Good day, ladies and gentlemen, and welcome to the CryoLife Third Quarter 2021 Financial Conference Call. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Brian Johnston. Sir, the floor is yours. [Technical Difficulties]

This is Pat Mackin CEO of CryoLife. We posted a solid quarter despite the headwinds caused by the Delta variant. Our results for the third quarter were $72.2 million, 5% growth on a pro forma constant currency basis compared to Q3 2019, which were right in the midpoint of our Q3 guidance. Our performance benefited particularly from our new stent and stent graft product launches and strength in our On-X aortic valve business in the U.S. More specifically, in the third quarter of 2021 compared to the third quarter of 2019, our stents and stent graft segment grew 22% and On-X grew 10%, each on a pro forma constant currency basis. The On-X product line growth was led by the On-X aortic valve revenue growth in North America, which grew 16% compared to 2019. I'm encouraged by these results given that we had three significant headwinds in the quarter that are all showing signs of improvement as we move into Q4. First, the spike of the Delta variant had an impact on procedure volumes, and therefore, an impact on our Q3 results. We have seen over the past month, however, the COVID cases have declined nationally, which we believe means that in Q4, procedure volume should stabilize and increase. Second, our cardiac tissue declined 10% in the third quarter compared to 2019, resulting from a backlog in review of donor and tissue charge to release this tissue, which, as you will recall, had been temporarily quarantine as a result of our previously discussed Tris issue. In the third quarter, we added staffing capacity and have been able to release more charts. As a result, we've already seen significant improvement in cardiac tissue revenue with an 8% year-over-year growth in October compared to 2019. Third, we did not sell any TMR…

Thanks, Pat. And before I move on, I'd like to remind everybody that this call does contain forward-looking statements, and you should refer to the forward-looking statements contained in our press release that we issued this morning and in the risk factors in our 10-Q that we'll file tomorrow. So, total revenues were $72.2 million for the third quarter, up 11% on a GAAP basis and 9% on a pro forma constant currency basis, both compared to Q3 of 2020. Revenues came in above the midpoint of our guidance despite the impact of the Delta variant, slower than anticipated cardiac valve chart clearances and the delay in restarting sales of our TMR disposable handsets. On a year-over-year basis, in the third quarter of 2021, aortic stent and stent graft revenues increased 37%, reflecting increased procedure volumes and improved JOTEC inventory position, the addition of the AMDS in September of 2020 and improved adoption of NEXUS in the EU. On-X revenues increased 16% and BioGlue revenues increased 5%, reflecting improving procedure volumes relative to the third quarter of 2020, and tissue processing revenues decreased 5% due to a temporary delay in cardiac valve tissue releases. On a pro forma constant currency basis compared to the third quarter of 2020, aortic stent and stent graft revenues increased 27%, On-X revenues increased 15% and BioGlue revenues increased 3%. On a pro forma constant currency basis compared to the third quarter of 2019, On-X revenues increased 11%, aortic stent and stent graft revenues increased 22%, BioGlue revenues increased 5% and tissue processing revenues decreased 7%. On a regional basis, third quarter 2020 revenues in EMEA increased 21%, Asia Pacific increased 26%, Latin America increased 88% and North America increased less than 1%, all compared to the third quarter of 2020. On a pro forma…

Thanks, Ashley. In closing, as you've heard this afternoon, the three headwinds that we faced in Q3 2021, the surge of the Delta variant, cardiac tissue chart processing and lack of a TMR handpiece are all improving. This positions us well for double-digit growth in Q4 2021 versus Q4 of 2019. We also expect this momentum for Q4 '21 to continue into 2022. As I explained throughout the call, we've built a plan that has three initiatives that will drive growth from now through the end of 2024. First, we should see continued growth in our five new aortic stents and stent grafts, AMDS, NEXUS, E-nside, NEO and E-nya. Second, we anticipate further upside from our investments in our channels and new regulatory approvals in Asia Pacific and Latin America. Third, in 2022, we expect to get PMA approval for PerClot as well as PMA approval for the On-X PROACT Mitral low INR indication. Finally, we have a robust midterm pipeline with three U.S. PMAs that are all currently enrolling like PROACT Xa and NEXUS TRIOMPHE, we're about to start enrolling the AMDS persevere trial. I'm very confident in our plan, and we're relentlessly focused on delivering double-digit growth on a consistent basis. Before I turn it over to questions, I'm going to actually have Ashley reread the forward-looking statements, because I don't think those were picked up as I started because we were having technical difficulties at the beginning. Ashley, could you just quickly run through that?

Yes, absolutely. So, comments that we made during the call that look forward in time involve risks and uncertainties and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include statements made as to the company's or management's intentions, hopes, beliefs, expectations or predictions of the future. These forward-looking statements are subject to a number of risks, uncertainties, estimates and assumptions that may cause actual results to differ materially from these forward-looking statements. Additional information concerning risks and uncertainties that may impact these forward-looking statements is contained from time to time in the company's SEC filings and in the press release that we issued earlier today.

Okay. Thanks, Ashley. So, I apologize for the technical difficulties at the start. We've now read the forward-looking statements. And operator, could you go ahead and open the line for questions?

[Operator Instructions] Our first question comes from Suraj. Please go ahead.

We can't hear him.

Suraj, if your line is muted, please unmute your line?

Pat, can you hear me?

I can, now.

Oh, my goodness, having issues. So, Pat, Q2 '22 PROACT Xa enrollment finishing, can you expand on that in terms of - I know the DSMB is looking at every one to two quarters, as we understand it. When is the earliest we could get some visibility on an interim basis on PROACT Xa?

Yeah, I think we've talked about this previously. So, this is - it's an interesting - the trial design, because it's such a - thromboembolic events with valve are very low, which is why we have a 1,000 patient trial. And the way this is set up as a non-inferiority to Coumadin. And so there really is no interim look. I mean you could get to a situation where you had the trials, and you're very familiar with how this works from a statistic standpoint, where you can have a trial stop early, but they would have to be a significant difference between Coumadin and Eliquis, which, again, we don't think is going to happen. This is powered for non-inferiority. So, I think, maybe the way I would answer it is we're assuming the trial enrolls in the second quarter next year. That means that you've got 1,000 valves, half on Eliquis, half on Coumadin. And we started this trial, as you know, in May of 2020. That means we will, at that point, have already had some of the first patients on Eliquis for two years. And I think the way to think about this trial, once this trial enrolls, every quarter that goes by, it's another quarter with 500 patients on Eliquis. So, in the end, we won't know the answer to the question until we get to our full 2-year enrollment. So, I think that's probably the best I can answer at this time.

Pat, I'll just plug in. Pat, can you still hear me?

Yes.

Just one additional question on PROACT Xa and I'll hop back in queue and let others chime in. So, Pat, remind you on PROACT Xa, let's say Suraj gets enrolled in March 2020, fine. And the trial enrollment gets completed March 2022, right? He's already two years in follow-up. But let's say, Pat Mackin gets enrolled March 22, right? You need to your follow-up for Pat also. And by the time Suraj is alive on Eliquis for four years, right?

That's right.

When the final data is presented, would the subgroup analyze by duration of follow-up also? And the reason I ask is, these event rates over time multiply the cumulative incidence increases, right? I know there is a mean and we are looking at two years, but I am just curious if that kind of data stratification also is eventually going to be presented, because it's going to be interesting, patients with longer term, how they could - how they do on Eliquis. Thank you for taking my questions.

Yeah, no problem. So, I mean, I think one of the points back to your earlier question is, we're - a typical FDA valve trial is about 800 - you need about 800 patient years of follow-up. So, for example, I mentioned the PROACT Mitral PMA has been submitted. That bar is an 800 patient years of follow-up. We're collecting 1,600 patient years of follow-up in this trial. And I think part of that is because any time you're going to change a drug, both our clinicians and the FDA wanted to see two years of data. But you're right. Under your example, Suraj will have been on Eliquis for four years and I would have been on Eliquis for two years. So, the last enrolled patient in this trial will have to be followed for two years and then we do the Kaplan-Meier analysis on area under the curve. So, there is no interim analysis. The DSMB, as you mentioned earlier, meets every six months and reviews the data. And as long as the trial keeps going, then it's a green light.

Thank you.

Okay. We can take the next question

There are no further questions at this time. [Operator Instructions] Mr. Mackin, there are no further questions at this time. I'd like to turn the floor back over to management for closing comments.

Yeah, and again I apologize for the difficulties at the beginning of the call. As we talked about, I think we had a solid quarter. We had some headwinds with Delta, with some headwinds with our cardiac tissue just clearing charge. But the good news is we've got lots of tissue. We just need to clear those charts. And that's actually - that the situation is improving as we speak. We're already growing tissue 8% in October. And we're about to send out our TMR handpieces after not having them for a couple of years. So, I think with all those headwinds kind of being mitigated, we're in good shape for the fourth quarter and look forward to putting up a double-digit growth number. The pipeline is advancing. We got two PMAs with the FDA right now that we expect to get approved next year and we've got three PMA clinical trials that are either enrolling or will be enrolling by the end of the year. So, again, we're very confident in the portfolio we have and look forward to putting up a double-digit growth number this quarter. Thanks for joining in.

Ladies and gentlemen, this does conclude today's teleconference. You may now disconnect your lines and enjoy the rest of your day.