使用警語:中文譯文來源為 Google 翻譯,僅供參考,實際內容請以英文原文為主
Operator
Good morning, and welcome to AtriCure's Fourth Quarter and Full Year 2009 Earnings Conference Call.
My name is Caitlin, and I will be your coordinator for the call today.
At this time, all participants are in listen-only mode.
We will be facilitating a question and answer session towards the end of today's call.
As a reminder, this call is being recorded for replay purposes.
And I would now like to turn the call over to Mr.
David Drachman, President and Chief Executive Officer of AtriCure.
Mr.
Drachman, please proceed.
David Drachman - President, CEO
Thank you.
First of all, consistent with seasonality, I would like to apologize for a stubborn cold and my voice in advance.
As a reminder -- thank you, operator.
And good morning, and welcome to the fourth quarter and full year 2009 earnings call.
Joining me on the call today is Julie Piton, Vice President of Finance and Administration and Chief Financial Officer.
At this time, I would like to turn the call over to Julie for a few introductory comments.
Julie Piton - VP, CFO
Thank you, Dave.
And good morning, everyone.
By now you should have received a copy of the earnings press release.
If you have not received a copy, please call Sarah Wickman at 513-755-4136 and she will fax or email you a copy.
Before we begin today, let me remind you that the Company's remarks may include forward-looking statements.
These statements include, but are not limited to, those that address activities, events or developments that AtriCure expects, believes or anticipates will or may occur in the future, such as revenue and earning estimates, other predictions of financial performance, launches of new products, and market acceptance of new products.
Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond AtriCure's control, including but not limited to the rate and degree of market acceptance of AtriCure's products, governmental approval, and other risks and uncertainties described from time to time in AtriCure's SEC filings.
AtriCure's results may differ materially from those projected on today's call.
And AtriCure undertakes no obligation to publicly update any forward-looking statement, whether it is as a result of new information, future events, or otherwise.
Additionally, we will refer to non-GAAP financial metrics.
A reconciliation of these non-GAAP measures is included in our press release, which is available on our website.
I would like remind everyone on the call today that the Food and Drug Administration, or the FDA, has not cleared our products for the treatment of atrial fibrillation or AF.
A majority of our products have been cleared for the ablation of cardiac tissue.
The Company and others acting on its behalf may not promote any of its products for the surgical treatment of AF or train doctors to use the products for the surgical treatment of AF.
These restrictions do not prevent doctors from choosing to use the products for the treatment of AF or prevent AtriCure from engaging in sales and marketing efforts that focus only on the general attributes of the products for the current cleared uses and not for the treatment of AF.
AtriCure educates and trains doctors in the proper use of its products and related technologies, and does not educate or train doctors to use its products for the treatment of AF.
AtriCure has provided research grants to institutions for the purposes of conducting certain studies that may be referred to on this call.
The primary authors of the papers referred to on this call may also be consultants to AtriCure.
With that, I would like to turn the call back to Dave.
David Drachman - President, CEO
Thank you, Julie.
And welcome to members of the investment community who have joined us today.
We will begin with a brief summary of our fourth quarter revenue results, and then review our 2009 results in comparison to our strategic priorities.
Next, we will highlight our performance and the ongoing opportunities for each of our three business sectors, followed by a regulatory clinical and product pipeline update.
Then we will comment on our Department of Justice Settlement and our 2010 strategic priorities.
Following my remarks, Julie will present a detailed review of our financial performance.
Then I will provide comments concerning our outlook.
We will then open the call for your questions.
This morning we reported fourth quarter revenues of $13.8 million, which represents a 14.4% increase over the prior year.
Although our fourth quarter 2008 comparables were less challenging in comparison to prior quarters, we are encouraged by our performance.
Turning to 2009, due primarily to factors outside of our Company's control, 2009 was the most difficult year of our Company's history, and a year that challenged large and small companies across all sectors.
In response to these challenges, we implemented a series of decisive actions and reset our 2009 strategic priorities.
In rank order, our 2009 strategic priorities were to accelerate profitability, advance atrial fibrillation approvals, expand our market share and leadership position through new innovative growth platforms, including the Cryo1 and AtriClip systems, along with the development of a totally thoracoscopic ET hybrid procedure.
In addition, Management was focused on the resolution of our Department of Justice Investigation and related qui tam case in a manner that would not impede our current capital or ongoing revenue opportunities.
As we measure our performance against our strategic priorities, we were successful in executing our 2009 plan.
Beginning with profitability trends, 2009 adjusted EBITDA was $1.6 million, or a $7.2 million improvement.
Moreover, we generated $420,000 from operations, which represents a $6.1 million improvement.
In terms of atrial fibrillation approvals, we plan to submit our ABLATE PMA in support of an atrial fibrillation approval during the first quarter of 2010 as previously communicated.
In assessing our current market share position, we estimate that our US market share is approximately 50%, which is consistent with prior years.
And we believe that we increased our market share in regions outside the US.
In terms of generating new innovative growth platforms, we released our Cryo1 system in the US during the second quarter of 2009, and in Europe during the third quarter of 2009 as planned.
Furthermore, we realized the AtriClip System in Europe during the fourth quarter on schedule.
In addition, we are in the process of working with key surgeons and electrophysiologists to pioneer a novel promising procedure, which combines the advantages of surgical ablation and catheter ablation into a single procedure.
Along with the execution of our operational milestones, we settled our Department Of Justice investigation and related qui tam case in a timeline and manner consistent with our internal plan.
As we move forward into 2010, it is important that we acknowledge the men and women of AtriCure for meeting our challenges with rapid, well-executed solutions and for their steadfast courage, commitment, and resolve.
Turning to our fourth quarter sales performance by business sector, fourth quarter revenues from open heart products were $6.7 million, a 12% increase as compared to the same period a year ago, a sequential increase of 4%.
Open heart product revenues benefited from the second quarter launch of our Cryo1 system.
Going forward, we intend to leverage our competitive advantages, which include superior products and the widest range of technologies and products in the cardiac surgical ablation space.
AtriCure is the only surgical ablation Company marketing a portfolio of radio frequency and cyrothermy assistance.
In the open heart setting, depending on the patient's presentation and the primary surgical procedure, physicians performing [can] concomitant MAZE procedures may chose to use our radiofrequency clamp with our reusable or disposable cryo probe.
Moreover, there are situations where surgeons may elect to repair or replace a mitral valve from a minimally invasive incision.
For this surgical approach, our long disposable Cryo1 Pro may be the preferred product.
In brief, our market leading position, expanding product portfolio, and focused sales organization are competitive advantages which we believe will lead to market share gains.
In addition, we believe that our ABLATE clinical trial results and the receipt of an FDA atrial fibrillation approval will support broader market expansion and new growth opportunities.
Now, turning to our minimally invasive business, revenues from domestic minimally invasive products were $4.1 million, a 3% increase compared to the same period a year ago, and consistent with the previous quarter.
Furthermore, despite our 2009 focus on profitable market share, on a year-over-year comparative basis we estimate that minimally invasive procedures increased in the high single digits.
Importantly, there is a rapid trend towards the development and investigation of a new novel hybrid ablation procedure.
This hybrid procedure is now being performed routinely in a limited but steadily growing number of key European and US centers.
The procedure combines the use of our minimally invasive totally thoracoscopic products with catheter ablation technologies.
This integrated or hybrid approach strengthens the partnership between electrophysiologist and cardiac surgeons, facilitates a coordinated referral development process in the interest of patient care and, most importantly, provides patients with a comprehensive mapping and ablation procedure, which we believe will become a standard of care for persistent patients and patients that have failed single or multiple catheter ablation attempts.
Several high-volume and prestigious centers are in the process of adding the hybrid procedure as a primary alternative for persistent patients or those patients that have failed single or multiple catheter ablation attempts, a growing population.
In support of this physician trend, we submitted an IDE and are in the process of working with FDA in order to receive approval to move forward with a feasibility trial.
The name of the trial is the Dual Epicardial Endocardial Persistent AF, or DEEP AF trial.
The study design allows for patients to be treated in either a hybrid suite, operating room, or the electric physiology lab.
Notably, approximately 20% of our US customers have a hybrid room, are currently in the process of building a hybrid suite, or plan to build a hybrid suite in the next 24 months.
Moreover, many of the largest centers are in the process of building a second hybrid suite.
We believe strongly that the potential of our DEEP AF approach is one of the most promising new patient alternatives and largest growth opportunities in the atrial fibrillation space.
Turning to our international performance, international revenues of $3 million were a new high, representing a 46% increase compared to the same period a year ago and a 15% sequential increase.
We anticipate high international growth trends will continue as we move further into full commercialization of our AtriClip and Cryo systems and, importantly, as we begin implementing plans to expand our integrated or hybrid ablation procedure throughout Europe during the course of this year.
Because of the growing opportunity in Europe and other key international markets, we're in the process of adding additional direct resources to support our international expansion and growth prospects.
As a result, we expect growth from the international markets to remain strong.
Now, a review over investments in clinical science and FDA approvals.
First, a review of our ABLATE pivotal trial.
The ABLATE clinical trial is designed to treat patients undergoing elective open heart surgical procedures that present with a documented history of permanent atrial fibrillation.
As communicated, we anticipate submitting the fourth and final module of our PMA, the clinical module, during the current quarter.
At this point, all evaluable patients have reached their six-month endpoint.
And we believe that the primary safety and efficacy endpoints of the ABLATE trial have been achieved.
As a reminder, the ABLATE FDA sanction protocol utilizes a Bayesian statistical plan and requires enrollment of between 50 and 100 patients.
The fundamental concept with a Bayesian statistical plan is that the better the results, the fewer the patients that are required to demonstrate safety and efficacy.
The preliminary analysis suggest that we reached our primary endpoints at the lower range of patient enrollment.
However, based on discussions with FDA we believe a larger cohort of patients will be reassuring to FDA and their advisory panel.
In conjunction with FDA, it has been decided that in parallel with submitting our final PMA module, the clinical module, that we would initiate a continued access protocol to augment the number of subjects for presentation at the FDA advisory panel meeting.
ABLATE continued access has been approved by FDA and utilizes a consistent clinical trial design as ABLATE.
We anticipate initiating enrollment in ABLATE, the continued access, during April of this year.
We believe that an atrial fibrillation approval will be a major growth catalyst.
And we are continued commitment to working with the FDA and our investigators to achieve FDA approvals for atrial fibrillation.
We anticipate receiving an atrial fibrillation approval during the second half of 2011.
Turning to our EXCLUDE clinical trial and support of US clearance of our AtriClip System, the path to clearance for the AtriClip System remains a 510(k) process with supporting clinical evidence.
In line with previous communications, during November of 2009 we submitted our clinical report to FDA summarizing the results of our 70-patient US clinical trial.
The final results from the EXCLUDE clinical trial were exceptionally strong and met the study endpoints.
We anticipate that the EXCLUDE clinical results will be presented at major meetings during the course of this year.
In terms of FDA clearance for our AtriClip System, we have recently been assigned a new FDA reviewer.
We are in the process of working with FDA to discuss the details of our correspondences and submissions, which date back to 2006.
Independent of the strength of the human data generated from the EXCLUDE clinical trial, we have received questions, primarily concerning our March 2007 510(k) submission and certain GLP requirements associated with our preclinical studies.
We are in the process of working with our preclinical sites to prepare responses.
As a result of these recent circumstances, the timing of our FDA clearance has become delayed.
However, this project is heavily resourced.
And internally, we are planning for product clearance and launch during the second half of this year.
In terms of DEEP AF, we submitted our IDE in support of our feasibility study in December of 2009.
FDA responded to our submission requesting additional information.
The primary request was related to performance data for the ablation catheter referenced in our clinical protocol.
We have obtained authorization from Biosense Webster for FDA to reference performance data provided in certain FDA submissions relative to the NaviStar clinical product line.
As a result, we plan to submit our responses to FDA during March.
And pending FDA approval, we anticipate commencing enrollment during the summer of this year.
Now, turning to our pipeline and product development initiatives, in order to further strengthen our market leadership position and stimulate growth, we have a series of sustaining innovations that we are planning to release during the year.
The innovations include a new Isolator Synergy platform.
The new Isolator Synergy Access is pending FDA clearance during the second quarter of this year.
In terms of the expansion of our cryo platform, we plan to release an enhanced cryo probe in the US and Europe during the second half of this year, and a new automated cryo generator during the first quarter of 2011.
Our new automated generator is designed to set with ORLab system, simplifying the process of toggling back and forth between radio frequency and cryothermia ablation devices.
In terms of our AtriClip system, it is important to note that left atrial appendage excision or exclusion is a standard procedure for patients undergoing open heart surgical ablation procedures.
In addition to left atrial appendage exclusion during ablation procedures, the ACC/AHA/ESC 2006 Atrial Fibrillation guidelines recommend removing the left atrial appendage in patients undergoing open heart surgery that are at risk of developing postoperative atrial fibrillation.
The main problem is that the currently available techniques and technologies for the surgical closure of the left atrial appendage are inadequate.
There was a key publication in the September 2008 edition of The Journal of American College of Cardiology authored by physicians at the Cleveland Clinic.
The study concluded that there is a high occurrence of unsuccessful surgical left atrial appendage closure.
This publication suggests that 60% of the subjects studied had inadequate left atrial appendage closure using the currently available techniques and technologies.
This represents an immediate opportunity for the AtriClip system.
Following the US release of our AtriClip system, we will be ready to launch a complementary version of our AtriClip system that is more specifically designed for open sternotomy procedures.
We believe that these new products and sustaining innovations will further distinguish AtriCure as the market innovator and lead to expanded market penetration, share gains, and new growth opportunities.
With respect to the Department of Justice Settlement, we have executed a definitive agreement with the Department of Justice in the office of the Inspector General of the Department of Health and Human Services to resolve the issues raised in the DOJ investigation and related qui tam complaint regarding the marketing of the Company's surgical ablation devices.
The terms of the agreement are substantially identical to those previously disclosed, and specifically state that AtriCure and its employees admit no wrongdoing or illegal activity.
Although we believe that we have [notorious] defenses to the legal issues raised in the qui tam complaint, the cost of litigation would have likely exceeded the settlement amount.
Moreover, we are an emerging growth-orientated Company with a lean management structure.
The discovery and litigation process would have distracted Management from focusing on our strategic plan.
Given the circumstances, we believe the resolution of this matter is in the best interest of our shareholders and allows Management to further focus on the execution of our plan.
Turning to our 2010 strategic priorities, as we transition into 2010, in rank order, our strategic priorities are growth, the execution of our regulatory and clinical milestones, and customer-valued innovation.
To capitalize on our new product platforms and market opportunities, we began to incrementally expand our US and international sales and marketing organizations during the fourth quarter of 2009.
At this point in our call, I would like to turn the call over the Julie for a detailed review of our financial performance.
Julie Piton - VP, CFO
Thank you, Dave.
I will begin by providing information related to revenues.
For the fourth quarter of 2009, revenues from domestic open heart products were $6.7 million.
Minimally invasive domestic revenues were $4.1 million.
And international revenues were a record $3 million.
Total revenues grew 14.4% to $13.8 million as compared to $12.1 million for the fourth quarter of 2008.
International revenues grew 45.8% on a GAAP basis and 38.1% neutralizing currency fluctuation.
On a consolidated basis, fourth quarter 2009 revenue growth benefited approximately 1% from currency fluctuation.
For 2009 full year, our revenues were $54.5 million, as compared with 2008 revenues of $55.3 million.
Revenues from domestic open heart products grew 1.6% to $27.5 million.
And revenues from minimally invasive products were $16.6 million, as compared with $19.8 million for 2008.
2008 minimally invasive revenues benefited from the introduction in placement of our ORLab system into a large majority of accounts that purchased minimally invasive products.
This resulted in a substantial reduction in ORLab sales during 2009.
2009 international revenues grew 24.9% or 28.2% on a currency neutral basis to a record $10.4 million, driven primarily by market share gains.
As a reminder, revenues from our multifunctional pen, which is used in both open and minimally invasive procedures, are allocated between open and minimally invasive product revenues based on our best estimate of the pens' actual usage.
Now turning to gross margins, gross margin for the fourth quarter of 2009 was 75.2%, as compared with 74.3% for the fourth quarter of 2008.
For the year, gross margin expanded 50 basis points to 76.6%.
The quarter-over-quarter and year-over-year improvement in gross margin was primarily due to a reduction in capital equipment sales, such as our ORLab system, partially offset by an increased mix of international revenues and new products.
Next, an update on operating expenses.
Operating expenses, excluding settlement reserve, for the fourth quarter of 2009 were $12.3 million, consistent with fourth quarter of 2008 operating expenses of $12.4 million.
Note that during the fourth quarter of 2009, we recorded a one-time non-recurring share-based compensation charge of approximately $500,000 or $0.03 per share.
Also, consistent with our communications during the third quarter conference call, sequentially you'll note that operating expenses, excluding the settlement reserve and the non-recurring compensation expense charge, increased $1.1 million or approximately 10.7%.
The increase was driven by an increase in spending related to clinical activities and an increase in SG&A of approximately $900,000.
The increase in SG&A was primarily due to an increase in the [sale] of headcount related expense to capitalize on our growth platforms, as well as an increase in sales and marketing expenses and activities.
For 2009, neutralizing the impact of goodwill in the DOJ settlement, operating expenses decreased $6.5 million or 12.3% to $46.5 million as compared with $53 million for 2008.
Adjusted EBITDA for the fourth quarter of 2009 was a loss of approximately $150,000, as compared with a loss of $2 million for the fourth quarter of 2008.
For 2009, our adjusted EBITDA was a record positive $1.6 million, as compared to an EBITDA loss of $5.6 million for 2008, representing a $7.2 million improvement.
Turning to earnings per share, fourth quarter 2009 earnings per share on a GAAP basis was a loss of $0.16.
Adjusting for the impact of the non-recurring share-based compensation charge of $500,000 and the DOJ settlement reserve of $200,000, our adjusted EPS loss was $0.11 per share.
For 2009, adjusted EPS loss was a record low of $0.39.
In terms of the balance sheet in cash, we ended the year with $15.7 million in cash, cash equivalents, and investments.
And we had $5.1 million in gross debt outstanding under our credit facility.
Year-to-date we generated cash from operating activities of approximately $420,000, as compared with the use of $5.7 million last year.
This represents the first time we have generated positive cash from operations on an annual basis.
The 2009 improvement in cash from operations was driven by an improvement in non-GAAP net loss and a reduction in cash use and supportive working capital needs.
At this point, I would like to turn the call back to Dave.
David Drachman - President, CEO
Thank you, Julie.
In terms of outlook, we anticipate restoring and accelerating growth during 2010 and '11.
And we plan to incrementally and strategically reinvest resources to achieve our internal growth targets and capitalize on our new growth platforms.
Primarily as a result of our investments in growth, we anticipate a leveling of profitability trends during 2010.
Importantly, we believe that the physician adoption of integrated or hybrid ablation approaches, our AtriClip platform, atrial fibrillation approvals, our expanding international presence, along with new product innovations, will lead to significant new growth opportunities.
We remain confident in the power of our strategic plan and believe that AtriCure is well-positioned to further deliver results for patients, customers, and shareholders.
We will now open the call for your questions.
Operator
(Operator Instructions).
Your first question comes from Matt Dolan of ROTH Capital Partners.
Please proceed.
Matt Dolan - Analyst
Hi, Dave and Julie.
Good morning.
David Drachman - President, CEO
Hi, Matt.
Julie Piton - VP, CFO
Good morning.
Matt Dolan - Analyst
Can we start with the international business, which had a pretty strong finish to the year?
Can you maybe help us with how much of that came from AtriClip and Cryo1 versus just executing and taking share over there?
I'm basically trying to gauge how much of that momentum can continue into 2010?
David Drachman - President, CEO
Good question, Matt.
First of all, the Cryo1 was released in Europe in the third quarter and really launched in the fourth quarter.
And the Clip was released in Europe in the fourth quarter and is really being launched in the current quarter.
And in the stocking distributor model, it certainly takes time to educate and get products through the distribution channels.
So, the main increment in our European and international markets, first of all, we now have a VP of Sales and Marketing that heads International and is based in Europe.
So the training and education of our stocking distributors has enhanced considerably.
In addition, in certain regions we had underperforming distributors.
Management has replaced those underperforming distributors with higher performing distributors.
Moreover, we put more direct resources in Germany.
You may know Germany represents 60% of the open heart procedures in Western Europe.
And Germany is a focus of the Company going forward.
In terms of Japan, we have higher market share, approximately 50%, and that's relatively consistent year-over-year share.
And China is a strong growth opportunity for us, as well.
We've developed building momentum in the major cities of Beijing, Shanghai, and Guangzhou.
And we continue to look at investing additional resources into the market in China.
In addition, we're picking up new markets along the Pacific Rim, smaller markets, but markets that we anticipate will have an impact, a positive impact, on revenue during 2010.
Matt Dolan - Analyst
Okay.
Great.
And, Dave, you mentioned you are expanding your US and international sales organizations.
And you kind-of touched on international there.
Just maybe give us some numbers in the US, where you are, where you plan to go.
David Drachman - President, CEO
Well, we're currently at 55 sales headcount.
During mid-year we dipped as low as just under 50.
So during the fourth quarter particularly, we began to reinstate sales positions.
We believe there are new momentum in the marketplace with our new growth platform.
And with a more stable and more expanded sales and marketing platform, we intend to restore growth trend as move further into the year.
Matt Dolan - Analyst
Okay.
And then shifting to the hybrid technique, it sounds like that is gaining some interest from some of the higher end centers out there.
Can you give us little bit more into your strategic plan this year?
How many centers are you looking to get on board and get active with hybrid this year?
And when can we see some actual data out of maybe single-center experience type of data?
David Drachman - President, CEO
Well, I think you will see single-center experience presented at [h gress] Symposia.
In terms of number of centers, physicians have adopted the hybrid approach in approximately seven centers during the quarter.
And the Company is primarily focused on the execution of our DEEPAF feasibility clinical trial, which will include up to five centers.
So this effort, we believe that in parallel with running our FDA clinical trials that key physicians at key centers will also adopt this procedure as a new alternative for the more persistent patients.
And, once again, those patients that have failed single or multiple attempts at catheter ablation.
Matt Dolan - Analyst
Okay.
Great.
And then last question, just looking at your 2010 outlook, it looks like you're clearly having some momentum on the sales line, at least into 2010.
Last year you had a priority for profitability.
So maybe can you give us a feel for how we should think about operating leverage this year as you return to growth?
Thanks.
David Drachman - President, CEO
Well, we've consistently said that we anticipate positive EBITDA in the range of $57 million to $60 million revenue run rate.
I think we continue to view our business that way.
We've exceeded some of our own internal expectations in terms of EBITDA.
So moving forward, we now, with $16 million of cash and cash equivalents on the balance sheet, we believe that based on the growth opportunities that we're facing in 2010, that it's important to reinvest for both stability to strength and the numbers of US sales headcount, as well, as you pointed out earlier, in the opportunities outside the US.
Matt Dolan - Analyst
Okay.
Thanks, guys.
Operator
Your next question comes from Jason Mills of Canaccord Adams.
Please proceed.
Jason Mills - Analyst
Thank you.
Hi, Dave, Julie.
How are you?
David Drachman - President, CEO
Hi, Jason.
Julie Piton - VP, CFO
Good morning.
Jason Mills - Analyst
Good to talk to you.
Just following on the last question and your commentary, David, about sales force head count, it is encouraging to see adding reps back again.
I'm wondering if you could give us some target in terms of where you think your US sales force should be exiting 2010 in terms of direct sales head count?
David Drachman - President, CEO
Well, our plan is to look at this in a measured and strategically, incrementally invest in sales head count.
But we want to continue to look at revenues and compare revenues to cost and expense and make sure that the alignment is following our internal plan.
But to more directly answer your question, we anticipate in the range of between 57 and 60 direct sales people exiting 2010 in the US.
Jason Mills - Analyst
Okay.
That's helpful.
And then, just more of a 20,000 foot view, Dave, as it relates to the domestic atrial fibrillation or ablation markets, we obviously saw some degradation in overall market growth during 2009 and some [postulate] to that, perhaps, is due to the recession and some of the minimally invasive procedures specifically being more discretionary than the concomitant procedures.
We'd love your thoughts on that and what you think over the course of the next 18 to 24 months will be a driver to re-acceleration in market growth.
And then, as it relates to your Company specifically, what gives you the confidence that relative to that accelerating market growth, perhaps you would expect to see in terms of your growth in market share?
David Drachman - President, CEO
Well, good question.
First of all, in the open business we agree that the market has leveled.
We continue to believe that the number one catalyst for market expansion is atrial fibrillation approvals.
That will give us the ability to market directly to referring doctors, cardiologists, and it will more make this product and procedure a standard of care.
Currently, there is about 30% to 35% penetration into the open markets.
We think that open markets are underpenetrated, and the major catalyst is in AF approval.
In terms of the minimally invasive and integrated hybrid approaches, if you look at catheter ablation in 2009, there are estimates that in the US there are 85,000 catheter ablation procedures performed and then outside US that there were approximately 35,000 catheter ablation procedures performed.
So, we believe that there is plenty of catheter ablation procedures being performed.
The growth is about 15% in the catheter market.
And we anticipate that this growth will continue for catheter, and that while the catheter market continues to develop, it's going to create more and more opportunities for patients that have long-standing persistent atrial fibrillation that are not good candidates for catheter ablation, as well as for failed catheter ablation.
We are now seeing patients come back that have two, three, four and sometimes five failed catheter ablation procedures.
That's not uncommon.
So we certainly believe that there is a growing market opportunity for a minimally invasive or integrated hybrid approach.
And we believe that this integrated hybrid approach really brings the EPs and the surgeons together to offer the patient the most comprehensive ablation and mapping procedure.
I hope that answered your question, Jason.
Jason Mills - Analyst
Yes.
That's very helpful.
And then, as it relates to the AtriClip, I am sure you are somewhat disappointed with respect to the delay.
However, it sounds like it is a function of where the FDA is in sort-of the composition environment of that organization and perhaps less.
So, a result of the data that you have seen so far as it relates to the trial encompassing that device.
Perhaps you could comment a bit about what you are seeing from a macro basis at FDA.
And I'm sure you've seen or heard about The Journal article today that comments about sort of-the environment and stance that I think we've all been privy to that FDA has become much more cautious as it relates to 510(k) approvals and shorter regulatory pathways.
Perhaps you could give us your inside census to what's going on and what we should expect to see from the FDA as we move forward, not just in your area, but just as it relates to their stance in general on shorter regulatory approvals.
David Drachman - President, CEO
I think for the foreseeable future 510(k)s will certainly be a more tortuous process, require more data.
So if the 510(k) requires more data, then the submission of the 510(k) would be delayed.
So, it will require companies to almost have a ready for human use product to file their 510(k) because of the amount of increased data that will be required for 510(k) approval.
But, in general, I do believe that the FDA is more cautious.
I think in terms of the PMA process and what FDA is looking for in terms of clinical trials is going to be more rigorous and probably lengthen the time for PMAs, as well.
Jason Mills - Analyst
Okay.
I'll get back in queue.
Thanks, guys.
David Drachman - President, CEO
Thank you.
Julie Piton - VP, CFO
Thank you.
Operator
Your next question comes from the line of Larry Haimovitch of HMTC.
Please proceed.
Larry Haimovitch - Analyst
Good morning, Dave.
Good morning, Julie.
David Drachman - President, CEO
Good morning, Larry.
Julie Piton - VP, CFO
Good morning, Larry.
Larry Haimovitch - Analyst
A couple of questions, one on your cryo business.
My understanding is that you did quite well in the cryo business, and I understand you gained some share back that you had lost in the open market to ATS.
I was told by somebody, however, that they think that the gains you made in cryo may have come a little at the expense of your RF business.
And I'm wondering did you see any cannibalization of RF as you gained cryo share, Dave?
David Drachman - President, CEO
It's hard to characterize any significant cannibalization.
Could there be some modest cannibalization?
That's possible.
But as a general rule of thumb, it's been hard for us to identify any cannibalization.
We've been very targeted with our cryo product.
And, in fact, since our launch, our full launch in the second quarter of 2009, 100 centers have purchased our Cryo1 probe.
So, we've been very targeted.
The intention with our Cryo1 probe was to go out and increase market share.
And we've been very cautious not to cannibalize our radio frequency products, which generally carry a higher ASP per procedure.
So, again, we are not able to identify any cannibalization, but it's possible that there is some modest cannibalization in certain accounts.
Larry Haimovitch - Analyst
Okay.
My next question is you mentioned in your prepared remarks, I think you said that 20% of your customers now have hybrid labs and more are adding.
Could you give us a number, an approximate number, but how many hybrid labs you think are actually out there, and how many could be added over the next year or two?
David Drachman - President, CEO
Well, we have about 700 customers that we look at on an annual basis.
And so, in general, we think that about 10% of the overall open heart centers currently have a hybrid room, and another 10% have one either in the works for this year or in the next 24 months.
Larry Haimovitch - Analyst
Okay.
So, there's roughly 70 out there now.
And that number is going to grow probably this year or to be over 100 places that will be hybrid labs.
And that will be your target audience initially for the feasibility trial, the full PMA trial?
Then obviously when you get full FDA approval, that will be the target market for that opportunity?
David Drachman - President, CEO
Well, it's 20% of the 700, just to be clear.
I said 20% of the 700 that either have a hybrid room or are building one, one is being built in process, one is in process --
Larry Haimovitch - Analyst
Yes.
David Drachman - President, CEO
Or one will be built over the next 24 months.
Our hybrid procedure in Europe is mostly performed in the EP lab.
And so this is a bit of a workflow issue in different centers.
Some centers may choose to perform the procedure in the hybrid room.
Some centers may choose to perform the procedure in an EP lab or in OR.
And our (inaudible) protocol allows either of those three locations.
I think the key issue, though, is hybrid is a very hot topic.
Percutaneous and transapical valves are certainly a part of that drive toward hospitals investing resources in hybrid rooms.
So, we think that hybrid procedures in general are a very dynamic area.
And certainly with the capacity, growing capacity of hybrid rooms, it should only help our effort in the DEEP AF approach.
Larry Haimovitch - Analyst
Let me ask one more question, Dave, and I'll jump back in queue.
Just a follow-on to your comments, it sounds like what you're saying is that your ability to grow the hybrid procedure is not going to be limited by the availability of hybrid rooms.
Is that a fair statement?
That there are enough now and there will be more coming, such that you can grow that business very nicely and not be constrained by a shortage of hybrid rooms?
David Drachman - President, CEO
That's exactly right.
In fact, currently the majority of centers that have either started or are anticipating starting are not starting in a hybrid room.
Larry Haimovitch - Analyst
Okay.
Great.
I'll jump back in queue.
Thanks, Dave.
David Drachman - President, CEO
Thank you.
Operator
Your next question comes from the line of Tim Lee of Piper Jaffray.
Please proceed.
Tim Lee - Analyst
Hi.
Good morning, and thanks for taking the question.
Just a couple of follow-ups.
Just in terms of the hybrid procedure, what does reimbursement look like?
Are docs billing for one procedure and then splitting the physician fee?
Or are they getting reimbursed for two procedures?
Just any details on that front, please.
David Drachman - President, CEO
Sure.
There are standards for hybrid procedures, obviously, since there are other forms of hybrid procedures.
In this case, the electrophysiologist gets paid and compensated under CPT codes which are consistent with AF ablation procedures, and the surgeon the same.
So there's compensation for the surgeon and EP that are comparable to their standalone procedures.
And depending upon where the procedure is being performed, but generally speaking if it's an outpatient setting, then the hospital reimbursement is consistent with the surgical procedure.
Tim Lee - Analyst
Got it.
Okay.
Okay.
That's very helpful.
Thank you.
And then just a couple of follow-ups on the ABLATE study.
Any sense of when you could expect to see a panel on that?
And with the -- I think this was asked last time.
Is the data -- the first data we'll see via panel rounds and any type of the meetings that are coming up here in the next coming months?
David Drachman - President, CEO
You asked that question, Tim, last time.
And I appreciated that.
Well, we are aiming to have a panel meeting in the first half of 2011.
In terms of the data, we would anticipate that the ABLATE data will be presented at national meetings during the course of the second half of this year and in the beginning of next year.
So, we are planning for presentations of that data ahead of the panel meeting.
Tim Lee - Analyst
If the final module is getting submitted here shortly, why so long until a panel gets convened on this?
David Drachman - President, CEO
Well, there is a six-month window for FDA to come back with the responses.
So, in the PMA process you submit your PMA, the FDA has six months to respond.
And then based on their questions, we'll have a need to rally with our investigators and respond to their questions.
And then the panel meeting will need to be planned.
Tim Lee - Analyst
Got it.
And just a couple of more quick ones here.
In terms of the cap regarding ABLATE, any sense of -- or how many patients are you requesting on that?
David Drachman - President, CEO
We've been allowed 50 patients.
Tim Lee - Analyst
Okay.
And two more quick ones.
In terms of your 2010, you talked about some of your strategic goals.
Would you care to quantify or put some numbers around what type of revenue growth we're looking for?
Are we looking for -- are you targeting double-digit top line?
Or are you looking for something stronger than that, low double digits?
How should we think about how 2010 will unfold?
David Drachman - President, CEO
I think you should look at 2010 as increasing revenue trends, increasing revenue growth trends, in the second half of the year.
In terms of qualitative information or guidance, we haven't set a point in time at this point to reinstate guidance.
Tim Lee - Analyst
Okay.
And then just one last one.
What was the $500,000 non-recurring stock comp during the quarter?
Just any details on that front, please.
Thank you.
Julie Piton - VP, CFO
Sure.
So, we use a well-known system called Equity Edge.
And they had a software upgrade that provided for essentially their calculation of the forfeiture process was resulting in inappropriate timing of stock compensation within periods, not over the life of the grant but within individual periods.
So, of the $500,000 that we recorded it related to this upgrade.
And essentially, it went back to 2006.
So most of the expense and then some actually belonged in earlier periods conceptually.
And so that's what it relates to.
And so it's a non-recurring.
We'll actually get a benefit prospectively.
Tim Lee - Analyst
Okay.
Thank you.
Operator
Your next question comes from the line of Erica Leighton of Noble Financial.
Please proceed.
Erica Leighton - Analyst
Good morning.
Thanks for taking my call.
I was actually hoping that you could breakout the AtriClip revenues, even if it's not for the quarter, if you could give us some sense of if you will be able to do that for us in coming quarters?
Julie Piton - VP, CFO
Erica, this is Julie.
We haven't taken a decision yet on whether or not we will segregate AtriClip revenues prospectively.
As Dave commented, we really just got through our initial clinical milestones during the fourth quarter.
And in Europe, with respect to our initial launch, there's a process we go through.
So, it was not a large or significant contributor to the fourth quarter.
And we're still evaluating whether or not we'll break out that revenue.
And we'll probably reach a decision on that at or near the time we launch it in the United States.
Erica Leighton - Analyst
Okay.
Thank you.
That would definitely be helpful to have if you can get that to us.
The other question is about the hybrid procedures.
This looks like a very good opportunity for you.
I know that that there's not many people in the space that are participating in this yet, and it looks like you could be a leader.
Do you know how many of the centers that are interested in hybrid procedures you're talking about -- talking to, pretty much an idea of prospective market share?
David Drachman - President, CEO
We are primarily focused on the FDA DEEP AF clinical trial.
However, we are getting a lot of buzz around the hybrid approach.
And there are physicians that are requesting opportunities to go and see hybrid procedures and participate in our clinical trial.
So, I can't give you any qualitative information in terms of the size of the market.
But in terms of the level of enthusiasm that we've experienced over the last six months has increased significantly.
The best example is always an example.
I got a call from one of the major catheter ablation centers just about a week ago.
The call was unplanned, asking for a meeting on March 3 to be convened to discuss the possibility of participating in trials and how they would go about opening up a hybrid program at their center.
In addition, if you look at the speakers that we've had at our CME programs that have spoken about the opportunity for hybrid procedures, if you look at positive atrial fibrillation, it was Frank Marchlinski from the University of Pennsylvania and Andrea Natale, who we know are some of the top catheter ablation people.
And the same is true for STS.
We had top catheter ablationists, as well as top cardiac surgeons speaking at Symposia about this novel new approach being one that needs to be further investigated, but holds great promise.
Erica Leighton - Analyst
Thank you.
I guess that shows that you have some good mind share, which I guess is the more appropriate term versus market share at this point.
And then the other thing is I missed how many of the centers that already have hybrid labs that are looking to build a second.
That would be helpful.
David Drachman - President, CEO
What we said was that 20% of our customers, which our customer base we look is about 700 customers on an annual basis, that we surveyed either have a hybrid room, are developing one this year, or have one in the plans for the next 24 months.
Erica Leighton - Analyst
Okay.
I thought I had heard something additional on the call.
That's very helpful, and all the other questions have been asked.
So, thank you very much.
David Drachman - President, CEO
Thank you.
Julie Piton - VP, CFO
Thanks, Erica.
Operator
Your next question comes from the line of Charley Jones of Barrington Research.
Please proceed.
Charley Jones - Analyst
Good morning.
Thanks for taking my questions.
David Drachman - President, CEO
Hi, Charley.
Charley Jones - Analyst
I believe the end point of the ABLATE trial was a six-month follow-up from anti-arrhythmics.
Do you think the FDA will be looking at 12-month data, as well, or even longer data, now that they have this continued access protocol and they are like -- this timeline has been lengthened a little bit?
David Drachman - President, CEO
It's possible, but we are taking measures to continuously follow these patients for longer durations of time since that's affordable to us.
So, we will be following the ABLATE patients for longer periods than six months.
Charley Jones - Analyst
Does that create any additional risk in your mind?
David Drachman - President, CEO
We believe in our procedure and our technology, and we believe in the long-term outcomes.
We've been at this since, really, 2002.
So, we have a pretty good understanding of what to expect and certainly believe that our outcomes will hold up.
Charley Jones - Analyst
Speaking of outcomes, what is the closure rate of your clip in the 78 patients you studied in Europe or in some segment of that?
David Drachman - President, CEO
There were 34 patients that were published in a European trial.
And at three-month CT scan, the rate of closure was 100%.
Charley Jones - Analyst
And what kind of efficacy rates have some of the single centers been demonstrating with the hybrid procedure?
David Drachman - President, CEO
These are initial results.
But initial results, again, for primarily long-standing persistent patients, many of them which have failed a single or second attempt at catheter ablation, has been in the mid 80s.
Charley Jones - Analyst
Is there any consensus among the thought leaders about how previous catheter ablations affect data, whether or not they make it more difficult to achieve a good outcome, or whether or not it's just small touch-ups, and as you do more you actually see the rate of atrial fibrillation returning decrease?
David Drachman - President, CEO
Excellent question, Charley.
Excellent question.
We're aware of a publication that's coming out looking at the minimally invasive procedure and comparing results to patients.
They are de novo patients versus patients that have failed one or more catheter ablation procedures.
And from our experience, what we've seen in terms of the minimally invasive result following a failed catheter ablation, it's very comparable to a de novo minimally invasive procedure.
Charley Jones - Analyst
Okay, that's helpful.
And then would you characterize your minimally invasive revenue growth as primarily being impacted by ASP?
Can you give us any sense there?
I'm trying to understand the volume trends here -- obviously hybrid is going to change that -- but the volume trends we have and how much.
It seems like you're being impacted by ASPs.
Any color would be helpful.
David Drachman - President, CEO
Sure.
Well, as you know, in 2009 the focus was to focus on our existing centers.
So, in doing that, we didn't go out and expand centers.
So there was some stocking order variance on a year-over-year comparative basis.
In addition, as we've discussed, in several of the larger centers for a combination of reasons did move to a single [clan], which did have a fairly significant impact on our blended revenue per procedure.
And I think, also, to a lesser degree some of the inventory tightening controls and purchasing controls have also had some modest impact on the revenue on a year-over-year comparative basis.
And, lastly, as you know, the ORLab was a significant contributor to minimally invasive revenue in 2008 and 2009, particularly in 2009.
And so, on the year-over-year comparative basis we were working against a very significant capital equipment performance on a year-over-year basis.
Julie Piton - VP, CFO
We haven't seen any real pressure with individual products.
It's more this blended procedural ASP where we saw a little bit of pressure during the year.
Charley Jones - Analyst
Right.
I thought that's where you were going to go with it, actually.
And so I guess I have a follow-up question.
I think last -- a couple of quarters ago we talked about maybe 30% of your doctors are using a single clamp method.
And I guess I assumed that maybe we'd move further down the curve there.
Can you give us an update on that?
David Drachman - President, CEO
Right now, from what we've seen, the single clamp usage has normalized.
We don't see any trends, any significant trends, toward further movement from centers to a single clamp approach.
Charley Jones - Analyst
Okay.
Thanks a lot for all of the questions.
I appreciate it.
David Drachman - President, CEO
Thank you.
Operator
(Operator Instructions).
You have an additional question from the line of Larry Haimovitch.
Please proceed.
Larry Haimovitch - Analyst
Dave, a question on the minimal invasive market.
It's grown some, but I think overall we would all agree that it hasn't grown as well as we might have all hoped.
Is the combination procedure that will be kicked off with the DEEP trial really the key to get that market growing, to get the EPs and the cardiac surgeons working were closely together in overtime, really develop a collaboration that results in that market really becoming a strong growth market?
David Drachman - President, CEO
Good question, Larry.
I think that is a key catalyst and a very large opportunity.
However, just stepping back, remember we started off with pulmonary vein isolation, and GP ablation and left atrial appendage exclusion was our primary procedure for minimally invasive.
The first publication that really came out and demonstrated results for a full left atrial compartmentalization procedure by Jimmy Edgerton, for example, was fairly recent.
So, it's really through 2009 when we released products like Coolrail and ORLab Systems that physicians began to adopt a more comprehensive ablation approach that would be more indicated toward patients with persistent and long-standing persistent atrial fibrillation.
So, our minimally invasive thesis is dependent upon disease [take] segmentation.
And we really haven't had the tools and the procedures to execute that strategy until fairly recently.
And now with the hybrid procedure, we think that's the most comprehensive ablation and mapping procedure and should yield the best results in the more chronic long-standing persistent patients and, again, those growing number of patients that have failed catheter ablation procedures.
Larry Haimovitch - Analyst
Great.
Thanks, Dave.
David Drachman - President, CEO
Thank you.
Julie Piton - VP, CFO
We'll take one more question, operator, if you have one.
Operator
Your next question comes from the line of Charley Jones of Barrington Research.
Please proceed.
Charley Jones - Analyst
Sorry.
Just one quick follow-up here.
You talked about referencing the Biosense Webster data, which I believe generated efficacy rates of about 59% globally and 40% in the US, relative to drugs of about 17%.
Can you discuss what data from that trial you plan to reference?
And then a follow-up question on your hybrid procedures, will you be -- will doctors globally be using an isthmus line, that's similar to what Natale was doing?
Or is this going to be freedom for them to do what they want?
David Drachman - President, CEO
Charley, I apologize, but you were in and out.
Could you repeat the first part of your question, please?
Charley Jones - Analyst
You talked about referencing the Biosense Webster data, which I believe generated 59% efficacy globally, 40% in the US relative to 17% drug efficacy.
Could you discuss what type of data you've planned to reference from that trial?
And then the second question was related to whether or not the doctors will be doing an isthmus line similar to what Natale did in the Biosense Webster trial and your hybrid DEEP trail.
David Drachman - President, CEO
Okay.
Good question, Charley.
Thank you.
The Biosense Webster data that we have gotten consent for FDA to reference deals with their ThermaCool NaviStar product.
And FDA basically wants to reference bench and pre-clinical data as part of the approval process of our IDE because the ThermaCool is one of the products that is called out in the clinical procedure.
So, we've gotten a consent from Biosense Webster for FDA to reference certain files because they've requested bench and animal testing on the ThermaCool NaviStar product as a part of our submission.
Charley Jones - Analyst
And a correction there.
The question is relating to [Paponi], not Natale.
David Drachman - President, CEO
Well, in terms of the isthmus lesion, we have plans in our hybrid procedure.
The DEEP AF protocol calls for both a left atrial mitral valve lesion, as well as a right atrial isthmus lesion.
So we do plan to have both left atrial isthmus and right atrial isthmus ablation in the DEEP AF clinical procedure.
Charley Jones - Analyst
Great.
Thanks a lot.
David Drachman - President, CEO
Thank you.
Operator
There are no further questions at this time.
I would now like to turn the call over to Mr.
David Drachman for closing remarks.
David Drachman - President, CEO
Thank you once again for joining us on the call today.
We look forward to talking with you in the near future.
Thank you very much.
Operator
Ladies and gentlemen, thank you for your participation in today's conference.
This concludes the presentation.
You may now disconnect.
Have a great day.