TransMedics Group, Inc. (TMDX) Earnings Call Transcript & Summary

Okay. Good afternoon, everyone. My name is Allen Gong. I'm on the medical supplies and devices team here at JPMorgan. It's my pleasure to introduce Waleed Hassanein, the CEO of TransMedics. After his prepared remarks, we will have a breakout session down the hall to the left and around the corner in the Olympic room.

Thank you, Al. Good afternoon, everyone. We're very excited to be here today at JPMorgan conference. This is our safe harbor statement. TransMedics, as you may know, is in the exciting field of organ transplantation. It's a very unique field in medicine that TransMedics is leading a global revolution in for the last few years. To understand what TransMedics does and the impact of TransMedics' business on this field, I want to start by giving you a little bit of background of why transplant medicine is a unique space. It's one of the very few health care spaces where all stakeholders in the field of organ transplant actually benefit from more and better organ transplant. That's exactly what TransMedics do. So every one of those stakeholders, the patient gets the best quality of life and the longest life expectancy. The hospital. Transplant is one of the most preferable procedure. An average GRG all-in for transplant is anywhere between $600,000 and $700,000 per procedure with a 30% margin contribution. It's also the treatment of choice for these long chronic disease state. From a payer's perspective, transplant represents the most cost-effective treatment of these very expensive chronic diseases. So what are the problems in the field of transplant? For the last 40 years, transplant has been limited in number because of the very poor utilization of available donor organs. And more importantly, the limited or the limitation of what is considered as donor organ for transplant. More importantly, even within the organ transplanted today or prior to the Organ Care System introduction, the post-transplant clinical outcomes remain very challenging. To better understand the issues, for the last 40 years, transplantation has seen significant innovation in this paradigm that takes a patient from a pre-transplant condition to the post-transplant condition. We've seen the advancement in ventricular assist devices, ECMO, dialysis. On post-transplant, we've seen advancement in immunosuppressives, the procedures, the anesthetic cares and the surgical techniques. The major area in transplant that has seen 0 innovation was organ preservation, which we believe is a huge mistake and TransMedics has been in business for 20 years to transform that. So what was the historical standard of care for organ preservation prior to TransMedics? It was cold storage. A human organ will be retrieved, chilled, flushed with a crystalloid pharmaceutical solution called preservation solution and placed literally in an Igloo box filled with ice. It sounds simple. However, there are some major issues and limitations with this approach that actually limited transplantation for 4 decades. First, once you take an organ from a human body and stop their blood supply, the organ suffers from a time-dependent injury called ischemic damage. The longer the organ spends on ice, the higher the probability, not only that the organ would suffer from post-transplant complications, but also the higher the probability that the organ would never function. Two, the organ that's sitting on ice have no capabilities of optimizing, treating this organ condition whatsoever. And because the organ is not functioning, you cannot assess the organ viability for transplantation. So you're literally flying blind. Because of these 3 limitations, we have been only utilizing 2 to 3 out of every 10 available donors around the world, leaving 7 to 8 donors unutilized every year. That's an annual ratio. In the post-transplant arena, transplant complications called primary graft dysfunction, the most common and the most costly complication after an organ transplant, has been occurring at a rate of 30% to 35%. It adds significant cost and frankly, increase the risk of mortality to the patients after transplant. When you look at the overall picture of organ transplant, the demand for organ transplant has been growing, and we expect it to continue to grow, which is in the top part of that funnel. The donor supply has been relatively large. There's 19,000 annual donor after brain death or DBD donors, and there's an additional, approximately 48,000, donors called DCD donors or donor after circulatory death. That they're not being utilized and the igloo box or preservation -- cold preservation is the rate-limiting factor for the utilization of these organs, resulting in these very poor underutilization numbers of 20% to 30% of thoracic organs and 0 DCD organs being used for transplant. So all these donor pools, they're seldomly utilized for transplantation. So we believe that there is a critical link in organ preservation that's been broken until we developed the Organ Care System. To give you a magnitude of this impact of these limitations of cold storage, these are the numbers that are published for how many potential donors for each disease state that TransMedics treats today, lung transplant, heart transplant, liver transplant that go unutilized every year. On the left-hand side is the number of donors that are available, 19,000 DBD donors, donor after brain death, and 48,000 DCD doors. Of those, we only use a fraction of 4,800 lung transplant, leaving the vast majority of that pool unutilized; 14,400 DBD unutilized and 40 -- almost the vast majority of the DCD unutilized every year. The same thing for the heart, the same thing for the liver. That represents a huge significant unmet need. We developed the Organ Care System, or OCS, to transform that field, to completely revolutionize transplantation. We took all the 3 limitations of cold storage, and we've addressed them comprehensively. In the Organ Care System, the organ is never suffering from ischemic damage. Why? Because we keep the organ alive and perfuse with warm oxygenate blood. The organ is living, it's metabolically active. We can treat the organ. We can optimize its condition, but more importantly, because the organ is functioning, we can fully evaluate and assess the organ up until the minute it's ready to be transplanted. Because of these advantages of the Organ Care System, we were able to demonstrate in FDA pivotal trial that we can increase utilization rate up to 87%, almost 9 out of every 10 donor lungs can be utilized. 8.5 out of every 10 hearts have been utilized. We've also been -- we've also managed to demonstrate that we can reduce post-transplant complications from the 30%, 35%, down to 10% to 14%. These are huge advancement in medicine. This is what the Organ Care System does. You can see here the lung is breathing, the heart is beating, the liver is actually making bile and the kidney, you will see shortly making urine. The organ is not suffering from any ischemic damage, but as you see, you can fully evaluate organ function up to the minute the organ is ready to be transplanted. These are the results of our trials. EXPAND lung, we were able to demonstrate and publish in Lancet in August of 2019 that we've taken lung transplantation from a 23% utilization to 87% utilization. We've presented at the International Society of Heart & Lung Transplant (sic) [International Society of Heart And Lung Transplantation] Meeting in April of 2019, that results of the EXPAND trial where we take -- where we've taken the utilization rate in heart transplant from 32% up to 81%. And finally, with the use of our technology, we were able to develop a brand-new transplantation that didn't exist 3 years ago. It's called heart transplant from DCD donors, heart transplant from donor after circulatory death. These are donors that their heart actually stopped beating for up to 40 minutes. We were able to revive those hearts on the Organ Care System, we were able to optimize their condition, and we were able to successfully transplant them. In the United States, we've transplanted our first DCD heart transplant in December of last year, middle of December, as we sit here today, we have 10 DCD heart transplants in the U.S in 4 weeks' time. Outside of the U.S., we've transplanted more than 160 of those. This is a brand-new therapy that didn't exist before the Organ Care System. It has the potential to quadruple the number of available hearts every year. In addition to the huge amount of utilization that we've been able to drive into the system, we actually pushed the envelope even further. Historically, with cold storage given the time-dependent injury there was a limited time you can move an organ from point a to point b, which usually -- was limited to 3 to 4 hours, maybe even 6 hours in some situations. We've been -- we demonstrated that with the use of the Organ Care System, we can transplant lungs that were retrieved in Honolulu, Hawaii into Duke in North Carolina, more than 20-plus hours. This means that we can move an organ anywhere in the world to be transplanted. We estimate our TAM to be $8 billion annually for the 3 organs we have clinical and commercial products for, heart, lung and liver. The kidney is our next frontier, and that would add an additional $2.5 billion to $3 billion TAM annual addressable market. This is how our TAM is built. It's built based on the results of our trial by applying the rates of utilization achieved in our trial to the donor pool and being conservative, not estimating an organic growth in the DBD or DCD donors. One of the beauty of our business is we are not a single-organ, single-product focus. We have 3 products and many indications in each product. We have -- we're focused on the lung transplant, heart transplant and liver transplant. We've demonstrated not only we can improve utilization, but also increase or improve their post-transplant complications by significant reduction in these very costly primary graft dysfunction rates, 50% in the case of the lung, 65% in case of the heart. The liver pivotal trial was completed 6 months ahead of schedule. 300 patients were enrolled, and we're planning to file the PMA also 6 months ahead of plan, and we are going to reveal the results of this trial -- this liver trial in Q2 of 2020. But we feel very confident that given the pace of enrollment in that trial that we will be experiencing similar results in the liver transplant space. Looking at the company from a business standpoint, it's a disposable-driven business. Our business is not hardware driven. We sell the most expensive medical device disposable on planet Earth. And we're very proud of doing that. We do that because of the huge economic value of organ transplantation. So our disposable sets here is the perfusion set and perfusion module and OCS solution set. We sell that anywhere between $60,000 and $65,000 in a commercial setting and $50,000 to $55,000 in the trial setting. When you look at the market drivers and key factors in the market there are 3 verticals. There's the clinical or the clinician transplant centers and transplant surgeons; there's the organ procurement organization, these are the organization that allocate organs for transplant and manage the allocations in the United States. And then there's the government or system-wide CMS, UNOS, United Network of Organ Sharing or HHS. From a transplant-center perspective, their focus is to increase their volume, improve their outcome, drive higher revenue, improve their margin contribution, but also, there are 2 key drivers. They're measured every year by CMS based on their outcomes of their transplant institution. If they don't meet a minimum threshold for their outcomes, CMS will warn them and stop their reimbursement. The other thing they're motivated with is to achieve this coveted center of excellence contract with managed care provider like Blue Cross Blue Shield. This can all be -- these all can be addressed with the Organ Care System. From an organ procurement organization, their #1 priority is to utilize more donors, to allocate more lungs and more hearts and more livers. In 2019, there was a national mandate from the White House, from HHS. And in December, CMS issued a mandate and a new guideline that every OPO in the country will be measured by improvement in rate of utilization of organs in the United States. If they don't improve the rate of utilization, they would lose their CMS coverage. Obviously, with every allocated organ for these OPOs, they make anywhere between $30,000 to $40,000. So there is a revenue contribution to that. Finally, from a system-wide perspective, the utilization of more organs is a huge topic. You've seen this in the public domain and Wall Street Journal and Washington Post, and it's all about driving more organ transplant. Transplant is another unique aspect of transplantation -- is how ultra concentrated that market is. 50 to 55 institutions in the United States drive about 70% of the annual volume of solid organ transplantation. This is our current footprint in the U.S. And this map, it represents our footprint in heart, lung and liver transplantation. There's about 32 centers in this map that represents about 52 transplant program. For example, Mass General in Boston has an OCS lung program, an OCS heart program and an OCS liver program. So we've developed a base -- a robust base of leading, large volume academic transplant institutions in the U.S. that are using OCS heart, lung and liver today. Our commercial strategy is to leverage that base to do 3 things. One, to go deeper in these centers. The reason why our strategy is to go deep rather than wide is our width is limited, and we're already in the leading institution. So we want to build a solid foundation by leveraging this base of U.S. transplant centers to double and -- double their transplant volume, penetrate their existing numbers to be converted to OCS use. Two, for organ procurement organization using the technology and the service that TransMedics provide to increase their utilization rate of organ, shifting our strategy from a center focus, not only center focus where the actual organs are being utilized, but also going to the source of the donor organs, which is the organ procurement organization. That will dramatically improve the rate of utilization and dramatically improve the access to these donors that may not be transplanted locally any longer. Again, we've been working closely with all the national transplant initiatives in the U.S. to expand awareness of the Organ Care System impact on donor organ utilization. And also, we're in active -- we're an active partner now in any national initiative about organ transplant in the United States. From a economic standpoint, again -- and I'm not underestimating it. But really, it's an IQ test. The Organ Care System and TransMedics technology is the only technology that can increase the supply of organs, increase the revenue-generating potential of an organ transplant, while we're maximizing the margin contribution. We can improve -- we can reduce patient cost and the waiting list by making more organ transplants available. We're seeing in Europe, where the technology and access to DCD heart has preceded the U.S., that even patients now are not getting to become [ on vets ] any longer for heart transplants. Patients are being taken directly to our transplant using OCS, either a DCD or DBD donor. We expect that to -- not to be the general use in the U.S., but definitely as more organs become available, the priority will shift back again to prioritizing transplant over mechanical support. But don't believe anything I said. The fact or the proof are in the results. Because of transplantation cost effectiveness, the CMS has been reimbursing the Organ Care System at the prices we discussed earlier, even pre-FDA approval because of the huge impact on cost effectiveness on organ transplant. So what are the potential growth catalysts for us for 2020. We're excited about 2020. We had a great year in 2019. We'll be releasing the full year results in -- on March 2, but -- we have 3 verticals. Lung transplantation, we are looking forward to growing our utilization and deeper adoption in our lung transplant centers. On the heart, we have a big catalyst. And hopefully, in the first half of 2020, we will hopefully achieve FDA approval for our heart indication. And also, we have 2 active DCD program and continued access protocol that will help generate additional clinical evidence and revenue while we're waiting for the PMA to be approved. On the liver front, we have the PMA to be filed in Q2. We have the readout of our pivotal trial, also concomitant with the PMA filing. And we're launching 2 liver programs in early 2020 that will have access to an additional almost 300 patients in the U.S. that will give us a huge clinical momentum as well as revenue-generating potential. From a competitive landscape, we have been working very hard to distance ourself from any potential competitor. We don't have any commercial competitor in the U.S. We don't have any commercial competitor to speak of outside of the U.S. So we have a very, very dominant place in the market. We didn't do that overnight. We did that by design. We have the only multi-organ platform technology. There's no other technology exists that has a lung transplant, a heart transplant, liver transplant and soon-to-be kidney transplant technologies in that space. We have the depth and breadth of clinical relationship with leading transplant institutions around the globe. And we have sponsored the largest body of global clinical evidence that exceeds 1,500 transplants, and we are the only sponsor of 9 pivotal trials in the field of organ transplants with the FDA, 7 of which have already been completed and published. We are the only technology in the field of organ transplantation that have 5 Lancet publications. And at the end, we have one of the most robust, broadest patent portfolio in the indication or in the space. So we feel very humbled. We feel very confident in our position. We're not basking in our glory. We are working on continuing to dominate and lead that field for decades to come. So in summary, we look at TransMedics as a significant growth opportunity in med tech. We base that assumption on our robust TAM of $8 billion of greenfield opportunity that we built off of a paradigm shifting, first-in-class and best-in-class technology. We have developed the largest body of global clinical evidence to prove the ability of our technology to increase the supply and improve the outcome in organ transplant. We have one of the most robust pipelines for FDA approvals in the space, 2 PMAs already achieved, 1 PMA is under review, and we're filing our fourth PMA in the first half of 2020. Our business is a disposable-driven business with very high margin contribution exceeding 92%. And we have established U.S. reimbursement in all 3 indications, even though a couple of the indications have not been approved by FDA yet. So -- and as we sit here today, we have more than 1,500 clinical transplants performed all over the world. Thank you so much for your attention, and I look forward to answering some of your questions at the Q&A session. Thank you.

[ Context of response. And lastly, the mics are live for the full 25 minutes. So if you end in 20, the mics are live, conversation right outside, yes. so we've got 2 minutes before we begin. And again, this would be webcast, so we're going to stop right at 4:00. The time will start. Test. Okay. ] All right. Let's begin.4

Okay. Thank you guys for being here. Just to kind of kick it off, TransMedics was one of several med tech IPOs that really happened over the course of 2019. And I think organ transplantation is just, to me, I think, a very exciting and interesting market, but I think for a traditional med tech investor, it might be something that they're not really familiar with. So I guess, just to start off, really high level, like, let's say, I'm in New York. I'm someone looking for an organ transplant. What is the process that gets me finding a match and then gets the organ, like, to me? Like, what is that entire process like?

Sure. I'm Waleed Hassanein. I'm the President and CEO of TransMedics. Al, the process is really -- is a multifaceted approach. As a patient who is in need of an organ transplant, you need to be listed on the national waiting list for an organ transplant through your transplant center, whether in New York or in New Jersey, depending on where do you list. You can list in more than one center, but the bottom line is once a donor becomes available, whether -- historically, it's been DBD donors. The organ procurement organization in New York, historically, would match that donor availability with the national list in the region initially, and once that list is exhausted, it gets focused on the next in the list in the region. Historically, that's been the case. Until a match is found -- or if the match is not found in the local area, historically, the organ would go to waste or get selectively offered to centers that may be in New Jersey or may be in Philadelphia. There's a lot of inefficiencies in the system. But last -- 2 years ago, CMS and HHS changed all that and made it that the New York OPO would go through the list in New York, but after that, the list goes across the United States because they're trying to allocate more organs and help other patients all over the country. The problem is, until the OCS was approved for lung transplantation, you couldn't really fly a lung from New York to California because you would surpass the 3- to 4-hour limit where the lung becomes viable. So the -- and I'm sorry for being detailed, but really is a multifaceted approach that starts with listing at a transplant center, the OPO finds the donor, offers the donor to the transplant centers in the region then nationally until you match a potential recipient, and then the transplant center would send the retrieval team out to where the donor is, wherever that donor is. It could be in Oklahoma. It could be in New Jersey. It could be in Baltimore. Let's say if a patient is in Colombia Presbyterian, Columbia Presbyterian would fly a team out on a private jet to get the heart, get the lung, get the liver and fly him back on a private jet to New York City and they perform the transplant. That's how organ transplant works. It works like that in the U.S. It works like that all over the world.

Got it. And I guess just for OCS, I think you guys have a lot of things going for you when it comes to adoption over the current treatment paradigm which is ice, right? So intuitively having the heart, the lung or the liver, like, beating, alive and being able to assess is clearly an improvement over ice. And you're also really benefiting from the fact that transplant centers in the U.S. are so concentrated. So I guess, obviously, you guys are early in the commercialization process, but what's really to stop you guys from taking over the entire market? And when we think about the rate of adoption, what really is going to be the main driver of that? Is it rep hires or something else?

Okay. So we are almost confident that we are going to be the standard of care for organ transplant, lung, heart, liver and, ultimately, kidney when we introduce the kidney, but we are also confident and we're aware that this is a -- changing a paradigm in medicine is not a flip of a switch. It takes time. It takes evidence. It takes regulatory approvals. And then it takes changing culture or a 40-year history of centers doing it one way and now we're telling them to do it in a different way. But where we -- our track record speaks for itself. We know how to transition these centers. We're early in the commercialization phase. But I'd like to turn it on to my colleague, Dr. Tamer Khayal, our Chief Commercial Officer, who can give you a little bit more granular information about some of the early headwinds that we have dealt with in 2019 and just give you a flavor of what are the challenges that our team faces every day to transition that market to, ultimately, be the standard of care. And we have no doubt that we'll be the standard of care, but we have to just be patient and do the necessary work to get us there. So Tamer?

So Tamer Khayal, Chief Commercial Officer of TransMedics. So the challenges that we faced transitioning from research into commercial setting is basically 2 to 3 challenges. One is getting the infrastructure in a center to really become commercially ready infrastructure, meaning what they were used to do in the research setting is having IRBs and [ CDEs ] and specific procedures that are related to data collection and patient management and consenting. There's slightly different processes that has to be followed in a post-approval commercial setting to still follow-up on those patients because we don't want to lose any data point on any clinical case that takes place, whether research or in a commercial setting. So that's a procedure that requires different entities at a hospital to be dealt with. Two, excuse me, adding additional teams to be trained, clinical teams, surgeons, others who need to use the OCS to expand the utilization beyond the capped numbers that they used to do in a research clinical trial setting. And three, and finally, is to see the economic money flow, is to see the reimbursement, to see the DRG and the organ acquisition cost centers that we have been successfully achieving in clinical trials also continuing in commercial setting, which is the case. So utilization becomes, at that stage, another key factor for them to gain more trust in the whole process, clinical and commercial. So these were the, mainly, if I want to summarize, the 3 hurdles that we faced and were able to overcome initially.

Got it. You talked about in your presentation the difference being, like, DBD -- a question in the audience?

Yes. So really the last point, and just correct me if I'm wrong, but I think there are certain standards required to maintain your status as an organ transplant center and realize the reimbursement for these procedures. I don't know if there's [indiscernible] margins [indiscernible] like a [indiscernible] transplant center [indiscernible]. And so is there something as it relates to improving [indiscernible] growing appropriately and if there is any added risk to converting to OCS? Is there anything in that learning in this last 12-month period that's worth sharing that would suggest that we are moving through this period of adding accounts understand how to adopt more appropriately?

Sure. So the question was to really, what are the learnings in the last 12 months relating to internal center dynamic as it relates to the economics and the money flow and the reimbursement to help us? Yes. So small correction, transplantation is a 30% margin on a $600,000 to $700,000 all-in DRG, an organ acquisition budget that covers the patient for the first 90 days. So 30% margin at that revenue is a substantial profit for these institutions. In fact, many of the large centers, they would tell you that transplantation finances a couple of other departments at that institution. So that's one correction. But yes, there's a lot that we've learned in the last 12 months that -- the most important one is there's a big difference between a center that has used the OCS through the trial where we actually were charging them $50,000 or $55,000 per procedure, and they've already gone through the billing cycle, they've already proven that CMS is paying them back and that commercial payers are paying them back, for a brand-new center that's coming in, wanting to adopt the technology and the surgeons are -- believe in the clinical value, believe in the clinical outcomes, they've read the manuscripts, they want to replicate that success, and now we have to deal with the hospital -- the transplant VP or administrator to show them how the money flow would work. And it's a little bit of an inertia. It takes about 30 days for them to reference the mechanism. We have 2 people in our organization that are focusing on teaching them how to bill, how to manage the transplant administration piece of it and to release the first stocking order, which is usually 5 perfusion module. So it's about $300,000 to $400,000 that they're concerned that -- are we going to get it back? Are we going to be able to get reimbursed for that? And we've developed a mechanism, a system by which we are shortening that discussion. It started at 90 days and we're now down to about 2.5 weeks to get the VPs to understand that money flow by referencing it. And also, we've added a VP level in Tamer's organization that actually managed 2 of the largest transplant programs in the U.S., in Duke and in UPenn, she's now our VP of Transplant Administration, that facilitates the discussion. And the other thing that we've seen towards the end of the year compared to the beginning of the year is -- now when we started, we started from 0 commercial centers. We ended with 18. And then we've added on top of that another 15 heart centers and 20 liver centers that -- even though they're not commercial yet, but they've been billing for those, yes. So we ended up with about 52 programs that know how to bill for the OCS. They know what the economic value of the OCS is. So we're bullish that, that foundation into 2020 and the learnings from that is going to help smoothen the headwind into 2020 as far as eliminating that economic sort of headwind that we had to deal with in 2019.

And just to follow on that point, is there any variance in the billing process if I was doing heart versus lung versus liver?

No. The question is, is there a variance between the billing process between the 3 transplant markets? The answer is no. Actually, one of the unique things that I didn't touch upon during my presentation strongly is everything we talk about -- we're talking about as revenue and billing comes from a specific budget called the organ acquisition cost center. That is applicable on all transplants in the United States. And that is applied for lung, heart and liver. The mechanisms are the same. Even the mechanism between CMS and commercial payers, identical. So that's the same across the whole organs.

To expand on what Waleed said, this is Tamer Khayal again. So -- and addressing your question further, the reimbursement procedures and processes has been successful for the OCS in the trial setting, and similar success, the same exact success that we're used to in the commercial setting. There's no surprises, if you want to ask the question.

You just have to convince a brand-new center that actually it's going to work the way we told them it's going to work.

That's all.

Any other questions?

So you're -- the way that you look at the opportunity is from the supply -- by the supply constraint. Can you refresh us on the demand? Like, are there really -- you got all 67,000 patients. Are there 67,000 people who need hearts and liver -- what's the demand side?

Sure. The question is, what does the demand look like if we can 10x increase the supply? This is Waleed Hassanein again. The demand will far exceed our ability to meet the supply. For example, on heart failure alone, there's about 100 -- 110,000 patients diagnosed with Stage IV heart failure every year in the United States. There's 1 million people with COPD, chronic obstructive lung disease, which is 1 out of 4 major indications for lung transplant.

What was that number?

There's 110,000 new cases of Class 4 heart failure patients, these are the patients that would need a heart transplant, diagnosed every year in addition to the core base of probably 250,000 heart failure patients that exists in the U.S. Lung -- for lung transplant, there's 1 million COPD patients in the U.S. There's 650 between cirrhosis, liver cirrhosis, NASH -- 650,000 between liver cirrhosis, NASH and hep C patients that would benefit from a liver transplant. So the short answer is the demand is huge. We're fixing the supply and we're keeping our eye on what else can we do or what else can happen to increase the supply because the demand, as we know it today, just based on the number of DBD and DCD donors, we can tenfold increase the supply and there will be more demand that we will now going to be able to meet.

A question so you don't have to repeat it again. How quickly can you establish new centers, train them and give them all the equipment? Because this is probably the most exciting technology I've heard in this conference by far. You can have a bigger impact in medical care than many other companies put together. This is very exciting. Just by -- how quickly can you move? There's, what, less than 100 transplantation centers in the United States. There are 7 in England. There are probably about 15, 18 in Germany. There aren't that many. How quickly can you move adoption of the technology?

Sure. So that's an excellent question. Our -- we know every center you mentioned in the U.K. They're users of our technology. Same in Germany, same in France, same in Belgium. The issue in -- outside of the U.S. is about establishing reimbursement. So we're approved in Europe and we are commercial in Europe, but the driver of our growth near-term is U.S.-based. So how quickly can we ramp up in the U.S.? As we discussed earlier, 2019 is our first year as a commercial company. We've gained FDA approval for the lung indication, the bigger indication in June of 2019. And we're -- we've grown from 0 to 18 commercial sites. These are 18 out of the top 25 centers by volume. So I think we're getting there. If you were at the presentation, I think you were at the presentation, you saw the map. So we've established a foothold, footprint in about 52 major transplant institution across the 3 organs, lung, heart and liver. And we -- that's...

Halfway there?

It's -- yes, it's halfway there. Now, 2020 and beyond is about driving deeper into these accounts, driving deeper in their existing volume, taking market share from the existing volume, but more importantly for us and more exciting for us is increasing their transplant volume, yes. And just to give you one example, one of the big transplant centers have increased their heart transplant last year from 70 to 93 in '19, only on OCS. We're seeing the same thing in lung transplantation. And in liver, we will announce the trial results hopefully in Q2, and we're seeing that kind of momentum. So we're just getting started, but we feel that we have a very good footprint that will give us a sort of a catalyst for growth into 2020 and beyond.

Can you talk -- just to continue on the commercial piece, can you talk about the centers that are already in your clinical trials in each case? Those ones you don't have to train except for the commercial side? And then can you just talk more broadly about the commercial organization? How many salespeople? How many folks in the reimbursement side? How many reps? Just what's the footprint look like, et cetera [indiscernible]?

Do you want to address that?

Sure. Yes, sure. So trials that are with -- this is Tamer Khayal again. Trials that -- centers that were in the clinical trials, at this stage, commercially, as we discussed, require expansion of training to additional team members. And we've been doing this and we're doing it to allow them to use the product more, allow more trained users to be available since this is an on-call status. This is not a scheduled procedure. So they have to have enough resources ready 24/7. So that's one of the challenges we've been addressing since the trial initiation. From a commercial organization standpoint, we have a total of 30 heads in my team. And those 30 heads are the ones that establish the clinical support model to all of these centers, establish the clinical data that has been published to date and granted us the FDA approvals to date, and they're the ones who continue to drive the success of the clinical outcomes of our product. And that's the basis really for our continued selling cycle. So for a center to reorder and to see the benefits in their own hands, you have to have good clinical outcome. So our selling process is really done by clinical specialists and directors who've been with the company for an average, 7 to 9 to 14 years, dealing with the same customer base, whether in research or commercial setting. We've augmented the team with 2 VPs of reimbursement who are working just on the economical value and the billing cycles with centers, and we also augmented the team with 2 very senior regional heads for just pure sales to drive the sales from a sales perspective.

This is Waleed Hassanein. Just to add to what Tamer said, this is an ultra-concentrated market. This is not a business that's going to drain a lot of our margins into sales organization. The pure sales reps represent a small, almost a micro-level part of our call points. Our call points get only moved by clinical data. So we need people that can articulate the clinical value, the clinical data, be there and tell the surgeon, "No, you did it wrong. You should have done -- you should have increased the flow rather than dropped the flow." And then you build that trust. And then the next transplant, they're calling that person saying, "Joe, what should I do here?" And that's what we're seeing, and that's what's exciting and driving the momentum.

How many of these centers are [indiscernible] clinicals for lung, liver, heart?

So out of the 18 commercial centers, 8 were in the clinical trial. So we've added 10 new centers since the PMA approved.

That's for lung only.

That's for lung. For the heart, we have 15 centers that are in the trial, and we expect them to convert to commercial. In the liver, we have 20 centers in the trial.

I don't want to go through...

No. The -- I think the earlier question about what we learned from 2019 that we can extrapolate into 2020. One of the things that added time for the lung launch is we had this hiatus between completion of the trial and converting clinical centers into commercial centers. They were not using the technology. So even though they were a part of our trial, and they're 8, and we're proud of them, they really were starting from scratch because they had forgotten a lot of what they'd been trained on. We've learned from that a lot. And since then, all of our programs have now had a continued access protocol or a smaller single-arm IDEs to keep the clinical momentum going, to keep the clinical knowledge base going while the PMAs are under review. So the heart PMA is under review right now. And we have 15 centers that are driving the DCD trial and the continued access protocol, so they can continue to build their clinical knowledge base. And we believe that's going to help accelerate our growth into 2020, converting those 15 centers to commercial centers after the PMA is achieved.

Two questions. If I center to your point that billing's the same, training [ isn't ] different, but what's the reason why a center that was doing -- is doing in a heart trial -- let's just say a heart trial, what -- if they haven't seen the billing from it, why are they not using lung? If that protocol is similar internally and billing is similar, after they learn how to use the lung OCS tools, but what's the hurdle? And then the second part of that would be you've -- I've seen commentary about creating a service model. Is that somehow -- is that a way do you short circuit this whole process and kind of facilitate adoption because you're taking over that responsibility of sustaining the organ on the system and just providing all the necessary delivery tools?

Sure. So the first question was, how can we leverage the multi-organ platform in the same institution if they're doing heart, lung and liver? And the second part of that is the commentary on service model, and why are we doing it? Or what is the benefit of doing the service model? So the first part of the question. We're absolutely leveraging the 3-headed monster that we have between lung, heart and liver. The majority of our institutions, I would say, a growing number of our institutions are using the 3 organs: heart, lung and liver. We always enter an institution through one indication. If it's lung transplant, prove the concept, show them the results. Next thing you know, we know that the next -- the low-hanging fruit will be the heart because they're very close to each other. They see the results in the same ICU. Then the third would be the liver. And because we have a big footprint in the liver, we're almost confident that when we have the kidney transplant product, that, that will transition right away quicker. The last part is -- the second part of the question, service model is exactly -- will give us ability to do 2 things: One, fill in the gaps when centers' internal resources are not catching up with the clinical adoption and the demand and smoothen that curve; and two, really long-term, as we really open up the supply and establishing relationship with OPOs so we can truly drive the supply, we're not relying on a local center to bring their people. We can retrieve as many lungs from New York, ship them to California, Boston, Washington, what have you, on OCS 2 centers that know what the OCS does. They trust in the team that we have that manage these lungs and they can transplant them without taxing that institution of sending a private jet to New York to get the organ and come back. So it facilitates the adoption. But also it generates more revenue for us, which is now an additional revenue-generating called perfusion services, in addition to the technology revenue model.

With that, thank you, ladies and gentlemen. Our time is up.

Thank you. Sorry about that.