CVRX - NASDAQ

Good day and welcome to the CVRx Q4 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker Mr. Mike Vallie with CVRx. Please go ahead.

Good afternoon. Thank you for joining us today for CVRx's fourth quarter and full-year 2022 earnings conference call. Joining me on today's call, are the company's President and Chief Executive Officer, Nadim Yared; and its Chief Financial Officer, Jared Oasheim. The remarks today will contain forward-looking statements, including statements about financial guidance. The statements are based on plans and expectations as of today which may change over time. In addition, actual results could differ materially due to a number of risks and uncertainties, including those identified in the earnings release issued prior to this call and in the Company's SEC filings, including the upcoming Form 10-Q that will be filed with the SEC. I would now like to turn the call over the CVRx's President and Chief Executive Officer, Nadim Yared.

Thank you, Mike, and thanks everyone for joining us today. To begin today's call by providing an overview of our fourth quarter and full-year performance followed by an operational update, a review of our financial results by our CFO, Jared Oasheim. And then I will conclude our thoughts on 2023 before turning to questions-and-answers. We are very proud of everything that our team accomplished in 2022. It has been a great year for CVRx. We made progress towards all our strategic initiatives resulting in the increased adoption and utilization of Barostim, despite several macro disruptions throughout the year. This is demonstrated by the fact that our worldwide revenue increased by 72% over 2021 primarily driven by our U.S. heart failure businesses 108% annual growth. And the year was capped by a strong fourth quarter. Our worldwide revenue for the fourth quarter was $7.2 million, an increase of 96% over the fourth quarter of 2021. Performance in the quarter was driven by the continued expansion for U.S. sales force and contributions from our marketing initiatives, which led to an increase in U.S. active implanting centers. In the U.S. our heart failure business generated $6.0 million, an increase more than 121% over the fourth quarter of 2021. The increase was primarily driven by continued growth and expansion into new sales territories, new accounts and increased physician and patient awareness. When we went public in the summer of 2021, we were in the very early stages of our commercial launch in the U.S. At the time, we expect it to consistently grow this business in line with the investments in our commercial organization. We are very pleased with how this has played out with the fourth quarter being our 10th consecutive quarter of increasing U.S. heart failure revenue with average quarterly sequential growth in excess of 20%, since the IPO. Now for an update on operational developments during the fourth quarter to support greater adoption in use of Barostim. Our focus areas were: one, the continued expansion of commercial infrastructure; two, innovation of our product portfolio; and three, the expansion of the clinical body of evidence. Starting with the continued expansion of our commercial infrastructure. During the quarter, we added three new territories bringing that total to 26. We are excited with the quality of sales talent we have been able to attract and look forward to continuing to build upon that quality in 2023. During the year, we generated momentum with several for marketing programs, including our direct-to-consumer or DTC pilot program, our new branding campaign and patient education programs. The DTC pilot program has been successful to-date and has had a positive impact on our U.S. business. To-date, we have made minimum investments in localized DTC campaigns and we have seen more than 100 patients undergo a Barostim implant and have a robust pipeline of potential patients with interest in learning whether they are candidates for the therapy. We plan to continue to optimize these campaigns to make them more cost effective as we evaluate whether to roll them out more broadly. Our second area of focus is innovation of our product portfolio. During the second half of 2022, we launched Barostim [Neo 2] (ph) IPG the second-generation device, which reduces the size of the IPG by 10% and extends virtualized by 20% reducing the frequency of device replacements for patients and their providers. It is remarkable for the Neo 2 extends longevity by employing a smaller footprint and allows for a streamlining of the implantation procedure. Our third focus of area is the expansion of our clinical body of evidence. The BeAT-HF clinical trial was designed to demonstrate that Barostim provides a mortality and more rated benefit in addition to a reduction of symptoms of heart failure in patients with reduced ejection fraction. As previously announced, we accrued the required 320th event in the trial and are working to collect and monitor all the data. As a reminder, the primary endpoint is a mortality and morbidity composite endpoint, and we have pre-specified a few potentially meaningful secondary and ancillary endpoints and analysis. These include the hierarchical win ratio analysis, few COVID sensitivity analysis, and waste account for the severity of hospitalization. While we and the steering committee are still blinded to the results, but also based on how the data collection is progressing with our belief that we will be in a position to unblind and share the data before the end of the first quarter of 2023. Our goal for this post market trial is to broaden Barostim’s labeling. We plan to submit the totality of the evidence in our corresponding analysis to FDA when we outline the data. Please note that FDA is the ultimate decision maker on whether to allow additional claims a new labeling for Barostim based on its own evaluation of all the available data. And team also seek advice from a panel of independent experts. At this point, it is difficult to plan for a specific scenario. The results may produce a conclusion that is more complex in the last than a straightforward binary answer. In addition, we continue to make progress BATwire, our ultrasound guided implant toolkit. In 2022, we added more sites and more patients into the clinical trial. As a reminder, we expect to complete the trial in 2024. We announced in late September that we added the veteran medical device executives, Kevin Hykes to our Board of Directors. Kevin brings his business acumen and his decades long experience in the field of cardiovascular implantable devices. Additionally, with the promotion of four leaders to the executive team, we now have eight out of 10 of our executives promoted internally. Showcasing the strength and depth of our talent bench at CVRx. In summary, we had a fantastic 2022 as we considerably expanded the adoption and application of Barostim as seen by 10 consecutive quarters of strong growth in our U.S. heart failure business. The year was start off with a successful fourth quarter during which we continued to push the growth of active implanting facilities in the United States, highlighting once more the benefits that Barostim can provide both healthy and professionals and patients with cardiovascular disease. I will now turn the call over to Jared to review our financials. Jared?

Thanks, Nadim. Total revenue generated in the fourth quarter was $7.2 million, which is an increase of $3.5 million or 96%, when compared to the same period last year. Revenue generated in the U.S. was $6 million for the fourth quarter, which is an increase of 109% over the same period last year. Heart failure revenue in the U.S. totaled $6 million in the fourth quarter on a total of 193 revenue units, up 121 percent as compared to 2700000.0 dollars in the same period last year on 95 revenue units. The increase was primarily driven by continued growth in the U. S. heart failure business as a result of the expansion into new sales territories, new accounts and increased physician and patient awareness of BaroStim. At the end of the fourth quarter, we had a total of 106 active implanting centers, as compared to 46 at the end of Q4 2021 and 91 at the end of Q3 2022. At the end of the fourth quarter, we have a total of 26 territories in the U.S., compared to 14 at the end of Q4 2021 and 23 at the end of Q3 2022. Revenue generated in Europe was $1.2 million in the fourth quarter, which is an increase of 49%, when compared to the same period last year. Total revenue units in Europe increased from 39% in Q4 2021 to 68 in Q4 2022. The revenue increase was primarily due to the lessening impact of the COVID-19 pandemic in Europe. The number of sales territories in Europe remained consistent at six during Q4 2022. Gross profit was $5.7 million for the fourth quarter, an increase of $3 million, when compared to the same period last year. Gross margin increased to 79% for the fourth quarter compared to 73% for the same period last year. Gross margin for the three months ended December 31, 2022 was higher due to a decrease in the cost per unit and an increase in average selling price, partially offset by a larger percentage of our revenue units coming through both systems versus battery replacements. Research and development expenses were $3 million for the fourth quarter, which is an increase of 70%, when compared to the same period last year. This change was primarily driven by increases in compensation expenses due to increased head count. SG&A expenses were $14.1 million for the fourth quarter, which is an increase of 46%, when compared to the same period last year. This was primarily driven by an increase in marketing and advertising costs associated with the commercialization of Barostim, as well as higher compensation costs from increased headcount. Net loss was $10.5 million or $0.51 per share for the fourth quarter, as compared to a net loss of $10.6 million or $0.52 per share for the same period last year. Net loss per share was based on approximately $20.6 million weighted average shares outstanding for the fourth quarter and approximately $20.4 million weighted average shares outstanding for the same period last year. At the end of the fourth quarter, cash and cash equivalents were $106.2 million. Net cash used in operating and investing activities was $10.9 million for the fourth quarter, compared to $7.6 million for the same period last year. We continue to believe we have enough cash on hand to reach cash flow breakeven without needing to raise additional capital. Now turning to guidance. As announced in early January, for the full-year of 2023, we expect total revenue between $35 million and $38 million. Gross margin between 78% and 79% and operating expenses between $76 million and $80 million. For the first quarter of 2023, we expect to report total revenue between $7.1 million and $7.5 million. I would now like to turn the call back over to Nadim.

Thanks, Jared. Before opening the line for questions, I would like to discuss our key areas of focus for 2023 as we seek to drive the increased adoption and utilization of Barostim. First, the continued expansion of our commercial infrastructure especially our direct sales force in the United States remains a top priority. We expect to continue hiring top talent throughout the year and are targeting a total of approximately 38 U.S. territories by the end of 2023 or on average adding three new territories per quarter. In addition, we will continue to invest in marketing efforts to help drive increased awareness of Barostim. Outside of the U.S., we have added additional talent to our direct sales organization in Germany and we continue to expect to add incremental headcount in 2023 to support our commercial strategy in that region. Our second focus area is the expansion of our clinical body of evidence. Both our post market study of BeAT-HF and BATwire remain on track with our previous updates. In regard to BeAT-HF we have been conducting this trial since early 2016. And here we are seven years later, we are looking forward to potentially unblinding the data and sharing the results with you before the end of this quarter. Looking ahead to 2023, we are very eager to accelerate the development of Barostim by utilizing the positive momentum we have built over the previous two years. While we are still very early in the commercial ramp and the market penetration, we are totally focused on the significant potential to provide treatment to as many patients as possible. And now, I would like to open the line for questions. Operator?

Thank you. [Operator Instructions] Our first question will come from the line of Robbie Marcus with JPMorgan. Your line is open.

Great. Thanks for taking the questions. Maybe first the cash burn is going to be -- it looks maybe a bit higher than last year based on the sales and OpEx guidance and you talk about a pathway to profitability without further capital raises? How important is a positive readout from BeAT-HF to getting to that target? And any time frames that in terms of revenue or years out that be thinking about cash flow profitability? Thanks.

Hey, Robbie. Thanks for the question, so one thing that we've been consistent on is the model that we've built is under the assumption that we get a neutral readout from the morbidity, mortality trial. And that's not based on us being pessimistic about the results it's just us taking a conservative approach. And so when we say that we think we still have enough cash on hand to reach cash flow breakeven and comes with that assumption that morbidity, mortality is neutral. We haven't yet drawn a line in the sand for when a publicly when we're going reach that cash flow breakeven point from a run rate perspective. But we do expect this to be the year where we see that cash burn start to flat line. To be similar to the burn that we saw in 2022. And then from there, starting to see the overall burning start to drop on a quarterly basis.

Great. If I just want to dream big and say it is a positive trial. How important has or how big a barrier has not having a mortality benefit been to driving physician adoption? And if it does have a positive, do you think we should be thinking more like a rapid improvement in adoption following? Or is there still -- would it have to wait for FDA labeling? So maybe a little time afterwards?

Hey, Robbie, Nadim here. So thanks for the question by the way. Listen, when we started the trial in 2016, beginning it in 2016 started enrolling it, we powered it to win it, right? So we're still hopeful that the data will be put out [Technical Difficulty] clear cut simple yes answer to all of the questions below. That said, it's the risk certainty here is the time it takes to get the word out. First, we'll probably if there is a medical meeting, we'll do the announcement of the results during the medical meeting. But if there isn't one, closed by in terms of time, long enough to sit on the data for too long, so we'd like to get it out as soon as possible. So we may end up doing -- and basically in the next event where we’ll invite you and other people who wants to listen in and will present ourselves the data. But that does didn't get it [Technical Difficulty], so we'll have to wait for that medical meeting and do the presentation there via symposium or [Indiscernible]. After that, you also heard those, one is the FDA labeling that would allow us to market the data. And the second is the publication [Technical Difficulty] surprisingly, FDA has been faster than most journals. The median time to publish and manuscript [Technical Difficulty] this month. So those are the uncertain element that's would make me hesitate to say, yes, we will see a pickup in 2023, but the pickup in sales would happen in 2024. But based on your previous question, if the data is positive, we may desire to [Technical Difficulty] so paradoxically, we may burn cash a little bit faster earlier to funnel that [Technical Difficulty]

Got it. Okay. Just last quick one for me. Is this something you're going to try and submit for a late breaker at ACC? Or do you think you'll miss the date there? Thanks a lot.

Yes, thanks for the question. We don't know yet.

Got it. Okay. Appreciate you taking the questions.

Thank you. The [Technical Difficulty] if you're still listening, the ACC deadline for late breaker was -- has passed. And that's why we don't know. We don't know if the data will be, right [Technical Difficulty] unblinded number one, and if we are, if they would accept us even after the deadline. Thanks, Robbie. Operator?

Thank you. One moment for our next question. And that will come from the line of Matthew O'Brien with Piper Sandler. Your line is open.

Good afternoon. Thanks for taking the questions. I don't know, Nadim or Jared, which one of you this is for, but I don't want to overstate this too much. But when I look at the unit number in Q4 versus the number of active centers that you had the last in Q3 and even in Q2. That productivity rate is down somewhat here in Q4. So can you just talk a little bit about why that's the case? And then the confidence and why those metrics improve so steadily especially even in Q1 and all the way throughout 2023.

Yes. Hi, Matt. This is Jared. I can take that one. So as we look to the productivity for the accounts that we saw throughout 2022. Part of this was driven by the success on the addition of new accounts driving the overall average productivity down. We've said early on that right when an account starts, we see them treat one or two patients and then they push pause for a period of three, four, five or six months. They check out the results from a reimbursement perspective, but then also as to how the therapy is going with or doing with their patients. After they see that, then they start to pick up the pace on their own productivity. So the longer they are with us on average, the more patients they are treating. So we still have confidence that the longer these accounts stay with CVRx, they're going to treat more and more patients based on the data that we've seen and collected over the last three years. But I think the challenge we're facing over the last couple of quarters is that we've exceeded expectations on the number of accounts we're expecting to add, which just drives that overall productivity rate down, because of the newness of those new accounts.

Got it. Makes sense. So just to put a finer point on it, just because you're up 15 and 20 active centers in Q2 and Q3 respectively. That's the reason why that metric is down a little bit. And you're not seeing any change from trend line as far as utilization among those accounts as we're kind of exiting that six-month window?

Yes, that's correct. Yes, we're still seeing the centers that have been with us for a couple of years doing more than the centers that have been with us between one and two years and they're doing more than the centers that have been with us less than 12 months.

Got it. Okay. And then we can get into margins and all the other stuff, which are positive updates, I guess later. But the other question I did have was really on the DTC campaign. It seems like there's a lot of patients out there and I know it's just a pilot study, but what are you seeing as far as running some of those studies getting in front of patients that could be good candidates for this and then transitioning them all the way through to potentially getting an implant.

So the -- Matt, this is Nadim. Thanks for the question. [Technical Difficulty] our DTC pilot, and why we kept it as a pilot still for a little bit longer is to understand exactly those questions that you're asking. They need to have no idea what form of heart failure they have if they have an ICD or a CRT, they think they have a pacemaker. And I'm over general [Technical Difficulty] it’s a disease that's harder to characterize. And when you look at our incidence rates that we calculated, because [Technical Difficulty] new patients every year, that's about 4% to 5% of the heart failure patients overall. So it's a small percent [Technical Difficulty], it's a game of numbers and we track every single click, every single patient when they provide us the information we try to get as much as possible. [Technical Difficulty] in medical condition as much as we are allowed to know. And if they are seeing their own physicians versus seeing how [Technical Difficulty] to pass diverge, and if the heart failure specialists they're seeing happen to be on the site where we are already activated, as well there is a [Technical Difficulty] it will go much faster, on the other hand, much slower. So it's all of those uncertainties now that keep this for the timing being as a very difficult one [Technical Difficulty] because all centers.

Got it. Thanks so much.

Thank you.

Thank you. One moment for our next question. And that will come from the line of Margaret Kaczor with William Blair. Your line is open.

Hey, good afternoon, everyone. Thanks for taking the question. Just because BeAT-HF obviously is a short-term catalysts. I was just curious if you can walk us through any commercial and marketing changes that you would make based on, let's call it, three scenarios where the first is positive on morbidity, mortality or on all events, maybe a more gray area, but numerical improvement mortality, but not on events. And then third of maybe a less good morbidity outcome or whatever gray area that would be less good that you would look at? How would that change your behavior? I guess, relative to the guidance that you have?

Thank you, Margaret. Thanks for the question. [Technical Difficulty] of the three scenarios that you mentioned, let's start from the most negative to the most positive. And the most negative the data is neutral, there is no [Technical Difficulty] until what we have been doing. Our plan is built on that scenario. As Jared just mentioned earlier, it's not that we don't believe that we will win, it’s just, you know, us [Technical Difficulty] that I would like to establish a baseline that is conservative and consider all of the past and use as upside. If it's base positive trending positive, but not meaning the endpoint itself, then probably there'll be no change in our marketing [Technical Difficulty] sales strategy. Now if it's a clear-cut positive where we met the most accretive endpoint and that FDA will give us the labeling that this device improves heart failure's outcome. Then it is possible that Jared and I with the approval of our Board, we may decide to accelerate the [Technical Difficulty] in our sales and marketing efforts in the United States. And when that would happen, it will take time. You don't see it [Technical Difficulty] adding territories, you have to identify the talent, hire them, train them and so forth. So that ramp will accelerate, but you will not see it overnight. [Technical Difficulty] answered your question?

Yes. That was great. And then, I guess, turning further on that right, so the existing accounts who already have a good sense of training and patient use and history with Barostim. Have you talked to them about what their expectations are for the trial and how they might change their utilization once the data is now [Technical Difficulty] I'll also make one more and walk us through how they would view their TAM opportunity changing? Should one of those more positive scenarios come up?

[Technical Difficulty] question and now I wonder if I should have spoken with some physicians about this, number one, we instruct our sales force to be super careful and stick up with the [Technical Difficulty] FDA approved labeling. So that's why they do not engage in speculative discussions regarding outcome. However, I could do that as explore that kind of getting feedbacks perspective. That said, there is one area where our TAM will increase even if we hit the endpoint. When we negotiated as the current labeling with FDA back in 2019. FDA was very clear that we have not met yet the more customer base, because it was not what we outlined it for. And PRC devices when they are a Class 1 indicated, so QRS about 150 and the presence of a left bundle [Technical Difficulty], they have a and more talking about modality benefit. FDA did not want physicians to prescribe auto device itself. In those situations. So that's why in our calculation of the total addressable market, we excluded patients who are eligible actually indicated for a CRT treatment. I believe that if we hit, [Indiscernible] endpoint, I know that we will ask FDA to remove that exclusion and I believe that FDA will accept exclusion, because we should then let the physician decide what therapy is more appropriate for their patients and the labeling would allow us than [Technical Difficulty] for those patients who are indicated for a CRT device. So that will increase the total addressable market. [Technical Difficulty] we have to expand of how much Margaret, but at the right time, probably during the discussion about the results, we -- I'm speculating here, but I believe we'll be ready with the updated numbers of the total addressable market at the same time. So in Q1.

Great. Thanks. That'd be fantastic. Thanks guys.

Thank you.

Thank you. One moment for our next question. That will come from the line of William Plovanic with Canaccord. Your line is open.

Great. Thanks. Good evening. Thanks for taking my questions. A lot of them have already been answered, so I think I'll stick with some guidance and P&L stuff. As you talked, you gave us the rep cadence you expect in terms of the new account cadence. Would you expect that to stay the same or are you shifting more to a go deep strategy?

Hey, Bill, this is Jared. I can handle that one. So from an account perspective, last year, we were talking about adding high single-digits on a quarterly basis throughout 2022. This year, we're expecting that to be in the range of about 10 to 12 new active implanting centers added on a quarterly basis as we march through 2023. And then there is going to be a bit of work done by the account managers to really start digging a little bit deeper and work in the referral pathway for those centers that are already active. So the centers that have been around for 12 or 24 months trying to go a little bit deeper, reach out to more of the referral cardiologists along the way.

Okay. And that kind of that ties into the DTC question and I think you kind of alluded to the fact that I want to make sure I heard that right is, is this more of a efficiency in terms of spend that you're trying to titrate and find out what is the most efficient in terms of getting a patient and converting them or getting a lead and converting it through a patient. Is that where a lot of the focus on the DTC is today?

Bill, the study and by the way. Thank you for this question. It's an excellent question. Yes, direct-to-consumer awareness campaigns that medical device companies did 20-years ago are very different from what we are doing today. Think about it, what they did back then, putting TV ads was an open loop system. What we're doing is a closed loop system. We favor channels where we have traceability of every single click and every single patients. I mean, everything was [Technical Difficulty] saw the ads and convert it, so we know all of those metrics at every single stage of the game. And the visible tip of the iceberg is the marketing campaign itself. 90% of the work is what happened behind the scene. Those consumers who saw the ad all the way to becoming candidate or not becoming to identify if they are candidates [Technical Difficulty] to basically offer them possibilities and contact our sites that are doing the procedure. So cost for every single one of those campaigns is very closely tracked and monitored almost on a daily basis and we wanted to optimize. We're not in the business right now of throwing money and creating awareness. This is not what we're doing. We're paying money where we believe that those money would lead to X number of patients. And that equation should be profitable for us from their [Technical Difficulty], that's what we're trying to explore. As an example, we added a new channel two days ago. And we'll be testing it for a few weeks, [Technical Difficulty] iteration and see if it’s as profitable, more profitable or less profitable than other channels we're using. And that's mainly what we're trying to do here, trying to figure out different geographies, different type of sites different type of advertisement, different channels between some of the [Technical Difficulty], social media out there. And you do not advertise Facebook the same way you do it on Instagram or TikTok or Twitter and so forth. So it's a big [Technical Difficulty]

Okay, good. And then quick Jared, the 1.136 gain in the other, that's a little it's kind of a big number, just curious what would that was. And then just you've kind of went through it with Margaret, but in like as simply as possible, what would you define as positive, what would you define as neutral and what would you define as negative for the B2HF outcomes. And I know that's hard to do, but I think for investors, if you could sum it up like where are those kind of break points and how should we think about it? Thanks.

Hey, Bill. I'll just -- on the first piece of it, I mean, the biggest chunk that's fallen into that other expense net bucket is the interest income that we're seeing from the cash balance that we have at this point in time. So that's kind of the biggest number there. Nadeem, I’ll let you cover the second piece.

Yes. Regarding the [Technical Difficulty] and statistics though, there is a p-value that you've widened five to ensure that the [Technical Difficulty] type one error less than a certain percentage, right? So what FDA wants to know is whether you achieve those results as a fluke by chance or whether the observation is preparation [Technical Difficulty]. What I consider to be positive is if the primary endpoint met the statistical relevance that FDA is looking for. I would then say it will be in between [Technical Difficulty] Margaret, if either the [Indiscernible] is trending close to that point, but not reaching it or what if other pre-specified, prioritized endpoints that we have previously agreed with FDA to analyze with clinical relevance. Why do I say so? Usually, when you're designing a [Indiscernible] for approval, you select the endpoint, FDA approved the endpoint and if you need the endpoint, you win, if you don't beat the endpoints, you lose and that's the end of the game. What we have seen over the past 20-years [Technical Difficulty] medical devices, it's a little bit more complicated than this and FDA has to rely on the totality of evidence before the issue adjustment on whether it's approved or not. In our case, our device is already approved to benefit outweigh the risk according to FDA. So what you're looking here is, what does the device do in other elements that FDA would allow us to tell physicians that yes, [Technical Difficulty]. And that's why it's a little bit more complicated than the usual situation. And even if we don't meet the primary endpoint per se, but [Technical Difficulty] to meet another secondary, or ancillary endpoint, we still believe that there is a net-net positive, not as positive as meeting the primary endpoint, but positive above our base case right now.

Thank you.

Thank you. One moment for our next question. That will come from the line of Alex Nowak with Craig-Hallum. Your line is open.

Okay, great. Good afternoon, everyone. And perhaps I missed this, but can you expand on what is happening in the background collecting all the morbidity data to move the readout from the first half to first quarter? You must be seeing something or hearing something to give you that confidence it's going to come this quarter, rather than more in the first half of the year?

Hey, Alex. This is Nadim. Nice hearing from you. [Technical Difficulty] it's actually not the data, but the rate of collection of the data and the rate of monitoring of the data. So we're just identifying the trend of monitoring of sites to ensure that we will have all of the data monitored as required by FDA before we are [Technical Difficulty] and based on the synergistic that we see, we are able and we're able to narrow the timeline for their blinding showing that now it's a very strong likelihood that this will happen in Q1, not in Q2.

Okay. Understood. And then would [Multiples Speakers] Okay, yes, understood. That makes sense. You're all good. When you think about the rate of new center ads in 2023, you more than doubled that number in 2022. I'm just going to throw it out -- double the number again in 2023? Or what are you thinking about what the ramping sales can do this year?

Yes, Alex, maybe I'll just kind of baseline on that guidance again. So for the U.S. heart failure business, the midpoint of the range, the expectation is that we'll be seeing ads of around 10 to 12 active implanting centers on a quarterly basis going forward. Continuing to see those longer-term accounts continue to ramp up the productivity level similar to rates we saw in the past. And then as I just look to the hypertension business in the U.S., it’s still flat, right, it’s a set patient population. And then just one more piece on the European side of it. We still haven't necessarily cracked the code over there at this point. And so our base case, the middle of the road of the guidance is that it would stay consistent at around that $1 million or so per quarter. We saw a bit of a uptick there in the fourth quarter, but some of that was distributors stocking up some shelves -- shelf units there for the first half of 2023. So we don't expect that to be repeated here in the first quarter. So overall, the vast majority of that growth coming from the U.S. heart failure business, but most of that revenue is coming from those centers that have already signed up have already been activated in 2022 and then adding that 10% to 12% per quarter going forward.

Okay, understood. That makes sense. And maybe on that last point, what do you need to happen for Europe to really ramp. Is it just you need to put a little bit more focus on it? You're just focusing too much on the U.S., probably for good reason. Is it a reimbursement dynamic? Just how are you thinking about Europe?

Alex, it's Nadim. It's all of the above, first we're really not in Europe, I'll put in Germany in a couple of other countries. In regards to Germany, we have a

Yes, you have. That makes total sense. Really appreciate the update. Thank you.

Thank you so much. And…

Thank you.

Go ahead, operator.

I'm showing no further questions in the queue at this time. I would like to turn the call back over to you, Mr. Nadim Yared for any closing remarks.

Excellent. Thank you so much, operator, and thanks everyone again for joining us for our fourth quarter earnings call. We appreciate [Technical Difficulty] and we look forward to updating you on our progress during our next update. Good night.