ShockWave Medical, Inc. (NASDAQ:SWAV) Q3 2022 Earnings Call Transcript

Adam Maeder: Thank you.

Operator: Our next question is from Bill Plovanic with Canaccord. Please proceed.

Bill Plovanic: Hey, great. Thanks for taking my questions. I’d like to zero in kind of on the guidance and maybe on the US coronary. In the past, you’ve kind of provided us and maybe I missed it on what the reorder rate was on C2 in the US. And just as you think about the fourth quarter guidance, it looks like the US coronary sequentially is kind of the slowest quarter we’ve seen nominally since the launch of C2. And just some of your thoughts is do you think that may be €“ are you just starting to hit kind of more of a penetration rate where it will be a little slower sequentially going forward, or was that potentially summer slowdown that we saw in the quarter? Thanks.

Isaac Zacharias: Yeah. Hey, Bill. I think we chose this quarter to provide a little more color on long-term coronary and how we’re going to get it from where we’re at today which we’re pleased with to where we think it can be. And from a kind of launch metric standpoint, we’ve now — we’re 18 months into that launch. So the kind of metrics on centers and who’s using both and reorder rates. That’s it. Everything is moving in a consistent direction with what we’ve reported previously, but it’s just not very interesting going forward as we’ve launched most of the accounts at this point. We still got some to go, but we’ve launched most of them. I think from a sequential standpoint in the quarter, we expect it to be a strong quarter for Q4.

So we’re — again, we’re pleased with the momentum. I think as you — as we get through launching the accounts, now it’s going to be more of a focus on driving penetration within the accounts. And I think we got the structure and the tactics going forward to make that happen. And also we’re really focused as I said on the call to close out our M5+ launch in the US this year so that we turn the corner next year, we’ve got that conversion of accounts to M5+ behind us and we’re focused on penetrating all the product lines that we have versus flipping accounts from M5 to M5+.

Bill Plovanic: Okay. And just clarification from Dan. Just when you said for fourth quarter the operating margin, you think it will be consistent and except for maybe the R&D line could move around. I would assume that there might be more R&D spend in the fourth quarter versus last. And then on the P&L, how do we think about taxes? You basically don’t pay taxes. Do you think you’ll start paying taxes? And if so what should we plug into our models? Thanks.

Dan Puckett: Sure. And — yes, we expect more spend in R&D in Q4 than Q3. On taxes, at the end of 12/31/’21, we had $351 million in NOLs. So we’re burning through those. And once we burn through those, we’ll have a nominal rate about 25% that’s 21% US, 4% other.

Bill Plovanic: Thank you.

Operator: Our next question is from Michael Polark with Wolfe Research. Please proceed.

Michael Polark: Hey, good afternoon. Thank you for taking the questions. Clearly not evident in your performance, but I am curious for anecdotes on what you see in the field. Staffing challenges is kind of catch all description, but what does that really mean for your customers day-to-day. Kind of what limitations are most pronounced and kind of how did 3Q in the cath lab versus the first six months of this year?