Good afternoon, everyone. I'm Robbie Marcus, the MedTech Analyst at JP Morgan. Very happy to introduce our next company, Penumbra. Adam Elsesser, the CEO, will give a presentation, and then we'll do some Q&A. Adam.
Thank you, Robbie, and of course, to JP Morgan for hosting us. Robbie was reminding me. I think this is our 10th or 11th time since we went public, so it's great to be here and a pleasure to talk. Let's see, here's our safe harbor. Just a quick sort of overview: our company was started in 2004, so over 20 years ago. We're headquartered here in the Bay Area in the town of Alameda, which is right across the bay in the East Bay, a beautiful community. We have a little over 4,500 employees worldwide. All of our products today are manufactured in California. That's going to change. I'll get to that in a minute, and we've been around a long time. Our products are available in over 100 markets throughout the world.
On the manufacturing front, I wanted to just sort of touch on this because I think it's important. In Alameda, we have nine buildings total, and obviously, a lot more square footage than this, but 260,000 sq ft of it is dedicated to manufacturing here in Alameda. I think it's important to point out why we do that and what the benefit of that is. We are known for iterating our products a lot. We're quite innovative. We launch many, many products every year. And having the manufacturing right there with all of our other engineering and support staff dramatically increases the pace that we can bring products from R&D, move them into manufacturing, and up and running.
So that's a really, really important part of our success: the ability to really bring products from R&D into manufacturing and up and running quickly, which by being altogether is part of the success. We needed to expand as we grew. We opened up a facility about two and a half hours from our Alameda facility, up in Roseville, near Sacramento. That is about 300,000 sq ft, and that has been obviously quite successful. And as we look forward, as we continue to grow, we're going to need more space, and we have secured a facility, a site in Costa Rica that we own, and are building a facility that will be about 330,000 sq ft. That's due to open sometime in mid to late 2027. And then we have an option next door to build another building of that same size to continue to grow.
We've learned a lot about being in Costa Rica. We're excited about it. I think it will augment our ability to make cost-effective products as we move forward. I want to really talk about the two sides of our business. Over the last couple of years, we have focused mostly on our thrombectomy side, where the growth has happened, but for a number of different reasons that I'll go through in a bit. We now have our embolization side of the business, both in peripheral and in neuro, also growing pretty significantly. And as I said on the last earnings call, I think that has some sustainable growth behind it. So I'll walk through the point of that and how we can do that. I want to sort of level set. Just sort of what is the thrombectomy markets we're in? The total, if you add it all up.
Again, these are U.S. numbers. It's easier to get these numbers, and they're more accurate than if we tried to look at this worldwide, so one can extrapolate, of course. And again, even so, there's some variability in people's estimates of these markets. We try to be on the conservative side, so if you look at other estimates of these markets, they tend to be higher. If that were to turn out to be true, great. But we want to be sort of a little bit on the conservative side, so just sort of think about that. Arterial, that's legs, limbs, not all arteries because the stroke patients are different, but that has a little over 250,000 patients. The majority of those patients now get either open surgery or dripping tPA or lytic. That's the majority.
On the device side, the mechanical thrombectomy side, we have the vast majority of that share, but the real effort for us there in that market is to continue to convert people who are doing these cases so they're being treated. They're not having to be found and brought to the hospital. They're being treated. They're just using more traditional, older technology. I think that has a lot of room for growth as we move into the era of what we call CAVT or Computer-Assisted Vacuum Thrombectomy, where the outcomes and the time and the pace are pretty extraordinary and I think have shown a significant benefit. So more work to be done there, but I think the opportunity is pretty obvious. The biggest of these numbers you can see is DVT.
What we've done with this number is try to limit it to the iliofemoral DVTs, the ones that have been shown in clinical trials to benefit from mechanical thrombectomy as opposed to the larger definition where that is yet to be fully demonstrated. I think there's room in the future to show that for all veins, but we haven't done that yet, so we're limiting it. Notwithstanding that, obviously you can see this is the, in terms of number of patients, the biggest opportunity. Next, since PE or pulmonary embolism, there's around a little over 150,000 of the type of patients that we've identified. Some numbers have that higher because it's a broader definition. That's not unfair, but we've just tried to limit it to a smaller number that is clearly appropriate and viable. Of that, that might be the other than stroke, the more penetrated.
It's somewhere around 15% or so that is currently penetrated in that market. Coronary patients is pretty significant. Our product there is a mechanical product. It's aspiration-based, but it's not yet CAVT. That market, I think, is relatively stable. Work to be done. Is there a need to have the computer-assisted vacuum thrombectomy in that space? There are certainly some patients we've heard that might benefit, but we're doing some analysis and trying to determine how many those are and is that a viable opportunity to help those patients. And then stroke, which has been our historic—we started the company based on stroke and trying to do something about stroke. That is about 200,000 in the U.S., roughly. There's a huge opportunity there to continue to grow that. It's the most penetrated. It's over 30-some odd %.
There were about 10 years ago landmark studies that showed you should treat these patients mechanically, and recently it sort of stalled out a touch. That's not atypical over the 10 years. We've watched the market sort of move on a quarterly basis. It's never a straight line when you're talking about this growth, so I think there's optimism that as we move into 2026, we'll see that revert back to some growth. So that gives you sort of a starting point. I want to focus a little on the technology, thrombectomy technology. We used to be a catheter and a pump, a very sort of analog system. You would turn it on and try to suck out the clot. That's what got us started for many, many years, and it's a viable technology.
We moved as we tried to continue to improve and improve and make ingestion of the clot all the way into the canister there that you can see attached to that pump, the standard. It just happens, and it happens quickly. We brought in CAVT technology. Again, now we're on many generations of that, and it really has fundamentally changed the way cases are done, both on the arterial side and, of course, on DVT and PE. Most recently, in the STORM-PE trial, pretty remarkable results, and also on Thunderbolt, which is, as everyone knows, under submission with the FDA. I know I'm going to get this question, so I'll at least answer it first, but I'm sure it'll come up again. As we said on the last earnings call, we answered their collective questions in the later part of the fall.
I said at another public event in December that we did get some follow-up questions. We're addressing those and answering those. There's nothing about this that I think this is in good shape. It's a thorough process. As you look at other products in the neuro space, there's some other ones, some liquid embolics that recently got approved. Their timeframe is 18 months from start to finish. They got approved. They ran trials as well. We're at nine months now, so we're in good shape, and we'll wait and see how that process goes. But I wanted to give that sort of additional update. Moving on to STORM-PE real quick. This is a randomized trial, the first in really a generation in pulmonary embolism, randomized against anticoagulation alone. Our arm is anticoagulation plus our device. The primary endpoint was a reduction in RV/LV ratio.
That was extremely positive statistically, very significant. The safety data was really just stand out and has been commented over and over by people in the field for being amazing, and then the other thing that people have commented on is the procedure time, both the low procedure time but also the device time itself, which in this trial was 25 minutes. Keep that in mind because I'm going to show you some cases with our latest product, which we didn't even use in this trial, and you can calibrate that 25 minutes, which was best in class at the time, which was now two months ago, and see where we're headed with our constant innovation. The thing that really stood out in addition to those other endpoints, which were really, really significant, was both the clot volume and the six-minute walk test at 90 days.
Both statistically significant in the CAVT arm, and that wasn't powered to be significant, but it was still, notwithstanding that, statistically significant. And just to measure this in the six-minute walk test, so this is 90 days later, you measure how long it takes, how long you can walk in six minutes. The people in the CAVT arm walked around a football field longer than the people in the anticoagulation arm alone in that six minutes. So it wasn't like a few yards longer. It was a football field longer. So it's pretty significant, and that has definitely caught the attention of folks. I'm looking at the time, so I'm going to sort of speed through this a little bit faster. I apologize. I'm going to show quick cases. These are with Flash 3.0, our latest product that we didn't have for the trial.
The image on the left is before a pre-image. You can see the blockage where you can see the tip of the catheter, and there's sort of no darkness, and then the two pictures following where a lot of that clot's gone, and then, of course, the image of the clot that was taken out. The device time of that was around one minute. I mean, it's extraordinary, and that is a hardware and an algorithm change. This is another one, again, similar pre and post, and all the clot that was taken out. That was a three-minute case. This is both a DVT and a PE in the same patient. Again, the ones on the left are pre, then the post, the same on the vein, which is the next, and then the clot. This is worth noting. You can see the color differential on the clot.
The lighter clot is much older. It's more fibrous, usually harder to get out, and again, we did that. The DVT took about five minutes, and the PE less than a minute. Just in DVT alone, again, another image is more clot, under two minutes for that, and this is an arterial case using our Bolt technology, again, pre, post, and then they form the clot on the table in the image of how it laid in the artery when it was sitting there. Again, pretty quick, 10 minutes for an arterial case. A couple of stroke cases as well. This is Silver Label, our current gold standard. You can see where the circles are, where the blockage is, and then in the images after that, how wide open it is in the brain.
This is a much more distal stroke, an M2 occlusion with the 43 in the picture of the clot. It gives you a little sense of where the technology's headed, and it's really just in a different league than some of the old analog technologies of a catheter and a syringe or a catheter and a pump, some kind of grabber. I want to talk briefly about embolization as well. Two different parts of embolization. The peripheral side, there's about 175,000 procedures done. We have a significant share, but not a majority. We, I think, have the largest share, but there's a lot of room for us to go. We saw that last quarter with both our new coil launch, but also the ability of our sales team to be able to focus more because the new sales team didn't have to cover both thrombectomy and coils.
The next thing I want to talk briefly about is MMA, and the number of patients here in the U.S. is about 140,000. These are chronic patients. This is somewhat new. It's sort of come up really this year. We didn't plan on this. This is a unique procedure that is coiling the middle meningeal artery after someone's had a subdural hematoma and trying to make sure that it wouldn't bleed again. It's an effective procedure. Our liquids have been used. They have some topics that people sometimes potentially get anxious about, so they started using our unique coil called the Swift Coil that really doesn't have a shape. It just sort of runs. And I'll share with you some images. We have a large portfolio. These are brand names of the coils, so it's not one coil or one small family of coils.
All of these coils have different sizes, functions, and capacity. So we're really now at a point where we can handle embolizing any part of, for the most part, any part of the body. A lot of different options for doctors to use. Just real quick, just sort of where things are in the peripheral, the types of things. The dark part that you can see there on the slides are where the coil mass is, where you need it to embolize area. So you have splenic aneurysms, tend to be round, big spaces that you're filling. If you go down and look at some of the other images, it's much more of a fine line like you're embolizing a part of an artery or a little piece. It's a little different. So just to give you a little sense.
And then, to end, talking a little more, this is what an MMA embolization looks like. It's not filling a volume of space. It's really filling the artery itself. So the coil has to be really soft. It just has to sort of float out, make sure it's in the right place. It's not blocking any of those little linkages between the middle meningeal artery and the ophthalmic artery. That's where the risk happens. And so you're not doing that, and you're able to see that before you detach it, which obviously isn't true when you're looking at liquids. So that's just one example. And the final example is when you have bilateral MMA. And again, you can see where both of those happened and just what that looks like. I want to end. I'm trying to time this pretty perfectly with 20 seconds. We're known for innovation.
We've done a ton of innovation, all of it in-house. We're super proud of our team and how we've structured that. And I just want to end by saying we're not done. We have great products, but they're going to get better and better and expand applications. And the future, I think, looks pretty good for us. So with that, thank you. And we'll take your questions or Robbie's questions.
Great. Maybe just a quick clarification, because in some emails during the presentation, I want to make sure people don't misinterpret anything you said. Just on Thunderbolt, you said it's been nine months since submission. You got some questions in December. You've responded to them. There are some that take 18 months. And I just want to make sure you're not saying it'll take 18 months.
I do not know how long it will take. If I did, I would tell you. What I was simply saying is this is normal. Look, we've been working with the neuro division of the FDA for over 20 years. We did this with our first company as well. I have nothing but utter admiration. They are doing a great job. The brain is different than the rest of the body. It requires a lot of being super careful. So we're addressing those questions. Nothing at all. I mean, am I anxious? Do I want the product out there? Of course. Do we want to do it the right way? We're in good shape.
Just wanted to get that out of the way. So maybe we could start 2025. We'll get the full results in February, I imagine, with fourth quarter earnings. Guidance implies something like mid-teens with 30% plus growth on the bottom line. That said, you have a lot of businesses that are doing really well, and you have just a few businesses and some outside U.S. difficult comps that are kind of limiting the reported growth this year when all is said and done. What are some of the businesses that are doing really well that have solid growth? And what are some of the headwinds that are going to go away as we move into 2026?
Yeah, so I can talk conceptually, obviously. The last thing I'm doing is giving implied guidance right now.
I'm not asking for numbers. I'm just talking structurally.
So I want to, well, obviously cover all of that on our upcoming earnings call. The biggest thing that is just easy to talk about because we've talked about it a bunch before is China. China had been a couple of point headwind. I think we won't see that in 2026, obviously, as it compares to 2025. So I think we'll have just on a growth rate basis that benefit. And then the difference is we have, as you could just see, we're in a different place. For a long time, the last two, three years, we were talking only about thrombectomy, and our coil business was just doing well but not growing at the same rate. And now that's changing. And I think we will see both provide benefit to the growth of this company. And so we'll talk about what those numbers are in the next call.
Those are two important growth drivers. Maybe we could start with peripheral thrombectomy. You had the STORM-PE data at TCT, and I think the words you used were, "This is a landmark trial," or maybe it was the PI of the trial who said that.
It was not the PI, and it was not me. It was the chair of that session who was not involved in that trial, Dr. Kenneth Rosenfeld, who's independent and had that reaction. That was not a marketing story. That was a reaction from an outside physician. It's important.
Yes. So very positive results in the patient trial. There are two more trials coming up over the next 12-18 months. We have HI-PEITHO from Boston Scientific and PEERLESS II in 2027 from Stryker. How are you thinking about what STORM-PE does for the market and Penumbra? And then assuming those other two trials are positive, I imagine that probably helps the market as well, just having more confirmatory evidence that thrombectomy is the best way to treat these patients. So how do you think the market will benefit from STORM-PE and Penumbra and then the market overall once we have more complete data sets?
Yeah. So I think the market's already benefiting. Lots of people are talking about this. The larger medical community has responded incredibly favorably. It's not just for interventionalists, obviously. It's for all of the referring physicians, pulmonologists, and emergency room docs, and so on. So those reactions now, I'm sure there's somebody one could find, but across the board have just been really, really positive. So people are starting the work within their systems to change their protocols inside. That's how it goes. And we're seeing that. It takes some time. Hospitals can't just in one day declare a change protocol. They go through a process. There's committees. There's back and forth to make sure what they're doing is accurate. So those have started, obviously, after the trial. No one's waiting for additional data. Whether those trials are positive or not, I don't think will matter to our success.
And partly that's because of the things that we already know that are part of that that I went through, which is the safety profile and the time of the case. Both things that are related to its success, but sort of somewhat independent. And I've never ever met a physician who says, "I'm going to use both products were successful in a trial, but one was three times faster. I'm going to use the slower one. I think that's the better decision." I don't think that's viable. So I think those things are what, and we actually called that out on our last earnings call where, again, it's the technology is at a different place. It's no longer everyone's the same what's happening. The technology has changed the procedure to be different and faster and with an amazing safety profile. So I certainly welcome the additional data from the trials, but I do think this technology is setting up at a standard in and of itself.
It's been a really fast-growing market for a while now. There's still a stubbornly high number of docs who don't use peripheral thrombectomy. Some of them will point to guidelines. Do you think STORM-PE is enough to change guidelines to maybe like 2B and?
Yeah.
Get 2A and how impactful would that be?
Protocols first get changed, and then guidelines sort of follow. There are very few people that wait until everyone else has changed and then do it. Some do, but most sort of react that way. So that's the position we're in. And I am happy to talk to somebody who's conservative or stubborn, but the number of people who want to get on with making sure these patients get treated is a fairly significant number. And we got a lot of work to do, a huge amount of work to do in the next year with people who want to do this. So we'll get to the others as we need to because there's an awful lot of energy right now and work to be done ahead.
Maybe if I think on the arterial side, you have a majority share in this market. It's still growing.
And mechanical, yeah.
Mechanical thrombectomy and arterial, and it's still a really nice double-digit growth business for you. Where do you stand in terms of penetration in that market, and how do we think about what sustains that double-digit growth moving forward?
Well, we stand in a great spot in that we're really the standard for mechanical. The work we have to do, and I think we're positioned to do that in a more concerted effort in this year and next, is really focused on making sure physicians who are otherwise using open surgery, doing open surgery, dripping lytic, that this is a better alternative. And I'll be honest, our sales reps, they covered coils. They covered VTE. They covered coronary. And they covered arterial. That's a lot to do all at once.
And when you wake up and, "Where do I focus? What do I do?" You're going to focus on the things that are moving and have momentum. And convincing someone who's done a certain procedure for 20 years to switch is maybe a slightly harder task. And so I think we're now at a place where, with the coil business going to a dedicated salesforce, our thrombectomy reps have the ability to focus on both arterial and VTE at the same time.
It's a great transition. Maybe we could talk about coils, and this hasn't been a growth driver for Penumbra historically. And all of a sudden, it's become a very nice growth driver. Over 100% growth the past several quarters. MMA is getting a lot of buzz at medical meetings, and clearly, we're seeing the benefits in the Penumbra results. You've talked about a billion-dollar opportunity, I believe, in this market over time. The Penumbra says.
I think somebody else said that.
Maybe somebody else.
I mentioned they said that. I did not also say that.
Are you willing to put out a market?
I think it's early. I think everyone has gotten a sense from other people that it's not insignificant. I did talk about the number of patients that could be treated. I think people can do the math. This is a different type of thing in that it sort of just came upon us. It wasn't. We already had the coil. We made it for other arteries. It's obviously indicated for using in neuro arteries. So that part's fine. But it was somewhat just appeared, and so just as investors were surprised and like, "What is this?" We, as a company, had to also get caught up. I think in our second quarter call, we mentioned it as, "This is something that people are now talking about," and then in that short period of time to the next call, it became like, "Oh, hold on.
This is actually real." And I think we're seeing that continue. So we're doing a lot of work to be able to be helpful in this space. Reps are getting trained that aren't as trained, which is wonderful. We're looking at retrospective data to make sure that people who are using our product, that it's all going as planned. We are starting the conversation of, "Do we want to run a prospective study?" So there's a ton of stuff that we're doing to sort of make sure these patients are getting the best care that they can. It's a great opportunity, a lot of excitement. And it makes a lot of sense. If you can have this treatment and not have to have more invasive surgery or burr holes drilled over time, that's great for patients. So we're happy to be part of it.
Do you feel like, obviously, the product just kind of fell into this? Are there any more product-specific enhancements you can make for using it in MMA? And also, are you out there now aggressively starting to detail this and spread the word on education?
So I think you know me well enough after all these years that, one, we are constantly innovating. And you also know that I'm not going to tell you what that innovation looks like. But yes, we always look at ways to make the products better and better. The interesting thing is our current product is really good in this space. So it doesn't have obvious limitations, but there are some possible things. I'm not promising, but some possible things that could make it potentially even better. So that's cool. But right now, as it is, it doesn't have a ton of limitations. And yeah, as I've said, we're reacting to everyone's interest. These are our customers. These are the people that we've been working with for many, many two decades to make sure that they have the support that they would expect from Penumbra.
It grew over 100%, arguably off a small base. Still doing nicely. Is it greedy to think that, given how small the revenue base is and big the opportunity without a whole lot of scaling?
I'm not going to answer the number question, but there is lots of opportunity here.
Great. If we think about stroke and put Thunderbolt aside for a second, the market decelerated in 2025.
In the second half of 2025.
In the second half of 2025. Where do you think overall market growth is right now? We see there are some companies investing in stroke. There are a lot of companies exiting and pulling back investment in stroke. How do you think about this market over, let's call it the medium run, three to five years?
Well, I think there's a lot of pros and cons of it, just as a market. You know how I feel. This is incredibly important work. These are patients that need to have this happen. There's so much randomized data that supports doing these interventions. And the product's.
Probably more than any other space.
Yeah. That we're in.
TAVR is more.
Yeah. No, it's.
Stroke is overwhelming.
So we have to deal with the structural issues of making sure patients get to places where they can be treated. There's enough physicians able to do that. All of those things have been the biggest challenge. And that's more unique in stroke than any other things because of the nature of it being neurospecific. We have been committed as a company. I personally have been to help drive that work, working with the societies and so on. And I think we have to do that even better as we go, coming out of COVID and lots of structural reasons that we saw sort of a different attitude. But the products are profound. We also are a little bit suffering from we have a lot of companies all with a catheter, and it's a little bit overwhelming.
So, I think what we're seeing, and even though the market did that, we did keep growing and gain share just because we're the standard. And as you've tried a bunch of things, you come back to the one that's the best. And I think we're seeing that happen. So, I think that consolidation around the best product, which we obviously believe we have, I think will continue into the year. And we'll continue to put the energy into doing this. There's some great bright spots. There's a young physician who is new in his practice a year or two, is really passionate about bringing stroke care deeper into the community that otherwise wouldn't have this type of care available. And with that effort, has seen just a huge uptick in the number of patients that are getting treated.
And sort of on a quarterly basis, they just share those numbers. And it's really heartening to see. So there are models out there. There are bright spots. We just have to continue to put that energy into it. And I think we can continue to see a lot of people. It's personal to me. I've had patients come up to me in various settings who knew who I was and had been treated and thanked me. And for a guy who's not a doctor to be thanked for somebody's well-being, I got to tell you, there's nothing better than that in the entire world. So we're committed to keep doing that.
With one minute left, it doesn't do it justice, but margins have been a bright spot. You've committed to exiting next year at 70% plus. How do you feel about the company's ability to continue to expand margins over the coming three months?
Yeah. I think we're in really, really good shape. I think if you look at a couple of things sort of put that in a worse spot. We expanded rapidly into the new facility in Roseville coming because of COVID. That pressured things. We launched a ton of products, which always takes a while to sort of get up to speed. We were in international markets with some of our products where it really depressed those things. And as you know, we exited some of those. So I think we're in really good shape.
Great. Well, let's end it there. Thanks for a great discussion. Thanks, everybody, for joining.
Thanks.