AtriCure, Inc. (NASDAQ:ATRC) Q1 2024 Earnings Call Transcript

So, whether or not we are going to see kind of uptick on that, we are not going to put that out there right now. I do think that the LeAAPS trial long-term plus the continued innovation will drive this market out for a long period of time.

Unidentified Analyst: Great. Thank you.

Operator: Thank you. [Operator Instructions] Our next question comes from Danielle Antalffy with UBS. Your line is open.

Danielle Antalffy: Hey guys. Thanks so much for taking the question. Just to Mike, you are going to be so sick of talking about AtriClip after this call. But I am going to ask one more question here and I would love a little bit if you could more color on where you see the most adoption, I mean I know Medtronic has barely any presence on the open ablation side of things. But they do have some legacy users there. Is it adoption in open procedures where an AtriCure ablation is being done, like is it broad basis trialing or is it more specific to one area versus one product than another?

Mike Carrel: And maybe to be clear, I mean we are trying everywhere. I mean it’s all over the country. It’s so you are definitely seeing them in markets and in almost every market around the country. I would gather that most of it has to do with good relationships. Medtronic has some good relationships that accounts, that’s probably where they have targeted first and gotten into it in terms of where we have noticed. But of course it’s definitely happening in procedures where AtriCure has gotten ablation going on and then they are testing out and using the Medtronic product on that front. So, we definitely see it there, but it’s happening everywhere and they have done a full launch on it. They have talked about it, they have marketed to it and so we see them all across the country.

Danielle Antalffy: Okay. Got it. So, it doesn’t sound like there is any difference in your uses and procedures being done where an AtriCure open ablation also being done, it sounds like you are seeing some stock pick-up expenditure in that procedure as well.

Mike Carrel: That does happen for sure, yes.

Danielle Antalffy: Yes. Okay. Alright. And one quick follow-up on [indiscernible], I mean another really good quarter. So, just trying to get a sense of how much of this is new center add versus same-store sales. I think you guys have talked about new center adds sort of not as much of a focus, more focused on driving adoption higher at existing centers. Can you talk about whether that continues, are you seeing more new centers come onboard, any color there, that would be great. Thanks so much.

Angie Wirick: Yes. Danielle, I would say across the board, the new centers add very little revenue to any individual quarter and that to a tee for each of the franchises. When I think about each area of the business, we do continue to add accounts. I would say in some places like our pain management business at a much faster pace than other areas like our EPi-Sense accounts. That being said, we are adding new accounts just at a slower pace. So, the revenue that you are seeing in the first quarter 2024 is largely from existing customers with some incremental pieces from newer accounts that over time will become much higher revenue contribution.

Danielle Antalffy: Thank you.

Operator: Thank you. [Operator Instructions] Our next question comes from Daniel Stauder with Citizens JMP. Your line is open.

Daniel Stauder: Yes. Thanks. So, it’s my first one just on international sales. EnCompass Clamp has European launch later this year and then I think you said EPi-Sense also be introduced internationally. And you are coming off a strong growth year outside the U.S 2023, so just wanted to ask, how should we be thinking about international sales contributions this year, at a high level as we model and throughout the year?

Angie Wirick: Yes. Daniel, when we look at our international business, just really pleased with the developments and the activities of that team over the past several years. We are leading to an accelerated growth rate. You saw that throughout 2023 and that repeated in this first quarter to start 2024. Our expectations are both of those products steerable EPi-Sense device. We do have the original EPi-Sense device on the market. But the steerable device, the EPi-Sense ST is right now in the process of a launch. We expect that to be a nice catalyst for that business where they just have done very much fewer converge procedures, so we are hoping that that’s a nice catalyst for that area of the business. And then the EnCompass Clamp, our hope is that that’s much later in 2024, once we have been through EUMDR approval, and ready to launch on that.

But our hope is that’s a really solid catalyst for our open ablation business, much like you have seen here in the U.S. I think we are all aware that pricing, a little bit more sensitivity in the international markets, but I think ease of use of the device and the differentiated technology give us a lot of confidence that this is going to be a really great product for that market. So, longer term, we have said look, U.S and international generally at the same growth rates, I think you have got a lot of reasons based on historical performance and some of the catalysts in our international markets to say that might be bigger leading edge of growth.

Daniel Stauder: Great. And then just one follow-up on the pain management side, you talked about the plus and the max helping with the time aspect, but just wanted to ask more about progress in gaining direct reimbursement. I know there is a handful of studies in this area, but what your mind moves the needle in terms of gaining reimbursement for these products? Thanks.