Axonics Modulation Technologies' (AXNX) CEO Ray Cohen on Q1 2019 Results - Earnings Call Transcript

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About: Axonics Modulation Technologies, Inc. (AXNX)
by: SA Transcripts
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Earning Call Audio

Axonics Modulation Technologies, Inc. (NASDAQ:AXNX) Q1 2019 Earnings Conference Call May 8, 2019 4:30 PM ET

Company Participants

Jill Bertotti – W2O Group

Ray Cohen – Chief Executive Officer

Dan Dearen – President and Chief Financial Officer

Conference Call Participants

Travis Steed – Bank of America

David Lewis – Morgan Stanley

Bruce Nudell – SunTrust

Operator

Good afternoon, ladies and gentlemen, and welcome to the Axonics First Quarter 2019 Results Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Ms. Jill Bertotti from W2O Group. The floor is yours.

Jill Bertotti

Thank you, and thanks, everyone, for joining the Axonics' quarterly results and update call. Joining me on the call from Axonics this afternoon are Ray Cohen, Chief Executive Officer; and Dan Dearen, President and Chief Financial Officer. Ray and Dan will provide prepared remarks and commentary on the first quarter financial results, FDA status, U.S. commercial preparedness and a general business update followed by a question-and-answer session.

Before we begin, I'd like to remind listeners that statements made on this conference call that relate to future plans, events, prospects or performance are forward-looking statements as defined under Private Securities Litigation Reform Act of 1995. While these forward-looking statements are based on the management's current expectations and beliefs, these statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause results to differ materially from the expectations expressed in the conference call, including the risks and uncertainties disclosed in Axonics' filings with the Securities and Exchange Commission, all of which are available online at www.sec.gov. Listeners are cautioned not only to place undue reliance on these forward-looking statements, which speak only as of today's date, May 8, 2019. Except as required by law, Axonics undertakes no obligation to update or revise any forward-looking statements to reflect new information, circumstances or unanticipated events that may arise.

With that, I'd like to now turn the call over to Ray Cohen for his remarks. Ray, good afternoon.

Ray Cohen

Thanks, Jill, and thank you to everyone who's dialing in for today's call or who may listen to the webcast. Since our last call in March, Axonics has made significant progress and continues to move forward with velocity. Most importantly, we've engaged with the FDA on an interactive basis virtually every week to ensure there are no open items that would interfere with our ability to gain PMA approval. And this is for all urinary and bowel clinical applications, along with full-body MRI approval within the second half of 2019.

We've enhanced our Board of Directors with two additional independent members, Ms. Jane Kiernan and Dr. Nancy Snyderman, both who have experience as public company directors and more over, are active advocates in women's health. We've doubled the revenue of our international business in England, The Netherlands and Canada from Q4 of 2018, and we have continued momentum into Q2 of 2019 on the basis of: a, our full-body MRI labeling in Europe; and the exceptional benefits of our small long-lived implantable Sacral Neuromodulation implant.

And we continue to build out our U.S. sales and marketing team in preparation for our U.S. launch. So I'll provide a complete update on these initiatives on today's call but first, similar to our last conference call, Dan Dearen, our President and CFO, will start by reviewing our Q1 financial results. Dan?

Dan Dearen

Thank you, Ray. For the first quarter of 2019, we reported net revenue of approximately $1.1 million compared to no revenue in the first quarter of 2018 and $494,000 in the fourth quarter of 2018. Net revenue for the first quarter of 2019 was derived primarily from sale of our r-SNM systems to customers in England, The Netherlands and Canada. Gross profit for the first quarter of 2019 was $529,000, representing a gross margin of 49.2%. That figure will likely move around this year as processes to ramp manufacturing are implemented and we, of course, anticipate increases in gross margin commensurate with volumes and scale, but were pleased with the range we're realizing at this level of sales. Total operating expenses for the first quarter of 2019 were $14.1 million, which is an increase of $7.6 million compared to the same period in 2018.

The increase in operating expense was driven primarily by increases in personnel costs, particularly the build-out of the U.S. commercial sales and marketing teams and costs associated with operating as a public company. As we mentioned last quarter and in today's news release, the company has accelerated a number of programs that are now tracking to an earlier completion date than initially planned. I would point out particularly the key areas of hiring the U.S. commercial team and additional hiring in support of manufacturing. We are committed to being ready for U.S. commercial launch, and our strategy is to have the U.S. sales team and product inventory on hand ahead of the launch date.

These are costs that would have been necessary regardless of the actual PMA clearance date. Consequently, the sales and marketing expenses, combined with the operational costs mentioned earlier will cause our operating expenses to increase steadily from the Q1 level throughout 2019. Operating losses for the first quarter of 2019 were $13.6 million as compared to operating losses of $6.5 million in the first quarter of 2018 driven by the same factors. Cash, cash equivalents and short-term investments on the balance sheet were approximately $144 million as of March 31, 2019.

And I'll now turn the call back over to Ray.

Ray Cohen

Great. Thanks, Dan. Our Q4 revenue – excuse me, our Q1 revenue of approximately $1.1 million represents momentum following the launch in late 2018 of our Sacral Neuromodulation system in England, The Netherlands and in one center in Canada, and this has all been driven by a small but rather experienced 4-person sales team. Commercial feedback from physicians and patients in the aforementioned markets have been very positive, confirming our belief that based on the unique features of our system, we will continue to drive measurable market share gains in these markets during 2019.

We're benefiting from a positive MedTech innovation briefing issued on our product by the U.K.'s influential National Institute for Health and Care Excellence, or NICE, as it is commonly referred to, and this occurred in December 2018. And then of course, the fact that our product is the only Sacral Neuromodulation device with full-body MRI labeling, which I have stated previously, avoids the need for the implanted neurostimulator to be explanted from patients that require an MRI scan to assess an injury in any part of the body. Overall, Q1 momentum has continued into April and the early part of May.

We believe the rapid penetration into these three relatively small international markets is indicative of our potential to rapidly gain measurable share in the U.S. upon FDA approval. This week, an expert working group within the NICE organization called the Guidance Selection Panel, informed us that they had selected the Axonics rechargeable Sacral Neuromodulation System for publication of a Medical Technology Guidance or the acronym, MTG. This means that we will be working with the experts from NICE who will be assessing the clinical effectiveness and cost-saving potential of our product in some good detail, with the goal to reach a recommendation for the use of the Axonics system within all NHS hospitals over the Medtronic InterStim II system.

We were informed that these MTG projects typically take about nine months to be completed, so we can envision publication in early 2020. Clearly, the result of our 19-center ARTISAN-SNM clinical study data was instrumental in making this happen. With respect to our penetration in Europe, in addition to the one hospital in Northern Germany and one hospital in Western Canada, we now have 19 hospitals in England and four hospitals in The Netherlands implanting the Axonics Sacral Neuromodulation systems.

For perspective, we believe that there are 24 hospitals in England and six hospitals in The Netherlands practicing Sacral Neuromodulation at this time. Whilst there are no exact numbers published, based on specific information from the hospitals themselves, we estimate that there are approximately 1,200 Sacral Neuromodulation implants, including replacements in the whole of the United Kingdom each year, of which approximately 800 are de novo implants for new patients.

So if one considers England only, not including Scotland, Wales, Ireland and Northern Ireland, markets that we have yet to enter, it is estimated that the NHS hospitals in England account for approximately 650 de novo Sacral Neuromodulation implants per year or approximately 165 per quarter. And based on our Q1 system sales of 50 systems in England, this gives us, on a conservative basis, a Q1 market share of de novo implants of approximately 25% to 30%.

In The Netherlands, where it is estimated that it is a 200, 250 to 300-unit annual de novo market, based on our Q1 sales, we estimate a market share of approximately 30% to 35%. As you can imagine, we are quite pleased with these early results accomplished over a relatively short period of time. Now, we are crystal clear that the price is the U.S. market, which represents as much as 90% of the overall volume in Sacral Neuromodulation and we've now – however, we do now plan to expand our footprint in Europe during 2019 and into 2020 based on this encouraging start.

Okay. So moving on from Europe now to talk about our regulatory status in the United States, which of course is the primary interest to all shareholders. As our shareholders know, gaining FDA approval is the single most important objective for Axonics and as such, we are continuing down the current PMA path in order to obtain U.S. marketing approval in the shortest possible time frame. As a reminder, let me begin by reviewing some of the filing histories since we filed several supplements or amendments to our PMA originally submitted and accepted by the FDA on December 10, 2018.

In early January, we submitted an amendment containing interim data from the ARTISAN-SNM pivotal study. In addition, following an early January 2019 in-person meeting with our reviewers at FDA, we filed an amendment containing complete testing data to support our full-body 1.5 Tesla MRI labeling for the implantable components of the r-SNM system. Then on February 21, we also filed an amendment containing the full six-month data set from the 129-patient ARTISAN-SNM pivotal study.

So since our last call, we have been working closely with the FDA on an interactive basis, promptly answering any and all questions they might have provided us. Based on our discussions with the agency and as previously disclosed in March, we are continuing with the PMA path supported by our clinical data in lieu of filing a separate traditional PMA. The additional good news that we have to share today is that based on feedback from the FDA, there will be no formal, 90-day substantive review letter issued to Axonics because at this moment, there are no outstanding deficiencies.

Accordingly, the 100-day meeting with the FDA regarding the PMA filing for the urinary indication has been canceled since there are no outstanding deficiencies to discuss. During the week of April 29, the FDA also conducted a detailed pre-PMA audit and inspection of Axonics and our facilities.

This inspection was necessary given we have added manufacturing at our new 26,000 square-foot facility at Irvine. The inspection was conducted over a 4-day period and included all relevant areas that are required for a medical device company with a Class III active implantable device including, but not limited to, our quality system, complaints, campus, design controls and manufacturing.

I'm proud to report that we completed the audit with no 483s and 0 observations. I should also add that this is the second pre-PMA inspections we've had. We were inspected once before, and there were no observations in that inspection either. This is a great result, and it's only possible with an experienced team of professionals, and it's equally testament to our team's commitment to quality in really everything that we do.

On a separate note, the PMA we filed during the first week of March 2019 regarding the fecal incontinence indication is also going quite well and moving quickly. We are unaware of any deficiencies, and the review has been interactive. We believe this review will be done quickly and ideally, this additional indication would be approved in late – or some time in 2019 in the second half, allowing us to market all Sacral Neuromodulation clinical indications at the same time.

Moreover, we believe that the technical portion of the review with the agency is almost complete and that we will now be entering the phase whereby the focus shifts to labeling and the summary of safety and effectiveness, which is labeling. The timing of approval is now 100% dependent on when the FDA completes their work, a time frame in which or by which Axonics had no control.

Having said that, we continue to believe that the FDA approval will come during the second half of 2019. So moving to the next big topic, which is the U.S. launch, and hiring and training of our U.S. commercial team. Since the IPO in Q4 of 2018 in our last call in March, we've made excellent progress in achieving commercial readiness with the goal of hitting the ground with velocity in the U.S. market.

As previously discussed, we are focused on building an exceptionally talented sales organization and again, this is about quality, not necessarily quantity. We've completed two rounds of hiring and training during the first part of January and then again in March, and our next group starts in June. So before the 4th of July holiday, in addition to our 11 regional sales managers, we fully expect to have between 85 and 90 sales professionals and approximately 30 clinical specialists hired and fully trained, strategically mapped to and located where current high volume implanters are practicing in the United States. We continue to pick and choose among high-caliber professionals.

And to date, we have still not paid any recruiting fees. Now we would not be able to accomplish this result without the support of our legacy and new shareholders. We have been entrusted with the luxury of time and the funding to invest in our people to ensure that our U.S. commercial team is expert in everything there is to know about Sacral Neuromodulation and of course, our product. This includes being confident at supporting cases in the OR, interacting with patients and programming the implanted device for exceptional therapeutic outcomes.

So outside of the sales organization, as Dan covered in his remarks, we are also ramping up the inventory and enhancing manufacturing and product assurance capabilities to support our goal of gaining market leadership in Sacral Neuromodulation. Dan and I also are looking forward to May 15 and May 22 and 23 when we will be presenting at the BofA Healthcare Conference and then the USB – the UBS, apologies, Healthcare Conference in Las Vegas and New York City, respectively, and meeting with institutional fund managers on a one-on-one basis.

We also look forward to seeing shareholders for our first public company annual shareholders' meeting slated for August 19, at which time we plan to actually provide a detailed presentation of our progress. In an effort to create an in-person attendance, the meeting will be held at the NASDAQ offices in Times Square in New York City. So in closing, we're making excellent progress on gaining FDA approval and our other strategic initiatives. We're confident about the future prospects for Axonics, and we are working diligently every day to fulfill our vision.

So at this time, we're happy to answer any questions that folks may have, and we'll come back to the operator for whoever might be in the queue to start.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from the line of Robert Hopkins from Bank of America. Robert you are now live.

Travis Steed

Hi, this is Travis Steed on for Bob. It sounds like the decision with the FDA [indiscernible] with their hands now. You have the six-month data, and it looks great. I guess the main question I have is, is it possible that they could decide at any point, like would they come tomorrow or is that – whether anything that would keep the FDA from making this decision a little earlier than expected?

Ray Cohen

So thanks, Travis. Look, we're – this is very difficult for management to opine on when the FDA is going to wrap up their work. This is an organization that obviously requires a lot of internal memorandums and a lot of paperwork before they issue a determination for PMA. So it's really difficult for us to – as much as we would like to be able to say, well, it should come exactly on this day.

It's just difficult for us to say. Where there's no reason that they couldn't opine earlier, and we just are doing everything we can to make sure that there's no open issues and whatever questions they have, we answer immediately. So we're optimistic and but we need to stick with the notion that it's going to happen in the second half of this year. Obviously, we prefer earlier than later, but that's really as much as we could say.

Travis Steed

And are they kind of getting feedback in updating you if they're going through the process on a weekly basis? What's your interaction between the FDA kind of week-to-week? And then in terms of the different approvals you have in different indications, do you expect that to come at once? Or how do you think about the timing for the different indications of the MRI label?

Ray Cohen

Sure. Sure. So we can make a few definitive comments. First of all, we fully expect and actually have received direct feedback from the FDA that the full-body MRI labeling will come with approval. So we're done with any questions and back and forth on that. So that's – we can check that box. We're really optimistic about the fecal incontinence PMA that we filed because it's moving very, very quickly. Now if we ran some numbers in terms of the clock, it would suggest that if you did a true 180 days from the date that we filed, which was early March, if my math is correct, it's something like October. There is a possibility they may line these two approvals up together, which obviously would be our preference. And there was an initial question, Dan, that he asked.

Dan Dearen

I don't know...

Ray Cohen

Travis, did I cover all of them?

Travis Steed

That was just – the feedback?

Ray Cohen

Oh, the interaction. Yes, yes, the interaction. Yes, yes, so look, as I've said in my remarks, I mean, we have interactively been in communication with the FDA literally since the beginning of the year, including the in-person meeting that we had in early January and subsequently, there is literally been weekly interaction with the FDA where we answered a number of questions along the way about this, that or the other thing.

And at this point, we're confident that the technical review is fundamentally over and that the questions that we're getting now are more geared towards labeling than they are towards anything that might deal with the product itself. So we feel really good about where we are in the process and the banter, if you may, or the review that has gone on has been very interactive.

And so we're pleased with the notion that they have chosen, instead of writing letters to the company and identifying a deficiency in an official letter, it's been informal conversations or – no, let me take that back, there's nothing informal about a conversation with the FDA, but they have been interactive conversations via email or on the telephone with the review team with the agency.

Travis Steed

On the labeling, is there anything different than your expectations there? Is anything on the label that could potentially surprise once the FDA approves that. And then I'll jump back in queue. Thank you.

Ray Cohen

The only surprise that we might see or announce would be positive.

Operator

Your next question comes from the line of David Lewis from Morgan Stanley. David you are now live.

David Lewis

Great, thanks, thanks so much. Just a couple of questions for me. Ray, I think, the FBI dynamics have been pretty much assonant, but I think there's a perception here over the last six months or so that there's an increasing scrutiny in sort of women's health related devices tied to various inquiries of breast and surgical marketplaces, most recently vaginal prolapse, something more kind of tied to the genital area.

Your discussions with the FDA, questions around safety or efficacy or concerns about broader class effect or approval of women's health devices, anything interactions with the agency that would suggest that, that is a concern? Or have we – or should we assume at this point that safety and efficacy issues have been largely been asked and answered with the agency?

Ray Cohen

I would – in the most efficient use of words, I would say it's the latter and that safety and efficacy issues have been addressed and that we have – there's two things here, I think, which are important to point out, David. One, this Sacral Neuromodulation has a 20-year history of safety and efficacy, and we can give a nod to Medtronic for that, right? So this is not a new therapy.

We didn't change the therapy. We have done a lot to improve on the embodiment and that showed up, of course, in exceptional clinical results. And the other thing I want to add is that we have been working with the agency now since 2017. So in the beginning of 2017, when we first filed over 20,000 pages of data with them for the ID approval. So I would suggest to you that we have had a really long history of working with the agency now, and they have had the opportunity to review our technical file numerous times. And the other point, I think, just to put a finer point on it. I mean we just completed, right, a 129-patient pivotal study that was ran in 19 centers around the world, 14 centers in the United States, 129 patients were implanted, and we have not one device-related significant adverse event.

So I would suggest to you whether it was in our RELAX-OAB study in Europe that we did in 2016 or the recent study we concluded, we have a perfect safety record, and we have been selling product commercially now as well and doing case series around the world, and we've got a rock-solid product. So I understand your question. I appreciate the question, but there has been no indication whatsoever that the agency is increasing any scrutiny with respect to Axonics and our filing.

David Lewis

Okay. Great. Very clear. Second question is I know you gave some nice numbers in terms of where you think your penetration is in certain ex-U. S. geographies. Would it be more helpful for people if you get a sense of on a per account or per customer basis, kind of what trends are you seeing? I know we don't have a significant end here, but are we seeing average 25% penetration? Or are we seeing more elevated rates of conversion where the accounts that you're actually targeting, those conversion rates or perhaps, the majority of that kind of business, 50%, 60%, 70%. So on a per account basis, if you could help us frame kind of how the commercial process is going, that would be super helpful at all. And I'll jump back in queue. Thank You.

Ray Cohen

Thanks, David. I finished the question, I think, it's one that is only going to be able to answered with more time. Just as a reminder, in England, and I am making a distinction between England and the U.K. these days, we've only – we only started to ship there in November. So we're reporting November, December and three months in 2019.

So we've had a five-month period of time. So a lot of these accounts, of course, as you might imagine, based on just the increase in the volume, have occurred in the first quarter of this year. So in that market, a lot of folks are just getting started. Now we have, of the hospitals that we have penetrated, we have had a number of them reordering. Things are a little slower in U.K. in terms of getting patients implanted, they are, let's say, in the United States, just a function of working in a capitated environment.

But what we are seeing is that once physicians get their hands on our product and get it implanted in patients, the patients are doing quite well and they're highly motivated to reorder again and to do more implants. And having said that, there are a number of accounts that within just that period of time that we have been able to penetrate that we're getting close to 100% of their business.

So this is not going to be about, "Oh, we're going to go in and we're going to open up an account, and they're going to dabble with our product." That is not what's going on and that's not what we anticipate. I'm sure this is not great news if you're working for Medtronic at the moment, but those are the facts on the ground. Now we need just more time to be able to illustrate with factual numbers and really answer your question in a more robust way, but I can tell you directionally, we feel really good about what's happening, and the feedback has been quite excellent on the product.

David Lewis

Okay. Thanks for that very clear.

Ray Cohen

Thanks David

Operator

Your next question comes from the line of Larry Biegelsen from Wells Fargo. Larry you are now live.

Unidentified Analyst

Hi, this is Sharon on for Larry. Thank you for taking the question. I guess, the first one is on the commentary about the 25% of the market in England and 30% in Netherlands of new patients implant in Q1. Can you tell me what the exit rate was in each of those geographies? And then can you provide more color for April?

Ray Cohen

So I don't know what exit rate means.

Unidentified Analyst

Well, so the 25% and the 30%, I'm assuming it's an average for what you did in the quarter. I was just wondering, how did you exit? What was it in the last month of the quarter? And then how did you track, as well as if you provide some color there?

Ray Cohen

So we're – as a public company, we're living quarter-to-quarter. We don't make a lot of distinction between what came in, in January and what came in, in March. So I'm just giving you the numbers for the quarter. And what I would tell you that April has been or April was a very strong month, and it's – everything that we're talking about here is really early. I just want to remind folks that we started to ship in November of 2018. This is – we're reporting – this is like early returns of an election that we're reporting. And as time goes on, we'll have more granularity that we can share.

Unidentified Analyst

Okay. Fair enough. And then, you indicated that these rates were a good proxy for the U.S., and I was wondering if you could shed more light in your thinking there. Do you think you can gain that type of penetration or share in the U.S. that quickly, if you can help us there, it will be great.

Ray Cohen

Well, let's just start by saying we're comfortable with the forecast that we've seen from the analyst community for 2020. It would be irresponsible for management to opine on what we think can happen in the U.S. in terms of market share at this time. Let us get FDA approval. Let us launch the product. Let us get a quarter under our belt and then we'll be as detailed as we possibly can about what's happening in the penetration. We're – I think it's clear from my remarks and from the numbers that we put on the board in a short period of time.

We're pretty bullish about our opportunity that we have with this product and the interest level in the product. So we're doing everything we can to be fully prepared and get our staff and U.S. commercial team trained up, and I would suggest that we are we'll be launching the product with a small army of highly trained individuals. So clearly, we are very optimistic about our potential to gain market share.

Unidentified Analyst

Got it. And if I could squeeze just one last one in. You did indicate that the FDA informed you that there will be no 90-day substantive review letter, and the review was substantially completed at this point. I'm just wondering, I guess, I'm just following up on another question, what is the earliest possible time line do you think you could get approval in the U.S?

Ray Cohen

It's a huge hypothetical question you're asking me, and there's really no real definitive answer that I can give you. On a hypothetical basis, it could be tomorrow and then again, it could be at the end of 2019. And anywhere in between, we would consider ourselves winners.

Unidentified Analyst

Okay fair enough. Thank you very much.

Ray Cohen

Thank you.

Operator

[Operator Instructions] Your next question comes from the line of Bruce Nudell from SunTrust. Bruce your line is now live.

Bruce Nudell

Thanks so much. Good afternoon Ray and thanks for taking the question. Just in terms of your sales force build, I think it's 85 to 90 professionals ready to go on day 1, and it sounds like it's going to have the MRI label. What percent of U.S. volume are you covering with that size of sales force?

Ray Cohen

So thanks, Bruce. I appreciate the question. So we are going to cover 100% of all active implanting physicians in the United States. Just to remind people, we've talked about this a number of times and have had it in print. There are approximately 850 physicians in the United States or centers in the United States that are doing approximately 75% of all the implants. If you break that down and just let's loosely say, we've got 100 people on the ground, right, and that's what we're talking about, 1,000 centers or 1,000 physicians to call on, that's 10 per salesperson. So Axonics representatives within a period of literally 10 working days will be in virtually every single account that matters in the United States.

Bruce Nudell

And I guess, I mean, NICE sounds like it's going to be doing the argument for you in Europe, but to what – could you just qualitatively speak to how self-evident will it be to clinicians that saving two replacement cases over 15 years and having full-body MRI on day one are very strongly in the patient's interest and that even though they may thoroughly familiar with the device, that it's something that they should really consider in terms of patient benefit.

Ray Cohen

Yes. Sure. Thanks, Bruce. It's a good question. I just think that there are so many things, and I'll just start with, this is a device, which has been qualified, validated and approved in all these regulatory jurisdictions around the world. And by the way, this has also been reviewed by the FDA.

And so this minimum 15-year life is a minimum 15-year life. In other words, it doesn't mean it's an open-ended statement or open-ended label to that extent. So the device could last longer. And if there is a good implant, then there's no reason why the device could not last longer than 15 years so, whether that's 20 or 22 or 24 years. So I think this notion that, "Oh, it's only going to save two surgeries." It's a bit of a misnomer.

And one needs to keep – take into account that some, it's a 3- to 5-year replacement cycle with the Medtronic InterStim II. So some patients are going to be on the short end of that stick. So there is a distinction, a very big distinction between our long-lived device and their device which needs to get replaced. That's number one. The fact that our device is significantly smaller, it's U.S. B size as compared to a pacemaker, that's a big deal. That's a big deal for patients.

The fact that we have a crude amounts in our system and the patient remote that is ridiculously easy to use, that's a big deal. The fact that we generated robust clinical data with efficacy that heretofore has not been seen. I mean, we're talking about 90% of all implanted subjects. That is a significant differential over what the legacy product has yielded. So I think it's not just about the embodiment or the size of the long life or the ease of use, but I also think that the clinical data plays greatly into this.

That gives people lot of confidence. And then you throw on, on the top of that, the fact that our device is – can – it's full-body MRI. It doesn't need to be explanted and by the way, I should add, that we are, conditional approval is for standard conditions." So even the folks, the MRI technician or people down the radiology area, they don't need to do anything special to be able to do an MRI with our device.

And that is a very kind of inside baseball distinction, but it's one more thing to add to the list of this kind of non-stuffiness, right? We have worked very diligently to produce, and we have now demonstrated that we have a fast, real product, and that is a different paradigm than what physicians have been currently dealing with. So I think that it is rather intuitive and quite easy for them to embrace this.

And all the feedback that we've gotten over these number of years where we track, traffic will be high volume implanters in the United States as well as internationally is it is intuitive and it is self-evident. And I think our results, granted in not the biggest markets, but this is what the international markets are, I think, are quite exceptional. And going out there and being able to take a 1/4 to 1/3 or more of a de novo implants right out of the gate, I mean, I think it does say a lot.

And I'd rather be defending the fact that we're doing well than to be making up excuses why things are slow or not happening. So we're bullish and I think there's a huge lineup of benefits associated with our product, and we're going to make make cut hay while it's all in the field

Bruce Nudell

Thanks so much Ray.

Ray Cohen

Thank you Bruce.

Operator

I am showing no further questions at this time. I would now like to turn the conference back to Axonics.

Ray Cohen

Great. Thank you, operator, and thank you, everyone, for listening in today. We appreciate the questions from the analysts, and we look forward to continuing to communicate with the market about the progress that we're making with Axonics. So thank you so much and everybody, have a nice evening.

Operator

Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect.