Abiomed, Inc. (ABMD) on Q4 2021 Results - Earnings Call Transcript
Operator: Ladies and gentlemen, thank you for standing by, and welcome to Fourth Quarter 2021 Abiomed Earnings Conference Call. At this time, all participant lines are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Todd Trapp. Please go ahead.
Todd Trapp: Thanks, Sarah. Good morning, and welcome to Abiomed's fourth quarter 2021 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 fourth 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.
Mike Minogue: Thanks, Todd, and good morning everyone. Throughout the COVID-19 pandemic, Abiomed has remained on course to advance our innovation and become the standard of care for circulatory support. We adopted and executed while successfully transitioning from our red, yellow, and green phases to Abiomed 2.0. The 2.0 marks our transformation into a smarter and more connected online medical device company with a COVID playbook. We conduct on-site and online training and education and provide patient support with smart algorithms to track real-world utilization in the cloud, identify best practices, and optimize patient care. For the quarter, Abiomed delivered a company record of $241 million in revenue, up 17% year-over-year with double-digit growth and record revenue across the U.S., Europe, and Japan. Within the quarter, we saw monthly sequential improvement in both global revenue and patient utilization. Q4 investments continued, while achieving a 26% GAAP operating margin. Applying our Abiomed 2.0 COVID playbook, we definitively transitioned to the green phase, validated with record number of patients supported in a quarter, in a month, in a week, and in a day, all in Q4. Turning to the full fiscal year, Abiomed delivered $848 million in revenue, up 1% year-over-year and 27% operating margin despite the COVID-19 pandemic. We took a disciplined approach to the fiscal year to help us navigate the uncertain environment and achieve our tactical plan. Over the past year, we endured the setbacks of COVID-19 and focused on keeping employees safe, making life-saving heart pumps, and supporting our hospitals and patients. We controlled expenses and invested in innovation, new clinical studies, and expanded distribution while remaining fiscally responsible. Our balance sheet strengthened to $848 million in cash, while maintaining zero debt and acquiring an ECMO platform. In addition, our IP portfolio increased to 1,150 Impella patents and 940 patents pending. We achieved a significant number of regulatory approvals and established world-class online training and education with CAMP PCI.
Todd Trapp: Thank you, Mike. And good morning, everyone. Now starting with Q4 results. As Mike mentioned, we delivered record revenue of $241 million, an increase of 17% year-over-year with double-digit growth across the U.S., Europe and Japan. We leveraged our Abiomed 2.0 COVID playbook, which allowed us to transition to the green phase where we grew patients and revenue year-over-year and delivered on our innovation, regulatory and clinical milestones despite the current environment. Turned into our regional performance; U.S. revenue grew 13% to $196 million, driven by a 13% increase in patient utilization. We saw double-digit growth in both high-risk PCI and cardiogenic shock. The pandemic hit peak levels in the first few weeks of January, which impacted patient utilization. However, as COVID cases in related hospitalizations began to decline and we executed our playbook, we delivered sequential improvements in patients and revenue in each month of the quarter. We also set a patient and revenue record in March. At the end of our fiscal Q4 in the U.S. the CP is now in 1,509 sites. We have placed the Impella 5.0 in 663 sites and the Impella 5.5 with SmartAssist is now in 211 sites, up 53 sites versus prior quarter. Lastly, the Impella RP is now in 588 sites, up 19 versus Q3. U.S. reorder performance in the quarter was slightly below 100% and average combined inventory at the hospitals for the Impella 2.5 and CP with 4.7 units per site, consistent with the inventory levels we saw in Q3. Turning to outside the U.S. In Q4 total revenue was $46 million, up 33% year-over-year, driven by strength in Europe and Japan. Our European revenue increased 28% year-over-year due to higher patient utilization in several markets, such as Germany, Austria and the UK, and benefit from the Euro-U.S. dollar foreign exchange rate. Similar to the U.S. in Europe we saw an impact in January when certain countries mandated lockdowns as COVID cases and deaths accelerated. However, here too we leveraged the COVID playbook, executed on our plan and delivered monthly sequential improvement throughout the quarter. Japan continues to perform very well delivering $11.6 million in revenue, up 38% year-over-year driven by patient utilization. We opened 10 new sites in the quarter bringing our total to 166 sites. Moving forward; gross margin for Q4 was 80.9% flat compared to the prior year due to benefits from increased production volume, offsetting higher material spend, and stock-based compensation. R&D expense total $32 million, an increase of 26% from the prior year. The value of our ongoing innovation has been evident throughout the past year, and we believe it will continue to create value as we invest in advancing the Impella ECP, XR Sheath, Breethe OXY-1 System and Impella BTR and in clinical evidence with PROTECT IV, STEMI DTU in danger. SG&A expense for the quarter totaled $100 million, up 20% versus prior year. The increase was due to targeted investments we made in expanding our distribution team, incremental advertising and higher stock based compensation.
Operator: Our first question comes from the line of Margaret Kaczor from William Blair. Your line is now open.
Margaret Kaczor: Hey, good morning guys. Thanks for taking the questions. I wanted to start a little bit with guidance and then a bigger picture question. So first, can you provide any more clarity on March and April? And then as we look at kind of the Q1 comments that you made Todd, it looks like historically, maybe you're up 1% to as high as 6% in the last several years. And given that we're kind of on the back-end of the recovery and you're moving into the green phase, why shouldn't we assume that Q1 maybe does a little bit better than that given what we had seen in Q4?
Todd Trapp: Thanks, Margaret, for the question. So, if you think about the progression in Q4, we did start off fairly soft in January that we highlighted on our last call. And then we did see sequential improvement in February and March. I would tell you, if you look at just our high-risk PCI performance in March, you can make an argument that there was a little bit of bolus from procedures that were deferred, I would say in December into January. So as it looks from April perspective, we're not going to provide April actual performance at this point of time. I think we have factored that into the color we provided about Q1 in our prepared remarks that it would be flat to slightly above Q4, but ultimately we think that makes sense at this point in time for based on what we've seen so far in April.
Margaret Kaczor: Yes. And then in terms of the beat at least relative to our numbers 5.0, 5.5 seems to do really, really well. Any kind of color you can give there, differences in utilization of accounts, maybe to upgrade to 5.5 from 5.0 or are you going deeper in accounts given these product improvements?
Todd Trapp: Yes. I mean Mike's commented that 5.5, our surgical business was up over 40% in the quarter. So, it continues to perform very well. We're in over 200 hospitals today. We’d expect that to continue. If you look at our patients, our patients are up substantially as well in 5.5. It's a great product, and I expect to see that momentum continue into fiscal year 2022.
Margaret Kaczor: Okay. And just kind of last one, again kind of a little bit bigger picture. You guys have a lot of things out that you're investing in right now, whether it's the RCTs; you've got the ECMO platform, even the Shockwave investment on the side. There's a lot going on, ECP and the rest. As you think about kind of the next two to three years, how do you outline those various types of opportunities and what's the next thing that you're going to spend your cash on? Thanks.
Mike Minogue: So, Margaret this is Mike. Thanks for the question. On the big picture, we come out of COVID-19 all in on innovation, on clinical research, and on distribution. And so, I think you're going to continue to see that in the tactical execution. For innovation, you're going to continue to see the execution of these new products that are revolutionary, ECP, the Impella Connect, ECMO, ECPELLA, 5.5, bridge to recovery. I mean these are – this is the new innovation that's going to take heart failure and focus it on heart recovery. For clinical research, we're now taking all the studies and the leverage that we've done and we posted a summary of the clinical studies on a slide in our – on the website. But it's just we've learned now how to optimize high-risk PCI. We've learned how to optimize cardiogenic shock, and we've learned how to optimize survival and return to baseline for acute on chronic heart shock. So, these are the cardiomyopathy patients. And so those are the things we're working on. We think we're going to further our lead across the board. And of course, we're going to solidify our patent position as we go. So, we're very excited because as I said in my prepared remarks, I do think we will have the path forward and create a new standard of care for high-risk PCI, for STEMI, for cardiogenic shock, and for heart failure overall. So, we're excited to be where we are coming out of the year.
Margaret Kaczor: Great. Thanks guys.
Operator: Thank you. Our next question comes from the line of Chris Pasquale with Guggenheim. Your line is now open.
Chris Pasquale: Thanks, and congrats on a nice finish to the year. A couple of questions. One, just, Todd, circling back on the margin guidance. That's down, obviously, from FY 2021, down quite a bit from where you guys were in 2019 and 2020. I appreciate the investment. You guys got some clinical trials starting to ramp up here. But we're also coming off of a year in which R&D spending increased quite a bit. So just curious on the other elements of the investment there. What are you doing from a distribution standpoint that's different and will require a significant step-up? And do you view this as a one-year drop into profitability and then you would start to see leverage again or is this a multiyear phase you're entering into?
Todd Trapp: Yes. Thanks for the question, Chris. When I think about our investments for this year, I mean, we're all in on our, what I would call, growth enhancing investments. So, it's innovation, its clinical evidence, and it’s distribution. So, when you think about innovation, it's smaller, smarter, more connected devices, ECP, the expandable sheaths, the AI algorithms, think about the investments we're making in BTR, which again would open up another 100,000-patient population for us for heart failure and then continued investment in Breethe. When I look at clinical evidence, it's really STEMI, PROTECT IV, the early feasibility study with ECP. I look at these as more digital events that require investment. They're not really long-term investments in R&D. So, I think over time, you'll see R&D as a percentage of sales will moderate as we execute on our trials. And then the third big bucket is around distribution. We are expanding our distribution team, Chris. We are – we – if you went back and looked at our performance over COVID, we noticed that the smaller regions tended to perform better than some of our larger regions. So, we've made the decision to go from 17 regions in the United States to 23. We've started making that investment in Q4. You'll see a little bit more of that investment in Q1. So we are expanding our distribution team, putting more feet on the street and having more local leadership. We are expanding advertising on our direct-to-patient initiatives that Mike highlighted in his comments, again, targeting that 319,000 untreated population, utilizing PROTECT IV. And then we're going to be doing a little bit more trade shows and education. So I think some of it in R&D and most of it in R&D is going to be, I would say, temporary over the next year or two. It's a big investment year for us. With that said, at our operating margin guidance of 24% to 26%, midpoint of 25%, is still pretty strong given the fact that we're driving 17% to 22% top line growth.
Chris Pasquale: That’s helpful. Thanks. And maybe just to follow-on there. You touched on this direct-to-consumer initiative, trying to get at some of these broader population of patients who could be appropriate for high-risk PCI. But you're talking about patients who are undiagnosed, which always brings up questions about really the feasibility of getting at that type of population. It's not as if we're not looking for heart disease in this country. So how realistic is it to really bring those patients into the fold, especially since penetration of Impella supported PCI within the diagnosed population is still relatively low today?
Mike Minogue: Chris, that's a good question and very insightful relative to why high-risk PCI still remains out there. If you look at TAVR, when they started, they went out and identified the patients that were surgical turndowns. They weren't considered for the cath lab because they didn't have the technology. The same is true with mitral as well as the WATCHMAN. When PROTECT II started, none of those patients went to the cath lab, and nearly all those patients had already been turned down for surgery, but not considered for high-risk PCI. The exciting thing about PROTECT IV and the engagement of the heart failure community and heart failure cardiology specifically is they don't consider PCI in general practice. And what they really look at is optical medical management or the invasiveness of a surgery, which many of these patients are turned down. So moving forward, because they're involved in the design of PROTECT IV – and as one physician described it the other day in a broad presentation. He said that PROTECT IV is essentially a heart failure study. And what it does is it opens up another therapy for this growing population, these Type 2 diabetes patients that have poor ejection fraction. They don't want or they're turned down for surgery. And you can see a benefit with Protected PCI. What's unique about and what's new is that our Protected PCI patients show an improvement in their quality of life and show an improvement in their ejection fraction in 90 days. And so that's what's unique. And now that we look at the historic trends, when people do show up in the hospitals, they usually – for these types of cases, they only look at it – at the – and try to look for coronary disease around 17% of the time. And it's less than 5% of the time that people are actually getting revascularization in the index admission. So there's a lot of opportunity there. And it's not anyone's fault. It's just that the heart failure community has not been looking at or considering a Protected PCI solution because in the past, PCI did not improve EF. That was only done with open heart surgery, with CABG. Moving forward, that's something we've been able to show in multiple FDA studies, PROTECT II, PROTECT III and also in RESTORE EF. And that will be the gain. And I believe that's why heart failure – the heart failure community overall will get engaged.
Chris Pasquale: Thanks.
Operator: Thank you. Our next question comes from the line of Anthony Petrone with Jefferies. Your line is now open.
Anthony Petrone: Thanks and good morning. Congratulations on the quarter. Hope everyone is I have one on reimbursement and one on PROTECT IV. The first one on reimbursement is just sort of a rehash and a recap of the IPPS proposals from earlier this week, maybe specifically on the proposal – the recommendation to shift high-risk PCI, add 215 to adjoining codes. Maybe just how sort of you’re viewing that? It seems overall that this actually cleans-up reimbursement going forward and maybe perhaps streamlines the process in future rounds. So maybe just some views there. And then I'll have a follow-up on PROTECT IV.
Mike Minogue: Anthony thanks for the question on CMS and the reimbursement. We agree with your comments. We're pleased, and we believe it now provides a permanent solution. What we've always talked about is that Impella is a platform with multiple patients. And so we position the products and the reimbursement and even in the future some of the pricing. You have a four-hour pump or procedure. That's a high-risk PCI. You've got a four-day patient. That's the cardiogenic shock patient in the ICU on Impella Connect with smart algorithms. And you've got this acute on chronic shock patient, that's a four-month – up to a four-month potential patient with the 5.5 and future BTR pump. So it definitely aligns completely what we're doing. So it allows for the differentiation for the type of resources and support that we provide. We do think it's a permanent – more permanent solution. And it also really aligns with our hub-and-spoke strategy. As Todd mentioned, we saw that – when COVID hit, we saw bigger growth in the small to mid-sized hospitals and regions. So we went a little bit leaner and a little bit faster by adding more regions and more team approaches. But we also saw in March a massive swing back in the large centers. And so part of that has to do with our hub-and-spoke coordination. Where if a patient ends up in any cath lab, we're going to know about it. We're going to be there to support. We'll be in the cloud watching. But then we can also help monitor and work together the top centers that do the most complex work with the spoke centers. And what CMS also did was slightly increase our DRG 268, which allows those outlying hospitals to place the Impella, stabilize the patient and then make the decision if they want to send them to the high end center. The last piece of this has to do with our distribution. We are going to maintain this distribution overall in all the cath labs but we do have a dedicated team now that's a heart recovery team that's working directly with the heart surgeons and the heart failure cardiologists. We think that will help with the referral network. But it will also allow us to go deeper to those transplant centers. There are about 140 of them that really do the most advanced work and those chronic patient care that we're excited now to bring 5.5 BTR. And RP did rebound also well in this quarter. We're going to put SmartAssist on RP. So we'll now get some of the information on a biventricular patient that has never existed, and we're going to make further improvements to the RP to ensure that the surgeons also have a way to utilize it. So lots of good things happening with CMS. We appreciate the work and the thoughtfulness that they put in to the final rule.
Anthony Petrone: That's very helpful. And my follow-up on PROTECT IV would be maybe just a broader view here and a sense on timing. It looks like you're targeting over 1,200 patients, 100 sites in Europe, U.S. So I just want to get a sense of timing on enrollment. And then maybe a question on the design, looking at Dr. Gregg Stone, the lead PI. He mentions obviously the goal here is to operate on more complex cases and perform more complex revascularization. And Mike, it brings me back to PROTECT II when there was the rotational atherectomy arm. And so can you give us a sense if there will be cohorts based on specific surgeries and sort of how that will sort of evolve as the study gets underway? Thanks.
Mike Minogue: So, Anthony, the PROTECT IV study timing, we're not giving specific timing right now just because we want to get a few months away from the transition with the vaccines. We have described in detail the study. Dr. Chuck Simonton did a webcast on it last year. So that's still up on our Investor page, and we'll give more details. But to your specific question, on the design, think of it as an on-pump PCI, which is the Impella supported PCI versus off-pump PCI, which is where the majority of these patients today – they actually don't get a balloon pump. They get the in and out approach where the physician has to inflate the balloon and replace stent quickly or otherwise the hemodynamics will collapse, or they stage the patient or they do a combination of things or they limit the contrast because they're worried about acute kidney injury. So there will be patients that they will have the option to use a balloon pump and they know that today. That's partly why they don't necessarily use it today because for many people it's not something that's going to provide hemodynamic support if the patient gets in trouble. And the majority of these patients today are in and out. What PROTECT II showed and other studies with Impella showed is that these patients that when they get complete revascularization, with Impella support, we've been able to demonstrate significant improvements in the ejection fraction or the quality of life of these patients at 90 days. Most recently, that was presented in the RESTORE EF and with the PROTECT III study also showed is lower adverse events on bleeding. So we've made great progress on access closure. But we're also seeing that the physicians are doing a better job leaving less ischemia. And when they do that, that's where you really see the benefit for the patient. In the past, CABG did and does get an improvement in EF because what they're doing is taking a clean vein and rerouting the blood flow. So there's an improvement in EF. But there is a price to pay with the sternotomy and the pump run and the recovery for an open heart surgery. And so in the end, what we – what we'll have here is a design study that will be able to track everything in terms of quality of life, heart failure, readmissions, improvement in EF. And it's really a comprehensive heart failure study designed by the trialists, and it will have an adaptive design. But we feel very comfortable that the physicians know the patients are out there, and they're excited to work with their referral network. And we're very excited that this is going to – this is an on label study. So we're excited to get out there and start identifying these patients.
Anthony Petrone: Thanks a lot. I will hop back in queue. Thank you.
Operator: Thank you. Our next question comes from the line of Chris Cooley with Stephens. Your line is open.
Chris Cooley: Good morning and thanks for taking the questions. And congratulations on a very strong finish to unprecedented year. If I could maybe just start with a question on the international opportunities. In the past, you've updated us a little bit about potential new markets to enter, and I've realized that you're still very low rates of penetration, sub 20%, sub 5% when we think about Europe and Japan. But if you could just walk us through how you see the international market expansion taking place and also reconcile your slide on patient growth and revenue performance? You show a 12% sequential increase in Japan in the most recent quarter and maybe it's a typo, but a 4% sequential decline in revenues. So maybe you could just help us with that. And then I've got a quick follow up. Thank you so much.
Todd Trapp: Thanks, Chris, for the question. In terms of – I'll take the first part in terms of the Japanese performance in the fourth quarter. Obviously, it continues to perform very well over $11.5 million. Patients in Japan for the quarter was up 50%. Revenue didn't grow as much, was down sequentially. And really, the function is simple, is we opened up four fewer sites in Japan this quarter versus what we did last year. It was about ten sites this quarter. I think it was 14 sites last quarter. And so that's really what's driving, I would say, a little bit of a disconnect between patients in revenue in Japan. So overall, very strong performance, up 50%. Now your second question was around just countries outside of…
Chris Cooley: Yes.
Todd Trapp: Yes.
Chris Cooley: No, I was – yes I just kind of curious about incremental markets and your thoughts there on timing.
Mike Minogue: Chris, the PROTECT IV is a European study as much as it is a U.S. So the co-PI is an academic leader and recognized trialist. We've had strong growth and publications from Italy. So the interventional cardiology society in Italy has been very active with publications, registry data. That's the – that was recently presented and published last quarter, showing the benefits of Impella with high-risk PCI and higher survival by placing the Impella before the PCI and achieving complete revasc. We are seeing a lift in Europe overall. We're starting to enter some of these other markets, and many of these top centers have expressed interest and will likely be in PROTECT IV. Relative to Asia, we remain focused on – Japan is the priority, but we also are planting seeds. And again, top centers in Asia are starting to enter into the Impella training and focus on heart recovery. So we think there'll be more there, but we also don't want to lose focus that the three biggest drivers for global standard of care and for our execution remain U.S., Germany and Japan.
Chris Cooley: And if I could just maybe squeeze one other quick one in here. Just when you think about the expansions here in the United States from 17 to 23 regions, conceptually it makes sense. You're closer to the customer, more frequent visits. They're helping drive greater growth in those territories. Curious though, are you seeing similar types of trends in both high-risk PCI and the shock patient populations? And also just as we see more patients on Impella Connect, help us kind of understand what this – how the distribution is really doing out there in the field? Just kind of want to get a better feel for what kind of lift you are seeing as you expand from 17 to 23. Thank you.
Mike Minogue: Chris, the design of our distribution and what's happened out there is really part of the COVID playbook. So on the COVID playbook; we're tracking weekly access to the hospital's ICU capacity, Impella Connect. And then we do see a flip back and forth between the high-risk PCI patients and the shock patients. We know if shock or pulmonary embolism or ECPELLA and those things go up, the ICUs fill up. That means that we're going to have a bit of a delay in high-risk PCI at the big centers, but that bolus will come back. The interesting element of that is our smaller and midsized territories and hospitals. They did not see that dip as much because they then potentially do that patient and they don't refer that patient to the larger center. If we track on shock and you look at the year, six out of the 12 months had positive growth, eight of the 12 months had flat to positive and two – the first two months of COVID last April, May were down and they were down double digit. But after that, shock itself recovered, and that's kind of part of the playbook. And then in this hub and spoke, last piece of this, is, as we've mentioned, we set records in Q4. But in March, we set our records for most patients ever, most high-risk PCI patients ever and most cardiogenic shock patients ever. So we think the playbook works, and we like this hub-and-spoke network, and we like the changes we've made to the distribution to really capitalize on that opportunity.
Chris Cooley: Thank you.
Mike Minogue: Thanks, Chris.
Operator: Thank you. Our next question comes from the line of Matthew O'Brien with Piper Sandler. Your line is now open.
Matthew O'Brien: Good morning. Just a couple of questions on kind of some products that I think are helping the business right now. One of them is clearly helping the business versus just the guidance, which is good to see getting back up to low double digits here, which I think is kind of what you're targeting for the business going forward or maybe a little bit faster. But for starters on the sheath side of things and I know this is kind of getting down to the weeds a little bit, Mike or Todd. But what are you seeing as far as utilization of the 2.5 sheaths among centers that have access to it? And then what's the timing on CP? Is it still kind of expected here in a few months? Because what I'm really trying to get at is, is this starting to accelerate some adoption of Impella because of access of the sheath and then CP can hopefully help accelerate things a little bit more?
Mike Minogue: Thanks Matt for the questions. And the short answer is the XR Sheath is the priority for CP. We do have it on the 2.5, and we did do cases in the U.S. last quarter. But the majority of our larger volume users are very comfortable with access closure today. PROTECT III showed we have low single-digit vascular complications and bleeding. We also showed that in the STEMI DTU FDA study. The single access is now approved also in Europe and has been the means of choice by a lot of the physicians that do the most Impellas. And so they'd much prefer today to have the CP. They're comfortable with access closure and they like single access. So what we're doing with CP is you have the XR Sheath, which is a 510(k), but we are also in coordination with that. We're making some minor adjustments to the product to augment that, but that will require a PMA submission supplement. So that's where we think we're going to have the two aligned by the end of this fiscal year. But we're also pretty confident that part of the momentum we're seeing is just that the new techniques, the new clinical data and the single access really are the preference of our top centers.
Matthew O'Brien: Okay, makes sense. And then shifting over to 5.5, which is clearly a nice tailwind or a meaningful tailwind right now. Mike, it seems like there was an acceleration in the number of centers using the products or getting access to the product here in fiscal Q4. Are those 211 sites entirely sites that were using 5.5 before? And then among the sites – and again, I know we're getting down into the weeds. But are you seeing some of the sites that were 5.5 is available more clinicians coming over and starting to use Abiomed for other procedures, now that they can see 5.5, see how well it works and how unique it is? And then saying, okay, maybe I can use CP in some other patients as well. So are we getting any signs of kind of some growing momentum because of 5.5 throughout an entire center?
Mike Minogue: Matt, the answer is yes, but it's – remember, you have two different customer bases. You have the heart surgeons and then you have the interventional cardiologists. And they work together well in certain cases. They work together well in TAVR because they're all aligned in the hybrid lab. But there's still this inherent competition between high-risk PCI and CABG. And what we've shown is that the two work together, something we call high-risk revascularization. So as we identify these patients, some of these patients go for high-risk PCI, some of these patients go for high-risk CABG, where they utilize Impella and that was presented by Dr. Ed Soltesz from Cleveland Clinic on the approach that they use. And some of those CABG patients, they do have for kidney function and they need support coming off the heart lung machine. And this presentation is also still up. But what their protocol is, is if there's acute on chronic patient, they go to the Impella 5.5 as the primary driver. They no longer use the 5.0. And the 5.5 has the optical sensor. It gives us the ability to see what's happening and the pressure in the left ventricle. It's ideal for weaning. Then they establish that patient, then they decide is the revascularization going to be done in the cath lab, by the intervention cardiologists, are they going to do it in the surgical suite with CABG. In certain cases, if they need a VT ablation, they'll take them to the EP lab, and they'll do a VT ablation but the Impella pump is stabilizing that acute on chronic patient. That's a different patient than an AMI shock patient, whose first symptom is the heart attack that leads to shock. That patient is still going quickly into the cath lab through the door to balloon time protocol, where they'll put the Impella in before they do the PCI. So the short answer is yes, because it's driving the science and the recognition of unloading. And it allows us to take patients and make sure that we maintain the ability to still provide a path of the least invasive, most cost-effective approach to not only keep the patient alive, but send them home with their own heart. And so we're really excited to see the leadership by Cleveland Clinic on surgery, Cedars out in LA, the teams in Chicago, across the board. The 5.5 is really a revolutionary product for heart failure. And we've added some heart failure people in the company and on the distribution. So we really are changing heart failure now to heart recovery, and it's a different mindset, but it's what 5.5 enables and what Impella BTR will continue because now we'll have the ability to send the patient home and have a pump that runs even longer without a purge.
Matthew O'Brien: Got it. Thank you.
Operator: Thank you. Our next question comes from the line of Jayson Bedford with Raymond James. Your line is now open.
Jayson Bedford: Hi, good morning. Just a couple of quick ones. I realize we're at the top of the hour. Just on 5.5. So if 5.5 and 5.0 is 15% of U.S. revenue, what percent is 5.5 these days?
Todd Trapp: I don’t have the actual percentage in front of me. It's – the majority of the business now is 5.5. I would say it's close to – it's over – it's probably over 75%, Jayson.
Jayson Bedford: Okay. And then on the guide, just wondering if you could talk about the expected growth in the U.S., which obviously has a much easier comp versus international for fiscal 2022. Thanks.
Todd Trapp: I think when you look at it across all three regions, we do expect to see double-digit growth. Obviously, rest of the world – OUS is going to be growing a little bit faster with Japan and Germany. But even in the United States, whether you look at the low, medium and high-end of our range, we do expect to see nice growth, double-digit, mid-teens growth in the U.S., a lot of it obviously driven by the surgical business. So I think, overall, it's pretty evenly distributed across all three regions.
Jayson Bedford: Okay, that's helpful. Thanks, Todd. And just quickly Mike, where are we with RECOVER IV in terms of starting that trial?
Mike Minogue: We've got Executive Committee, Jayson. We're working through some of the specific details of it. It's a very difficult population to randomize, as you know, we've tried in the past. We think we can satisfy that now. We're looking at some things around consent. And yesterday, we presented the final summation of the 406 patients in the NCSI with a 71% survival but what's really interesting in the presentation is that the status C, which is the kind of the classic shock patients had a 77% survival. We even have very, very positive survival on the Class C, which is the cardiac arrest group. So we have a tremendous amount of information. We're now working through the logistical challenges and how we'll do the consent. We expect to finish the design end of the year and start this study the following year. But it really is a difficult population, but we feel very confident now with the best practices in Japan, in Italy and Germany and the U.S., that we have the formula for the higher survival with more than 90% having native heart recovery for this type of patient.
Jayson Bedford: All right, thanks, Mike.
Operator: Thank you. Our next question comes from the line of Marie Thibault with BTIG. Your line is now open.
Marie Thibault: Hi, good morning. Thank you for taking the question. Just a quick one here to follow-up on the comments you made to Jayson. I wanted to confirm. We always like to see that U.S. patient metric, and I know you gave that to us this quarter, up 13% year-over-year. Is high teens the right bar to think about if we think about the midpoint of your guidance for fiscal 2022?
Todd Trapp: Are you talking from a U.S. prespective?
Marie Thibault: Yes, the U.S. patients, yes, exactly.
Todd Trapp: I would say patient utilization would be somewhere in that mid teens. I think it makes sense based on our guidance.
Marie Thibault: Okay, sure. Yes, I back into that. I just wanted to confirm, given some of the higher ASPs and benefit you've been seeing there. Okay. And then a quick follow up here. I don't think we've heard too much on Breethe, but it seems to be getting very good feedback. I would love to hear whether you've included any of that revenue in fiscal 2022, whether that's something we can see as a meaningful contributor this years. Thanks for taking questions.
Todd Trapp: Yes, thanks, Marie. Good question. I think in terms of meaningful impact, it's been a great launch. We had five sites right now, treated over – about 20 patients. I think as you think about fiscal year 2022, it will be somewhat of that controlled rollout that we've talked about. So again, focus on training and education and, more importantly, patient outcomes. So we'll continue to do a controlled rollout. And from a revenue perspective, I'd say it's not going to probably have a material impact on us as we think about it, the big picture, probably more of a fiscal year 2023 story.
Operator: Thank you. Our next question comes from the line of Cecilia Furlong with Morgan Stanley. Your line is now open.
Calvin Chu: Thanks for taking the question. This is Calvin on for Cecilia. Just two quick ones for me. The first is just could you share with us your thoughts on what your M&A strategy for FY 2022 is going to be? Do you anticipate remaining kind of active on that front in 2022 and beyond? And the second is just – could you give us an update on STEMI DTU, on kind of what the pace of enrollment has been on – perhaps on full enrollment timing to the extent you can share? Thanks so much.
Todd Trapp: Do you want to take? I will take the first question with regard to M&A. Obviously, if you look at our cash deployment strategy, I think our top priority remains investment in organic growth opportunities that we believe lay the groundwork for sustainable growth. With that said, we'll continue to look at new technologies and core competencies. As of the last quarter, we still have a little over $100 million investment on our balance sheet in roughly 15 to 18 companies. And we will again continue to look for differentiated technologies that can either increase Impella utilization, improve patient outcomes, anything around access, closure and monitoring. But ultimately, we're looking for technology that can bring additional value to our patients, whether in the cath lab, ICU or CCU.
Mike Minogue: Calvin, on the STEMI DTU, we added six sites in Q4 and we enrolled 28 patients in Q4, so we’re not at 61 patients enrolled in 26 hospitals.
Calvin Chu: Got it. Thanks so much.
Operator: Thank you. Our next question comes from the line of Danielle Antalffy with SVB Leerink. Your line is now open.
Danielle Antalffy: Good morning guys. Thanks so much for taking the question. I actually just have one question, and it’s tied to a longer-term growth. So I appreciate you're giving fiscal 2022 guidance today. I know you’re not going to give us fiscal 2023 guidance today. But at a high level, if you could comment qualitatively, fiscal 2022 is still facing some odd comps with COVID and the recovery and things like that. So I guess, as we look longer term, what’s the right way to think about the underlying growth profile of the company? Should we be thinking about it in line with sort of end cardiogenic shock and high-risk PCI volume? Or between now and, say, this time next year, do you feel like you guys are making progress among some of the sort of – I don’t know if it’s too dramatic to call them deniers or the folks that were impacted by the AHA data, that we should see underlying growth acceleration? I know that’s really difficult to answer, but even any qualitative comments would be helpful.
Mike Minogue: Danielle, I would say at a high level, Abiomed 2.0 expects to be one of the fastest-growing profitable medical device companies, and we have been for the last 10 years. And we think between our existing products and new products, existing indications, new indications and potentially stronger guidelines in existing countries and new countries, we have a decade ahead of us of growth.
Danielle Antalffy: Thanks so much.
Operator: Thank you. There are no further questions. I would now like to turn the call over to Mike Minogue for closing remarks.
Mike Minogue: Thanks, everyone, for the time today. Sorry, it went over. If there’s any follow-up questions, please feel free to reach out to us. Have a great day.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
