Well, all right, let's get started. Good morning, everyone.

My name is Marco Espelot. I work at Goldman Sachs covering MedTech and HDIT. I have the pleasure of hosting CBRX, specifically with the CEO to my right, Kevin Hikes, and CFO Jared Orsheim. there's a lot going on and I want to make this as interactive as possible for those online so I'll make sure to periodically stop in and ask for some questions from the audience but I think maybe we could start there was a recent announcement and would love to hear how you guys are thinking about the new CFO transition sure thank you Marco and we appreciate the chance to be here today and to chat a little bit about CVRX and obviously with the news yesterday of Jared's intention to transition out of the company It's a great opportunity for us to hear a little more from him about what that means.

But just on behalf of the company, before I let him address that, we're thrilled after 11 years and significant, innumerable contributions, he's ready for his next chapter, which we fully support, and he's been extremely instructive, not surprisingly, in constructing this transition So we'll have him for another nine or 10 months, likely, but have the time to do this right and find the right next successor. But maybe Jared can share a little bit about that.

Yeah, happy to cover that. So this is something I've been thinking about for a little while, right? Been at the company for more than 10 years, been in the CFO seat in the public world for more than five years at this point in time, and really starting to just get that itch for what is that next adventure, right? At the same point, I love this company. I love this product. Everything that it does for patients, I am completely bought in, right? And so I want to make sure that this company continues on in a very strong way and goes to the moon, right? So when I came forward to Kevin and talked about the opportunity of transitioning out at some point in the future, it was really built on wanting this thing to continue to grow and be in a really healthy position moving forward. So we constructed this approach where I am committed to getting them up to speed over the 30 days period afterwards, and then even beyond being to help that new person get up I'm excited for the next opportunity, but I'm here for a while, right? We've got to find the new person, get them up to speed.

That's great. And Kevin, why don't you start with maybe providing a brief overview on CVRX and your background as well as framing what you are working on.

So maybe I'll start with the background piece. I'm a 35-year med device veteran, 17 years at Medtronic, now 17 years running growth stage, mostly private ventures, just like CVRX, very much at the same stage, dealing with the same issues. So I was on the board of this company for a couple years before I stepped into this role. And I found, you know, a fantastic company that had very typical sort of early stage commercial successes and challenges. And so when I joined two years ago now, we spent some time just looking at what those first three or four years had told us, what worked, what didn't, what sort of approach we needed, what were the fundamental structural barriers in the market to the adoption of the therapy. So on that basis, we built the go-to-market plan that we began implementing roughly 18 months ago. And I can talk about that later if we have time. Maybe just to back up a step, so Barosim Therapy was approved in the United States in 2019 for the treatment of heart failure. We treat patients, heart failure as a whole has sort of two large halves. One is reduced ejection fraction. One is preserved ejection fraction. So we treat patients that fall with the reduced ejection fraction. Those are EFs below 35. So our therapy is indicated for a subset of those patients who are on guideline-directed medical therapy. So those are the four commonly prescribed drugs today, but who are still symptomatic. And the challenge we are dealing with in heart failure, especially in HEF-REF, reduced ejection fraction heart failure, for 50 years the disease has been treated with drugs. And so patients are diagnosed, they're started on as many of these four drugs as they can tolerate, and they're effectively sent home for five to seven years to suffer with debilitating symptoms. And at the end of their journey, seven or eight years later, if they're lucky, they're considered for a VAD or a transplant. If not, they're sent to hospice. So we're dealing with a disease that's been largely undermanaged for many, many years. And the quality of the four drugs, and I can tell you only 1% of patients ever can take all four of those drugs. And of those that do, 40% discontinue in the first year. So the drugs are tough to tolerate. They do nothing for quality of life, and many patients can't take them. So we deal with the population that we treat are called the forgotten middle by the heart failure community. So those are patients between sort of two and three years in and six and seven years in, and they're suffering. So our therapy rebalances the autonomic nervous system by restoring signaling from a set of nerves, a bundle of nerves called the baroreceptors on the carotid artery that signal the brain on the status of the cardiovascular system.

You've historically framed Barostim as a $10.5 billion U.S. market opportunity. Why don't you walk through how you size that market? And sometimes there's both deciding what is totally accessible as well as servicely accessible. So how do you frame that in that context?

Yeah, so we would describe our population. So the incidence, the annual incidence for our indicated population is about 76,000 patients. And so that starts with all patients with heart failure. We take a cut for those who have an EF less than 35. We then take another cut based on a biomarker called NT-PRO-BNP, which effectively describes the stability of their heart failure at a given time. So our indication is for patients that have an NT-PRO between 400 and 1,600. A really sick patient could have an NT-PRO of 20,000, right? So we say under 35, 400 to 1,600 on the NT-PRO. And then we take another cut for access to health care comorbidities, kind of Medicare, Medicaid, sort of the typical cuts to come up with a very conservative 76,000 patients per year, about $2.4 billion on an incidence basis. On a prevalence basis, it's about $10 billion a year, and that's about 340,000 patients.

So maybe we transition to more of the clinical evidence side of things. And you've conducted multiple studies. So why don't you start talking about how physicians and patients have reacted to your current clinical evidence?

Sure. So the most recent trial that we've completed, large-scale trial, was our BEAT-HF pivotal trial. That trial was the first ever, our device in therapy was the first ever breakthrough designated device by the FDA. There's now 2,500 such devices, but ours was the very first. And at the time, the structure of those trials involved a part one, which allowed you to get FDA approval on the basis of safety and efficacy, and then a second phase of the trial that would study additional endpoints. So in our case, we got approval for the therapy at the six-month point on the basis of an extremely safe procedure with significant impact on quality of life. We then began the second phase to further enroll the trial and look at two endpoints of hospitalization and mortality. Unfortunately, as we began that second phase in December of 2019, COVID was on the horizon. So as a result, we were unable to fully enroll that second phase. And ultimately, when we published the data, we demonstrated extremely durable quality of life symptoms out to two years. But we just missed on the hospitalization endpoint. the mortality endpoint. So since that time so we've been marketing and you know formally on label on the basis of the quality of life impact of the therapy up until now but have significantly built out the sort of range of evidence around that initial clinical trial. So we now have very solid real-world evidence that shows dramatic 85% reductions in hospitalization. We have significant data showing the impact on on arrhythmia, on kidney function, on diuresis, on some of the mechanistic underpinning. So for the last four years, we've really tried to build around that initial BDHF trial data that eluded us to some degree because of COVID to provide clinicians with a much broader sense of why the therapy works and why it affects so many different elements of heart failure. So I'll stop there.

Can I just ask, sorry, a question back on the serviceable addressable market. On the one hand, I think investors get confidence when you take a big TAM and put it into a more direct, serviceable market. On the other hand, when you start slicing the size of the market, you start to ask questions about, are the 76,000 patients treated in a small number of centers? Are they very diffuse? How do you actually access that and maybe help us understand the unlocking of that opportunity?

Happy to cover that. So we've gotten this question quite a bit over the years. I think if you go back to our investor deck and look at where we start with this heart failure population that Kevin was referring to, it's millions of patients in the U.S. that are currently suffering from heart failure. As we went through our FDA indication process, you take cuts against that. And Kevin mentioned, you know, we're cutting it for NYHA Class 3 or Class 2 with a recent history of 3. We're cutting it for the ejection fraction being below 35%. We're cutting it for that NT Pro biomarker of 1,600. And so every time we get this question, both from investors and even from physicians, of who is the perfect patient, it really is those patients. We're talking now about 340,000 patients in total out of the millions that exist in the U.S. today. So we believe all 340 are serviceable. Now the question is, how do you get access to those patients? And as we've gone through this update to our go-to-market strategy, it really was focused on where is the most significant volume of these types of patients? And you can do that through many different ways, right? You can look at other devices that they've been able to get for their heart failure, for example, a single-chamber ICD or maybe a diagnostics device like a CardioMEMS. Or you can look at heart failure admissions data at a hospital and try and understand how many of those patients are being referred into those specific hospitals when those types of events take place. And that's how we've then identified which are the most important centers that we need to activate to capture the majority of those patients, the 76,000 new ones in a year or the 340,000 in that prevalence pool.

And maybe just a follow-up question. Like, heart failure has been a really tough space for devices, and it really hasn't been, even on the drug side, there's really been no innovation. I mean, there was Intresto that's done, like, okay in terms of having an impact. But as you think about your V-Wave, which failed, in the preservative ejection fraction segment, now you have folks going after, like, cardiac contractility modulation, you going after heart failure. They're like, help us understand just from a market landscape perspective, what is the status of kind of on the one hand, devices in heart failure, and what is it going to take to really move the needle here on adoption?

So that's a great question. So, you know, at 100,000 feet, this is a very conservative specialty, whether you're talking about the HEF-PEF-focused physicians or the HEF-REF. So things move more slowly in heart failure, perhaps, than in some other fields, even within cardiology. So there's point number one. Point number two is, as I mentioned, there's a 50-year paradigm here of using medication to treat this disease, undertreat it, frankly, and to do nothing for quality of life. So there's a paradigm that we and others, like you mentioned cardiac contractility modulation, we think often about Abbott and CardiMem, we're all in the same boat trying to introduce the idea of devices to this very conservative physician population. The good news is the earlier stage physicians, even mid-stage now in heart failure, have been exposed to these devices. Abbott has been at work with CardioM's now for 11 or 12 years. They're really the predicate device, and they spent a lot of very difficult time in the trenches introducing the idea of a device in the treatment of this disease. And in their case, it's a diagnostic device that has a pretty significant workload associated with it. So that was a heavy lift. We're the beneficiaries of that work, and I can tell you for the first time ever in 2024, the Heart Failure Society of America, who are typically thought of, they're sort of the keepers of the pharma flame, if I can say it that way, they published a consensus document that said if after six months a patient on best tolerated guideline-directed medical therapy is still symptomatic, it is time to think about an intermediate, they call them intermediate devices. So that was a very significant threshold event for the specialty and certainly for companies like ourselves who are trying to change that paradigm. It doesn't mean people change their behavior overnight, but that's yet another element of getting physicians comfortable that there is a role for an invasive therapy like a medical device in treating this disease and that sending a patient home for six years to suffer and just telling them that's sorry, that's heart failure, it's a horrible disease, that's not enough. And there are options now that can get paid for and that are demonstrated to be safe and effective and that should be considered.

And as we stand today, you're in the process of preparing for another meaningful data release. Why don't you provide an update on your benefit trial, current enrollment, and other considerations?

Sure. Do you want to take that?

Yeah. Maybe just kind of taking it up a level first. The trial itself is a large trial to prove morbidity and mortality in an expanded patient population. So we're looking at around 2,500 patients enrolled for patients that have an ejection fraction below 50%. Again, remember, our current cutoff is 35%. And then also expanding this population for our NT-proBNP cutoff up to 5,000. Again, our current cutoff. By enrolling 2,500 patients, by expanding the patient population, we could gain access to potentially triple this market opportunity from a $10 billion prevalence pool up to $30 billion. As far as the trial itself, so we did get FDA approval towards the end of last year. We also applied for and received category B IDE designation from CMS where they will cover the cost of the procedures of this trial. And that was received early in 2026. With that in hand, we were then able to go out and start activating centers. And that at times can be a long and arduous process. Depending on the types of centers you're engaging with, it can take more than a year to actually get on contract and go through that IRB approval process to get a new trial off the ground. We have already activated several sites. So some of those faster movers where contracting can happen at a quicker rate are signed up and are already enrolling patients. We're still single digits in both arms, but as we think about how the year started, we had not really factored in any of this trial enrollment into our guidance. So the fact that we're activated in several centers and seeing patients enrolled is a positive story from our perspective. So it will take probably three to five years to enroll, a couple years of follow-up afterwards. So we're supposed to set expectations on the data release to be about five to seven years from today. And during that time period, we're expecting a net cost of this 2,500 patient trial of about $20 to $30 million. And again, the reason we're able to keep that cost of a trial that size down is because we're selling these devices to these hospitals, because CMS has agreed to cover the cost of the procedure. So that will net down the overall cost of this trial. offer.

And there's been a lot of excitement coming into the year and throughout as you transition onto the Category 1 CPT code. So how has this impacted your reimbursement and overall market availability?

Sure. So that's an important question. Thank you. And an area of great focus over these last three years. What I can tell you, one of the things we reaffirmed when I arrived two years ago were the sort of fundamental barriers to adoption of this therapy in the market. And And each therapy has a slightly different, you know, they're like snowflakes, right? They each have a different set of issues that are slowing or accelerating the adoption when you're introducing something new in medicine, right? There's a different sort of recipe for each therapy. In our case, our barriers are quite, they're almost motherhood and apple pie. It's, you know, are physicians aware of where this therapy fits in the treatment of a disease? Number two, is there enough evidence for enough of the different physician groups for them to be convinced that it's safe and effective? And number three, most importantly, can patients get access to it, right? So ours are pretty right up the middle. We've been heavily focused for three years now, two and a half years, focused on breaking down those barriers wherever we can. The reimbursement piece, the patient access piece has probably been the most productive in the last year. And so we've made tremendous progress both in terms of the codes, the payment, and the And so most recently, two weeks ago, Humana, perhaps as a result of Category 1, which went into effect in January, Humana announced a written policy for our therapy. And Humana is the number two largest Medicare Advantage provider out there. They're one of the toughest. And frankly, this was a surprise, a welcome surprise to us, probably 18 to 24 months sooner than we would have expected. So that on top of Category 1, which began in January, has really created a tailwind in our business. And if we look back at the numbers, I think the Medicare Advantage 30-day approval rate in 2024 was 31%. When we ended 2025, it was 44%. As of the end of April, it was 49%. So it's steadily creeping up, but I can tell you the exit rate in April was over 60%. So Category 1 is sort of floating all the boats. Humana, which is a very important threshold event for us, has provided an additional tailwind in terms of Medicare Advantage coverage. And what the Humana written coverage policy, our first, allows us to do is reference that policy in every single prior authorization that we submit, regardless of payer, to use it in every appeal that we fight, which we fight day in and day out with these payers. And importantly, it allows us to go in, in terms of coverage discussions, policy discussions, we can reference it with Humana's competitors and say, look, the second largest Medicare Advantage payer is covering this procedure. Why are you not doing so? So that's a really important tool for us as we work on that third barrier, which is probably the most significant for any therapy, and in our case, obviously, one we've been very focused on. And maybe we could segue a little bit now into commercialization, further adoption.

You've talked about a three-pillar approach to overall commercialization. Can you dive into each of these and maybe talk about how you're going into improving productivity and territory growth?

Sure. So as I mentioned, we revised and implemented our kind of next Gen 2.0 go-to-market strategy about 18 months ago, and there were three key areas. Number one was getting the right sales team in place and driving their productivity. Number two was understanding the types of accounts that will adopt this therapy in a deep and sustained manner. Moving from a mile wide to as deep as we can get in the right sorts of centers. And number three, it was working on those three barriers, as I mentioned. So to go back to number one, we have ultimately transitioned over 70% of our sales team over the last 18 months. And that was necessary because we still had a relatively relationship-driven sales force, typical for any early startup. We had not yet made that transition, so that's something we've now done. We brought in sales reps, probably the least common denominator is they understand how to introduce a novel therapy. That's a very different skill set than selling a slightly better pacemaker or a new approach to a procedure that already has reimbursement and access and referral patterns established. So we want people that understand how to introduce novel therapies, largely within cardiology if we can, but in some cases in other fields. because it's that process itself that's so important. And then it's a matter of getting them up to speed, teaching them how physicians think about Barostim, where they can create awareness and visibility and leverage in their markets. Each rep, we believe a rep takes between 6 and 12, sometimes 18 months to get up to speed, and that's dependent on their background, their understanding of heart failure, and the status of the territory that they're inheriting. And so we're still, as Jared mentioned, We're still in the process of transitioning some accounts. We inherited a lot of typical early-stage dabblers scattered across the country, so we're pulling back on a lot of those dabblers who we don't think will ever adopt this deeply, replacing them with the kinds of centers that we think will, in fact, adopt the therapy into how they treat the disease. So step one is getting that team up to speed. Step two is understanding the right process in an account to develop the support you need. So you need referrers, you need champions, you need surgeons, you need an administrator and a CFO that understands the profitability, which is very attractive for this procedure, right? So you need to build the ecosystem at this account of support, and then you need to stitch them together with a workflow that says, here's what an appropriate patient looks like, here's who you send them to for evaluation, here's who the prescribing doc sends them to for an implant, and here's how you make sure that the right patients get treated and get the right outcome. So that's kind of part of building the right center. That's number two. Number three, as I'd mentioned already, is constantly working on awareness, on evidence, and on patient access. I'll stop there. We can dig into any of those three.

Maybe we do dig into the center level specifically. When you think about overall and peak productivity, how do you frame your current center's performance relative to that?

So we've shared some data over the past few quarters as it relates to our center. So we're in 257 active centers. Kevin noted that some are kind of in this bucket of centers that we want to be active in driving deeper adoption. Some are not. And so we aren't actively firing those centers that don't meet our requirements, but maybe we spend a little bit less time marketing to those types of centers. On the ones where we are trying to drive deeper adoption, we have seen pretty good utilization where we're now north of one patient per center per month. That's data from Q4 of last year. I think we were doing about 19 patients a year in those top 20% of our centers. Our goal for the entire cohort of centers that are active is to get them treating at least one patient a month so that we can get them to this stage where they're thinking about this therapy on a regular basis. So the fact that a fifth of our centers are already at that threshold is a positive story, but we want the whole cohort to get there and then beyond. Even in those centers where we are seeing the deepest adoption of 18 or 19 patients per center per year, we're only about 7% penetrated. So there is still a lot of room to run to go out and educate the rest of the referral groups and the nurse practitioners that are helping to treat those patients on a regular As far as the center ads go, we've talked about trying to add a net number of high single digits per quarter throughout 2026. So maybe we're adding, you know, seven or eight centers per quarter on a net basis. That includes the ones that are sunsetting going more than a year without an implant. But there will be some choppiness as it relates to those numbers because it really is dependent on is that one center who treated a patient a year ago going to come back with a new patient at the last minute and stay alive for another year? Or is the new center that's gotten on contract and ready to start treating patients, did they get the right type of patient that could be treated this month? or is it going to have to wait until next quarter? So we'll see a little bit of choppiness as far as the net number of ads per quarter, but averaging around high single digits throughout 20 is the expectation.

And so the U.S. is still the majority of your revenue base and your focus, but maybe we could talk a little bit about international markets and how you think about the overall opportunity there.

Yeah, so I would say we were approved in 2014 in Europe for the treatment of hypertension, and we have a heart failure indication there as well. Europe has changed dramatically since that time. We are still active. We have a small team there. We're active in seven or eight markets. But it's not a focus today. Just based on the reimbursement challenges in those markets, we don't see it as a viable alternative to investing in the U.S. So we're continuing to serve customers. We're growing that business. But it's really more of a holding pattern to some degree until we see further progress on the reimbursement front and on patient access in Europe. So it's really largely our focus is in the United States, whereas Jared said we're only beginning to scratch the surface of this indication.

And now let's shift focus a little bit more into the business performance and the overall financials. We're roughly six months into the year, and your current guidance is for $63 million to $67 million. You guys beat in the first quarter. So how do you think performance is tracked relative to your original expectations so far?

So this is a year of execution. That's how we framed it up at the beginning of the year when we released this guidance back in early January. So in 2025, our annual growth rate was around 9% or 10%. It was the lowest growth that we had seen since commercializing this opportunity. And in a large part, it was tied to the fact, like Kevin had mentioned, that we transitioned 70% of that sales force on the U.S. side of the business over the last few years. Now that we reestablished that new team in place in 2024, in 2025, the expectation is more of those reps are going to start working their way up that productivity curve. As we set guidance in 2026, the midpoint of that number was set at 15% of the numbers we saw from 2025. Q1 results were closer to 20% growth across the worldwide business, even greater if you just look at the U.S. side standalone. So we were really happy with the performance we saw in the first quarter, but it's one data point, right? And so now our expectation is as we go through the year and we continue to repeat that growth of 15% plus in 2026, knowing that our long-term goal is to continue to accelerate into the mid to high 20% as we get into 27 and beyond. Again, not giving guidance for those out years at this point in time, but we believe this is a massive market opportunity and we're just scratching the surface. So as we bring down those barriers to adoption, like with reimbursement and getting this coverage policy with Humana, and seeing our approval rates in prior authorization for the standalone month of April achieve 60% at 30 days, we're happy with the performance we've seen.

Can I ask just a question on, you talk about this year as a year of execution, I mean, every year is kind of a year of execution, but you've got this massive opportunity in front of you. You're at a point in revenue where you're in this sort of build phase of the company. I'm guessing like other early stage medical device companies, breakeven is probably in like the $250 million revenue run rate range. Can you execute this strategy fully effectively as a standalone independent company, or do you need to partner or consider being part of a large organization?

Yeah, maybe I'll just call out a couple points in that question. Again, not drawing a line in the sand, but I think that is a bit high for what we're modeling for a breakeven point. The way we've described it as a business is trying to get each of these active territories treating about 60 patients a year or generating about $1.8 million in revenue. We're going to continue to add active territories, but you don't have to reach break-even as you continue to improve productivity on a per record. As far as executing this strategy on a standalone basis, that is very much our intent, right? We have built this business from the ground up, building a commercial sales force, and now it's all about optimizing. and starting to see leverage in this model. As we continue to see these individual reps treat more and more patients in their individual territories, we expect that to come through on the bottom line, helping to reduce that cash burn. And from a standalone balance sheet perspective, with $72 million in the bank, we've stated we have at least two years of cash available to us. We could draw an additional up to $40 million from this debt facility, allowing us to have access to three-plus years of cash available today. That being said, it doesn't mean that we won't go raise money at some point in the future, right? We believe in the opportunity and the ability to grow this business at a faster pace. And so if the timing is right, we may consider raising capital at some point in the future. But the nice thing is with our balance sheet and access to draw on this debt facility, we don't have to do anything.

You know, maybe I would add as well, to Jared's point, that we have, we believe we can absolutely successfully commercialize this therapy without the need of a broader, much broader team or organization. We have built, we believe, a world-class distribution channel into heart failure. There are very, very few heart failure-specific channels in our markets. Abbott has one, we have one, but the others are relatively smaller and in their infancy. So our intention, and this trial, interestingly, Jared mentioned it, triples our addressable market, but it does that by addressing two very adjacent patient populations who are being seen by the same physicians in the same clinics for the same disease. So that's patients with slightly elevated dejection fractions, slightly elevated NT pros. So we have a really unique opportunity with our given channel to dramatically increase our market opportunity without the need for a different channel. or a different call point, or a different set of skills. So we think we can build critical mass, we can build a world-class team, and as Jared mentioned, we're only now scratching the surface in terms of the patients we can help.

And as we go down the P&L and thinking about the rising input costs, and we've seen where oil is, we've seen where freight is, how do you guys think about the margin progression through the year?

Yeah, it's a great question. So obviously exceeding expectations in Q1 compared to our annual guidance was a positive story, and it was done twofold, right, by seeing higher than expected average selling prices and being able to drop that cost per unit. We actually produced the device at our office in Minneapolis, Minnesota, and so we have very clear visibility as to the overall cost structure of each of these units. We know we have additional capacity to be able to expand how many units we're building on an annual basis, which should help drive that overall cost. From a gross margin perspective, you know, that range of 85 to 87 on the year, we still believe is just a starting point. There are opportunities to see improvements in that number in the coming years as we continue to produce more and more units to drive those costs down. On the spend side of the house, you know, so much of our spend goes into headcount today. And it really is in those early reps that are getting up to speed where we're spending money but not necessarily seeing the full productivity out of them. So as they get more tenure and get up that productivity curve, that's where we see the most leverage coming within our model today to bring that overall cash burn and loss down moving forward. Great.

And, you know, with the minute we have left, Kevin, maybe I turn it back to you for any closing remarks and make sure you really are able to send the clear message as to what you hope that investors and the audience are capture here.

Yeah, so thank you. You know, we obviously, we're operating in a largely historic pharma market, one of the last massive markets that has limited device exposure. There are millions and millions of patients who can benefit from medical devices. We believe hundreds of thousands from barostim therapy specifically. So we think we have all the necessary components to both serve those patients and create significant value, highly differentiated therapy, obviously clear safety record, solid quality of life data, and more and more data now on hospitalization that suggests that this could be a very meaningful alternative for these patients who are sitting home, the forgotten middle that are home on these medications or not, and suffering. So we've got the right team. We think we have the right strategy. We've got the capital we need. And so it's our intention to put our heads down. As Jared said, this is a year of execution and to build this business and build from this new foundation we've created to serve these patients and create significant value.

Well, that's all the time we have for now. Thank you all for coming. And Jared, good luck on your next role.