Endologix, Inc. (
Q4 2011 Earnings Conference Call
February 22, 2012 5:00 PM ET
Zack Kubow – The Ruth Group Investor Relations
John McDermott – President and Chief Executive Officer
Bob Krist – Chief Financial Officer
Duane Nash – Wedbush Securities
Steven Lichtman – Oppenheimer & Company
Brooks West – Piper Jaffray
John Putnam – Capstone Investments
Roberto Morales – Adage Capital
Chris Cooley – Stephens
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Greetings and welcome to the Endologix Incorporated fourth quarter 2011 earnings conference call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Zack Kubow for The Ruth Group. Thank you, Mr. Kubow. You may begin.
Alright, thanks operator and thank you everyone for participating in today’s call. Joining me from the company are John McDermott, President and Chief Executive Officer; and Bob Krist, Chief Financial Officer. This call is also being broadcast live over the Internet at www.endologix.com and a replay of the call will be available on the company’s website for 30 days.
Before we begin, I would like to caution listeners that comments made by management during this conference call will include forward-looking statements within the meaning of Federal Securities laws. These forward-looking statements involve material risks and uncertainties. For a discussion of risk factors, I encourage you to review the Endologix’s Annual Report on Form 10-K and subsequent reports as filed with the Securities and Exchange Commission.
Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, February 22, 2012. Endologix undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this call.
With that said, I would like to turn the call over to John McDermott.
Thanks Zack. 2011 was another productive year for Endologix. We made great strides advancing our new product pipeline, expanding our sales team and laying a foundation for the launch of Nellix and Ventana. We also continue to gain market share along the way generating 24% annual revenue growth.
Fourth quarter global revenue was up 22% to a record $23.4 million, this included 26% year-over-year growth in the U.S. driven by the strength of our sales team and the successful introduction of our new AFX system. Outside the U.S. we achieved 4% year-over-year growth and are pleased with our direct sales force in Europe.
Looking forward we believe we are well positioned for another year of strong growth driven by continued market penetration with AFX the expansion of our sales team in Europe and the anticipated limited introduction in Europe of Nellix and Ventana. Based upon these opportunities we anticipate full year 2012 revenue will be in the range of $102 million to $107 million representing 22% to 28% annual growth.
Now I would like to spend a minute going through our growth plans in more detail. In the U.S. we experienced a positive reaction to the launch of AFX in the third quarter and saw a high level of interest on physicians. We continue to promote to clinical advantages of AFX and expect to keep driving revenue growth in 2012. We ended 2011 with 72 reps and clinical specialists and budgeted 77 by the end of this year. We’ve now got over 400 years of EVAR experience in the U.S. sales force and I think they do a great job providing clinical support to physicians.
In 2012, the majority of our incremental sales and marketing investments will be in Europe. At the end of last year we have established a 12 person team including six people that will be supporting clinical cases. The team has effectively transitioned customers from our former distributor it is now starting to add cases on their own.
In January we introduced AFX in Europe at the Link meeting in Germany it had a very successful live case that generated lot of interest. Over the course of 2012 we plan to build our European team up to 25 to 30 people of which we will train 15 to 20 of them to support clinical cases. I expect to see a lot of growth in Europe over the next few years and the team is off to a very good start in 2012.
In December of last year we submitted our EU regulatory (Inaudible) for Nellix and expect to receive CE mark in mid 2012. The Nellix clinical experience to date will be presented at the Charing Cross Meeting in April in London. Then in summer we are planning a limited market introduction focusing on targeted number of regional EVAR centers. We will probably stay in a limited market phase through the balance of 2012 and then look at opening it up in 2013.
For Ventana, we just enrolled the final patient in our CE clinical study yesterday and expect to file our regulatory (Inaudible) in the second quarter. This positions us to potentially get CE mark for Ventana in the fall of 2012 similar to Nellix we will being with a limited roll out in selective centers with a focus on achieving positive clinical outcomes in building training centers.
Turning back to the United States we are well positioned with the recent launch of AFX and advancement of our other new product initiatives. Earlier this month we announced the completion of enrollment in our PEVAR clinical trial. This randomized trial included 150 patients and requires 30 day follow up. Based on our current time line we hope to receive the percutaneous indication by the end of the year, which would position Endologix as the only EVAR company with an on-label indication for percutaneous aneurism repair.