ABIOMED Inc (ABMD) 2014 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Abiomed first quarter 2014, earnings conference call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. (Operator Instructions)

As a reminder, this call may be recorded.

I would now like to introduce your host for today's conference, Susie Lisa, Senior Director of Investor Relations and Corporate Development. You may begin.

Thanks, Ashley, and thanks, everyone, for joining us for the Abiomed first quarter fiscal 2014 conference call. I am joined today by Mike Minogue, Chairman, President and CEO, and Bob Bowen, Chief Financial Officer of Abiomed.

The format for today's call will be as follows. First, Mike will provide you with strategic highlights for the first quarter. Next, Bob will provide details on the financial results outlined in today's press release. And then we will open up the call for your questions.

Before we begin discussing the first quarter fiscal 2014 results, it is necessary to remind you that during the course of this call we will be making forward-looking statements, including statements regarding development of Abiomed's existing and new products, the company's progress toward commercial growth, and future opportunities and expected regulatory approvals.

The company's actual results may differ materially from those anticipated in these forward-looking statements based upon a number of factors, including uncertainties associated with development, testing and related regulatory approvals, including the potential for future losses, complex manufacturing, high quality requirements, dependence on limited sources of supply, competition, technological change, government regulation, litigation matters, future capital needs, and uncertainty of additional financing, and other risks and challenges detailed in the company's filings with the Securities and Exchange Commission, including the most recently filed annual report on form 10-K, and quarterly report on form 10-Q.

Listeners are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this conference call. The company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances that occur after the date of this release, or to reflect the occurrence of unanticipated events.

Lastly, comparative references made financially in this call to revenue, expenses, margins, or other increases or decreases will be indicated by references to first quarter of fiscal 2014, as compared to the first quarter of fiscal 2013, or first quarter of fiscal 2014 as compared to the prior fourth quarter of fiscal 2013.

I'm now pleased to introduce Mike Minogue, Abiomed's Chairman, President, and Chief Executive Officer.

Thank you, Susie. Good morning, everyone. We are pleased to report our first quarter progress. Abiomed increased total revenue by 10% year-over-year, to $42.7 million for the first quarter. While we had a slower April in the US, May was our best month and included our best week and best day we have reported in Impella history.

The Scientific Physicians Societies in Europe, Japan, and the United States have embraced the clinical need around the science and therapy of percutaneous circulatory support. Hemodynamic presentations and case studies have now become mainstream at the medical meetings.

We believe the Impella technology is now recognized by the major regulatory agencies as a new product category based on first-of-its-kind catheter VAD technology.

Our execution this fiscal year on the regulatory approval processes is critical because it will transform Abiomed and create Impella as the new benchmark for percutaneous heart pumps. As a result of this progress, we will execute our plan around these 4 strategic goals for fiscal '14.

Number 1, maximizing the customer satisfaction and patient management experience with product quality, clinical training, and optimal outcomes. The size of the US field team continues to expand to 5 zones and 125 field employees. We are investing in our field on-site support and hospital training, as well as a more interactive 24 hours a day/7 days a weak clinical call center staffed with 7 experienced technicians and nurses.

Our company offers this valued service, which may impact the outcomes of critically ill patients. Therefore, it is imperative that we help optimize the patient management experience and train appropriately.

In April, we conducted our annual National Field Team Meeting, and provided face-to-face training. Additionally, we completed 8 employee headquarters training courses and 7 physician events within the quarter. We expect our first half training to provide a return in the second half of the fiscal year.

Goal number 2 is achieving significant patient and revenue growth. We have now grown double digit for 15 straight quarters. In Q1, our patients exceeded our reorders. Some sites were [drawing] down their Impella 2.5 inventory in anticipation of receiving Impella CP, and others are reacting to healthcare reform initiatives by reducing overall inventory. As a result, we predict higher quarterly growth for the rest of the fiscal year.

Patient utilization of prophylactic and emergency circulatory support represented 49% and 41%, respectively, with 10% in the all-other category of total usage. We continue to preserve our discipline to limit quarterly news site openings and maintain low customer inventory levels.

Goal number 3 is supporting the medical community to publish manuscripts on hemodynamic support, patient outcomes, and cost effectiveness. There were 7 publications regarding Impella within the quarter. The Protect II Cost Effectiveness Study was published in the American Health and Drug Benefits Journal, and provides insight into the costs associated with out-of-hospital adverse events, and repeat revascularization.

Additionally, the original Protect II publication in circulation made the editor's picks as one of the most read articles and most important manuscripts published on the topic of cardiovascular interventions within the last year. We encourage all investors to read both publications.

To remind everyone, Impella is now incorporated into 4 different guidelines, and has dedicated hospital DRG and physician CPT codes from the US government for established payments.

We believe our focus on publications and cost effectiveness has been critical to our reimbursement in the US and recent approval in the Netherlands.

Now I would like to spend the rest of my time on our fourth goal. Executing on our clinical and regulatory processes in order to achieve approvals in Japan and the United States.

We are tracking ahead of our last-reported 515 schedule on our modular Impella PMA submission. A modular submission is summarized by a PMA shell, which outlines the modules, provides a table of contents, and a plan for submission, and identifies information necessary to support the filing and approval of a specific class III product through a combined IDE PMA process.

We were pleased to report today that the FDA has formally approved our PMA shell, indicating that they agree with our approach and are ready to receive the 3 components on preclinical and testing, manufacturing and quality, and clinical data, all submitted within 5 modules.

Today, we are also pleased to communicate that we have already submitted 40% of the modules to date, and will have approximately 80% submitted by September. The remaining 20% of the submission is a clinical module which is planned for a February submission to allow for ongoing FDA input. The FDA has already reviewed and provided written feedback on our clinical summary and proposed indications. The FDA will review each module within 90 days of submission.

A key data point to note is that for all patients in Protect II, Impella significantly lowered the primary endpoint of major adverse events at 90 days per protocol, with a P value of 0.023. We believe this is the foundation of our rationale for reasonable assurance of safety and effectiveness for the use of Impella in high-risk PCI patients.

However, we are also augmenting this data by describing the totality of the Impella clinical experience, hemodynamic science, and consistent 5-year safety record, with now over 15,000 US patients supported, making it the most widely used heart pump in the country.

Our overall clinical summary incorporates 8 years of clinical studies referencing over 200 publications. Specifically, 3 FDA studies, including 225 randomized Impella high-risk PCI patients, 20 Impella high-risk PCI patients from Protect I, and the peer-reviewed published Impella registries totaling 319 patients.

This Impella product was initially cleared by the FDA in 2008, after completing the 510(k) review process, which included peer review publications and the Protect I FDA Safety Study.

Unlike standard PMA submissions, PMAs filed as part of the 515 process, provide the FDA access to real-world clinical experience. In the case of Impella, the FDA will have access to 5 years of US clinical experience and mandatory company reporting of readily available medical device reporting safety records. Until this 515 process is completed, Abiomed operates under the existing Impella 510(k) clearances.

The FDA PMA review clock starts when the final Impella clinical module is submitted. The PMA approval process requires 180 days without a panel requirement, and 320 days with it. We understand the FDA rationale requiring special PMA-like controls and post-market monitoring for Impella and all future products in this new temporary ventricular support class III category.

The FDA has expressed the desire to work with Abiomed to complete the process and is not interested in removing Impella from the US market, provided Abiomed makes efforts to complete the process.

We also continue to expand our portfolio and have received outstanding cooperation from the FDA for the Impella RP trial. We also expect to have the Impella Japanese approval and the Impella RP CE-mark approval in Europe by the end of the fiscal year.

In summary, we are on track to achieve our fiscal year revenue guidance and set new records in patient utilization. The size, demographics, and complexity of the heart failure population are driving global healthcare reform towards more minimally invasive procedures that improve patient quality of life, have shorter length of hospital stays, and reduce hospital readmissions. We are investing for success in our products, in training, and regulatory approvals.

We believe an Impella PMA approval will transform our company and provide a significant long-term benefit, while validating our quest to become the new standard of care for percutaneous circulatory support.

In the future, the depth of our intellectual property and organic growth opportunities from new clinical indications, new geographies, and new products will provide a long-term growth engine. We look forward to another record year.

I thank all our stakeholders for their support.

I will now turn the call over to Bob Bowen, our CFO.

Thank you, Mike, and good morning, everyone. Before I get started, I would like to refer you to the safe harbor language noted at the outset of the call, as well as the risks and uncertainties noted in our SEC filings, particularly our most recently filed 10-K.

Today, I will provide comments on our fiscal year 2014 first quarter results, as well as provide guidance for the balance of the year. Most of my comments on the fiscal first quarter comparisons will refer to the same quarter of the prior year.

As noted in this morning's full earnings release, fiscal first quarter revenue of $42.7 million increased $3.9 million, or 10%, from the prior year. Worldwide Impella product revenue grew $4 million, or 12%, to $38.7 million, from $34.7 million in the prior year, with reported patient use in the US up 12%.

Following a record US patient volume and our typically strong fiscal Q4, April got off to a slower start, but both May and June rebounded, with double-digit year-over-year patient volume increases.

Service revenue grew 44%, to $2.6 million, from $1.8 million in the prior year, and legacy product revenue decreased by $800,000 to $1.3 million, from $2.1 million in the prior year. An additional 27 new Impella 2.5 sites were open, yielding $2.4 million in revenue, $0.5 million less than the 35 new Impella 2.5 sites opened in the prior year, which yielded $2.9 million in revenue. I would remind investors that we opened 117 Impella 2.5 sites in fiscal year 2013, and 110 in fiscal year 2012, and we plan to open between 100 to 120 in fiscal year 2014. And historically, we have seen some variability by quarter.

An additional 66 hospitals purchased Impella CP, bringing the total Impella CP sites to 172, or approximately 22% of the overall installed base of 775 US Impella 2.5 customer sites.

Impella CP represented approximately 30% of overall reported patient usage during the quarter, compared to approximately 20% in the prior sequential quarter, reflecting continued strong demand for this higher flow device.

US Impella unit reorders have trailed patient use in each of the last 2 quarters, after tracking relatively close in the prior 4 quarters. We believe this headwind reflects remixing of site inventory toward Impella CP, along with hospital efforts to maintain low unit inventory carrying levels in this challenged healthcare environment. Over time, we would expect the reorder-to-patient use rate to move closer to 1-to-1.

The gross margin rate for the quarter was 79.6%, compared to 80.8% in the year-ago period. Our gross margin rates are sensitive to the number of console placements in the quarter for new site openings, expanded use needs, [AIT] upgrades. During fiscal Q1, we placed 191 Impella consoles compared to 163 in the prior year. Our current thinking is that we will begin to see improvement in the gross margin rate in the second half of the fiscal year.

R&D expense of $7.3 million, grew $600,000, or 9%, compared to the prior year, largely due to expenditures to support the PMA application. SG&A expense of $28 million, grew $7 million, or 33%. The increase comprises basically 4 items. During fiscal Q1, we incurred $2.6 million of legal expense related to the Department of Justice subpoena, shareholder lawsuit, and derivative action. We also incurred $1 million of higher stock compensation expense, compared to the prior year, and $600,000 of medical device tax expense. Lastly, the build out of the US sales and marketing field organization to support growth, increased expenses by $2.5 million, compared to the prior year.

GAAP net loss for the fiscal first quarter was a loss of $1.7 million, or a loss of $0.04 per basic and diluted share, compared to GAAP net income of $3.1 million, or $0.08 per basic and diluted share in the prior year.

The balance sheet remains in excellent shape. Accounts receivable of $21 million equated to 49% of quarterly revenue, compared to a balance of $18.3 million in the prior year, or 47% of quarterly revenue. Inventory of $16.5 million equated to 39% of quarterly revenue and compared to inventory of $12.5 million, or 32% of quarterly revenue in the prior year. The increase reflects the addition of the Impella CP and increased safety stock levels for risk mitigation purposes.

We ended the quarter with cash, short- and long-term marketable securities of $88 million. And as a reminder, we have no debt.

Fiscal Q1 is our most challenging quarter from a cash generation standpoint, and is the quarter in which incentive compensation payments are made that had been previously accrued during the fiscal year. We expect to generate cash in each of the next 3 quarters.

Turning to guidance. As noted in our press release, we are reiterating our full-year revenue guidance in the range of $180 million to $185 billion, with Impella growth expected to be approximately 20% for the year.

Consistent with prior years, we expect 45% to 50% of revenues to fall in the first half of the year, and 50% to 55% to fall in the second half of the year. And we are expecting higher revenue gross rates in the balance of the year. As previously mentioned, we believe our gross margin rates will begin to improve in the second half of the year.

Our R&D spend is focused on US and Japanese regulatory approvals, the RP recovery right trial, Symphony development, and ongoing product support, all of which are core to our future growth plans. We currently believe that R&D expense will be $2 million to $3 million higher than previous expectations.

We also are prepared for higher legal expenses related to the DOJ subpoena, shareholder lawsuit, and derivative action, which we believe will total approximately $9 million for the year, compared to our previous estimate of $6 million to $8 million.

I would like to emphasize that we are a few months into the process and have a better understanding of the ongoing cost of collecting, reviewing, categorizing, and submitting the requested documents. The requirement or work activity has not changed, but we believe our understanding of the cost is improved.

Lastly, we expect stock compensation expense to be approximately $3 million higher for the year based on a true-up of our expected forfeiture rate of previous grants and the most recent grants, which were granted at a higher stock price post our May 2, prior earnings call, than our estimate as of May 2, and which reached deep into the organization. We also have assumed, going forward, a lower forfeiture rate.

Taken together, on a GAAP basis, we believe income from operations will be in the range of breakeven to 5% for the year. At present, we expect the second fiscal quarter P&L to look similar to the first quarter, with somewhat higher R&D costs related to the US and Japanese regulatory submissions. And we expect to begin to rebuild operating leverage as we move into the second half.

We will now open the call to questions. Operator, would you please open the line for questions?

Thank you. (Operator Instructions) Our first question is from Matthew O'Brien of William Blair. Your line is open's.

Was hoping we could start out on the patient versus unit -- or I'm sorry -- inventory volume commentary. Can you just give us a sense for the delta between patient utilization and the inventory work down in the quarter? And then specifically, when you were providing guidance at the beginning of the fiscal year, as you incorporated this dynamic into the guidance, or, asked a different way, would the Impella growth actually for the year have been a little bit higher, if he weren't facing this headwind?

Sure, Matt. Well, the drawdown in each of the last 2 quarters was a little bit in excess of 100 units. And I think our guidance of $180 million to $185 million has been constructed pretty consistently, both from the last call and this call. So I do think that the reorder rate is going to move toward 1-to-1 as time goes by.

Okay. But, so 100 units per quarter --

100 units per quarter.

-- (inaudible) quarter?

Little more than 100 units in Q4, and a little more than 100 units in Q1.

Okay. So that translates into, I want to say 2.5 million bucks in inventory worked down -- I think I'm doing the math right in my head. But, so, again, to the first question, as far as the guidance goes, I'm anticipating you're expecting that inventory issue to persist a little bit here in fiscal Q2, and maybe into Q3 a little bit. So would the Impella specific 20% growth target for the year actually be a little bit higher, if you weren't facing that headwind? Or is that something that you had already contemplated in the guidance that you provided?

Yes, I think if we were not facing that headwind, the growth rate could potentially be higher.

Okay. Fair enough. And then Mike, you were talking about the --

And Matt, this is Mike. We don't give quarterly guidance. And there is some seasonality to the business. But as far as the CP goes, it's pretty much a 1-to-1, so they're used and reordered. The drawn down in inventory has been more around the general sense or around the 2.5.

Okay. Thank you. And then one more quick one. On a clinical side of things with the 515 process, is your estimate, and I know it's a little bit difficult to really predict this. But that February date's a little bit later than you had mentioned before. Do you think that's probably the latest likely or kind of worst-case scenario in terms of submitting the fifth module? And when do you think we'll know whether or not [you'll be] a panel? Thank you.

Yes. So, Matt, we actually had said prior, last quarter, that we'd submit the whole packet by the end of the fiscal year, which would be March. So we actually have accelerated - 40% of the modules are in already now. We have to stagger some. That's the point of the module. So we'll put in another 40% by September. And then the last remaining 20% is on the clinical. So we're ahead of schedule. And that would be worst-case on the February side for the clinical piece.

On the panel, we don't know at this time, and we'll give more updates as that works out. But we also, again, everything remains business as usual, and we keep our 510(k) clearance until the 515 process is completed.

Thank you.

Thank you. Our next question is from Greg Simpson of Wunderlich securities. Your line is open.

First, I'll stay away from clinical, actually, for a minute. First of all, just want to ask, on the CP, are we far enough into the CP launch, Mike, can you talk a little bit about, without getting into specific numbers, because I know you don't want to do that, but average usage rates at accounts? I mean, are you seeing greater usage of the CP than what similar accounts were doing when they just had the 2.5?

So the net answer is, at the CP sites, in aggregate, their usage goes up over all for patients. And we're really not trying to dictate which pump. We see different roles and different options, depending on the physician's preference of flow or privatization of cost. And we're allowing them to have their own protocols and support them with extensive training in either case.

Okay, great. And then a couple on the expense side. First, on the phrase pipeline development, and then your comments on the RP and Symphony, kind of jumped out to me. And I'm a little bit of a conspiracy theorist on your pipeline development stuff. I'm curious, the higher expenses, the higher R&D expenses, is there anything new that we don't know about or are we looking at accelerated development of the RP and/or Symphony, based on feedback you're getting from the FDA?

There's nothing relative to the feedback from the FDA, and we are, and have an aggressive plan to improve the Impella platform in general, to accelerate the RP study, to continue to work on the Symphony, which is an exclusive type of product - there's nothing like it. We think it's got a great opportunity for heart failure patients outside the US, as well as in the US. And clearly, we are working on some things that are not yet public information.

So we have a principle in the company [to lead] in innovation and technology, and we're constantly trying to innovate and improve not only our own products, but to add to that platform.

Okay, thanks. Then just two more quick ones. First of all, on the SG&A side, the sales force expansion, I didn't hear a number of salespeople added. I may have missed that. But it sounds like you guys, you're seeing something or whatever, CP launch or whatever, that seems to make you more optimistic or more aggressive [without] expanding the sales force. Can you maybe talk about that?

Well, we see this year as a transition year, getting ready for a PMA, getting ready for more products like the CP and, in the future, the RP, and also supporting the trial. So we are accelerating. We have said in the past, it's 4 to 6 per quarter, and we've been trending more on the 6, 6-plus side for the last 2 quarters, as we ramp up.

But we're also spending additional time to really get our field team at the level and training and understanding best practices. We have regional training experts. Our call center now is really not just interactive, but proactive. We're trying to check in to make sure that the local hospitals have the support they need. And we're really trying to do the best we can to make that patient experience very positive and get great outcomes.

Okay. And apologize, just one more, then I'll get back in line. I was doing some hardcore research on the TMZ website, and I see Randy Travis got out of the hospital. All jokes aside, you guys got just an absolute ton of publicity over that situation.

Can you maybe just talk about the usage? And I mean, are there any -- kind of a goofy question. But any real benefits that have emerged from that? I got a kick out of all the stories talking about this great new technology. And I guess it is to some people, but not so much to the people on this call. But can you just talk about that situation, in general?

Sure. So we have to be somewhat confidential. It's a patient issue. But one is, we wish Mr. Travis and his family the best wishes, and we're glad to see the progress.

We have permission from the physician who implanted the Impella, if directly asked, that the Impella did its job and was used early on to help stabilize and transport the patient. And I'll let him talk about his pleasure with the performance. And that person has been in the news is Dr. Todd Gray.

But we feel very confident, and we're happy the Impella was able to play a role in his support.

Okay, thanks. I'll get back in line.

Thank you. Our next question is from Raj Denhoy of Jefferies. Your line is open.

Wonder if I could ask just a couple questions. Just first, on the FDA issue and their approval of your shell for the PMA submission, I appreciate the way you've laid it up in terms of different modules you have to submit.

But in terms of the clinical data piece of that, have they actually given you any indication as to whether the data which you've laid out will be sufficient? Or is it really that they've just given you some approval on the overall structure of what you will submit?

So, the way a shell works, and you can go Google it or go on the FDA website and read it, is it is a very specific plan, it's table of contents. And you outline the information that's necessary to support the filing and the approval of the PMA. So it's very specific.

And in the outline and the content, we did describe the Impella. We did talk about Protect I, Protect II. It goes into detail of the totality of the data, things that I'm talking about. And there's no mention of another randomized study.

And so this is a formal approval. It's signed off by the agency. They send you a letter and it formally starts your submission process, along with your user fee.

So we feel very confident and we're happy. Whether or not we collect some other data or single [arm] or produce some specific things from the registry, we'll work with the FDA on that. They've been very supportive and cooperative. And we look forward to being one of the first companies to successfully transition from a 510(k), to a PMA under the 515 process. But it is specific, Raj.

Okay. That's clear. And then, just going back to the US Impella performance in the quarter, the slightly above 7% growth. I appreciate the commentary around inventory drawdown in some of your centers.

But I guess I just wanted to, perhaps, ask you about your level of confidence in your return to growth over the balance of the year, because, obviously, that number, cosmetically, is quite a bit worse than we've seen for a long time for [that] business. And even, I think, the 12% unit growth you talked about, actual patient unit growth, is still below trend of late. So maybe just some additional commentary on that would be helpful.

Sure. I think the big thing is, April was slower. We had tremendous amount of training within April. We had a lot of focus on headquarters training as well, and that does impact us. But I think it's a good investment.

And historically, if you go back since we've had Impella cleared, the Q1, Q2 always has this somewhat of a slowdown perspective, whether it's in Q1 or Q2, based on just the training we do, based on resetting the template for the year, the compensation plan, and, also, it tends to be a little bit slower time for our customers in the cath lab.

And nothing that you're seeing in terms of any change in terms of use or [receptivity] or anything falling out of the 515 process? I mean, there's really no change in your mind in what's actually happening in the field at this point?

Yes, I don't think -- 90% of our customers don't know what the 515 process is, and have no idea whether it's 510(k), PMA. I think that's not something that they understand or even track.

I think that PCI in general, there's a lot of scrutiny on appropriate use criteria that we've talked about in the past. Again, the presentation we did at the 515 panel, those slides are public, and we posted them on our own website. That explains the positioning of where the patients that are high risk, but they're not surgical candidates, that's different than a bread-and-butter, single vessel approach.

So I think what you're seeing in the cath labs is a lot more scrutiny on the type of PCI they're doing, and I think that's where we will continue to publish data, because as Protect II shows, is that there is a benefit to these patients with their [EFs] improving. And again, the minimally invasive treatment has some other benefits as well. So we're going to continue to publish around that, and we have more data to publish from Protect II, around quality of life. And we'll continue to announce those as they come.

Very good. Thank you.

Thank you. Our next question is from Misha Dinerman of Piper Jaffray. Your line is open.

I'm just wondering if there's any more clarity around what the potential PMA label may look like. Is it going to be a temporary hemodynamic support or is there a potential to carve out high-risk PCI cardiogenic shock? I'll just note that, I guess last night in Thoratec's presentation, they discussed going forward in the US in cardiogenic shock, while in Europe in high-risk PCI. And I was just wondering if you had thoughts around that, and if that had any implications for what you might be able to go forward with in your own label. Thank you.

Sure. So just to answer the first part of the question, it will be along [around] some type of benefit of the hemodynamic support for something with high-risk procedures or patients. Being a benefit, we believe, will be the reduction of major adverse events to 90 days. And so that was the primary endpoint. And obviously, we see that as a foundation for reasonable assurance of safety and effectiveness.

The FDA also first evaluates safety. So before you do any randomization of any study, you have to prove the safety. And when we came into the states, before we'd ever even done Protect I, we had done thousands of patients in Europe. We had double-digit peer-reviewed publications. And then from that point, after you've proven safety and you've proven safety to the FDA, then you can go forward and do a randomized study.

As we expand, that will be with the FDA, if they want us to do something around [bridge] to recovery or data collected from our registry or we are filing HDEs. We'll leave that up to them, and we'll follow the path that they prefer.

With regard to Thoratec, and their FDA path, I really can't comment. I'll let them communicate directly to you all. And we look forward to seeing their progress. And we know HeartMate II and HeartWare, as well, helps patients, and we wish them both the best of luck.

Okay, great. And then just one quick question on Impella CP. I think you said 22% of your customer sites are now penetrated. I believe that's up from last quarter, around 14%. Is there a goal or a target level that you think you can penetrate? Is it all of the accounts? What do you think is reasonable? And why, I guess why is it 22% as opposed to, I would think that it could be substantially higher. So any commentary there would be helpful, too. Thank you.

Yes, I think what we want to do is we want to have a self-imposed discipline around new site openings, around training around the CP. So in each quarter we're not only opening new sites, which takes time and energy away from actively supporting patients, we are also training again on CP, and we also have to train around the new AIC consoles that we're upgrading in the field each quarter.

So there's lots to do for our field team, and we want the priority to be around patients and we want to make sure that our training is really optimized. So that puts a little bit of competing priority.

So applying this discipline so that we can do everything well in each different territory is the focus, and that's why we're self-regulating. Obviously, if we wanted to sell the CP to 100 new sites tomorrow, we could do that - there is the demand there. But we want to make sure we do it under a controlled manner to get the best outcomes.

Okay, great. Thank you.

Thank you. Your next question is from David Lewis of Morgan Stanley. Your line is open.

It's Steve Beuchaw here for Dave. I just had a couple of quick follow-ups. I wonder, within the context of the relationship between revenues and volumes in the quarter, over the balance of the year, do you expect any acceleration in the clinical contribution to the revenue line?

I'm not sure I understand. Are you talking about --

With perhaps IDEs coming online, could we see any tailwind from the clinical on the US Impella revenue figures?

I think it's already baked into our forecast, and we're assuming nominal numbers for the Impella RP study.

Nominal, so sub-$5 million?

Oh, yes.

Oh, yes. Yes.

The whole RP study is 30 patients. And we're basically charging as we go per the patient. So that's already baked into the forecast.

And then on high-risk PCI, as we track the volume growth trends, it has slowed down over the last several quarters, but that growth rate has gotten to something that's roughly stable in the low double digits. Is there a case to reaccelerate the high-risk PCI volume growth line? Or is this the right level for us to think about for the balance of the year?

Well, I think overall we've been growing double-digit. And if you look at last quarter, the prophylactic was single digit, as you said. The emergency's been strong double digit, and the all others been double digits as well.

So we think it will continue to grow and we also think it has to do with the continuation of our training, our protocols, and our publications.

Great. Thanks so much, everyone.

Thank you. (Operator Instructions) Our next question is from Jayson Bedford of Raymond James. Your line is open.

Just a few follow-ups. The CPT code has been in place for a while now. Any notable change in physician behavior due to the new CPT code at all?

Jayson, don't know if I would say noticeable change. We know that it's a lot easier for physicians, as far as a process, to submit. It's been standardized, and they like that.

And in our goal to become the standard of care, you kind of have to check off the DRG code, the CPT code, and be in the guidelines. And we've achieved all 3. And it probably makes it more mainstream now as we start to get some new users, that they understand that they're not collecting all the extra information required under an unlisted code, and that it's been approved by the appropriate agencies.

Okay. Usage trends with respect to CP, how would you break up the use of the device, high-risk PCI versus shock?

I think that the CP tends to be favored for the emergency patients or the highest, largest, riskiest procedures patient's they'll operate under. So we see the trend basically along those lines.

Okay. And then just generally, use in EP, it seems like a potential area of growth for you guys. If you look at your volume, both CPT 2.5, how much is being used in EP?

EP is the largest other application in our all-other bucket.

Okay. And then, I guess for Bob, what was the net impact of pricing in the quarter? Meaning, I'm saying CP helped out a little bit. But just on a year-over-year basis, how did price factor in terms of the growth?

The average catheter price was up less than 1%, a slight, very, very slight uptick.

All right. Thank you.

Thank you. I'm not showing any further questions in the queue. I'd like to turn the call back over to management for any further remarks.

Thank you, everyone, for your time today. As always, if you have follow-up questions, feel free to call him. Have a great day.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a great day.