Penumbra Inc at JPMorgan Healthcare Conference (Virtual) Transcript

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

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Okay. Well, great presentation, Adam. And maybe we could jump into some Q&A here. Again, feel free to send questions if you want. We also have Maggie Yuen, the CFO of Penumbra joining us for Q&A. So Adam, I want to give you congratulations. I think you win the award for biggest preannounced beat in the fourth quarter so far of all the companies that have reported. So I want to start there and spend a bit of time on it. Let's start with the Peripheral business. And clearly, Lightning 12 has just had a huge launch. Maybe you could give us the initial thoughts on how that contributed to the quarter? And how much it really added to growth? 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 12, 2021 / 3:50PM, PEN.N - Penumbra Inc at JPMorgan Healthcare Conference (Virtual)

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : And Adam, Lightning 12 essentially took your venous business from minimal to substantial. I just want to help set expectations as we move into 2021. CAT 7, you already have a really healthy arterial business to begin with. So should we think of this as adding anywhere close to the same dollars to Penumbra as Lightning 12 or think of this as more of a nice incremental addition?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Adam, a couple of questions coming in here. I'll group them together. The gist is on Lightning 12. In the venous space, there's -- you and Inari are 2 of the newer products. We also have Boston Scientific. But given that you're more focused in this space, it gets a lot more attention. Inari has a good product at a higher price point. You have a good product at a lower price point. So I'm getting questions from both angles, but basically, the gist is, what's the strategy at the lower price point? Is there any room to a bit higher over time?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Great. Maybe if we could shift gears a little bit from peripheral to the Neuro business. And there's been a lot of moving pieces throughout 2020 and just recently with the recall of XTRA FLEX. Maybe before that and we get to some of the impact going forward, I want to spend a minute on fourth quarter. And it looks like on my math that international neuro had a really good quarter and bounced back from what we've seen. How much of that was inventory rebuild? And how much of that -- was it just better underlying fundamentals, if you could give us a sense of the quarter?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Adam, a question that came in here, it's been something people have been asking you since the IPO road show. And it's really -- what is Penumbra's competitive advantage? And how durable is it? This is an area where you compete against a lot of different large, well-established companies, yet you continue to innovate faster and outmaneuver them time and time again. So what is it that really keeps Penumbra ahead of the competition?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Maybe Maggie, I'll bring you in here. And I know you haven't given guidance for 2021, but maybe I can ask a question this way. You put up a run rate that in the fourth quarter here, that's about $690 million, if you annualize it. The Street is sitting at $645 million for 2021. That didn't really include much of a quarter's impact from XTRA FLEX. So maybe just I'll ask you, do you feel like you're very comfortable with where the Street is for next year? And do you think there's probably more upside given the fourth quarter number you just put up?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Got it. Do you think we'll get a full year's worth of guidance on the fourth quarter earnings call coming up? 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 12, 2021 / 3:50PM, PEN.N - Penumbra Inc at JPMorgan Healthcare Conference (Virtual)

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Got it. And maybe one more on XTRA FLEX here. It looks -- when I look at my numbers, when I look at Street numbers, I took about 75% of the lost sales out, assume 25% migrate over to another product, took out some access sales along with it, it looks like the Street was a little more severe in its cuts and basically took all XTRA FLEX sales out with no transition out to a number of products. It's only been a few short weeks since the announcement. But Adam, any way to help investors think about how to play around with our models and how much of those sales you can capture into other products?

Question: Robert Justin Marcus - JPMorgan Chase & Co, Research Division - Analyst : Well, great. I didn't get to talk about REAL VR. Maggie, we could talk about a lot more in financials. But unfortunately, we're out of time here. So Adam and Maggie, thank you so much for your time. Wish you a good conference, and I hope everybody enjoys the rest of their day.