Penumbra Inc at Wells Fargo Healthcare Conference Transcript

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

Question: Larry Biegelsen - Wells Fargo - Analyst : So Adam, let's start with a big picture question. You set a goal of $1 billion in revenue by 2023. You clearly achieved it. Broad strokes, how are you thinking about Penumbra's next billion-dollar revenue growth, and how do you get there? Of course, I'm not asking for growth rates, just the drivers.

Question: Larry Biegelsen - Wells Fargo - Analyst : Got it. All right. We'll drive -- jump into the growth drivers. But first, on the guidance, you lowered the '24 revenue guidance due in part to a more conservative approach. What is management's current approach to guidance? And why has it changed? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 6:15PM, PEN.N - Penumbra Inc at Wells Fargo Healthcare Conference

Question: Larry Biegelsen - Wells Fargo - Analyst : Got it. And we'll definitely get to the other stuff. Just a couple of more guidance questions. You lowered the guidance by $60 million due to a variety of factors. How much or any of it do you get back next year? So for example, $20 million in China, $15 million from Europe.

Question: Larry Biegelsen - Wells Fargo - Analyst : You talked about the SKU exits, I think. I guess I understand you don't want to talk about specific markets. We've talked about this before. But are you willing to provide an aggregate number of how much that's impacting 2024 so we can evaluate the underlying business?

Question: Larry Biegelsen - Wells Fargo - Analyst : Right. But in terms of quantifying the SKU exits at the beginning of the year when you guided, it looked like it was about $40 million. And does that -- is that close?

Question: Larry Biegelsen - Wells Fargo - Analyst : All right. So transitioning to the thrombectomy business. The US thrombectomy business missed street estimates by about $5 million in Q2, and you lowered that guidance by about $20 million. Why was Q2 lighter? And why did you lower the guidance? I mean that's your key growth driver.

Question: Larry Biegelsen - Wells Fargo - Analyst : So you had a good Q2, still growth rates-wise. US -- well, US vascular thrombectomy grew around mid-20%. You talked about venous and arterial each up in high 20s, and coronary growing low double digits. So before we talk about Neuro, what's driving -- what's the outlook for the US vascular thrombectomy business?

Question: Larry Biegelsen - Wells Fargo - Analyst : It sounds like we should check the trademark database or -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 6:15PM, PEN.N - Penumbra Inc at Wells Fargo Healthcare Conference

Question: Larry Biegelsen - Wells Fargo - Analyst : All right. We'll keep looking. Adam, that's helpful. I mean, clearly, you're the market leader on the arterial side, and that's Bolt. On the venous side, you've gained more share in DVT than PE. You've said that before.

Question: Larry Biegelsen - Wells Fargo - Analyst : So you feel like with Lightning Flash 2.0, you're catching up.

Question: Larry Biegelsen - Wells Fargo - Analyst : Yes. I mean I think at JPMorgan, you gave share of numbers of DVT and PE that was catching up.

Question: Larry Biegelsen - Wells Fargo - Analyst : And you talked about the competitor issues. I guess there's two issues. One is the ClotTriever XL issue, and then the FlowSaver issue. You alluded to both of those. Which one is having more of an impact in the market, from your perspective?

Question: Larry Biegelsen - Wells Fargo - Analyst : And PERT is next week. That's a big meeting.

Question: Larry Biegelsen - Wells Fargo - Analyst : What are you -- what do you think will come out at that meeting that's noteworthy?

Question: Larry Biegelsen - Wells Fargo - Analyst : And I know you want to talk about your own product, but returning -- what is unsafe about returning blood to the patient?

Question: Larry Biegelsen - Wells Fargo - Analyst : Got it. So the three new products you have coming of CAVT, does that still include one this year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 6:15PM, PEN.N - Penumbra Inc at Wells Fargo Healthcare Conference

Question: Larry Biegelsen - Wells Fargo - Analyst : Okay. And the only thing -- I feel like the only thing you really said on the new product is other vascular beds. I mean people have interpreted that to mean below the knee. That's about the only kind of, I think, clue you've offered. Is that fair?

Question: Larry Biegelsen - Wells Fargo - Analyst : Okay. The other two are -- remind me again?

Question: Larry Biegelsen - Wells Fargo - Analyst : You have said they're peripheral. Okay. How are you thinking about the market growth in general for peripheral? There's a ton of studies going on, like seven outcomes trials, randomized controlled trials, including one of your own. Do you think these trials are going to just keep the trajectory of, call it, 20% growth for the market, or we could see an inflection?

Question: Larry Biegelsen - Wells Fargo - Analyst : Just to go back to PERT next week, you're not aware of any like new data coming out there, positive or negative. It's more of the physician just discussion that you were alluding to earlier? I looked at the program, it's not obvious. There's no --

Question: Larry Biegelsen - Wells Fargo - Analyst : Got it. Is there a specific day we should be there? And you made a comment earlier about Lightning Flash or Lightning Bolt in Europe. Is there any change there in terms of like CE mark approval?

Question: Larry Biegelsen - Wells Fargo - Analyst : Okay. So you haven't announced a CE mark for those products.

Question: Larry Biegelsen - Wells Fargo - Analyst : Okay. Got it. All right. So turning to Neuro. You had a strong quarter in the second quarter for US Neuro, about 20% growth, I think. The market has gotten pretty crowded. And the interesting thing is we're seeing -- so Adam, there's two approaches. It's like stent retrievers, and you pursued aspiration. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 6:15PM, PEN.N - Penumbra Inc at Wells Fargo Healthcare Conference Now we have these aspiration companies pursuing large bore aspiration devices, right? 088. You alluded to it a bit on the call. You're pursuing cyclical aspiration or you call it, I think, something else. But there's companies pursuing that, like you, and there's companies pursuing these large bore catheters. Why is Thunderbolt a better approach?

Question: Larry Biegelsen - Wells Fargo - Analyst : So you think basically, they're too big, they won't be able to -- they can't --

Question: Larry Biegelsen - Wells Fargo - Analyst : Makes sense. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 6:15PM, PEN.N - Penumbra Inc at Wells Fargo Healthcare Conference

Question: Larry Biegelsen - Wells Fargo - Analyst : Adam, we ask you this all the time, but time line on Thunderbolt. There is -- you've got public database out there. The company -- I believe the companies are responsible for updating it. Some update it regularly, some don't. But your update, the clinicaltrials.gov has the THUNDER trial

Question: Larry Biegelsen - Wells Fargo - Analyst : Okay. And you're happy with the pace of enrollment, it sounds like?

Question: Larry Biegelsen - Wells Fargo - Analyst : Good. And what impact do you think Thunderbolt could have on your stroke businesses? Should we be thinking about the analogs for peripheral?

Question: Larry Biegelsen - Wells Fargo - Analyst : Adam, I'm going to go back to peripheral, if that's okay. We don't have perfect information, but we try to look at your share gains within -- in venous, and you gained a lot of share over the last year, but the share gains seem to have slowed a little bit in Q2. The question is with these differences you talked about between your product and competitor products, do you think your share gains can reaccelerate?

Question: Larry Biegelsen - Wells Fargo - Analyst : So Adam, so let me ask you. We've done surveys, two, I think. In the last year, we've talked to doctors. I understand your perspective that returning blood might be -- is unsafe, okay? But there's still some doctors who think that your product --

Question: Larry Biegelsen - Wells Fargo - Analyst : Are there still physicians out there, because we see it in our surveys, that still --

Question: Larry Biegelsen - Wells Fargo - Analyst : Are concerned about the blood loss with Penumbra product.

Question: Larry Biegelsen - Wells Fargo - Analyst : So it's just people that have not tried it yet. Okay. And that's fair. I'm sure not every doctor has tried it.

Question: Larry Biegelsen - Wells Fargo - Analyst : So the concerns people might have had in the past about blood loss, that will go away, if you will, when they try --

Question: Larry Biegelsen - Wells Fargo - Analyst : I didn't have a chance to ask you about 2025, but maybe we'll skip that this year.

Question: Larry Biegelsen - Wells Fargo - Analyst : I'll let you off the hook.