Hi, hi, everyone. My name is Rohin Patel. I work on the medical devices and research team at J.P. Morgan. I just wanna say it's my pleasure to introduce CEO Nadim Yared of CVRx to provide his opening remarks.
Thank you, Rohin. Thanks, J.P. Morgan, for the opportunity here to speak. It's been a couple of years in a row here, but this is the first time we're sitting at the adult table in this big room. It's a little bit impressive. Thank you, everyone. Well, forward-looking statements in here. We're here to talk about CVRx. It's a great company. We'll be talking about the product, about the technology, and but we're only limited to 20 minutes, so I'll try to go as fast as possible, try to shrink it even further, so if we can answer more questions toward the end. So be ready with your questions. Our company, CVRx, developed the first FDA-approved neuromodulation device that is addressing a cardiovascular disease.
We have a solid management team in place, almost 200 employee, actually more than 200 employees, and we manufacture the device ourselves in our facility in Minnesota. The device looks like a pacemaker, but unlike a pacemaker, we don't put anything inside the heart or inside the arteries or vessels. This has an IPG, the implantable pulse generator, implanted in the chest, and the carotid sinus lead, which is the wire connected. So I-- in the next few slides, I'll talk about how the device works, who is it addressed for, how do we find those patients, how do we treat them, how is the device getting paid for, and give you an update here on the regulatory environment, particularly with the news that we shared with you in between Christmas and New Year's Eve. The device, as I mentioned earlier, stimulates...
It has, you know, an active implantable device. It uses electricity, goes through the wire, stimulates receptors that we all have on the wall of our carotid artery. Those are called baroreceptors. Baro is Latin for pressure. The baroreceptors, when they are activated, they trigger a mechanism called the baroreflex. The baroreflex has been studied now for 70 or 80 years, and it's a well-known mechanism that when it's triggered, you have signaling coming from the brain to the organs to dilate the artery, slow down the heart, and dilates the kidneys. That's a very simple mechanism, well documented for decades.
Yet when you look at it, this is exactly the three axes of therapeutic targets that you need for multiple cardiovascular diseases, because as you know, we prescribe diuretics to dilate the kidney, beta blockers, slow down the heart, ACE, ARB, ARNIs or other vasodilators to dilate the arteries. Who is this for? It's a large patient population of heart failure patients, but we narrowed it down to the segment of patients that we believe will be addressed by this device, not only within the FDA labeling, but even narrower than this. For example, if a patient is too old, we do not believe that physicians are going to prescribe this device, so we do not include them into our total addressable market. In the recent update, we shared with the world that we believe that there are 76,000 new patients in the United States every year.
Those are new patients every year, incidence model, that are addressable by our device with the current labeling. When you multiply this number by an average selling price point of $29,000, that translates to $2.2 billion annual. Finding these patients is not that difficult. When you look at our indication for use, it's very similar to an ICD indication for use for heart failure. So a patient's being considered for ICD or has received an ICD. They need to do one test. It's a blood assay called NT-proBNP, and if it's below 1,600 picogram per milliliter, which is about 2/3 of the patients, then the patient is a candidate for Barostim. And the procedure starts like a carotid endarterectomy, and there are hundreds of thousands of those procedures done every year, and it ends like a pacemaker, with two exceptions.
We do not go into the carotid, unlike a carotid endarterectomy , and we do not go inside the heart like a pacemaker. We just do the pockets. It's done by a vascular surgeon, one single operator. It takes about an hour. The economics of the procedure are favorable to the hospital. We've had a transitional pass-through payment that adds on to the existing code up to December 31st of last year. We presented data to CMS last year that shows that hospitals, in average, were charging about $45,000. CMS accepted our request to move the code from the level 5 neurostimulator that used to pay $30,000 plus the TPT, to a code called APC 1580 that pays $45K. That simplifies the process. It's the same payment. "Where is the upside?" you will ask me.
Well, in all of our assumptions, we assume that in 2024, the payment level will go down, so our ASP will be lower. Now, we don't have to lower the ASP. It will continue in the same direction. We assume it will be around $29,000-$30,000. We currently do not have explicit coverage decisions. So 67% of heart failure patients are covered by Medicare. We are authorized now to do the procedure, and it will be a claim-by-claim adjudication after the procedure for Medicare patients. For commercial patients, it's a prior auth process, and we have a team in-house that supports patients and their physicians. And if you've been following our study, you know that we issued a press release right after Christmas, that FDA looked and analyzed our data from the post-market study.
You may ask me, "Why am I paying so much attention to a post-market study? Nobody does." Well, when we designed our trial, we had a pivotal trial as a pre-market that led to an FDA approval in 2019. That trial met all of the safety and efficacy endpoint at the time. We got approved. But we continued with a post-market to confirm this data in the long run, and with a moonshot saying, "What if we can improve mortality and morbidity?" This paragraph is from the final section of our clinical report that has been approved by FDA a couple of weeks ago, where we basically are saying in here that the primary safety endpoint in the pre-market phase and in the post-market phase was met. Okay, so the product is safe. In the pre-market phase, all of the effectiveness endpoints were met.
Okay, the product was approved. The benefit outweighed the risk. We continue saying, so while the post-market phase, effectiveness primary endpoint of cardiovascular death and heart failure hospitalization was not met, additional post-market phase effectiveness analysis, such as the win ratio and freedom from all-cause mortality, suggested a favorable effect of Barostim therapy, and we continue with the data. So I'm gonna show you the data and explain why this is important for us, and now why, why everybody made a big deal when we said that we failed the endpoint back in February, and why everybody thought it's also a big deal when FDA finally gave us the approval to be able to show this data to patients. I will show a couple of slides in here, data. The way to read those slides, the first dark bar is the patients who received the device.
That's the results in them. The blue bar are the patients who did not receive the device, and the purple bar is the difference. So you see here in the exercise capacity, using the six-minute hall walk in the trial, we had 56-meter improvement at 6 months and 44-meter improvement at 1 year, which compares very favorably with the clinical threshold of 25 that is deemed to be what is clinically meaningful to patients. In the quality of life measure, using the Minnesota Living with Heart Failure Questionnaire, so 14, 17, and 18 point... I'm sorry, 14, 8, and 10 points, which is much higher, almost 2x more than the threshold of 5 point that is deemed to be clinically meaningful, 4 points, and this goes to 24 months. Same with the functional status.
27% of the patients at 2-year had an improvement of at least one class of NYHA compared to the control arm. You mentioned - I mentioned earlier that we said about the all-cause mortality and the win ratio suggesting a favorable benefits. This chart exists right now in the labeling of our device. This chart is part of the labeling that has been approved by FDA as part of our instruction for use. What does it say? It says that patients who were enrolled in the trial that received the device, so this is the black line, the dark blue, had 34% less death, LVAD, or transplant, as compared to patients who did not receive the device in the trial. And you see at the bottom here, the hazard ratio. Is this significant?
Well, it's an important fact that we need to communicate to patients and their physicians, so that they can make the decision if this data is important to them. And I can ask you, is it important for you to know about the patients in the trial, how they did compared to the patients who did not receive the device in the trial? That's why this is important. The second element, I mentioned the win ratio. What is a win ratio? It's a way to calculate this mortality and morbidity, but using a hierarchical composite as compared with the flat composite that we had established as a primary endpoint. The hierarchical composite, very good data, relatively speaking, in here. The way it works, we take comparison, every pair of possible patients, device versus control arm, and you compare who did better.
But you do it in a hierarchical way, meaning, are both alive? If one is dead, that last. If both are alive, then you compare, has anybody received an LVAD or transplant? And you keep going in this way, hierarchically. And in this test, the results were 26% more wins for the patients with the BAT, as compared with our device, Barostim ReFlex, as compared with patients who did not receive it in this trial. So it is important data. Now, even without this data, as you can look at this graph, this is our U.S. sales over the quarters, starting from Q1 2021. You can see it's a nice progression. But even without this data, we were having good traction. We announced the data in February 2023.
A lot of people got a little bit concerned about what does this mean, yet the market, our market, was not concerned. As you can see here, Q2 had a significant uptick from Q1 after the data was presented at the public meeting, which meant physicians and their patients, for those who had the opportunity to see the data that was presented at THT, reacted favorably to it. Now that we have the FDA blessing to show this data, we can show it to anybody. We can be proactive showing this data, not waiting for the questions to be able to answer it. All right, back to the preliminary results of Q4. We had 38 active territories. Correct me, Jared, when I do something wrong. Thank you. And 178 active implanting centers right now in the United States.
Those generated about $10 million in Q4 in the United States. Now, if I put this with the rest of the world, we got in Q4, $11.2-$11.3 million in Q4. When you look at this bar, the dark blue is what matter to us. This is where we're investing the money, is the U.S. heart failure markets. The light blue is our European market, where we've been talking about that we stabilize this for $1 million a quarter. We are not investing there. You may ask me why. Every dollar we have right now, we prefer to invest in the United States. The return on investment right now is much higher in the U.S., and we're limited in how much we can spend to stay within our code of profitability. We've mentioned the ASP, $29,000 is an estimate for the future.
However, in Q4, this past year, it's worth $30.8, almost $31,000. And we have, as I mentioned, earlier, 178 centers and $91 million dollars still in the balance sheet. You may say, "How is that bigger than last quarter?" Well, we pulled, we drew another $15 million on our debt facility. That would have been, it would have expired if we didn't do it by December 15. That's why we still have $91 million cash. If you do the math, we burn about $7 million in Q4, which is less than the $8+ million that we burned in Q3, which is better than the double digits million that we burned in Q2, and so forth. So we've been shrinking, gradually, our cash burn quarter over quarter.
For the year, we estimate for 2023, $39.2 million-$39.3 million. The US portion of this is about $34.6 million, which is about doubling the business year-over-year, 97% growth year-over-year in the US, and our ASP for the full year was $30.8 million. Turning my attention here to the guidance, which is the slide before the last. For 2024, we expect total revenue between $53 million and $57 million worldwide. Gross margin, we estimate, we expected or we're guiding towards 83%-84% for 2024. And our operating expenses, we're estimating them to be between $86 million-$90 million for 2024. For the first quarter of 2024, we're also expecting total revenue of somewhere between $11 million-$12 million. So my last slide here is summary.
We are targeting an underserved population with a very morbid disease, with a proven proprietary platform technology. We have a very large market, $2.2 billion annual. The patients are easy to identify with an actionable elements. We have a number. We are below this number, above the number, you know what you need to do. You need to get a Barostim. We have a successful commercial launch now since the IPO. We have favorable reimbursement, as you've seen. We've proven that we can manufacture this device. We have not delayed a single procedure since we started manufacturing the device ourselves in our facility in 2009. We have an attractive financial profile. I mentioned the gross margin, the balance sheet, and we have an experienced leadership running the company.
With this, I think we have now 5 more minutes for questions, so I hope that you're ready with your questions. Went back to you.
Thanks, Nadim, for that presentation. And also, I'm sure that most of you in the room have seen of Nadim's plans to retire, most likely within the year. And so I just wanted to wish you congratulations on your success at CVRx over 17 years. Truly a phenomenal legacy you've built. But I guess another follow-up question is why do you think that now is a good time to retire, given I think a lot of—there's a lot of positive momentum in the business, obviously, with the reimbursement as well as the new label? So just wanted to hear your thoughts on your journey.
Yeah, Jared is very good for this question. So, yeah, it's a, you know, it's presumptuous of me to talk about the need to retire or not, and the timing to retire or not, but the fact is all of us will retire one day, and the choice of that date is tricky. It depends on multiple factors, some depending on us as person, some on the business, sometimes they're voluntary or involuntary, and so forth. In this situation, I've been giving some thoughts to the timing of a transition. What would be the least worrisome time where we can transition the leadership at CVRx? And there is no good time. There are just less worse periods of time where this transition could happen with less disruption to the team.
We just finished a very successful program called BeAT-HF, that started in 2015, that followed the phase 2 of that same indication, that followed the phase 1. So since 2011, we've been on this journey of getting this heart failure program. So now we're finishing phase 1, phase 2, phase 3, pre-market and the post-market study, getting reimbursement and FDA done. Before we jump on the next adventure, I think this is a long time in terms of product development or clinical development that one can change. So that's one axis or one dimension that we need to look at. The second dimension is the growth. We've been growing the business.
We've demonstrated now that this business model works, that we add reps, they go, they open accounts, they teach them how to do the procedure, they help them build a referral network, they get more implants, and they grow. While they're farming this account, they go hunting for the next account, and we keep adding more reps, create more territories, and so forth. What we have not demonstrated yet is that we have a leader that can take this business to a billion-dollar business. Can I do it? I think I can. I had the experience back in the days with GE Healthcare and Medtronic running large businesses. But am I the only one outside in this world who can do this? Am I the best one who can do this? I don't know. So that's another question mark here that we can look at.
So at the same time, we have two components: timing from a product or clinical development, ideal. From a growth development, when you reach that $40 million-$50 million, it sometimes require different skill set. Is this the most ideal time to get us the best CEO that one can hope for, for a company like CVRx to take this to its full potential? I am a large shareholder of CVRx. It is in my best interest to ensure that when we're transitioning, we transition to a CEO that can take this to a new height, much higher than I could have ever taken it in my life. So this is very personal to me. I'm on this journey. I'm not leaving CVRx.
I'm looking for a replacement who can do a better job than I did, who can continue with this journey, and I'm here to support now until we find this person, during the transition, and after the transition, in any way, shape, or form that the board of directors and the new CEO would want me to help with. So sorry for the long-
No, no.
Jared could have said it better than me.
No, that was great. I guess just I had a quick follow-up about the timeline for succession and how the search is going so far. Obviously, we just heard of the news, but I'm assuming you've kind of maybe been in the process for a few months now. And kind of what does that timeline look like for a new CEO here?
Yeah, we have signed Egon Zehnder as a search firm to help us with the support, so they are actively looking for candidates as we speak.
Okay, great.
Yeah, we have a search committee in place, and the board of directors, and I'm supporting the search committee in this regard.
Great. I guess just shifting gears-
Let me add one more thing.
Sure.
If anybody knows anyone who could be interested, who you think have experience scaling businesses from $50 million - $1 billion, please reach out to myself here, of the search committee.
I guess just shifting gears, wanna just start with the quarter. You had a nice quarter. Sales of $11.2-$11.3 million came in above consensus, and our own expectations as well, and these were primarily driven by U.S. heart failure sales of $10.2 million. I guess, just wanted to get your thoughts on more of the qualitative trends in the quarter. How kind of you see these translating into 2024 and so far in first quarter? I know it's, it's really early, but kind of any preliminary thoughts for what you're seeing on the ground in terms of procedures?
Jared, you want to take it?
Yeah, happy to take it. So I think, you know, there's a few components that go into those numbers that we put out on a quarterly basis. Number one, how many new territories or how many fully ramped account managers we were able to activate in a given quarter? nd Nadim mentioned we added 3 more here in the fourth quarter, going from 35- 38. That has been very consistent adds since we went public back in the middle of 2021. We've been adding 3 per quarter, like clockwork, every single quarter. So we were able to bring on 3 more reps to get them fully trained so that we could carve out those territories for them here in the fourth quarter. The second piece is the number of new centers that signed up and actually treated their first patient in the quarter.
We added 19 net new centers here in the fourth quarter, bringing us up to 178. When we started the year, I think we were guiding the street to start thinking about 12 or 13 new center adds on a quarterly basis, and throughout 2023, we were able to exceed that expectation. The nice thing is, we have a long process. Well, maybe not the nice thing, but there is a long process to get a new customer through the contracting phase, to get them to a point where they can actually start searching for patients to be treated.
The nice part of that is, it gives us a lot of visibility to that funnel, where every single one of those customers are in the process, from champion identification all the way to contracts being signed, maybe going through that value assessment committee, and then searching for that first patient they want to be the right one to be treated. So, you know, it. The last part of that is the part that's a little bit harder to predict when we find that right patient to get treated and be the first one. But adding 19 in the quarter was, again, exceeding expectations, allowing us to beat the top end of the range we had put out for the quarter. And then the last thing is just utilization.
I think we've seen about on average, two revenue units per active implanting center per quarter throughout 2023. That number has stayed pretty flat, but a lot of that is driven by more new customers coming on board. The trend continues that the longer on average a center has been activated, the more patients they're treating. That means the more patients they see get treated with this device, the happier these physicians are, and the more they want to use it for their other patients. I think we saw that trend continue as we saw 2023 come to a close.
Did you, I guess, see any disruption, probably earlier in the quarter, as physicians may have been waiting for the updated reimbursement to take effect? Or was that just not something that was seen in the quarter at all?
Yeah, yeah, I'll, I'll take that one. So, what we had talked about was we were gonna be mapped to this new code, APC 1580, as we move into 2024. We knew that answer was gonna be coming out in the final OPPS ruling that was announced at the beginning of November. We gave guidance for Q4 towards the end of October, along with the rest of our earnings release. And we just talked about... We've never gone through this before, right? Not too many companies lose a, a, an add-on payment and then get mapped to a new code, you know, in the coming months. And so we didn't know necessarily how physicians were gonna react to that news.
I don't think, you know, as we dug into the details, that we saw any physicians holding back patients, thinking they wanted a more firm code as they go into 2024. Because remember, it's a similar reimbursement level, whether it was the old code with the add-on payment in 2023 or the new code as we march into 2024. So I think the positive news we got in November, you know, didn't really disrupt the business.
Great. Yeah, I, I definitely wanna jump back into that a little bit later, the reimbursement. But just moving on to guidance. So your first-time guidance for 2024 was $53 million-$57 million. Just wanted to get a sense for what's assumed in there as far as territories, revenue units, just maybe a little bit more color about that, as well as how much conservatism is baked in here?
... Sure, happy to take that one, too. You've given the easy one here. So, so revenue, we talked about, seeing $53 million-$57 million throughout 2024. That's growth of about 50% from 2023 to 2024. When we look at the range of what, that revenue number includes, it, it - a lot of it assumes very similar results that we saw in 2023. So I'll go through a little bit of that. So if you look at the low end of the range for new center adds, we're talking about maybe adding about 14 new centers on a quarterly basis. The top end of that range is looking a little bit more like what we were able to deliver in 2023, which was about 18 new center adds on a quarterly basis.
So ranging between that 14 and 18 number for new centers per quarter. When we look at the ASPs, focusing on the U.S. heart failure business, in 2023, we saw average selling prices of about $31,000. We are expecting to see some pricing pressure as we move into 2024, where that ASP might come down to the range of $29,000-$30,000. Again, factoring those numbers into the low end and the high end of the range. And then the last piece on the revenue component is around the productivity. So if we look at how many revenue units each one of those active implanting centers was using or buying in 2023, it was about 2 per quarter.
Throughout the top end and the low end of that range, we're still assuming about a 2, you know, revenue units per active implanting center, as we march into 2024. The final piece you mentioned is the territories. We've been adding at 3 per quarter. We feel like that's a good number to continue to, you know, add as we march into 2024 on a quarterly basis. But again, we're gonna be opportunistic. If the physicians look at this new clinical data and really start to, you know, adopt at a faster pace, or they see this reimbursement as a positive tailwind and want to start treating more and more patients, then we'll be open to, you know, adding more reps at a faster pace.
But making sure that we're being thoughtful about how we're using that cash we have on the balance sheet. Just, I mean, touching on the rest of the guidance quickly, gross margins looking very similar to what we saw in 2023, margins around 83%-84%, and then OpEx growing at a slower rate than what we're expecting to see from top-line growth.
Then just last question on the guidance, how... And specifically on OpEx, how do you see it kind of being split relatively between SG&A and R&D?
Yeah. Vast majority of the growth in OpEx is gonna be going towards sales and marketing. Nadim mentioned it, we see a high return on investment when we're putting it towards the U.S. sales and marketing organization, and that is the plan for 2024 at this point.
Okay, great. I guess moving on to the interesting stuff now. So just turning to the label.
Mm-hmm.
I guess if you could just recap what's, what exactly's changed in the label versus before, and then I did want to follow up and talk a little bit more about the new market opportunity.
Mm-hmm. Mm-hmm. Yeah, so the word label is actually often confused with the instruction for use document, which is a 78-page document in our case, that you can all find on www.cvrx.com/ifu, the latter instruction for use, or sometimes confused with the indication for use, which is the section three in that document, which is the one paragraph that describe who is this indicated for. So let me comment on the indication for use about, you know, that one paragraph. It used to say previously that this device improves symptoms in patients with Class III heart failure or recent history of Class II with recent history of Class III, reduced ejection fraction below 35%, despite guideline-directed medical therapy, NT-proBNP below 1,600, excluding patients who are indicated for CRT according to the guidelines.
We changed the new labeling with the agreement with FDA to split it into two sections. One section is, who is this indicated for? And the second, the sentence below it, is what does it do? So who is it indicated for? Right now, it says this, this device is indicated for patients with heart failure, who have symptoms despite being on guideline-directed medical therapies, in parentheses, devices and medications, who have Class III or Class II with recent history of Class III, LVEF less than 35%, and NT-proBNP less than 1,600. The benefit, we're still talking about the symptoms. Now, why, what was the difference? Why did you not hear me say, excluding patients who are indicated for CRT in the new indication, and what does this mean?
Well, when you look at the guidelines for heart failure, there is a Class I indications for patients who have an LVEF less than 35% and a QRS above 150 and left bundle branch block to receive a CRT. And those patients, in those patients, CRT had a mortality benefit. It is in the guideline. The same way, in the guidelines, those same patients, there is a benefit if they get Entresto, a mortality benefit, and there is a benefit if they get an SGLT2 inhibitor. Why in the world are we treating them different in the previous indication for use? It's a long history. In the new indication for use, the same way we are asking the physician gently, "Please, doctor, consider first all of the guideline-directed therapies, the four classes of medications, diuretic, beta blocker, ACE, ARB, or Entresto, and then the SGLT2 inhibitors.
Consider as well the devices and the guidelines, ICD and CRT. But after you've considered all of this, whether you do it or not, it's up to you. Of course, you're the doctor, but after you've considered all of this, then you may want to consider Barostim." ... and that's easier to understand for physicians. It's also easier to understand to payers. When a payer used to receive a patient who had a CRT device, and the patients could have received the CRT device without a Class I indication because they didn't have anything else. Yet, because this patient had a CRT device, the payer will say, "Well, it's excluded. We cannot reimburse for that." Now, that is eliminated, okay? So that simplifies on the indication for use. Was this part of your question?
Yeah. Yeah. No, that was, that was great. Following up on that, though, I... This also kind of coincided with an expansion of the TAM.
Mm-hmm. Mm-hmm.
From my understanding, it went from roughly $1.4 billion with 55,000 new patients to $2.2 billion and 76,000-
Mm-hmm
- So it would be helpful just to kind of walk through the bridge there.
Mm-hmm.
What accounts for that increase? Obviously, you kind of talked a little bit about the ASP as well as kind of new patients are considered for the therapy, but just any specifics you could provide would be helpful.
Mm-hmm. So the $2.2 billion is simply the 76,000 new patients every year, multiplied by the new price point, which is $29,000 estimated ASP. Previously, it was 55 multiplied by 25 because we assumed that in the long run, it would be 25, okay? So let's focus on the 55 versus 76. When you consider our FDA labeling, the patients that would fit the FDA labeling, purely, not patients, all of the human beings in the United States that will fit the FDA labeling to the letter would be way more than 55,000. But within those patients, you have a lot of patients who do not have access to healthcare, who are not diagnosed, who have other comorbidities, severe chronic kidney disease, end-stage renal disease. They could be on dialysis. They could be 103-year-old.
Would they implant a Barostim in a 103-year-old heart failure patient? Maybe not. So when we did the analysis for the S-1, for the IPO, we took a conservative road, and we said, "All right, let's focus only on the patients whom we believe will be targeted by physicians for Barostim." So it's not the 150-ish or whatever thousand patients who meet our FDA labeling, but it's only 55,000 patients who would be considered for Barostim by the physicians in the United States with the approval we had in 2019. Fast-forward to today, we have now real-world experience about the patients who are being considered in reality by physicians in the world. So we needed to use that information to adjust our model.
We're still way below the FDA indication, still at a very small subset of the total FDA-indicated human beings, but it's wider than it. And it's a reduction of the number of comorbidities that we're excluding now from this therapy. It's the fact that as well, you know, the market has increased, the number of heart failure, the prevalence and the incidence has increased a little bit from the time we did the first analysis in 2019 to today and so forth. So when you add all of this, and we have a waterfall model describing every single step along the way, we went from 55,000 new patients every year to 76,000 patients a year.
Having the long-term symptomatic data and some of those information that physicians can use, give us more confidence that physicians will be open to considering those additional patients every year, and that's the linkage with the FDA.
Got it. That's very helpful. And, do you have an estimate about, like, penetration, where that stands today in this population?
Last year, we did 1,000.
Yeah, just over $1,000 revenue.
Yeah.
So-
Of 76,000. Somebody has a calculator? Is that 2% or less? So we're still far below, so the sky is the limit still.
I guess shifting gears now to competition. There's no, like, direct competition right now for CVRx, though there are some competitor products that might target a limited subset of the Class three, reduced ejection fraction patients. Do you have an idea for what the share dynamics in this subset are today, perhaps, and why you think still Barostim offers a better solution for these patients?
Yeah, sure. I think the only product right now that could target this patient population is the Impulse Dynamics Cardiac Contractility Modulation device. It is approved for patients with ejection fraction between 25%-45%. Our approval is 35 to 0, so the overlap is the 25%-35%. If we have to compete, it's often on the share of minds of hospitals when they want to select one of the two to get started with the program. I think with the data we have and the marketing effort we've done and the quality of the sales team that we assembled in the field, we tend to often to come first, and that's why this is not slowing us down.
On the other hand, on a patient-by-patient perspective, it's up to the physician to decide when, for those 30% of the patients that overlap between them and us, who would they pick? Is there any contraindication for using both devices? No, but this has not been tested, so we don't know, right? So they have to select one or the other, and we let the physicians decide. I need to add that in the labeling of the Cardiac Contractility Modulation device, I think they showed the data separate between 25-35 and 35-45 ejection fraction, and the data was different. Let's say their data is really good between 35%-45%, and that's. In our opinion, this is where physicians should focus their effort for the CCM device.
Got it. No, that's helpful. It seems like they're more complementary-
Mm-hmm
... based on that. And longer term, I know, and I obviously recognize that right now you have a, you have a large opportunity within the current indication, and that's where the majority of your focus is. But, you do have breakthrough designation for two additional indications in resistant hypertension as well as preserved ejection fraction. So I guess, what are the timelines for that? Obviously, I recognize you probably can't provide anything super concrete, but just generally, I think a lot of investors are, are focused on the very long term for the company, and naturally so. So it would be good to get a sense for how you're thinking about these two.
Yeah, right. Let me reiterate to everybody, because Jared said it, but our focus right now is to use our cash to grow our sales and marketing effort and grow our footprint, right? So that's our priority. Nevertheless, we've been part of an effort with FDA. They call it the TAP, and actually, we're competing right now for audience. They have a panel in the other room, the same group, Doug Kelly and the team from FDA who's running this program, is presenting to the audience about this program. We applied for it on December 31st at 11:59 seconds, assuming that FDA would receive it at 12:01, because that was the deadline, that they should receive the applications by January 1. This was last year. So we got the first program accepted in this new FDA program.
They call it the Total Lifecycle Product Advisory Program, TAP. In this program, we used the breakthrough designation we have for the patients with ejection fraction above 35%. We call this program Beyond 35. Just one word, Beyond 35, and it's intended to study this patient population, class three, class two heart failure, with ejection fraction 35% and above, to complement what we have. Why did we decide to go in this field versus other areas where our device could have benefits, such as hypertension, where we have a breakthrough designation, chronic kidney disease, arrhythmia, or others? The reason is simple: When we do direct-to-consumer advertisement campaigns, we cannot pinpoint patients based on their EF. We can pinpoint patients based on the fact that they have heart failure class three. But the same money we're spending, we're losing some patients because their EF is above 35%.
Now, that same money could yield us 2-3 times more patients if we are approved in EF above 35%. Obvious synergy, same physicians, same referral network, same implanters, and same DTC campaign, doubling or tripling the throughput. So that's why we want to do the study, but we have not decided when to start it. Since we have not decided when to start it, we cannot even talk about when it will be available.
Completely fair. In a similar vein, obviously, I know you, you aren't investing a lot internationally, just given you see higher opportunity in, in the US. But is this something... I mean, I guess, for your expectations around European revenue, it's, like you said, remained roughly flat, around $1 million per quarter. Should we expect it to stay that way in, in 2024 and beyond? And I guess when would we- when should we see a bit more inflection there, if at all?
Yeah. Near term, I think that is a good expectation, just to continue to see flat revenue levels. I think we're gonna continue to test, you know, opportunities where we can make smaller investments, see if they pay off, and then if they do, we could continue to make larger investments in Europe and other places in the future.
Great. And I think just with a minute left, I wanted to close out with one question on profitability. Obviously, long runway ahead with innovation, potential, and investment opportunities. But do you have a sense for when we could start to see EBITDA breakeven or profitability down the PNL?
Yeah, I'll touch on that one. We still have $91 million of cash left on the balance sheet at the end of the year. We burned, as Nadim said, about $7 million in the most recent quarter. We have a long runway if we were to keep cash burn at that same level. But what we've seen in the model is, as we grow revenue, we're not growing OpEx at the same level, so we're able to bring that burn number down. Our expectation is that the model is built so we can get to breakeven without needing to go out and raise additional capital.
We have not drawn a line in the sand at the revenue level that we reach cash flow breakeven, but what we've been talking about since the IPO is we want all of those territories that I mentioned, the 38 we have now and that will grow into the future, to start producing about $1.5 million per year. If we're able to achieve an average productivity at the territory level in the U.S. of around $1.5 million, that's the point where we get to breakeven and have a cash flow positive business.
Great. No, thank you so much. And, Nadim, I wish you the best in your future journey, and it's been a pleasure working with you.
Thank you. Thanks, everyone.