Merit Medical Systems Inc To Discuss Wrapsody Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jason Bednar - Piper Sandler Companies - Analyst : And Fred, I know you're listening in wish you were here as well, but congrats on everything so far and hope you're doing better here soon. Raul, I wanted to start with the '25 sales guidance for WRAPSODY the $7 million to $9 million. Totally appreciate there's a lot of factors here influencing the timing of uptake with respect to reimbursement, the VAC approval process. A couple of questions here. I guess, do you anticipate the VAC approval process to be largely addressed by the time we get through to the end of the year -- and then we can all do our own math around what the revenue exit rate might look like for WRAPSODY in the fourth quarter, but are you comfortable with the expectation today is something like $10 million to $20 million run rate exiting this year?

Question: Jason Bednar - Piper Sandler Companies - Analyst : Okay. All right. Fair enough. I guess maybe if I pivot over to the other part of the P&L here, the rest of the P&L, I didn't hear any commentary around margin assumptions. I think in the past, you've characterized WRAPSODY as being very much margin accretive. You don't have to hire a new sales force, but also we're also understanding your manufacturing might not yet be optimized. You might have some necessary spending around initial marketing, account on-boarding and things like that. Should we think of WRAPSODY as immediately accretive to margin and earnings this year? And are you willing to offer color on what the margin contribution from WRAPSODY looks like when it does get to greater scale? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 9:30PM, MMSI.OQ - Merit Medical Systems Inc To Discuss Wrapsody Call

Question: Gursimran Kaur - Wells Fargo Securities, LLC - Analyst : This is Simran on for Larry. Very helpful presentation. Maybe just a follow-up on Jason's question around the 2025 WRAPSODY revenue assumptions. Appreciate kind of all the color that you guys have laid out I didn't hear ASP. So is there an underlying ASP or range that you can point us to? I know you said that it is a premium to the competitors, but any finer point there?

Question: Gursimran Kaur - Wells Fargo Securities, LLC - Analyst : Got it. That's very helpful.

Question: Gursimran Kaur - Wells Fargo Securities, LLC - Analyst : Got it. That's very helpful. And maybe just to parse out the launch cadence throughout the year. I know there's moving parts with the price, the path or payment coming online, VAC committee processes. But I believe for office-based labs and ASCs, it's a much simpler process to get access to devices like these. I think it would be helpful to maybe just walk through how the launch could be different in different sites of care. And could we see potential upside from a faster launch in office-based labs and ASCs? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 9:30PM, MMSI.OQ - Merit Medical Systems Inc To Discuss Wrapsody Call

Question: Steven Lichtman - Oppenheimer & Co., Inc. - Analyst : Thanks for the call. Caleb, you mentioned the initial market opportunity, the 95,000-or-so stent units going in today. What do you think are going to be the key steps to getting at the larger TAM beyond that currently treated population?

Question: Steven Lichtman - Oppenheimer & Co., Inc. - Analyst : Okay. Got it. And relative to pricing, how much should we think about that being variable based upon the success you have with NTAP, et cetera, in the middle of this year?

Question: Steven Lichtman - Oppenheimer & Co., Inc. - Analyst : Great. One last quick one. Based upon the approval now and the increased visibility on WRAPSODY, what impact do you think it could have on your -- outside of the US WRAPSODY business?

Question: James Sidoti - Sidoti & Company - Analyst : Can you hear me?

Question: James Sidoti - Sidoti & Company - Analyst : Great. So you started off the call talking about -- saying that this is the first of the line of products. What other products can you develop using this technology? And will future products require PMA? Or now that you have this approved, will you be able to use 510(k)?

Question: James Sidoti - Sidoti & Company - Analyst : And then can you give any detail on your sales outside the United States, how this approval affects those sales and the size of those markets?

Question: Craig Bijou - BofA Global Research - Analyst : Great. Congrats on the approval. So I wanted to ask on the pricing program and I appreciate the fact that you guys are going to have a different strategy for each of the different sites. In the prepared remarks, Dr. Patel mentioned that pricing was going to be or could be a factor in adoption. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 9:30PM, MMSI.OQ - Merit Medical Systems Inc To Discuss Wrapsody Call So I guess, specifically, the question is, that pricing program or the pricing strategies that you have, are you considering the profitability of WRAPSODY at a certain site versus a competitive product? I guess, is that how maybe a little bit of how you are trying -- how you came up with the pricing strategy? I guess I'm just trying to get an understanding of the site profitability with WRAPSODY versus some of the competitive products.

Question: Craig Bijou - BofA Global Research - Analyst : Okay. And then maybe just a little bit on the training strategy for docs. It sounds like it's going to be pretty easy to adopt for most docs. But maybe if you could just expand on how we should be thinking about that ramping throughout '25?

Question: Jayson Bedford - Raymond James - Analyst : Maybe just to pick up the last line of discussion. The term physician advocates, I was just a little unclear. Is the inference here that the 250 physicians drive the $7 million to $9 million in revenue meaning at $5,800 that's five to six procedures per physician?

Question: Jayson Bedford - Raymond James - Analyst : Okay. So you expect to have more than 250 physicians performing the procedure in '25? Is that how I understand it?

Question: Jayson Bedford - Raymond James - Analyst : Okay. And then maybe for Caleb, the 95,000 stent procedures that you mentioned, what percent of those are inpatient, outpatient/ASC or OBL? Maybe I missed it.

Question: Jayson Bedford - Raymond James - Analyst : Okay. Perfect. And then one of the potential limitations that Dr. Patel mentioned was just the larger diameter sheets. Can you just talk about the internal efforts to reduce or the ability to reduce the size of the sheet?

Question: Michael Petusky - Barrington Research - Analyst : This is sort of touched on, but I guess I want to just drill down a little bit on this issue that Dr. Patel raised in terms of the outpatient saying, where he said the choice of device use is extremely price sensitive. And I guess just relative to your targeted premium pricing. How did all that sort of weigh in as you were thinking about sort of the ASP and where you guys landed?

Question: Michael Petusky - Barrington Research - Analyst : Okay. Great. And just a quick second question. In terms of success you guys might have with VACs, GPOs, IDNs, I mean you sort of called out some specific names and groups you're targeting. I mean as you get sort of wins, you get the ball across the goal line with some of these organizations. I mean, would that be like something on a conference call where you would actually call out, hey, we got Atrium across the finish line or do you plan to update on that at all?

Question: Michael Petusky - Barrington Research - Analyst : Okay. So even on conference calls, even on quarterly conference calls, you wouldn't update?

Question: David Rescott - Baird - Analyst : Can you hear me?

Question: David Rescott - Baird - Analyst : Congrats on the progress here. A lot of the feedback that we've kind of uncovered so far here on the space. It does seem to suggest that if you have the ease-of-use clinical outcomes reimbursement all in place. It's something that some of these docs likely would look to switch to or shift to primarily utilizing WRAPSODY and the vast majority of their procedures are having a bulk of their procedures being with a single product, again, whether it's you guys or another player. When you think about the initial $7 million to $9 million for the year, are you kind of expecting a broader increase in utilization across the activated physician base? Or is this something where you could have a skew of some higher end users and the rest of them kind of moving up the curve. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 9:30PM, MMSI.OQ - Merit Medical Systems Inc To Discuss Wrapsody Call

Question: David Rescott - Baird - Analyst : Okay. And then as it relates to the existing kind of Renal division that you have out there on The Street today. Can you remind us, I guess, what the head count is for that group. And when you think about delivering something for the upper end, if not above $7 million to $9 million for the year. And then even as you look into ramping that into 2026, is a lot of the upside or growth beyond $7 million to $9 million more baked on just increasing utilization per account or per territory. Or do you think you need to maybe invest behind the head count to grow this thereafter '25?

Question: William Plovanic - Canaccord Genuity - Analyst : Just the first question, you gave us the average pricing for WRAPSODY CIE across the different cell points. What's the coverage tend to average pricing today?

Question: William Plovanic - Canaccord Genuity - Analyst : Okay. Great. And then in the 250 basically KOLs that you're targeting the trainers, of the 95,000 stents that are done today, what percentage are covered by those 250 docs? Is this like an 80-20 rule where they're doing most of them? Or how should I think about that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 9:30PM, MMSI.OQ - Merit Medical Systems Inc To Discuss Wrapsody Call

Question: William Plovanic - Canaccord Genuity - Analyst : That's fine, Raul. I can appreciate that. And then I think the last thing is just -- it looks like it's doing simple math at you're expecting to get about 1/4 -- 1.25% to 1.5% of the market at the average ASP and whatever the procedures. As we talk about -- I'll actually switch back. As we talk about the reimbursement, TPT and NTAP (inaudible) decision in June, did those turn on July 1, August 1, September 1? I'm just trying to figure out the cadence of your work and you're pushing, you're trying to get in there. When that reimbursement comes on, I would imagine that's a huge inflector point. So what -- when it turns on, when would -- are those July 1 dates on both of those? Or how should we think about that? And in June, the decision -- actual decision point on both of those? Or is there something else in between kind of as we go through the process of getting NTAP and TPT on?

Question: William Plovanic - Canaccord Genuity - Analyst : But typically, given what you know, do you expect that to be a July 1? Or is that like a September 1? I mean I just don't know, given the process, I'd imagine your consultants have at least advised on what's most likely.

Question: William Plovanic - Canaccord Genuity - Analyst : Thank you. This does conclude today's Q&A session. I would like to go ahead and turn the call over to Raul for closing remarks. Please go ahead.