Axonics Inc (AXNX) 2021 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the Axonics Quarter 4 2021 Results Conference Call. I would like to turn the call over to your host, Mr. Neil Bhalodkar. You may begin.

Thank you, Sarah. Good afternoon, and thank you for joining Axonics' quarterly results and update call. Presenting on today's call are Raymond Cohen, Chief Executive Officer; and Dan Dearen, President and Chief Financial Officer. Ray will provide introductory remarks on the fourth quarter, followed by Dan discussing, in detail, financial results and 2022 guidance. Ray will conclude our prepared remarks with updates on sales, marketing and product development initiatives, followed by a Q&A session.

Before we begin, I would like to remind listeners that statements made on this conference call that relate to future plans, events, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. While these forward-looking statements are based on management's current expectations and beliefs, these statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause results to differ materially from the expectations expressed on this conference call.

These risks and uncertainties are disclosed in more detail in Axonics' filings with the Securities and Exchange Commission, all of which are available online at www.sec.gov. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today's date, February 24, 2022. Except as required by law, Axonics undertakes no obligation to update or revise any forward-looking statements to reflect new information, circumstances or unanticipated events that may arise.

I would now like to turn the call over to Ray for his remarks.

Okay. Thank you, Neil, and I'd like to welcome everyone who's joining the conference call this afternoon. So we're very proud of our fourth quarter and fiscal 2021 results, considering the disruption COVID-19 has had on elective procedures in the health care facilities in the United States and, of course, around the world. In addition to strong commercial execution, we made important progress on several strategic initiatives that position Axonics for durable growth for years to come.

Turning to fourth quarter results. Axonics generated record net revenue of $53.1 million, representing an increase of 53% compared to 2020. Sacral neuromodulation revenue was $44.4 million in Q4 of 2021, an increase of 28% year-over-year and a sequential increase of 11% compared to the third quarter of '21.

In fiscal year 2021, through a combination of market expansion and share capture, our sacral neuromodulation revenue grew by over 40% to $157 million, representing over 10,000 patients that were implanted during the year. With tens of millions of Americans affected by bladder and bowel incontinence, continued innovation and increased patient and physician awareness for sacral neuromodulation, we expect this market to grow by at least 15% annually over the next 5 years and turn into a $1.5 billion category.

So now turning to Bulkamid, our unique biocompatible bulking hydrogel for stress urinary incontinence for women, fourth quarter revenue was $8.7 million, an increase of 27% on a sequential basis. In the 10 months of 2021 that we owned this asset, Bulkamid has improved the quality of life of over 20,000 women propelling Axonics into the market leader in this category.

And we're just scratching the surface of what is possible in this large and highly underpenetrated stress urinary incontinence market. As it relates to the impact Omicron had on our business, we started seeing an impact in sacral neuromodulation procedure volumes in the second half of December.

Similar to what you have heard from other companies, the significant increase in the Omicron cases continued into January and early February, resulting in cancellation and deferral of hundreds of sacral neuromodulation procedures. The impact in February moderated, and we are encouraged by the improving trend line and expect this positive momentum to continue into March. Given this impact from Omicron and the normal seasonality from the annual resetting of insurance deductibles, we expect sacral neuromodulation revenue in the first quarter to experience a decline in the mid- to high teens as compared to the fourth quarter of 2021.

Importantly, we expect cases that were deferred or canceled in December and early 2022 to be rescheduled throughout the year, and as such, our outlook for growing SNM revenue by 25% in 2022 remains unchanged. With that, I'll turn the call over to Dan for a more detailed review of fourth quarter 2021 and financial results as well as 2022 guidance. Dan, I will give you a second.

Thanks, Ray. In the fourth quarter of 2021, as Ray mentioned, Axonics generated net revenue of $53.1 million. This represents an increase of 53% compared to $34.8 million in the prior year period. Sacral neuromodulation net revenue was $44.4 million, 98% of which was generated in the United States. Bulkamid net revenue was $8.7 million, 67% of which was generated in the U.S.

Gross profit for the fourth quarter of 2021 was $35.4 million, representing a gross margin of 66.6% compared to 63.6% in the prior year period. Total operating expenses for the fourth quarter of 2021 were $53.1 million. Included in operating expenses are $6.8 million of stock-based compensation expense and $2.1 million of intangibles amortization.

Operating expenses totaled $33 million in the prior year period. Net loss for the fourth quarter of 2021 was $15.2 million compared to a net loss of $11.3 million in the prior year period. Cash and cash equivalents were $220.9 million as of December 31, 2021.

Turning to fiscal year 2022 guidance. We expect total company revenue of $234 million, an increase of 30% compared to fiscal year 2021; SNM revenue of $197 million, representing an increase of 25% compared to fiscal year 2021; and Bulkamid revenue of $37 million an increase of 63% compared to fiscal year 2021.

We expect gross margin to increase 200 basis points year-over-year to approximately 66% in fiscal year 2022. We expect to benefit from higher fixed cost absorption and purchase price discounts as well as lower cost of goods sold on our new recharge-free device, partially offset by higher prices along the supply chain.

In fiscal year 2022, we expect operating expenses to total $260 million including $35 million of noncash expenses associated with depreciation, amortization and stock-based compensation. The increase in operating expenses compared to 2021 is primarily being driven by investments we are making in direct-to-consumer advertising and growth in the headcount of our U.S. field sales team. We expect these investments to pay significant dividends in 2022 and the years to come.

I will now turn the call back over to Ray for additional remarks.

Thank you, Dan. So I'd now like to provide updates on our product development and sales and marketing initiatives. Suffice it to say, we're very excited about what Axonics has on tap in 2022. On the product development front, we have engaged with the FDA on an interactive basis throughout our PMA submission for the newly developed Axonics recharge-free sacral neuromodulation system. We are very close to the finish line and anticipate FDA approval before the end of the first quarter.

We expect to begin shipping the new device within days following FDA approval. We're confident that the introduction of our recharge-free device will continue to drive market expansion and advance Axonics on its path to market leadership.

At over 15 years at typical stimulation settings and over 22 years on low energy settings, this new device will have the longest functional life labeling of any nonrechargeable neurostimulator the FDA has ever approved. This recharge-free system will have a positive impact on our business since many physicians have only known an implanted nonrechargeable sacral neuromodulation system for the last 2 decades.

As we did with the introduction of the first long-lived MRI-compatible rechargeable sacral neuromodulation system in late 2019, our new recharge-free INS sets a new standard for what is possible in sacral neuromodulation. The fully recharge-free system is full-body 1.5 and 3T MRI compatible and employs the same stimulation engine along with a wireless patient remote control that, unlike our competitors' device, does not require a communicator nor does it require recharging or replacement batteries.

In accounts that are loyal to Axonics, this new device will allow us to capture business we previously couldn't service. And more importantly, having an SNM portfolio that now includes a recharge-free option will allow us to take another crack at competitive accounts that previously didn't come our way because the physician believed that a nonrechargeable system was best for their patients.

In order to maximize the potential for an exceptional product launch and market share capture we are ready to go with a full-scale market launch that includes running seminars around the United States in the second quarter. These seminars proved exceptionally successful when launching our first-generation SNM system in late 2019 and Bulkamid in the second half of 2021.

So I would now like to spend a few minutes discussing the large and underpenetrated market opportunities our therapies address. For the last

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Ladies and gentlemen, please remain online. Your conference will resume shortly.

Okay. I think we're back. I think we're back live now. There were some technical difficulties. So I was speaking about our initial approach to raising awareness, which we still employ to this day. And that is to encourage practices to identify patients that have been previously treated with drugs and/or BOTOX and are eligible for Axonics therapy.

With our assistance, the practices then send mailers to these patients, which discuss the availability of a long-lived new device that is MRI-compatible, highly efficacious and easy to use. The program has been very successful and is one that provides a tremendous return on investment for both Axonics and our physician customers.

We also reach patients via print advertising, radio and a combination of digital activities, including Facebook ads, paid Internet search and search engine optimization. These various channels direct patients to Axonics branded websites, where the person registers and then qualifies themselves based on answers to a short online symptom questionnaire.

Now we partner with a third-party call center that is staffed by a team of nurses well versed in incontinence and the therapies we offer. This effort has resulted in over 50,000 inquiries last year and a few thousand qualified leads that were provided to physicians that offer Axonics therapy.

Now we've taken the learnings from the last 2 years of our direct-to-patient and direct-to-consumer efforts, we went to school on what has and hasn't worked for other med tech advertising campaigns, and we are now excited to take the next step in our DTC journey.

Beginning in April, we will be airing television commercials locally and nationally on network television as well as streaming channels. Television will allow Axonics to reach millions of women in 2022 and potentially generate hundreds of thousands of inquiries.

Our messaging will need not to distinguish between urge, stress or fecal incontinence because we offer solutions for all of these conditions. We believe this will increase our response rates, lower cost per lead and drive more patients into practices that offer Axonics therapy. Our omni-channel strategy will help establish the Axonics brand and allow us to engage patients with incontinence across multiple platforms with a consistent message that new life-changing incontinence therapies are available to them. It will also be clear to physicians that we are behaving like and plan to be the market leader in this category.

To prepare and fully capitalize on the market growth and share capture we anticipate in both the near and long term, we have grown our U.S. field team to approximately 300 individuals. The team is evenly split between quota-carrying sales professionals and clinical specialists that support cases. We are confident that the breadth and depth of our team matches the market potential for sacral neuromodulation and stress urinary incontinence treatment for the next several years.

In closing, we're grateful and humble for the trust physicians, patients and shareholders have placed in Axonics. And I'd also like to thank our field team and our colleagues in Irvine for their diligent efforts and dedication to fulfilling our mission of improving the lives of adults suffering from incontinence.

So at this time, we're happy to take questions, and I'll turn it to the operator.

(Operator Instructions) Your first question comes from the line of Larry Biegelsen from Wells Fargo.

So I wanted to start on the primary cell device. The information you shared tonight was interesting on the 15- to 20-year life -- battery life, if I heard correctly. So my question is, Ray, how do you think your device is going to stack up to what we've seen so far from the Medtronic new nonrechargeable device that they just got approval for? And are you going to be able to market that 15- to 20-year claim? I think you mentioned on this call, if I heard correctly. I think they said theirs is about 10 to 15 years. And I have 1 follow-up.

Yes, no problem. So Larry, look, I think that there's no question that we're going to be able to market the claim because that's the data that we submitted to the FDA, and they have already accepted our longevity claims based on our robust internal testing and accelerated life testing. So just to give you a comparison, to pick a point, a 1 milliamp implant for us is going to get 17.5 years out of our device and that's typical settings.

So we're really excited about that, and we think it's going to compare not only quite favorably, but once again, as I made in my prepared remarks, this is going to be the longest time in terms of longevity in the body for any nonrechargeable neurostimulator that the FDA has ever approved. So we're quite excited about that. And then, of course, the product I think very importantly, I mean, it uses the same clinician programmer, the same wireless patient remote. It's got the same engine. We'll have the same conditions for MRI compatibility that we have in our existing products.

So we think this is clearly is going to set a new standard in sacral neuromodulation for what is possible. And I'll just add by saying, of course, we're not abandoning by any means, our long-lived rechargeable device which could easily get over 2 decades in the body and currently only requires charging once a month for an hour.

So we're real bullish about this, Larry. And I think the key thing for us is to be able to offer the complete line and give physicians choice depending upon maybe the age of the patient or whatever other parameters they may decide to move a patient in one direction or another. We're agnostic from that standpoint. We just want them to implant Axonics.

That's super helpful, Ray. And then just for my follow-up, on your DTC effort, could you describe how much you're going to spend in 2022? And what gives you the confidence you won't help your competitor more than yourself given that their share is still higher?

Yes. You broke up a bit. Hopefully, this line is not broken up. Larry, can you hear my response well?

I can hear you fine. Do you want me to -- just to repeat...

No, no problem. I heard your question. So your question fundamentally was what gives us confidence that we're not going to be advertising for our competitor, right? And the answer is that we're not advertising sacral neuromodulation. We're advertising Axonics therapy for patients who have incontinence.

So I think that's what we're doing. So we feel pretty confident about that. And of course, the rising tide, as we said all along, floats all boats, right? So if this helps the category in general, we're okay with that. But we're being smart about it. We recognize that there is a competitive offering. And so we're purposely orienting our commercials so that we could pick up patients with any form of incontinence, whether it be stress or urinary or whatever the case might be.

We're not going to make those distinctions. And besides, in a 30-second commercial you really can't. Further to that, just to give you a complete fulsome answer, any time somebody raises their hand, they're directed to website, they fill out a survey, if they're interested. Obviously, that's the first level of qualification. And then we have, as I mentioned in my remarks, a call center, where people -- these are registered nurses who not only understand incontinence, but they understand our offerings. And they will call out to those patients, speak with them, speak with them about their condition and then offer them an opportunity to get connected to a center that is offering Axonics therapy.

So this is not about sending people to A website, putting a physician locator on it and letting patients decide who they want to go to willy-nilly. So we -- we've had a lot of experience with this over the last year. And so we feel like we've got that system down and we'll be getting the right kind of return on our investment.

Your next question comes from the line of Chris Pasquale from Guggenheim.

Ray, you said you're just scratching the surface of what you can do with Bulkamid. What else can you do there? Are there product line extensions or clinical trials you want to pursue that you think could drive more adoption? Or is it just about touching more physicians?

Thanks, Chris. It's a good question. We don't need to do anything. I mean this is -- we have physicians that are evangelizing the therapy based on the results that they're seeing with the patients. I mean this is a phenomenal alternative that anybody who is coughing, sneezing, pickup objects, exercising and leaking urine. I mean we can get them fixed up in 15 minutes, whether it's in an office, ambulatory surgery center OR outpatient section of a hospital.

So for us, it's just more about going out there with our team and accessing more of these accounts and giving them access to the product. So this thing is growing like weeds as you've seen already, and there's no pushback in terms of a, the quality of the product, the ease of administration, the immediate results that patients are getting. So we don't have a burden to really do anything else other than go out there and offer this product and support these customers.

So this thing's got legs. And I think we've seen that already, and we expect the revenue just to continue to flow in and obviously provides us with a lot of other benefits besides just the revenue and the margin.

Got it. Okay. And then, Dan, if I heard you right, you're guiding to a roughly $70 million increase in OpEx on a, call it, $50 million increase in revenue. It certainly makes sense to invest in the future growth of the business, but that seems like quite a bit of investment or sort of negative leverage in this year in particular. Can you talk a little bit about where that's going and how you think about this level of spending? Is this a onetime investment year, then we start to see leverage as we get into '23?

I think that's right. I don't think I'd characterize it as onetime. I think at a high level, there's obviously increases across a number of departments as we scale up and have just more activity. But obviously, the big drivers, as you've called out, are the DTC campaign in addition to other marketing programs. And I think we glanced off of this on the call, we didn't get into it, but we've also added a number of sales reps and clinical specialists in the U.S. field sales team.

And as a secondary since you brought up Bulkamid, we started out with 4 U.S., what we call key account managers, which are the Bulkamid reps, and we now have increased that to 25. And so what you're seeing is increase in spending across a number of departments, primarily focused on revenue generation. And then we are talking about a sizable, certainly for us, increase in DTC spending.

It's the type of program we're going to push hard as long as we see return on investment and revenue growth. And look, when we optimize it in regional and local territories, then we'll be able to cut back on some of the bigger expenses. and it's the type of program that we don't know if it runs for 1 year, 2 years or 3 years, but at some point, the leverage will come in because it will take some patients some time to go through the process and the care pathway to get implanted. But it's the type of investment that will produce returns for the next 1, 2 or 3 years.

Your next question comes from the line of Cecilia Furlong from Morgan Stanley.

I wanted to start just with the revenue guidance. Understanding the sequential dynamics in the SNM business. But could you just talk about, one, what you're expecting from Bulkamid 4Q to 1Q and then throughout the balance of '22 as well as how you incorporated the launch of recharge-free platform and your thinking in terms of sequential acceleration in the business through the balance of the year?

Certainly. So for 2022, as we said, we expect total revenue of $234 million, and that's both sacral neuromodulation as well as Bulkamid. The SNM piece is $197 million of that, which represents 25% year-over-year growth. We're expecting in Q1 a mid- to high-teens sequential decline compared to the fourth quarter, and that's due to seasonality and also the Omicron variant, which has in certain markets, hampered elective procedures.

And as we look forward at quarters 2 through 4 in 2022, when you factor in seasonality, we expect the SNM revenue in the second and third quarters to have roughly equal weighting of 25% of the total revenue and in the fourth quarter, which is always strongest, to be approximately 30% of the total revenue.

On the Bulkamid side, what we're expecting to see in Q1 is a slight decrease from Q4 2021 of just a couple of hundred thousand dollars. And then we expect to see that increase quarter-over-quarter by approximately $500,000 each, which is how we get to $37 million in revenue for 2022 for Bulkamid.

Okay. Great. And if I could also just follow up. As you think about the initial launch of the recharge-free platform, how you're thinking about either targeting accounts where you have the majority of share -- Medtronic still has a portion -- versus those accounts that maybe you've been leveraging Bulkamid to get into where you haven't had a presence before, but just the ability now to have the recharge-free platform in your portfolio? I'm just curious if you could provide some high-level commentary around how you think about that initial launch.

Sure. Sure. This is Ray now. It's pretty straightforward. So as we've said before, it's not as if our existing accounts are clamoring for a nonrechargeable device, okay? I think this is important to say. We've got happy customers. They're implanting our device. I mean, 10,000 of our devices got implanted last year alone, 98.5% of that in the United States.

So -- so there -- will we get some business on the margin? Are there some patients that are in Axonics loyalist accounts that still wind up with an InterStim II because they may have had one in their body before? There's some of that that's going on. And clearly, we have some accounts that have been splitting their volume.

So we'll see some incremental increase in the existing accounts that we have today. Now as you mentioned Cecilia appropriately, our target is competitive accounts. And we have quite a number that have been waiting, right, for us to come out with this new product that we haven't gotten any business from. And so we're going to target them, of course. And then a lot of those accounts, interestingly enough, have started with Bulkamid. So we're already behind the counter, so to speak.

So it's a combination of all those activities. And as you probably know, salespeople are a special breed of cat. They follow the path of least resistance. So that's the guidance, right? Let's get the business where we can get it and try to light up the scoreboard the best that we can.

So for us, we're just very thankful that the pandemic seems to be receding. Things are opening up nicely around the country. There's still a little bit of a hangover, clearly. We got a lot of patients that we're hoping that will reschedule their procedures now that the hospitals and ASCs are open to doing procedures.

And so we're very optimistic about things. And we think that the only thing that's held us back, quite frankly, has been the pandemic. And with that receding and with the new product offering, and additional stuff that we have planned for this year, along with the advertising, we're quite bullish about what 2022 will offer for Axonics.

Your next question comes from the line of Adam Maeder from Piper Sandler.

Congrats on the progress. I wanted to start on the primary [cell] device. And maybe you can just level set us for the market today. How is that split between rechargeable and nonrechargeable therapy?

And then the second part of the question is, if you were to look forward kind of 12 months from now, Ray, I mean, how do you think your device mix will stack up recharge versus recharge-free? And then I had a follow-up.

Sure. Sure. Sure. I just want to make a point. We talk about a recharge-free system. We're talking about a recharge-free system where neither the IPG, which is implanted in the body or the patient remote needs to be recharged. That is not the same offering that our competitor has.

It's true that you don't have to recharge their IPG, but the rest of the accoutrements all need to be plugged in the wall and recharged on a regular basis. I'm going to answer your question backwards, Adam, if you don't mind. We would expect that given a year or so from now, we probably will see a 50-50 split in terms of our nonrechargeable versus rechargeable product.

And maybe that's not the most enlightened projection, but probably can't be too far off one way or another if we stick with the 50-50 idea. So that's ultimately, I think, where this thing goes.

Now your question about what is currently the case in the marketplace. I think it's important to kind of remind people that the #1 selling product in the United States and the world has been the InterStim II, right? That's the product that we've been competing with. It is a nonrechargeable device. We just have not seen much penetration of the competitor's rechargeable system, okay? Have they sold some? Sure. But once again, the product that we've been competing with has been InterStim II. And we're going to -- and we continue to replace those products as nearly 15% of our overall volume is still replacements of these legacy products in these physician offices.

So I think we'll pick up more of that business as time goes on now that we have a long-lived nonrechargeable system to offer. So there are 2 markets. I think this is really important for people to understand. There's 1 -- there's a physician who's communicating with their patients and trying to move those patients in the best direction that they can, right? So it's not like patients are coming in with a strong preference per se. We've done surveys about this and what the patients tell us is they're following the advice of their physician. And that shouldn't surprise anybody.

Really helpful color, Ray. And then for the follow-up, I wanted to ask about the recent journal publication that talked about higher prevalence than previously anticipated on incontinence and how you think that could potentially benefit therapies like sacral neuromodulation, Bulkamid. I think the journal article talked about the need for routine screening as part of preventative care for all adult women. So is this a tailwind for the category? Is it something that could have a light switch effect? Is it something that kind of just benefits the category over time? Just any color there would be helpful.

Yes. Thanks, Adam. It's a good question. I wish I could say that anything in medicine is a light switch, but it's not. As you know, things change very slowly. And it's unfortunate. And I say it's unfortunate because here's the fundamental problem we have. Primary care physicians have no idea about sacral neuromodulation. Primary care -- OB/GYNs don't treat for the most part, urinary incontinence, right?

This is part of the problem. So what we're looking to do here is not just stimulate the urology and urogynecology market, these are the docs that are actually offering these therapies. But we also want, with our advertising, to stimulate the market in general, right? And we hope that if patients are coming into their regular doctor. And as you know, women mainly see GYNs. And if they're walking in these offices and they're saying, look, I'm leaking. And I saw an ad on television, how can you help me? Either that stimulates them to get in the game to do Bulkamid or to refer that patient out to a urogynecologist as an example.

So -- so there's so much blue sky in this category. It's truly unbelievable. We're sitting on top of a unicorn opportunity with a TAM that is really quite unbelievable. And I think that it's been quite frankly, a very sleepy corner of our business up into this point. But we aim to change that. And given these -- the prevalence and incidence of these problems, that exist out there, we think that creating some buzz out in the marketplace, particularly among potential patients that now are going to hear for the first time, there's actually a solution. And I dare say this is very analogous to what we've seen from Inspire, right?

Nobody knew that there was a neuromodulation device that could treat sleep apnea, but now with their cute commercials, if you're using CPAP, you're thinking, maybe I should go look into this other product. So -- this is a well-kept secret. We've been banging that drum. Dan and I have been talking about this now for 8 years. And we've been banging the drum, and I think now is -- it's one of those situations where I think it's the right time, the right -- we have the right technology now. We've got -- we're going to have that full line of products for people to choose from.

We don't care what kind of incontinence you have, we can get you treated. And I think we've positioned Axonics quite nicely to benefit from additional awareness in the marketplace.

So I really appreciate that question, Adam, it gave me a chance to say a few more things I wanted to talk about.

Your next question comes from the line of Mike Matson from Needham & Company.

It seemed like the fourth quarter, there was a bit more of a divergence between your performance and Medtronic. I mean they even admitted that they lost share in the quarter. So what I'm wondering is did something change? I mean, did you -- is it the sales force expansion? Is it the Bulkamid strategy of cross-selling? Is there something going on there? Because there wasn't any change from a product perspective, at least at that point in time?

Mike, we've got great products. We got great people. We provide exceptional service and it's just a matter of time. And I think that -- look, we've only been at this for a short period of time. I mean just to remind people, we launched our product in November 2019. We had 4 months where we were not impacted by a global pandemic.

Ever since that day, Mike, we've been under that cloud. I think what you're seeing now is here we are. It's been basically -- well, not even 2 full years, but it's been 2 years since we've been out there calling on these practices. And I dare say that we're not going anywhere, right, that we are turning our customers into raving fans of Axonics.

They love our people. They love the quality of the product. They're getting better results than they've ever seen in this category. Our Bulkamid product now is being able to literally cure stress urinary incontinence, at least for the next 5 or 7 years after these injections. So I think you're just starting to see the momentum building around the Axonics brand and people recognizing that we do business in a different way. When we talk about one of our mantras is no patient left behind, I mean this is something that really resonates with our customers. They understand that we actually care about these patients. We want to make sure that they're going to continue to do well over time.

It's not about selling something and walking away and leaving it up to chance. We're really committed and we're working very hard with these practices to embed our people there so that they're confident about not only the quality of the products, but that they get to know our people and their commitment and so forth.

So Mike, I just think it's -- quite frankly, it's a result. Our Q4 numbers and the fact that we're making serious progress in the market is a result of a million little things that we've been doing since we launched this product in the United States.

Okay. Makes a lot of sense. And then the -- with regard to the TV campaign that you mentioned, how is that going to be sort of rolled out? Is it going to -- I can't imagine you're going to go national all at once or maybe you are? And then what sort of metrics are you going to use to kind of judge the performance?

Well, look, we are going national to start. I mean, we're not playing around with this. This is a serious undertaking. We've spent a lot of time and energy on the messaging and making sure that we feel confident about what the ad is going to look like and all the rest, and we're going to make a big splash with this and so forth.

Now initially, the only real metric that you can measure is going to be response rates. It's going to be how many people are actually going to those specialty websites and qualifying themselves and filling out the survey. That's going to be the first thing that we're going to be looking at.

And we have a pretty good sense about what to expect. But in measuring how many of those -- so then the next thing we'll measure is how many of those individuals can we actually place with an appointment into an Axonics account, right? That's going to be the 2 top metrics that we're going to look at it first. And then we're going to have to be a little bit patient because, once again, these are people with a problem. We don't know have they taken drugs, have they failed drugs, have they tried BOTOX. We have -- we're going to have no idea.

So they're going to have to work their way -- as Dan mentioned earlier, they're going to have to work their way through the care pathway. Some people are going to be ready for procedures right away. Others are going to need to go through the process of being differentially diagnosed and then maybe taking some drugs for OAB or having a conversation about stress urinary incontinence and what their options are and so on and so forth.

So it will take some time, and we won't be shy about reporting back out. But we've got to see how it's going to go first. Nobody has ever done this in this category before. So it's kind of a little bit of the brave new world.

Your next question comes from the line of David Rescott from Truist Securities.

Wanted to start off on guidance and just get your thoughts behind the approach to guiding to this $234 million revenue estimate for the year. Rather than a range, if I heard you correctly, I think in the prepared remarks, you mentioned that there were cancellations and procedures that are expected to be rescheduled throughout the year.

So I guess my question is, what level of visibility do you have in the business? And how should we read into this guidance number when we think about the level of existing backlog or those expected to be rescheduled this year versus those that are newly scheduled throughout the course of the year?

Well, I mean, I'm not really exactly sure. I'm looking at Dan on how to answer that question other than to say, look, we gave you what we think is our best estimate. And we felt that providing a range doesn't provide us with really any upside because if we put the range, everybody is going to expect the high end of that number. And if we come in at the low end of the number, then everybody is going to be disappointed.

So we just basically put forth what we think we can do. And obviously, as is the case with any management team, our objective is to beat those numbers. And in terms of visibility, this is a different kind of a pipeline, right? We're not selling capital equipment where you have x amount of prospects and you're waiting for the purchase orders and things of that nature.

I mean, this is a very fast-paced volatile business where patients walk in the door, you know what I mean, and then ultimately, we got to get them treated. So it's not -- we have a lot of metrics. Of course, all our analytics are looking backwards, right? I mean that's the key thing. But we have a good sense, right, of how many procedures each of our accounts are doing.

We've had plenty of surveys that have been done either by ourselves or the analyst community or institutional investors themselves. So we -- the feedback from our customers is that they expect the market to grow significantly as this pandemic recedes.

So hopefully, what we're talking about growing your business 30% year-over-year is never that easy. It's not like you wake up and just look at the scoreboard, but we think there's plenty of potential for us to exceed what we've put forth.

Okay. I guess on Bulkamid, the sales force are fully kind of trained on Bulkamid, a few quarters in the bag. And in the past, you know, we've talked about this is as having a halo effect or in your words, being catnip for some of these new SNM accounts. So I guess my first question is what level of pull-through have you seen so far within SNM accounts?

And second question to that. Is it possible to think about maybe a more material halo effect within the SNM business bearing fruit in the second half of 2022, if that SNM business is more impacted by Omicron in the near term?

And I guess, if I were to ask a different way, are there SNM accounts now that are being activated that were pulled in because of Bulkamid that may just not ramp in the near term because of COVID or staffing issues that may more materially do so in the second half of the year?

So I think if I simplified the question, clearly, we believe the second half of the year is going to be more fruitful, but we're optimistic that the second quarter of this year will be as good as we experienced in the second quarter of last year, right? That was probably a good clean quarter for us.

So we don't think we have to wait until summertime to see an uptick in the business. We think our customers are anxious to get patients treated. And as long as the elective procedures are open, then I don't see any reason why we can't get these patients in and get them treated.

There's no question that Bulkamid has been contributing to the halo effect as you referred to it, and we've talked about it in the past and has gotten into a lot more accounts. And I think we're going to see really the fruits of that labor.

We've seen some already, of course, in Q4, but we're going to see the fruits of that labor in 2022. That's really where we're going to start to -- how should we say, reap the benefits of having this expanded product line and being able to treat all these types of patients with incontinence.

So there's no doubt that it's worked well. The seminars that we ran for Bulkamid last year yielded quite amazing results in terms of the number of physicians that have started. We had 328 people attend these seminars. I think the latest numbers I've seen is that we have about 80% of those physicians that attended are actually treating patients with Bulkamid already.

And we've picked up a few dozen accounts because of this in places that -- in accounts that we weren't in before. And we expect that trend to continue, particularly now or as soon as we get the approval on the recharge-free system. So hopefully, that we'll start to see the fruits of all of our labor really come to bear in 2022.

(Operator Instructions) Your next question comes from the line of Danielle Antalffy from SVB Leerink.

Ray, I just have a high-level question and then a more specific question. So high level, I think even through a pandemic, it's safe to say your U.S. launch has exceeded expectations. Is there a way to quantify or even qualitatively ascertain how much growth has come from market share gains versus market expansion?

And I guess, are market share gains still a meaningful part of the growth story or how much of the low-hanging fruit has been had already from a market share perspective?

It's funny, Danielle. You're asking us about market share when we have -- there's only one part of the equation that we know, which is our revenue. We don't know the revenue from the other part. And the fact that there was a comment about that they gave up market share to Axonics in this most recent quarter.

I mean, it's not a surprise to us. The only surprise was actually the admission. But we still don't have a number. And so it's really impossible for me to answer that question. So I mean, we've said that we think it will be a combination, right, of expansion of the market and market share gains.

And if you decode our 25%, like we've said, we think the market will grow at least 15%, and we'll pick up the rest of market share gains. So I think we've kind of given the answer. But honestly, we're trying to make -- we're trying to talk about this with literally one hand tied behind our back because we don't have the other numbers.

Yes. What I was going to add is what we're seeing across the entire customer base is an increase in annual unit volume. And what's not surprising to us, but I think probably interesting to people on the call is we're also seeing a number of physicians now that have maybe not really been practicing SNM for a long time now asking to get retrained by us and to get back practicing this therapy.

And so I would say if there's any surprise post commercial launch from 2019 is the market is more underserved and larger than we originally expected. And this latest data that Ray talked about on the prepared remarks of the 78 million women in the U.S. that suffer from incontinence, it's substantially higher than what we were operating off when we went public. And so I think the blue sky that's in front of the 2 SNM players is vast, and this market is going to continue to grow for the next 5 to 7 years.

Yes. Got it. Okay. And then Ray, this is maybe an unfair question because it sounds like it's hard to say. But I was just curious how sticky the market share gains you have made versus Medtronic have been. And I don't -- I guess maybe a way to ask the question is in accounts where you've gotten traction, how sticky has the share been since Medtronic has launched a rechargeable device?

We just have not had any impact from the competitive rechargeable product. Just we cannot ascertain any impact, quite frankly. I'm sure that accounts that are loyal to our competitor, I'm sure they've tried that or to some extent, may have tried that product, but it's been a nonissue for us.

I think the only time when we saw some accounts go back the other direction was back in 2020 when the competitor product got MRI compatibility claims, right? And that was the last time that we actually saw accounts -- some accounts that had started with us that kind of switched back. Since then, we just haven't seen that. So hopefully, that's a direct answer to your question.

So most of the action that we see is -- it's like what Dan said, where we've got new people that are wanting to get in the game for the first time. And now in 2021 and in 2022, we can train somebody up. We didn't have that capability per se back in 2020 when we first launched nor was it a focus of ours.

And then also competitive accounts that want to work with Axonics because they've heard from their colleagues about the quality of our products and the quality of our people and the fact that we pay a lot of attention to every account, and we're there for every procedure, and we make sure that every patient is programmed well and is followed up.

So that's the game, right? And we think we're doing business in the right way, and that's going to continue to accrue to our benefit over time.

I'm showing no further question at this time. I would now like to turn the conference back to Raymond Cohen.

Super. Thank you, operator, and thank you for everyone for listening in today. We appreciate all the questions from the analyst community, and we look forward to speaking with you all again. Bye-bye now.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and have a wonderful day. You may all disconnect.