CVRx Q4 2024 Earnings Report

CVRx EPS Results

• Actual EPS: -$0.43
• Consensus EPS: -$0.37
• Beat/Miss: Missed by -$0.06
• One Year Ago EPS: N/A

CVRx Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

CVRx Announcement Details

• Quarter: Q4 2024
• Date: 2/4/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, February 4, 2025
• Conference Call Time: 4:30PM ET

CVRx (NASDAQ:CVRX), a commercial-stage medical device company, focuses on developing, manufacturing, and commercializing neuromodulation solutions for patients with cardiovascular diseases. The company offers Barostim, a neuromodulation device indicated to improve symptoms for patients with heart failure with reduced ejection fraction or systolic heart failure. It sells its products through direct sales force, as well as sales agents and independent distributors in the United States, Germany, and internationally. The company was incorporated in 2000 and is headquartered in Minneapolis, Minnesota.

CVRx Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Greetings, and welcome to the CVRX Fourth Quarter twenty twenty four Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce Mike Vallee from ICR Healthcare.

[Mike Vallie, Managing Director at ICR Healthcare]

Good afternoon. Thank you for joining us today for CBRx's fourth quarter and full year twenty twenty four earnings conference call. Joining me on today's call are the company's President and Chief Executive Officer, Kevin Heicks and Chief Financial Officer, Jared O'Shein. The remarks today will contain forward looking statements, including statements about financial guidance. The statements are based on plans and expectations as of today, which may change over time.

[Mike Vallie, Managing Director at ICR Healthcare]

In addition, actual results could differ materially due to a number of risks and uncertainties, including those identified in the earnings release issued prior to this call and in the company's SEC filings. I would now like to turn the call over to CB Rx's President and Chief Executive Officer, Kevin Hykes.

[Kevin Hykes, President & CEO at CVRx]

Thanks, Mike. Good afternoon and thank you for joining us. I'm pleased to report another quarter of strong performance driven by

[Kevin Hykes, President & CEO at CVRx]

continued solid execution within our U.

[Kevin Hykes, President & CEO at CVRx]

S. Heart Failure business. We delivered total heart failure business. We delivered total revenue of $15,300,000 representing growth of 36% over the fourth quarter of twenty twenty three with U. S.

[Kevin Hykes, President & CEO at CVRx]

Heart Failure growth growing 41%. We continue to be very excited about the trajectory of the business and the positive impact that Barostim therapy continues to have on patients. Throughout 2024, we made significant progress building a strong foundation to support future growth. After some disruption in the sales force early in the year, we stabilized the sales organization, brought in new commercial leadership and made significant steps towards building out a world class sales team. This team is now implementing a go to market strategy focused on driving deeper penetration within new and existing accounts by implementing a disciplined targeting strategy and a program focused selling approach.

[Kevin Hykes, President & CEO at CVRx]

The team's execution along with our expansion to 48 territories in The United States allowed us to end the year with two twenty three active and planning centers, up from 178 at the end of twenty twenty three. Beyond the build out and optimization of our commercial team, we focused on addressing key barriers to adoption by improving patient access to the therapy, increasing education and awareness among physicians, advanced practice providers and patients and developing a more robust portfolio of clinical evidence. Starting with patient access, we made substantial progress throughout 2024 on a number of important initiatives. In the final 2025 hospital outpatient prospective payment system rule, CMS maintained Verastim in the new technology APC-fifteen 80 for 2025, preserving the current reimbursement level of approximately $45,000 for outpatient procedures. This decision, once again, appropriately recognizes the resource requirements associated with the Barostim implant procedure and supports continued patient access.

[Kevin Hykes, President & CEO at CVRx]

On an inpatient basis, we successfully secured the reassignment of Barostim to DRG two seventy six, which took effect in October of twenty twenty four. This increased the inpatient payment to hospitals from approximately $17,000 to $23,000 to approximately $43,000 We are pleased that hospital reimbursement has now been effectively equalized between inpatient and outpatient settings for 2025, allowing clinicians to treat their patients in the most clinically appropriate setting independent of economic considerations. Regarding coding developments, the American Medical Association's CPT editorial panel has accepted new Category one CPT codes for BaroStim therapy, which we expect to be implemented on 01/01/2026. This transition from Category III to Category I codes is particularly significant as it will eliminate the automatic prior authorization denials associated with Category III codes, which payers often consider to be experimental. It will improve prior authorization throughput and predictability and will unlock access to new markets where Category one codes are required for coverage.

[Kevin Hykes, President & CEO at CVRx]

Importantly, the Category one procedure codes will formalize physician payment for the Barostim procedure and programming, reducing uncertainty for heart failure physicians and their surgical partners. Our second adoption related initiative focused on increasing awareness among referrers and patients regarding the appropriate role for Barostim therapy in the heart failure treatment continuum. We expanded our therapy educational programs, including launching our comprehensive ASCEND program for heart failure fellows and piloted programs for referral physicians and affiliated practice providers referred to as APPs. Additionally, our Barostim Connect program continued to be highly effective in providing education and prior authorization support to prospective patients. Our third focus area was developing a more consistent stream of clinical evidence supporting Barostim therapy.

[Kevin Hykes, President & CEO at CVRx]

Throughout the year, we made progress in publishing additional scientific evidence that more fully describes Barostim's mechanism of action and the wide range of patient benefits. Several months ago, the first long term post COVID data set was published by the University of Southern California, which showed a five fold decrease in hospitalization one year after patients began receiving baroSTEM therapy, highly consistent with the pre COVID Phase II HOPE for heart failure data. The statistical significance of this result was particularly interesting given that it was based upon a small subset of USC patients who were optimally medically managed. We plan to use real world evidence data to further explore this impact, which we believe will be of interest to the payer community. In summary, we ended 2024 with tremendous momentum, delivering growth in U.

[Kevin Hykes, President & CEO at CVRx]

S. Heart Failure revenue and increasing operating leverage through prudent capital deployment. With successful navigation of critical reimbursement milestones and growing adoption momentum, we are well positioned to drive strong sustainable growth as BaroSim advances towards becoming standard of care for heart failure patients. Now, I'd like to turn the call over to Jared for a financial review.

[Jared Oasheim, Chief Financial Officer at CVRx]

Thanks, Kevin. In the fourth quarter, total revenue generated was $15,300,000 representing an increase of $4,000,000 or 36% compared to the same period last year. Heart failure revenue in The U. S. Totaled $14,300,000 in the fourth quarter, an increase of 41% on a total of four fifty seven revenue units compared to $10,200,000 in the fourth quarter of last year on three thirty revenue units.

[Jared Oasheim, Chief Financial Officer at CVRx]

The increase was primarily driven by continued growth as a result of the expansion into new sales territories and new accounts as well as increased physician and patient awareness of Barostem. At the end of the year, we had a total of two twenty three active implanting centers compared to 178 at the end of twenty twenty three and two zero eight on 09/30/2024. We also had 48 sales territories in The U. S. At the end of the year compared to 38 at the end of twenty twenty three and forty '5 on 09/30/2024.

[Jared Oasheim, Chief Financial Officer at CVRx]

Revenue generated in Europe was $1,000,000 for the fourth quarter of twenty twenty four and 2023. Total revenue units in Europe decreased from 52 in the fourth quarter of twenty twenty three to 41 in the fourth quarter of twenty twenty four. At the end of twenty twenty four, we had five sales territories in Europe as compared to six sales territories as of 09/30/2024. Gross profit for the fourth quarter was $12,800,000 an increase of $3,200,000 compared to the fourth quarter of twenty twenty three. Gross margin for the fourth quarter was 83% compared to 85% for the same period last year.

[Jared Oasheim, Chief Financial Officer at CVRx]

Research and development expenses for the fourth quarter were $2,800,000 reflecting a 25% increase compared to the same period last year. This change was primarily driven by a $500,000 increase in clinical study expenses, a $200,000 increase in consulting expenses and a $100,000 increase in non cash stock based compensation expense, partially offset by a $200,000 decrease in compensation expenses. SG and A expenses for the fourth quarter were 20,200,000 representing a 19% increase compared to the same period last year. This change was driven by a $2,900,000 increase in compensation expenses mainly as a result of increased headcount, a $1,000,000 increase in non cash stock based compensation expense and a $300,000 increase in travel expenses, partially offset by a $1,100,000 decrease in advertising expenses. Interest expense increased $900,000 to $1,500,000 for the three months ended 12/31/2024, compared to the three months ended 12/31/2023.

[Jared Oasheim, Chief Financial Officer at CVRx]

This increase was driven by the interest expense on higher levels of borrowings under the term loan agreement. Other income net was $1,100,000 for each of the three months ended December 2023. Other income net consisted primarily of income on interest bearing accounts. Net loss was $10,700,000 or $0.43 per share for the three months ended 12/31/2024, compared to a net loss of $9,200,000 or $0.44 per share for the same period last year. Net loss per share was based on 24,700,000.0 weighted average shares outstanding for the three months ended 12/31/2024, and 20,800,000.0 weighted average shares outstanding for the fourth quarter of twenty twenty three.

[Jared Oasheim, Chief Financial Officer at CVRx]

As of 12/31/2024, cash and cash equivalents were $105,900,000 For the three months ended 12/31/2024, the company issued approximately 869,000 shares of common stock for gross proceeds of $12,800,000 under its At The Market offering. Now turning to guidance. For the full year of 2025, we expect total revenue between $63,000,000 and $65,000,000 We expect full year gross margin between 8384% and we expect operating expenses between $100,000,000 and $104,000,000 For the first quarter of twenty twenty five, we expect to report total revenue between $14,500,000 and $15,000,000 I would now like to turn the call back over to Kevin.

[Kevin Hykes, President & CEO at CVRx]

Thank you, Jared. Before we open the line for questions, I'd like to share our excitement about the opportunities that lie ahead in 2025. We're entering the year with a strong foundation for growth supported by a clear reimbursement landscape, increasing patient and physician awareness and a growing body of compelling clinical evidence. For 2025, we're focused on three key strategic priorities. First, we're building a world class sales organization focused on developing sustainable barilstim programs with deep therapy adoption.

[Kevin Hykes, President & CEO at CVRx]

This includes recruiting sales representatives with strong therapy development backgrounds, strengthening our training and onboarding programs and aligning our incentives to support program oriented sales processes. To support this evolution, we're implementing a new compensation structure that rewards the key elements of a successful program, including consistency of implants and the development of multiple physician champions at each center. Second, we will focus on targeting centers with the highest potential to develop sustainable baril stim programs. We plan to systematically replicate the elements present in current Barostim centers that have achieved the deepest levels of adoption, leveraging our learnings from our most successful partnerships. Specifically, we are targeting centers that demonstrate three key characteristics: large heart failure patient volumes, proven adoption of novel heart failure diagnostic devices and a track record of successfully leveraging new cardiovascular therapies to strengthen their cardiovascular service lines.

[Kevin Hykes, President & CEO at CVRx]

Within these centers, we will work to develop clinical champions and administrative partners who understand the positive impact of Barostim on their cardiovascular service line and will work with these champions to educate their network of heart failure physicians, interventional cardiologists, electrophysiologists and advanced practice providers. Third, we will continue to execute on our market development strategy, which addresses three fundamental barriers to adoption. On the therapy awareness front, we are engaging more deeply with referral networks surrounding our targeted centers through expanded regional medical education programs, our newly launched APP focused programs and our Ascend Heart Failure Fellows program. These programs represent the full implementation of the successful pilot programs that we ran in 2024. Regarding clinical evidence, we're developing a steady cadence of publications in two key areas.

[Kevin Hykes, President & CEO at CVRx]

First, evidence supporting Barostim's mechanism of action, including reduced sympathetic nerve activity, restored cardiac parasympathetic control and anti inflammatory effects. And secondly, evidence of improved clinical outcomes such as enhanced quality of life, reduced hospitalizations and improved ejection fraction. This evidence will be sourced from a variety of internal and external datasets, including data from our randomized controlled trials, the Barostim investigator initiated research program, our multiple internal registries and importantly a growing body of real world evidence. We intend to present the first results of our first real world dataset analyses in early February at the THT meeting in Boston. Finally, on the patient access front, we will continue to build on our 2024 progress by maintaining appropriate payment levels for both inpatient and outpatient procedures, working towards permanent procedural codes and leveraging our long term data to positively impact coverage policies.

[Kevin Hykes, President & CEO at CVRx]

We believe that we are well positioned to drive strong, sustainable, efficient growth in the coming year as Barostim advances towards becoming standard of care for patients suffering from the debilitating symptoms of heart failure. Now I'd like to open the line for questions. Operator?

[Operator]

Thank you. We'll now be conducting a question and answer session. Our first question is from Robbie Marcus with JPMorgan. Please proceed with your question.

[Rohin Patel, Vice President at JP Morgan]

Hi. This is actually Rohan on for Robbie. Thanks for taking our question. Two from me. The first is just starting off with revenue guidance for next year and specifically what's assumed as far as new center adds and utilization.

[Rohin Patel, Vice President at JP Morgan]

Utilization is probably the biggest lever in the model. So I was hoping you could also just touch more on some of the specific things you're doing to drive this up on a per center basis. And then I have a follow-up.

[Jared Oasheim, Chief Financial Officer at CVRx]

Hi, Roland. This is Jared. I'm happy to take the first part of that question. So on the guidance for 2025, the revenue levels of 63,000,000 to $65,000,000 there's a few components that are included into coming up with that number. The first is the average selling price.

[Jared Oasheim, Chief Financial Officer at CVRx]

For our base expectation within the guide, we're assuming similar ASPs that we saw in 2024 for The U. S. Heart Failure business, which is approximately $31,000 per device. The second piece is the number of net new active implanting centers that we'd be adding on a quarterly basis. And as we mentioned at your conference earlier this year, we're expecting to see high single digits to low double digit net adds on a quarterly basis.

[Jared Oasheim, Chief Financial Officer at CVRx]

And when factoring in both of those items to get to the revenue totals that we guided towards, we're expecting to see the average revenue units or the utilization at these accounts get back to the levels we just delivered in Q4 of twenty twenty four after seeing a slight dip here in the first quarter due to seasonality.

[Rohin Patel, Vice President at JP Morgan]

Great. Thanks. That's helpful. And then just on OpEx, I think you came in a little bit above the guide for the year of about $100,000,000 like $2,000,000 above. So and then obviously expecting to see $102,000,000 to $104,000,000 in 2025, which is a slight uptick from that.

[Rohin Patel, Vice President at JP Morgan]

So can you just talk more about what's assumed between SG and A and R and D and some of the spending priorities? And just what gives you confidence that you'll be able to kind of maintain that level as we progress throughout the year?

[Jared Oasheim, Chief Financial Officer at CVRx]

Yes. So we landed just north of $102,000,000 of OpEx for 2024. And as a reminder, included in that total is a one time stock option modification expense related to the first quarter or that was recognized in the first quarter of twenty twenty four of roughly $8,400,000 And so the growth that we're expecting from $24,000,000 to $25,000,000 when removing that one time item is around $8,000,000 or $9,000,000 to hit the midpoint of our guide. The vast majority of that spend in 2025 or the growth in spend is going to be going into the sales and marketing organization. We're continuing to expect to add around three new territories on a quarterly basis throughout 2025 and we'll continue to spend on other marketing activities as well.

[Jared Oasheim, Chief Financial Officer at CVRx]

So the vast majority of that growth in OpEx is expected to go into sales and marketing. And as we mentioned before, our expectation here is to start to see some increase in utilization at these centers, but it doesn't require significant uptake to see some leverage play out in this model long term.

[Rohin Patel, Vice President at JP Morgan]

Great. Thank you so much.

[Jared Oasheim, Chief Financial Officer at CVRx]

Thank you.

[Operator]

Thank you. Our next question is from Margaret Kaczler with William Blair. Please proceed with your question.

[Macauley Kilbane, Equity Research Associate at William Blair]

Hi, everyone. This is Macaulay on for Margaret tonight. Thanks for taking our questions. You spoke to aligning the sales rep compensation around going deeper, obviously within these target high volume accounts and driving those more predictable referral patterns. So first, wondering if that's officially been rolled out to the entire sales force now, how has it been received?

[Macauley Kilbane, Equity Research Associate at William Blair]

And Kevin, I know you were barely in the role, when the disruption happened in the first quarter of last year, but what did you change this time around to ensure you retain the strong sales team that you've built thus far?

[Kevin Hykes, President & CEO at CVRx]

Thank you, Macaulay. I appreciate the question. And it's quite pertinent as we look back on what happened a

[Kevin Hykes, President & CEO at CVRx]

year

[Kevin Hykes, President & CEO at CVRx]

ago, this week in fact. So I'd say there's sort of three key differences. Number one, the process through which the program was developed and rolled out and introduced to the team was radically different. This year, we started with our top sales leaders and their top lieutenants and ultimately our sales counsel and collaborative work with them to develop the program for the year ahead. We then rolled it out in succession to larger and larger groups within the sales organization, culminating with a rollout Saturday of this last weekend at our global sales meeting.

[Kevin Hykes, President & CEO at CVRx]

And so the process was far more inclusive and did not involve the sort of surprise that caused some of the disruption last year. Secondly, I think the key difference, the structure is in fact the core elements are the same and it's clean and simple and understandable and driven by revenue. But this year, we've now built around that core revenue driver a number of program related kickers or accelerators that relate to the consistency of implants or the diversification of referral sources around the center or building redundant surgical partners within a center. So again, trying to really start to drive behaviors that we believe will lead to these much more productive, deep adopting predictable centers. I'd say the third difference is it was received resoundingly well this last weekend versus a year ago, which was not exactly well received by our team.

[Kevin Hykes, President & CEO at CVRx]

So we're pleased at the reception we got. We have a team that's in the field this week excited about the year ahead and energized by their comp plan.

[Macauley Kilbane, Equity Research Associate at William Blair]

That's great to hear. And then maybe just one for Jared. I think in our past conversations, you've talked about expecting that cash burn to decrease year over year this year. But as we look at the cadence throughout the year, I think we've historically seen that step up in Q1 around $10,500,000 to call it $11,000,000 So is that similar to how we should be thinking about it as we enter this year and then sequential decreases throughout the remainder of the year?

[Jared Oasheim, Chief Financial Officer at CVRx]

Yes, that's exactly right, Mac. Our expectation is that we will see a step up in the cash burn in the first quarter, which is pretty typical for what we've seen in the as we pay out our annual bonuses and have other one time spend that goes out the door. Then from the first quarter, we would expect that cash burn to be coming down to where our lowest cash burn would be expected in the fourth quarter. And overall with the guidance provided, our expectation is that our annual cash burn would be coming down in 2025 as compared to 2024.

[Macauley Kilbane, Equity Research Associate at William Blair]

Great. Thanks again for the question.

[Jared Oasheim, Chief Financial Officer at CVRx]

Thank you.

[Operator]

Our next question is from Bill Plovanek with Canaccord Genuity. Please proceed with your question.

[Bill Plovanic, Managing Director & Equity Research Medical Technology Analyst at Canaccord Genuity - Global Capital Markets]

Hey, great. Thanks. Good evening. Thanks for taking my questions. Just you've given us a lot of clarity and information on the plans you're putting in.

[Bill Plovanic, Managing Director & Equity Research Medical Technology Analyst at Canaccord Genuity - Global Capital Markets]

But as you look at the hurdles for the HF specialists out there, I mean, that's the biggest kind of thing left in this that you need to address to really get the business to grow significantly. But what are you doing to get them to understand the therapy versus drugs and other options? And is this something the programs you're putting in place, it sounds like this is something that's more of a gradual than a kind of a significant inflection point?

[Kevin Hykes, President & CEO at CVRx]

Sure. I'll take that. Thanks, Bill. So that's a good question. We've talked at length over the last year about what we believe are the three key barriers to adoption in the minds of the heart failure physicians and the general cardiologist that manage earlier stage heart failure in the community.

[Kevin Hykes, President & CEO at CVRx]

The three barriers as a reminder are awareness of the therapy itself of the outcomes that can be achieved and how it might fit into a heart failure disease continuum. The second is developing the evidence that these clinicians need to feel comfortable and confident in prescribing the therapy. And different physicians have different degrees of conservatism and different data needs in order to get over the hump. And so we're continuing to invest aggressively in both clinical data as we've discussed around quality of life and hospitalization and other clinical endpoints, but also the mechanistic, the physiologic underpinnings of the therapy so that they can truly understand how and why it works. The third barrier is patient access.

[Kevin Hykes, President & CEO at CVRx]

And these clinicians want to be confident that if they prescribe this therapy to a patient, there's a decent chance that that patient's payer, their insurer will cover it. And so it's really and as you point out, it's a little bit like air cover for our troops on the ground. None of these are specific inflection points per se, but this is a constant whittling down of the barriers that we see in the market over time. And it will get better and better, but it's something we'll be doing on all three of those fronts for some time to come.

[Bill Plovanic, Managing Director & Equity Research Medical Technology Analyst at Canaccord Genuity - Global Capital Markets]

Okay.

[Bill Plovanic, Managing Director & Equity Research Medical Technology Analyst at Canaccord Genuity - Global Capital Markets]

And then just one with the increased inpatient reimbursement, just have you seen a shift in the business with that now that you're equalizing that? And then two is just internationally, you lost a territory that's been pretty consistent for a long time. Do you plan on replacing that territory or was it an unprofitable country or geography or how should we think about that going forward? And thanks for taking my questions.

[Jared Oasheim, Chief Financial Officer at CVRx]

Thanks for the question, Bill. Yes, first on the reimbursement front. So we do have internally reported metrics that we're tracking on-site of service between inpatient and outpatient. And we did not see a material shift in where procedures were being done in the fourth quarter after that new inpatient code went live in October. However, we won't actually receive the CMS reported data for multiple quarters to confirm that we actually got it right based on our internal reports for inpatient versus outpatient.

[Jared Oasheim, Chief Financial Officer at CVRx]

So I think it's something that we're going to continue to track over the next couple of quarters and see if there ends up being a shift in where patients are being treated when they receive a Barostem. On the OUS side, we did see a reduction in the number of territories from six at the September down to five at the December. That was a decision on our part to pull back a little bit in spending in Europe based on the level of revenue that was being generated over there. So it's same as Kevin mentioned for the barriers to adoption in The U. S, there's similar barriers to adoption on the OUS side of the business.

[Jared Oasheim, Chief Financial Officer at CVRx]

We're not investing as significantly to reduce those barriers, but we'll continue to put efforts forward there. In the meantime, I think our expectation is that the revenue levels would stay relatively flat despite seeing territories drop by one.

[Bill Plovanic, Managing Director & Equity Research Medical Technology Analyst at Canaccord Genuity - Global Capital Markets]

Thanks.

[Jared Oasheim, Chief Financial Officer at CVRx]

Thank you.

[Operator]

Our next question is from Matthew O'Brien with Piper Sandler. Please proceed with your question.

[Samantha Munoz, Medtech Equity Research Analyst at Piper Sandler Companies]

Hi. This is Samantha on for Matt. Thank you for taking our question. I guess to start off, we see that you exited Q4 with a record high number of units per center at least over the past few years. Could you speak to what drove that performance in the quarter and whether it's you're seeing greater usage in these new target centers or is that historically talked about the pause and delay from the older centers?

[Jared Oasheim, Chief Financial Officer at CVRx]

Hi, Samantha. Happy to take that one. Yes, we did see an increase in the number of revenue units per active implanting center in the fourth quarter that was above levels that we had seen throughout the rest of 2024. I think part of this is some of the work that Kevin has been doing and employing the team to do since he joined a year ago is starting to come forward. We're focused on getting the right centers activated and where the centers maybe aren't the right target for us, we're allowing them to sunset.

[Jared Oasheim, Chief Financial Officer at CVRx]

So part of this is making sure we're removing the centers that aren't productive out of the denominator from that calculation. I think the other piece of this is that we've hired a lot of really good individuals in 2024 that helped to educate physicians and APPs, so that they understand the benefit of this therapy, allowing us to see that revenue unit percent or increase here in the fourth quarter.

[Samantha Munoz, Medtech Equity Research Analyst at Piper Sandler Companies]

Great. Thank you. And then just one more on guidance for the year. Q1 obviously implies a slight deceleration quarter over quarter. Could you talk to the rest of the particular cadence throughout the rest of the year?

[Jared Oasheim, Chief Financial Officer at CVRx]

Yes, happy to cover that. Yes, we are expecting a little bit of seasonality to hit as we go from Q4 to Q1. It's something that we've seen with other companies as they approach this $50,000,000 revenue mark and something that we did experience as we look back to Q1 of twenty twenty four. So expecting to see a slight dip in revenue compared to what we just delivered for the fourth quarter. As we go throughout the rest of the year in 2025, our expectation is that we'd see pretty consistent growth from what we'll deliver in the first quarter throughout the rest of the year.

[Jared Oasheim, Chief Financial Officer at CVRx]

So we're not expecting any other dips or seasonality to be impacting the business.

[Samantha Munoz, Medtech Equity Research Analyst at Piper Sandler Companies]

Thank you.

[Jared Oasheim, Chief Financial Officer at CVRx]

Thank you.

[Operator]

Our next question is from Frank Tackanan with Lake Street Capital Markets. Please proceed with your question.

[Frank Takkinen, Senior Research Analyst at Lake Street Capital]

Great. Thanks for taking the questions. Mine's kind of around 0.2 that you've talked about kind of priorities for 2025 about sustainable barrel stim programs. I heard the comments around large heart failure volumes, appetite to adopt new novel devices. But I was hoping you could provide a little more color around just what does this kind of translate into for CBRx?

[Frank Takkinen, Senior Research Analyst at Lake Street Capital]

What's the NorthStar account look like? How many implanters are there? What could utilization trend to? And then maybe how does that trend over a longer period of time from a growth perspective?

[Kevin Hykes, President & CEO at CVRx]

Sure. Thanks, Frank. I'm happy to address that. So we think at this stage that the accounts a number of characteristics exist in the accounts that have most deeply adopted this therapy. The first is that it's led not just by a clinical champion that often brings us in initially, but that clinical champion has an administrative partner that sort of flies air cover from a financial standpoint for this program in the center.

[Kevin Hykes, President & CEO at CVRx]

That's really important. Second, it involves not one, but multiple heart failure specialists in the center who are effectively the prescribers of the therapy. And they're getting referrals from not one or two, but multiple community based physicians, whether they're heart failure specialists, APPs, electrophysiologists, etcetera, general cards, right? And importantly, those implanters, so surgical partners that implant the device. And what we found is that when we can create that sort of redundancy, an ecosystem that looks like that, we see sustained, predictable, continued utilization of the therapy.

[Kevin Hykes, President & CEO at CVRx]

And that's really what we're driving for here. That's kind of a North Star. And so those are some of the elements I mentioned earlier that we've now built into the comp plan for the coming year where we'll pay effectively not all implants are created equal. We will pay more, significantly more in some cases for an implant that comes from a center that has those components in place. So again, we're trying to drive behavior within our team to build more and more of these centers to look and feel like that.

[Frank Takkinen, Senior Research Analyst at Lake Street Capital]

Okay. That's helpful. And then thinking about the 300 to 400 target accounts you've spoken about in previous calls, where do you stand in that group of 300 to 400 target accounts where these Ferrostim programs really could exist?

[Jared Oasheim, Chief Financial Officer at CVRx]

Hi, Frank. Happy to take that one. So as you know, we have the two twenty three active implanting centers at the end of the year. At this point in time, we're still not disclosing the breakdown of the centers that we're focused on targeting, but could be something that we consider disclosing at some point down the road. Again, this strategy is something that we just rolled out at the October.

[Jared Oasheim, Chief Financial Officer at CVRx]

And so it's going to take some time to start to see more and more of these centers get

[Kevin Hykes, President & CEO at CVRx]

So we've got lots of room we think to further optimize our account mix. Perfect. Thanks for taking the questions.

[Operator]

Thank you. Our next question is from Chase Knickerbocker with Craig Hallum Capital Group.

[Chase Knickerbocker, Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC]

Just maybe following up on Frank there for a second. In the example of that Northstar account that you gave, in your most developed accounts at this point that look like that, call it top decile, what the units per quarter look like?

[Jared Oasheim, Chief Financial Officer at CVRx]

Yes. Chase, we haven't broken it down at the account level at this point in time, but we are seeing those centers get well above our goal of treating at least one patient a month. In some cases, we know there's dozens and potentially even hundreds of these patients available at these top tier centers. So it's on us to really go drive utilization and drive deeper adoption at each one of these centers. But we're not breaking it down by center at this point in time.

[Kevin Hykes, President & CEO at CVRx]

One thing I could add though, Chase, we took this new relatively new definition of Tier one, two, three, four and applied it retroactively against the accounts that we've developed over the last three years. And we were pleased to see that it in fact, the Tier one accounts did in fact outperform Tier two, three and four in that exact order. So it sort of validates to some degree what we think these signals of what good looks like, the right centers in fact do outperform their peers for we think the reasons we've described. So that was encouraging.

[Chase Knickerbocker, Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC]

Agreed. Maybe just on the reimbursement front, is there any advocacy that you guys can do kind of in front of kind of twenty twenty six decisions on the interim side when we get the proposed OPPS in July. Is there any kind of outreach that your market access team can be doing at this point or anything we should kind of be tracking?

[Kevin Hykes, President & CEO at CVRx]

Yes, that's a great question. The answer is yes, absolutely. And our team is already engaged along with the other now four members of the coalition. That work is well underway. And so we are meeting with folks at CMS, meeting with the team, bringing in additional statistical and consulting resources to help CMS really understand that the only way to solve this issue on a permanent basis is to create that level six code.

[Kevin Hykes, President & CEO at CVRx]

So we're pleased that the interaction so far, we're pleased that they've not been disrupted by the administrative changes in DC over the last couple of weeks. And we're increasingly confident that we will ultimately, if not this year, then soon achieve that final permanent level six code.

[Chase Knickerbocker, Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC]

And then as we think about the CAT one code, effective Jan one hundred and twenty six, is there any kind of moving pieces we should be thinking about around kind of the RBUs that you're assigned as far as how it could kind of indicate an uptick in potential demand if things kind of skew positive? Anything that you can kind of give there as far as how you're thinking about kind of the RBUs that could be assigned your procedural code?

[Kevin Hykes, President & CEO at CVRx]

Yes. So we are not, by definition, we are not allowed to influence that process in any way. The survey is now complete as we understand it. Our first visibility to the actual RBUs that will be assigned will come in July with the proposed rule. And so we believe that those RBUs will fall in the range that are currently being negotiated with the payers today, roughly between $500 and $800 or $850 per procedure because they cross walk it often to a carotid endarterectomy.

[Kevin Hykes, President & CEO at CVRx]

So there's no reason to believe that that same outcome, we won't see that same outcome from the survey itself. So we're interested in what we'll see in July, but we don't believe there's a ton of risk there at least as of today.

[Chase Knickerbocker, Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC]

Great. Thanks guys.

[Operator]

Thank you. There are no further questions at this time. I would like to hand the floor back over to Kevin Heitz for any closing comments.

[Kevin Hykes, President & CEO at CVRx]

Thank you, operator. And thanks again to everyone for joining us for our fourth quarter and full year earnings call. We appreciate your ongoing support and we look forward to updating you on our progress at our next call. Thank you.

[Operator]

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Participants

Executives

• Kevin Hykes, President & CEO
• Jared Oasheim, Chief Financial Officer

Analysts

• Mike Vallie, Managing Director at ICR Healthcare
• Rohin Patel, Vice President at JP Morgan
• Macauley Kilbane, Equity Research Associate at William Blair
• Bill Plovanic, Managing Director & Equity Research Medical Technology Analyst at Canaccord Genuity - Global Capital Markets
• Samantha Munoz, Medtech Equity Research Analyst at Piper Sandler Companies
• Frank Takkinen, Senior Research Analyst at Lake Street Capital
• Chase Knickerbocker, Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC