Abiomed, Inc. (ABMD) on Q1 2022 Results - Earnings Call Transcript
Operator: Good day, and thank you for standing by. Welcome to the Q1 2022 Abiomed, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Todd Trapp, Chief Financial Officer. Please go ahead.
Todd Trapp: Good morning, and welcome to Abiomed's first quarter fiscal year 2022 earnings conference call. This is Todd Trapp, Vice President and Chief Financial Officer and I’m here with Mike Minogue, Abiomed's Chairman, President and Chief Executive Officer. The format for today’s call will be as follows. First, Mike will discuss first quarter business and operational highlights, and then I will review our financial results, which were outlined in our press release. After that, we will open the call to your questions. During the call, we will discuss certain financial information on a non-GAAP basis. This non-GAAP information is provided to enhance the overall understanding of our current financial performance. The presentation of this additional information should not be considered in isolation or the substitute for results or superior to results prepared in accordance with GAAP. Reconciliation between GAAP and non-GAAP results are presented in a tables in our earnings release. Finally, I would like to remind everyone today this call includes forward-looking statements. The company cautions investors that any forward-looking statements involves risks and uncertainties and are not guaranteed in the future. Actual results may differ materially due to a variety of factors identified in our earnings press release and our most recent 10-K and 10-Q filed with the SEC. We do not undertake any obligation to update forward-looking statements. With that, let me turn the call over to Abiomed's Chairman, President, and Chief Executive Officer, Mike Minogue.
Mike Minogue: Thanks, Todd. Good morning, everyone. Abiomed reported strong start to our fiscal year '22 with global record revenue and record patient utilization in the U.S., Europe Japan. In Q1, we delivered revenue of $253 million, up 53% versus prior year and up 5% versus prior quarter. Within the quarter, we achieved a 26.2% non-GAAP operating margin, while continuing to invest with a focus on extending our lead and innovation, advancing clinical evidence and building a premier commercial team. Our balance sheet remains robust with $805 million in cash and zero debt. While acquiring preCARDIA, a heart failure company. We grew our IT portfolio to 1,216 Impella patents and over 1,000 patents pending. We’ve maintained our disciplined execution on our strategic goals and Abiomed 2.0 continues to drive our success. I’m proud of our employees for their continued hard work and dedication to our patients and mission of recovering hearts and saving lives. On today’s call, I will highlight progress on our product innovation milestones for Impella 5.5 and RP, the regulatory status for Impella ECP, and briefly discuss our strategy to be the leading company for all cardiologists and heart surgeons at every heart hospital which means they have a cath lab and a surgical suite. Beginning with innovation, the Impella 5.5 with SmartAssist continues to perform very well. In the quarter, our U.S surgical revenue grew 115% year-over-year and 17% versus prior quarter as we expanded this life saving device to 46 more sites or 257 sites out of the 1,113 heart hospitals in total. Impella 5.5 is a revolutionary product. It does not require a sternotomy or coring of the left ventricle and it is a forward flow, fully unloading weanable heart pump designed for heart surgeons to implant in less than 60 minutes via the axillary artery in the shoulder. The minimally invasive implant also allows for early ambulation for the patient, which correlates to faster recovery and better outcomes. The longer usage time for the Impella 5.5 allows the SmartAssist software to track aortic pressure, left ventricular pressure, make predictive analysis on volume and right heart stability, and communicate in the cloud with Impella Connect. We look forward to continuing to roll this device out to the remaining 856 heart hospitals in the U.S., and many more outside the U.S. We also received FDA premarket approval for the Impella RP with SmartAssist as safe and effective to treat acute right heart failure. This smart pump is the next generation of right heart support, and already has exclusive weaning capability and FDA approval for right heart failure with multiple FDA studies and a recent emergency use authorization for COVID patients with pulmonary embolism. It is the first single venous access percutaneous heart pump with a sensor for the right ventricle. The sensor technology provides real time guidance and trends that help with pump management and weaning. Much of this groundbreaking information on the right ventricle will be published and will elucidate the field of right heart failure. The Impella CP, Impella 5.5 and Impella RP now all utilize SmartAssist software, enhanced with Impella Connect to enable remote monitoring from any internet connected device through a secure HIPAA compliant website. The Impella Connect software is now live at more than 80% of our U.S sites, and approximately 80% of our U.S patients on support are monitored in the cloud. No other company in this space offers this capability a 24/7 service to the hospital, which is ideal with COVID. We also continue to accelerate the rollout of Impella Connect in Germany and Japan. Next, we remain ahead of schedule on our Impella ECP, early feasibility study, EFS. Impella ECP is the world's smallest heart pump and measures 9 French in diameter, easing insertion and removal from the body. This allows for a smaller access site optimal for protective PCI, which we believe will continue to drive better outcomes and overall utilization. To date, we have achieved our initial FDA study milestones, enrolled 25 patients and submitted additional clinical data to the FDA for review. We plan to expand this breakthrough technology to new sites with product enhancements already implemented in the EFS process to up to 50 patients. In parallel, based on our interaction with the FDA, we have started to prepare the details of the single-arm pivotal Impella ECP High-Risk PCI study. Next quarter, we expect to confirm our IDE protocol and submit for Approval with the goal to enroll our first pivotal patient for High-Risk PCI by the end of our fiscal year. We want to compliment the FDA for this EFS program overall, which allows for faster innovation, real time safety feedback and accelerated access to new technology for U.S patients. Finally, our strategy to become the leading player for the heart team, which includes interventional cardiologists, heart failure cardiologists, intensivists, and heart surgeons grow stronger. Our breakthrough platform now includes the Impella portfolio, ECMO with Breethe, ECPella and recently acquired preCARDIA. preCARDIA was designated by the FDA as a breakthrough technology and will complement our existing product portfolio, increased options for patients with acutely decompensated heart failure, called ADHF, and expand our relationship with heart failure specialists managing the ICU. Heart failure is the leading cause of hospitalization in patients older than 65 years of age, and we believe this device has the potential to be a revolutionary tool for the treatment of millions of patients in early stage ADHF, a new patient population for Abiomed. This strategic acquisition, in combination with our continued Impella 5.5 success, and our future Impella BTR pump marks our movement towards minimally invasive devices for the heart failure community, including our hub and spoke hospital network in every region of the country. To further enhance these clinical efforts, we continue to invest in commercial excellence with a focus on the broader heart failure community and the referral network. Specifically, we began our direct outreach referral programs that we expect will better identify the undertreated High-Risk PCI patient population of 440,000 U.S patients. We continue to deliver best-in-class training and education by leveraging CAMP PCI, and transition to both virtual and on site settings. We have seen physician traction on our educational platform through events such as live cases and advisory boards, and are excited to expand CAMP PCI internationally, as well as at Camp Heart Failure and Camp Heart Surgery this fiscal year. Before I conclude, I would like to share an inspiring patient story. John Fisher, 77 is a husband, grandfather and retired law enforcement officer from Ashland, Ohio. John has been experienced chest pain for more than a year, had been. When the chest pain became more severe following his recovery from COVID-19, he decided to seek treatment. After an evaluation, John was diagnosed with coronary artery disease, and evaluated for coronary artery bypass surgery, called CABG surgery. Due to a low ejection fraction of 15% and multiple comorbidities, including type 2 diabetes, John was turned down for surgery. Interventional cardiologist, Dr. Atish Mathur determined John was a candidate for Protected PCI with Impella. Dr. Mathur, inserted the Impella CP with SmartAssist, while he performed a complete revascularization. John returned home 6 days later. Today, his heart function is normal with a current EF of 55% and he enjoys walking his dogs, woodworking and spending time with his grandson, who happens to work at Abiomed in headquarters. In closing, we will continue to create and deliver value by successfully advancing our innovation, clinical research and commercial distribution. We remain steadfast to our mission of creating the field of heart recovery and driving a new standard of care for multiple growing patient populations around the world. Q1 was a solid start and we believe we're well-positioned for success in fiscal year '22. I would like to thank our employees and customers for their dedication to the mission of recovering hearts and saving lives, and we appreciate the ongoing support of our shareholders. I would like to now turn the call over to Todd Trapp, our CFO.
Todd Trapp: Thanks, Mike, and good morning, everyone. We delivered strong results in the first quarter of fiscal year '22 with revenue of $253 million, an increase of 53% versus prior year, primarily due to the recovery and patient utilization from COVID-19. Starting with the U.S., total U.S revenue grew 54% year-over-year to $207 million. This growth was driven by a 43% increase in patient utilization, favorable sales mix and a higher reorder rate. We are encouraged by the continued recovery from COVID within the quarter as we continue to see patients working their way back into the system. At the end of our fiscal Q1, in the U.S., the CP is in now 1,528 sites. We have placed the Impella 5.0 in 665 sites and the Impella 5.5 with SmartAssist is now in 257 sites, up 46 sites versus prior quarter. Lastly, the Impella RP is in 609 sites, up 21 sites versus Q4. Our U.S reorder performance in the quarter was slightly above 100%, and average combined inventory at the hospitals for the Impella 2.5 and CP was 4.7 units per site. This is consistent with the inventory levels of the prior two quarters. Outside the U.S., revenue totaled $45 million, up 51% versus prior year. European revenue increased 64% year-over-year due to a strong recovery in patient utilization, favorable sales mix and a benefit from the foreign exchange rate. Our Japan business delivered $11.3 million in revenue, up 26% year-over-year due to a 78% growth in patient utilization offsetting lower site openings. In the quarter, we open 5 new sites, bringing our total sites to 171. This compares to the 10 site openings last quarter and 13 site openings in Q1 of '21. We have seen some impact due to hospital restrictions related to COVID-19 in the Summer Olympics, which limits our ability to train new sites. But this is more timing, as our backlog for new sites in Japan remains robust, and we expect to open more sites in the second half of the year as vaccination rates increase and hospital restrictions ease. Gross margin in Q1 was 82.1% compared to 78.2% in the same period of the prior year. The 390 basis point increase was primarily driven by higher volume and favorable sales mix. Our Q1 GAAP financial results for the quarter are summarized in our press release in earnings deck. For the remainder of the call, I'm going to provide the highlights of our financial performance on a non-GAAP basis in order to give greater transparency on the impact from the preCARDIA acquisition and to be consistent with our peers. A full reconciliation between non-GAAP and GAAP results are summarized in our press release and earnings deck and are available on the Investor section of abiomed.com. R&D expense for the first quarter totaled $38 million, a 43% increase from the prior year. The increase was driven by clinical costs for PROTECT IV and STEMI DTU randomized control trials, as well as our investments in new products such as ECP and BTR. We believe that clinical evidence and innovation of smaller, smarter, more connected devices will drive sustainable long-term growth. SG&A expense for the quarter totaled $103 million, an increase of $35 million or 51% versus prior year. The year-over-year increase is driven by headcount additions to our distribution team, our direct-to-patient initiative, higher spend on training and education, and COVID-related one-time cost actions from the prior year. Non-GAAP operating income grew 94% to $66 million in the quarter, which translated to non-GAAP operating margin of 26.2%. Our margin expansion of 550 basis points was primarily due to higher volume, which more than offset our growth enhancing investments. Non-GAAP net income for the quarter was $51 million, or $1.10 per share, up 95% versus Q1 of '21. Our year-over-year performance was driven by higher volume and a lower effective tax rate. Our balance sheet remains debt free, and we ended the quarter with $805 million of cash and marketable securities after funding our strategic investment to acquire the remaining shares of preCARDIA. In terms of full year guidance, keep in mind that our fiscal year experiences seasonality. Q2 is typically a slow quarter for all cardiovascular devices, due to a summertime slowdown in the cath lab and physician vacations. And this summer, we believe it is being even more exasperated based on the pent-up vacation demand from COVID last year. With that said, we expect Q2 revenue to be in line or slightly down from our Q1 record revenue performance of $253 million in our summer quarter. As we transition to the back half of the year, we typically expect to see sequential lift in Q3, based on increased hospital activity and physician engagement. And as we finish the fiscal year in Q4, our March quarter, we expect to deliver our best results. Given our strong performance in the first quarter, and our confidence in our outlook, we are now raising our full year revenue guidance and expect it to be in the range of $1.03 billion to $1.05 billion, up 22% to 24% for the year. This is an increase from our original guidance range of $990 million to $1.03 billion, up 17% to 22% for the year. The low-end of our guidance assumes some continued unevenness due to the Delta variant. At the high-end of the range, our assumptions include a normalized procedure cadence in the cath lab, any minimal impact from COVID based on global vaccine distribution. We expect non-GAAP operating margin to be in the 24% to 26% range. In summary, we are encouraged by our first quarter performance. We executed well and are building for the future through strategic investments in innovation, clinical evidence and commercial excellence. We are well-positioned for a successful fiscal year '22 and beyond as we continue to build the new field of heart recovery. Operator, please now open the line for questions.
Q - Margaret Kaczor: Hey, good morning, everyone. Thanks for taking the questions. I wanted to start a little bit on the quarter. Obviously, you guys saw a nice uptick here. I was hoping to go a little bit deeper into some of those drivers, whether all things being equal excluding seasonality, and now that you're solidly into the screen says you're ramping up some of these initiatives. We talked a lot about commercial initiatives last quarter and getting patients into that -- to that funnel. Is this something that should continue to get better as we go throughout this year. And if you could talk about that cadence and what's included in guidance, that would be helpful.
Mike Minogue: Great, Margaret. Thanks for the question. I guess the answer is yes, because you've seen it now for two quarters in a row as we transition to green and now green is our phase which is Abiomed 2.0 execution. So starting with is just the product innovation. If you just break it out and look at the product growth CP grew 52%, which is primarily driven by existing indications we have today for High-Risk PCI and Shock. 5.0 and 5.5 combined grew to 115% and that was driven by a 209% growth in 5.5. Impella RP, which we're just starting now to roll out SmartAssist grew 71%. It has exclusive FDA approvals and is also approved for the emergency use for COVID. And ECMO, we are going slower to continue to evaluate and innovate, and so the demand does exceed our willingness to shift because it's similar to when we launched in Japan the first year. So we've got lots of quarters ahead of just strong growth in those products. On clinical research, we've got abstract presentations that are being converted now to publications. The big ones are PROTECT III, which is the largest prospective FDA study on High-Risk PCI. You've got RESTORE EF, which is best practice protocol, showing a permanent improvement in ejection fraction. You have the completion of the NCSI presentation which is going to publication, and you also have the presentation going to publication for the Japan Impella Cardiogenic Shock study. So there's a lot of information, plus there's tremendous momentum and excitement around STEMI DTU, which now we've at least got to about half of our enrollable sites and PROTECT IV, which we've started to enroll. And of course, ECP had a strong quarter, and we were able to do another 15 patients since the last earnings call. And then last, as you pointed out, we have made changes to the distribution. It's very focused now to strengthen our ability to move with speed, but also have a hub and spoke interaction. So that we continue to call on those spoke accounts, which continue to grow even during COVID as well as the network where the hub centers which are do the most High-Risk PCI and those complicated shock patients are transferred to, they also saw growth. So across the board, existing indications, shock and High-Risk PCI had strong growth. We feel very confident coming out at Q1, but we've got more to do. And we're very excited now to just be executing and allowing us to treat more patients than ever before.
Margaret Kaczor: Okay. That’s a laundry list of, obviously, new R&D initiatives that you've got, but maybe let's focus a little bit on RP with SmartAssist. You got approval for that. Can you give us thoughts around the ASP whether it could be a premium or is it the same? And then if we think about whether the -- that product could bring shocks off the sideline sort of like 5.5 has helped with axillary access, is that a possibility? And how do you think about a controlled rollout for new products for years to come? Thanks.
Mike Minogue: Yes, Margaret, just to clarify, I heard the first part on the RP with SmartAssist, but what was the connection to the 5.5, it cut out there?
Margaret Kaczor: Sorry, it's just more -- can it bring clinicians off the sideline? Is it a more material change and sort of like 5.0 and 5.5 was where it did actually bring docs off the sideline.
Mike Minogue: Oh, absolutely. So a few things on RP. The RP can be put in the cath lab and is truly percutaneous. So that's unique. But we also are designing that device so that surgeons can put it through the juggler, and it's -- it will be utilized that way. So you'll have the ability now. And that will come at the end of the year, but we're also are getting full support for surgeons that are already using the Impella 5.5. So it's as you see from the numbers on the demand, all those products with exception to 2.5 are increasing. And for High-Risk PCI, half of our patients for High-Risk PCI now are single access, which is the preferred method with the leaders out there. And so that really does address some of the ease of use and things around the cath lab for High-Risk PCI. And remember, when you do a single access, they do the PCI and they also do the Impella in the same hole rather than two holes. So we've got a lot of momentum and where it comes together is in this heart team approach. Some of those patients that are high risk revascularization get a CABG with a 5.5. And some of those patients go to the cath lab to get a High-Risk PCI. So the network and the referral stream is coming together. But again, if you're in the field, and you're a customer, Abiomed has all the new technology. We have the most clinical studies, and we provide the best 24/7 support that's also in the cloud with the SmartAssist and Impella Connect platform.
Margaret Kaczor: Great. Thanks, guys.
Operator: Thank you. Our next question comes from Matthew O'Brien with Piper Sandler. Your line is open.
Matthew O'Brien: Good morning. Thanks so much for taking the questions. So, Mike, just a little bit more on 5.5. Can you talk about some of the earlier adopters of that technology, how they're ramping? And then, some of the backlog and the interest that you're seeing from all of these other higher hospitals out there to get access to that technology? And then, how we should think about the utilization of that technology here in fiscal '22 and fiscal '23?
Mike Minogue: Matt, thanks for the question. The Impella 5.5 is a breakthrough product. We -- in our Investor Day last year, Dr. Ed Soltesz gave a presentation of how they use it in a protocol at Cleveland Clinic. And you'll see that out West with Cedars, one of the largest ECMO, VAD and transplant centers, you see it in the Midwest and now you also see it in the East Coast, in other hospitals. And the reason it's important is because prior to the Impella 5.5, if you wanted a VAD, something that could do more than five liters, you essentially have to do a sternotomy, including for our old AB5000 and you'd have to spread the ribs and then these devices require the surgeon for the implantables to make an incision and core out a quarter size hole in the left ventricle. And so all those things have adverse events. And if a patient's in shock, or has trouble coming off the heart or lung machine, that's not something you necessarily want to do. And if the patient is 70 and above and you put them on ECMO, you tend to load the ventricle, and then that takes away their ability to get back to baseline. And again, a 7 year old is not going to get a transplant, nor does he want a permanent implantable device in them. That requires the most expensive and invasive surgery. So what the 5.5 does is it really opens up these Class III and Class IV patients that are acutely decompensated, or have been in more profound shock that needs longer support and need their kidneys -- the kidneys have to have the benefit of being loaded at the heart. And it really does become a game changer and a new therapy. And so we're excited. We expect this product to continue to have growth, strong growth over the next several years. And we have submitted it for approval in Japan, where we think it will be even a stronger driver because in Japan they don't necessarily do a lot of sternotomies or believe in transplants. They already do stem cells and things around myocardial recovery. And having an Impella 5.5 it immediately unloads the patient, supports the hemodynamics. These patients can come off all of the inotropes, their kidneys make urine. We've even had anecdotal data of patients that are listed for heart and kidney transplant, having their kidneys recover after a prolonged use of the 5.5 while they go now to just a heart transplant. So it's a breakthrough product because it does what a lot of the heart surgeons have always wanted, which is a minimally invasive weanable pump and that's what it's continuing to do.
Matthew O'Brien: Great. That's fantastic to hear. As a follow-up on ECP, you're moving from 20 to 50 patients on the feasibility side, I think that's pretty standard. You're talking about the first patient in the pivotal by the end of this fiscal year. So sometime early in '22, how many patients, Mike, should we think about for the pivotal? And then if you're enrolling about 15, I think you did in the last quarter for the feasibility side, is this something you can enroll by maybe -- the early part or even mid part of '23, and then potentially get an approval late in calendar '23 or even early '24?
Mike Minogue: So Matt, it's a great question. We'll give a little bit of color today. But we are not going to give all the details yet until we lock in the protocol with the FDA. But we think a single-arm study, the numbers that we did were primarily from two physicians. There's tremendous excitement from all the centers to use the ECP. And if we can do up to anywhere from 20 to 50 centers doing High-Risk PCI in a single-arm to compare with our other data, we feel very comfortable, we'll be able to enroll pretty quickly. And on a numbers basis, we haven't given a numbers out but we -- but what you're looking at is an equivalency. So things around access closure as well as the valve safety are the most important parameters and we feel very confident in this device. And the fact that it's just a 9 French in and out really does simplify the utilization for High-Risk PCI. So we're happy to be ahead of schedule. We're pleased with the process we've already made and implemented some new technology changes. That's the benefit of the early feasibility. So we're going to utilize the next -- up to another 25 patients to continue to keep the experience level there. So we can roll right into the ECP centers and we're ahead of schedule. We're confident, we're excited to bring that product already into the market through the ease -- early feasibility study, and then expand it right into a pivotal.
Matthew O'Brien: Got it. Thanks so much.
Operator: Thank you. Our next question comes from Pito Chickering with Deutsche Bank. Your line is open.
Pito Chickering: Hey, good morning guys. Thanks for taking my question. As we go over the guidance increase, can you give us sort of the key drivers here between the U.S revenues and international revenues? And how much of the guidance increase, if any, is due to 5.5 penetration to the positive ASP? And I ask just because ASP -- there was a large delta between the patient growth and revenue growth this quarter.
Todd Trapp: Thanks, Pito. This is Todd. It's a good question. I would say when we look at the guidance increase based on the different geographies, we do expect to see, like I say, acceleration in the second half of the year, and basically all of our three major geographies, so U.S., Europe and Japan. And so we do expect them to all contribute to that increase in guidance that we’ve provided out for the year.
Pito Chickering: Okay. And then I'm sorry, if I missed this, but on the margins, you obviously moved up the lower end of revenue guidance by 500 basis points, the top end by 200 basis points, but maintaining operating guidance or margins. So just curious why we're not seeing more revenue throw through the bottom line here. And which investments are you making today that you were contemplating maybe last quarter? Thanks so much.
Mike Minogue: Yes, Pito, I would say it's one quarter into us and to the year and we have a lot of the spin I would say that we're going to be investing in is really in the second, third and fourth quarter. So as the clinical trials ramp up, both STEMI as well as PROTECT IV, we're going to -- you're going to see those costs increase, like I said, Q2, Q3 and Q4, you pay for the drink. So every time you initiate a site, or enroll patient, that's where the cost is incurred. So right now, I would say some of the costs have pushed to the right, mostly around, I would say, randomized control trials as well as a little bit on the direct-to-patient initiatives that we're looking to, we pilot in the first quarter and now we're looking to accelerate, like I said, Q2, Q3 and Q4.
Pito Chickering: Great. And then just one quick one. Can you get a an updated timeline of the XR Sheath as well. Thanks so much.
Mike Minogue: Pito, the timing for the XR Sheath was going to be limited market release by the end of this fiscal year. We essentially made a decision to change the roadmap a little bit. And our design is really to match what our customers now want. And what they want is the higher flow the CP with single access. So we're going to go to from limited market release at the end of the fiscal year '22 to mid year fiscal '23. But the learning curve is -- has been met and the majority of them really feel comfortable with the CP and single access. And so it's a benefit for the patient. And if you look at, again, this quarter 50% of our High-Risk PCI patients use single access, and it's an all-time high for High-Risk PCI. And the current Sheath isn't compatible for that. So based on the customer feedback, we're now going to align the technology for the next-gen Impella CP with the XR Sheath that can do single access. And in the short-term, we're growing. We'll put more investment into the single access approval and training that we have from the FDA. And as you look at clinical abstracts that have been out, whether it's PROTECT III or RESTORE EF, our bleeding at Bar III, and our vascular complications are in the low single digits. And it's very similar to TAVR and that the experienced users are now comfortable with the 14 French access. And when it comes to bleeding and vascular rates in the cath lab, we're actually equivalent or lower than TAVR, because our catheter is already 9 French. So long-term, the Impella ECP will kind of eliminate any of those concerns for that late majority. But overall, our outcomes for vascular complications and bleeding are much better and our customers want the higher flow from CP.
Pito Chickering: Great. Thanks so much.
Operator: Thank you. Our next question comes from Anthony Petrone with Jefferies. Your line is open.
Anthony Petrone: Great. Thanks and congrats on the good quarter here. Just a follow-up on price dynamics in the quarter for Todd. I just want to clear up, was there a pricing benefit in the current -- in fiscal third quarter? And is that part of the guidance looking into the back half of the year? Just want to -- it seems like there's a mix benefit going forward. So just want to clarify that. And then a follow-up question would be on Impella Connect. Just an update on how many active sites there are there and what you're noticing in usage trends at those sites. And then I'll have one follow-up on M&A.
Todd Trapp: Yes, thanks for the question, Anthony. I do expect to see the ASPs continuing to drive tailwinds in the second half of the year, and it really comes down to a few things. Number one is our surgical business continues to perform extremely well. As Mike mentioned in his remarks, we're up 200% on the 5.5 in the U.S. We still have a long runway to go in terms of opening new sites, just as anecdotally, we were over 600 sites with the 5.0. And so the average ASP on the 5.5 is also significantly higher than the 5.0. And we are -- we still continue to benefit from the favorable mix with the Impella 2.5 becoming a smaller piece of the business versus CP. So I do expect to see that positive trend on ASP is continuing through, at least in the second half of the year and beyond. In terms of the Impella Connect sites, at the end of the quarter, we were obviously close to almost over 1,160 sites in the U.S. So about 82% of our sites had Impella Connect and over 80% of our patients are being supported in the cloud on Impella Connect. So we continue to make progress there, and we continue to accelerate some of that rollout in Europe as well as in Japan.
Anthony Petrone: And a quick one on M&A. Just the timelines on preCARDIA, the feasibility study is already enrolled, but just as we look ahead with that R&D development sort of cycle looks like beyond the feasibility study, and the company shifting here to non-GAAP. Two deals done in the past year or so. So just comments on how you see M&A going forward. Is that a bigger piece of the Abiomed story over the next couple of years? Thanks.
Mike Minogue: Anthony, this is Mike. Thanks for the question. On preCARDIA without given specifics, the early feasibility study is completed, the safety data has been submitted. But again, we're continuing to enroll patients there as you make certain improvements and changes to the product. So that's in process. We do see it in the midterm based on our current regulatory path. So we'll get more focused on that. It's not long-term, it's in the midterm, which both from more patients to getting it out on the market as a commercial product, that's our timeline. It really does augment what we're already doing. That referral stream -- some of those patients are decompensating because they have advanced coronary artery disease, and are great candidates for High-Risk PCI with Impella support. Some of those may get worse and end up in cardiogenic shock and may need longer support and have kidney issues. So they're going to get the Impella 5.5. And we're very excited about it. Relative to the non-GAAP, most of our peers for several years now have been reporting it on GAAP. I think it's more transparent. And the fact that we've been doing certain types of deals, it doesn't change our mindset overall on acquisitions, if we see something that strengthens our strategy or intellectual property. And to remind everyone, we were one of the original investors, and we own 30% of preCARDIA when it got started. So we were there from the beginning. And that's what you'll continue to see us do is there's ideas and things out there that we're experts in, and we might help support and innovate. But then we're willing, and we have the balance sheet to be able to do that. So we're going to stay focused on organic growth. But obviously, we're going to be opportunistic, where we can acquire more breakthrough technology that matches our strategy.
Anthony Petrone: Thank you.
Operator: Thank you. Our next question comes from Chris Pasquale with Guggenheim. Your line is open.
Chris Pasquale: Thanks. Mike, I wanted to follow-up on something you mentioned there a second ago, which is just some of the overlapping roles or connected roles in your emerging heart failure portfolios. You've got Impella 5.5, which you mentioned is having a lot of success with Class III and Class IV acutely decompensated heart failure patients, now you have preCARDIA, which is sort of targeting that same population. You also have BTR still in the internal pipeline. So how do you think about the different roles for those products and how they complement versus duplicate one another?
Mike Minogue: Chris, we look at the growing epidemic of heart failure. And we are going to address the biggest problems are out there for heart failure cardiologists, interventional cardiologists, and for heart surgeons. And so if you're a surgeon, whether you're at a transplant center or just a center that does open heart surgery, the Impella 5.5 is a must have. You already have ECMO now, so part of this now is leveraging our ECPella and those relationships. If you're a heart failure cardiologist, you're in the ICU or you're in the referring community. So you want to see the data around High-Risk PCI. And in fact, we have a executive committee part of PROTECT IV, which are the leading heart failure cardiologists. So think of PROTECT IV as an interventional cardiology and heart failure cardiology study, so that we can transition the mindset of just optical medical management for those patients for them to think about Protected PCI with the potential improvement in ejection fraction post treatment. So those things leverage well. And then from preCARDIA, it puts us more upstream with those acute on chronic patients, which if they escalate, we'll end up on 5.5 or BTR. So there's great synergy. And the way we overlay our distribution on that is we're the largest distribution, calling on every cath lab and surgical suite out in the community. We're also the largest distribution with a dedicated team now working at those top transplant and VAD centers that hub and spoke, and we even leverage the relationships. And again, all the patients are in the cloud. So as they go from one hospital to the other, there's information to transfer our people are involved, and there is even a dedicated DRG from CMS to accept the patient on Impella support and manage them. So we feel very confident in the future, partly because of the innovation, but also just because of the clinical research that we're doing, showing that we continue to improve outcomes for these patients that are very sick populations that have the opportunity to not only survive, but go home with their own heart.
Chris Pasquale: Thanks. And then I think I heard you say you have half of the STEMI DTU trial sites up and running now. Would love an update on how many patients you’ve actually enrolled in the trial? And just curious why -- I mean, the trial has been going for quite a while, not only at half the sites activated. Anything you can do to speed up that progress? And is that still a pretty highly anticipated data set? Thanks.
Mike Minogue: Yes, Chris, I think we can always have done better, but we're at 28 hospitals out of -- we are halfway there. I think if you look at most big companies that were doing studies, we only shut down for a few months when COVID hit initially. And while we haven’t been at the pace we wanted, we still, I believe, moved at a pace that’s outperformed other COVID type of studies in the process. Once you get these sites up and running, I think that’s where you start to see the acceleration of the curve. And STEMI itself got complicated because of COVID and now Delta because some of the hospitals require additional steps and testing on those patients before they will bring them into the cath lab. So there has been a lot of complexity, but I think the team has adapted and executed pretty well. We got 79 patients enrolled, and we are at 28 hospitals and we were only shutdown a few months because of COVID. Thanks for the question.
Operator: Thank you. Our next question comes from Marie Thibault with BTIG. Your line is open.
Marie Thibault: Hi. Good morning. I appreciate the time this morning for questions. Mike, I heard you say that you are adding, I think, it’s CAMP heart failure and heart surgery to the CAMP PCI sort of line up. And wanted to just get an idea, I mean, that’s clearly symbolic of the push into heart failure. But I wanted to get an idea of how impactful you feel CAMP PCI has been since you initiated that program? And what we can possibly expect from that training program and the impact on heart failure and heart surgery going forward?
Mike Minogue: Sure. So, Marie, thanks for the question. Someone had said the other day if we had had a crystal ball before COVID we would have designed CAMP PCI for that reason alone. And we were fortunate and lucky that we had already had the concept and put in place a faculty to do live cases, to do interactive training and have CME credits for physicians before COVID hit. So we were doing one live case a week, now we do one every 2 weeks with the top leaders in this space. There is over 50 live cases that are up on the Internet. And the numbers show that the people who are most engaged in CAMP are the higher performers and growing the most, but of course, that’s a biased sample for that reason. But there is just tremendous amount of opportunity to grow and to teach wire skills information around hemodynamics, give CME credits and things around just doing a better PCI, and we do believe it’s been very helpful, and it only has gotten more important for us and for our customers because of COVID. We continue to do virtual training and advisory boards. And then we reserve the right to do in-person meetings where it's going to be more hands on. But the type of training and what we can do now on the Internet with a password protected user group is pretty phenomenal. I think what will happen with heart failure and with surgery is, it's further going to expand the knowledge base of our users that will also allow them to share and spread best practices and tips and tricks at a faster pace, which does improve outcomes. And again, our outcomes are improving survival and native heart recovery. So these are big items versus maybe four hours less in the ICU.
Marie Thibault: Okay. Very good, very good. And then I don’t think I heard an update on BTR. Would love to just hear where that product is in the development phase? Thanks.
Mike Minogue: At last earnings call we said we're going to anticipate our first in-human in the Q4 of this quarter. We have a lot of great things on the schedule. I had to cut certain things out, but we are extremely confident. Remember the Impella BTR stands for Bridge to Recovery. It will be an LVAD without a sternotomy, you will be able to go home with it. It will run in the cloud, and it will have high flow and it's again forward flow. So it allows you to wean off the patient while you watch the wall tension in the left ventricle and increase coronary flow. So it's another breakthrough technology. There is tremendous excitement. We’ve been working on it for a while and we are very excited to do our first patient here in the U.S end of the year.
Marie Thibault: Okay. Thanks for the …
Todd Trapp: Just want to confirm, it's Q4 of '22.
Marie Thibault: Q4 of '22.
Marie Thibault: not this quarter.
Mike Minogue: Yes, Q4 '22. This fiscal year we will do our first in-human in the U.S in our early feasibility study. Thank you.
Marie Thibault: Thank you.
Operator: Thank you. Our next question comes from Jayson Bedford with Raymond James. Your line is open.
Jayson Bedford: Hi. Good morning. A lot has been covered, so I will be quick. Just on the quarter, do you think the business was helped by the fulfillment of any type of pent-up procedural demand?
Todd Trapp: Yes, Jayson, this is Todd. Good question. As Mike mentioned, we did set a record in Q1 and treated more patients in the quarter than ever before. And again, just as a reminder to everyone, in Q1 last year, obviously, April was a COVID trough and from there we saw a sequential improvement within the quarter with actual have seen patient growth of 7% in June. I think some of that strength or that bolus that we highlighted on our last earnings call really continued a little bit into the month of April. And then I would say, May and June played out as expected, and I would say, in line with normal seasonality. So, overall, I think we are very pleased with how the quarter played out.
Jayson Bedford: Okay. And then just maybe, Todd, do you have the revenue contribution from Breethe as well as the impact of FX in the quarter?
Todd Trapp: Jayson, it was very, very small in the quarter. I mean, less than probably $300,000 in the quarter, so very small at this point in time.
Jayson Bedford: And FX? Maybe you gave it, I apologize.
Todd Trapp: Yes, FX, I mean, from a U.S -- euro-dollar perspective, in Europe, it was about a 13 point headwind from FX. I think when you look at it on a consolidated level, and for global Abiomed, it was probably less than a point.
Jayson Bedford: Okay. And then just lastly, PROTECT IV, any update in terms of how many patients you have enrolled in that study?
Todd Trapp: PROTECT IV, yes. As of right now we have site -- 7 sites that we've activated and we've done a handful of patients.
Jayson Bedford: Okay. Thank you.
Operator: Thank you. Our next question comes from Danielle Antalffy with SVB Leerink. Your line is open.
Danielle Antalffy: Hey. Good morning, everyone. Thanks so much for taking the question. Congrats on a really strong start to the year. My question is, if you are looking at the base business, it's very hard to parse out any sort of backlog or whatever from COVID, but it feels like this is not the type of market that would necessarily have that. And, I guess, my question is on CAMP PCI, I mean, just to follow-up on that point you made, Mike. What a great time to be turning virtual. And I’m wondering if you’re starting to get any of those physicians that were just sort of lower volume users that were more dramatically impacted by some of the data that we saw a few -- 2 years ago out of AHA. Have they started to express interest in getting involved again? And if not, what are they waiting for?
Mike Minogue: Danielle, the question around kind of the interaction of CAMP PCI is also tied to our COVID playbook. So, as we disclosed last year, the sites that were the low users or mid users, so it's sometimes in the community, they actually went up because they ended up keeping patients and doing more High-Risk PCI. And the biggest drops were in the hub centers, the big centers, which tended to be the COVID centers. So part of our COVID playbook is making sure that with our distribution, calling on the transplant centers, and the distribution calling on all the cath labs and surgical suites in the outline centers, that we coordinate finding those patients out there. And by finding those patients out there, we've turned on a direct-to-patient initiative and a referring physician network, and then we try to link that in with teaching people where they can go to CAMP PCI, watch live cases, potentially interact with some of these experts and do kind of film reviews. So, the -- every Wednesday is -- or every other Wednesday now is live case. The CAMP has people submit cases and they explain it. So we have a tremendous amount of case studies already put on there. And it does allow us then to kind of leverage and network the top users that can do it from their own computer at home or in the office rather than having to get on a plane and fly everywhere. So it's been very helpful, and what we continue to see in Q1, again, is the smaller, the mid size and the large centers are all growing and that's partly why we are able to have such a strong quarter for High-Risk PCI.
Danielle Antalffy: Got it. Okay. That's helpful. And that's good to hear. My next question, Todd, I think is probably more in your CAMP, and that's on the patient growth in the U.S versus the revenue growth, there is a big discrepancy. I know there is a discrepancy -- there tends to be a discrepancy every quarter, but I just want to make sure we are not missing anything. I’m guessing it's mixed shift in stocking. Is there anything else that's driving the higher revenue growth versus patient growth?
Todd Trapp: Danielle, I think you captured all of them. I mean, if you look about just a high-level walk, it was we obviously seen a little -- still some mix improvement from 5.5, so that was a couple of points. And then reorder rate last year obviously in Q1 with COVID, the reorder rate was below 100%. And as I mentioned in my prepared remarks, it was just a slightly above 100%. So I think with the reorder and the sales mix, really kind of bridges the gap between patients and revenue.
Danielle Antalffy: Okay. That's it from me. Thanks.
Todd Trapp: Thanks, Danielle.
Operator: Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Mike Minogue for closing remarks.
Mike Minogue: Thank you. And everyone, have a great day. If you have any follow-up questions, feel free to reach out. Take care.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
