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XENT Intersect ENT

Participants
Jeri Hilleman Chief Financial Officer
Tom West President & Chief Executive Officer
Robbie Marcus JPMorgan
Richard Newitter SVB Leerink
Brian Weinstein William Blair
Matthew O'Brien Piper Jaffray
Chris Pasquale Guggenheim
Ravi Misra Berenberg Capital Markets
Kyle Rose Canaccord Genuity
Call transcript
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Operator

Good day and welcome to the Intersect ENT Third Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note, this event is being recorded.

I would now like to turn the conference over to Intersect ENT'S CFO, Jeri Hilleman. ahead. go Please

Jeri Hilleman

Andrew. Thank you,

today Intersect is and me West, Tom of ENT. CEO Joining President

approval clinical begin, performance, remind statements and are obligation which reimbursement upon Federal our Before will contained or like anticipated update assumptions and events I'd we to studies, products time uncertainties, codes, reports file and risks forward-looking from materially result our salesforce statements herein. any results and in revise timing of for those the outlook new of and procurement could Actual risks differ to we make other such you with limitation, within of indications, meaning estimates a from undertaking laws. as coverage based include as statements any the of forward-looking growth, or to time without the Securities in and disclaim financial of as forward-looking detailed SEC. which we that these well current We

the I'll now call turn Tom. to over

Tom West

back a on and as our that can at this meaningful first ENT the days that progress to beginnings. happy reflect time. confidently in view October is I XXX Looking quarter of now further completed third Intersect I've what my in new I I'm report time and a on progress

taking would sustainable now in success. are XXXX execution in focused on We refining noted remained was financial we consistent time growth the revenue a sound our to communicated strengthening necessary growth ensure quarter as enter expectations return the to and we August. we Our with at performance and precursor driving actions I and the and believe that to that be

our communicated on our priorities the on commitments PROPEL door growth focus access sales with both two, you to SINUVA these while redirecting One, market execution, will partnership. August during we to aligned adding efforts reemphasizing the remain businesses. and Together, open call. as effort; Importantly, our delivering earnings we

of pipeline ASCEND are the in to meaningful this results the drug-coated balloon clinical development received quarter addition, and findings product. the the applying In we study further

of a areas XXXX efforts with walk now on positioning you we through each our I'll how these current us for and see three beyond. focus

PROPEL. addressing issues business, recent of focus by been on a impacted but and has growth the remains bandwidth our product backbone by First, caused SINUVA. family This distraction disproportionate

During our third specific to that three ourselves to on actions PROPEL. in quarter you a to to call, put were restore to we we committed position over deliver time growth going

and development clinical to The adoption. first bridging was by deeper reprioritize growth to drive support to activities market broader our evidence

balance launch. meaningful PROPEL, efforts was supporting our second meaningfully to still the greater bring team's the of to sales a on strengthen The greater SINUVA -- while focus

to we And back could on that that in down striving PROPEL our down the communicated three inventory finally, ASP, quarter. up drive work to while orders often we simultaneously and accumulated pleased discounted addressed inventory points in any channel. successfully third the build you I'm pull tell of larger these intention bulk to all

interactions market physicians activities. and some effort we share have refocusing considerable To with clinical put to into emphasize development our selling specifics,

encourage evidence of PROPEL; use the three, a clinical the PROPEL one, substantial our using to; number all of leveraging means development market indicated in of and sinus extend usage of PROPEL, audience physicians two, patients; sinusitis For areas cavity. expand chronic wider across the

teams sales our across cases. clinical the field held In designed benefits refresh to approach August, message. sinusitis toughest meetings beyond our the country just a back-to-basics with with proven PROPEL's we extend regional

messaging. clarify workshops marketing ensure that building and these and help mastery best sales targeted practice and interactive of During led prioritize our segment, and objectives, leadership physician our skill meetings, universe our

targeted PROPEL and drive to in product and deployment deeper order franchise a by broader was our expert direction to clear selling and The adoption. tailored more prioritize growing clinical

ENT quarter new has helped sales full first managers, approach reimbursement our was seven coordinated SINUVA QX and This greatly of our our core specialist balance, to regional resourced XXX-person salesforce team, team. fully partnership our XX-person our team the Regarding improve of effort. account balance among their

primary selling in SINUVA a to a requirements of the PROPEL drug attend clinical away of Previously, of reimbursement our inherent with demands team from to drawn versus of a new sales care distinct was introducing site a device.

office. skill, resources will drug effort you address whereas ambulatory as introduction. in specialty of primarily This a specific the have our primarily and SINUVA's clinical groups and recall, growth our PROPEL, time the hospital in that that We with classified is classified as field ASC, knowledge, is to core. is focus device smaller reestablish in a is greater and and renewed center, used the SINUVA primary selling with used and PROPEL the can and in now frees come allocation to deliberate clinical reimbursement force needs drive surgical

SINUVA As selling. work the SINUVA our prioritize the regional new account manage SINUVA in demands, proportionately reimbursement driving assist team directors managers of much PROPEL and and sales can

also that continue in and the our measurement tracking we improve and Year. accordingly quarter to efforts compensation New expect strengthen field incentive will this fourth adjust balance as We of into the and

third tightly PROPEL encouraging grown customer us and largely product the quarterly In this issue existing inventory inventory procedure-driven for behind our Finally, where on more year-end. the reducing continue by assessment to we at of believe in consciously we end achieved shelves quarter, beyond shipments shelf goal aligned limited had the utilization to we flow, be will usage. customer of customers order our

clinical efforts we are year are But PROPEL our naturally and this of you order procedure-driven know a and achieve and expect PROPEL point a flowing with both of premature I in of purpose on focus confident market growth to pipeline, proportionate PROPEL. a development ask it's better to that our next conveying indicate with what will we level we sense more more reestablish will focus selling, that hope we Though renewed on growth. we progress. At

we SINUVA, all designed of a adoption. advance to to have product Turning number initiatives coordinated significantly

and access assurance of reimbursement of But patients feedback the strong in We coverage the from key office adoption ease physician clinical of physicians. continue and to product setting. determinant receive remains very

our we discussed And key efforts. exceeded bringing even last and we we in tell committed we happy that to deliverables, these achieved As to the last particularly our our call in pharmacy I'm set to of August. call, partners, in goals support in stronger execution are on you specialty

month, last a we the well access SINUVA. support focused ties in new to both on payers physician specialty Specifically, with added new to pharmacy hub a streamlining physician as national as

J and supporting code wholesaler. also commercial of newly contracting We we are an and the additional issued on use finalizing are payer CMS specialty

we provide as third-party investigation. facilitate me some Since to Let with launch, further have on service physicians hub to benefits a capabilities. these work new referred partners to patient engaged and a background provider

hub patient Our addressed this it to able our understand ConnectiveRx. easier technology-enabled process. basics processing to been to we expect first a faster, the case, In to strengthen making with physicians this partner of authorization more better, for benefits status. have But coverage services translate more hub transparent and technology-enabled we

Our new up and partner running was on Xth. October

and into phase to as analytics the new We these with well through XXXX. operations eye an as services are data as we working start-up enables expand move the the hub

very with journey. Orsini mid-October, chronic fit We specialty specialty Healthcare. to partner throughout exceptional a We care their their is see in on SINUVA as pharmacy providing nationwide also in rhinosinusitis. strong an services new focused added a patients important pharmacy, Orsini

critical about we ingredients We today. are excited offers have partnership been Orsini the two addition missing as

payers. a with array broad of payers has major Orsini including established First, arrangements national

is benefit addition claims product needs medical medical checking pharmacy I number the Orsini benefits look just that they benefit Second, in payer review medical at of SINUVA. processes claims the policies versus on a to and for require mean, patient formulary.

The Orsini to Up specialty medical for via benefit now, the physicians open specialty capabilities benefit a door have to SINUVA required medical receive patients fulfillment through claims buy-and-bill for distributor. pharmacy. at

belt, need physicians purchase the is or when specialty product to seek impact give field you reimbursement very With pharmacy clearly but it's early a only assessment too they buy-and-bill As three not is a reports advantage to of early from are reminder, do the as under full of encouraging. weeks Orsini's required. do the fulfillment that for our

code, in remains specific in a side the specific October this has SINUVA mix on work is Xst. element price. progress of code as the which a assign became to the Another Implementation effective yet J reference CMS JXXXX, Medicare

effective price posted anticipate with this X. We be that are CMS working and will January

we On code of determine estimate Commercial and these that of the their many payers in side, billing where to specific is J SINUVA XX% code payers patients own are positive systems the their The utilize true to are J covered. ease pricing SINUVA. payer for commercial adoption. starting already for a

for J XXXX underscore code specific addition assigned office also the for office is care. the to hospital I'll setting In or PROPEL than reimbursement setting ASC. rather of in in for the coding SINUVA, providing

serve will office. flip use adversely code the physician to are practices on We dollar reimbursement or for J PROPEL coverage PROPEL the with of per the side, to the value in the office in engaged and that broaden of potentially impact payers the assess

is of QX. the scenario treated to this approximately start In XXX of commercialization a now element X% SINUVA basis, business, representing patients been X% since product of an in with approximately metrics On revenue. either XXXX a of with roughly increase patients our small have PROPEL

ordering. XXX Since have in SINUVA, launched with engaged one-third buy-and-bill successfully about XXX physicians patients of which about have treated or

Another to supporting of to XX% continues that SINUVA. SINUVA access lives very with coverage currently for positive grow is having factor approximately payer covered our

physicians code believe is J flows established office. should efficiency and physician in code burden partnered SINUVA the streamline insurance depth and hub The product growth believe the The the Looking pharmacy we with further streamline obtaining at new used. should J consistently once more workload reimbursement use and population. and specialty the our of breadth buy-and-bill a against increasing the while processing being through the able SINUVA reducing to that increase fully broader we ahead, when reimbursement adoption that channel changes confidence in offices will the should ENT stimulate patient pharmacy physician's

is adding we specialty a lot the of And a over to enhancement progress and said, that quarter, by potential. all an of national as So full With additional reach. a look our work by minimum, pharmacy unlock means done. lot we to change at our SINUVA's anticipate next further as a no past spring

In additional our the in to add with support for addition, hospital near a customers. wholesaler term on specialty focus improving we particular clinic intend

With the expansion demand clinical months, we are generation we the place coming effectively our placed in efforts. partnered to patient further put better and infrastructure, in channel ramp up and now have

subject sinus our drug-coated our to come investigational third we now balloon. area, And ASCEND,

disclosed trial was endpoint, of few obstruction. patency completed balloon conventional a against As or our hit ASCEND independent an claim upon weeks a and of based superiority the not did view a ago, accessor's lack primary which we sinus

to unchartered patency the was as conventional measurement novel proved relatively This our for for be challenging grading territory product balloons. endpoint and and of

As XXX(k) governed our stents. PMA and as much as devices conventional study clinical had delivering balloons have NDA not drug

drug-coated our of study endpoint at ASCEND was of comparable Importantly, the all control balloon primary nearly the observed the the looking and performance across data, the of patency. parameters when to at trial least measured relative including

differences showed and statistically In reduction measured addition, balloon mometasone significant secondary positive to our time inflammation meeting polypoid importantly, reduction directly polyps, are including include of statistically and day drug, XX. attributable in at endpoints endpoints important in at all the several physicians to drug-coated edema, These statistically that furoate. significant in points significant

steroid trial of demonstrated oral serious through adverse and our events related in for balloon also the significant drug statistically were We events the observed. no there XX. adverse a ASCEND device-related were component to day reduction Further, the need no in interventions drug-coated

study. of this study serve not earlier that As a kind study, pivotal a its as we might first clear communicated

can drug work clinicians committed our now upon remain We with with patients PMA. if believe submitting their is delivery we'll with the clinical to assessing drug-coated balloon a we closer for very innovation and devices. trial encouraged based studies team role by of further the to chronic localized benefit play But prior results, examination are next of we portfolio Our evidence sinusitis. in to FDA of the needed the steps leading and are determine our

to towards balloon To new of prioritization this, support portfolio to drug-coated the all the clear pathway adding platform evidence access future. PROPEL, a summarize commercial focus SINUVA, physician on and a renewed and capabilities in to

Jeri to and to Now on outlook. turn our financials the let touch me over call

Jeri Hilleman

year our $XX.X of included last revenue down XX% PROPEL, XXXX. Thank from revenue X% of $X.X you, million $XX and over on up Tom. from the To of total of quarter, SINUVA the touch from QX revenue third of million, million revenue quarter

We the inventory in QX in $X.X maintain customer the that lowered of million commensurately. $X estimate over approximately also we growth million prior to outlook We which XXXX. for of accumulation flat quarters, our sold cleared our results range

year. of margin previous and for guidance Gross the remain quarter as XX% in quarters. third our with Accordingly, past consistent XX% on track anticipated XX% was to the we with

next to lowering to effective from as certain and utilization of gross we margin do operations. earnings overhead forward expect rate designed anticipated the efficient improvement, an noted ramp-up more year, see of develop last modest call, Looking of resulting we to for in some process manufacturing spending and the

Beyond and overhead to strong current this, our returning do levels utilization efficiency work revenue, anticipate over gross plan. regain through as process improvement we our time we margin ramp and

Regarding $XXX as million we our with incur maintaining setup operating the we onetime QX outlook range, expenses expenses, this are in million spending $XXX to such market access changes. in increasing costs supporting as

Finally work our the to net to quarter was continue cash second position the quarter the cash in our revenue believe of in the ramp burn we end XXXX. we have a $X in that approximately position strong a as of to million quarter. million at third cash usage with $XX similar We

to back call the Tom. turn now me Let

Tom West

our emphasize set for effectiveness and ENT embracing the am focus commitment access. execution, and proud conclude to market prepared me sales strengthen how both of the direction we let their Intersect I we Before our remarks, team to

Further, clinical I quickly and a innovation the to and are history success true the we chart results. company believe teams following making R&D the study a progress. forward of ASCEND are remain with and We course deliberately and responding

Our usage the create in this important pipeline. goals such opportunities establish restore history. I delighted have growth company's team opportunity at lead future broad to to to remain SINUVA our to PROPEL, the through of an am exciting moment and

the to lines. on your Andrew you address we Thank open you and the and would your please time will for questions. your attention line remain

Operator

first from comes [Operator of Robbie Instructions] Marcus go ahead. Please JPMorgan. question The

Robbie Marcus

had have quarter Thanks morning a from out morale needed good of changed company there start the at you to good I what was far of a have? functional do on you we thoughts and could what level your to And both and get Tom, you congrats on and since was here. the and come hoping company just turnaround? impact in you've practice plan so terms anything company? in to And if

Tom West

Good certainly and Thanks Yes. Robbie. too. questions nuance

really tackling I change execution the opportunities measured is a we focus kind at of and go how think and we most the we the important change hand more cultural problems deliberate, on How do more and get that have? rigor. about

the in that intentional sales adding execute? And But manifests in a being clarity very we that of very being chartering being internally about many metrics programs we positively measure really a how And force what in ways about intentional how performance doing. people we're It's that's itself new key received more have in it field. and is the sense deliberate, company. I direction as think shift greater of on the more

Robbie Marcus

how set And maybe awareness about reeducate How be just What need the going out the code? re-launch expectations revenue in acceleration it investors there an with is code J it some the benefits for of SINUVA, launch? of that here And the on reimbursement? to much should steps help -- forward? How is should we place. you J there's to focused easy should this everyone be much here of think have you on shifting the you as product now of now over are

Tom West

Thanks Robbie.

be slower I think expectation set think it's to to I a going build.

cognizant be the really of to is the Initiating therapy have the in ENT behavior that the office. changing fact We in to drug office ENT new setting community. we're

clinically, code to build practice most practice it only medical oncology a physician's the and how to been train a for desire place on assignment buy-and-bill, capability some office-based and the appropriately. use of staff ophthalmology for benefit, time, got of discern in new it's While but benefit, to pharmacy that's the been to that's in it we've between not J

people the will we've anything the pharmacy it we've And in but I the to with advantage -- the of them pharmacy taking them. really time adopt built. the which takes true for use code of of place. specialty But that's think think J and of capability and hub tools We put also benefits simplify, that

Robbie Marcus

a Thanks lot.

Operator

ahead. go SVB of Richard next comes Leerink. from The Newitter question Please

Richard Newitter

Hi, a thanks for couple taking I the have here. question.

business about the think quarter its down should quarter. was some know on could the I impacted beyond? PROPEL working us just we that was if update inventory the through work into and hoping anything by way Just in fourth how that you I

I PROPEL see the is on reacceleration to And which you on topic better thesis have launch? that or until naturally execution? the SINUVA that some know of Does confidence just same help why that mean part there of start you the benefits reimbursement that should

the being Does at you can that in rather have mean time with on PROPEL that put to you're to of for just a place? the do as two trying than things more lower until SINUVA them the whereas much focus once reimbursement productivity kind focus angle going is at

I'm a into we for basically PROPEL the -- XXXX? think sense get of guess XXXX end truly I can business reaccelerate -- that trying the should quickly just into to how how

Tom West

Sure.

two we just So to about to had million out overall. $X were to took believe range inventory, built we said the on we your call, last to million relative question, up. parts that our million first as stated of the in we I of $X $X channel been $X.X inventory of million

have So of to bit in a we work the still quarter. do fourth

But year. close behind that as be I us I we noted largely out will the think as

spend as So the expertise and have to and out that's SINUVA's more and that SINUVA end to between address XXXX. of reimbursement our environment be that not SINUVA in on built Relative by directors emphasis PROPEL time back clearly as not we've can team head we focus experts why burdened our to to be that headwind into selling to and look questions office reimbursement well. clinical regional our balance -- free should PROPEL a resource is provide to

to both in the the success. driving key products clearly But are end

much better pendulum better really measurement, physician audience the called-on and way. of that segmentation swings will the want our to be that too and where don't extent to get metricing, us we balance. better other to And enable So that's universe the

And that's we're striving what balance. a better for is

you'll neither in to one steady build is going our predictable overnight steady think I but both businesses, growth up it rise on both. a goal is see tear to

Richard Newitter

SINUVA? just about there. of be all see thinking much these you when then to start unfolding. reimbursement positive XXXX. the probably Got reluctant impact Tom. one it: and think color developments appreciate last maybe for to what the to we But We're as move one, do just on specifics -- too I give some think can needle you're we and actually Realistically them of going

thinking Or ramp, a away? you to ourselves? give maybe quarters I think something as help just Thanks. is there get sequential we be think away? ahead of to color quarters so any think SINUVA should Two you of? the And thinking should in could don't when about that we of this improvement three sales? Is us sense us start just we

Tom West

Yes.

on the we either to was think execution, focus look turn steady to is not I growth In think predictable the PROPEL to progress. about somewhat back-to-basics more a we one better and really business. way It's steady think back better by that which get overnight can is business message. mature we it for better going targeting, case have of that our theme

With And ramp. SINUVA it. the We it the -- specialty takes the in good code. behaviors about of pharmacy, tools new time that tools hub, patients new access time new feel to the use to we're market still somebody J to to provide teaching any training you're product, order the

next steady an in But predictable suddenly I think Steady what us. for immediate you progress, it progress. you quarter the timeframe. look expect from flip steady don't in growth or see is should should to

Operator

comes William question of The Brian next Blair. from Weinstein

Brian Weinstein

Thanks for force executive morning. on bit? regrettable and where make question. to you had on then your additions as Are in stands? sales that coming you're start give as Can us departures the kind you you team little other need the members? trees just shaking relates on there Have the team. any of update that an all a Tom it to your we taking any can team maybe and Hey good to

Tom West

new you would and fall Sure. an in CFO Thanks through been to Brian. we've is have that is we expect in order. the Most to a relatively and process obvious a one that short to announcement conducting bring

gracious me the and allow her in the our to months. to honoring her commitment early New move been me to the these on bringing has curve early learning in we're Jeri to Year. part up supporting through of And committed

So make the groundwork CFO business right that announcement of able there first we is relatively to to got soon. order clearly and the be an feel we've

fundamentals that is deliberate In continuing it more build and and it's execution intentional. terms to one And well we with order program of business under bit that's a and more the is the of culture might absolutely to the capabilities, measure on create as little our it commitments. internally other the as around titles, to radar the to in in management, deeply while analytics on the a back culture bigger relative be of performance that think, execution wish to delivery kind of how I

question kind for about embraced turnover, your had looking executional up that been grateful the I'm had we commitment. their I'm have leadership and to And sales sales sales though demands for have force, any a performance the that And not bit. we team the the of even abnormal dialing

keep to So no we're there the But, for unusual and turnover. and to going respond. look for striving no performance team strong changes again,

Brian Weinstein

continue put looking specific of you metricing for little other do? about it on course evaluating better reps, that. at but then, guys of follow-up, you're idea specifically the what a are as analytics, more want bit ensure what to you can and them than Great. appropriately And is field you this when to you is focus Thank revenue be being reference that you that to a in putting

Tom West

Yes.

procedures prescribing their them types different to comes expand segment was our -- of How back So there use universe. we and opportunity What appropriately how a really, of much to would in utilization? and understanding granular more understanding where they segmentation their do behavior? physician level is it in

on proven most PROPEL difficult things for we the of broader much sinusitis patients. chronic of One use the clinically PROPEL The and is, a lot my sufferers. is hear audience of use is, reality I

physician it's within business. it. we So individual being our behavior at indications a our is that really the the that grow and about level, understanding by how and product an appropriately to about granular comes order measuring, It's detailed using it's changing how and with metricing are follow-through in

Brian Weinstein

need is additional infrastructure I mean, IT is that? this that for? do it able to at something And add you spending to do point, anticipated still be to

Tom West

No, not of we'll material IT don't a level. I expand think infrastructure. need to

to I data think need able we better new will have of CRM that and more to train in don't with be and and rigorous advantage place the better additions, data and and them our third-party data we be teams take populate already see. analytically systems driven, then use that but I to

Brian Weinstein

Thank you, guys.

Tom West

Thanks, Brian.

Operator

comes of Piper Jaffray. next ahead. Please go The from question Matthew O'Brien

Matthew O'Brien

just Good follow-up I morning. wanted taking the questions. for things. Rich's question PROPEL on Thanks side to of on the

million that took inventory all of all? out all, I PROPEL to you or in $X you said, million QX. think revenue, product Is first first of $X.X PROPEL of

would quarter X% was And a the range? grown X% reduction? in little the back not here inventory QX growth your you in out, secondly, in actually something had been for that you at did if procedure to that have So then bit

Tom West

Yes.

inventory. higher to million, billion demand you PROPEL? And, relative fact and been have yes, took we amount had would $X revenue it procedure not would to higher $X.X about the have have -- it been that been if down think first, I Yes, of would inventory, demand the all is. mean, down So, that pulled we is

a way commitment going back a direction stand. we clear where that were candidly procedure-driven that much sales you were of we more field bring to to organization more the managing we down in and predictable business much and flow, order the understanding our and to get But our to

bite took we little Yes, the line, and So done. to move do again. was a would that of what good do of but a we've about right revenue it feel bit it the I out

Matthew O'Brien

Tom. great, That's Okay.

business you go And some it there some well. the more was So field disruption the in how or reeducating terms where is the those discounting? way same were force probably you no activities retraining QX after of of selling additional on fair market? to on done up at all bulk say, this so that as then PROPEL into sales the also, And were in to your changing to was based that time

Tom West

Yes, we in I regional in out have maybe that bit. the month team I the demands of a field August. the anything the norm folks you of little had of but pressing meetings to some the speed up to We're the out order mean, how of year undue. don't on our think of bring and of significantly terms fall course training. in Nothing would throughout really direction folks,

So I take another of may think terms was that, I been for unusually in credit disruptive. we have wouldn't don't it encountering. headwind

Matthew O'Brien

have just you I'm is Okay. would during probably you trying business -- doing something I activities what think the business, like grown quarter. not which here, digits to it, I'm PROPEL triangulate these actually base the can more see the are that mid-single without all

XXXX to efforts some of your is much, despite what but refocusing wanting a doing, get the on just you of base general into that not have early too organization. again, business So, sense the

Tom West

it do able to SINUVA XX% take back grower. a in messaging doing predictable get That's then clarity to what what should a bring predictable the off. the be make playing a not of calculations is, and is piece growth. for. right we can go appreciate you're steady I'm in back running I while business, to of again, I And the and we thing But Yes. Again to begins let's think likely level well terms intention, PROPEL real the of myself. I But the that I'll important same back-of-the-envelope the engine field of confess

Matthew O'Brien

And Got just it. then, one more one. real quick

SINUVA really I with what the How new to do providers everybody better would pharma this -- got is kind is critical need a in you accelerating now are and distributor do place wholesaler what you new call You've the Or now? XXXX have year? good spec on next to of the right say pharma growth in spec meaningfully product? for think

Tom West

Yes.

I we we're want our think better. to specialty addition in good with it pharmacy, of the make new shape but

capability better add bring addition. looking on in So medical our we materially the and that's both, think equation. pharmacy I a can benefit, pharmacy, in a benefit particularly key we're potentially our they because the But to another new specialty process have in

Matthew O'Brien

much. Very so helpful. Thanks

Operator

The next ahead. from Please Guggenheim. question of Chris go comes Pasquale

Chris Pasquale

want boxes terms Yeah. product checked market to like happen from to all push mean, a needed little the just to challenges bit Thanks. resolve SINUVA sounds mentioned here? of the things that in previously that I in on holding I that it the trajectory back. access the were you've

board, pick You've hub, specialty you've start shouldn’t code, things on new the upgraded the up got to have partner this so the quarter? J pharma what's you And why left?

Tom West

key I teaching patients put the in how in of physicians the and we've know see tools think, good like news product. product that and the all changing behavior now to use we that's The the is benefit the alike, place. environment. We're that offices left practice groups office is, to the

of an and now happen It's this much just that. again, the of really It's the burden we've oncology of don't ophthalmology the But that we've it's about how it that mentioned office kind and I we'll And has terms expectation I the categories. experience are in that are building other more therapy These are ENT changed the initiation office. the reimbursement, to drug with comes in all behavior set that tools to manage to lined and that initiating want overcome up be used -- therapy staff the seen overcome. practice in to things overnight. in can get going office.

Chris Pasquale

on are mentioned competitors balloon you side, there then, And the products. sinuplasty XXX(k) the Okay.

than you going been that the pursuing the were guys randomized commercial of superiority trial requirement. you for that regulatory to was has impression the something a potential enhance really specific rather product, are my So

have that the that how going And the clinic are getting do of you it? that out just mixed way back more the about now Is to generate maybe a product stronger you characterize to think approved? trial, try there? to trade-off relative that to claim competitors between and right And the a

Tom West

really a question, good That's Chris.

directional got the after credit run. conventional Interestingly, head. which claim superiority the of are was nail the You on area preceded significant for hit the that home that here superiority good. statistically claim. me the quite not and a that but going team courage balloons in for They went attribute we I in the superiority give for and

correct. one very viable of reducing steroid that XXX% share product can while a reducing very, still in all capture a a an in believe and and that established polyps is benefits delivering the viable we you're of product use, There performs balloon. well is inflammation, commercial That terms reducing But very oral market.

Unlike we're and for. on the where in SINUVA, that's playing we beneficial my with a incremental already of to a perform commentary balloon, the have the market case drug-coated claims that's market building in there worth potential

Chris Pasquale

Thanks.

Operator

Capital The Ravi from next of ahead. go comes Please question Misra Berenberg Markets.

Ravi Misra

the appreciate I call. question. question the taking comments on for you My SINUVA. on structured thank the was Hi,

either of that competitive being Some of gathering from around the established. an checks seems it this and into terms large actually the nasal regularly. our it or is it's being In pharmaceutical that using a a be I'm those it. devices are there of and to used at How armamentarium? And doctor's environment say basis? some the out polyps. are of options drugs fitting in around how kind treat Just basis can and doctors of device with established wondering steroid We injectable very accounts curious AAO just distribution the -- being there's that were or reimbursement again

Tom West

terms of of days what within kind early be level Yeah, to of it's armamentarium. definitive in able usage of say to the use the pattern still the

of we that in of the and that itself alternatives of other the I relative would unique our bring benefit I to thing expansion the the the we the highlight bring drug device is of combination stent. physical stent radio think SINUVA that

in also a localized we level the drug it's because location an of delivery, also the that We need implantable. compliance corticosteroid bring and enforced be, drug of it that should you bring the

XX to get physical days full us You're puts radial coverage of real imposed and That localized to drug combination that. where other in position delivery unique don't a against compliance. same have provide the of that going benefit expansion, offerings

Ravi Misra

maybe just not you as market can term, in XXXX. on ahead see device? us market Thanks. calibrate this what of I there Great. But And do PROPEL PROPEL, your that you view appreciate of to you're the get terms growth growth longer still then is And you is? skis going an help for above

Tom West

Yeah.

me two And and to million $XXX encouraging assumed surgeries each very is those offer talking up that Are excess for roughly come I is of of that the number for, $XXX PROPEL terms would guess, million. eligible. for PROPEL So surgeries. we of with the is market -- simple growth in you the FESS XXX,XXX I of envelope back total care site FESS certainly which we come is we're are because about if of to about you them, tough the by total of in surgeries? at talking of market a available

say disciplined, us upside a to suggests continued So certainly take growth. our $XXX will predictable game are to will part. able there's be but rigorous steady I time. level a targeted should not it. deliver we that against I'm in It PROPEL a It see efforts the more to our room million me of and of is here execution grow on take effort ample into lot where audiences to end that brand, that fairly

Ravi Misra

if Great. the more Thanks. And I can ask pipeline. on one just

balloon. R&D the an comments from I appreciate the Just on perspective,

just you So to been we the company. balloon about your this you least, talk Historically anything expect have clinical hitting us guys at good should of what out very else until targets. at can

perspective? terms you curious an growth from where organic a Just opportunities Thanks see of for lot. in

Tom West

we ASCEND order Yeah. doubt with the about business Well, data that, conversations with the hand. first FDA informed have in it's And work upcoming on is No that. our by complete obviously, to be to of balloon. going the

working other innovation. things Beyond steady are that comment pipeline a other to cadence on and going to bring in I'm we terms continuing to look of to say, of than we forward not

the our marketplace would bringing with that is use steady product say the to committed are ability and innovation definition where how enhances cadence am news I to But when we claims, that and to innovation. I and both me for community's bringing physician to understand just of new clinical products. And our

of order balloon. business is First the

Operator

a there follow-up Mr. Was Misra?

Ravi Misra

No. Thank you.

Operator

ahead. comes question of next from Kyle Rose Please The Canaccord go you. Genuity. Thank

Kyle Rose

the Great. taking call. for very you Thank much

to days. from a I So been -- you've just think wanted Tom XXX in this team for

moving year about a growth take broad changes. made view year mean, you here? growth do the when XXXX turnaround strokes I step probably setting and is we obviously that the You've in more this towards think -- a something should I of about of in up it forward. actually around line for is putting can the you the structural and a lot How Or time turning organization path happen on XXXX? a transition think back in guess XXXX?

quickly And then question just second my ask I'll here.

things sort. you've the about rigor investments lot you that Help and the a continue made Or us have talked we to invest will and and analytical of understand investments You in beyond? of those team seen to need XXXX already? in

Tom West

Got it.

when really growth expect question the when and go first think new latter show get new a occasion to that think will I time. it was turnaround. XXXX be a build clearly the going would there's of to part the how on going the signs kind be do point your the and momentous we the XXst don't to What time because is turnaround. it towards of is the moment I beginning of to July pivot moment over So can year and “turnaround.” we part about better growth you that say show than of will don't muscle to rigor we front as it. accelerating the there's see progress is And a I'm steady against and in this endeavoring more build and with

that's we're going slow it's for. be steady to I planning think and what and

in investment, of don't any terms I approach. change our investment expect precipitous In

the dollars will do the that changes things We need and necessary to go. make we necessary have we as the we

convey rather big big I'm really and a changes. seeking steady jokes progress again to of story than So of

Kyle Rose

just And of XXXX? to Great. you've changes should selling on price just compression? about orders One, incentives. from sales that then the questions talked large any two changing with you think in how we me. some about of more And focusing And made -- then away structure and from having also have dynamics more kind force compensation focusing

mix unit Am -- see positive starting also a selling pricing as to less How drive like because effort, XXXX, mix then more we thinking utilization we discounting showing dynamic and but pricing more feels focused well. should about just appropriately? if positive should it you're we in should that see you're I if

Tom West

you think Yeah, are. I

Nothing me in take continue with minimal ASP steady you had let able our some increases might you pricing ASP but effect. And dramatic should booking see time. adversely in downwards not modest I ASP pretty the So segments. we've that We've been to but sustain the price. see to holding that impacted very been first. think in pressure other We over

that regard. feel I we're good position strong a in So, that in

Your other question was…

Kyle Rose

those of incentives? compensation about force how and Sales thinking you're kind

Tom West

comp. sales Oh, Thank Right. you.

want whether the that. a appropriate on minor don't whole I engaged substantial comp made not year, in is some plan But leadership determining in the major. are more this We right now sales the about to team the We -- Sorry tweaks not XXXX. change or for within and year. change

teams comp direction in. the the their products also priorities. on got headed field are that organization. there SINUVA, placing that to consistent that recognizing we're that be structure specialty But we've on for the because priorities it's and sure are to reflect That's we're appropriate make our announced PROPEL, that focused game would our we say to sales we on upping incentives that And with therefore, haven't their continuing SINUVA, particularly it should our premature have,

Kyle Rose

Great. Thank taking for you question. the

Operator

the like [Operator Instructions] This would back turn over closing for our concludes question-and-answer conference session. Tom to West to remarks. any I

Tom West

support Really for you your Again everyone your moments, interest to days. for grateful And interest in of number your Thanks Thank coming touch. you. look staying and know us we Yeah. coming with in we'll I attention. joining a appreciate today. forward be the greatly and and speaking

Operator

for concluded. you presentation. attending now has conference The today's Thank

disconnect. now may You