Q4 2023 Silk Road Medical Inc Earnings Call
Participants
Marissa Bych Bych; Investor Relations; Gilmartin Group
Charles McKhann; Chief Executive Officer, Director; Silk Road Medical Inc
Lucas Buchanan; Chief Financial Officer & Chief Operating Officer; Silk Road Medical Inc
Rick Wise; Analyst; Stifel Nicolaus and Company, Incorporated
Frank Takkinen; Analyst; Lake Street Capital Markets
Suraj Khalia; Analyst; Oppenheimer & Co.
Kristen Stewart; Analyst; C.L. King
Presentation
Operator
Good day, and thank you for standing by. Welcome to the Silk Road Medical's 2023 fourth-quarter earnings conference call. (Operator Instructions)
Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Marissa Bych with Gilmartin Group, Investor Relations. Please go ahead.
Marissa Bych Bych
Great. Thank you all for joining today's call. Earlier today, Silk Road Medical released financial results for the three months and the year ended December 31, 2023. A copy of the press release is available on the company's website.
Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward-looking statements.
All forward-looking statements, including without limitation, those relating to our operating trends and future financial performance, expense management, expectations for hiring and growth in our organization and our business, physician training and adoption, market opportunity and penetration, commercial and international expansion, regulatory approvals, reimbursement, competition, and product development are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements.
For a list and description of the risks and uncertainties associated with our business, please refer to the risk factors section of our latest annual report on Form 10-K filed with the Securities and Exchange Commission. Additionally, software medical refers to adjusted EBITDA, a non-GAAP financial measure, a reconciliation of adjusted EBITDA to net loss, which is the most directly comparable GAAP measure is included in our press release, which is available on our website. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, February 28th, 2024. Software Medical disclaims any intention or obligation, except as required by law to update or revise any financial projections or forward-looking statements, whether because of new information future events or otherwise.
And with that, I will now turn the call over to Chas McKhann, Chief Executive Officer.
Charles McKhann
Thank you, Marissa, and thank you all for joining today. I'm pleased to share that Silk Road Medical achieved full year 2023 or 2023 revenue of just over 177 million, supported by more than 25,250 procedures, reflecting 28% and 29% year-over-year growth in revenue and procedures respectively, in 2023, more than ever growth in the business was driven by deepening adoption of key CAR within our trained physician base.
As we begin the call today, I'd like to take a step back and offer a brief introduction of my background since there are some of you with whom I've not had a chance to connect since joining Silk Road Medical in November 2023, I've been focused on the advancement of minimally invasive medical technology throughout my career. And over the last decade, I've been dedicated to the development and commercialization of several innovative products. Most recently as CEO of Apollo Endosurgery, we accelerated the Company's growth through a transformational strategy, rooted in product innovation, robust clinical evidence and commercial discipline before successfully being acquired by Boston Scientific early last year. Following the sale of Apollo. And after 25 years of developing and commercializing medical devices, I was afforded the luxury of taking a step back to like to look for the next right next opportunity. In my diligence, I focused on three core tenets, which I see as the foundation for success as measured by positive patient impact and durable growth. First, the technology must target a critical deficiency in the current practice of medicine. Second, the solution for that deficiency must consistently yield best-in-class outcomes in a generalizable fashion. And third, the solution for the market must be supported by an experienced team that can adapt to an ever-evolving commercial landscape to drive success. And so I took this opportunity here at silk road because I saw all three of those factors and three months in my experiences only serve to further validate the market for TR and our opportunity at Silk Road.
So before turning to our 2024 strategy. I'd like to reiterate some of my remarks made at the recent JPMorgan Healthcare Conference, which underscore the winning tenants I just described. First, the deficiency incurred current carotid treatment is indisputable. When we look at the devastating burden of stroke on patients and their families, the consequences of stroke by the numbers are staggering. Stroke is a leading cause of morbidity and mortality in the U.S. with millions living in a state of persistent disability and billions in stroke related costs to the health care system and in particular, prior treatment modalities for patients with carotid artery disease fall short of addressing the issue patients historically choose historically chose between carotid endarterectomy and invasive surgical procedure with significant patient morbidity and procedure-related complications for transfemoral carotid stenting, a minimally invasive approach in which procedural difficulty and lack of effective neuroprotection can lead to excess procedure-related stroke risks when patients are presented with an informed choice evidence shows that they prefer TTR, which leads me to my next point. Ttr works with incredible consistency and the cheek, our base of adoptions is growing and healthy. Silk Road is built on extensive evidence collection through the VQI. registry, a vast base of real-world evidence that includes nearly all of our commercial experience its launch and has contributed to more than 300 key car publications to date through the registry, we see market consistency and outcomes across different settings of care operator experienced levels and patient profiles. TCAR. is just as effective in a rural community hospital as it is in some of the most accomplished medical centers in the country. And the consistency of TCAR. was recently highlighted at a presentation in November at the 2023 beef cut meeting in a retrospective study conducted by Schirmer Horn, which studied real-world results in nearly 45,000 patients study which showed very low rates of perioperative stroke and death across both symptomatic and asymptomatic patients, well below acceptable thresholds represents one of the largest applications of real-world data in the analysis of carotid treatment. And in my more than 25 years in medtech, I have very rarely seen datasets of this size supporting a medical therapy that consistency in outcomes and generalizability across patient cohorts speaks to and it's an exquisite technology with a short learning curve. And these are critically important factors when the brain is at stake, broad real-world clinical evidence and a short learning curve already have driven robust adoption, and we expect to see further tailwinds as TCAR. becomes further entrenched in the marketplace.
And third, Silk Road was founded by pure pioneers in carotid treatment. And today, Silk Road is the only scaled company focused on addressing one of the leading causes of ischemic stroke carotid artery disease. In my first hundred days, I've spent significant time with our leaders, most of whom have spent the majority of their careers focused on better treatments for carotid and other cardiovascular disease. That includes Lucas Buchanan, our CFO and COO, is with me here today, along with the rest of our management team who have all worked extensively in large cardiovascular enterprises and MedTech. It also includes Andy Davis, our experienced Chief Commercial Officer, who leads a strong commercial team, employing a high-touch model to wrap around our physicians and their staff to offer unmatched unmatched support to their carotid programs. The outstanding clinical outcomes for DKr are a testament to the excellent support that our team provides to our customers every single day. And with the guidance of Dr. Spira McDonald. Our Executive Medical Director is one of the leading experts in the world on the treatment of carotid artery disease and the leadership of Bill Whalen, our EVP of R & DRR. and D. team leads the way in credit innovation to ensure that we remain at the forefront of minimally invasive carotid treatment. And so with the strong fundamentals I've outlined, our focus in 2024 is optimizing the transition from broadening our reach to now deepening adoption among our trained physician base, while recognizing improving leverage that comes with scaled operations. I'll start by focusing on deepening physician adoption. Silk Road has built a formidable commercial presence today. Our team is as strong as ever following initiatives we took last year to optimize our commercial model and to achieve greater scale and continue to evolve from going broad to going deep. And in the process.
Last year, we experience some growing pains, but we are confident that we are entering 2024 with the right talent and leadership in place to continue driving strong T car adoption at the start of this year, approximately one-third of our sales reps have been with the company for less than a year, and we are but we are already seeing that these additions to our team are strengthening their relationships and growing their case volumes across the physicians and staff they serve. And we look forward to seeing these reps continue to move up the adoption curve or the experience curve as our entire organization executes against the Silk Road mission of treating more patients at risk of stroke. And over the long term, we know that we will be able to increase our leverage with this organization to maximize adoption while moving towards sustained profitability. As we drive deeper adoption, we will continue to emphasize effective clinical data collection to complement our sales and marketing efforts, we are actively building on a track record of more than 85,000 patients treated to date and most of whom are captured in the DQI. database and we continue to analyze outcomes across all patient cohorts and profiles. This includes our prospective Roadster three post-market study, in-depth investigating outcomes in standard surgical rich risk patients, which is enrolling at a strong pace. We anticipate completing enrollment in Roadster three in the second half of this year. Beyond the right commercial infrastructure deepening adoption requires We continuously innovate on our key product lines to extend our leadership position in carotid treatment and enhance the offerings for T. car. Last year, we rolled out our purpose-built key car balloon catheter or inflate, which has seeing steadily increasing adoption even with a premium price position relative to competitive balloons. And in 2024, we are introducing a tapered configuration of our en-route TransColorado stent and our next-generation neuroprotection system or NPS plus. Today, I'm excited to announce that we've initiated a limited market release of our tapered stent. Customer feedback has been outstanding, and we plan to ramp up to a full market release in Q2. We are also finalizing preparations for the launch of NPS plus, which features important ease of use and technical advances, and we anticipate initiating the launch of T plus in the second quarter.
In addition to our core commercial and product advancement strategy, we are looking by beyond the horizon at the next phase of growth for Silk Road. Cultivating international markets offers an extension of key car growth in the long term. Our international focus has centered around China and Japan to markets with compelling strategic and commercial dynamics for the treatment of carotid disease in Japan, following clearance of our en-route stent and en-route neuroprotection system. I'm excited to announce that we've signed an agreement with a leading distribution partner, MediCOE Serada, and we are actively working working towards establishing reimbursement before initiating a post-market study in China. I'm excited to announce that we've received clearance in January for en-route stent following approval of our under NPS in 2023. And more recently, we signed an agreement with Genesis medtech Group, a leading distributor in China, while market development activities in both countries will take some time and we do not anticipate a meaningful revenue contribution in the near term. We are excited to move to this next phase of expanding TTR internationally Finally, we'd like to touch upon our efforts to expand into new disease states from our core competencies in carotid earlier this quarter, result of the night one study or neuro protection entrance crowded embolectomy was presented at the International Stroke Conference. We are pleased with the outcomes of this early feasibility study, which showed that TransColorado acute stroke thrombectomy with flow reversal is feasible and safe. And importantly, there was a clear signal that flow reversal could potentially offer incremental clinical benefits to patients while advancement into Knight two is not a strategic priority at the near term results of the study directly inform other active R&D initiatives. We are working on to extend our lead within carotid disease and with our portfolio over 250 issued and pending patents globally and our core competence entrance, carotid access and neuroprotection, we are well positioned to serve our stroke prevention mission and drive durable long-term growth.
I'd like to close by discussing what all this means for our financial profile in 2024 and beyond. I hope it's abundantly clear that durable growth remains our number one priority in 2024, we anticipate full year revenue of 194 to 198 million, reflecting 10% to 12% year-over-year growth as we capitalize on the strength of our commercial infrastructure to drive deeper adoption among our active physician base. At the same time, we are committed to driving sustainable progress towards profitability with a strong capital position and scaled infrastructure we have today to that end and to chart our path for investors path forward for investors, we are introducing adjusted EBITDA to our reporting framework, and we are targeting annual improvement in adjusted EBITDA in 2024 relative to 2023. Building off our progress in recent years. Lucas will provide more detail shortly. And So in sum, I am very excited about the year ahead, Silk Road as a world-class company with a world-class opportunity, and we expect to capitalize on that opportunity for betterment of patients and shareholders.
And with that, I'd like to turn it over to Lucas, our Chief Financial and Chief Operating Officer, to review our results in more detail. Lucas?
Lucas Buchanan
Thank you, Chas for revenue for the three months ended December 31st, 2023 was $47.3 million, an 18% increase from $40.1 million in the same period of the prior year. Growth was driven primarily by increased T car adoption and continued healthy demand following expanded Medicare reimbursement, which went into effect October 11th of last year. The number of TCAR. procedures in the quarter was approximately 6,625, a 20% increase from the same period of the prior year.
Gross margin for the fourth quarter of 2023 was 74% compared to 73% in the fourth quarter of the prior year. The increase was a result of larger production volumes, which allowed us to spread fixed and overhead costs over a larger volume of units as well as the benefit in stent unit COGS that will continue through Q1 before normalizing in Q2 and beyond, the benefit is related to a temporary favorable purchase price variance. For 2024, we anticipate modest gross margin improvement over full year 2023. Total operating expenses for the fourth quarter of 2023 or $49.2 million, an 18% increase from $41.7 million in the fourth quarter of 2022.
R and D expenses for the fourth quarter of 2023 were $10.1 million compared to $9.2 million in the fourth quarter of 2022. The increase in R&D spending was driven primarily by growth in personnel, along with continued investments in new and ongoing programs. Sales, general and administrative expenses for the fourth quarter of 2023 were $39.1 million compared to $32.5 million in the fourth quarter of 2022. The increase was primarily driven by the commercial expansion efforts we conducted throughout 2023. Now more than ever, we are leveraging the years of work and investment. We have put behind commercial R&D and back office infrastructure. Accordingly, we expect our forward revenue growth rate to outpace growth in operating expenses.
Net loss for the fourth quarter was $13 million or a loss of $0.33 per share as compared to a net loss of 12.6 million or a loss of $0.34 per share for the same period of the prior year. As Chad noted, we are introducing adjusted EBITDA into our reporting framework to further illuminate our operating profile and path to sustained operating profitability. Adjusted EBITDA for the fourth quarter 2023 was a loss of $4.1 million compared to an adjusted EBITDA loss of $4.4 million in the prior-year period.
On a full-year basis, 2023 adjusted EBITDA was a loss of $17.7 million, reflecting an improvement of $7.4 million over full year 2022 adjusted EBITDA loss of 25.1 million. Our expectation is for adjusted EBITDA improvement in the full year 2024 relative to 2023. However, note that we expect our first quarter of 2024 adjusted EBITDA loss to be larger than the loss we saw in the fourth quarter of 2023. Given standard first quarter expenses against an expectation for a mid-single digit sequential revenue decline related to seasonal patterns. Finally, we ended 2023 with 190.9 million in cash, cash equivalents and investments. In combination with our modest burn profile, we remain confident in our ability to achieve profitability with existing capital.
Turning to our 2024 outlook and commercial strategy. As Chad mentioned, we expect full year 2024 revenue to be in the range of 194 to $198 million reflecting revenue growth of 10% to 12% over 2023, driven primarily by growth in procedures and relatively stable revenue per procedure with normal quarter to quarter variation as a reminder, we recognize revenue when we sell units to hospitals and those hospital owned inventory units are later used by physicians and procedures leading to some quarter-to-quarter variation in revenue growth relative two procedure growth. We are actively focused on driving adoption within our 2,800 strong trained physician base, supported by 85 active sales territories, and we are excited to expand our patient impact as we execute on our 2024 commercial strategy with this established network.
At this point, I would like to turn the call back to Chas for closing comments.
Charles McKhann
Thanks, Lucas. At this point in my career, it's all about delivering excellent patient outcomes, supporting an unmatched provider experience and contributing to a better health care system. And I want to emphasize that we have a special opportunity to do just that at Silk Road. And so in closing, I'd simply like to say thank you to our customers and our team at Silk Road who impacted the lives of more than 25,000 patients undergoing the R procedure last year.
And with that, we'll turn to our operator for questions. Gerald, please open it up for questions.
Question and Answer Session
Operator
(Operator Instructions) Rick Wise, Stifel.
Rick Wise
Good afternoon and thanks to both. And maybe if we could start off just first if you could talk about the guidance and just help us think about two aspects of the guidance. I'm just one talk about what's incorporated in your guidance. Some of the key elements, particularly if you would some of the headwinds and tailwinds related to the CMS cash decision. What are you baking in? And are there any other on the sort of larger concerns that you want us to be sensitive to.
And just this second aspect of that and if I heard you correctly, in terms of the first quarter, Lucas, I mean, it sounds like something like a a $44 million number, if I'm doing my quick math correctly, would be somewhere in the kind of territory you would hope we would center around the first quarter of that guidance it gets put into place.
Charles McKhann
Sure. Why don't I take the first part, Rick, and then I'll hand over to Lucas on some of the details but see as we think about overall on the guidance and kind of key puts and takes that went into it.
You know, first and foremost, I hope you heard me loud and clear, I feel very good about the overall fundamentals of the market and where we can take things. I think areas that factor into our guidance some versus just as I mentioned our sales force experience and time and territory. You know, it's we do have about a third of our team who are kind of working their way up the experience curve and so we do see that progressing over the first couple of quarters this year and really catching us up on the back half of the year. I will say we just recently had our national sales meeting and it was great. The absolutely are the energy levels. There were fantastic. People are excited, but a lot of new faces. And so we're working through that.
On the second piece to it, as we are moving from going broad to going deep as an overall approach doesn't mean we don't have some new customers. We will but a big part of it is going deep, and that's a bit of an evolution for us. And so we're focusing on that.
And then you ask specifically about, you know, the NTDMTFCAS., and I'll just hit at a high level. The entity was put in place in early October. So we've got what about four months here. And while we are aware of anecdotes of some people picking up cars, it's not a big, broad wave of new users for transfemoral stenting and our customers feel very good about the ongoing demand for TTR. We're going to keep watching it incredibly carefully. But as the only company that really is dedicated to this space, we feel good about our ability to keep driving demand for TCAR. in a world that over time will move to be more endovascular. But we think that we're well-positioned for that.
So those are some of the high-level comments, but Lucas, other specifics on the guidance you want to do?
Lucas Buchanan
Gerald, I'll tackle the second half of your question, Rick. I think on the historical pattern we've seen Q4 into Q1 has been has been flattish. And as I mentioned, sometimes there's kind of flat to slightly up on procedures and flat to slightly down on revenue just given some of those timing effects so on, I think carrying forward, the Q4 result into Q1 is probably not the right approach because we do see and expect kind of a normal dip in revenue per procedures even if procedures are strong. So I think you're in the right ballpark, maybe maybe a slight tick higher.
Rick Wise
And just if I could follow up on one comment you made, Chas, you clearly are emphasizing your focus and on you're making innovation a priority. Maybe just broadly talk about the innovation pipeline. What are you excited about what do you want us to be excited about and expect from you and that pipeline? Thank you.
Charles McKhann
Sure. Yes. And I appreciate the question for the pipeline and what we've got the immediate opportunities which are now really are coming to fruition. And so just happy to see, as I mentioned, very good uptake with the balloon and nice progression there.
Having the tapered stent. And as I mentioned, a pretty limited number of accounts initially, but very good feedback from customers.
And then NPS plus, which I know was discussed last year, but we're putting the final touches to be ready to launch that as well. And so just, you know, show in the marketplace that we are innovating and staying on top of the existing TCAR procedure.
And then beyond that, since I've come in, I have spent a lot of time with our R&D team and we've got some really interesting things. We're working on to extend our leadership in the carotid space. And I want to get a little further along frankly, in terms of those development efforts before we talk about it, a lot publicly just so we know where we have and what some of the timelines are, et cetera. But the team's been doing some very good work and I look forward to sharing more on future calls.
Rick Wise
Thanks again.
Operator
Frank Takkinen, Lake Street Capital Markets.
Frank Takkinen
Jonathan Lucas, thanks for taking the questions and congrats on a strong first nine days. Chad, look forward to many quarters going forward. I wanted to start with a follow up on your previous answer, you talked about the Go Deep strategy, increasing that utilization rather than broadly. I heard the comment though, adding incremental here and there, but clearly the focus ongoing deeper, maybe walk through that strategy. What does that look like in the field? Any changes you think you need to make it related to the selling organization to achieve that strategy?
Charles McKhann
Sure. Thanks for the question, Frank. Yeah. So I mean, going deep is it's something that happens naturally in the evolution of a lot of medical technologies, know your initial and it's not binary, right? The Company has been evolving towards this for a while. But as we look at it, partly it's having the scale of the organization sort of fully up and operating on all cylinders, which So 85 territories we think is a good number. You know, we don't have plans that may have large growth over that. But if we see opportunities incrementally, we will we'll also probably add some additional of our therapy development specialists just for case coverage will be a piece of that. But a big part of it then is just refining our playbook as we go forward there. So things like customer segmentation and being really smart about what do we and what our approach is with somebody who's a key car first adopter. How do we help him or her be most successful in growing and developing their practice versus somebody who may be a more mid-level adopter and earlier in that adoption curve, what are all the tools in the toolbox that we can use to help them expedite that that could be things like our therapy awareness team that really helps work with and educate referring physicians that could be patient marketing, which we do see playing an important active role here. And I mentioned also fellows and early career physicians and we have made a change. I've made a lot of big changes to the team, but I have made a change organizationally and promoted or A. O Hara is now our VP of Marketing for. He has a lot of experience in his background, starting at P & G & Marketing and then at Medtronic and EV three as well as a lot of really good other health care experiences. So Hurray already was at Silk Road, let our marketing business and our strategy and business development efforts. He's now going to lead our marketing efforts and take on this work, working with our and again, an already strong team managing Andy Davis and the team that he has. So it's an evolution, but I think areas of emphasis and focus, a lot of which we just talked about at the sales meeting I mentioned.
Frank Takkinen
Got it. That's helpful. And then maybe just one follow-up related to the reimbursement changes. Around transfemoral stenting. I know you've only been there for a limited amount of time and the feedback is only anecdotal. We haven't seen this play out, but if we were to speak, theoretically, how do you think the share shift end up playing out? Obviously, OPEN is still the lion's share of procedures. Peak are second and then transfemoral stenting third. But if transfemoral stenting is more successful. Do you think that's more likely coming out of open? Or is there a possibility from that comes from TCAR., if you were to think theoretically?
Marissa Bych Bych
Yes, no, I think we do see a world that over time becomes more endovascular based, right? And we certainly expect that TTR is very well positioned to capture the majority of that growth. And that, as I said, Silk Road Medical is well positioned to capture and be continue to be the leader in treatment of CAD, right? We know the space really well, and we've got a level of commitment to it that others just don't have them.
The other thing I would emphasize though, is just the time element to it I think as I was going through my interviews and process last year, you had a little bit of sort of stealing that some others as we've that was going to happen frank, we're not seeing that. We just aren't. There may be pockets of where we see some changes and views, but a lot of it's already existing carotid stent users. And so the steps to then get new people doing the procedures can take time. And so doesn't mean it can't happen over time and we're going to watch it all really carefully. But our primary area of focus. Our primary driver continues to be evolving behavior among what is still the bulk of the market that being seen.
Frank Takkinen
Okay. That's good color. I'll stop there. Thanks for answering the questions.
Operator
Robbie Marcus, JPMorgan.
Hi. This is actually Ryan on for Robbie. I just had a question on the outlook down the P&L. Still growth proven the ability to obtain a pretty healthy 70% plus gross margin for some time, but just trying to gauge what's required on the OpEx side, can maintain revenue growth while also achieving profitability. Ultimately, I know you talked about how you expect kind of the an OpEx growth to be lower than sales growth. So I was wondering if you could just maybe give some more specifics on that for 2024 and maybe a time line for potential adjusted EBITDA profitability as well?
Lucas Buchanan
Sure, Rohan, thank you for the question. I'll tackle that one. So the short answer, and as we've mentioned in these prepared remarks, and talked about prior is we are really at critical mass across our key functions. And some we do have a hiring plan in 2024, of course, but it's much more modest than than years prior. And so this the infrastructure we have, whether you're thinking about the manufacturing capacity or the commercial organization or the commercial support R & DG. and A. back office that can support a much higher unit volume, much higher revenue line. So we like where we sit today on kind of our base of OpEx and some if you take kind of a Q4 run rate 49 and change, take it up ever so slightly, that's where we think for. And so we were at 100 OpEx as a percentage of revenue was 105% in 2023 is up from 104% in Q4. We want to continue our march towards 100%. And this year, obviously, we want to really put the main our main focus on top line growth because because that can now start to flow through more and more into that relatively fixed OpEx base. So as you mentioned, we are at we are highlighting adjusted EBITDA as a new reporting metric. We were 17.7 loss in 23 versus 25 and change loss in 22. And so we do expect to have another year of improvement on that important metric as well.
Sitting here with the $91 million of cash on the balance sheet.
Got it. Thank you. And I just had a quick follow up with some more on the top line guidance. Is this assuming any kind of increases in revenue per procedure from the new product launches like the NPS plus or the new tapered stem?
Lucas Buchanan
Yes. I'll give a quick kind of math answer and just feel free to weigh in. There's a lot of puts and takes in there. As I mentioned, we expect revenue per procedure to be slightly less variation, but still quarter to quarter variation. So I think we ended just over 7,000 on average for the year, and I think around 7,000, maybe slightly less is a good ballpark to be in for 2020 for some. But as you point out, there are there are various kind of puts and takes that see to that average. So all of our price assumptions are units it sold and ordering patterns, product launches, things of those sort are all all baked into that number, Greg, the only thing I would add one thing I would add is that price.
Charles McKhann
Our pricing really is stable, you know, in a good way. And so the variability we're talking about does have to do with things like order patterns, but we feel good about the overall health there and the primary driver will be procedure growth.
Great.
Operator
Suraj Khalia, Oppenheimer & Co.
Suraj Khalia
Good afternoon, Chad Lucas, can you hear me? Alright?
Charles McKhann
Yes, we can. Suraj.
Suraj Khalia
Perfect. Hey. So Chas, congrats on a nice quarter on, I hope to see many more because I want to focus on two things. First field force characterize it in your prepared remarks, you said a third of them were I think you said new orders and I want to notice some word you use just I split that out a little more tests in terms of what has been the sales force churn on, you know, especially given the NCD., how many feet on the ground currently, whether you're expecting to end calendar 24?
Charles McKhann
Sure. Yes. And that's what I said just to recap was that as of the beginning of this year, about a third of our sales force, especially at the rep level, is new within the last year, or so within the last 12 months. And it really is a variety of factors that impacted that primarily was the expansion, right? We went from about 70 territories to 85 territories. We promoted some people into either manager level roles or into things like sales training. We had some attrition or this will go back to early 2023, but nothing out of the norm of what I've seen in my career and certainly not in the back half of the year as it were you would think would be related to the NCD. So it was just a variety of factors that led to a lot of change last year. But I will tell you we feel good about people. We hired and we hire from the best places in medtech. And you know, I met pretty much all of this group at the sales meeting I mentioned on the mood is good. The attitude is good. The excitement for the year is good. We just got to help them get up the learning curve as fast as we can. And the good news is we've got a lot of really good experienced reps who can help them do that as well as our marketing team and our reimbursement team and all the other folks that help do that our sales training, obviously. So hopefully that gives a little more color.
And then to answer the final part, right now, we don't have big expansion plans at the rep level over the course of this year doesn't mean we may not add some in certain spots, but it's much more about kind of consolidating with the group. We have we will probably add some additional therapy development specialists who, as you know, support the reps for things like case coverage over the course of the year to make sure we've got everything we need to support the growth in volumes we expect.
Suraj Khalia
Got it. And just in terms of your accounts, right, one of the things you mentioned in your remarks was you're not focusing going there. So if I use that context right, you are right now in 1,200 or so accounts do the rough math, average utilization is 5.5 units per quarter per hospital. Just walk us through if I were to divide your accounts into high volume, medium volume and low volume writes arbitrary, I defined them in these three buckets. You know what is the stress test show you right now with NCD., just given what's going on with the entity or the high volume accounts pulling back a little bit versus medium just compare and contrast for us. Thank you for taking my questions.
Charles McKhann
Yes, I'll provide some overall thoughts and then Lucas, feel free to chime in as well. I mean, I think it's, you know, I guess unlike a lot of medical device situations, we certainly have a version of our top customers are the ones who are the primary drivers of a lot of our volume. And those are the ones who truly have adopted what I said, a T car first mentality. And we certainly aim to grow that. That group I mentioned in my remarks at JP Morgan, we've got a lot of data to show that does in fact, happen over time. The learning curve with TCAR. is slow. The adoption I mean, it is fast learning curve as quick the adoption curve takes a while as people continue to move from, I'm going to do some key car and just the right patients to then eventually, why wouldn't I do Acucar, meaning take our first and it does happen over time. So we still have a lot of I mean, you asked about accounts but let's talk about physicians, physicians who are in that sort of middle bucket that we can continue to work on and develop and grow their their adoption to keep moving forward and all the comments I've made are really independent of the NCD. because again, our surgeon customers are not reverting to transfemoral cases and we do monitor very carefully and we're not seeing a widespread change. And for example, in referring patterns, we're going to keep watching it. It's early. But you know, the dynamics are much more again on us and our customers and how we move that adoption more than the NCD, I think. So because what else would you there?
Lucas Buchanan
Yes, Suraj, I think I'll just at a hospital level, some in the treatment of carotid disease. You've got and value analysis committees. You've got credentialing committees, you've got data collection of CEANT. car. If they do cascades itself as well. You've got kind of multidisciplinary folks kind of weighing in first and foremost on on what's best for the patient, right? And then you get into what's best for the hospital bottom line and check our stacks up really favorable when you consider those variables at the hospital level. First of all were already there were already entrenched. We continue to collect data showing that this works. We continue to show hospital administrators and CFOs on the money. They're making their money. They're saving the throughput they're getting, they're now serving their patients and realizing this indeed, from the patient perspective, it is a great procedure. So the DNCD., the physicians, our sales team right now, it's really viewed as an opportunity and folks are excited that a few additional administrative barriers have been removed from multicar perspective, Tom, and we can go out and compete against MCEA. primarily, but certainly as to where where there is some interest or ongoing activity. But ultimately, this is all in service to the patient, right, having having options is a good thing and we'll lead with the best option in most cases.
Suraj Khalia
Thank you.
Operator
Kristen Stewart, C.L. King.
Kristen Stewart
Great. Thanks for taking my call and it goes into the ER. I just wanted to ask on Chas, if you think that the 12% guidance you're looking for or think of the Company long term about or do you think there's some things that you're factoring in 24 that are leading to a slightly lower rate than you otherwise in the outer years?
Charles McKhann
Yes. No, thanks, Kristen, you cut it. And it was just a little bit on your question, but I think you were asking about the 2024 guidance in relation to sort of use over time. Is that correct?
Kristen Stewart
Okay.
Charles McKhann
I think it was sorry, you cut out just a little bit on. Yes, no, I mean, I think as I think about the guidance at this point, I did mention a few factors that I think impacts us here this year as we sort of head into the year, a big one, as I mentioned, is just the sales force piece of it and just getting kind of fully up to speed with a pretty significant portion of our group. I feel really good about our ability to do that. I already touched on that and mentioned the like just overall positive elements at this meeting. And I think evolving our strategy on the going broadly going development is important and we already have a lot of the ingredients, but I think there's more we can do there and we're working on it. And as you know, honestly, I've been in my role for about 100 days. And so partly I'm also feel very good about the fundamentals, but still working with the team to really deep dive deeply into sort of the specific plans are going to maximize success. And so, you know, for the year we want a heavy heavy emphasis on predictability and accountability going forward. And then over time, we'll layer in additional growth in the U.S. to be able to move adoption further. International growth will eventually start kicking in and will be a factor. There are other R&D programs that I know as a little cryptic, but I alluded to will help. And so, you know, our view is to be a sustainable grower over the long term and we're going to keep working on a range of plans to do that.
Okay, perfect. And then I just want to clarify whether or not the MPS., the new one and the tapered stem would have a premium. If you said that there is a lot of moving parts thinking about things, but are those coming out at a premium price Hi, Chris, it's Lucas.
Lucas Buchanan
I'll take that one. Fundamentally. It is factored into that overall kind of 7,000 or slightly under revenue per procedure guidance. And ultimately all of our kind of new product efforts are in service to the adoption curve, right? We want to make this procedure better, faster, safer, easier and so across what is now some five products that make up the TCAR. procedure and iterations thereof at the product level, you might have price opportunity in certain times and certain products and price pressure elsewhere and all of that is factored into our guidance.
Kristen Stewart
Okay. Thanks very much taking the question.
Charles McKhann
Yes, thanks, Kristen.
Operator
Thank you. This concludes the question-and-answer session. I would now like to turn it back to Chas McKhann for closing.
Charles McKhann
So listen, thank you all very much for joining us again today and look forward to keeping the dialogue going over the course of the year. Appreciate it.
Operator
Thank you for your participation in today's conference. This does now conclude the program. You may disconnect.
