We noticed a pause of three, four months before they start considering patient number 3, 4 and 5. And that part was driven by two elements. One is seeing the effect of the device on their own patients. But second, most importantly, and we did not understand the impact of that, was understanding the payment level because the TPT is still seen as an obscure way of getting payment for hospitals. The calculation for [indiscernible] TPT is very complicated and very few administrators at hospitals understand how the accounting works for that TPT. So after doing a couple of patients, they wanted to wait to see the payments coming back. So at least one of those two elements, we expect would be alleviated by having a code with a simple code, a simple number, just adjusted for the ZIP code, which is — they understand how it works.
So I cannot answer quantitatively yet. At this stage, it would be the answer will be on the qualitative, Robbie.
Robert Marcus: Great. No, that’s helpful. And maybe as you think about balancing, as you talked about in prior questions, balancing your cash burn with now the updated label and the finalized reimbursement. How are you thinking about balancing OpEx spend to drive sales rather than just cash preservation. What goes into the decisions? Why is the amount of OpEx you’re spending the right amount? If you spent double it, do you think you’d be able to double your sales? Thanks.
Jared Oasheim: Good question, Robbie, right? I mean the simple question is, have we proven the model, right? And I think we have two more years of experience after the IPO, showing that we’ve been able to add three territories on a quarterly basis while continuing to see that overall productivity per territory increase as that number continues to grow. And as we see more feedback from customers after the new label from FDA, and after the new code has come out, we’re going to continue those conversations as we see the results of those conversations and reactions from physicians and patients through our DTC campaigns, I think that’s where we will continue to make some tests, right? And I think some of those investments are baked into the guidance that we gave of the $86 million to $90 million to start, seeing is there opportunities to continue to spend a little bit more because the goal at the end of the day for us is to help more and more patients.
And if we can do that at a faster pace while not diminishing our cash balance too quickly, I think we’ll take advantage of it. But that’s something that we’ll continue to work on throughout 2024.
Robert Marcus: Great. Thanks a lot.
Operator: Our next question comes from the line of Bill Plovanic with Canaccord. Please proceed with your question.
Bill Plovanic: Great. Thanks. Good evening. And thanks for taking my questions. I’m going to start out with — you mentioned on just the list price increase in 2024. If I could just there’s always a big difference between list price and the ASP. Just kind of curious to what extent are the — if you could quantify that for us. And then just we’re a bit surprised your R&D expenses come down a lot. How should we think about the OpEx spend in 2024 relative to ’23 as it relates to the SG&A versus the R&D? Like so in R&D, are there any major new projects kicking off that we should think about? Or is this kind of the run rate for that going forward?
Jared Oasheim: Yes. Good questions, Bill. Thanks for the question. So on the list price, there was a 10% increase on the list price for the U.S. business. So — and seeing an increase from a $35,000 less price up to $38,500. So that’s where all of the contracting discussions will start as we move into 2024. And then going down to the OpEx guide and the split between R&D and SG&A. As I mentioned earlier, the vast majority of that increase is going into SG&A. As you can imagine, we saw a bit of sunsetting of the BeAT-HF clinical trial as we went throughout 2023. And so that’s driving some of that reduction as we march through 2023, especially into the fourth quarter, seeing that trial close down those expenses turn off and we’re able to reduce the overall spend in research and development.
. What we have going on right now, we’ll have some smaller projects within research and development like our post-market registry, continuing to do some investigator-initiated research programs with different sites that are proposing them through our program on our website. And then we continue to do some early work with designing the next clinical trial. And Nadim has talked about this before, where we were admitted to an advisory program from FDA for one of our breakthrough device designation, specifically our ejection fraction above 35% patient population. And so we’ll continue to look at that trial designed to see if we can get to a point where we feel comfortable that we can win the trial and not spend too much money and decide at that point in time whether or not we want to kick it off.
But at this point, that’s not baked into the guidance in the spend for 2024.
Bill Plovanic: Okay. And then if I could also ask since we’re working the P&L here, just on the gross margin. I’m trying to understand the guide on the gross margin is 83% to 84%. You’ve been solidly at 84% or above for the past three quarters. What are the dynamics that would cause the gross margin to go down next year, especially considering you’re likely to have stable to increasing ASPs and higher volumes.
