CVRX - NASDAQ

Ladies and gentlemen, good afternoon and welcome to the CVRx Second Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Mike Vallie. Thank you. Please go ahead, sir.

Good afternoon. Thank you for joining us today for CVRx's second quarter 2024 earnings conference call. Joining me on today's call are the company's President and Chief Executive Officer, Kevin Hykes; and 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 to CVRx's President and Chief Executive Officer, Kevin Hykes.

Thanks, Mike. Good afternoon and thank you for joining us. I’m pleased with our solid second quarter results, driven again by encouraging strength in the U.S. Heart Failure business. We delivered total revenue of $11.8 million, an increase of 24% over the second quarter of 2023. I remain enthusiastic about the team we are building and the impact Barostim therapy is having on patients. One of my key priorities in the second quarter was to deepen and strengthen our leadership team to drive our market development priorities. To head our U.S. sales team, we recently announced the appointment of Robert John as our new Chief Revenue Officer, who brings over 25 years of sales leadership experience in the medical device industry. Robert has a strong reputation within the heart failure community and has significant experience building sales organizations, launching novel heart failure therapies, and delivering results. Robert officially started on June 27th and has seamlessly assumed leadership of our sales team from Paul Verrastro, our Interim Sales leader. I would like to thank Paul for his leadership and commitment during this transition period. Paul was able to quickly unify and stabilize the team, confining the disruption that we experienced to the first quarter. This allowed us to hit our numbers and open three new territories in this most recent second quarter. While Robert is obviously still early in his tenure, we're confident in his ability to build upon the solid momentum that Paul initiated and look forward to Robert's contributions to driving our market development priorities. In addition to our new sales leader, we've also filled four other key executive roles, including Dr. Philip Adamson as Chief Medical Officer, Bonnie Handke as Senior Vice President of Patient Access, Reimbursement, and Health Care Economics, Jennifer Englund as Senior Vice President of Global Clinical Research, and in order to help accelerate and support our rapid growth, we hired the company's first Chief Human Resources Officer, Tonya Austin. The quality of these hires and the speed with which we were able to attract such talent underscore the value of the opportunity ahead of us. These additions complete our senior team and provide the resources to allow us to now fully focus on expanding the adoption of Barostim for patients with heart failure. These new hires reflect our focus on addressing key barriers to the adoption of Barostim, which include improving patient access to the therapy, increasing education and awareness among referrers and patients, and developing a more robust portfolio of clinical evidence. Starting with an update on patient access, I'd like to discuss some recent reimbursement developments. On July 10th, CMS released its proposed rule changes for the 2025 hospital Outpatient Prospective Payment System. The OPPS notice of proposed rulemaking includes a potential change to Barostim's reimbursement status that would decrease the overall payment to hospitals for outpatient procedures from approximately $45,000 on average in 2024 to approximately $31,000 in 2025. This proposed change involves moving Barostim from its current placement in new technology APC 1580 to APC 5465. While disappointing, the proposal remains subject to comment before it can be finalized. Over the 90-day comment period, CMS will solicit feedback from hospitals and physicians on the merits of creating a level six neurostimulation APC as well as on the impact of placing Barostim in APC 5465. As we have successfully done in the past, we are actively engaging with CMS and hospital stakeholders during this period to advocate for maintaining Barostim's current placement in the new technology APC for at least another year or for the creation of a level six neurostimulation APC. The value Barostim provides to patients and health care systems is confirmed by outcomes data, and we will work with physicians, hospital administrators, and our industry colleagues with similar advanced technologies to ensure fair and appropriate reimbursement. We'll provide any updates on this process on our third quarter earnings call in advance of the publication of the final rule in November. While we navigate these reimbursement rulemaking processes in the outpatient setting, we have a potentially favorable development on the inpatient side. The inpatient prospective payment system proposed rule released earlier this year proposes to reassign Barostim to MS-DRG 276 to better reflect the clinical severity and resource use. The result of this change would be an increase in payment to hospitals from approximately $23,000 to approximately $43,000. We look forward to the release of the final inpatient rule, which is expected in August. Our second initiative is increasing education and awareness amongst referrers and patients in the community as to the benefits and role of Barostim in the treatment continuum. While our primary focus is on the 1,400 heart failure specialists who manage 24% of our indicated patients, we're also expanding our outreach to general cardiologists and their advanced practice providers who see 44% of our target population. We're also continuing to invest in our highly effective direct-to-consumer marketing efforts, which are a key part of our Barostim Connect program, providing education and prior authorization support to prospective patients. Our third focus is on developing a more consistent stream of clinical evidence supporting Barostim therapy to strengthen the clinical literature with a more comprehensive representation of the positive real-world clinical outcomes that physicians are achieving with Barostim therapy. During my time at CVRx so far, I've repeatedly heard from physicians that the benefits they observe in their Barostim patients exceed those described in the literature published to date. Because of this, they continue to encourage us to support further publications on the wide range of benefits that their patients experience with Barostim. We are also focused on publishing additional scientific evidence more fully describing Barostim's mechanism of action. This involves further explaining the physiological and hemodynamic mechanisms that underlie the effectiveness of the therapy and that help illustrate its mechanism of action. These publications will provide a more comprehensive scientific foundation for Barostim's impressive results. Turning to sales, the work that we have done during the sales transition and the preliminary observations of our new leaders are bringing additional insights into the performance of our account base, specifically the characteristics of the most successful Barostim programs. From a sales strategy standpoint, we are increasing our focus on accounts where our therapy is integrated into the treatment continuum and supported by multiple heart failure physician champions and surgical partners. These accounts have demonstrated deep and sustained therapy adoption leading to high utilization. We believe that building Barostim programs like these will best support our plans for long-term growth. I want to emphasize our continued optimism about Barostim therapy, our market opportunity, and the strength of our organization. The changes we're implementing are improving near-term execution as well as our focus on the key drivers of adoption. Our broadened leadership team is already making strides in aligning our commercial and scientific resources to drive long-term adoption of Barostim in the HFrEF market, to deepen our evidence base, and to explore additional indications. We're developing a comprehensive long-term vision and strategy, which we'll share in the future, aimed at driving growth in 2025 and beyond. Barostim's potential to transform the treatment paradigm for millions of people suffering from heart failure and other cardiovascular diseases is inspiring, and it's a privilege to be leading the company at this time. Our goal remains clear, to drive our therapy towards becoming standard-of-care. With our innovative technology, expanding market presence, and strengthened leadership team, we're well positioned to make a meaningful difference in even more patients' lives. Now I'd like to turn the call over to Jared for financial review.

Thanks, Kevin. In the second quarter, total revenue generated was $11.8 million, representing an increase of $2.3 million, or 24%, compared to the same period last year. Revenue generated in the U.S. was $10.7 million in the current quarter, reflecting growth of 29% over the same period last year. Heart failure revenue in the U.S. totaled $10.5 million in the current quarter on a total of 339 revenue units, compared to $8.3 million in the second quarter of last year on 265 revenue units. The increases were 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 current quarter, we had a total of 189 active implanting centers, compared to 140 on June 30, 2023, and 190 on March 31, 2024. Active implanting centers are customers that have completed at least one commercial heart failure implant in the last 12 months. We also had 42 sales territories in the U.S. at the end of the current quarter, compared to 32 on June 30, 2023, and 39 on March 31, 2024. Revenue generated in Europe was $1.1 million in the current quarter, representing a decrease of 6% compared to the same period last year. Total revenue units in Europe increased to 63 for the three months ended June 30, 2024, from 56 in the prior year period. The number of sales territories in Europe remained consistent at 6 for the three months ended June 30, 2024. Gross profit for the three months ended June 30, 2024 was $9.9 million, an increase of $1.9 million compared to the three months ended June 30, 2023. Gross margin was 84% for each of the three months ended June 30, 2024 and June 30, 2023. Research and development expenses for the current quarter were $2.8 million, reflecting a decrease of 16% compared to the same period last year. This change was driven by a $0.4 million decrease in consulting expenses and a $0.1 million decrease in compensation expenses. SG&A expenses for the current quarter were $21.1 million, representing an increase of 28% compared to the same period last year. This change was primarily driven by a $2.6 million increase in compensation expenses, mainly as a result of increased headcount, a $1 million increase in non-cash stock-based compensation expense, a $0.4 million increase in advertising expenses, a $0.2 million increase in travel expenses, and a $0.2 million increase in consulting expenses. Interest expense increased $0.5 million for the three months ended June 30, 2024 compared to the same period last year. This increase was driven by the interest expense on borrowings under the loan agreement. Other income net increased $0.3 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This increase was primarily driven by greater interest income on our interest bearing accounts. Net loss was $14 million or $0.65 per share for the three months ended June 30, 2024 compared to a net loss of $11.6 million or $0.56 per share for the three months ended June 30, 2023. Net loss per share was based on 21.6 million average shares outstanding for the three months ended June 30, 2024 and 20.7 million weighted average shares outstanding for the three months ended June 30, 2023. As of June 30, 2024, cash and cash equivalents were $70.4 million. Net cash used in operating and investing activities was $10.2 million for the quarter ended June 30, 2024. This is compared to net cash used in operating and investing activities of $11.8 million for the three months ended March 31, 2024. Now turning to guidance. For the full year of 2024, we continue to expect total revenue between $50 million and $53 million. We continue to expect full year gross margin between 83% and 85% and now expect operating expenses between $95 million and $98 million. For the third quarter of 2024, we expect to report total revenue between $12.7 million and $13.7 million. I would now like to turn the call back over to Kevin.

Thank you, Jared. Before we open the line for questions, I'd like to reflect on my first six months as CEO. My interactions with physicians and patients have provided valuable insights into the real-world impact and benefits of our therapy. These experiences have only strengthened my belief in Barostim’s potential to transform lives. Our team's dedication to improving patients' lives continues to impress me. We've built a strong, focused group of professionals who are committed to our mission. I recently spent a full day with our expanded leadership team and could not have been more pleased with how quickly and collaboratively the team has worked together to identify opportunities and to begin executing on our three focus areas. My optimism is also bolstered by the momentum that we have built in Q2 and which we are now seeing continue into the third quarter. We look forward to keeping you updated on our progress in the coming months. Now, I'd like to open the line for questions. Operator?

Thank you. [Operator Instructions] Our first question comes from the line of Robbie Marcus with JPMorgan. Please go ahead.

Oh, great. Thanks for taking the questions. Two for me. Maybe the first one. There's been a lot of changes at the organization. Revenues came in line with the street, OpEx guidance moving up just a touch here, I would imagine, on the new hires. Maybe walk us through the pathway to profitability here. And how do you get revenues high enough or expenses low enough to start generating free cash flow? When do you think that might happen?

Hi, Robbie. This is Jared. Thanks for the question. Yes, I'm happy to take that one. As the model has been built to where we're adding more individuals out into the U.S. sales force, training them up over time, having them activate centers, and getting them more and more productive with more and more experience. And so while we haven't drawn a line in the sand to say when we will reach a break even, our models are still built to show that we will continue to see increased productivity out of each one of these sales territories that we continue to add on a quarterly basis to allow us to reach that breakeven point before we would have to go back and raise capital. The reason we haven't drawn a line in the sand to talk about what level of revenue we cross that threshold is because we want the opportunity to make decisions as we grow this business, whether to invest at a faster pace and hire more reps to result in more territories added on a quarterly basis, or continue with the same pace where we're adding about three territories on a quarterly basis. So while we had, a bit of a step back in the first quarter, we viewed it as a bit of a push from Q1 to Q2 to be able to go out and deliver the revenue levels that we did here in the second quarter.

And then when I think about the reimbursement changes, how do you want us to model revenues going forward? Should that come down in line with the percentage change or reimbursement? Or are there other ways that you think you can offset that to not have the ASPs go down? Thanks.

Yes, I'm going to take a moment and just step back and remind people where we've been on the reimbursement landscape before I kind of dive into that second part of that question, Robbie. So if everybody remembers, about a year ago, the proposed rule came out for the outpatient setting in July of 2023. And they had us mapped in this exact same spot where we would be coded to APC 5465 at the beginning of 2024, which would then turn reimbursement to the hospitals to be about $30,000 January 1st, 2024. Once we received that proposed rule, we took the steps to gather the data, understand the average costs being submitted to CMS for this specific procedure, and brought that in front of a CMS panel of physicians in mid-to-late August last year. As part of that process, there is a non-binding vote where the physicians make a recommendation to CMS where the individuals or where the procedure should be mapped from a payment perspective. And the result of that non-binding vote was 5-0 in our favor to be mapped to a new tech APC 1580. The final rule was released in November of 2023 that did exactly that. They had us mapped to APC 1580. Reimbursement on average to hospitals in an outpatient setting was then $45,000 starting January 1, 2024. Now as we move into 2024, the data around the costs being submitted to hospitals is as good or better than what we had seen in the past. The same levels of costs, just with higher volumes. So while a little surprised by the proposed rule, we now know the process that we went through last year to bring this data back to the physician panel group and then hopefully end up with a more positive outcome again as we get into November. As far as the long-term model goes, we're going to hold off on making any changes to our models at this point in time. We believe the costs being submitted to CMS do support us being mapped to new tech APC 1580 for at least another year. If not, the creation of a level six neurostim code that would reimburse about the same level. So I think once we see the final rule in November, then we can have more conversations about what impact it could have to the long-term model. But in general, we've seen other neurostim devices pricing their products in the mid-20,000s when mapped to APC 5465.

Thank you.

Yes. No, thank you for that question, Matt. We are in fact focusing more certainly this quarter and I think through the rest of the year driving utilization in our existing accounts, doing more of that and doing it better, and perhaps less so on opening new accounts in the short term. Maybe to give you a little bit of color, I'll take just a step back for some context here. We're making a pretty typical transition here at CBRX from sort of an early stage first chapter of commercialization into one that's more widespread and one that's more informed by what we've learned. And that's one of the reasons that I was brought here by Nadim at this point, given that's something I've done throughout my career. And so we're now, with the help of our new executive team, taking a very careful look at what we've accomplished and what we can learn from that first chapter. And, as is often the case, we tried a lot of things, as we should have. We approached a lot of different types of physicians, a lot of different types of accounts to understand how this therapy will best be supported and ultimately adopted. So now as we dig through that and understand what makes the good accounts really good and what causes differences in utilization across the different types of accounts, that's really important. So we're applying that now as we head into the back half of the year and think we're starting to see some patterns and an understanding of why adoption is really strong in the best of our accounts. So our commitment is to do more of that in lieu of approaching a significant number of new accounts, at least in this period.

Thank you. Our next question is from the line of Margaret Kaczor Andrew. Please go ahead.

Hi, good afternoon, guys. Thanks for taking my question. I wanted to maybe go a little bit deeper in utilization per count, to the extent you can give it maybe on a monthly basis. I think at our conference in June, you had said you saw some good month-over-month improvement in May. Have you continued to see that improvement in July? And then, again, taking that a step further into guidance throughout 2024, what is the implied Q4, utilization per center that you guys are adopting? And how does that lead into 2025, I guess?

Hi, Margaret. Yes, I'm happy to kind of break down the two buckets here. So first, we talked about the momentum we had seen starting in March, carrying through into the second quarter. And then again, in Kevin's prepared remarks, talking about seeing some continued momentum in the month of July. All of that's obviously factored into the guidance that we put together for the third quarter. And then for the full year guide that we put out again, we reiterated just today. And so when we look at utilization, when we look at account ads, we know the vast majority of the revenue generated is from the existing account base, with some new accounts coming on board, treating a couple of patients, and then kind of sitting back and wait and seeing the results. So when we look at the guide for Q3 specifically, we're looking at utilization rates increasing back to levels similar to what we saw in 2023 on a per account basis. So revenue units per AIC outstanding. As far as for the fourth quarter, I think again, without getting into the specifics, we're talking about all of the positive momentum that we've seen in the positive assets that we've added in the first half of the year, that give us confidence that we're able to go out and continue to grow this business and see some pretty good results in that final quarter of the year.

Okay. And so, it's, I guess, two follow up questions. One, in that scenario, are you going to keep adding the accounts that you've kind of referenced in the past still, something in the in that kind of 13, 15 plus account, or new center per quarter range. And then, one of the other things we've spoken about is the interest driven by the new C-suite addition. So maybe that's part of the thought processes. You guys are also saying a lot of interest externally, just as you've brought in a new CMO, new head of sales, etcetera. And can you give us some metrics around that as a leading indicator into 2025?

Yes, so we do still have a funnel of accounts that are going through the activation process. We've always talked about the uncertainty of when they would actually treat that first patient and actually become an active account. But I think back to Kevin's prepared remarks, our focus is really turning towards driving utilization at a lot of these active centers, especially the high potential centers that have already treated patients and are already on contract. So when I think back to, what we've seen historically for new account ads on a quarterly basis, I don't know that we're necessarily setting an expectation for a significant number of net new ads for the rest of this year, but rather turning our focus towards driving utilization at the active accounts. That being said, there are accounts in the funnel going through the process to be activated. It's just the vast majority of the revenue that we're going to be generating here in the third and fourth quarter are from the accounts that are already active.

And maybe I could, Margaret, I think address what your second question is. Obviously we're, as you heard in my prepared remarks, thrilled at the quality and strength of these new executives. And I'm particularly pleased at the speed with which they've engaged. And, I don't know that we could put a number on the sort of the impact that Dr. Adamson, our Chief Medical Officer or Robert John, our new sales leader, they both been in the heart failure space for many, many years. There's almost no one that they don't know. So the qualitative response has been very positive and overwhelming at certain points, which I would imagine is obviously going to help our business in the long-term. What I would also say, so I couldn't put a number on that, but the other piece that's I think very helpful, Bonnie Handke, who joins us from a very, very senior role at Medtronic has deep relationships in Washington and within the industry and is bringing a whole new level of access and influence to our efforts on the reimbursement front. So again, hard to quantify that, but obviously in that positive in terms of moving this therapy forward.

Thanks.

Thank you. Our next question is from the line of Bill Plovanic with Canaccord Genuity. Please go ahead. Ladies and gentlemen, the line has been dropped. We move on to our next question, which is from the line of Frank Takkinen with Lake Street Capital Market. Please go ahead.

Alright, thanks for taking the questions. Was hoping you could talk about sales for us just a little bit more. I don't know if you guys have disclosed this in the past, you're comfortable in doing so but maybe talking to the mix of more senior reps, I don't know how you define that exactly maybe with the company one to three years fully scaled versus maybe some of the newer reps and we'll define those as maybe less than with the company for less than six months. What's that mix look like and how is that ramp of new reps been trending since Q1.

Hi Frank. Thanks for the question. Yes, we don't typically disclose the tenure of the reps as they've come up to speed. We did mention that we had some people have taken over territories in the first quarter and getting them up to speed. I think the thing we'd like to highlight is really the reps that we are hiring here in 2024 are really high quality individuals getting up to speed and getting through their training programs on at a really quick pace to the point where they can get out in the field and start making a difference here as we get to the back half of this year. But yes, we typically don't disclose the tenure or the breakout of the different reps.

Okay, fair enough. And then maybe switching gears a little bit and talking about Medicare Advantage or commercial coverage or and commercial coverage. Maybe talk about those two initiatives. Maybe what's in the works there from an investment perspective to start establishing some of those policies and how could we see that impact the reimbursement landscape in 2025.

Yes, so thanks Frank. It's Kevin. So obviously Bonnie is rolling up her sleeves after five or six weeks on the job. We have begun a significant outreach effort with the commercial payers through her team to try to establish more consistent coverage. So that's in its early stages, but we're pleased at least with the reactions we're getting. As it relates to supporting Medicare Advantage or commercial prior authorizations for that matter. We have a very robust prior in house prior authorization function. That's part of the Barostim Connect programs that has had, I think surprising success both with commercial payers and with Medicare Advantage supporting and appealing and ultimately winning patient prior authorization request. So, I think we're pleased with what we're seeing. We're bringing new found experience and engagement to bear on both those sides as well as our interactions with Medicare and the mass. So we're pleased at what we're seeing.

Perfect. Thanks for the question.

Thank you. Our next question is from the line of Bill Plovanic with Canaccord Genuity. Please go ahead.

Great. Thanks. Good evening. You think I'd be able to work a phone at this age. So my question is just one, you obviously your accounts went backwards and I'm just curious of, is that due to loss of sales coverage? What have you? In terms of the sales force has that fully been stabilized and it's all ads here or since the last call, did you see more turnover? And then just I have a follow up on the R&D strategy.

Sure. Thanks, Bill. Kevin, I'll take that. So maybe in reverse order, thanks to Paul Verrastro stepping in without missing a beat, he was quickly able to stabilize our sales team. And to limit the disruption largely to the first quarter. As I mentioned that at public event in early June, we had turnover down to zero in the early part of the quarter. And while there were a few more heads that left turnover still well below what we would have expected for a company of our size and stage. So we're pleased at what we're hearing from the team. They're energized and excited about their new leader who brings, a 25-years’ experience building teams from scratch and deep, deep relationships. So I feel really good about the morale within that team and the strong sense of momentum. To your first question, which is whether that affected the active in planning accounts dynamic this quarterly. The short answer is no. Those are accounts that by definition had not implanted in over 12 months. And so there's different reasons for that. But they go back 9 months to 12 months from now and really weren't part of that most recent dynamic in the sale team.

Okay, thanks. And then just on the R&D. I think when you joined on the last call, we talked about taking a hard look at the longer term strategy and where you go from here. Anything you're willing to share with us since it's you've been on board a while.

Yes, another good question. So we are looking very carefully both at our clinical and our product development strategies. The good news is we have a new SVP of clinical and Chief Medical Officer who are hard at work, certainly on the clinical side, understanding how we build the right evidence base to support the therapy and how and whether we may at some point pursue another prospective multi-center trial. So that work is underway. It's a little early to report on what we will decide to do ultimately, but there's a lot of new energy and I think insight going into both of those questions and the R&D product development piece is part of that as well. So I would say stay tuned if you if you would, but we've got some fresh eyes looking at it and a lot of experience I think being brought to bear.

Okay, great. Thanks. Thanks for taking my questions.

Thank you. Ladies and gentlemen, our final question comes from the line of Chase Knickerbocker with Craig-Hallum Capital Group. Please go ahead.

Good afternoon guys. Thanks for taking the questions. So just one more on the lower, lower sequential centers number. Kevin, is it fair to think of this as kind of the first sign of that new strategy if you guys going deeper rather than wider? In the near term, if you know, it's not because of the sales turnover, why we had that lower number? Or was it just a kind of an uncharacteristic number of dropouts in the in that active incentive center number?

Yes, no, I think it's the former. And this is a result of us really doubling down with a new leader and a fresh set of insights and a new level of discipline and really looking at how we can make even more of our current centers look like the best of them. And that by definition then has us spending a little less time out looking for new centers. But we're pleased with what we're seeing.

Then just one more on reimbursement, in the worst case scenario in which we remain, mapped to the level five neuro stem code. Should investors think about there being anything different from an expense perspective for your customers, about your procedure rather than, the other kind of products that Jared mentioned that were in that mid 20s ASP that were also mapped to the level five code. Or those kind of a good proxy for us to think about, the amount of meat that you guys need to leave on the bone for this to be a profitable procedure for your customers.

Yes, Chase, I think that's right. Right. If that's the outcome and we end up being mapped to APC 5465 then we will have to look at our model. And but in either case, we're confident that we can evolve towards a sustainable business model. Right. And so I think with our ability to manufacture this device and having an understanding of what the cost structure looks like, we still believe that, we could have solid growth margins, even in that scenario on a go-forward basis.

Got it. And then just last two for me. Can we get your current mix of kind of inpatient versus outpatient just so we can kind of think about the, magnitude of kind of both of those changes potentially? And then Kevin, kind of what's your expectation from a standpoint of all these new reps that you guys have hired over the last couple quarters, as far as when they should be fully productive, as your expectation six months, nine months. Just how should we think about that? And thanks guys.

Chase, I'll get the first one Kevin can grab the second one then since you directed that one to him. So roughly the breakout is roughly 10% to 15% are being treated in an inpatient setting today and so 85% to 90% in an outpatient setting. And that's been pretty consistent over the last couple of years.

Yes, I guess as it relates to the reps, Jared mentioned, we've been really pleased with both the Q1 and the Q2 classes of reps. These are, I think, the highest quality and importantly, most appropriately experienced reps we've yet hired. And as I mentioned, we're kind of going through a transition here from the early chapter where you try a whole bunch of different things, including a bunch of different rep profiles, and you start to understand what really works well. And I think we have gotten better and better at choosing reps who don't just have a Rolodex necessarily or don't just happen to know cardiac anatomy, but who have built programs and who've worked in a market development environment and launched a novel therapy like this with all that comes with that. So our new leader is bringing a new approach to onboarding, certainly to sort of hiring and the hiring profile, but as well as onboarding and training. So I can't tell you that the time to productivity will change material as of today. But our intention is to launch these new reps into these territories with more background and support than they've ever had and hopefully then make them productive that much faster.

Thank you. Ladies and gentlemen, this concludes our question-and-answer session. I would now hand the conference over to Kevin Hykes for his closing comments.

Thank you operator. And thanks again to everyone for joining us for our second quarter earnings call. We appreciate your ongoing support and we look forward to updating you on our progress at our next update. Thank you.