Summary of Key Points from J.P. Morgan MedTech Conference Call Industry Overview - The MedTech sector is experiencing earnings reports from various companies, including large-cap firms like BDX (Becton Dickinson) and ZBH (Zimmer Biomet), as well as several SMid-cap companies such as CVRX, INSP, and others [1][31]. Company-Specific Insights CVRX (CVRX) - CVRX has a strong track record, beating top-line expectations 87% of the time, but has seen an average stock reaction of down 2% post-report [2]. - Guidance for 2Q has been lowered to $55-58 million due to salesforce disruptions, with a forecast of $13.5 million in sales for 2Q, representing a 14% increase year-over-year [2]. Inspire Medical (INSP) - Inspire has beaten top-line expectations 86% of the time, with a positive stock reaction 75% of the time, averaging a +4.9% move [3]. - The focus is on the launch of Inspire 5, with expectations for a ramp-up in the second half of the year [3]. Bioventus (BVS) - Bioventus has beaten on sales 78% of the time, with expectations for an in-line to slightly better quarter, forecasting sales of $146 million [8]. - The company is cautious due to mixed orthopedic prints and lower correlation with large joint manufacturers [8]. Ceribell (CBLL) - Forecasting sales of $20.6 million for 2Q, representing a 35% increase, with gross margin expected at 85.5% [9]. - The company is viewed positively as a high-quality SMid-cap, despite the sector being out of favor [9]. Becton Dickinson (BDX) - BDX has beaten top-line expectations 67% of the time, with a significant concern among investors due to a lack of pre-announcement and potential fundamental weaknesses [12][14]. - The Street forecasts organic growth of +2.9% for the upcoming quarter, which is below previous expectations [14]. Enovis (ENOV) - Enovis has beaten on the bottom line 90% of the time, with expectations for a small beat-and-raise against the Street [18]. - The company is facing pressure from a short report and mixed orthopedic prints from competitors [18]. Insulet (PODD) - Insulet has a strong record, beating top-line expectations 93% of the time, with a forecast of $618.8 million in total revenue for 2Q, a 27% increase [22][23]. - The company is viewed as a top pick due to its competitive advantages in patch pump manufacturing [23]. Zimmer Biomet (ZBH) - Zimmer Biomet has beaten revenues 60% of the time, but investors are frustrated with inconsistent performance [29][30]. - The company is expected to deliver a clean quarter with a slight beat and guidance raise, but there are concerns about the high-end of its growth range [30]. Additional Insights - The overall sentiment in the MedTech sector is cautious, with many companies facing challenges such as salesforce disruptions, mixed orthopedic trends, and investor skepticism [6][14][18]. - There is a notable trend of fund flows out of healthcare and MedTech, impacting stock performance across the sector [23]. Conclusion - The MedTech sector is poised for a series of earnings reports, with varying expectations across companies. While some firms like Insulet and CVRX show strong potential, others like Becton Dickinson and Zimmer Biomet face significant investor scrutiny and challenges. The overall market sentiment remains cautious, reflecting broader economic uncertainties and sector-specific dynamics.

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $13.6 million, a 15% increase compared to the same quarter last year [5][18] - U.S. heart failure revenue was $12.2 million, also a 15% increase year-over-year [19] - Gross profit increased to $11.5 million, a 16% increase from the prior year [21] - Net loss for the quarter was $14.7 million, or $0.57 per share, compared to a net loss of $14 million, or $0.65 per share, in the prior year [23][24] Business Line Data and Key Metrics Changes - Heart failure revenue units in the U.S. increased to 3.87 million from 3.39 million year-over-year [19] - The number of active implanting centers in the U.S. rose to 240 from 227 at the end of Q1 2025 [6][20] - The number of sales territories in the U.S. increased to 47 from 45 at the end of Q1 2025 [6][20] - Revenue in Europe was $1.3 million, a 19% increase year-over-year, although total revenue units in Europe decreased to 61 from 63 [21] Market Data and Key Metrics Changes - The company expanded its U.S. sales territories and active implanting centers, indicating growth in market presence [6][20] - The reimbursement strategy is advancing, with CMS proposing to maintain the Barostim implant procedure payment at approximately $45,000 [12][13] Company Strategy and Development Direction - The company is focusing on sustainable Barostim programs and optimizing onboarding and training for new territory managers [8][11] - The strategy includes targeting Tier one and Tier two accounts while also exploring opportunities in Tier three and four accounts [10][11] - The company is committed to building clinical evidence and increasing awareness of Barostim through educational programs [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the direction of the business and the momentum being built, particularly in sales force stabilization and reimbursement improvements [26] - The company anticipates continued growth driven by strong fundamentals and a predictable therapy [26] - Management acknowledged ongoing challenges in changing medical practices but believes reimbursement improvements will significantly reduce friction [84][85] Other Important Information - The company appointed Brent Binkowski as Chief Operating Officer, effective August, to oversee research and development, operations, regulatory affairs, and quality [27] - The company narrowed its revenue guidance for the full year of 2025 to between $55 million and $57 million [25] Q&A Session Summary Question: Can you walk us through the narrowed guidance and how it contemplates the ramp of new territory managers? - Management explained that the narrowed guidance reflects a slight adjustment and focuses on getting the new team productive as quickly as possible [30] Question: How do you measure the success of Tier three and four accounts? - Management clarified that they track data internally and provide it to reps as part of their playbook, helping them understand which accounts may be more receptive [32] Question: What are the expectations for the Salesforce reorganization and productivity ramp? - Management indicated that they expect to activate more territories and see productivity ramp up as new reps become more effective [38] Question: What are the implications of the gross margin guidance? - Management stated that the gross margin has been consistent and they expect to maintain similar numbers in Q3 and Q4 [42] Question: Can you elaborate on the reimbursement process and the transition to a category one code? - Management explained that the transition to a category one code will improve approval rates and predictability for procedures, moving away from the experimental status of category three [56][58] Question: What are the expected challenges for next year regarding adoption? - Management identified ongoing barriers related to reimbursement, awareness, and evidence generation as challenges that will persist [85]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $13.6 million, representing a 15% increase compared to the same quarter last year [4][18] - U.S. heart failure revenue was $12.2 million, also a 15% increase year-over-year [5][19] - Gross profit increased to $11.5 million, a 16% rise from the prior year [21] - Net loss for the quarter was $14.7 million, or $0.57 per share, compared to a net loss of $14 million, or $0.65 per share, in the prior year [23][24] Business Line Data and Key Metrics Changes - Heart failure revenue units in the U.S. increased from $3.39 million to $3.87 million year-over-year [19] - The number of active implanting centers in the U.S. rose to 240 from 227 at the end of Q1 2025 [5][20] - The number of sales territories in the U.S. increased to 47, up from 45 at the end of Q1 2025 [5][20] - Revenue generated in Europe was $1.3 million, a 19% increase year-over-year, despite a decrease in total revenue units [21] Market Data and Key Metrics Changes - The company is focusing on expanding its presence in Tier one and Tier two accounts while also exploring opportunities in Tier three and four accounts [8][10] - The sales force transformation is progressing, with over 35% of territory managers hired since January 1, 2025 [6][7] Company Strategy and Development Direction - The company is shifting focus from hiring to optimizing onboarding and training to increase productivity among new territory managers [7] - A refined approach to developing sustainable Barostim programs is showing positive results, targeting centers based on potential indicators [7][10] - The company is actively working on reimbursement strategies to reduce barriers to adoption for its therapy [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the direction of the business, highlighting the positive developments in reimbursement and clinical evidence [25] - The company anticipates continued growth as it moves towards making Barostim a standard of care for heart failure treatment [25] - Management acknowledged ongoing challenges in changing medical practices but believes reimbursement improvements will significantly aid adoption [85] Other Important Information - The company appointed Brent Binkowski as Chief Operating Officer, effective August 2025, to oversee research and development, operations, regulatory affairs, and quality [26] - The transition to Category one CPT codes in January 2026 is expected to enhance commercial efforts and improve prior authorization predictability [12] Q&A Session Summary Question: Can you walk us through the narrowed guidance and how it contemplates the ramp of new territory managers? - Management indicated that the narrowed guidance reflects a slight adjustment and focuses on getting new team members productive as quickly as possible [29] Question: How do you measure the success of Tier three and four accounts? - Management clarified that internal data tracking is used to guide reps on which accounts to target, rather than placing the burden on the reps themselves [31] Question: What is the expected ramp and cadence for the Salesforce reorganization? - Management expects to activate more territories quarterly and sees productivity ramping up as new hires become more effective [36] Question: Can you elaborate on the gross margin guidance? - Management stated that the gross margin has been consistent and does not anticipate significant changes in the second half of the year [40] Question: What are the expected challenges in the future? - Management identified ongoing barriers related to reimbursement, awareness, and evidence generation as challenges that will persist [85]

Core Insights - CVRx, Inc. reported solid second quarter results for 2025, with a revenue increase of 15% year-over-year, reflecting strong business momentum and sales force transformation [3][4][9]. Financial Performance - Total revenue for Q2 2025 was $13.6 million, up from $11.8 million in Q2 2024, marking a $1.8 million increase [4][27]. - U.S. revenue was $12.2 million, also a 15% increase from $10.5 million in the same quarter last year [5][27]. - Heart Failure (HF) revenue in the U.S. reached $12.1 million, a 15% increase compared to $10.5 million in Q2 2024, with HF revenue units rising from 339 to 387 [5][9]. - European revenue was $1.3 million, a 19% increase from $1.1 million in Q2 2024, despite a slight decrease in revenue units from 63 to 61 [7][27]. - Gross profit for Q2 2025 was $11.5 million, a 16% increase from $9.9 million in Q2 2024, maintaining a gross margin of 84% [8][27]. - R&D expenses decreased by 11% to $2.5 million, while SG&A expenses increased by 11% to $23.4 million [8][9][10]. - The net loss for Q2 2025 was $14.7 million, or $0.57 per share, compared to a net loss of $14.0 million, or $0.65 per share, in Q2 2024 [12][27]. Operational Highlights - As of June 30, 2025, CVRx had 240 active implanting centers in the U.S., a 27% increase from 189 centers a year prior [6][9]. - The number of U.S. sales territories increased to 47, with two new territories added during the quarter [6][9]. - The company is advancing its clinical evidence strategy and strengthening its reimbursement position, with CMS proposing to keep Barostim in APC 1580 for 2026 [3][14]. Reimbursement Updates - CMS proposed to maintain the Barostim implant procedure in the New Technology APC 1580 for 2026, with an outpatient payment of approximately $45,000 [14][15]. - The transition to Category I CPT codes in January 2026 is expected to enhance reimbursement predictability and eliminate automatic denials associated with Category III codes [15]. Leadership Changes - Brent Binkowski has been appointed as the Chief Operating Officer, bringing over 20 years of experience in medical devices [16]. Business Outlook - For the full year of 2025, CVRx expects total revenue between $55.0 million and $57.0 million, with Q3 revenue projected between $13.7 million and $14.7 million [17][18].

Core Insights - CVRx, Inc. announced that the Centers for Medicare and Medicaid Services (CMS) proposed to maintain the Barostim implant procedure under the New Technology Ambulatory Payment Classification (APC) 1580, with an outpatient payment of approximately $45,000 [1] - The proposal follows positive reimbursement developments, including Barostim's assignment to a higher paying MS-DRG for inpatient procedures and its transition from Category III to Category I CPT codes for physician payments starting January 1, 2026 [2] - The updates in reimbursement are expected to enhance access to Barostim for patients with heart failure, supporting its broader market adoption and long-term growth [3] Company Overview - CVRx is a commercial-stage medical device company focused on innovative neuromodulation solutions for cardiovascular diseases [4] - Barostim is the first FDA-approved medical technology that uses neuromodulation to alleviate symptoms in heart failure patients, delivering electrical pulses to baroreceptors in the carotid artery [4] - Barostim has received FDA Breakthrough Device designation and is compliant with EU Medical Device Regulation, holding CE Mark approval for heart failure and resistant hypertension in the European Economic Area [4]

Barostim Device & Clinical Trial Results - Barostim improves exercise capacity in HFrEF patients, showing a 19%-20% improvement versus the control arm in clinical trials[19, 37] - The BeAT-HF pivotal trial demonstrated a clinically meaningful improvement of 60 meters in exercise capacity and a -14 point change in quality of life for Barostim patients[27, 28] - The BeAT-HF pivotal trial showed a 25% reduction in NT-proBNP levels with Barostim, which is considered clinically meaningful[34] Market Opportunity & Patient Identification - The initial annual market opportunity for Barostim in the U S and the five largest EU countries is estimated at $2 9 billion[44] - The U S market consists of 6 3 million patients, while the 5 EU countries have 8 6 million patients[42] - The initial addressable patient incidence rate is 55,000 patients per year in the U S and 61,000 patients per year in the 5 EU countries[42] - Patient identification for Barostim is straightforward, based on NYHA II/III symptoms, LVEF ≤ 35%, and NT-proBNP < 1600pg/ml[47] Commercial Strategy & Financial Performance - The company aims to add 3 new account managers every quarter to create new territories and activate implanting centers[58] - The goal is to have 5 active implanting centers per territory, with each center implanting 12 Barostim units per year[58] - Full year 2022 revenue was $7 0 million - $7 1 million, with US HF revenue at $5 9 million (+118%)[67] - The company projects total revenue between $35 0 million and $38 0 million for the full year of 2023[68]

Market Opportunity & Disease Burden - Heart failure affects over 6 million people in the U S [9], leading to over 1 1 million hospital discharges and over 1 3 million emergency room visits annually [11] - The annual costs associated with heart failure are expected to reach $70 billion by 2030 in the U S [11] - The U S annual net addressable market for Barostim is estimated at $2 2 billion, assuming an average selling price (ASP) of $29,000 [37] Barostim Therapy & Clinical Evidence - Barostim is presented as a neuromodulation therapy designed to improve heart failure symptoms [8] - Barostim implantation is a 60-minute procedure with a 97% freedom from major complications [46, 48] - Real-world evidence demonstrates an 85% relative reduction in hospital visits per year post-Barostim implant (average 1 92 years) compared to pre-implant (12 months) [67] Financial Performance & Guidance - Worldwide revenue for 2024 was $51 3 million, representing 31% growth [87, 88] - The gross margin for 2024 was 84% [87, 88] - The company's revenue guidance for full year 2025 is $55 0 – $58 0 million, with a gross margin of 83% – 84% and operating expenses of $95 0 – $98 0 million [90]

Group 1 - The company reported revenue of $12.3 million for Q1 2025, reflecting a 15% growth compared to the same quarter last year, aligning with preliminary results shared earlier [5] - The company aims to establish Barostim as the standard of care in its field [5] Group 2 - The earnings call included forward-looking statements regarding financial guidance, which are subject to change based on various risks and uncertainties [4] - The call featured participation from key executives, including the President and CEO, Kevin Hykes, and CFO, Jared Oasheim [3]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $12.3 million, representing a 15% increase compared to Q1 2024 [5][19] - Gross profit was $10.3 million, a 13% increase year-over-year, with a gross margin of 84% [21] - Net loss for Q1 2025 was $13.8 million, or $0.53 per share, compared to a net loss of $22.2 million, or $1.04 per share in Q1 2024 [24] Business Line Data and Key Metrics Changes - Heart failure revenue in the US totaled $11.1 million for Q1 2025, up from $9.7 million in Q1 2024 [19] - The number of active implanting centers in the US increased to 227 from 223 as of December 31, 2024 [20] - Revenue generated in Europe was $1.1 million for Q1 2025, a 23% increase from the prior year [20] Market Data and Key Metrics Changes - The number of sales territories in the US decreased by three to a total of 45 [20] - Total revenue units in Europe increased to 59 for Q1 2025 from 44 in the prior year [21] Company Strategy and Development Direction - The company is focused on three strategic priorities: building a world-class sales organization, targeting high-potential centers, and addressing barriers to adoption [9][10][11] - A new compensation plan was introduced to align with a program-focused selling approach, generating enthusiasm among the sales team [10] - The company is working with CMS to create a level six neurostimulator APC to improve reimbursement for Barostim therapy [11][12] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about long-term prospects despite Q1 revenue performance, citing low exposure to macroeconomic uncertainties [26][27] - The company is seeing positive signs from the sales force realignment and expects productivity improvements as new hires gain experience [27][28] - Recent clinical evidence showing significant reductions in hospitalizations is expected to enhance adoption of Barostim therapy [28] Other Important Information - The company expects total revenue for 2025 to be between $55 million and $58 million, with Q2 guidance of $13 million to $14 million [25] - Cash and cash equivalents as of March 31, 2025, were $102.7 million [24] Q&A Session Summary Question: How much of the sales force changes were self-inflicted versus natural turnover? - The majority of changes were initiated by the company due to a reevaluation of the sales organization, not related to the new compensation plan [32] Question: What does the 2025 guidance imply regarding new center additions and overall utilization? - The company expects high single to low double-digit new center additions and plans to add around three territories per quarter throughout 2025 [34][35] Question: How much of the Q1 softness was due to seasonality versus sales team challenges? - The majority of the softness was attributed to disruptions in the sales team rather than seasonality [42] Question: What is the current mix of the sales team in terms of tenure? - Approximately 50% of territory managers were hired in the last 15 months, while the other 50% have been with the company longer [46] Question: Are there specific patient segments showing good signs of Barostim adoption? - There is no specific patient segment; adoption varies based on physician conservatism and treatment approaches [63] Question: What are the timelines for the potential randomized controlled trial (RCT)? - The company hopes to reach an agreement with the FDA in the next month or two and plans to engage CMS for reimbursement shortly thereafter [70][71]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $12.3 million, representing a 15% increase compared to Q1 2024 [4][17] - Gross profit was $10.3 million, a 13% increase year-over-year, with a gross margin of 84% [19] - Net loss for Q1 2025 was $13.8 million, or $0.53 per share, compared to a net loss of $22.2 million, or $1.04 per share in Q1 2024 [21] - Cash and cash equivalents as of March 31, 2025, were $102.7 million [21] Business Line Data and Key Metrics Changes - Heart failure revenue in the US totaled $11.1 million for Q1 2025, up from $9.7 million in Q1 2024 [17] - The number of active implanting centers in the US increased to 227 from 223 as of December 31, 2024 [18] - Revenue generated in Europe was $1.1 million for Q1 2025, a 23% increase year-over-year [18] Market Data and Key Metrics Changes - The number of sales territories in the US decreased by three to a total of 45 [18] - Total revenue units in Europe increased to 59 for Q1 2025 from 44 in the prior year [19] Company Strategy and Development Direction - The company is focused on three strategic priorities: building a world-class sales organization, targeting high-potential centers, and addressing barriers to adoption [7][8][9] - A new compensation plan was introduced to align with a program-focused selling approach, generating strong enthusiasm among the sales team [8] - The company is working with CMS to create a level six neurostimulator APC within the outpatient prospective payment system [9][10] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about long-term prospects despite Q1 revenue performance, citing low exposure to macroeconomic uncertainties [23][24] - The company expects to see productivity improvement and account stabilization as new sales representatives gain experience [5][16] - Management highlighted the importance of compelling clinical evidence, including an 85% reduction in heart failure hospitalizations, to drive adoption [25] Other Important Information - R&D expenses decreased by 18% to $2.5 million, driven by a reduction in consulting expenses [20] - The company plans to conduct a pragmatic randomized controlled trial to expand its total addressable market [15] Q&A Session Summary Question: How much of the sales force changes were self-inflicted versus natural turnover? - The majority of changes were initiated by the company due to a reevaluation of the sales organization [27][28] Question: What does the 2025 guidance imply regarding new center additions and overall utilization? - The company expects high single to low double-digit new center additions and plans to add around three territories per quarter [31][32] Question: How much of the softness in Q1 was related to seasonality versus sales rep challenges? - The majority of the softness was attributed to disruptions in the sales team rather than seasonality [37][38] Question: What is the current mix of the sales team in terms of tenure? - About 50% of territory managers were hired in the last 15 months, with the other half being more tenured staff [41] Question: Are there specific patient segments where Barostim adoption has shown good signs of penetration? - There is no specific patient segment; the adoption is more dependent on physician behavior and conservatism [60] Question: What are the timelines for the potential randomized controlled trial? - The company hopes to reach an agreement with the FDA in the next month or two and plans to enroll between 1,000 to 2,000 patients across 100 to 150 centers [68][69]