Good afternoon, everyone. I want to obviously thank J.P. Morgan for inviting us, and of course, Robbie, for his great coverage of us over the years. This is our Safe Harbor Statement. Just a little background for those of you who don't know, our company is headquartered here in the Bay Area, right across the Bay Bridge in the wonderful community of Alameda. We have around 4,500 employees worldwide. Our products are currently manufactured right here in California, in both Alameda and a few hours eastward in the town of Roseville in California. Our products are available in about 100-plus markets throughout the world. We've been in business for, we're entering our 20th year. Our business really is focused on three areas, and I want to touch on them all, but do a deeper dive, of course, on thrombectomy.
We have an embolization business, which we've had for quite a while. We, of course, have our thrombectomy business, led now by CAVT platform, and then our access business. I want to sort of walk through a little bit more detail around the embolization and access business, because we tend to not sort of explain that in a lot of these settings, so I wanted to do that for a touch. Our embolization business crosses both our neuro and our vascular platform. It's, though, primarily in terms of just volume of revenue in the peripheral space, and the technology really is known for being sort of larger, longer, softer than other coil platforms, and that's been what has allowed us to sort of have sort of the market-leading share in that market. This is sort of a list of the variety of actual product categories and names.
They differentiate a little bit based on size and properties. But what I want to say is that that business has done incredibly well. It's created, of course, a ton of loyalty. It works really, really well in sometimes very, very complicated cases. And we're not done innovating there, too. We've spent a lot of time talking about innovation in the other areas, particularly CAVT and thrombectomy, but we're not finished innovating, and we think we can continue to make better and better tools on the embolization side as well. On the access side, that's primarily a neuro business. Some companies, some private companies in neuro now combine access and aspiration catheters. We don't do that. They're really two separate things. And access catheters are basically what we all used to call guide catheters, sort of the basic starting point of most interventional procedures.
Many, many years ago, it was actually our first commercial product made the first specifically designed neuro guide catheter. Prior to that, neuro physicians would use primarily coronary guide catheters, since that was the only thing available. We've since broadened that offering, and I put down there Neuron MAX 088. That product, we made the first 088 guide catheter in, I think it was 2011, maybe it was 2012, but many, many years ago. And that product has been a mainstay of sort of the access or guide catheter market for the better part of a decade-plus. We've sold over a million units of that product over the years, more than any other product in the company's history.
And I say that because in the last couple of years, there's been obviously a lot of talk about, "superbore," larger aspiration catheters, which are now sort of being retooled to be guide catheters. And I think a lot of folks who don't know the history know that our place in that market, our capacity in that market, and I think it's just worth sort of pointing out that I think we know how to make a really good guide catheter that isn't 088. So that sort of gives you guys a sense of that part of our business. I want to do a deep dive on the thrombectomy side. This is where our effort and focus will really come over the next few years and the opportunity that we have here.
Just to remind everyone, these are the sort of, I think, relatively conservative numbers of patients in the U.S. that can be treated with our current technology. The arterial side is just shy of 260,000. The venous side, over 350. Pulmonary embolism, just under 160. Coronary, 280-plus. And then stroke, which we've talked about for a long time. We're under 10% penetrated in these numbers, and so there's a huge opportunity, particularly now with the advent of the newer technology, that what CAVT brings, sort of the ability of a computer to do the work faster compared to analog technology, to really show the benefit clinically and economically of treating these patients with CAVT.
So we're going to go through that, what that looks like and what that journey looks like as we move into this next phase of really focusing on trying to get everyone the best and most modern technology. I just sort of remind everyone the current product names and sort of what they do. Lightning Flash 2.0 is right now a 16-French catheter used in both DVT and PE. The technology is a little bit different from a software standpoint than what we see in Lightning Bolt and Thunderbolt, where we use technology called modulated aspiration. It's a little more sophisticated. We have brought that Bolt technology to a bigger catheter with Bolt 12, and it's working incredibly well. And so Bolt 12 is used in both larger arteries and also smaller veins.
I want to just make sure [that] for a while it was [thought that] the Lightning Bolt technology was for arteries and the Lightning Flash technology was for PE and veins. That's not really true. It's really just what does it do and how can one maximize the benefit of this technology. When I say that, the most important thing here is how fast can you get the clot out? Not total procedure time, which involves things outside the control sometimes of tracking the catheter to the face of the clot or anatomy or so on, but just how long does the device take to remove the clot? Because the goal of a device is to remove the clot as fast as possible and as safely as possible.
If you can remove the clot in 10 minutes versus an hour, you're going to take the one that takes 10 minutes, because that's better for the patient. It's obviously better for the system. The cost, the time, and so on is much better. So we've talked about that in the past, but I wanted to do something maybe slightly atypical.
I want to go through a series of cases, not one or two, but I think it's 20-plus cases. Real quick, I promise I won't bore you with them, but I want to show how both all of these technologies, and we're going to go through every one of these products that are listed here, and show what is now happening, and this isn't cherry-picking cases. This is picked from thousands and thousands of possible cases. We just picked these because the images were easily available and we could get permission.
This is sort of the new standard. It's compared to things that take a lot longer, whether it's our competitor on the VTE side that takes an average of 40-plus minutes, and that's from published data. That's not me making that up or from the arterial side, where you do open surgery and do a cutdown and so on, which obviously takes some period of time. I think this is trying to put in mind what matters, which is how fast can we safely get the clot out. Let me go. This first case, you can see the first image is the picture with pre-mechanical thrombectomy. The next one is with the contrast showing it wide open, and then the picture of the clot at the left pulmonary artery. That was two minutes of device time, two minutes.
Again, that compares to some of the numbers I've said. Another PE case with Lightning Flash 2.0. This is both sides, the bilateral PE, so you have the left and the right side, pre and the post, and then you have pictures of the clot taken out of both sides. Again, that picture, that case was done with eight minutes of device time. This is a picture of a case, another PE, again, about less than three minutes. We were able to get both sides open with a fair amount of clot. Less than three minutes. I'm just trying to put in context what this new technology can do. Another PE, about 10 minutes of device time. You can see how much clot was taken out and how wide open the pulmonary artery is after that case. This is another Lightning Flash case.
This is actually a bilateral DVT case that also has an occluded IVC filter, less than 10 minutes. The image of the clot, that's a ruler, so it's about a foot long of clot, but in multiple layers, and took less than 10 minutes to remove that. Another PE case, four minutes. You can see the pre and the post, and again, how much clot was taken out. Four minutes. Sorry, there we go. Again, another 2.0 case is a TIPS case. You can see six minutes, decent amount of clot. Some of the white coloring in the clot shows it's a little more chronic. Still no problem, still quick, and was able to remove it that quickly. Another DVT case. Again, I promise we're going to finish this pretty quick. Eight minutes. Again, you can see the color there of the clot.
It's relatively white, which is a fairly fibrous moving into the chronic nature. No problem, still only eight minutes. Switching from Lightning Flash 2.0 to Lightning Bolt 6X, this is one of the two new products we launched this past quarter. This is sort of upper extremity, the brachial artery up here sort of in the shoulder. Less than two minutes. You can see the first picture where it's blocked off and then it's wide open, and the clot was there. Less than two minutes for the device to function and take out the clot. Another 6X case, popliteal artery, five minutes. Image with the color there is a little harder to see, but you can see the clot, and again, less than five minutes. Another 6X case, six minutes. This one's interesting because is that clot, is it something else?
You can see the white sort of goop, but it was occluding the artery, the renal artery, and again, in six minutes, it was taken out, and you can see the flow wide open. This was another 6X case, which you can see very, very small focal piece of clot, less than one minute was able to get the clot out, and it was wide open after that. Lightning Bolt 7, which has been around for about a year-plus, a year and a half, decent amount of clot there, slightly bigger catheter, again, taken out. This is in the iliac artery, taken out in about two minutes of aspiration time. I promise I'm almost done. Lightning Bolt 7, four minutes of fem-pop bypass. Again, white nature of the clot, very, very organized. Still only took about four minutes to open that up and be wide open.
Again, another superior mesenteric artery, less than one minute to get all that clot out with this new technology. God, I'm almost done. Three minutes. That one's a funny image because the teeny, teeny little pieces of clot that sort of broke up because of the function that Lightning Bolt had. Lightning Bolt 12, again, one of our other new products. This was in a DVT case, so back to a smaller catheter for smaller veins. Fair amount of clot, again, five minutes of device time. This was actually an artery, also with Lightning 12, three minutes. Now I'm going to show three Thunderbolt cases. As you all know, the trial completed enrollment, so I wanted to show you that. This is an M1 occlusion up in a typical location for large vessel strokes. Four minutes device time.
You can see the blockage and then wide open after Thunderbolt was used. Another M1, sorry, ICA terminus, about a minute of device time, and the clot was removed. Final case, two minutes, distal M1, proximal M2, wide open after two minutes. So the point of what I wanted to make here is this is sort of the innovation that we've started. We're not done innovating. This is our four-pronged strategy that we laid out in the last earnings call, and you're going to hear us refer back to this quite a lot. We're going to keep innovating. We have a long product roadmap, both heavy focus on CAVT going forward, constantly making the products better and better, even though they're pretty darn good now, as you could see. But we're going to continue to do that.
We're going to add other aspects that we've alluded to around data since we have a computer in every case and what we can do with that. We're going to focus on clinical data, both randomized data like the STORM-PE study, which is a PE study, critically important for the field. There are other studies that are running that are also helpful to show that doing something other than anticoagulation is a good idea. That's sort of what we have to show.
In addition to that randomized data, we have a whole series of data sets that have started to come out, one on PE, where we looked through a whole year-plus of work with Vizient, covered about 40% of the hospitals, and looking at the benefit of CAVT in that case of that data set PE against anticoagulation to look at how it does clinically, but also the health economics. Is this viable? Is this good, bad? And it's very, very compelling. Other data sets in ALI, arterial, as well as DVT will be presented, I believe, at SIR that will show similar type of things on those as well.
Then we're going to keep adding to this on an annual basis because that's how we do some of the other work, and we have hospitals engage in the work that is necessary to begin to move their thinking from doing anticoagulation to mechanical thrombectomy. So that's really ultimately how the market grows through that type of market access work with that kind of clinical data. The third aspect, of course, is just our extraordinary commercial team. We're blessed, and you'll get tired of me saying this, by having the best commercial team ever assembled. Apologize to our competitors. I think that's well known, and I'm proud of them. And it's helpful. They're incredibly diligent. They're missionary. They don't give up. They care deeply about the physicians and the patients they serve. And we're going to focus on we hired some additional people in 2024.
We're going to focus on making sure that that team, particularly on the vascular side, has the ability to be focused, focused on, and able to continue to launch our new products as well as the products that we currently have, and will continue to evolve and tweak that organization in order to be able to do the work ahead of us, and then the final point, and I think I've hit my 20 minutes, so we'll open up to questions in a second, is profitability. Obviously, we've shown that we can do all this with having a profit. Our gross margin, I know, has been a topic. It's obviously going up, but in addition to gross margin driving that, our efficiency is pretty significant, and profitability matters.
I think we'll continue to our goal is to continue to see that grow faster, and I think you'll be pleasantly surprised as 2025 unfolds. So with that, I'll say thank you, and we'll open up to questions. Well, great. Adam, you were telling me not one person has asked you this question today, so let me start off. Obviously, leading into the conference, Stryker acquired your competitor, Inari, in the venous space. You can look at this from two angles. You could look at this as a large company like Stryker is validating the space you participate in. And maybe for Penumbra, that there might be some disruption with the acquisition, it opens a door for you to maybe gain some more share that wouldn't have been there without the acquisition.
On the other side, Stryker is a very large and successful company, and maybe it'll be a little stiffer competition. So how do you react to that, and what's your view on the acquisition?
Yeah, it's a totally fair question. I think I'll leave it at this for now. Look, Stryker's not a stranger to us. I think everyone knows we've competed with them, against them, however you want to frame it, for almost 15 years. I think it was 2010, if I've got my chronology right, where they bought Boston Scientific's neuro division. So since we're a couple of years into being commercial, we've spent a lot of time competing. I feel pretty comfortable that we know how to do this, and given our current technology, how well it's working, which I just spent time, given our incredibly amazing sales force, tenured, loyal, I think we're going to be in good shape.
Maybe on the back of that, we could talk about you had a number of new product launches this year. You put a lot of them on the screen. Tell me if I missed any. You had Flash 2.0 and Bolt 7.
6X.
6X and Track X.
Yeah.
Yep, and Bolt 12. The first two were more venous with 6X in arterial, right?
Yeah, so Lightning Bolt 12 is both arterial and venous. 6X is primarily arterial.
Do you feel like now, arterial, you'd been the market leader for a long time, and you're moving, continue to gain share on the venous side? Do you feel like these are the products where Penumbra is exactly where it needs to be in terms of competition, or is there still more that you need to add to the portfolio to get to the position you want to be in?
Yeah, that's actually a really good question. I'm glad you asked it. So in terms of competing against other mechanical tools, I think it was pretty clear that I feel like our current portfolio products have removed the clot faster and safer than anything else by a mile, like a pretty significant margin. And that's why I went through that number of cases just to really sort of make sure people understood how it's working. And I'm extraordinarily happy with that. I won't tell the whole story just from a time standpoint, but our first stroke case we ever did many years ago, I think it was 2005 or something, I've lost track of time, was successful. We got the clot out. It was amazing. The patient got better on the table. The idea that one could do that was mind-blowing.
The case took an hour and a half of device time.
Wow.
Everyone thought that was extraordinary. That was fast. That was the starting point of 2005. That was 20 years ago. That was okay. That was amazing. Now we're down to minutes. We're measuring it in minutes. That's called innovation. You get better and better and better. I think everyone would know. I'd rather have it taken out in a minute than an hour and a half. So do I think there's room to keep doing that with even though we have amazing products now? I do. I think we're going to get better and better and better. I think we're going to be broader and broader. I know that sounds maybe selfish, like we want it all, but yeah, we want to make the best product for patients we can possibly make, and I feel we're headed there.
So you're going to see more stuff, and it will just get better. But yes, on a competitive standpoint, it's pretty hard to compete with an analog technology at this stage.
Obviously, what needs to or where you can improve is different on stroke and peripheral, even between arterial and venous. What are some of the key metrics? If speed, if we're doing two-minute, five-minute procedures, and I'm sure some are shorter, some are longer.
Yeah.
Besides speed, is it size? Is it vacuum? Is vacuum power? Is it the ability to bend and navigate? What are some of the things that you'd be looking to improve?
Yeah, so catheters themselves, getting them better and more trackable and so on, there's room to continue to improve on that, without a doubt, because there's always going to be room on that. But we've come a long, long way, and it will become less of the story, albeit there's still room to do that. And I think the next part of the story is what I talked about, which is not procedure time. I just want to correct, but the device time, the time that product is on, like aspiration is running. In some cases, if you look at a really complicated stroke, tracking, even in the best of hands, takes time and access is a little challenging. I'm talking about once you get there, how fast does the clot come out, which is what the point of the CAVT technology is.
The computer is only focused on getting that clot out once you get the catheter there. And there, I think, even though we're really fast, you just saw these times, I think we can be even faster and even more complete. And I'm excited to see the technology we've been working on. A lot of that is just software. A lot of that isn't hardware. It's just tinkering with algorithms and getting those more and more perfected.
We saw really good adoption in venous when you added CAVT, the computer-assisted vacuum technology.
Yeah.
In arterial, you had majority market share, so it probably didn't have as big an impact to growth there, but still helped, and Thunderbolt and stroke could potentially come later this year. How should we think about the magnitude in stroke? Is this something that can not only help take share, but expand the market, or is it less meaningful than venous? How should we think about it?
Yeah, it's hard to pick which disease state means more. They all matter if you're a patient with clot in one of those locations. So I think that's important.
Let's make it easy to revenue growth.
Yeah. I think, look, everyone has heard me talk about Thunderbolt. I'm obviously excited about it, in part because we started in stroke, and it's going to be nice to sort of bring that technology to the field that we started. That being said, from a pure dollar standpoint, when you look at the numbers that I put up in the presentation, obviously, when you add up arterial, DVT, and PE, that's a lot more patients than stroke. So from a pure dollar standpoint, the simple math is you're going to see a higher dollar contribution from those areas than stroke. That being said, it all matters. And I think the fields are small enough. Neurophysicians are different, obviously, than the peripheral, but a lot of times they share labs and talk to each other.
The neuro guys have already watched their peripheral colleagues be using this same technology in the legs and in the arteries. I think that has helped grow the anticipation and the excitement. I think the market's ready for it. I'm pretty excited about it.
Is there the same room for pricing with CAVT as there was in peripheral to bring it into stroke?
Yeah, there's definitely some room for price. When you see right now how some people do things, they use a centrifuge and an aspiration catheter and all that. When you add up sort of the average pricing, if we were to be in that range without going above that and getting into the wrong thing, I think we have some room there.
If we step back, maybe you don't have the exact numbers for 2024 yet, but how should we think about market growth, both stroke and peripheral by arterial, DVT, and PE, and I'm thinking U.S., and then if you have outside the U.S., because we get a lot of numbers from companies, but it's really hard to tease out what's the underlying volume growth of those different markets, so how should we think about those?
Yeah, well, when you have multiple players like we have had competing, it is hard to tease that out, how much of that is market growth versus share growth versus other ways of selling and so on and so forth. So it's tricky. So I can't give you definitive numbers. We don't have that any more than anyone does. I do think it's pretty clear that the underlying market in both VTE and arterial has been growing. It's got a nice growth. Is it linear? No, it's never been linear since the early days of stroke when we've been talking on a quarter-by-quarter basis. But there is an underlying sort of steady growth. When you add CAVT and sort of how fast it is, how fast you can turn a room, all of that stuff, because of that, I think will increase that market growth.
You add in the work we've started on the market access that I've alluded to, that takes time. It's very much a ground game. So it won't show up quickly. But in future years, you have to do that in order to see the kind of much more significant growth going forward. And so right now, it's going to be a combination of share and market growth. That's going to put us in a pretty good spot. At some point, it will become less share and more reliant on market growth. But we'll have already had time to do that market access work that will seemingly drive that growth, at least in the early returns from the accounts that we've engaged in, seems very positive.
What about in stroke? I've heard market growth estimates anywhere from mid-single to mid-teens and everything in between.
Yeah, I think it's in flux right now. I think post-COVID, we saw a waning of effort to drive patients to the right place and so on. There were staffing issues and all that helped do that. I think we're seeing a re-engagement from hospitals and physicians in wanting to build and drive their stroke growth, and so I'm optimistic at the various conferences starting this summer, moving into the fall. That was much more of a prevalent topic, both publicly and in the hallways and private conversations. So I'm optimistic that. We've relied in the last couple of years on pretty significant share shift coming out of 2020 and JET 7 and all that. We've regained most of that share.
And that has been the momentum, which for us has been great because the more share we have in stroke, the easier it's going to be to switch to Thunderbolt because you're already using our catheter. You're not doing two things at once. You're already using the same catheter, and now you're just using the Thunderbolt tool to remove the clot.
RED 72, it's excellent. Had a great.
RED 72, RED 62 has been a very popular catheter. A little smaller, it can go more distal. So yeah, we're set up in a pretty good way.
Maybe if we shift gears outside the U.S., you have a number of new product launches coming in 2025. You had some, let's call it sales disruptions or changes where revenues came down in the middle of the year. We're going to move past that. And it sounds like Europe and outside the U.S. should have a much more normalized year in 2025. Maybe just speak to some of the product launches and how we should think about that component of the business.
Yeah, I mean, let me step back for two seconds, and just international markets keep changing. Markets where everyone five years ago said, "You have to be in, say, China." Now it's like, "I'm glad you're not in China." And again, that will change again and so on. So things move around. We, I think correctly, albeit it came with some pain, tried to clean up a lot of that stuff in 2024. This was the year to sort of like, "Let's get in a position so that as we enter 2025, we're not facing those kind of comps, we're not facing those kind of markets, and we can really focus on the markets where there is currently growth." And some of those are different than what they used to be.
There are certain regions and countries that are much more able financially and much more interested emotionally in taking on the current CAVT portfolio. And that's awesome. And that might not have been the case four or five years ago. It would have been different. But I think we have that setup. Europe is generally good. We have some number of countries that have decent reimbursement, others that are coming. Certain countries in Latin America and Middle East and all are showing a lot of interest and usage and capacity, particularly in the private setting to pay. So I think we're set up to see international be no longer sort of that drag that it was somewhat purposely in 2024.
But to caution, when you look at the numbers that I presented, the 800,000 plus more, to be very conservative, patients that we're not treating could be up to a million that we're not treating. Those in the U.S., that's straight up there for us to go do. It takes some time. We have to do the work. But we are going to focus a lot on that. Not because we're not focusing on the other, but the pure dollars will drive that as an outsized part of our growth over the next few years.
You didn't pre-announce any financials today for fourth quarter here, but any qualitative comments you're willing to share on how fourth quarter went?
No, I'm going to the new me. I'm very disciplined, everyone. Let the record reflect, there was a lot of laughter in the audience. No, you know what? We're going to announce in February. We'll leave it at that. It'll be fine.
So 2025 guidance is also off the table here as well. All right.
So I think something's achievable. No, for network. I'm not going to go down that path. I learned my lesson. I can learn my lesson.
Let me ask you this. One of the things that's been really interesting about Penumbra's story and that has really reflected in the stock, especially in the back half of the year, was the margin expansion you've been able to show. So maybe speak to the ability to what's like a good sustainable growth rate for Penumbra at this intermediate phase of your maturity? Is it 100 basis points, 200 basis points? What's a reasonable number you could do year in and year out right now, you think?
So for the same reason I'm going to be disciplined on the revenue side, I'm going to be disciplined on the margin side. Other than I'll say I really like running a nicely profitable company. The opportunity for us to grow that margin pretty significantly is in front of us. And that's why it's one of the four prongs of our strategy because that's what we're going to do.
Maybe we could put it this way. 2024, without talking numbers, 2024, you had good margin expansion. That's not the end of it. There should be plenty of more to go.
We have a continuity to do that.
All right. Great. Maybe with that, we're out of time. Adam, thanks for a great conversation. Thank you, everyone.