CVRx reports Q4 and full year 2023 financial and operating results

CVRx, Inc. announced its financial and operating results for the fourth quarter and full year of 2023, and affirmed its 2024 business outlook.

Recent highlights

• Total revenue for the fourth quarter of 2023 was $11.3 million, an increase of 58% over the prior year quarter
• U.S. Heart Failure (HF) revenue for the fourth quarter of 2023 was $10.2 million compared to $6.0 million in the prior year quarter, an increase of 70% over the prior year quarter
• Total revenue for 2023 was $39.3 million, an increase of 75% over the prior year
• Active implanting centers for 2023 increased to 178, a 68% increase since December 31, 2022
• As previously announced, President and CEO Nadim Yared plans to retire upon the completion of a deliberate succession process and the appointment of a successor

“As we reflect on the accomplishments of 2023, it has been a great year for CVRx. We are proud to have sustained the momentum in driving the adoption and utilization of Barostim, resulting in a 97% annual increase in U.S. heart failure revenue,” said Nadim Yared, President and CEO of CVRx. “Additionally, we achieved significant milestones, such as the expansion of Barostim labeling and CMS’ OPPS ruling assigning Barostim to the New Technology payment code. We believe these changes will enhance access to our therapy.”

“Turning our focus to 2024, we’re enthusiastic about CVRx’s future and the ongoing commercial adoption of Barostim. With a strong foundation, an exceptional leadership team, and consistent execution of our strategy over the last two years, we are confident in our ability to attract a high-caliber CEO. This individual will play a crucial role in executing our strategic plans and driving future commercial growth. Serving as CEO of CVRx has been an incredible experience and privilege, and I look forward to continuing to contribute to the Company’s success through this transition.”

Fourth quarter 2023 financial and operating results
Revenue was $11.3 million for the three months ended December 31, 2023, an increase of $4.1 million, or 58%, over the three months ended December 31, 2022.

Revenue generated in the U.S. was $10.3 million for the three months ended December 31, 2023, an increase of $4.3 million, or 72%, over the three months ended December 31, 2022. HF revenue units in the U.S. totaled 330 and 193 for the three months ended December 31, 2023 and 2022, respectively. HF revenue in the U.S. totaled $10.2 million and $6.0 million for the three months ended December 31, 2023 and 2022, respectively. The increase was primarily driven by continued growth as a result of the expansion into new sales territories and new accounts, as well as increased physician and patient awareness of Barostim.

As of December 31, 2023, the Company had a total of 178 active implanting centers, as compared to 159 as of September 30, 2023. Active implanting centers are customers that have completed at least one commercial HF implant in the last 12 months. The number of sales territories in the U.S. increased by three to a total of 38 during the three months ended December 31, 2023. A sales territory is an established regional area held by an account manager, typically after at least six months of employment.

Revenue generated in Europe was $1.0 million for the three months ended December 31, 2023, a decrease of $0.2 million, or 15%, over the three months ended December 31, 2022. Total revenue units in Europe decreased to 52 for the three months ended December 31, 2023 from 68 in the prior year period. The number of sales territories in Europe remained consistent at six during the three months ended December 31, 2023.

Gross profit was $9.6 million for the three months ended December 31, 2023, an increase of $3.9 million, or 69%, over the three months ended December 31, 2022. Gross margin increased to 85% for the three months ended December 31, 2023 compared to 79% for the three months ended December 31, 2022. Gross margin for the three months ended December 31, 2023 was higher due to a decrease in the cost per unit and an increase in the average selling price.

R&D expenses decreased $0.8 million, or 26%, to $2.2 million for the three months ended December 31, 2023 compared to the three months ended December 31, 2022. This change was primarily driven by a $0.7 million decrease in clinical study expenses and a $0.6 million decrease in consulting expenses, partially offset by a $0.3 million increase in compensation expenses, mainly as a result of increased headcount and a $0.1 million increase in non-cash stock-based compensation expense.

SG&A expenses increased $2.9 million, or 21%, to $17.0 million for the three months ended December 31, 2023 compared to the three months ended December 31, 2022. This change was driven by a $1.7 million increase in compensation expenses, mainly as a result of increased headcount, a $0.7 million increase in marketing and advertising expenses, primarily related to the commercialization of Barostim in the U.S., a $0.4 million increase in non-cash stock-based compensation expense and a $0.4 million increase in consulting expenses, partially offset by a $0.1 million decrease related to D&O insurance costs and a $0.1 million decrease in professional fees.

Interest expense increased $0.4 million to $0.6 million for the three months ended December 31, 2023 compared to the three months ended December 31, 2022. This change was driven by the interest expense on borrowings under the loan agreement entered into on October 31, 2022.

Other income, net was $1.1 million for each of the three months ended December 31, 2023 and 2022. Other income, net consisted primarily of income on interest-bearing accounts.

Net loss was $9.2 million, or $0.44 per share, for the three months ended December 31, 2023, compared to a net loss of $10.5 million, or $0.51 per share, for the three months ended December 31, 2022. Net loss per share was based on 20,826,634 weighted average shares outstanding for three months ended December 31, 2023 and 20,593,312 weighted average shares outstanding for the three months ended December 31, 2022.

Full year 2023 financial and operating results
Revenue was $39.3 million for the year ended December 31, 2023, an increase of $16.8 million, or 75%, over the year ended December 31, 2022.

Revenue generated in the U.S. was $35.1 million for the year ended December 31, 2023, an increase of $17.1 million, or 95%, over the year ended December 31, 2022. Total HF revenue units in the U.S. totaled 1,123 and 587 for the years ended December 31, 2023 and 2022, respectively. HF revenue in the U.S. totaled $34.6 million and $17.6 million for the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2023, the Company had a total of 178 active implanting centers, as compared to 106 as of December 31, 2022. The number of sales territories in the U.S. increased by 12 to a total of 38 during the year ended December 31, 2023.

Revenue generated in Europe was $4.2 million for the year ended December 31, 2023, a decrease of $0.3 million, or 6%, over the year ended December 31, 2022. Total revenue units in Europe decreased to 207 for the year ended December 31, 2023, from 231 for the prior year period. The number of sales territories in Europe remained consistent at six during the year ended December 31, 2023.

Gross profit was $33.0 million for the year ended December 31, 2023, an increase of $15.6 million, or 89%, over the year ended December 31, 2022. Gross margin increased to 84% for the year ended December 31, 2023, compared to 78% for the year ended December 31, 2022. Gross margin for the year ended December 31, 2023 was higher due to a decrease in the cost per unit and an increase in the average selling price.

R&D expenses increased $1.7 million, or 17%, to $11.6 million for the year ended December 31, 2023, compared to the year ended December 31, 2022. This change was primarily driven by a $1.7 million increase in compensation expenses, mainly as a result of increased headcount and a $0.6 million increase in non-cash stock-based compensation expense, partially offset by a $0.8 million decrease in clinical study expenses.

SG&A expenses increased $14.5 million, or 29%, to $64.5 million for the year ended December 31, 2023, compared to the year ended December 31, 2022. This change was driven by a $8.6 million increase in compensation expenses, mainly as a result of increased headcount, a $2.3 million increase in marketing and advertising expenses, primarily related to the commercialization of Barostim in the U.S., a $1.8 million increase in non-cash stock-based compensation expense, a $1.5 million increase in travel expenses and a $1.0 million increase in consulting expenses, partially offset by a $0.3 million decrease related to D&O insurance costs and a $0.2 million decrease in professional fees.

Interest expense increased $1.6 million to $1.8 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.This change was driven by the interest expense on borrowings under the loan agreement entered into on October 31, 2022.

Other income, net was $3.9 million for the year ended December 31, 2023, compared to other income, net of $1.4 million for the year ended December 31, 2022. This increase was primarily driven by higher interest rates on interest-bearing accounts partially offset by a lower cash balance.

Net loss was $41.2 million, or $1.99 per share, for the year ended December 31, 2023, compared to a net loss of $41.4 million, or $2.02 per share, for the year ended December 31, 2022.

As of December 31, 2023, cash and cash equivalents were $90.6 million. Net cash used in operating and investing activities was $39.6 million for the year ended December 31, 2023, compared to $43.4 million for the year ended December 31, 2022.

Business outlook
For the full year of 2024, the Company expects:

• Total revenue between $53.0 million and $57.0 million;
• Gross margin between 83.0% and 84.0%;
• Operating expenses between $86.0 million and $90.0 million.

For the first quarter of 2024, the Company expects to report total revenue between $11.0 million and $12.0 million.

Recent developments
In the fourth quarter of 2023 and first quarter of 2024, the Company announced the following business developments:

• CEO Retirement Plans – In January 2024, current President and Chief Executive Officer, Nadim Yared, announced his plans to retire. Both he and the Board are committed to a measured and deliberate process to identify his successor, and Yared will remain in his current role until a new CEO is appointed.
• FDA Approved Expanded Labeling for Barostim – In December 2023, the U.S. Food and Drug Administration approved revised Instructions For Use for Barostim, incorporating key long-term clinical data from the BeAT-HF randomized clinical trial.
• Market Opportunity Updated – In December 2023, the Company announced an updated U.S. annual market opportunity for Barostim. Based on the new long-term safety and efficacy data, the Company’s commercial experience, and the new reimbursement assignment, the number of patients considered to be eligible for Barostim therapy by physicians was increased to 76,000 new patients or $2.2 billion annually, as compared to the earlier estimate of 55,000 new patients or $1.4 billion, representing increases of approximately 38% and 60%, respectively.
• CMS Increased Outpatient Payment for Barostim Procedure – In November 2023, the Centers for Medicare and Medicaid Services reassigned the Barostim implant procedure to New Technology APC 1580, which carries an average payment amount of $45,000 effective January 1, 2024, an increase from the prior average payment amount of $29,000, with a Transitional Pass-Through Payment. The move is expected to improve access to Barostim therapy for Medicare heart failure patients by ensuring facilities receive adequate reimbursement.

MB Bureau