Earnings Call Transcript - ATRC Q4 2020

Operator, Operator

Good afternoon and welcome to AtriCure's Fourth Quarter and Full Year 2020 Earnings Conference Call. My name is Kevin and I'll be your coordinator for the call today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Lynn Lewis from the Gilmartin Group for a few introductory comments.

Lynn Lewis, Gilmartin Group

Thank you. By now you should have received a copy of the earnings press release. If you have not received a copy, please call 513-755-4136 to have one emailed to you. Before we begin today let me remind you that the company's remarks include forward-looking statements. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond AtriCure's control, including risks and uncertainties described from time to time in AtriCure's SEC filings. These statements include but are not limited to financial results guidance, expectations regarding the timing of FDA review, expectations regarding the FDA's response and whether it will approve CONVERGE, the potential CONVERGE launch timing, the potential market opportunity for CONVERGE, and the adoption of the CONVERGE procedure. AtriCure's results may differ materially from those projected. AtriCure undertakes no obligation to publicly update any forward-looking statements. Additionally, we refer to non-GAAP financial measures specifically revenue reported on a constant currency basis, adjusted EBITDA and adjusted loss per share. A reconciliation of these non-GAAP financial measures with the most directly comparable GAAP measures is included in our press release which is available on our website. With that, I'd like to turn the call over to Mike Carrel, President and Chief Executive Officer. Mike?

Mike Carrel, CEO

Thanks, Lynn. Good afternoon, everyone, and thank you for joining us. We hope that you are remaining safe and healthy. As you look back on 2020, I want to begin by recognizing the dedication of our team at AtriCure and the resilience and durability of our business. In spite of the dynamic and challenging nature of the past year, we made meaningful progress in all areas of our business. In 2021, we will continue building for the future with many key catalysts on the horizon. Total revenues for the fourth quarter were $58 million, representing a 5% sequential revenue growth over the third quarter. Following solid growth in the early part of the quarter as COVID cases and hospitalizations increased after the holidays, we experienced volatility both in the U.S. and in Europe. This led to reduced cardiac procedure volumes at the end of 2020 and put pressure on our volumes as a result. These trends continued into January, and some areas began to worsen driven by a return to quarantines and diversion of medical resources to COVID patients. With that said, we are starting to see some strong positive trends and experience an uptick in volumes as hospital constraints subside. While we expect this upward trend to continue, we believe that cardiac surgery volumes will remain slightly below full capacity, and that we will experience some variability for the first half of the year. Now turning to some of our accomplishments through the year, beginning with CONVERGE. Last year, we made our final submission to the FDA seeking a label for the treatment of patients with longstanding persistent Afib. This brings us closer to completing the regulatory process, which will allow us to market the hybrid Convergent therapy, providing a compelling treatment option in a large and vastly underpenetrated patient population. On our last call, we discussed the differentiated clinical trial results of longstanding persistent Afib patients in the CONVERGE trial. Since then, the clinical results for the long-standing persistent patient group were presented last month at the 26th Annual Afib Symposium. The analysis demonstrated clear superiority in the hybrid convergent arm compared to the endocardial catheter ablation arm with a 29% absolute difference in effectiveness at the 12-month period. While this alone is a significant improvement over catheter ablation, the data was even more convincing at 18 months where long-standing persistent patients returned a 35% absolute difference in effectiveness. We are incredibly encouraged by these results and firmly believe the hybrid convergent procedure has a more pronounced, consistent, and durable effect for long-standing persistent Afib patients than any other clinically available standalone treatment alternatives today. While I know the exact timing of the panel and/or approval is top of mind for all investors, we do not give that today. However, we are making excellent progress on the regulatory front and the PMA process with the FDA has both been being productive and collaborative. We look forward to providing an update on this milestone soon. The anticipated approval of CONVERGE marks the culmination of many years of tireless work by so many AtriCure employees and physicians in pursuit of a therapy for this underserved patient population. I am incredibly proud of the partnership throughout our company which brought us to this point; we have a clear and extensive opportunity in front of us. In preparation for the anticipated approval of CONVERGE, we have built a dedicated sales team and developed training programs and infrastructure to support the launch of this therapy. Currently, our U.S. sales and training team consists of more than 200 individuals in the field, including 35 dedicated reps and clinical specialists in our EP-focused hybrid sales team, and over 30 professionals supporting nationwide training and education courses. We look forward to a future where we champion the hybrid convergent therapy to become the standard of care for the millions of patients with long-standing persistent Afib. We also took significant steps on the aMAZE, our other landmark clinical trial. The aMAZE study is a 600-patient randomized-controlled trial designed to show superiority of catheter plus our LARIAT LAA exclusion system versus catheter ablation alone. We have submitted 3 of 5 modules of the PMA to the FDA and made excellent progress on patient follow-ups. To put this into perspective, 127 patients completed final primary endpoint visits during 2020 and we now have only 11 patients to complete follow-up; this is a testament to our clinical trial team and the aMAZE investigators and study teams who strongly believe in this therapy. We expect to complete patient follow-ups in April, after which we will conduct our analysis of the data. We are targeting our PMA submission and the aMAZE trial for the second half of this year and expect to release trial data following next submission. As a reminder, the LARIAT system is the first AtriCure solution directly in the hands of electrophysiologists. We believe the aMAZE clinical trial will show this therapy, much like the hybrid convergent procedure, is complementary, not competitive to catheter ablation. By adding the LARIAT system to the toolkit, EPs will be able to offer a solution that both mechanically and electrically isolates the appendage without leaving anything in the bloodstream. This complementary technology not only diversifies our portfolio, but it's also an opportunity to further leverage our existing commercial channel in the EP market that has been built up in anticipation of the CONVERGE approval. Adding to the many achievements of 2020, we made strides towards 510(k) clearance of our new EnCompass Clamp in addition to our open ablation platform where we are the market leader in cardiac surgical procedures for the treatment of Afib. The EnCompass Clamp provides a simpler and faster approach for ablating the heart in open procedures, and we expect this device to appeal to the high volume CABG surgeons. As a result, we expect this new clamp to deepen our penetration in the cardiac surgery market. Our 510(k) submission to the FDA is currently under review, and we anticipate clearance later this year, followed by a concentrated commercial launch at certain key centers and a broad commercial launch shortly thereafter. Finally, while our strong history of revenue growth was interrupted due to COVID, there were 2 products; cryoSPHERE and the AtriClip FLEX-V, which both grew over 2019. Starting with cryoSPHERE, our innovative and dedicated device for managing post-operative pain in thoracic patients. Our unique cryoICE technology uses a differentiated freezing method to block nerves from transmitting pain signals for several months. The cryoSPHERE probe continues to resonate in the market following its launch in the first half of 2019 with a positive trend of consistent sequential quarterly sales growth. We ended 2020 with a cryoSPHERE probe accounting for approximately 5% of our total revenue. We recently expanded our 510(k) label for cryo nerve block therapy to include the treatment of adolescent patients of at least 12 years or older. Adolescent patients undergoing invasive surgery of the chest wall can experience severe pain and have limited options for pain management after surgery. This label expansion provides an opportunity to help these younger patients manage post-recovery pain. We have heard inspiring stories about patients, young and old, who are going home from the hospital with absolutely no pain and are excited to further build our presence in the pain management field with the cryo nerve block therapy. This therapy is to continue to drive accelerated revenue growth in the coming years. The AtriClip FLEX-V was first launched in early 2018, and it was a novel addition to our AtriClip franchise. Despite the impact of the pandemic, the FLEX-V clip delivered year-over-year growth in 2020 versus 2019, indicating strong and steady adoption by physicians since launch. We have also seen the increased use of our minimally invasive AtriClip devices and hybrid conversion procedures, a trend which we expect to boost revenue growth with the expansion of this therapy over the next decade. The cryoSPHERE probe and the AtriClip FLEX-V are both shining examples of the engineering and efforts of our product development team, and the innovative spirit on which AtriCure was founded. Now, looking ahead we are incredibly encouraged by the many catalysts on the horizon, which we believe will further accelerate our revenue growth in 2022 from our historical rates of growth. We remain laser-focused on the many activities underway to drive our market expansion including CONVERGE, aMAZE, cryo nerve block, and EnCompass; all mentioned in this discussion. I'm proud to be part of a team with such a pivotal moment at AtriCure and we are strongly positioned and poised for the future. With that, I will now turn the call over to Angie Wirick, our Chief Financial Officer, to discuss more detailed results and our guidance for 2021.

Angie Wirick, CFO

Thanks, Mike. Our fourth quarter 2020 worldwide revenue of $57.7 million declined 6% on a GAAP basis, and 7% on a constant currency basis when compared to the fourth quarter of 2019. U.S. revenue was $47.4 million, a 4% decrease from the fourth quarter of 2019 reflecting the deferral of procedures using our minimally invasive ablation products. International revenue was $10.3 million, down 12% on a GAAP basis, and down 16% on a constant currency basis, as compared to the fourth quarter of 2019. We experienced more pressure in our international revenue with conditions in Europe stalling and a tough comparison to the fourth quarter of 2019. On a sequential basis, we experienced growth of approximately 5% in our worldwide revenue from the third to fourth quarter. As Mike mentioned earlier, the sequential increase results from procedure volumes stabilizing at the onset of the quarter followed by increased variability in December in the U.S. and in Europe based on the resurgence of COVID-19 cases. Touching briefly on a few key metrics for the fourth quarter: gross margin was 73.5%, up 50 basis points from the fourth quarter of 2019, largely driven by geographic revenue mix. We had positive adjusted EBITDA of $1.7 million compared to an adjusted EBITDA loss of $5.4 million for the fourth quarter of 2019; this improvement to the bottom line reflects lower variable compensation, travel and training costs, all which were impacted by COVID, and we experienced a decrease in clinical trial spend related to aMAZE activity each year. Our loss per share was $0.42 for both fourth quarter 2020 and 2019, while the adjusted loss per share each period was $0.18 and $0.37 respectively. Fourth quarter 2020 net loss and the resulting loss per share includes a one-time charge of approximately $6 million related to a legal settlement. Given the extraordinary nature of this expense, it is excluded from both our adjusted EBITDA and adjusted loss per share metrics. To recap our 2020 fiscal year; worldwide revenue was $206.5 million, a decrease of 11% on both GAAP and constant currency basis. This decline reflects a significant contraction in cardiac surgery and elective procedures worldwide as a result of the pandemic. U.S. sales decreased 9% to $169.2 million, while international sales decreased 17% to $37.3 million. Gross margin, which was impacted in 2020 by a period of reduced production activity, as well as the absorption of a full year of center heart operations, was 72.3% in 2020 compared to 73.8% in 2019. Now turning to full year operating expenses; for comparability, I will exclude SentreHEART acquisition costs incurred in 2019, the legal settlement recorded in the fourth quarter of 2020, and the recurring effects of non-cash adjustments to the contingent consideration liability from my comments. Total operating expenses decreased $16.5 million or 8% from $204.4 million in 2019 to $187.9 million in 2020. The decline results mainly from reduced variable compensation and travel costs along with discretionary spend for trade shows and physician training, offset slightly by an increase in stock-based compensation. We do believe most of the areas where we experienced cost savings were impacted by the pandemic and expect spend to be restored to historical levels as our top line improves and travel, training and event activities increase. Full year 2020 adjusted EBITDA loss was $6.3 million compared to $6.7 million in 2019. Our loss per share was $1.14 in 2020 and $0.94 in 2019, and the adjusted loss per share was $1.01 and $1.07 respectively. We are proud of the efforts across our company to manage the bottom line through the instability of the past year. While we repeatedly adjusted our operating plans in 2020, we never strayed from our employee and patient-first focus; ensuring there were no job or pay cuts or furloughs. We adjusted our manufacturing operations to enable our team to continue production of inventory in a safe, socially distant manner, and ended the year with a strong inventory position. Outside of our facilities, field-based employees supported customer needs virtually or in person where possible. We maintained investments in several critical projects and later in 2020 resumed strategic investments with the expansion of our team and other initiatives such as our mobile lab training and preparation for the many growth opportunities ahead. Last year also strengthened our balance sheet with $189 million of net proceeds from our financing in May, and we ended the year with $258 million in cash and investments. And finally, turning to our outlook for 2021; we expect to achieve roughly $250 million in revenue for the year. While we would normally provide a range of expected revenue results given the continued dynamic environment with COVID-19, there are several unknowns that could meaningfully drive our revenue upward or downward from this level based on macro trends. With our current outlook, we expect stronger performance in the second half of the year as the pandemic subsides. We are continuing to experience procedural volumes generally operating in the range of 80% to 90% of normal, and expect this metric to improve steadily through the year, resulting in sequential quarterly revenue growth for the remainder of 2021. While we do not expect to provide quarterly guidance on an ongoing basis, given the timing of this call with nearly 2/3 of the first quarter behind us, and quickly changing dynamics due to the pandemic; we also want to offer guidance for the first quarter. We expect first quarter revenue to be in the range of $55 million to $57 million, down slightly from fourth quarter 2020 but up year-over-year. At the forecasted first quarter revenue range of $55 million to $57 million, we expect an adjusted EBITDA loss of $5 million to $6 million for the first quarter. This adjusted EBITDA loss translates to an adjusted loss per share of approximately $0.36 to $0.39. We typically experience heavier losses in the first half of the year and anticipate adjusted EBITDA to be a loss of approximately $10 million for the full year 2021. With improvements to the top line throughout 2021, we should realize a corresponding and meaningful improvement in quarterly adjusted EBITDA. Adjusted loss per share for 2021 is expected to be approximately $1.15. As we thoughtfully manage our business for long-term success, we continue to make investments in numerous strategic initiatives in support of our catalyst-rich future. At this point, I will turn the call back to Mike for closing comments.

Mike Carrel, CEO

Thank you, Angie. While this past year was undoubtedly a challenge for everyone, we are optimistic and confident about our road ahead and the pathway to accelerating revenue growth. To that end, we are fueling our investments for our future and our focus on executing the many catalysts for growth that we discussed today. Thank you for joining us today. And with that, we'll turn it over to the operator for questions.

Operator, Operator

Our first question comes from Robby Marcus with JPMorgan.

Unidentified Analyst, Analyst

Hi, this is actually Lilly on for Robbie. Thanks for taking the question. So to start, could you just share a little bit more details on how your conversations with the FDA regarding CONVERGE have been progressing? I think we were expecting to hear something with regards to the timing of a panel or whether a panel would even be needed by now; so is it still realistic to expect a panel or approval without one in the first half of the year? So, any color you could add on timing would be really helpful. And this guidance assumed any benefit from CONVERGE? Thanks.

Mike Carrel, CEO

Sure. I mean it's a fair question and we do understand the interest in the timing of everything. As we've talked about before with many of you and a little bit on this call, there really are those two decision points: the panel or no panel. We're not in a position to give any more details than what we gave on the call today. We do know that it's a catalyst, we're excited about the conversations that we're having; they've been very productive with the FDA. As I've said, we view these as very positive and collaborative discussions, and we look forward to updating everybody in the very near future. As we look at our guidance for the year, our guidance really is much more impacted by COVID. COVID is really the big one because elective procedures are having to come back, and so we did start to see some strong growth coming back in the February timeframe after a very weak January that I believe most companies were experiencing. As things are beginning to improve, we do anticipate that this trend will continue. So, hopefully, we'll continue to see COVID subside and we'll be able to move forward from that standpoint. That has a much greater impact than timing or anything associated with CONVERGE at this time on the revenue for 2021.

Unidentified Analyst, Analyst

Thank you. Could you explain what the guidance outlook takes into account regarding the pace of the recovery, both for the top line and the profit and loss statement? Are you expecting any significant impact beyond the first quarter? Will it extend into the first half of the year? Any insights you could provide would be appreciated. Thank you.

Mike Carrel, CEO

Yes. We believe that the pandemic will continue to be with us through the first quarter and into the second quarter, even with the back half of the year to some degree; but we think that the back half of the year will be much stronger. We're already starting to see signs of improvement today, but it's not going to be a bounce back all of a sudden overnight; it's going to be an incremental growth as the year progresses. Therefore, for the back half of the year, we anticipate much stronger performance than the first half of the year, given what we're seeing today, and as we're starting to see things open up.

Operator, Operator

Thank you. Our next question comes from Mike Matson with Needham & Company.

Mike Matson, Analyst

Thank you for taking my questions. I'll start with CONVERGE. You mentioned that you currently have 35 hybrid representatives focused on those products or procedures. How many of these were hired in 2020-2021? How many are recent hires? Additionally, how should we think about the launch of CONVERGE? How quickly can sales ramp up? Will this be material this year, or is it more likely to be significant in 2022?

Mike Carrel, CEO

Yes. We hired about 10 people over the last 12 months, maybe a little less. We will continue to expand that team. Some members came from the LARIAT team and were already familiar with the EP world, which provided us valuable insights into those relationships. We have cross-trained everyone, so we are in a solid position and will definitely grow the number of representatives this year. The main issue is really about COVID. COVID will have a significant impact, not related to CONVERGE. Once we receive approval for CONVERGE, it will take time to establish the market; we are prepared but need to work on building the market. We have to get the new sites operational, raise awareness, and train the surgeons, which will have a substantial impact in 2022. As I mentioned earlier, we expect to see accelerated revenue growth compared to the historic double-digit growth you've seen in the past.

Mike Matson, Analyst

Thanks. The guidance on EBITDA appears to be more negative than I expected. Is this due to your investments in preparation for the CONVERGE or LARIAT launch, or are there other factors contributing to this more negative outlook this year, especially considering the trajectory you were on before COVID?

Mike Carrel, CEO

Yes. Last year, we projected a loss of about $10 million on around $260 million in revenue. Then COVID affected us, but we're now anticipating a similar loss as we had expected last year. Our investments are aligned with our previous expectations as we prepare to accelerate into this new market. We need to invest in the rollout of CONVERGE and get ready for aMAZE. We have a strong balance sheet, which allows us to manage these investments. This year, we will incur the full year of commissions and bonuses, but we expect to perform significantly better in that regard, as we saved a lot last year. As we get back on the growth trajectory, we will be prepared to accelerate in 2022. While there will be some level of investment, it is minimal; we have an exceptionally strong balance sheet with $258 million in cash. We believe we can handle this loss while making substantial investments in our team and preparing for upcoming catalysts over the next several years.

Mike Matson, Analyst

Okay, great. Thank you.

Operator, Operator

Our next question comes from Matthew O'Brien with Piper Sandler.

Matthew O'Brien, Analyst

Good afternoon, thanks for taking the questions. Mike, just to be clear, the guidance that you have laid out today doesn't include any kind of incremental benefit from the convergent approval this year. I know you're already selling into that channel but there is no incremental revenue this year. And then, along those lines; can you just give a little bit more color as far as the discussions with the FDA? Is it the move to long-standing persistent that they're asking more questions about? Is there anything that they really pulled forward that they are incrementally more concerned about; anything along those lines? Thanks.

Mike Carrel, CEO

Matt, our overall guidance did not include any additional incremental revenue. What I meant was that our figures reflect what we believe will be the impact for the year. COVID is having a much greater effect than any incremental revenue growth related to an approval. The impact of COVID is already factored into our current numbers. Additionally, what we expect to achieve with CONVERGE is included in the figure you see today, which is approximately $250 million. We believe this is a very solid figure for the year, building on last year's performance, and we are in a strong position overall. We're looking at a 21% growth year-over-year. Regarding our discussions with the FDA, there are essentially two paths: one involves a panel and the other does not. We are having very positive and collaborative discussions with the FDA, and we hope to provide an update soon.

Matthew O'Brien, Analyst

Okay, I won't push any further then. Mike, regarding the volumes you're anticipating, last quarter you mentioned a range of 70% to 80%. Are you expecting slightly better volumes this year for the remainder of the business? I'd also love to hear any insights on the clips and what you're observing in terms of new account additions.

Mike Carrel, CEO

Yes. We anticipate that about 80% to 90% of cardiac surgery volumes are occurring. There was a slight setback due to a resurgence, so we are currently at the lower end of that range, but we are making progress into the 80s. I don't expect us to reach 100% by the end of the year, but I do believe we will see gradual improvements as the year progresses. Things are certainly opening up, and we are beginning to notice that. While I don't expect a dramatic increase, it will influence all areas of our business. The most significant impact this year is the continued gradual improvement in hospitals treating cardiac surgery patients.

Matthew O'Brien, Analyst

I just want to clarify that you're suggesting that 250 is around 90% of what would typically be expected over the year. So, if we were to normalize that, it would likely be significantly higher; is that correct?

Mike Carrel, CEO

I'm saying that I'm not equating it to the 250, as that could lead to confusion. Currently, cardiac surgery volumes at the hospitals are between 80% and 90%, and they are showing incremental improvement. They were closer to 80% when the surge returned, and they are gradually improving. That's the current volume for cardiac surgery. Attempting to calculate all of this can be complex, especially since we have multiple types of businesses, but it indicates that hospitals are getting busier. If things return to normal, reaching 100%, that would represent an upside for our revenue and growth as a business.

Operator, Operator

Thank you. Our next question comes from Rick Wise with Stifel.

Unidentified Analyst, Analyst

Yes, this is actually Don on for Rick. Thanks for taking the question. Just one kind of follow-up on the COVID trends you're seeing in the quarter so far. If you could give any more color on just the business, what you're seeing; just for modeling kind of 1Q? And then also any geographical differences that you're seeing between the OUS and OUS impact into a recovery?

Mike Carrel, CEO

Yes, in general, the cardiac surgery segment, particularly the open chest valve CABG, tends to show the least volatility but also offers limited growth potential as we recover. This context is important to understand. Elective procedures are gradually returning, as they were the most impacted during the initial COVID period. They are slowly coming back, but they faced significant challenges throughout this time due to their elective nature, especially in the minimally invasive segment of our business. Our clips and cryo nerve block products remain strong performers, and we expect that trend to continue as we progress through the year.

Unidentified Analyst, Analyst

Got it. Thank you. And then, just one on the EnCompass clamp. Just trying to get a sense once approved, how quickly we may see a positive impact in growth in the open business? I think in prior quarters you've said that you already have relationships with a lot of these higher volume CABG accounts and sales teams have been in place. So if it's the case that they're kind of looking for an easier to use faster tool like this, it seems to me like it could be a pretty quick uptake. So, just kind of any color around that?

Mike Carrel, CEO

Yes, we're discussing the EnCompass clamp in terms of its potential to promote growth once we reach a normalized volume, which is crucial as we need to adjust for COVID impacts. We expect that once we achieve this normalized volume, the EnCompass clamp will help us maintain the solid growth rates we've experienced previously, typically in the mid to high single digits, with some quarters reaching low double digits. This growth will allow us to penetrate the market further, particularly among surgeons who were not previously performing procedures. The EnCompass clamp is fundamental to our business, but the quicker growth factors will stem from our clip, cryo nerve block, and minimally invasive therapies. Additionally, the future approval of LARIAT will serve as another catalyst for growth.

Unidentified Analyst, Analyst

Got it, makes sense. Thank you.

Operator, Operator

Our next question comes from Marie Thibault with BTIG.

Marie Thibault, Analyst

Hi, thank you for taking the questions this evening. I had one, possibly for Angie on the sales build and some of the SG&A; it certainly seemed to step up a bit in Q4 and I'm guessing that had to do with some of the preparations for CONVERGE. But just wanted to get some thoughts on perhaps the cadence of how to think about the SG&A line as some of those bonuses and commissions and things get built in throughout the year? And whether you would look to expand further at the end of the year in preparation for LARIAT as well?

Angie Wirick, CFO

Sure. Thanks, Marie. I think the way to think about SG&A costs looking into 2021, we typically see an uptick at the beginning of the year, that's when we reset plans and you're marching to new orders. There are other kinds of timing items such as trade shows where they are heavier in the first half of the year, and a little bit in the second half of the year. In terms of investments, we expect to continue to make investments throughout the year in preparation for the CONVERGE launch, the EnCompass launch, and some of the other catalysts longer term. So, I'd say kind of declining over the course of the year but look to historical levels when you're thinking about spend overall.

Marie Thibault, Analyst

Thank you, Angie, that was really helpful. I have a question about CONVERGE. While I won't press for more information on the FDA, I'm interested in understanding the impact of the symposium data on current users. Are they recognizing the significant 35% absolute benefit? Are we seeing that reflected in procedures now? Additionally, you mentioned targeting new sites; could you provide an estimate of how many new sites we can expect with the rollout of CONVERGE?

Mike Carrel, CEO

The data is relatively new and was presented and peer-reviewed for the first time at a scientific session just a few weeks ago. While it isn't affecting our volumes yet, there is certainly a lot of discussion within the electrophysiology community about the significant benefits for long-standing persistent patients. Dr. Delurge presented the data, which is compelling and has led to more conversations with both surgeons and the electrophysiology community than we had before. It has sparked some discussion within that group, but that's about it for now in terms of procedural volumes. Could you please remind me to ask the second question, Marie?

Marie Thibault, Analyst

New sites, beyond the current users what you hope to target, no more or less?

Mike Carrel, CEO

Yes. Each of our representatives is focusing on new sites in the area while also identifying existing sites that can be expanded. Once we receive approval, we will approach the market methodically as we train and establish these new sites. They have prioritized locations in their territories to ensure they can deliver optimal results, learn from the process, and ramp up effectively. We anticipate that 2022 will mark the start of accelerated growth, which we expect to sustain over the coming years. The advantage is that we have plenty of sites to target; we will prioritize them carefully, ensuring procedures are performed safely and effectively, leading to positive outcomes for patients before expanding to more sites.

Operator, Operator

Thank you. Our next question comes from Suraj Kalia with Oppenheimer.

Suraj Kalia, Analyst

Good afternoon, everyone. Mike, can you hear me all right?

Mike Carrel, CEO

Yes.

Suraj Kalia, Analyst

Thanks. That's perfect. Hey, Mike. So, I know a lot of questions have been asked; I just want to go on to CONVERGE. Mike, forgive me, did I hear you wrong when you said there was a 35% absolute delta between the two arms at 18 months?

Mike Carrel, CEO

That is correct. It was basically approximately 61% success in the convergent arm at 18 months. And in the catheter-only arm, it was around 26%.

Suraj Kalia, Analyst

So the convergent arm, and forgive me for belaboring this, and the reason I ask, Mike, is I've never seen a 40% delta; that's a big deal, at least clinically. So help me understand; the treatment arm went from, let's say, 68% to 61% within a span of six months, right, from 12 months to 18 months. And what you are saying is the ENDO-arm went from, let's say around 50% to 27% something?

Mike Carrel, CEO

The treatment arm decreased from about 68% to 61% over six months, while the ENDO-arm dropped from roughly 50% to 27%.

Suraj Kalia, Analyst

Wow, that's interesting. And Mike…

Mike Carrel, CEO

And that's why we talk about the durability of the procedure, and that's what we've seen; that's one of the compelling pieces to it. And remember the catheter and the conversion are complementary, we really kind of play to each other's strength when they work together, it's about the two procedures or the two devices really working well together to get a better result.

Suraj Kalia, Analyst

Right. Mike, I'll be in a position to make any assessments about long-standing persistent AF, and more recent, persistent AF within the context of this 35% absolute delta?

Mike Carrel, CEO

I'm not sure I understand the question when you say… I guess the data that we presented to the FDA and obviously that was discussed at the Afib Symposium; so that’s for long-standing persistent.

Suraj Kalia, Analyst

Got it. Okay. And Mike, regarding the initial centers, I might be asking the same question in a different way and I'll return to the queue. For CONVERGE, I know you mentioned the reps, but how many of your current centers would you consider as easy opportunities? You can use any metric you prefer; centers, cases, whatever. I'm just trying to understand. I see you're making progress, but what do you consider the easy opportunities within your existing client base? Thank you for taking my questions.

Mike Carrel, CEO

On the long-term, this harvest is huge. In most of our existing client base, you only have one EP or maybe a small group of cardiologists referring; and they believed in this, they started going down that path. Now that we've got very compelling data, once we get that approval, and we're able to kind of actually market to that which we cannot do today, it allows us to expand the referral network, expand to the EPs within that community; we do feel like there is significant expansion opportunity within the existing base, it already has a trained surgeon. For sure we've prioritized those sites that we already know are good sites, and already have at least a few EP champions in that group. So we're definitely going after that; we will go after that for sure.

Operator, Operator

Thank you. Your next question comes from Rebecca Wang with SVB Leerink.

Rebecca Wang, Analyst

Hi, this is Rebecca for Danielle Antalffy. I want to talk about LARIAT as I believe it is an important data catalyst for later this year. First, how should we consider LARIAT in relation to the business? Is it complementary or competitive with the minimally invasive sector? Will there be any impact on sales? Additionally, what should we anticipate from the aMAZE trial data regarding efficacy and safety, particularly in relation to FDA approval or adoption? Thank you.

Mike Carrel, CEO

Thank you for the questions, Rebecca. Regarding clips, we view them as complementary because they enable us to engage with the physician community, specifically electrophysiologists, and offer options for their patients. Our aim is to let physicians choose what is in the best interest of their patients. We now have the LARIAT, which is a less invasive percutaneous approach, alongside the clip; both are highly effective in closing off the appendage. They both provide epicardial access and offer the advantages of mechanical and electrical isolation. The choice of which device to use ultimately lies with the physicians, and this allows us to facilitate that discussion. Pricing varies; the LARIAT generates higher revenue per procedure, which benefits us, but we plan to market it simply as an option based on what is best for the institutions and patients. Regarding the LARIAT data, I know this is a primary concern for many. We designed the trial to be a superiority trial, and while we aren't disclosing specific numbers due to variability, we anticipate demonstrating a benefit in this trial. We hope this will be relevant both clinically and for our FDA submission. Similar to how we communicated the importance of demonstrating superiority with the CONVERGE trial, we aim to achieve that with LARIAT as well, and the trial involves 600 patients.

Rebecca Wang, Analyst

Thank you.

Operator, Operator

And I'm not showing any further questions at this time. I'd like to turn the call back over to Mike Carrel.

Mike Carrel, CEO

Great. Well, again, everyone thank you for joining us tonight, and your interest in AtriCure. As I mentioned before, we're really excited about the progress that we've made with the FDA, and where we're going right now in the future and the catalysts in front of us, both with CONVERGE, aMAZE, EnCompass and cryo nerve block, and the many clips that we've got in the market. We've got an exciting future, not just for this year but for the next decade. Thank you again for your interest, and we look forward to talking to you soon.

Operator, Operator

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.