ShockWave Medical, Inc. (NASDAQ:SWAV) Q4 2022 Earnings Call Transcript

Page 5 of 11

So I can treat eccentric I can treat longer lesions, with C2+ and bifurcations, where I would have otherwise maybe have to burn two catheters now I can do a full case with that 50% increase in pulses. So our impression, and it’s an impression so far is that the deminimis sort of second catheter cases that we may lose because of the extra pulses will be greatly outweighed by the incremental cases will pick up because of the greater treatment dose persist if you think about that way, that’s going to be inherent in this catheter. So I don’t – I certainly don’t think you’re going to see any decrease in unit numbers as a result of C2+. And then Isaac you can talk about sales force optimization.

Isaac Zacharias: Sure, yes so – good clarifying question, Bill. We are just – we talk about optimization, it’s really geographic optimization, optimization of how many FCSs each territory has and optimization of how many accounts are in each territory. And I mean the key to that is as we — goal is to launch two products per year. And the more accounts, obviously, a territory has the less time you can spend in each account, the more diluted your presence and your messaging becomes and the more products the rep has to sell that dilutes again. So as we bring in more products into the bag, L6 this year, C2+ next year, we’ve got two more on the slate or C2+ this year, two more on the slate next year. We want to have these territories right-sized in terms of the number of hospitals. So that the people servicing the territories on our team can spend adequate time at all places within the hospital that they need to be selling.

Bill Plovanic: And then just clarification on Travis’ question on operator margins on the core business, I want to be clear, so at least stable to improving op margins in the core business, including the acquisition. Is that a fair way to think about it? And thanks for taking my question.

Dan Puckett: Excluding the acquisition, this is Dan excluding the acquisition we should be fairly stable. We’re going to invest heavily in ’23. Sales and marketing, like Isaac alluded to earlier, we’re going direct. We’ve got some other initiatives in place. R&D we’ve got 20-plus programs. So we’re going to invest, but we’re going to be fairly stable with that heavy investment even.

Bill Plovanic: Yes ex-acquisition.

Dan Puckett: Yes. And then you’re going to top the $30 million this year, even if it’s a short year, we got some work. And we’ll find out once that deal is closed, but you’ve got to factor that in on top of it.

Bill Plovanic: In the levels that make 100% clear, I mean, you ended at a 29.5% operating margin in the fourth quarter. Is that the base we’re building off of?

Dan Puckett: No, I’d look at kind of the blended – for the year, where we ended up — we should improve off the year. We ended up at 25%, I think, for ’22. So we should get a little improvement. I’d expect OpEx for the full year to be about the same in ’23 as ’22 as a percent of revenue.

Bill Plovanic: Thank you.

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

Michael Polark: Okay, thank you maybe a non-core opportunity for Rob here. Great update on the TPT pathway. The question on NTAP was also asked, and I’d love just a little more meat on the bone there are puts and takes around the sunset of that booster payment. Will it matter for customers using your products, if not, why not?

Doug Godshall: Yes, I’d be happy to answer that, but Rob will do a better job. So I’ll let Rob take it.

Page 5 of 11