Penumbra, Inc. (PEN) Earnings Call Transcript & Summary

Good day, and welcome to the Penumbra Management Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Bob Hopkins. Please go ahead, sir.

Okay, thank you, operator, and thanks, everybody, for joining us this morning. I'm Bob Hopkins from Bank of America, the medical device analyst for BofA. Thank you for joining us today. So welcome to what is essentially a virtual group breakfast for Penumbra. We've hosted investor meetings for Penumbra around this time of the year in New York, roughly every other year since the company went public, and we appreciate their willingness to do it this year virtually. So on the call with me today is, obviously, Adam Elsesser, the company's CEO and Co-Founder; and Jason Mills is also on the line, Pen's new Head of Strategy. Before we get started, I just want to mention obviously that for all relevant disclosures, please see the invitation note that went out. And today's call is scheduled for 45 minutes. We're going to try to cover a lot of ground today, talk about several topics to try and get a better understanding of the outlook for Penumbra, its growth drivers, risks, opportunities. We'll hit all the key issues, and we'll try to get a better understanding of Pen's pipeline, growth opportunities across their major franchises, including a couple that don't, at least in my view, don't get enough attention. So Adam and Jason, thanks very much for joining us this morning.

Yes, my pleasure. Thank you for having us.

So I'll just jump right in with questions, and again, we're going to hit a lot of topics. But to start, I just wanted to talk a little bit about the current operating environment, given the spread of COVID and the restrictions that are being put in place by certain states. And many med tech companies have obviously suggested recently the spread of COVID has, not surprisingly, impacted current trends. So Adam, just to start out on a kind of current state-of-the-business question. Just curious if you could give us kind of an update on what you're seeing out there since your late October conference call.

Yes, Bob, it's a great question. Obviously, looking at the headlines and reading the news, the continued spread or the acceleration of the spread of COVID-19 and the impact it's having on our country and really the rest of the world is just terrible. As we've mentioned in the past, our priorities during this whole pandemic has been to keep our employees as safe as possible and also to continue to ensure that our -- the products that are used in critical life-threatening conditions are available for our customers. As you know, many of our products indirectly help a subset of COVID patients who have developed clot in their bodies when they get COVID, both in the peripheral and the neurovasculature. So we really want to keep making sure that those are available for those patients. As for COVID-19's impact on our business this quarter, we mentioned that we would be watching that on our last earnings call. As of now, we have not seen a negative impact on our business. But obviously, we're watching that very carefully over the next 3 to 4 months as this continues.

Okay. So that's interesting. Is that a statement that kind of applies to both sides of the business, both vascular and neuro? Just curious if it's kind of a comment on the overall business or one doing better than another. I realize we still got a long way to go with December, but just curious if there's any trends that sort of stick out that are interesting.

Yes. It's a good question. I think it's really meant to describe the overall health of the business and not go into sort of specific line items. But overall, we have not seen a negative impact on the business. So far, here we are in the beginning of December, but this is obviously evolving quickly. And as I said, we will watch that carefully. But so far, so good in terms of our ability to make sure these patients are getting their products and they're getting treated.

Okay. And then just one last follow-up on this topic. Is it fair to assume that you'll follow kind of normal protocols for providing thoughts on the year ahead and that will come on your Q4 call?

Yes. As you know, our practice has been on our Q4 call to provide whatever outlook we can going forward, and we will certainly be planning on doing that on our call, our Q4 call.

Okay. So next, I wanted to turn to the neuro business and specifically, ischemic stroke. Obviously, the company has a long history in the treatment of ischemic stroke. I'll ask the question to start kind of broadly and let you take it. But the sort of the question to start that I think a lot of people are interested in is just in light of your 8-K disclosure yesterday around XTRA FLEX and the percentage of revenues that are represented in the third quarter, can you just give us a sense for the makeup of that business in light of that disclosure? And also, obviously and importantly, we'd love to get a sense for the status of JET 7 XTRA FLEX. Any comments you're willing to offer there I'm sure would be appreciated.

Yes, thanks, Bob. I'm certainly happy to discuss this part of the business. Obviously, we provided in an 8-K filing yesterday that JET 7 XTRA FLEX represents 7.5% of our last quarter's revenue. So I don't think your question makes sense. Let's step back and sort of understand our stroke portfolio as it's developed and these products are used in these really urgent procedures. We sell a range of aspiration catheters. Each one of them is used in locations in the brain where the clot might happen to be. They also -- there's different physician preferences as to size and other performance criteria. JET 7 XTRA FLEX happens to be our eighth generation aspiration catheter. It's the same size as our original JET 7 catheter. But we made a few important changes to it to make it more trackable. Since its launch last year, just so everyone fully knows, it's been used successfully in tens of thousands of cases to improve those patient outcomes. And we regularly hear stories from our physician customers that JET 7 XTRA FLEX allowed them to successfully treat patients that they otherwise would not be able to treat with other catheters on the market due to the XTRA FLEX's superior trackability. Now to answer the final part of your question, as you know, earlier this year, we worked with the FDA to update our instructions for the JET 7 XTRA FLEX and then delivered a notice to doctors with an added warning that bolsters the existing instructions for use. Like the original instructions for use, the added warning informed physicians to inject contrast media through the guide catheter and not through the JET 7 XTRA FLEX. And of course, Penumbra's going to continue to work to closely monitor the effectiveness of that notice to physicians and work openly with the FDA. Finally, Bob, I do think it's important to know that there has not been a patient death associated with the JET 7 XTRA FLEX when it is used in line with these instructions.

Thank you for that, Adam. And just as a follow-up to that, and it's just -- you kind of addressed it, but I just would love a smidge more clarity on the question of the communication to physicians in late July about XTRA FLEX. Are you comfortable that, that message has kind of gotten out there and being heard? Just curious how confident you are that, that message is really broadly out there given its importance.

That's a good question. Yes, I am, but as you know, we are having regular conversations with the physicians using JET 7 XTRA FLEX. It's -- since the notice, it's in all of our training materials and of course, it's in the updated IFU itself.

Right, okay. So -- and then --so I mean, obviously, with any catheters, there's trade-offs. I just -- one other question from me on this topic is just your confidence that the benefits to the doctors and patients brought by having XTRA FLEX on the market outweigh the risks that exist. Just -- and talk about kind of what gives you that confidence is sort of a final question on this specific topic.

Yes, I think it's a fair question. And with every product that any medical device company makes, whether it's us or anybody else, you always -- unfortunately, you have to look at those risks and make those determinations. What gives me confidence is what I just said, which is when used in accordance with the instructions, we have not had any death. So we've also balanced that or hear from a great number of people that this product has allowed them to treat patients that they otherwise wouldn't be able to treat. So I think the answer to that question is fairly obvious. But it is obviously important to make sure that people continue to use it the right way. And we will continue to monitor that, as I said, and when, hopefully, that will continue. That's our goal, that's our obligation. We can't control everyone's behavior, but we're going to do our absolute best to make sure that everyone understands that and uses it how we've asked them to use it.

And then the disclosure about the 7.5% of revenues, just to level set everybody, that the rest of ischemic stroke is -- I assume is basically the 068 -- ACE068 catheter, the JET 7 catheter, and then obviously, your stent retriever. Is it safe to assume that the vast majority of that ischemic stroke outside of XTRA FLEX are the other 068 and JET 7 catheters?

So we haven't gone through those numbers line by line. But yes, a majority of our ischemic stroke business is our aspiration catheters. But as you pointed out, we do have a stent retriever as well which is used. So when you add it all up, that gets the total. But yes, a majority is our aspiration catheters.

And just -- again, to be clear, the 068 and JET 7 continue to be widely available today?

Yes. we have other ones. We have JET D. We have some smaller ones. So it's not just 068 and JET -- the original JET 7. But those 2 are obviously continued to be used.

Okay. And then from a ischemic stroke pipeline perspective, you guys -- I'd love to ask a couple of questions here. Because you've talked about potentially shifting -- trying to shift the paradigm in stroke as we look forward to 2021 and beyond. So I'd love to get a sense of what's coming in and when on that front to the degree that you're able to talk about that. And then the other question, and I'd be happy to reiterate it afterwards, is just can you give to kind of an update on the launch of XTRA FLEX outside United States and what your plans are and where that stands?

Yes. Well, why don't -- let me address that one first and then we'll move into the future. So JET 7 XTRA FLEX is currently sold in a number of other countries. I think everyone heard on the earnings call that, in Japan, we work through a distributor. We don't actually sell that product directly. They -- we're in the early stages of the launch when we contact them and decided to change the notice or change the instructions and paused it. They've submitted, just like we did in the U.S. to the FDA, the changes. They've submitted that to their regulatory bodies. And what we have been told by them is once that is approved, they will continue that. The product in Europe is -- was CE marked right at the time that we submitted our new instruction in the U.S. So we obviously did the same thing and submitted those to be CE marked. That hasn't happened. But as soon as it is, we plan on launching that product as well. So that's sort of the way we see this product in those major markets. As it relates to the pipeline of our products. I've said in the past that we have a series of products that each will matter individually, but taken together will sort of be a paradigm change. So you're starting to see a little of that unfold. We recently launched BMX96, which is an access catheter that allows for having a larger inner lumen, so one can inject contrast through the guide catheter without removing the aspiration catheter, which will speed up cases, which is a benefit. Our goal is to -- we've said, remove clot as fast as we can in as many patients as we can. So that will go to the time and efficiency of the case. So far, that product has been really well received. And I think it will make a big difference in the long run. We're also excited about the ability to continue to innovate on aspiration catheters. We're certainly not done in making catheters that can do the 3 things that catheters need to do in an aspiration case. And the first is, of course, track easily and safely without hurting the vessel as it goes up. And then two, hold its shape when aspiration power or vacuum is put into it and not sort of collapse on itself, which is a key and important component. And then be as efficient as possible. In many cases, sort of sized properly for the vessel so that the inner lumen can remove as much clot as possible. Those are the 3 design criterias. And we think there's room to continue to innovate across our portfolio for those types of things. And then finally, And the thing that maybe we're the most excited about is what I have sort of described as a paradigm change where we're really moving to a different level around aspiration efficiency and the ability to sort of remove clot quickly. I can't reveal more than that, obviously. But my hope is that we will be able to reveal a lot of these ideas and new products in 2021.

So on that, so is it likely then that we'll have a next-gen aspiration catheter available in 2021?

So that's certainly our goal. The last thing I want to do is predict regulatory processes and so on. I've never done that. In fact, from our standpoint, that certainly is what we think will happen.

Okay, and then just 1 quick follow-up on the CE Mark process. So XTRA FLEX is approved, or was it? Can you just give us like when was it approved and what is the gating factor to commercialization?

Yes, so it was approved after -- I don't have the exact dates in front of me, so I don't want to be inaccurate. But it was approved when -- the CE Mark approval was under submission for some time. We then changed the IFU that the CE Mark came before we were able to resubmit the IFU change, so we did that. So as soon as the notified body approves the new IFU change, we will proceed.

Okay. So we're just waiting on regulatory bodies to approve the new language? Okay.

Yes, that's all it is. It's sort of like Japan. But obviously, we don't want to put out that product without the new IFU.

Yes, yes. And I apologize if you haven't said this before, so no worries if there's no answer on exact timelines, but both of those are -- the Japan and Europe are expected to be kind of 2021 events, I assume?

I would assume so, given that we're in December now, but I don't have more detailed visibility with the exact timelines. I just don't.

Okay. And then so -- let's see. I guess one other thing on stroke, and I may circle back as you answer this question, but just also wanted to get your sense now that we're on the topic of OUS of just -- China as an opportunity for you guys. I mean, at the 2019 Analyst Day, you talked about that as a very large opportunity not just because of the obvious size of the country but their per capita rates of stroke there. And there's some challenges in terms of accessing that market. So where are we in thinking about China as an incremental opportunity for Penumbra on the stroke side?

Well, it's a great question. And you're absolutely right. There are an awful lot of people in not only China but other international markets that we are excited to bring our products to and be able to help particularly not just in stroke, but really in our broad portfolio on the peripheral side as well. So those, as I mentioned on the earnings call, we're focused on looking at the right way to do that in the markets and making sure we're building a model that makes sense for our long-term growth. And you'll, I think, see that pretty significantly in the years ahead, starting in 2021 and going forward.

So at what point do you think you're kind of -- are you comfortable right now with the distributor that you have? And just like what else needs to happen before you kind of push on that opportunity a little bit more? Because some of your competitors are generating decent revenue in that geography already.

Yes. I am very comfortable with our partner. And I think that, as I've said, you will see some very significant opportunity for us in 2021 and beyond.

Okay, so we could see some contribution in 2021, though, in China?

Yes.

Okay. And then, Adam, I'd also love to get your view just the overall stroke market in the United States. It obviously -- it was the market that the company was founded around, a lot of bullishness and excitement around the size of the opportunity at the time of the IPO. Lately, in part because of obviously the tremendous success of your vascular and peripheral business, your commentary seems to have changed a little bit on the outlook for the stroke market. So I would love to just sort of take this opportunity to kind of level set here and get your views in terms of where we are on penetration and where we might be going from a growth perspective in the U.S. ischemic stroke market.

Yes. I think, Bob, it's a really good question. This was never -- and we've been consistent on this since we went public, this was never going to be an easy sort of straight line growth story that I think everyone who followed this story understood that. The challenge is this, and let me just quickly walk through the numbers because I know there's a lot of other questions we need to get to on the other parts of our business. But with stroke, there are roughly 750,000 ischemic strokes every year in the U.S. These are just U.S. numbers. Of those, roughly half or so are what are called large vessel occlusions, where a catheter treatment or interventional treatment is possible. And of those, some number -- and there's no real definitive way to answer this, but the estimates vary from 200 to a little over 200,000, are sort of amenable to be treated. In other words, there's viable brain tissue left, to sort of say it that way. And where are we on that curve? We're about 25 or so percent penetrated roughly of that number. The challenge is not all these patients show up to hospitals that can do the procedure. Unlike some other procedures that are done, really, at any kind of hospital, a neurovascular or ischemic stroke procedure is a highly specialized procedure. It requires trained, specially-trained physicians, in many cases, more sophisticated imaging angio equipment than in other hospitals. And so the challenge has always been to get those stroke patients when they have a stroke or call the ambulance to get those patients to be triaged to the right hospital as opposed to just any hospital. And those rules are not mandated at a federal or state level. They're really local, really county by county and sometimes by ordinance, and other times, by practice. So the work that's been done over the past years, which I've been just unbelievably impressed with this field and our customers and the tireless work that they've had to go into their communities, to work with their local EMS providers and fire departments to get those patients to the right place. But that's not a straight line. And we've always talked about that. It's not been -- it's sort of been a bumpy road curve. This year has been a challenge because as everyone saw, there were lots of mainstream media articles about it. The stroke patients sort of disappeared, if you will, in late March and April for a bit. The premise or the theory was people were afraid to go into hospitals given COVID. Most of that's come back, not totally. And obviously, we don't know now that we're in really a major surge if that will put that back again. We haven't seen that yet, but that certainly is at least conceptually possible, but I want to make sure we -- you hear we haven't seen that. But then the question is, are -- is it likely that the community is doing the work necessary to keep growing that, making sure they're out in the community, talking to fire departments, talking to EMS providers. And the likely answer, just from our -- talking to our customers, is probably not as much as they were before. We're in the middle of a pandemic. Getting out and moving around is restricted and certainly, health care providers understand that and are cautious and thoughtful. So I think there is a huge opportunity for this market to continue to grow. I think there's a passion and desire for it to grow, which I'm part of and excited about to make sure we treat as the people as can be treated. But it's not going to be a straight line, and we can't and have never been able to predict that. So let's stay tuned and let's see how that grows. From our business standpoint, as -- and this is separate from the important need to make sure those patients can get treated, we have the opportunity to continue to impact a huge number of patients on the peripheral side as well as on the REAL side. So from our ability to continue to impact more and more patients and therefore, continue to grow, that doesn't have -- the issues in stroke doesn't negatively impact our business, albeit don't take that comment as anything other than my desire to keep driving that part of the business as well.

So on the -- on the vascular side, on the peripheral side, I'd love to kind of see if we could ask a few questions on the thrombectomy side of vascular. And maybe the first question would be just to compare kind of the peripheral and ischemic stroke opportunities. Both -- just -- you've kind of already been through it. So we don't spend -- need to spend a lot of time on the addressable market overall. But I'm curious on the competitive environment, if you could compare it to stroke. We've talked about this a little bit before, but there are a ton of companies out there talking about launching peripheral thrombectomy technologies, some lytic-based, some not. I understand, and obviously, I'm watching the stroke market very closely. It took, I don't know, 5, 6 years for competitors to offer something that was somewhat competitive. How do you view the competitive landscape in the thrombectomy area relative to what you saw on the stroke side?

Yes. It's a really, really good question. Let me maybe answer that first by just defining the market because I think there is a lot of misunderstanding sort of when we talk about peripheral thrombectomy, what we're talking about. There's really 2, call it, 3 sort of large areas. There's some smaller areas. But substantively, we're talking about the arterial side, clot in your arteries; the vena side, clot in your veins; and then PE or pulmonary embolism. Those are sort of the 3 buckets. Some companies are allowed or focused their products on 1 or 2 of those, not all of them, and we're focused on all of them. So that's just an important thing to hear. Let's just also talk about numbers for a second so we can understand it. There's roughly -- and these, of course, are estimates, about 450,000 patients in the United States that have some form of intervention or surgery performed on them today for clot in their body. The vast majority that is catheter-directed lysis, which is putting a catheter into the body and dripping a drug like TPA, that's not on label for that, but dripping it slowly. Over the course of several days, usually, you have to put those patients into an ICU or a monitored bed to make sure that those patients don't end up having a hemorrhage because that's a risk in those procedures. And then some of the arterial side are also treated surgically where they go in and surgically try to remove that clot. And then there are other companies that have devices, some working with TPA to try to enhance it, and others more in the traditional sort of mechanical thrombectomy category to try to physically remove it. So that's sort of the lay of the land. On top of those 450,000 that are already being treated today by our customers, which are interventional radiologists, vascular surgeons and interventional cardiologists, there are roughly another 300,000 patients that are evenly split between DVT patients and PE patients that aren't being intervened on, but possibly could, if there's enough data to show that the benefit of doing an intervention is there. Those patients are typically now treated with medical management. But there's a lot of interest in the physician community to do something more for those patients because that treatment is viewed as not ideal by many. And so there's clinical work ahead for us and I know other companies to try to make sure that we investigate and see if that benefit would be there as the products in mechanical thrombectomy improve. So that's sort of if you will, the lay of land. As we think about the competitive question, the competitor, if you will, that we see is the most important right now is really the catheter-directed lysis idea, the idea that you would use that procedure, which has been around a long time. It's never been proven scientifically. It's being done because people feel -- physicians feel appropriately that they have to, in clot in those locations, particularly on the arterial side, has huge catastrophic events, and also PE, where it's life-threatening. So they are compelled appropriately to do something to try to help those patients even though it's not been proven. So we come along with the tool that does that better. And it's really important right now with COVID and the hospitalizations and the ICU beds being full, you see that on the press right now, with the idea of doing a single session where we're removing the clot and the patient is able to go home shortly thereafter. That's a big deal right now, and we're seeing a huge reaction to that because the idea of putting a catheter into the clot and then taking up an ICU bed right now when ICU beds are being full of COVID patients is really not an ideal situation. And our product, particularly our new product, Lightning, has really been able to accelerate people's confidence in doing single-session treatments for these patients. So that's sort of how we see the competition. Now with Lightning, it's a little different than the stroke business. With the stroke business, we were talking about catheters. There's not a lot of intellectual property. There's -- people can all make the catheter. Some have made good ones, some have not. But that was a different type of field. With Lightning now with the platform technology for our peripheral thrombectomy business, it is -- it's a little bit different. And we're really, frankly, excited about the performance of that product and its ability to really do 2 things, which is confidently allow for strong aspiration without any risk of blood loss in these patients and really an efficient removal of that clot in a single session. So as we go forward, we have a lot of confidence. As you know, Lightning 12 is out there. It recently got an indication from the FDA for PE, and we're excited about that. And we're going to do some clinical work both in DVT and PE in 2021 and beyond. And then Lightning 7, which has already been cleared, is going to launch at the beginning of 2021, which will be primarily used on the arterial side. And I think it will sort of have that feel of being just the right size catheter together with really mitigating the risk of any worry about blood loss for those patients and those physicians. So all in all, I couldn't be prouder of our team for the work on these. These are very interesting and sophisticated products, some of the best we've ever done. And you've seen that in the numbers just last quarter how important they have been and again, particularly now in COVID more than ever.

So I have a couple of follow-ups on the peripheral side. But before I get there, I did want to make sure we got to one other portion of your vascular business, which I know is not necessarily a hot topic for people. But from a modeling of your company perspective, we need to have a sense for kind of the peripheral embolization business. And just -- you don't need to spend too much time on it, Adam, but I'd love to get a sense for how you think about the durability of the growth of that line item. Just maybe spend 2 seconds on kind of exactly what you sell there, and more importantly, though, like what's a reasonable way of thinking about the growth opportunity for you in that specific division? And then we'll circle back, return back to me.

Yes, very quickly, just so we have time on all the other stuff as well and REAL at the end. So our embolization business is one of those sort of quieter businesses. It's sort of almost the exact opposite of thrombectomy. Here, we're putting in primarily a coil technology that, in effect, stops flow of blood that's done -- it's sort of the exact opposite. As I said, it's done in certain cases like aneurysms or endoleaks and a variety of other conditions that need that to happen. And what the physicians have found is that our particular offerings here are very uniquely designed. We did it purposely and innovated over the last number of years to make products that are very purposeful and helpful for a really variety of pretty serious conditions that these patients have. And as people experience that and get used to it, they're realizing that the products are really, really unique and valuable. And a lot of times, You hear the category. "oh, I have coil, they have a coil." There's a perception sometimes that they might all be similar or sort of commodity. And as more and more people get exposure to it, hear about it, try themselves, they're realizing that our products are very uniquely designed, like everything we try to do, and are really helpful in many, many cases, beyond what they might have received. So I remain -- to answer your question, pretty optimistic that, that business will continue to grow as more and more people get exposed to it. And some of that comes from just hearing about it because they're now using our thrombectomy tools, or, of course, word-of-mouth from other physicians who are talking about how successful it is.

But in terms -- I mean, it's just like from a -- just any way to help quantify that? Obviously, not talking about a quarter or a specific year, but is this a business that can sustainably grow double digits for you, in your view, as a kind of a rough kind of quantification of what might be possible?

Yes, I don't want to put out a particular number on a particular sort of sub part of our business. But yes, it will be part of the continued growth of our vascular business going forward, which, as you know, as a collective part of the business, we believe will drive growth in 2021 and beyond for the company pretty significantly.

Okay. And then back on peripheral thrombectomy. Would just love to get your -- maybe dig in a little bit deeper on how you think about the size of the DVT opportunity. And specifically, with the launch of, obviously, new Lightning product, it seems like in this particular quarter, it probably actually did more in sales than XTRA FLEX did just based on sort of simple math. So I was just kind of curious of kind of how you size specifically that DVT opportunity? And can -- with your technology, you really address some of the more chronic clots with a pure aspiration system.

Yes. I think that's a great question. So just your sort of estimate is accurate. Lightning did do better than JET 7 XTRA FLEX in terms of sales and that in Q3, and that was sort of with a partial quarter. So that does give you some sense of confidence, I hope, in the success of that product. It really is extraordinary. It has the ability -- does what we thought it would do, but it has the ability to really go after a pretty broad range of clots, both on DVT and now, obviously, in PE with that indication. And so we're not -- can you go after every single case? Of course not. Really chronic clot that's been there, that's sort of like a rock, that's not for any mechanical tool, whether it's us or anything else. But we think there are opportunities to continue to innovate to go after every single case. But the broad range of cases that present themselves with DVT right now, we believe that we will be very, very valuable. And that's the feedback we're getting from just literally, lots and lots of customers who are experiencing it. And what they like about it is really the safety element. They're not worried about blood loss, they're not worried damaging the valves. The product is sort of the right size for the right application. And that's why it's so successful right now.

Okay. That is helpful. And so on the kind of the product front, would you ever consider more of a mechanical thrombectomy from a retriever perspective in this category? Or is that not likely for you guys?

Yes, look, we're never going to exclude any form of innovation that might be valuable. That would be silly. What we believe right now is that there are ways to continue to innovate off the platform of Lightning to go after really the whole range of clot in a way that is -- we believe, is the safest way to go do it. So I'm not going to exclude that. But so far, our focus has been on doing it. And really, how do I say, sort of harnessing the power of aspiration to its fullest extent.

And then -- we're a little crunched for time, and I apologize. There's a lot of stuff flying around here this morning. But I wanted to ask you 2 last things. One is just on the stroke rehabilitation side. I know for a lot of people, it sort of seemed that this thing that's kind of interesting but sort of always out in the future, and none of us know a lot about stroke rehabilitation. And so a lot of the investment community and medical devices doesn't really have a strong basis for making a call as to whether or not you've kind of got something interesting here. But you've kind of characterized it as one of the most important things going on at the entire company. So in the sort of last kind of question here, I'd love you to address 2 things. It's just help us understand why you seem so confident in that technology, when you think is a realistic time to think about commercialization. So I'd love you to just, in the limited time we have left, to kind of hit a little bit on REAL. And then also, also sort of thinking a little bit long term, I know COVID creates some uncertainty, and there's a lot of uncertainties swirling around out there. But are you still comfortable, put COVID to the side, with those 2023 targets that you've laid out there? So those are the last 2 things I wanted to address. Just some commentary on REAL and some commentary in the long term.

Yes, well, let me start with REAL, and I know we're pressed for time, so I'll do it quickly. But you're absolutely right, I am very excited about the possibility that we have with the REAL system. Just let me sort of walk through this very quickly. If you look at our history, we started with stroke. At the time, nobody was doing anything there. We helped pioneer the idea of aspirating clot out of stroke, which obviously helped with other companies doing other techniques to really build that whole market. That's something we're proud of. We did that, obviously, also with the neuro access products. We were the first to really build purposeful neuro access products. So we really go back to sort of our roots in neuro, but that was a defined group of people, a lot that we could help. But it's still a defined group. Then we moved into peripheral where it was much larger, and you're seeing that success play out now with our ability to impact even -- help even more patients than we were able to do in neuro. And now we're moving to the REAL system, which grows upon that same view, that this is the largest group of patients that we can help that we've ever taken on. It's more than just stroke rehab. Our first initial application was for that type of patient. But it is now, and always has been planned, to be much broader. And I've talked about that. The COVID did sort of slow down the commercial rollout because patients in March were not all -- at the end of March not going into rehab facilities and clinics. And we were able to pivot and focus our time then on developing the next phase, the platform, if you will, that not only addresses patients that are being treated with therapists right next to them, which is the original system. But then telerehab, where you can work with the patient and a therapist remotely anywhere in the world and get really the same type of connected benefit that you would get if you were together. And then be able to do it individually, on your own without having a therapist being part of that experience. And that, we sort of laid out on our last call briefly. When you can do a thing then on your own, that opens up a whole myriad of other medical conditions beyond just physical rehab or stroke rehab or cardiac rehab or orthopedic rehab, all things where movement and an occupational physical therapist is relevant. But it goes into the whole world of mental health, which I think is critical, and there's a ton of science around the use of virtual reality in a number of mental health applications. Always been part of our thought, but this year has allowed us to accelerate that pretty dramatically. So in the beginning of 2021, we're going to, as I said, lay out that opportunity, both in terms of the technology, the hardware platform that we've developed, which is frankly, pretty impressive and I'm proud of, as well as all the applications that I'm alluding to and sort of the business models that go with it. So it's the largest opportunity we've ever had to impact people in terms of the number of people we can help. And really, it's now on us to execute that. And we're certainly confident we can do it, but I want to roll that out and share that with the public as soon as possible in early -- in 2021. But yes, to answer your question, I think we can do extraordinary work to help just a significant number of people. And really, if you think about the mental health issues that have come from COVID alone that you read about, I think just in that timeframe, we can have an impact with those type of issues that people are suffering from. So that's how I feel to answer your final question. And I know we're pushed on time here. We did put out at our investor conference just about a year ago today that we believed that we would be at $1 billion plus in revenue in that timeframe. I appreciate your acknowledging that 2020 is a funny year and maybe timeframe slide by a 6-month or some window because of COVID. But with that qualification, we absolutely are on track to continue to hit that expectation. And if anything, more has happened that has given us confidence to do that.

Great. Well, we're out of time. I know you have other meetings. I know there's been a lot on, but I'm sure there'll be a lot more to say on multiple topics as we go forward. So Adam, thanks for your time today. Thanks, everybody, for listening in, and that will conclude this call. Thank you very much.

Thank you. I appreciate it, Bob. Bye-bye.

Okay, thanks.

Thank you. And this call was for everyone. You may now disconnect.