Abiomed, Inc. (ABMD) on Q1 2021 Results - Earnings Call Transcript
Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Abiomed's First Quarter 2021 Earnings Conference Call. . I would now like to hand the conference over to your speaker today, Mr. Todd Trapp. Sir, you may begin.
Todd Trapp: Thanks, Crystal. Good morning, and welcome to Abiomed's First Fiscal Year '21 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 the first quarter business and operational highlights. And then I will review our financial results, which were outlined in today's press release. After that, we will open the call to your questions.
Michael Minogue: Thanks, Todd, and good morning, everyone. The COVID-19 pandemic has sharpened our sense of responsibility and commitment to patients and our communities. We've had to work harder and smarter during this health crisis, and I am grateful and impressed by the way in which our employees and customers have risen and given their best to meet these unprecedented challenges. During Q1, we prioritized keeping our employees safe, supporting our patients and manufacturing our life-saving heart pumps, while investing in innovation. Coronavirus has brought changes to our operations, but our focus and the core of what we do remains the same, improving outcomes for our patients with innovation and strong execution. At Abiomed, our 4 principles, operating procedures and patients-first culture, enable us to lead, manage, adapt and execute, especially in challenging times. We achieved our Q1 goals, including monthly sequential growth, regulatory milestones and advanced our innovation and education. Our disciplined execution in Q1 delivered one of our most productive quarters in my 16-year tenure with the company. Despite the impact of the pandemic on our commercial organization in Q1, Abiomed delivered $165 million in revenue, down 21% year-over-year. Within the quarter, we achieved monthly sequential growth in April, May and June and 4% year-over-year growth in revenue in June overall. In June, patients and revenue increased year-over-year in the U.S., Europe and Japan, as countries began to reopen and hospital restrictions were eased on high-risk, urgent and emergent patients. Abiomed remained productive and relevant in the field by supporting cases and actively educating physicians through videoconferences and broadcasting live cases with expert panels. We successfully controlled costs and expenses, driving a solid 21% operating margin, while continuing to invest $26 million in research and innovation. Our balance sheet remains robust with nearly $600 million in cash and 0 debt, and our patent portfolio now contains 884 patents and 759 patents spending.
Todd Trapp: Thank you, Mike, and thanks, everyone, for joining the call today. I hope you and your families are staying safe. During our last quarter call, we talked about the actions we were taking to be prepared for the dynamics of the COVID-19 environment. Those preparations served us well, and as Mike described, we're navigating the near-term challenges, while keeping a focus on the long term. The negative effects of the pandemic resulted in Q1 revenue of $165 million, down 21% versus prior year. We felt the impact of the environment most intensely in April in terms of the decline in patients and revenue from the shelter-in-place restrictions and limitations on hospital procedures in most countries. As Mike mentioned, we saw sequential improvement globally in May and June as restrictions were lifted and limitations eased. In the month of June specifically, we delivered year-over-year global revenue growth of 4%, driven by growth in both patients and revenue in the U.S., Europe and Japan. We believe we experienced some positive lift in June, as some patients, who had deferred treatment in April and May began to come back into the system. For your reference, we have provided a slide in our investor package, Slide 3, which breaks out reported revenue and patient performance by month and by geography. In the U.S., we delivered revenue of $135 million, down 23% year-over-year, driven by a 22% decline in patient utilization. The Northeast in California declined the most from an otherwise broad-based decline in utilization in the quarter. U.S. revenue grew 3% in the month of June. In the U.S., at the end of June, the Impella 2.5 and CP have reached 1,451 sites. The Impella 5.0 has been placed in 653 sites and the RP is in 538 sites. The Impella 5.5 with SmartAssist is now in 86 sites. We continue to receive very positive feedback from the surgeons on this innovative technology as well as positive real-world clinical data on outcomes. In the quarter, the reorder rate was just shy of 100%. Average combined inventory at the hospitals for the Impella 2.5 and CP was approximately 4.6 units per site, basically in line with the inventory levels we saw last quarter. Outside the U.S., revenue totaled $30 million, down 6% on constant currency due to the negative impact of COVID-19 across all regions. Our European revenue decreased 10% on constant currency, driven by weakness in Germany, France and the Benelux region. Specifically, German revenue was down 9% in the quarter, driven by softness in high-risk PCI. For the month of June, revenue in Germany and Europe was flat and up 5%, respectively, on a year-over-year basis. In Japan, we delivered $9 million in revenue in Q1, up 3% on constant currency due to the impact of COVID-19 and lower site openings. This quarter, we opened 13 new sites, 9 fewer than a year ago. As a reminder to investors, we front-loaded site openings in the first half of last year to allow the local team to focus on the post-approval study in a broader CP launch. Similar to other regions, Japan did see a recovery within the quarter as revenue in the month of June increased 22% year-over-year. Gross margin was 78.2% in the quarter compared to 82.1% in the prior year. The year-over-year variance was primarily driven by lower production volume and some incremental costs to accelerate the Impella Connect rollout. As Mike mentioned, one of the objectives of the Q1 red phase was to continue to invest in innovation, while being fiscally responsible. In the first quarter, R&D expense totaled $26 million, an increase of 11% versus prior year. We invested in small-bore devices, specifically the XR Sheath and ECP and in clinical studies including STEMI DTU and PROTECT IV, to support our long-term sustainable growth. SG&A expenses for the first quarter totaled $68 million, down 21% versus prior year. The variance was driven by our emphasis on lower discretionary expenses, executive and management salary reductions, reduced work schedules and lower stock-based compensation in the quarter. Q1 operating income was $34 million, translating to an operating margin of 20.7% versus 29.2% in the prior year. The year-over-year margin performance was primarily driven by lower volume and our ongoing growth investments despite the favorable impact of the cost actions we implemented. GAAP net income for Q1 was $45 million or $0.98 per diluted share versus $1.93 in Q1 FY '20. The year-over-year performance was driven by lower volume, a mark-to-market adjustment on our Shockwave investment and our tax rate. In Q1, our reported tax rate was 27% versus 14% in the prior year, driven by lower excess tax benefits associated with equity compensation. Our balance sheet remains very strong. We generated $32 million of operating cash flow in the quarter, and we ended June with a cash balance of nearly $600 million, up 13% over last year with no debt. Our cash balance declined versus fiscal year-end due to the Breethe acquisition. We continue to be disciplined and have the capital necessary to stay focused on innovation in the long term. The COVID pandemic is still very fluid and continues to evolve differently across geographies. We believe we are likely to continue to experience variable impacts on our business based on some of the resurgence that is occurring in cities across the globe. Given the uncertainty in the environment and consistent with our comments last quarter, we're not in position to provide full year guidance at this time. However, to provide transparency to our investors during this period of COVID resurgence, we will provide insight into our July preliminary results. For the month of July, we reported approximately 8% global revenue growth year-over-year, potentially augmented by timing of reorders, favorable sales mix and foreign exchange. However, U.S. patient utilization for the month of July was down approximately 4% year-over-year, driven by a resurgent in COVID cases across select areas, such as Florida, Texas and California. Japan has also seen a resurgence in COVID cases, which is impacting utilization, resulting in single-digit patient growth for the month. Abiomed has a benefit of patient visibility by hospital, by physician and by indication through our on-site, on-call and online tracking included in our IQ database and Impella Connect platform. We will continue to monitor the fluid situation and will provide updates as necessary. In conclusion, while Q1 was a challenging quarter, we are very pleased with our operational performance and our sequential improvement in both revenue and patients as we transition to the Q2 yellow phase. We still face short-term uncertainties given the depth and unknown duration of the pandemic, and we are focused on the actions we can take and what we can control. We will continue to be agile, which allows us to adapt and execute quickly and remain focused on our fiscal year '21 goals. We are confident in our overall strategy in the significant opportunities ahead for Abiomed. With that, operator, please now open the line for questions.
Operator: . And our first question comes from Raj Denhoy from Jefferies.
Rajbir Denhoy: Wonder if maybe I could start with some additional detail perhaps on June and July. I'm curious if there's anything you can provide in terms of whether there was some deferral catch-up that maybe drove the better performance in June. And then maybe as you're getting into July, that's more of a normalized demand. Is there anything you can offer just in terms of the complexion of maybe patients coming back that were previously not done? And how that maybe impacts the growth going forward?
Todd Trapp: Yes, Raj, it's a good question. So in terms of June, obviously, part of it was driven from some of the, what I'd say, reorder rates that were a little bit lower in April and May as hospitals kind of managed inventory. So we saw our reorder rates fairly low in those months, and there was a little bit of a catch-up, I would say, in the month of June. With that said, I mean, our patient growth in June was up 7% in the United States versus 3% from a revenue standpoint. As I think about July, a couple of things I'd point out. First, it's 1 month, right? And I don't think you can translate the performance to the entire quarter. As I mentioned, we had a really strong finish to June, and some of those reorders did push into July. One thing we are seeing is we are seeing a favorable sales mix as the 2.5 is really being replaced by the CP and the 5.0 is being replaced by the 5.5. So we've seen some benefits of higher average selling prices there. We saw a little bit more 5.5 deals as well in the month of July. And the FX rate too, is a little bit of a -- I would say, a little bit of a tailwind. The Euro rate was $1.18 in July this year versus the $1.12 last year. So there's a little bit of noise, I would say, in the month of July. But overall, it's 1 month. We still have a long way to go. And the only other thing I'd point out about July and Q2 is, we did have a really strong September, and I just want to make sure people understand that we had some tough comps in the latter half of the year. September's growth rate was about 25%. So just, I would say, don't get ahead of us a little bit in the month of July.
Rajbir Denhoy: Understood. And maybe just one last one in terms of the complexion of revenues. It looked like shock was still down maybe high teens. PCI was down maybe twice that rate. The question is risen about why shock is not coming back? Why there's still such a falloff in that kind of very emergent kind of need to treat indication? And so anything you can offer in terms of whether you're seeing any disparate kind of rebound in that versus PCI as we're going forward?
Todd Trapp: Yes, Raj. I can tell you, for the quarter, high-risk PCI was down 35% and shock was down 12%. But as you look at how it progressed through the quarter, for the month of June, actually, shock was up almost double digits and high-risk PCI was basically flattish. So we definitely saw a stronger recovery in both indications, but a little bit stronger on the shock side and an increase in RP.
Operator: Our next question comes from Margaret Kaczor from William Blair.
Margaret Kaczor: Just wanted to follow up again on the July commentary. We were recently who also saw some maybe delays in July, but they suggested that maybe some of those were just truly delays and already getting rescheduled for the next couple of weeks. So I was curious if you guys are seeing that as well? Or is it too early to tell?
Michael Minogue: So Margaret, I want to make sure I clarify the question. The -- is it about a rebound in July from some of the delays?
Margaret Kaczor: Yes, correct. And the timing of rescheduling some of those cases.
Michael Minogue: Sure. So obviously, a few of our patients are getting CPR. And in April, when systems were really overwhelmed, for example, in New York City and in Italy, basic treatment for cardiovascular diseases was pretty much on hold, unfortunately. However, what we did see is, as things progressed, we saw a strong rebound in Italy and New York City and had positive months in patients in both May and June in those areas. As I mentioned in my prepared remarks, the societies in Europe, in the U.S. and even the government agencies like CMS are now putting out guidance documents because cardiovascular patients that are high risk or urgent or emergent have high risk of death if they are not treated in a timely manner. So they're doing a much better job. And so we feel confident that the system won't get broken again or overwhelmed and what we see is that as things progress, they're able to rebound, they're able to still treat those emergency patients because again, they have an imminent risk. And in some cases, they have a higher risk of death than some COVID patients when they're in profound organ failure. So that's the trend we've been seeing. It's -- we're optimistic about it. However, there are some places that have been a little bit overwhelmed in the ICU. We're able to track that and those areas where we don't get as much interaction into the hospital, having the Impella Connect and having the telesales or the clinical team there calling in, helping on cases is very productive as well.
Margaret Kaczor: Okay. Yes. That's helpful. And then I wanted to clarify that you -- I think you had referenced your now in the yellow phase. What are the changes that you're making commercially as you're in this phase? And should we assume that there is a potential for growth? Or is comps going to -- or comps going to impact that a bit?
Michael Minogue: It's a great question. And so as we look at the year, we're providing total transparency to our investors, you can see how we're managing and what we're seeing relative to both revenue and patients. The red phase was really driven by a bit of the unknown, and there was less preventative care. There was less documented guidelines, and we think we've managed through that pretty well. And we really truly invested in the innovation, things that we can control. As we move to the yellow phase, it has to do now with continuing to advance the product innovation, the regulatory approvals, ramping up again our clinical studies, moving forward on lots of publications and managing not just COVID logistics but the anxieties. And so the way we're doing that is, we're -- want to become experts at testing, whether for the antibodies or the active case. And so we're buying tests. We're performing tests. We have local accounts that we can send our people to. We run drills once a week, where we do a COVID mock drill where a person is identified to potentially have it. They run through the process. We clean out their cubical, their office, we sterilize it, and we ask them now to go and get tested, not the -- not that upper nasal test but some of these less invasive procedures that are lower nasal or saliva. We just want people to get used to that process because I think the anxiety is tougher than logistics. We've only had 15 cases globally. We haven't had any patients that have had death, and we only had one hospitalized briefly, but the person is doing fine now. So we've -- again, we want to make sure that we manage everything here in the office. We've never shut down in the office, but we had a skeleton crew for manufacturing and logistics. Now we're moving back to full production. And it's a bit business as usual. From a customer education and training perspective, they are used to now being on virtual calls. We do weekly live cases now. So every Wednesday, we have a live case with -- from a hospital, where physician panel experts and people call in. We record it for people to watch it later on CAMP PCI, but we've pretty much moved everything now into supporting virtual training, virtual education for both our customers and our employees. And we are confident that we have the right blend of what we can control, what we can influence around outcomes and what we can endure. And so we'll continue to endure the COVID-19, but again, our main focus is improving outcomes and growing patients and revenue year-over-year in Q2.
Margaret Kaczor: Great. And if I can, one last one. Just the new data in Japan, obviously, spectacular -- the growth that you guys saw in June was spectacular. Notwithstanding any COVID spikes, how should we think about progression there? Whether it's commercially or revenue oriented or maybe some societal responses?
Michael Minogue: The Japan interim data is very positive. We're going to finish out the final study, but that was presented by the Chairman of the Japanese committee on ventricle assist device usage. We feel good that the Japanese physicians are implementing best practices. They tend to show a lot of rigor and discipline in their protocols. And we -- with the exception of some of the flare-ups in Japan, we again love the fact that the primary focus with the Japanese physicians is native heart recovery. And we're moving forward to get the Impella 5.5 in Japan as soon as we can.
Operator: Our next question comes from Chris Pasquale from Guggenheim.
Christopher Pasquale: A couple of questions. First, Todd, I wanted to circle back on the June-July commentary and July specifically. The delta between revenue and patients treated is wider than we tend to see from you guys. Can you give us a better sense for the impact you're seeing from mix? And then the catch-up in reorders make sense, but you really didn't report a decrease in inventory levels or reorder rates in 1Q. So how big of a catch-up do you really need to see there? Why didn't we see more of a dip in the quarter?
Todd Trapp: Yes. So Chris, it's a good question. The reorder rate actually for the month of -- for the quarter was about 0.98. And so we've been typically a little over 1.01, 1.02 in the past several quarters. So the reorder rate was a little bit slow. And again, as you look at how it progressed through the quarter, I mean, April and May, the reorder rates were down in the low 90s. And then there was a little bit of a catch-up in June. But from an overall quarter perspective, it was still below 100%. So when I look at July's performance, and let's just take the U.S., for example, we are seeing about, I would say, 2 to 3 -- probably 3 plus points just from a stronger reorder point. Again, a lot of the -- June was really strong. And so at the end of June, some of those reorders did push into July, and I would say that's probably driving 3 points of growth in the month of July. The other big point, as I mentioned, is the mix on our business. And so if you think about CP, CP was down 18% in the first quarter, 2.5 was down over 60%. And so we see a higher average selling price on the CP versus 2.5. So we're seeing some mix there as well as the acceleration of our 5.5 versus our 5.0 and that's driving obviously some mix, too. So I would say from a sales mix perspective, it's probably 2.5, 3 points as well in the month of July. And the other thing too which we're seeing is because of the Emergency Use Authorization that came out in early June, we are seeing some nice pickup in RP. And our RP actually has a higher average selling price and actually had some nice growth in the month of June and as we head into July.
Christopher Pasquale: That's helpful. I appreciate all the detail there. And then, Mike, it basically sounds like we've transitioned directly to the green phase that you laid out in May, just based on where the business set at the end of the quarter. You're still talking about yellow in 2Q. So what elements of that green phase are you still not seeing?
Michael Minogue: Chris, the perspective we have on yellow is that we're not yet green. But we're not in the red phase. And for example, we do have territories and regions that are up and positive. We are launching the new products. And we are back in the office, but we're not at 100% in both facilities while we ramp up, again, manufacturing to full production. That being said, you will have and we do have territories that are moving a bit back into the red relative to some of the access into the hospitals. And you have some areas that are moving forward into green. We're very pleased, as I announced. We're back in July reenrolling again and reactivated sites for the STEMI DTU study, so that's a positive. But we're not at every center yet. So until we get to every center, until we get to the -- we're no longer seeing some of the flare-ups or the ICU constraints, we're not in the green phase. But we're able to look at territories and say, by the end of this quarter, we will have territories that are green, and we will have certain territories that maybe flip back to red and hopefully get out of it as fast as we can. We're also pleased that the societies and the government agencies have really stressed the importance to treat high-risk essential emergency patients. Most of our patients have an imminent risk of death if they're not treated, and therefore, they're putting in the processes and the protocols into the hospitals. And many of the hospitals give us access, but even if we don't have direct access into the room, we do with our call center. And again, with Impella Connect, we're managing and monitoring these patients real time in the cloud.
Operator: Our next question comes from Danielle Antalffy from SVB Leerink.
Danielle Antalffy: Just a question on the COVID impact in the quarter. More specifically, the potential positive sales impact with the EUA for RP. I appreciate the left heart did not come until this month or very recently, so no impact there. Any way to quantify sort of how much of sales was tied to COVID patients?
Michael Minogue: That's a good question. From what we track, we have over 400 COVID or suspected COVID patients. But in many ways, you're reading about things around organ failure shock or myocarditis, that we've been talking about for 10 years, and those are indications were already approved by the FDA. So I think Danielle, the visibility of what's happening where the lungs progress to the heart and it causes kidney failure, the whole element of Impella plus with ECPELLA gives us the ability to break that chain and still drive not just survival but native heart recovery. The story that we highlighted of Devon is truly remarkable. And just to point out, again, to everyone is his native heart function now is back to normal. And so that's the ultimate goal. The ultimate goal should not be survival and then have to go on to other surgeries or a transplant. And I think that what COVID has done is it has increased organ failure, it has increased the need for respiratory failure, so that should drive an increase in ECPELLA. But it's also allowed for people to understand the protocols and looking for what's the cause of death. And the ultimate cause of death is either respiratory failure or heart pump failure. And so for both of those technologies, that's where we're uniquely positioned now to provide a solution and again, with the goal of native heart recovery.
Danielle Antalffy: Right. So I guess the point is, it doesn't matter what causes those issues, whether it's COVID or not, Impella or ECPELLA helps. Okay. So that makes sense. The other point...
Michael Minogue: Yes. And one point on that. If you look at diabetes and obesity, that's growing to the point that, that could impact 10% of the population. And obesity and type 2 diabetes causes heart attacks, coronary disease and all these other challenges that patients have. So unfortunately, heart failure is going to continue to grow at a faster pace now with COVID. And the population of 65 is growing 44%, but also the population between 45 and 65 is also showing an increased mortality rate from heart failure.
Danielle Antalffy: Understood. Okay. And you sort of alluded to this in the prepared remarks. But does the COVID dynamic actually motivate hospitals in a bigger way to establish and enforce protocols for cardiogenic shock and maybe even high-risk PCI? Now in this environment, hospitals are crunched for time and money. So perhaps protocols increase efficiency, while also improving outcomes. Is there any dynamic you're seeing there? Or am I stretching too much to get to that?
Michael Minogue: I think so. I think that's the way we look at it. It's also why we're doing these weekly calls to constantly talk about best practices, what are we learning about COVID, what are we learning about the treatment. You have COVID on the left side with the heart and the lungs, but you also have COVID causing inflammation, which increases the clotting risk. And so if a patient gets a clot in their lungs or pulmonary embolism, what happens is the right ventricle gets overwhelmed trying to pump across that extra resistance, and that can cause right heart failure. So by putting an Impella RP, the pump can take over the work of ventricle, it can reduce the oxygen demand for both right and by subsequent left ventricles themselves and it allows the physicians to either do TPA to break up the clot or do an aspiration device to suck it out. So there's just lots of tools we're enabling now, but all education is helpful, and that's what we're trying to do as much as we can through these virtual calls and live cases.
Operator: Our next question comes from Matthew O'Brien from Piper Sandler.
Matthew O'Brien: Not to keep beating a dead horse here on July. But Todd, you've got a lot of data on the U.S. specifically. And the patient number in the quarter -- sorry, in the month is likely going to get some attention. So what are you seeing between some of the breakout areas, Texas, Florida, Arizona in terms of contraction in patients versus areas that are less affected? So COVID affected areas, are they down 10%-ish, more than that in July and then other areas are up 5%, 6%? How do we think about that?
Todd Trapp: Yes. No, it's a great question. We do have -- I mean, obviously, we do track patients every day by hospital, by physician. And if you think about the hotspots in the United States, which were, obviously, Florida, Texas, a little bit of Arizona and California, that represents almost 30% of our volumes. And for the month of July, for example, Texas was down close to 30%. And we're seeing not as bad of declines in Florida and California, but still declines more than the 4%. So we are seeing an impact of COVID resurgence in these areas. The one thing I would say, Matt, is that the fact of -- it's not like we saw in New York, right? New York was overwhelmed, New York was, some would call, broken, and we saw, for example, in April, in New York, our patients were down 90%. They bounced back in June, they were up 45%. So we know at the end of the day that these patients are sick, they're not elective, and that, obviously, we'll see an impact for a month, but there will be -- there should be a bounce back based on what we saw in Q1.
Matthew O'Brien: Okay. And that Texas example you provided, you didn't lose a bunch of customers or anything like that in Texas specifically that would explain it, it's really COVID specific that's impacting the business.
Todd Trapp: It's specifically COVID related. And it's not all in Texas.
Matthew O'Brien: Got it. Okay. That's really helpful. And then, Mike, you've been touching on this throughout the call. I know you don't want to capitalize on a pandemic. But the technology has been underutilized in a lot of areas for a long time. What kind of catalyst is this going to provide? Again, you talked about RP a little bit, ECPELLA, cardiomyopathy, et cetera. What areas underlying here is this going to really catalyze going forward that may be difficult for investors to see at the moment?
Michael Minogue: I think the first subtle point, Matt, is high-risk PCI provides a minimally invasive procedure for a patient. So as compared to CABG or open heart surgery, it could be a preferred mode now for high-risk patients because it's a shorter hospital stay. The second component is for these patients, you want to get it done right, protect the patient, so they don't have a hospital -- longer hospital stay, and you need to get complete revascularization in a single setting rather than staging patients. So I think we do see that in areas, as Todd mentioned, in June, AMI shock was around 10% growth and high-risk PCI was flat. So that was the opposite of what happened in April, where everything was down, but high-risk PCI was down more. So there's a certain resiliency in our technology because even our high-risk PCI patients aren't technically elective. It's not an orthopedic procedure. And 40% of our high-risk PCI patients are urgent. So they're being admitted into the hospital with chest pain and need to be treated. For the shock side, I just think that more education that's out there on what causes a lack of oxygenation and what happens when the heart goes into cardiogenic shock and what's the impact of the kidneys. And so what we've been talking about for many years is this element that unloading itself creates a positive cascade. It rests the myocardium, it helps it to recover, it's actually in our FDA label that it's a therapy to allow for native heart recovery. We've also been publishing papers and talking about the benefits on unloading the heart has a positive impact on the kidneys themselves, allows the kidneys to turn back on, make urine and get the impurities out of the body that's in the blood. So there's just -- the whole component now of evolving that and now adding in the need for oxygenation leads to more ECPELLA discussions because the end goal for all of these patients has got to be survival with native heart recovery. And in the news, there's constant new vaccines and other drugs, and there was a lot of press on ventilators being used for the right reasons. But ultimately, what we're trying to do is get patients home with their own heart.
Operator: Our next question comes from Jayson Bedford from Raymond James.
Jayson Bedford: Just a few questions here. There's been a lot of discussion around revenue growth versus patient growth. Excluding the ASP uplift tied to moving from CP -- or 2.5 to CP, 5.0 to the 5.5, can we assume that pricing in the quarter was generally stable?
Michael Minogue: Yes. So we -- just to clarify, we provided in our third slide on the investor deck, we broke out, you'll see on that bottom, there's 2 boxes. So you got April, May and June, and April, May and June had sequential lift. And then we also broke out to provide complete transparency for June, let everyone see the patient growth and the revenue growth. So as you can see, the U.S. patient growth was 7%. The mix is changing, but the ASPs for the products are the same. And so that's the gist of your question. As we move forward into July, when we see an area down, there's a direct correlation with some of the spike in COVID. So outside of the spike in COVID, which we think we see a rebound now as we've seen in New York and some of these other areas, including in Italy, is we feel confident moving forward that we have a good balance now between patients and revenue growth, and we have a playbook in order to go into these territories that might have a flare-up in COVID to allow for these cardiovascular, these high-risk essential patients to be treated. And so that mix is not necessarily driven by purely price, it's being driven by some of the COVID restrictions. And then the last is, we appreciate it's a challenging time to give guidance. So we're going to -- we're providing all these details so that you can see how we're managing it. And remember that when we say there's an impact in Texas, it's not all regions in Texas, it's not even every hospital. Because we have the IQ database and the telesales and Impella Connect, we're able to see it as it's happening real time in specific hospitals with specific physicians.
Jayson Bedford: Okay. But again, as I look at the slide, patient growth was up 7% in the U.S., revenue growth was up 3%, implying some sort of price degradation. I'm guessing that is not the case.
Todd Trapp: That is not the case. Jayson, that's not the case at all. I mean the month of June, it would've been the lower reorder rates and it would've been less deals. That's really -- I mean because at the end of the day, it's 22% patient utilization and 21% growth. So it's very close. And so there's a little bit of puts and takes, but there's no degradation of price.
Jayson Bedford: Okay. Okay. That's fair. And that's what I suspected. Wanted to ask about 5.5, and I appreciate this is a difficult environment to gauge this. But is 5.5 growing in the market? Or do you see it as largely cannibalizing 5.5 at this point -- 5.0 at this point?
Michael Minogue: Both. The 5.5 is a breakthrough product. If you watched the Investor Day, Dr. Ed Soltesz from Cleveland Clinic talked about the ease of putting it in, talked about the blood compatibility based on publications and the FDA testing parameters. We believe it's the most blood compatible heart pump ever made. And it really allows for higher flow for patients that have shock including patients that are acutely decompensating that are more heart failure chronic patients.
Jayson Bedford: Okay. And Mike, just -- I think 5.5 has been out in Germany a couple of years. I forget the exact approval time line. Can you just talk about the use of 5.5 versus 5.0 in Germany today?
Michael Minogue: Yes. So the 5.0 is still available. It's a lower price point, and it has it's a little more difficult to place. In Germany, we're working through reimbursement issues to -- as we go through the cycle. It's a bit of a higher price point, and the same will be true in the U.S., but both products are naturally driving into the 5.5 market. So the 5.0 and the LD, that's the direct, you're able to do both with the 5.5. You can place it direct or you can place it with the chest open or you can place it through the axillary artery. And so I think that's where the market is going to go long term.
Operator: Our next question comes from David Lewis from Morgan Stanley.
Fang Chu: This is Calvin on for David. Just one clarification on June and July. So just curious, is the growth rate you have quoted for June and July inclusive of contribution or benefit from extra selling days? And if so, how many extra selling days are there relative to last year? And the same question for July. And I just have a quick follow-up.
Todd Trapp: Yes. Calvin, this is Todd. So we have 30-patient days in June this year versus last year, and that's how we look at the business, right? So we treat patients every day of the month. Obviously, we had a few more workdays this June versus last June. And if you look at some of the patient volumes in the weekends versus weekdays, there is a little bit of a difference there. So that might have been maybe one point of growth, but we had the same opposite effect in the month of May. So from a quarter standpoint, it nets out.
Fang Chu: Got it. Understood. And just a quick follow-up on clinical trials and timing. Just -- have you guys said or disclosed on kind of estimated timing for PROTECT IV and RECOVER IV enrollment completion and readout?
Michael Minogue: We haven't given the specifics on completion, especially in the COVID times here. However, we have said that we anticipate doing our first patient at the end of our fiscal year, but we'll be obviously monitoring that with the COVID experience around these research centers. We're very excited that the STEMI DTU study is up and running. And as I said, we've had 5 patients enrolled in July, and we're going to continue to focus on proper execution of both studies.
Operator: And our next question comes from Chris Cooley from Stephens.
Christopher Cooley: Maybe just a quick one as a follow-up to the last kind of lot of questions. Could you maybe talk to us about what you can do to accelerate enrollment when we think about STEMI DTU? I know on the -- during the Investor Day, you mentioned some of the challenges associated with that here, the COVID environment. But are there ways in these riddled up centers that you can further accelerate that enrollment? And I'll just go ahead and ask my follow-up now in this session. You guys did a phenomenal amount of heavy lifting, while also changing strategically, I think, pretty significantly during the fiscal 1Q. When we think about Abiomed 2.0 now going forward, are there opportunities to use newer technologies like Connect and others to further accelerate or not just Connect but also just the online education to further accelerate adoption in kind of the community setting, more specifically around protected PCI?
Michael Minogue: So Chris, thanks for the question. I'll answer the second one first. CAMP PCI is 100% focused on creating that network, the user group. Every Wednesday, we have live cases now from around the country, and it's been very helpful. I do think it creates awareness with the physicians that are calling in, talking about how they treat these patients, and I -- and we do expect it will drive -- protected PCI will drive some of the awareness of the treatment protocols. And we're very excited because physicians now routinely log in calls. They see this as the future. They enjoy getting access to the world's experts and watching these cases. And we're very pleased and very excited, and I think Abiomed 2.0, part of the big game changer for us is physicians wanting to use this type of user network like CAMP PCI. For your first question on STEMI DTU, there are things we can do. We're doing it, but a lot has to do with just working with our physicians, identifying the STEMI patients. With the recent guidance documents that are out there, I think there is a lot more visibility again to try to drive the STEMI DTU patients to the hospitals. And our physicians tend to be the thought leaders and the influential folks around the country.
Operator: And our next question comes from Marie Thibault from BTIG.
Marie Thibault: I'll ask just one here. I'm curious what you're hearing from your hospital customers on patient willingness to come in at this point. And given sort of the urgent and emergent nature of many of your procedures, when do you think you might have worked through sort of the majority of that deferred patient backlog that we had from April?
Michael Minogue: Marie, a good question. And the answer is it's the yellow phase. So in some areas, they are making progress. The hospitals and the societies have been successful at getting people to understand the risk of staying at home with chest pain or having a heart attack. And you have sites in areas that are positive and doing well and you have other sites where there is more fear. Part of it has to do with the regional nature and what's happening with the restrictions by the government. But for the most part, everybody knows now that the risk of staying at home with a heart attack is far greater than the risk of contracting COVID-19. And I think as the logistics is worked through, the next phase of this is people understanding the anxieties. We're very confident in our physicians and these hospitals that they are completely dedicated, committed to these patients, and whether the patient has COVID-19 or not, there's lots of guidelines and protocols now of how to treat these patients even with COVID-19 that are having emergency cardiovascular issues. Thanks for the question.
Operator: And that does conclude our question-and-answer session for today's call, and I'd now like to turn the conference back over to Mike Minogue for any closing remarks.
Michael Minogue: Thank you, everyone, for your time today. If you have any follow-up questions, feel free to reach out, and have a great day.
Operator: Ladies and gentlemen, thank you for participating in today's call. This does conclude the program, and you may all disconnect. Everyone, have a wonderful day.
