Ladies and gentlemen, thank you for standing by and welcome to the Axonics Third Quarter 2021 Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

[Operator Instructions] I would now like to turn the call over to Mr. Neil Bhalodkar to host our conference today. You may begin..

Thank you. And good afternoon and thank you for joining Axonics' quarterly results and update call. Presenting on today's call are Raymond Cohen, Chief Executive Officer; and Dan Dearen, President and Chief Financial Officer.

Ray and Dan will provide prepared remarks on financial results, commercial progress and a general business update, followed by a Q&A session.

Before we begin, I would like to remind listeners that statements made on this conference call that relate to future plans, events, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995.

While these forward-looking statements are based on management's current expectations and beliefs, these statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause results to differ materially from the expectations expressed on this conference call.

These risks and uncertainties are disclosed in more detail in Axonics' filings with the Securities and Exchange Commission, all of which are available online at www.sec.gov. Listeners are cautioned not to place undue reliance on these forward-looking statements which speak only as of today's date, November 4, 2021.

Except as required by law, Axonics undertakes no obligation to update or revise any forward-looking statements to reflect new information, circumstances or unanticipated events that may arise. I'd now like to turn the call over to Ray for his remarks..

Thanks, Neil. I'd like to welcome everyone joining the conference call this afternoon. In the third quarter of 2021, despite significant disruptions to our business from COVID-19, Axonics generated net revenue of $46.9 million, representing 33% growth compared to the prior year period.

When we held our second quarter conference call on August 5, we noted that a modest number of cases had been canceled in July and early August and that our 2021 guidance assumed no further deterioration in elective procedure environment during the quarter.

Unfortunately, a significant increase in COVID-19 due to the Delta variant led to cancellations and deferrals of numerous SNM procedures in the third quarter. Some patients were reluctant to undergo a procedure and canceled their external trials and/or permanent implants.

More impactful, with the dozens of hospitals that restricted elective procedures due to a relocation of resources to the ICU and more recently, the impact of nursing shortages across the country. These factors became more prevalent in August and continued into September.

Many states were disrupted, with a widespread impact in the Southeast, with major markets such as Florida and Texas being particularly impacted. While the COVID infection rates have gone down, the pandemic and staffing shortages continued to impact our procedure volumes in October.

As such, we have revised our fiscal year 2021 revenue guidance to $177 million which Dan will discuss further in his prepared remarks. So turning back to the third quarter; sacral neuromodulation revenue was $40.1 million which was flat sequentially.

We consider this to be a solid and respectable result considering the Delta variant headwinds, summer vacation seasonality and the other factors that I previously mentioned. We continued to add new accounts in the quarter and we estimate that our market share held steadily or perhaps even grew modestly.

Bulkamid revenue was $6.8 million, of which 57% or $3.9 million was generated in the United States. It's clear that this fast and easy office-based procedure is significantly more insulated from the COVID surge as compared to sacral neuromodulation and other facility-based outpatient elective procedures.

Physician response to Bulkamid has been overwhelmingly positive. And as anticipated, the expanding offering has elevated Axonics' stature within the urology and urogynecology community.

While we see only modest growth for Bulkamid in international markets going forward, we expect robust growth in the United States to continue for years to come given how highly undertreated stress urinary incontinence is.

Over the last four months, we have expanded our commercial footprint in the United States by adding more field-based salespeople and clinical specialists. Our U.S. field team now numbers 260 people. Over the last few months, we've also hosted over 325 physicians at six regional seminars to introduce Bulkamid and provide proctored wet lab training.

The seminars also provided us with an opportunity to introduce our sacral neuromodulation system to physicians who are not yet our customers and have them hear firsthand from their peers who have already experienced the difference of working with Axonics.

The positive feedback from attendees has been exceptional and we fully expect that these efforts will pay dividends for us in the quarters ahead as more physicians begin implanting Axonics for their patients suffering from bladder and bowel dysfunction.

On the product development front, as previously announced in late June, we filed a PMA supplement with the FDA for our newly developed, long-lived recharge-free sacral neuromodulation system.

We're engaged with the agency on an interactive basis and continue to anticipate receiving FDA approval during the first half of 2022, at which time we fully expect to begin shipping the new non-rechargeable SNM system to customers in the United States.

We're confident that the introduction of a recharge-free device will continue to drive market expansion and advance us on our path to sacral neuromodulation market leadership. With that said, I'd like to turn the call over to Dan to review Axonics' third quarter 2021 financial results.

Dan?.

Thank you, Ray. In the third quarter of 2021, Axonics generated net revenue of $46.9 million. This represents an increase of 33% compared to $35.2 million in the prior year period. Sacral neuromodulation net revenue was $40.1 million, of which $39.1 million was generated in the United States and the remainder in Canada and select European markets.

Bulkamid net revenue was $6.8 million, a sequential increase of 21% compared to the second quarter. The U.S. accounted for $3.9 million, with $2.9 million coming from international markets. Gross profit for the third quarter of 2021 was $31.2 million, representing a gross margin of 66.5% compared to 61.9% in the prior year period.

Total operating expenses for the third quarter of 2021 were $47.7 million. Included in operating expenses are $6.7 million of stock-based compensation expense and $2.2 million of intangibles amortization. Operating expenses totaled $30.6 million in the prior year period.

Net loss for the third quarter of 2021 was $17.3 million compared to a net loss of $9.2 million in the prior year period. Cash and cash equivalents were $228.8 million as of September 30, 2021. Turning to guidance; we are closely monitoring the ongoing impact the COVID-19 pandemic and staffing shortages are having on elective procedure volumes.

Our updated guidance is based on what we are currently seeing in the field and incorporates our expectation that we do not anticipate much of a recovery in elective procedures in the fourth quarter. We expect fiscal year 2021 total company revenue of $177 million, representing growth of approximately 59% compared to fiscal year 2020.

We expect fiscal year 2021 SNM revenue of $155.2 million which represents an increase of 39% compared to fiscal year 2020. We expect fiscal year 2021 Bulkamid revenue of $21.8 million. In the fourth quarter, total company revenue is expected to be $49.8 million, an increase of 43% compared to the prior year period.

Fourth quarter SNM revenue is expected to be $42 million, an increase of 21% compared to the prior year period. Finally, Bulkamid revenue is expected to be $7.8 million in the fourth quarter. I will now turn the call back over to Ray for additional remarks..

All right, super. Thanks, Dan. Many of you that have been following Axonics for the last few years know that as of today, we've reached the two-year anniversary of the FDA approving our rechargeable sacral neuromodulation system and the company launching commercial operations in the United States.

So before we move to Q&A, I would like to spend a few minutes discussing the sacral neuromodulation market, where we are today and where we see things going in the years ahead. From the time of Axonics inception, we have consistently said that bladder and valve dysfunction is underreported, underdiagnosed and significantly undertreated.

In each physician practice, there are hundreds of patients that have been differentially diagnosed with urinary, fecal or mixed incontinence. Many of these patients have taken prescription drugs to treat overactive bladder with limited success.

In fact, clinical literature indicates that over 80% of patients who are prescribed drugs discontinue these meds within six months. Over the last two decades, millions of patients have been suffering in silence or simply decided not to pursue sacral neuromodulation therapy due to lack of awareness and shortcomings of the legacy offering.

Moreover, for many physicians, sacral neuromodulation was viewed as a therapy of last resort, given that the need for replacement surgeries every few years and lack of MRI compatibility and less than optimal efficacy and fussiness of the incumbents product all conspired against growth in the market.

In November 2019, our introduction of a bespoke fuss-free, long-lasting, MRI-compatible device changed the landscape for sacral neuromodulation therapy. Axonics made SNM an attractive therapy proposition for patients, with physicians discussing the long-term benefits of sacral neuromodulation more often with their patients.

We continue to hear from clinicians that more of their patients are saying yes to sacral neuromodulation therapy than ever before. Our commercial success in last two years has been grounded in significantly improving the quality of life for patients and providing physicians exceptional support.

On the marketing front, to increase awareness of sacral neuromodulation, we have invested in a combination of activities, including Facebook ads, paid Internet search and search engine optimization.

We continue to partner with practices to identify patients that have been previously treated with drugs or BOTOX that are eligible for sacral neuromodulation therapy. We have worked with our customers to support mailings from those physicians to their own patients. We've been engaged in doing some local print advertising and some short TV spots.

Our messaging now includes offering solutions for all types of urinary incontinence regardless of whether it's stress or urge incontinence. We believe this will increase our response rates, lower cost per lead and drive even more patients into practices of the physicians who are loyal to Axonics.

We're also working on launching a television marketing campaign in early 2022 and we will continue to invest in these efforts for the foreseeable future. It's clear that sacral neuromodulation is experiencing a renaissance based on new and effective technology in the marketplace.

We fully expect sacral neuromodulation to become the preferred third-line therapy for patients suffering from overactive bladder. As such, we continue to believe the SNM category is poised to expand into a $1 billion plus business annually in the United States in the next few years. More specifically, we estimate that the current U.S.

sacral neuromodulation market is around $700 million. We expect the market to sustain mid-teens annual growth for years to come which would result in a U.S. SNM market doubling to around $1.5 billion in 2026.

With this level of market expansion and Axonics continuing to add customers and capture more share, we're confident that our SNM business can achieve durable sales growth of at least 25% per annum for years to come. And if COVID is defeated, perhaps we can grow at even higher rates in the near term.

In closing, we remain grateful for the trust physicians, the patients and shareholders have placed in Axonics. We'd also like to thank our field team and our colleagues in Irvine for their diligent efforts and dedication to fulfilling our mission of improving the lives of patients suffering from incontinence.

So at this time, we're happy to take questions and we'll turn it over to the operator..

[Operator Instructions] Our first question comes from the line of Adam Maeder from Piper Sandler..

Hey guys, appreciate you taking the questions here. First one for me. I would just like to, I guess, better understand Q3 intra-quarter trends and kind of how the business progressed over the course of Q3. I mean it sounded like, if I heard correctly, the COVID impact, it grew throughout the quarter.

But was hoping you could just give us a little bit more granularity there in terms of how the business progressed throughout Q3 and then into October as well..

So Adam, thanks. Thanks for your question. We're -- we haven't been providing like monthly statistics to date. I would say that there wasn't anything unusual in terms of the progression of revenue throughout the quarter. Clearly, or maybe it's not obvious but September was obviously better than July and August.

And October was slightly better than October -- excuse me, October better than September. So that's kind of the trend. So things are trending in the right direction.

But yet, it's not -- we don't have a clear field at this time and we continue to see problems occurring in different parts of the country and things are moving around now, right? Whereas before in Q3, it was all about what was happening in the Southeast.

And now we have issues that are occurring in places like Washington and Oregon, in Colorado and other places in the Midwest. So this is kind of like a rolling blackout with this COVID impact.

And we're as anxious as you could possibly imagine to have this kind of dissipate so that we can get into a situation where -- like in Q2 where things were more normalized from an elective procedure standpoint..

Sure. That's helpful, Ray, I appreciate that. And then just for the follow-up, I wanted to ask a little bit about potential backlog. I mean it sounds like there were a chunk of cases that were postponed or canceled.

So maybe just talk about kind of the backlog that accumulated in Q3 and how you see that kind of being worked down in subsequent quarters? And what, if anything, is included in the Q4 outlook?.

Yes. Thanks, Adam. So look, we have not included a backlog in terms of the guidance that we articulated here to close out the year. We're trying to be really conservative here, Adam, in what we are anticipating in Q4.

And if it turns out that some of those patients that canceled their external trials or permanent implants, particularly the permanent implant patients, then that could be helpful. And we could see that accrue to our benefit in Q4.

But we haven't done a detailed analysis and to try to get in the minds of some of these patients who have deferred their procedures. And also it's difficult sometimes to make distinctions between patients that have deferred a procedure for their own concerns versus what's happening in the institution that they would be getting that procedure done.

So it's really a mixed bag out there. And we're just doing the best that we can to predict what the company can do in an environment where there's external factors that we absolutely have zero control over..

Sure. Thanks, Ray. Appreciate you taking my questions..

All right, Adam. Thank you..

Our next question comes from the line of Bob Hopkins from Bank of America..

Thank you, and good afternoon. I guess two things….

Hey, Bob..

Hey Ray, how are you?.

Good..

Sorry, I just jumped right in. Just as you really -- are you really seeing here in October parts of the U.S.

kind of going in the wrong direction now?.

No. Let me just be clear about that. No question. And I think we don't want to be the COVID cryers [ph], right, or the people that defy this and we continuously seem to find ourselves in this mode.

But when I'm getting e-mails from the field, from our salespeople through our sales management team about the fact that, oh, we just lost four cases in Oregon because of this hospital shutdown, or the entire state of Idaho right now has put a kibosh on elective procedures.

These are the kinds of things that are coming to us and they're coming regularly. It's just that the names and the places are changing. But you know what I mean? It just has -- it just hasn't abated, it's just moving around.

One could say that, obviously, Q4 may not look quite as bad as it did in Q3, just because we're no longer talking about the Southeast where things have really settled down quite a bit. But not out of the woods in a lot of these locations. So once again, we're really not trying to make any excuses.

And we think that considering what we're able to accomplish in Q2 and the fact that we basically posted the same number for sacral neuromodulation in Q3 with all these factors, we take that as a win for the company. And then obviously, Bulkamid continues to march along, really unabated and unaffected by this pandemic..

Okay, that's helpful.

And I guess the other question is, given that we're start -- ending or going to end 2021 at a lower level than you originally thought, does that make you a little more conservative? Or do you think the Street should be a little more conservative in how they model 2022 growth as a result?.

So I think that what we tried to do is lay some breadcrumbs with this 25% kind of solid growth. And we're thinking if the market is growing at around 15%, these are just estimates. And it could be -- it could grow a lot faster once again, if we get rid of this COVID problem.

But we think despite that, we will grow faster than that and grow at about 25%. So if you kind of run those numbers, I think you see that it's not that far off certainly from what the 2022 consensus was. And we kind of catch up over the next couple of years. So look, if we can just get these clouds to lift a bit, then we can overachieve.

But I think it's, at this point, prudent for us to be conservative and not get kind of get over our skis because we're dealing in an environment that's difficult to control..

Okay. And is that 25%, that's a total company, not a sacral neuromodulation? Just to be clear..

Just SNM. Yes, just SNM. The Bulkamid stuff, I mean, that just continues to surprise us in a positive way, right? Given that so many of these -- Bulkamid can be done in the office and so you don't have the same patient reluctance. Plus the product is hot and people are really excited about that.

So, I think if you noticed that we even increased incrementally the guidance for Q4 in Bulkamid. And if I -- Neil is sitting right by me but I think the consensus is $32 million for Bulkamid in 2022 and that seems like a number that we should be beat handily [ph]..

Excellent. Thanks for the color. I really appreciate it..

Thanks, Bob. Thanks for joining our call. We appreciate that..

Yes. We have certainly enjoyed [ph]. Thanks..

Our next question comes from the line of Michael Polark from Baird..

Hi, good evening, good afternoon. So I'll follow the lead on '22 and say numbers so you don't have to. Two ways to do this; the guidance reduction this year, $10 million in total, consider that for a half year of business. If I annualize that, that's $20 million. So Street's number should maybe come down by $20 million revenue next year.

That takes, I see, $255 million to $235 million. The other way to do this is to take the new guidance and take Bulkamid to $30 million and then grow the SNM number 25%, consistent with the commentary tonight and that gets me to $225 million. So my range for next year total company revenue, $225 million to $235 million.

How did I do?.

I think you did pretty good. I think you're a little light on the Bulkamid side. You rounded it down to $30 million. Consensus is already $32 million and we'll definitely beat that number. So -- but it's not a -- it's a pretty good range..

Yes. Okay, the other -- the follow-up. Yes, sorry..

Mike but with the caveat, right, this is -- we're guiding now based on the fact that COVID still is present in the market. The elective procedure environment is still restricted, that we've got staffing shortages, we've got hospital shutdowns, we got all these factors.

So I think the point is we don't want to be the company to say, well, we're not as confident about the future, about our business and this to be misinterpreted.

All we're doing is saying, look, in the current environment, right which we have fundamentally lived through, with the exception of four months when we first started and launched our product in November of 2019, our entire business and everything we have done has been under the COVID cloud.

So we're just trying to be realistic about what's going on right now. And I think the mistake that we may have made earlier is that we assumed that the COVID clouds were going to lift, right? And that's why we find ourselves in a situation where now we're having to reduce the guidance. And I regret that we did that.

But then again, we've all been optimistic. And I think surprised that for many reasons, this COVID situation continues to persist..

Very clear. If I may, a follow-up, a tidbit question. Curious, I appreciate all the detail on the seminar attendance for Bulkamid, quantifying the number of docs. Would you hazard a number of docs that did a Bulkamid implant in the U.S. in the third quarter? Just be curious for what that number is, injection....

Yes. No, that's a good question. We don't have that level of detail in terms of analytics yet. We've been focused much more, of course, on the SNM stuff because we have many quarters in which we can run these analytics.

But there are -- I mean, off top of my head, I would say that it's probably at least 400 physicians, maybe more, that are currently using Bulkamid..

Thank you so much..

Thanks, Mike. Appreciate your questions..

Our next question comes from the line of Larry Biegelsen from Wells Fargo..

Hi, it's Lei calling in for Larry. And thanks for taking my question. Just first one on gross margin. It was really strong in Q3 and well above what we saw in first half.

Any color on what drove that strength? And how do we think about that in Q4? And maybe even into next year, especially as we hear about inflation and freight cost headwind?.

I'll let Dan handle the question but I thank you for noticing that the margin increased sequentially quite a bit, since we've been working very diligently on a number of initiatives to try to move that GP in the right direction.

So Dan?.

Thanks for the question. I mean, we've been consistent really since the early days talking about how has this time went on and we've scaled up manufacturing and benefited from economy of scales and purchase volume discounts that we would see margin improve. Our target still remains to be in the low to mid-70s at full scale. And so we're pleased.

We're on track with where it came in for Q3. And quite honestly, it's just simply longer production runs, better overhead absorption and purchase volume discounts on components.

To answer the part B of your question, because we built up such a nice and stable inventory balance for the business, for the time being, we're somewhat insulated from the inflation in certain raw material components that we're seeing generally across the global supply chain. But it's definitely something to watch.

For Q4, what we messaged in the last earnings call was we expect gross margins to be in the mid-60s for the second half of this year and that still remains our point of view. So we're pleased with where it's going, we're on track and we'll just keep moving it forward. Thanks..

Do you have a follow-up?.

Yes.

Sorry, can you hear me?.

Yes..

Sorry about that. And just on the -- on your PMA filing for the primary cell device, you said that's still on track for approval in the first half of next year.

Any color you can provide at this point in terms of how to think about the contribution for '22?.

Yes. What we've said all along is how that will impact revenue in 2022 depends on how quickly it gets approved, right which is -- sorry for such a silly comment. But -- and we're optimistic in terms of getting the product approved. We don't see any showstoppers whatsoever. I can confirm that we did receive the 90-day substantive review letter.

We have prepared responses. We have a call coming up with the FDA in the next week or so. And we expect to provide the additional responses to the questions that they had. And so this puts us on track, if everything goes according to plan, to actually get the approval in Q1.

But we're trying to be once again conservative by saying some time first half of 2022. We are very bullish about the impact that this product will have.

And I think it's important for me to say that this is not a product that our existing customers are clamoring for but this is the product that the customers who haven't come our way yet are clamoring for. So this is really where we see this.

And just like Bulkamid is helping us bring new physicians to Axonics because we have an expanded offering and more reasons to do business with them, we think that this non-rechargeable or recharge-free system will give us a strong offering to go and pick up a bunch of these other customers that have not come our way yet.

So that's upside and I think that it is clearly upside to the numbers in 2022 as well. So once that product is approved and we get this thing launched, then we will provide good color around it. And I can assure you that we are already working on the launch plan for getting that product into the marketplace.

And we'll likely put together a whole bunch of seminars. Again, they've been very successful for us to introduce new things to the market. So we're really excited about that product. Things are looking really very positive in terms of the FDA filing.

And hopefully, we can kind of overachieve, if you may, in terms of timing and then have that product make a nice impact on what is possible for us in terms of growth and market share gains in 2022. So, thank you for that question. I really appreciate it..

Thank you. Very helpful..

Our next question comes from the line of Mike Matson from Needham & Company..

Yes, thanks for taking my question. I guess given -- I'm curious what's driving your growth.

With the roughly 15% growth in SNM in the U.S., how much of that, roughly speaking, is coming from existing customers kind of increasing their volumes? Converting urologists that haven't done SNM before to start doing it? And I guess the third category, converting your competitive physicians that are using Medtronic.

I mean I know you're probably not going to give detailed numbers but can you kind of give me some sense of what's happening and what's driving the growth?.

Sure. Sure, Mike. Look, we're talking about -- and it's kind of interesting because sometimes I think these numbers just get missed over.

We're talking about -- in sacral neuromodulation, for 2021, we're talking about an increase of approximately 40% year-over-year which is a substantial increase in revenue for any company in any business, especially in the middle of a global pandemic, right? Where a lot of our existing customers are just seeing some incremental growth in their number of procedures.

But they've been stymied of course, by COVID, right? So a lot of our existing customers, I think, can do a lot more than they're currently doing. So it's a combination of incremental increases, modest as they may be, in the volume of our existing accounts, right? So same-store sales are increasing but not dramatically because of the pandemic.

But of course, it's the new account acquisition and it's the movement of all these legacy accounts. Once again, every single implant in the United States prior to November of 2019 was a Medtronic customer. And we picked up quite a big number of those customers and we continue to bring new customers to the game.

So there's been a lot of movement of "competitive accounts" coming to Axonics. Now we may have handed a couple -- one handful or so or maybe two handfuls back when Medtronic made their legacy product MRI compatible. Okay, that's old news. That's a year ago already. That is not happening. We don't see accounts going back to the legacy provider.

It's all the movement is in our direction. Now, what's also new? What's new is we've got a lot of folks now that are coming into the game because they want to use Bulkamid, right? And these are a combination of people who are also implanting sacral neuromodulation with our competitor.

But also doctors that have been doing BOTOX because they got tired of implanting the Medtronic product and all the fussiness associated with that product, right? So we're seeing people coming to our seminars that are just doing BOTOX and now starting to do Bulkamid and BOTOX. And clearly, we want to get those folks doing sacral neuromodulation.

So now there's a focus.

We've got strong data which is now in the hands of all of our salespeople with respect to who's doing BOTOX, how much BOTOX is being done and those are really phenomenal opportunities for us to get those physicians in the boat doing sacral neuromodulation maybe for the first time or maybe for the first time in a number of years.

And we've got quite a number of anecdotal examples of that. So Mike, it's all the above, right? I mean it's not -- if there was one major trend, then we would speak to it but it's a combination of all these factors that are positively conspiring to help us increase these numbers. It's just different. I'll make one comparison to Inspire.

When Inspire is talking about their results, it's all same-store sales. It's all adding new customers but mainly increasing volume because they have no competition and it's a brand-new thing in the market. We have a different dynamic that's going on right now. But I appreciate the question.

And we'll look from an analytics standpoint and maybe in February when we announce for the full year, we give a little more granularity and a little more color that can quantify a bit better about where some of this increase is going to come from or where we expect it to come from in 2022. So, thanks for the question, Mike..

Yes, no problem. And if I could just ask a second question. I'd like to ask about the TV ads you're talking about. So obviously, it's probably going to be fairly costly.

But -- so how do you ensure that this isn't just going to kind of cause a rising tide that helps your competitor as well as Axonics?.

Well, look, it's going to help the category, there's no question about it, right? And that's an unintended consequence in a way, right? But what we have seen is that we started heavily promoting on Facebook. And we've generated tens of thousands of leads and website visits and all those other statistics.

Well, interestingly enough, our competitor now is doing exactly the same thing. So I think what's going to happen is you're going to see and I think we're demonstrating this to be the case, that now the legacy provider is looking to be a fast follower to Axonics, right? We're going -- we started to do heavy Facebook promotion, they're doing it.

We're talking about a long-lived, non-rechargeable device, now they're starting to talk about it. I guarantee you that once we start turning heads with TV commercials, no more pads, no more pills, just relief, I bet you you're going to see similar from our competitors.

So if they want to stay in the game, then they're going to have to spend some money to match the activities that Axonics is doing and we think that's a good thing, right? This is -- it's America, competition, apple pie and motherhood, right? Competition is a good thing.

And we want to be able to get more eyes -- more people to understand that it is not normal to leak urine, whether it's -- whether you're coughing, sneezing or picking up an object or playing with your kids or you can't get to the bathroom in time. That's not normal. And the fact of the matter is, Mike, women don't know this.

They don't know it because there's never been a campaign to educate the public that there are solutions for this problem which really does significantly impact the quality of life of people and so forth. So look, this is -- the fact is sacral neuromodulation has been around for a long time but it wasn't an attractive solution. It is now.

It's long-lived, it's MRI-compatible. The efficacy is very high, in the 90% range. I mean these are great facts now to go out and promote this therapy and we think that this is absolutely the right thing to do. And we would hope that our shareholders would support the investment of dollars to create more awareness and to grow this business..

Okay, great. Thanks a lot..

Thank you, Mike. Appreciate it..

Our last question comes from the line of David Rescott from Truist Securities..

Hey, Ray. Thanks for taking my questions. And I'm going to apologize upfront if these are repetitive, I've been hopping around calls. But I guess I wanted to start on Bulkamid first. I know you've talked about the product in the past being sort of catnip for the physicians and the ability to pull across different SNM implants.

And have previously indicated I think that around maybe 50% or so of the training sessions for Bulkamid were new accounts to Axonics.

And so I guess, was that still the case for the first of the kind of final training sessions you had with the product? Have you had any or have you been able to quantify any type of accounts from Bulkamid that have been pulled through as SNM accounts? And then just as a final part to that, I mean, did you have a pipeline essentially right now where you can understand what accounts are Bulkamid that could potentially be SNM implants as well?.

Yes. The answer is yes, yes and yes, okay? And it wasn't a repetitive question. It's a good question, David, so I appreciate that. Look, the -- we have turned a lot of heads. And the fact is we have quite a good number of attendees at the seminars that not only have started with Bulkamid, that they're starting to inject into patients.

But also our -- a number of them have started with us as a result of having the Bulkamid, of doing the seminars and so forth and they're starting. But when people start, they start with a couple of procedures. You get a couple of patients for external trials. And then some time goes by and then you got the permanent implant.

So we don't have a quantification, right, that we could speak to right now that says, oh, definitively, we generated x new accounts and we've generated this much volume.

Because it takes a little time, there is a bit of a delay, right, between the time somebody comes and attends to seminar and all the rest before you can get back out there and get some procedures in the calendar. But we do expect that the benefit of Bulkamid, the benefit of these seminars, will certainly accrue to us, to Axonics, in 2022..

Okay, that's helpful. I guess on recharge-free, with that product kind of coming up next year. I mean do you see this product as being more market expansive? I mean I know nowadays that the -- that there's some other -- that the market itself for SNM is primarily does -- or primarily was the recharge-free device in the past.

And so you've launched out this rechargeable device, it's been taking share.

And so I guess do you see over the future of the market being primarily a rechargeable-type market and then having recharge-free as additive to growth? Or is it something that it's going to essentially be able to augment the growth or accelerate growth further here within the SNM business?.

Yes. So I want to answer the question in a little bit of a remedial way to start. I think it's really important for people to appreciate that the number one selling product for sacral neuromodulation in America today is the InterStim II, a 20-something-year-old product from Medtronic.

It lasts in the body approximately four to five years, three to five years. And that's the biggest selling product today. That is still the biggest selling product today, all right? The only thing different about it is it's now MRI-compatible. Okay, great, so you don't have to get it explanted when you need an MRI.

But other than that, nothing's changed. Product is fussy as all hell [ph], okay. And you know what I mean, it hasn't all of a sudden changed its stripes and become this great winning product. But that's -- all the competitive accounts that we don't have yet, that's what they're implanting.

They're not implanting the new rechargeable product from our competitor, right? That's not the way it's gone. So we believe there are significant benefits to the rechargeable product given its long life and the fact that now you only have to recharge the product at one hour every month.

So we still believe that is going to -- that's the winning product. That's going to be the product line that's going to sell the most. But you used my phrase about catnip with Bulkamid but think about now a non-rechargeable device that can last 10 or more years in your body. And we're using the word recharge-free in a very specific way.

We don't mean it to be just a non-rechargeable IPG. We're talking about our patient remote which does not need to be plugged in the wall which does not use replacement batteries. And can also live for quite a long time in the patient's purse as an example.

So when we say recharge-free, we mean an IPG that doesn't need to be recharged and the patient remote that the patient gets, doesn't need to be plugged in the wall to be recharged, doesn't need batteries or anything of like.

So our definition of a recharge-free system is very different than the non-rechargeable IPG and rechargeable patient remote system from our competitor. So we're going to -- that's a nuance that I don't think many people have caught on to.

But when we're using those words, we're using them very specifically and we're going to make sure that the marketplace, these physicians, understand the distinction between what we're offering and what they currently have. Because this is an absolute fuss-free, no-hassles product for people.

And for those doctors who believe that their patients are not going to be suitable for a rechargeable device and that is -- that's where the propaganda has been, that's where the brainwashing has gone.

So this is why this is such an important product for us because that's going to get us that extra 25% of the customers out there that we need to be the market leader.

And so that's why we're geeked up and extremely bullish about how this product is going to be able to help -- get us to ultimately where we want to go which is to be the market leader in sacral neuromodulation..

Okay, that's helpful. Thanks for taking the questions..

My pleasure. Thank you..

There are no further questions at this time. Please continue, Mr. Raymond Cohen..

Super. Okay, thank you. Thanks, everybody. Look, we really appreciate you listening into the call today. I appreciate the questions from the analyst community and we look forward to speaking with you all in the new year. You take care and stay safe..

Ladies and gentlemen, this concludes today's conference call. Thank you everyone for participating. You may now disconnect..