DCD organs for? No, no. Please don't do this to the kidney program like we did for heart and lung. No, kidney is a, is a generalized benefit for DBD and DCD. The outcomes I described to you is a mix of DBD and DCD, and we see the value across the gamut. You know, again, another nuance in kidney that's very important to mention is CMS is financially responsible for all end-stage renal disease conditions in the United States. All these negative outcomes that I described negatively impact the financial profile of a kidney transplant. There will be significant efficiencies in economics of a kidney transplant with an OCS Kidney compared to the current standard of care. We'll circle back on CMS in a moment, but wanted to talk about the next-gen OCS system, which the first foray or the first indication will be OCS Kidney. There are some margin expansion potentials inherent in this next-gen system. Gerardo, maybe you can walk us through some of those dynamics and, 'cause the next-gen system will not just be for OCS Kidney, but you'll also have next-gen systems for the other organ indications too, as we move through to the end of the decade. Yes. There are two areas that we are really looking for to capture additional margin. One is the device itself. The device itself will be smaller. We have less part counts, which basically will allow us to reduce the cost of assembling, right? When we do that, naturally, we gain efficiencies in the production line. Right now, a lot of process is manual. We're expecting to do a lot of that process with robots. That's the first one. The second one that could be even more impactful is the support that we get in clinical service. You probably know that today we need a clinical specialist that needs to be babysitting the organ from the moment that is placed into the device to the moment that is removed from the device for transplantation. The reason we have a clinical specialist all the way is because we constantly assess the organ, right? We look into what the organ needs to be functioning at the level it should be. Well, imagine a scenario in which with that next generation, we can do that testing, that assessment and treatment remotely via a clinical command center in our headquarters. That's actually the vision. The amount of human resources that we will need to run every single mission will be much less than what we have today in average. That's a big, let's say, opportunity to capture in terms of operating leverage. As we think about the development of the OCS Kidney platform and as we go through the end of the year, I think you've commented that you could potentially kind of design lock and be able to move forward with clinical trial in 2027. How should we think about the milestones as we work through this year? How will you guys share the progress and communicate it to the investment community? I think- ...maybe the clinical community too? Yep. We already presented the design to the clinical community at the American Society of Transplant Surgeons winter meeting in January. We have another milestone coming up in June here in Boston at the American Transplant Congress, where we are aiming to have functioning devices by then. Then it's a race through getting all the testing required to present the dossier to FDA, and hopefully by first half of next year, we're in the clinic. We're also one of the unique attributes of the kidney program is it's an international phenomenon. Kidney transplant is the most transplanted organ. The huge momentum in kidney OCS is palpable, not just in the U.S., but across the globe. We are seriously considering having a parallel path, both releasing the product internationally and at the U.S. at the same time for clinical programs. It's very exciting times and, you know, as I said, it's going to be one of our biggest, if not the biggest program that we've ever rolled out into the clinic and into hopefully commercialization, so. Any high-level thoughts to share just on clinical trial design or endpoints. Too early. Too early. Okay. Too early. Okay. Definitely the clinical endpoints is gonna be, incidence of DGF and, you know, requiring dialysis within the first 30 days post-transplant. That's bread and butter. That's the huge cost added to CMS. Any preclinical data that you can share, or is that too early? Too early. Okay. Understood. Too early. Based on what we know so far, we're very, very excited and very bullish. We presented a little bit of sort of the tip of the iceberg at the ASTS, but we're presenting more fulsome data in June at the American Transplant Congress. You mentioned earlier that CMS owns the chronic kidney failure patient population. It's my understanding we learned earlier too that you're heading down to Washington to meet with CMS, and there is this restructuring initiative, the U.S. Transplant Network, you called it out as a potential kind of catalyst or growth lever in the future in terms of how TransMedics is positioned with this restructuring, the U.S. Transplant Network. Any further thoughts or updates you can share just on the path forward for TransMedics and how well-positioned the company is to continue to be an important stakeholder in this U.S. Transplant Network? Sure. First of all, we meet with CMS quite routinely to keep them updated on our progress. They just approved the heart and lung programs for us, so that's not a new interaction for us. I think we need to take a step back. Everybody who follows TransMedics knows that seven years ago, six years ago, there has been a bipartisan effort by Congress, by HRSA, by CMS, even some White House initiatives to increase organ utilization for transplant in the U.S. to modernize and revamp the transplant ecosystem in the U.S. to maximize donor utilization, to improve patient outcome, to increase transparency, to minimize waste. All these initiatives are mandated on the entire community of organ transplant by bipartisan effort from U.S. government, HRSA, CMS, and others. That is ongoing, and there is new language coming out of CMS, new initiative, new language, proposed language by Senator Wyden from Senate Finance Committee, talking about potentially opening up the opportunities for new entities to become Organ Procurement Organization to maximize competitiveness and maximize transparency. You know, we're here to serve organ transplantation. We are the company that invested nearly 30 years of our lives and hundreds of millions of dollars to create the only national network functioning and operational and actually producing results to increase organ utilization in the United States. We're the only company that has the only ischemia-free technology for organ preservation. We're the only company that invested in vertically integrated logistics for organ transplant, 100% dedicated to organ transplant. We're the only company that developed a very sophisticated digital ecosystem to maximize transparency, and visibility of every organ that we carry. We want to be helpful. We wanna help existing OPOs. We want to help the system maximize organ utilization. We will express our interest to try to play a bigger role in collaboration with existing structures in that new Modernization Act of organ transplantation in the United States. That's why, it's very important for us to be at the table and share what TransMedics has been able to achieve over the last three years to, you know, policymakers and government stakeholders. Is it fair to kinda digest your recent messaging, including today, and conclude that TransMedics is very well positioned for any changes to the U.S. Transplant Network, but the positioning could get even better? listen, we never like to be ahead of our skis when it comes to this, these federal and national initiatives. We humbly believe we are well positioned and very flexible and dynamic to accommodate any changes. As I said, these changes are not driven by TransMedics. They're driven by the government leaders that regulate organ transplant, and we think we can help. We can help the initiative. We can help existing OPOs. We can help patients. That's what we're here to do. If we do that, we're gonna be in great shape. The company has had significant momentum since the liver and heart indication approvals back in late 2021, including throughout 2025. You know, a lot of the growth has been driven by the OCS Liver franchise, but you're looking to catalyze stronger growth from heart and lung, maybe to start on lung in 2026. de novo trial is kicking off. It sounds like, I think you've labeled it the sleeping giant indication. Walk us through just your how you expect signals to be provided by this clinical trial, whether it's enrollment pace, whether it's early outcomes, and how you're gonna assess this program over the next 12-18 months. I think it's very, very important to know that these trials will be reflected in our quarterly report. As we see lung volume grow, meaning that we're enrolling faster in de novo quarter-over-quarter, that's a positive sign. Obviously this is an FDA, still an FDA-regulated trial, so we're not gonna be able to reveal the outcomes. Usually, in our track record with nine FDA trials to date, usually the enrollment pace reflects what the clinical experience is. Our hope is to as we see more lung volume added to our reports every quarter, this is a good sign of the progression and that the community, the lung transplant community in the U.S. is responding well to the next-gen OCS Lung. That for us is the 1 and 2 and 3 near-term focus. Once that is achieved, it's now it's gonna be just the formal readout and the PMA supplement. For us, is monitoring the accrual of the trial in Q3 and Q4 is gonna be telling about the, are we heading in the right direction or we need to do something different. In terms of the preclinical work that's been done, I think one of the highlights has been, you know, some concerns with the lung transplant community around edema formation with longer OCS preservation or perfusion runs. I mean, how has the preclinical data been received and just the enhancements to OCS Lung system to kinda catalyze centers to wanna participate in this study and giving them an overall positive outlook for this trial? Yep. Josh, I wanna correct one thing. prolonged perfusion, whether on OCS or in ex vivo or in any other perfusion modality, is always associated with lung edema, not just in OCS. Sure. Sure. Thank you. Sure. Sure. Thank you. Sure. Sure. Thank you. In fact, OCS has the lower of all of the modalities. It's a serious concern because you do not want the lung to be filled with fluid. You want the lung to be light, fluffy, full of air, so it can oxygenate the blood. Our preclinical testing focused specifically on this, and our R&D work of developing a whole new perfusion solution, composition, ventilation modalities to minimize edema was very well received by the community. Now it's showtime. Now we need to transition that momentum into active enrollment, into completion of the trial, because that's really, that's when we know that, you know, people vote with their commitment in enrollment and adoption. We can't wait to see that in action in Q3 and Q4. In 2026 revenue growth guidance, in my understanding, it doesn't include much from this OCS Lung trial de novo in terms of clinical trial revenue contributions. Maybe just remind us of what's baked in from the lung trial? Yeah. It doesn't include any incremental impact, but it does include, like for in case of lung, right? We have 300 patients in the case of lung. The first 100, which more or less what we do today, that's included. The other 200, we'll see how fast. That one is not there. On the heart side, part A, 175, that's current. We have that indication today. We're assuming that that is part of our current baseline. However, in part B, 320 hearts, we don't have that. We don't know how fast we're gonna be able to enroll because of what we have mentioned before. That one, it can be an upside, absolutely. Right. said differently, guys, the current initial guidance for the year does not include any. Incremental ... volume or contribution from the trial, leaving the room for us to actually go and execute and see what the performance look like, and then we can modify and adjust as we see, as we progress throughout the year. Great. On the part B of the ENHANCE trial, the heart trial, it sounds like maybe 12 to 18 months before you get to finalize the plan for that the control arm. Any other updates you can provide since the 4Q call just on how that control- Sure ... arm will shape up? Yeah. I wanna clarify. It's 12-18 months to finish the trial. Finish the trial. My apologies. Not to. Yes. Thank you ... not to solve the control arm. The control arm will be solved by the ISHLT, I can guarantee you that. We're still holding the total accrual timeline between 12 and 18 months. Yes. The only update I can shed more light on is, this is a very important trial for the field of heart transplantation. It's a very important trial for the OCS Heart. No competitor or no competing technology is going to derail this trial. TransMedics is gonna take full control over the entire trial, including the control arm. By the ISHLT, we'll make public announcement what the control will be, and it will be a potential upside for TransMedics. I think the competitor spoke loudly when they were unsure of their performance against the new OCS. I think that reaction alone is very telling. We're not gonna allow that behavior to derail or delay the trial. We have a plan. We're gonna execute it, and we're gonna announce it publicly at the upcoming ISHLT in April. Thank you for that. My understanding is that the rubber is kinda hitting the road with OPOs and this mandate to increase allocation volumes, I think by the end of this year. I mean, one read-through is that the OPOs need to allocate more high-risk solid organs and that would be kind of where TransMedics wheelhouse is. I know you're expanding your wheelhouse into lower risk DBDs and standard criteria DBDs. I mean, could that be a tailwind to TransMedics volumes as we move through this year? Is that the right way to think about it? Maybe, maybe give us any details one, on just what's mandated by the OPOs and what their behavior could be this year. I mean, we're working with many OPOs across the nation to help them out, and we've improved the rating of many OPOs by working with them collaboratively and supporting them, and we will continue to do so. Because again, we are a transplant company. We are in the business of doing more organ transplant. As I've stated before, guys, TransMedics is the only company in the field of organ transplantation or frankly, any other medical technology. We don't make money if the organ is not transplanted. It's simple as that. We will support any OPOs that are serious about organ transplant. We will support any OPO that is focused on improving their performance because we know we can, and we have done it with many large, small, medium-sized OPO across the nation, so. Thinking about 2026 again and the guidance and, you know, the execution in the OCS Liver franchise, I think the expectation is for OCS Liver momentum to continue clearly in 2026. There are some concerns just about, you know... There's always concerns, Josh. Exactly. There's always concerns. No matter how successful we are- I'm not, I'm not saying that they're my concerns. There's always concerns. just saying that we've heard concerns that there could be some slowdown just off of challenging comps for one, there's some competition. Yes. You've been very clear, as recently as the fourth quarter call that you don't expect much, of a slowdown. The mic. The mic may have. Oh, here we go. You don't expect OCS Liver to slow down in the United States and the momentum just to continue. Maybe just share your outlook and some of the drivers of just more of the same in 2026 as 2025. Ultimately, where do you think OCS Liver penetration can hit in DCD and DBD, you know, through the end of the decade? I think it's very important to note that my position is not just a hypothesis or the thesis or a dream. My position is based on the fact that we are sitting here with nearly 10,000 liver transplants in the U.S. We know what the data says. The data is unequivocal in liver transplantation. The OCS is superior to cold storage. The OCS is superior to competitive technologies. The OCS is superior to back-to-base model. The OCS is superior to other perfusion technologies that try to compete with the OCS. Period. Full stop. That's what the market is showing. That's how the adoption curves are being, you know, printed every quarter. It's because of that fact. Because of that, I have a high degree of confidence that, one, our superb technology, supported by a world-class clinical leaders in the field, will continue to drive adoption in liver, and liver will continue to be an engine of growth for TransMedics. As far as penetration rate, we, as we stated publicly, we're only at 25-27% of DBD livers and 54% of DCD. We have a long way to go. We have a long way to go because when you're sitting with superior technology at every metric, at every level, you can evaluate it. It will be malpractice not to use OCS. Maybe the last topic to hit on in these last two minutes is expansion into international markets and that opportunity. You've clearly had a presence with heart, some lung, just getting started in liver, but Italy has now opened up. Tamer, your chief commercial officer, has moved over to lead that charge along with you and the team. How should we think about the ramp? I mean, Italy is in play in 2026. Could we see just some announcements about additional European countries kind of opening up for? Yeah for your TransMedics complete offering? Yeah. Well, the fact that we're very, very excited about the international expansion of NOP, especially into Europe. The fact that Tamer is transitioning into an international role should speak volume about that. Tamer has the second most experience and breadth of knowledge of NOP, OCS, every aspect of the business. He's needed there to launch our international franchise, leading with Europe, leading with Italy, and expanding into several other European countries. We hope that Italy will be fully functional and you can feel the breadth of Italy by end of this year. Really, it's a huge catalyst for 2027. We hope that by end of this year, we'll announce who's next in Europe, and we are working with several countries in Europe, Netherlands, Belgium, France, UK, and Switzerland are the kinda the near term opportunity in addition to others, of course. Outstanding. Well, gentlemen, thank you so much for spending time with us this afternoon and all day in meetings. Good luck with the rest of them throughout this afternoon. Thank you, Josh. Thank you, Josh. Great to see you. Appreciate it. Thank you. Thank you.