Penumbra Inc (PEN) 2017 Q1 法說會逐字稿

Good afternoon. My name is DeShawn, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Penumbra First Quarter 2017 Conference Call. (Operator Instructions) Thank you.

I would now like to introduce Mr. Dan Wilson, Director and Head of Business Development for Penumbra. Mr. Wilson, you may begin your conference.

Thank you, DeShawn. And thank you all for joining us on today's call to discuss Penumbra's earnings release for the first quarter of 2017. A copy of the press release and financial tables, which includes a GAAP to non-GAAP reconciliation can be viewed under the Investors tab on our company website at www.penumbrainc.com.

During the course of this conference call, the company will make forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial performance, commercialization, clinical trials, regulatory status, quality, compliance and business trends. Actual results could differ materially from those stated or implied by our forward-looking statements due to certain risks and uncertainties, including those referenced in our 10-Q for the quarter ended March 31, 2017, which will be filed with the SEC on May 9, 2017 as well as those described in our 10-K for the year ended December 31, 2016, filed with the SEC on February 28, 2017.

As a result, we caution you against placing undue reliance on these forward-looking statements, and we encourage you to review our periodic filings with the SEC, including the 10-Q and 10-K previously mentioned, for a more complete discussion of these factors and other risks that may affect our future results or the market price of our stock. Penumbra disclaims any duty to update or revise our forward-looking statements as a result of new information, future events, developments or otherwise.

We anticipate the prepared comments on today's call will run about 14 minutes.

Thank you very much. And with that, I would like to turn over the call to Adam Elsesser, Penumbra's Chairman and CEO.

Thank you, Dan. Good afternoon. I would like to welcome you to Penumbra's First Quarter 2017 Conference Call. I'm joined today by members of our senior management team. I will begin today's call with a few business updates from the first quarter, and then I will turn the call over to Sri to cover the detailed financials. Our total revenues for the first quarter of 2017 were $73.2 million compared to $57.9 million for the first quarter of 2016, an increase of 26.4% as reported and 27% in constant currency.

We had an operating loss in the quarter of $2 million compared to $1.9 million in operating income for the same period last year. We continue to see strong momentum throughout our product portfolio. We were particularly pleased with our results in the quarter. As you may recall, we had an unusually strong fourth quarter. And our results today represent a slight sequential increase over Q4.

Our strong product portfolio, together with the amazing effort from our U.S. and international commercial teams, continued to distinguish Penumbra and drive our success.

Today, I would like to start by highlighting several positive events that have recently taken place that only adds further support to our market development efforts and longer-term mission across both our Neuro and Peripheral Vascular franchises. I will then finish by highlighting 3 products that we are introducing in existing areas that further broaden our portfolio.

In early March during the Society of Interventional Radiology meeting in Washington, D.C., the results from the ATTRACT Trial were presented. As a reminder, this was an NIH-funded trial to study the use of adjunctive pharmacomechanical catheter-directed thrombolysis in patients with acute proximal DVT. We estimate that 600,000 Americans each year are affected by deep vein thrombosis, and we believe it is one of the largest addressable areas within peripheral thrombectomy. While the trial did not meet its primary endpoint, of showing that these patients had a decreased incident of post-thrombotic syndromes compared to patients with standard anticoagulant therapy only. We at Penumbra commend the study's investigators for providing further visibility into this highly complicated disease. Most importantly, the trial gave us several key takeaways, which strongly encourage us about the possibilities of advancing DVT treatment. Our Indigo family of devices continues to see strong growth. Our physicians typically see their initial success with Indigo on their arterial side. And over time, that success is translating to the venous side. We have found that many physicians are enthusiastic to work with Penumbra to help make further progress in shifting the treatment paradigm towards immediate clot removal.

Moving forward, we are focused on 2 key areas: Bolstering clinical efforts to provide more useful information to the community; and also continuing to expand and improve upon our existing technology.

The other notable events that I want to share are within our Neuro franchise. On our fourth quarter 2016 call, we discussed the angiographic results of the ASTER Trial. The clinical results will be presented next week at the ESOC meeting in Prague. We are excited that this additional data will be made public. We continue to see the body of evidence strengthen around starting with direct aspiration with additional papers being published that show the benefits of this technique.

Additionally, there are 2 other positive announcements supporting the long-term outlook for the treatment of ischemic stroke with mechanical thrombectomy. The DAWN study, which was sponsored by Stryker, was halted for positive results in treating stroke patients beyond the typical 8-hour treatment window. While many neurointerventionalists may currently treat these patients, this clinical evidence, once published, may add an important support for treating patients outside that treatment window.

Also, few weeks ago, the 2-year data for the MR CLEAN trial was published in the New England Journal of Medicine. This data showed that patients at 2 years were doing as well as they were doing at 3 months. Specifically, functional independence was still maintained at 2 years. The long-term results also showed a positive trend of lower mortality, which was not initially seen at the 3-month endpoint.

These announcements are extremely helpful in our pursuit of the long-term opportunities related to ischemic stroke. Along with a critical work that is being done in market development and commercial execution, we are also staying focused on our product development. A few weeks ago, we introduced the newest member of our Indigo family, CAT D. This device is a shorter length thrombectomy tool that we designed specifically in response to physician feedback. CAT D represents the type of work we are known for, enhancing our product family to make our products perform better. We have been quite pleased with the results from the early cases and expect a more complete launch later this year. Within our Neuro franchise, we're pleased to receive FDA clearance of our 3D revascularization device, which we received on April 20. This clearance occurred faster than we had anticipated. The 3D device is our version of a stent retriever, but specifically designed for use with direct aspiration as part of the Solumbra technique. To remind you, the 3D trial results were presented last summer. The outcomes were numerically higher than the meta-analysis from the published trials with existing stent retriever technology. However, to remind everyone, we also showed that the -- that using direct aspiration alone obtained similar results. And notwithstanding our clearance, we will not be changing our fundamental view.

Our 3D device will be used as an adjunct to our highly successful aspiration system. Importantly, it will position us with a broad stroke offering, which includes the full complement of tools and options for our physician customers to choose from.

Also, during the first quarter, we introduced our latest addition to the SMART COIL family, the Wave extra-soft finishing coil. This finishing coil has several unique characteristics. Physicians have responded very enthusiastically in their early cases, specifically commenting that the Wave coil is the softest finishing coil that they have used. And importantly, its specific shape allows it to fill the gaps in the aneurysm in a highly unique way.

Now to close out my remarks, I'd like to share a story of a patient that was recently treated with Indigo System for DVT. I had the privilege of speaking to Mr. Knox last week. Mr. Knox is in his late 70s and was born and raised in Baton Rouge, Louisiana. After playing football in high school and college, he joined the military and fought in Vietnam. He is a school counselor for a local middle school. During our conversation, he shared his intense commitment to the middle school kids that he works with. Recently, Mr. Knox took several plane trips. And afterwards, he noticed swelling and pain in his legs. At the urging of his wife, he went to an after-hours clinic. The physicians asked that he stay overnight because they were afraid of a pulmonary embolism. The next morning, he was scheduled for an interventional procedure a few days later.

During the time, he was waiting for the operation. He was appropriately anxious and assured his wife of 50 years that she would be well taken care of, if anything happen to him during the procedure. Dr. Perkowski, a vascular surgeon, performed the procedure with the Indigo System. The procedure took about 1 hour and cleared the blockage. And Mr. Knox left the hospital later that same day feeling close to normal. These cases and the hundreds like them continue to motivate us at Penumbra to keep working extremely hard to positively impact patients and families dealing with tough medical conditions.

I'll now turn the call over to Sri to cover the financials.

Thank you, Adam. For the first quarter ended March 31, 2017, our total revenues were $73.2 million, an increase of 26.4% reported compared to the first quarter of 2016 or 27% in constant currency.

Our geographic mix of sales in the quarter were 66.2% U.S. and 33.8% international. Neuro and Peripheral Vascular represented 68.6% and 31.4% of sales, respectively. We saw a strong performance in the quarter following an unusually strong fourth quarter 2016.

Revenue from our Neuro business grew to $50.2 million in the first quarter 2017 from $41.3 million in the same period a year ago, an increase of 21.7% reported or 22.3% in constant currency.

Our Neuro growth was primarily driven by sales of our ACE68 reperfusion catheter, which is part of our Penumbra system for ischemic stroke. We saw strong growth contribution from access as well as our embolization product families. Within embolization, we observed a sequential decline that we had discussed last quarter related to our SMART COIL launch in Japan.

Looking ahead in Neuro, next quarter, our year-over-year comparisons include the launch of ACE68 and the competitive recall tailwinds in both embolization and access. In the back half of the year, we expect growth in neuroembolization to be consistent with this quarter after excluding the impact of our SMART COIL launch activities in Japan.

Revenue from our Peripheral Vascular business grew to $23 million in the first quarter 2017 from $16.6 million in the same period a year ago, an increase of 38% reported or 38.7% in constant currency. Our growth in Peripheral was driven by our Indigo family in peripheral thrombectomy. Similar to last year, we saw a strong follow-through in Indigo coming out of the SIR meeting in March, which resulted in higher Indigo growth than what we had seen in our last 2 quarters. As a reminder, last year's SIR meeting fell in our second quarter, and thus will be part of our comparison next quarter.

Our gross profit in the quarter was $47.7 million or 65.2% of revenues compared to $39.9 million or 68.9% of revenues in the same quarter last year.

Our gross margins improved slightly from last quarter due to more favorable product and geographic mix.

Now moving to our operating expense. Total operating expense for the quarter was $49.8 million or 68% of revenue compared to $38.1 million or 65.7% of revenue for the same quarter a year ago.

Our research and development expenses were $7 million for Q1 '17 compared to $5 million for Q1 2016. The increase was primarily due to greater product development costs and increases in clinical trial expense.

SG&A expenses were $42.7 million for Q1 2017 compared to $33.1 million for Q1 2016. Our spend increased primarily due to increased compensation expense related to increases in headcount. We had an operating loss in the quarter of $2 million compared to $1.8 million in operating income for the same period last year.

Moving to our balance sheet. We ended the quarter with $231.6 million in cash and cash equivalents and marketable securities. Our increase in cash was due to our opportunistic follow-on equity offering, which we priced on March 16, and which netted approximately $106.3 million after underwriting fees.

As a final comment, we are not changing our revenue guidance. However, we do feel comfortable towards the top end of our previously stated 2017 revenue range of $312 million to $317 million.

And now I'd like to turn the call back to Adam for closing remarks.

Thank you, Sri. As we head into the middle of 2017, we are continuing to make investments in our team and capabilities to set us up for the extraordinary opportunities that we believe are in front of us. We have the possibility of increasing the impact of our products dramatically over the next 4 to 5 years.

The work to do this is not easy and is not guaranteed. However, I want to let you know that the entire team at Penumbra, our engineers, our production team, our quality team, our clinical and regulatory teams and our commercial team remains singularly focused on continuing to positively impact patients and their families. I am very proud to be part of an organization that has responded with such passion and energy to this meaningful challenge. Thank you for your attention. And we will now open up the call for questions.

(Operator Instructions) You do have a question coming from the line of Michael Weinstein with JPMorgan.

Can we start with the peripheral thrombectomy business? So you commented that your Indigo business actually accelerated this quarter. And I'm pleasantly surprised and I'm thinking in part because of the numbers from Boston Scientific this quarter in which their business decelerated, and we were kind of left wondering whether there was some negative fallout from ATTRACT that was impacting their business. So can you just spend a minute on kind of what you're seeing with that business, and your thoughts kind of post ATTRACT and going forward?

Sure. Thanks, Mike. The -- as we said in the prepared remarks, we saw this last year as well. The SIR meeting happened, though, in the second quarter last year. At this time, it was in the first quarter. And we have seen, now for the second year in a row, a relatively notable increase coming out of that meeting. I think, you're got an awful lot of physicians hearing about and learning about the success that we are having with Indigo. So I think that is the primary thing that we can attribute it to. I do think, as I've said around ATTRACT, that ATTRACT has not been negative, even though the primary endpoint was not met. It, I think, highlighted 1 very important point and that is, it is part of the transition or the paradigm shift that we've talked about from using drugs and ancillary tools with those drugs to a different approach, which we're obviously describing as immediate clot removal. And that transition is underway, and I think ATTRACT trial sort of highlighted that and has been helpful to us. I think, the main thing that we can attribute it to is just the sort of post SIR interest that comes out of that. I want to sort of focus briefly, I said it in my prepared remarks too, we really have a notable sort of success story on the arterial side. And I think that's become more well known. And then, as we move onto the venous side, physicians are starting who have really practiced and gotten the hang of it and understand it, we've gotten some great success on the venous side as well.

And if I look at this quarter geographically, it looks like the incremental upside is relative to our expectations, it was in particularly outside the U.S. And you commented that, that kind of that -- some of the stocking you got in Japan in the fourth quarter kind of faded this quarter, but you still had this really strong, what looks like, an underlying performance internationally. Can you just maybe call that out a little bit for us and where that's occurring and why?

Mike, it's Sri. I think you're on the mark there. We've had very strong international growth the last number of quarters. We saw, particularly, the last couple of quarters a pickup. And it wasn't just 1 quarter, we had a couple of quarters of launch activities in Japan related to our SMART COIL, which we've spent a lot of time talking about. So that did help international, but even as that's trailed off and we're sort of transitioning slowly to ongoing usage, we've still had very strong international and rest of the world growth.

Any other investments that you're making in terms of distribution into any geography that we should be aware of?

So we're constantly looking at that, Mike. I think you know that we have a distributer relationship in Japan. We're direct in many parts of Europe, as you think about the markets that we're involved and they are global markets. So we're constantly looking at that and also looking at the right way to approach those markets, not necessarily doing it as quickly as we can, but thinking about the best economic solution as well.

And Adam, last item, and maybe if you could touch on is, is just the capital raise this quarter. And now that you've got this cash in your balance sheet, can you just talk a little bit about your thoughts on how you might choose to put that to work? And what's your business development thought process is?

Sure. Mike, I think it's an important question. I don't -- and we went out of our way, I think, to stress this during the capital raise. The capital raise doesn't fundamentally change how we think about projects we work on, whether it's internal projects or external opportunities. I think we have always looked at them with the same sort of fundamental criteria. Does it matter? Can we at Penumbra do it? And does it have -- do the economics work, i.e., and I mean not just on the price or the development cost internally, but how do we sell it? Is it a channel that we can do? And nothing has changed from that fundamental view with the capital raise. It is with that same discipline that we've always looked at things, and we will continue to do that.

And your next question comes from the line of Bob Hopkins with Bank of America.

I just want to ask my first question about the 2017 guidance relative to the new products that you're talking about in this call. Did the original guidance that you guys gave include an assumption for 3D, the Wave finishing coil and CAT D or not? I'm just kind of -- I just want to get a sense for that. And maybe, is the introduction of those products is the reason why you're emphasizing the high end of the guidance?

Yes, Bob, it's a very good question. And we wanted to just touch on a couple of components of the guidance because we've talked about a few things in this call today. One, as it relates to our business, we did touch on a few announcements that only give us greater enthusiasm for the long-term prospects across Neuro and Peripheral. Two, to your question, we did talk about 3 new products. Many of those you've known about, many of those we've spoken about, about how we see their impact, and particularly with 3D and Adam can touch on this more. It's got more of a strategic relevance for our franchise that we've been talking about since the 3D trial was out last year. And the third component, just to help with the more specific fine-tuning, we have been trying to be in front of a lot of items that happened in '16 that we didn't see necessarily as being repeatable in 2017. In Q2, there are few of those, which I have touched on competitive recalls in Neuro, the SIR meeting, which is 1 quarter removed from this year between last year. And then, as we get to the back half of the year, the SMART COIL launch, and we estimate that there is roughly $4 million to $5 million of stocking and that's to help with this analysis so that you can reconcile the guidance commentary that we're talking about today. So hopefully, that's helpful, Bob.

Well, just to be clear though, was the original 3 '12 to 3 '17 for the year, did that include an assumption that these launches and announcements will happen, or no, is this incremental?

Bob, this is Adam. We obviously knew about these products when we gave our guidance.

Okay. And then I just want to ask about 3D. Because obviously, the stent retriever market opportunity broadly is, I don't know, at least $300 million to $400 million by my math. So it's a big business. It's a very profitable business. You're now launching into that business. And you're saying, obviously, you're going to focused on Solumbra. But maybe, Adam, you could put 3D in perspective for us. Of this stent retriever market that exists today, what portion of that do you think is Solumbra-type cases? And why wouldn't 3D potentially be competitive in that entire $300 million to $400 million market?

Well, I think, it's a great question, Bob. And I want to without going through our detailed launch strategy and plan, which I think you would appreciate, we're not going to do on the call, I will tell you that it is very important philosophically to understand how we see the world. We obviously want the best and most efficient and fastest cases done possibly, and we believe that aspiration as the leading edge of that is critical. And so we're not going to change that view, I think I've made that clear for quite a while, and within that fits this tool. We think it's a great tool. Obviously, we're very proud of its performance. It did extremely well in the trial and the data says that. But we're always going to lead with aspiration as the first, and this will fit underneath that as an adjunct tool. So for Solumbra users, it could be a very helpful tool. For ADAPT users, who use stent retrievers in a much more limited way, it could be a good tool. But it is not in our mind the same as somebody who is using stent retrievers alone. That's not the point of this product.

Just curious, is 3D now launched and selling in the marketplace today, where are you in the launch?

We have not yet shipped product.

And your next question comes from the line of Larry Biegelsen with Wells Fargo.

Let me start with the guidance, something you've touched upon at the end of the quarter as well. So Sri, this was the first time you were relatively flat sequentially, but you talked about some one-time things are relatively strong Q4. Could you just remind us, again, what those were and why, we shouldn't necessarily look at this flat sequentially. And then on the guidance, typically maybe a little bit more color on the cadence. Typically, Q2 is up the last 2 years, it's been up about 10% sequentially. Why would this year be different? And I had a couple of follow-ups.

Sure. Larry, on sequential Q1, Q4 as you recall was just under -- sorry, Q4, our last quarter, was just under 9% sequentially up. And we talked about some of the dynamics there, particularly with the strong December and Japan SMART COIL launch that we also talked about on top of that. So we also talked about, if you recall on the last call, our expectations in Q1 would sequentially be down following that quarter. So we're happy with where we ended up relative to those comments. Related to your comments on how we typically see Q2, last Q2, we were up a little over 12%. But again, I mentioned in our commentary, and it's important that we make sure we put the right context around this, we had just launched our ACE68 in the U.S. We had had competitive recalls that we benefited from, and we were just coming off the SIR meeting, which last year was in our second quarter. So that was one of our stronger Q2s. I think the guidance that's implied today still implies that we have a pretty healthy sequential uptick each of the remaining quarters of this year. So I hope that's helpful.

That's very helpful. And then, I wanted to turn to DAWN, Adam. I mean, it seems like a pretty important trial for the field. So what are your thoughts just kind of on the implications for the market? We assume currently about 50% of large vessel occlusion patients are treatable right now in our model. How do you think DAWN changes that?

Yes. Thank you, Larry, for that question. First of all, obviously, as DAWN was run by Stryker, so I can't comment on the specific data until it's presented and ultimately published. From what they've announced and what we know is that it seems that it will show that treating outside the treatment window for this subset of patients, it shows a benefit. So that obviously is additional data that is positive for the movement here. And will, I think, help in the larger issue that we've talked about a lot over the last couple of years, and that's the effort to get patients from where they have had the stroke through the ambulance and EMS services to the right hospital. And that -- there it will just be helpful to have additional data and motivation to do that. It's hard to know -- and I don't think there is any real definitive data that we've seen that shows how many of those patients are currently being treated versus this really dramatically open up the number of patients that can be treated eventually. We just don't know that. We certainly know that many very, very busy centers, not just in the U.S., but around the world, do use imaging techniques to treat many of those patients, even outside the window already. And at the same time, obviously, inevitably that could open up some number of those patients that aren't yet been treated. We just can't quantify that with any kind of certainty right now.

And your next question comes from the line of Jason Mills with Canaccord Genuity.

Adam, just to follow-up on sort of the commentary on ischemic stroke. It strikes me, and I don't think I have ever asked you this question, but what do you think the top 1 or 2 things that can be done either by you or the industry to augment the care pathway for ischemic -- for patients who suffer an ischemic stroke, and ultimately, could be patients for mechanical thrombectomy. We all know the stats, right, in terms of how many strokes and how many of them are ischemic and how many of them we assume can be treated large vessel, but are salvageable patients once they get into the hospital. But what can be done in your mind to the care pathway to move us off of, call it, may be 10% penetration currently of a problem that kills people.

I think, it's -- I'm glad you asked that question. It's really the fundamental question that we have been attacking. I would break it up to 3 categories. The first is the local work, most of that is driven, and this is really hospital by hospital and county by county, where it usually starts by somebody within that system, whether it's a physician who does the treatment, a neurologist who has cared for these patients over the years and wants to make sure they're treated now, stroke coordinators at centers. Somebody driving this at a local level, where they start doing outreach with EMS providers and they try to break down the rules and have agreements within hospitals around patient travel to make sure that the patients are being brought to the right place at the right time. And we have done whatever we can, whenever we're asked, on a local level to help do that, and that has been really the unsung heroes of this entire movement for the last 2 years on a local level. As you know, and I think I've shared in the past, there is a pretty comprehensive political effort underway to go after certain states and have state legislation passed that directs patient flow to be sent to centers that are neurointerventional-ready centers. And obviously, as a company, we are actively financially supporting that. In any other way we can that effort, we think that is really a critical component. And then finally, the third category is really at the federal level and looking at reimbursement pathways. And we've helped put together a cross functional group of physicians in 3 different societies working together with a team in D.C. to look at are there ways that one could look at the reimbursement to encourage the patient flow in the right away? And it's a pretty creative effort that will obviously take a little longer. And the other ones, we think, might bear fruit a little sooner.

That's helpful color, Adam. And then, I wanted to follow-up on Bob's question about 3D. And I think, I understand your philosophy with respect to the stoke market. Clearly, direct aspiration first is something that you have benefited from and plan to continue to move forward with. I'm wondering, does 3D volume you maybe see it as a tool, asking Bob's question the other way, do you think it will accelerate or augment the speed with which direct aspiration generally is taking share from either Solumbra and/or stent retriever alone?

Yes, I think that will be an interesting question. I don't know if know the answer of that. I do think -- look, the most fundamental questions or the way I'd answer that is, we designed the 3D device specifically to be used with aspiration, direct aspiration at the site of the clot, and I think that has shown the results. So I think from that standpoint, it will be a very helpful tool. Our goal, as I have said, for many years now is to continue to refine the products and the procedures to be as fast as possible. Because we all know that the faster you can remove the clot, the better the patients ultimately do. And so that's from our advantage point, I think there is enough data that does show that starting with direct aspiration first is faster and there is some data that shows it's even statistically faster than other cases. So that has to stay our foremost view of the world, but there are certain patients that are tricky and hard and having a device that's specifically designed to be worked well with direct aspiration that could be helpful to the field.

That's helpful. Just 2 quick follow-ups, probably, not so quick, but nevertheless 2, maybe I'll get back in the queue. Really, in first question I asked about ischemic stroke. Same question as it relates to peripheral thrombectomy, and specifically what do you think that the top couple of things, either you or the institute could use to augment the care pathways there. And I was interested in your commentary about the arterial versus venous traction that you have, and perhaps if you could comment on the total addressable markets looking one versus the other. And then lastly, Sri, on gross margins, good to see you now officially in the high 60s. I'm wondering do you expect sequentially to improve from here. I know you've done a lot of work in augmenting your campus and your traction capacity. And I'm sure there is more investment to come, but I'm wondering if the majority of that is behind you, and you're going to reach some of the leverage benefits?

Why don't Sri answer the gross margin question first, and I'll circle back on the peripheral question.

Yes, we'll go in reverse, Jason. So on the gross margins, we did touch on just -- pretty basically, it was product and geographic. And I think some of the Japan-related commentary helps discuss and describe that. On the other end, we just talked about 3 new products. So I think our hope is, we're going to see a continual progression. I don't think our expectation is we're going to see it all come right away here in the next few quarters. So we're happy it's moving the right direction, but we think it's going to take some time.

Okay. And then on the question of peripheral thrombectomy in terms of work, it's very, very different from what I just described in stroke, where most of that work is specifically sort of system work around how to get patients to the right place. In peripheral thrombectomy, those patients are really already in the hospital and are available to be treated. So the work is really very different. It's around the constant effort to move from using tPA and tPA with some form of an assist device that are out there now. Two, something very different, which is really immediate clot removal rather than moving the clot around and dissolving it over a long period of time. We're really encouraging the idea that you can just take the clot out, and again, even it might not all be as successful as Mr. Knox's case where he went home the same day. But it's certainly less of a procedure and a big deal. That's the goal, and you just have to do that sort of experience by experience. Obviously, over time, data will continue to support that effort. We've shown that data and presented it several times on the arterial side, which is probably partly why we're able to have that level of success earlier on. But we'll continue to add to that set as we move to the venous side.

(Operator Instructions) You do have another question coming from the line of Joanne Wuensch with BMO.

I have 2 questions. In the post ATTRACT presentation days, have you seen any change or interest or conversation as it relates to peripheral thrombectomy. And is there anything associated with the trial that made you to rethink a trial of your own or efforts of your own to just sort of better document the use of peripheral thrombectomy?

Okay. So first of all, the answer is, the data that comes from ATTRACT, I think, we have seen some data, there is others that will be published later. And I alluded that gives us a couple of key takeaways. I'm going to ask Daniel Davis to sort of comment specifically on the few subsets of cases and patients. But I do think that there is some real key takeaways from that trial.

Hi, Joanne. This is Daniel Davis. And yes, the specific subset data, which more will be forthcoming in the publication of ATTRACT, and so I think we're going to hear about this going forward for some time and there will be more pearls, but the response from physicians that have been very involved in treating this disease for many years is that the data is largely confirmatory for what they know for iliofemoral disease and that's been very helpful. And we see that in some of the practices that were well established as they've looked at what's available of the subset data. And we expected that data will be forthcoming and there will be more discussion around that going forward.

And my second question has to do with intra-quarter there was some moment regarding off-label usage of some catheters for aspiration can you comment on that and, if you saw any impact on your business? And I'll sign off then.

Thank you, Joanne. I really can't comment on what the FDA has done. Obviously, we're aware of the letter they issued. We have always gone through the process. As everyone knows, our products are fully cleared, and I really think it would be inappropriate for me to comment further. We haven't really seen a change in our business, I think, most people understood that, and we haven't seen a change -- dramatic change one way or the other.

And your next question comes from the line of Bob Hopkins with Bank of America.

I just wanted to sneak in 1 more quick one or a couple more quick ones. Just to clarify, when do you plan on launching 3D? And then also, Adam, I was wondering if you could talk a little bit more about CAT D and Wave. Like is there a way to kind of quantify or define the incremental market opportunity for CAT D and for Wave. And then, again, on 3D, just any time lines would be helpful?

Yes, well, so I appreciate time lines. We will likely launching 3D this quarter. But I'm not going to go through any specific time frame. Obviously, new products have to go through the VAC committees and processes. So there's always a fairly significant time frames in which one introduces those products into the marketplace, so it's not immediate. As for CAT D, I don't think CAT D will bring a particular increment of patients. It was, as I alluded to in my comments, really designed to specifically address comments around sort of the length of the products and making sure that procedures were easier to do and a little less awkward with length of products that are hanging outside during the procedure and it's been well received. And again, those are the kinds of things we need to keep doing as we enter brand-new areas that brings with it all kinds of nuances and changes and be responsive, so that the customers find that their procedures are easier and more efficient, and it promotes the paradigm shift that I have talked about. On the Wave side, I think we're really kind of pretty proud of that coil, finishing coils are really important. Aneurysms are many times well treated or not well treated based on the finishing coil's performance. I don't think it changes our outlook of the market per se. We certainly, understood the size of the market and our place in it. But the actual performance of this coil has been really fun to watch and have the reaction that we've had.

And I see no further questions over the phone at this time. I'll turn the call back over to Dan Wilson for closing remarks.

Thank you, DeShawn. On behalf of our management team, thank you all, again, for joining us today and for your interest in Penumbra. We look forward to updating you on our second quarter call.

And this concludes today's conference call. You may now disconnect.