AtriCure, Inc. (ATRC)
Q3 2011 Earnings Conference Call
November 1, 2011 10:00 AM ET
David Drachman – President and CEO
Julie Piton – VP, Finance and Administration and CFO
Jason Mills – Canaccord
Thomas Gunderson – Piper Jaffray
Charley Jones – Barrington Research
Larry Haimovitch – HMTC
Jose Haresco – JMP Securities
Previous Statements by ATRC
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I would now like to turn the call over to Mr. David Drachman, President and Chief Executive Officer of AtriCure. Mr. Drachman, please proceed.
Thank you, (Francine). Good morning and welcome to our third quarter earnings conference call. Joining me on the call today is Julie Piton, Vice President of Finance and Administration and Chief Financial Officer. At this time, I would like to turn the call over to Julie for a few introductory comments.
Thank you, Dave, and good morning, everyone. By now, you should have received a copy of the earnings press release. If you have not received a copy, please call Sarah Luken at 513-304-8931 and she will be happy to fax or e-mail you a copy.
Before we begin today, let me remind you that the company’s remarks may include forward-looking statements. These statements include, but are not limited to those that address activity, events, or developments that AtriCure expects, believes, or anticipates will or may occur in the future such as revenue and earnings estimates, other predictions of financial performance, launches of new products, market acceptance of new products, and atrial fibrillation approval by the FDA.
Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond AtriCure’s control, including, but not limited to the rate and degree of market acceptance of AtriCure’s products, governmental approvals and other risks and uncertainties described from time-to-time in AtriCure’s SEC filings.
AtriCure’s results may differ materially from those projected on today’s call and AtriCure undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additionally, we will refer to non-GAAP financial metrics. A reconciliation of these non-GAAP measures is included in our press release, which is available on our website.
I would like to remind everyone on the call today that the Food and Drug Administration, or FDA, has not cleared our products for the treatment of atrial fibrillation referred to on this call also as AF or for stroke reduction. The company and others acting on its behalf may not promote any of its products or train doctors for the surgical treatment of AF or stroke reduction. These restrictions do not prevent doctors from choosing to use the products for the treatment of AF or stroke reduction or prevent AtriCure from engaging in sales and marketing efforts that focus on the general attributes of the products for the current cleared uses. AtriCure educates and trains doctors in the proper use of its products and related technologies.
With that, I would like to turn the call back to Dave.
Thank you, Julie. We will begin today’s call by reviewing the significance of the FDA advisory panels for recent recommendation for the approval of an AF indication for our Synergy Ablation System. Then we will review the clinical data from our ABLATE pivotal trial which is the basis for this approval. We anticipate final FDA approval during the first quarter of 2012. This positions AtriCure to be the first company to receive an indication for the surgical treatment of AF. Furthermore, this is the first approval for a persistent and longstanding persistent atrial fibrillation indication.
This approval signifies a major step forward for cardiac surgery and all interventional ablation treatments of atrial fibrillation. We appreciate FDA’s interactive and responsive review of the clinical evidence. Most importantly, an AF indication will allow us to thoroughly train surgeons which will optimize patient care and result in improvement patient outcomes. This anticipated FDA approval will mark a new era of the expansion in growth for AtriCure. FDA proposed indication is as follows. The AtriCure synergy Ablation System is intended to ablate cardiac tissue for the treatment of persistent for a long-standing persistent atrial fibrillation in patient to undergoing open concomitant coronary artery bypass grafting and/or valve replacement or repair. The advisory panel recommended that FDA approved the Synergy System to this indication.
The FDA approval will represent a path way to improve patient outcomes by enabling the company to perform comprehensive training and certified surgeons that demonstrate predefine measures of competency as AtriCure-qualified operators. Certified surgeons will have successfully completed the curriculum developing coordination within education steering committee comprised of physician experts in the interventional treatments of atrial fibrillation.
Now I would like to make three key points concerning the open concomitant AF ablation market first the large majority of cardiac surgery patients with preoperative AF or not receiving treatment for most recent market estimates if there are approximately 85,000 patients per year undergoing coronary artery bypass into a valve procedures with preoperative AF of these 85,000 patients approximately 25% are receiving concomitant ablation treatment today.
Secondly, preoperative as associated with the significant increase in debt and stroke in patients undergoing coronary artery bypass grafting and/or valve procedures the Cleveland Clinic publication of patients undergoing bypass procedures concluded there is more than 20% increase in mortality within 10 years and twice the number of strokes in patient with preoperative AF. Moreover (inaudible) study for Mayo Clinic found reduced late survival, more postoperative strokes as well as higher incidence heart failure in patients with preoperative AF.