Artivion, Inc. (NYSE:AORT) Q4 2021 Earnings Conference Call February 17, 2022 4:30 PM ET

Company Participants

Brian Johnston - VP, IR, Gilmartin Group LLC
J. Patrick Mackin - Chairman, President and CEO
D. Ashley Lee - EVP, COO, and CFO

Conference Call Participants

Jeffrey Cohen - Ladenburg Thalmann
Mike Matson - Needham and Company
Suraj Kalia - Oppenheimer and Company

Operator

Greetings, and welcome to Artivion 4Q and Year-end 2021 Financial Conference Call.

At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It's now my pleasure to introduce your host. I will now turn the call over to Brian Johnson from the Gilmartin Group. Thank you, and you may begin.

Brian Johnston

Thanks, operator. Good afternoon and thank you for joining the call today. Joining me today from Artivion’s management team are Pat Mackin, CEO and Ashley Lee, CFO.

Before we begin, I'd like to make the following statements to comply with the Safe Harbor requirements of the Private Securities Litigation Reform Act of 1995. Comments made on this call that look forward in time involve risks and uncertainties and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include statements made us to the company’s or management's intentions, hopes, beliefs, expectations or predictions of the future.

These forward looking statements are subject to a number of risks, uncertainties, estimates and assumptions that may cause actual results to differ materially from these forward-looking statements. Additional information concerning certain risks and uncertainties that may impact these forward-looking statements is contained from time to time in the company's SEC filings and in the press release that was issued earlier today.

Now I'll turn it over to Artivion CEO Pat Mackin.

J. Patrick Mackin

Hey, thanks, Brian and good afternoon, and thanks for joining us on the call. This is our first call since rebranding as Artivion. This name was derived from the words aorta, innovation and vision and reflects our evolution to be a global leader providing innovative treatments for aortic disease, and our vision to continually innovate to maintain our position of leadership. It was time to change our name as we significantly evolved from the CryoLife I joined seven years ago.

During these past seven years, as we continue to evolve, I would come across investors and customers who are not aware of the significant transformation that was taking place in our company. Investors and customers now have a fresh look at Artivion to see what we do and to learn more about our significant transformation.

Artivion now encapsulates all that we've accomplished since we acquired On-X in 2016. Through a series of strategic acquisitions and divestitures and our new development initiatives, we've assembled a portfolio of products focused on aortic repair that we believe can compete with those of any company on the market today. We provide cardiac and vascular surgeons with innovative solutions to the most difficult challenges, and will continue to do so in the future as our product pipeline and new regulatory approvals will open access to our innovative therapies to many more patients around the globe.

My goal since becoming CEO of CryoLife was to transform into Artivion, and our employees by collaborating with each other and our physicians have basically just done just that. We now expect to organically grow our revenue double digits at the midpoint of our 2022 guidance. We believe our product pipeline and regulatory strategy sets us up well for continued success for years to come.

A rebrand followed on the heels of a record fourth quarter 2021 for Artivion, as we posted strong quarterly revenue growth. Revenues for the fourth quarter were $79.4 million. That's up 16.9% compared to the fourth quarter of 2020 and up 18.8% on a pro forma constant currency basis. Revenues were up 13.5% on a pro forma constant currency basis compared to the fourth quarter of ‘19.

Our growth in Q4 was driven by our stent, stent grafts as well as our On-X product segments. More specifically, on a pro forma constant currency basis, comparing Q4 ‘21 to Q4 of ’20, stents and stent grafts grew 33%, On-X grew 13.5%. Here are the growth rates of the products that are in the stent and stent graft segment. AMDS up 20%; NEO, up 73%; E-nside, up 39%; NEXUS up 233%.

We also saw a return to growth in cardiac tissue, as well as the relaunch of our TMR business. In all we are pleased with our fourth quarter results despite continued and lingering headwinds from the Delta variant and Omicron variants that were associated with staffing issues and patient overflow issues in the hospitals.

As I explained on our last call, our near term plan is to accelerate revenue growth through three main initiatives. First, we plan to drive On-X growth by commercializing AMDS, NEXUS, E-nside and NEO, our new aortic stent and stent graft products. Second, we plan to further expand into Asia Pacific and Latin America, beginning regulatory approvals and expanding our commercial channels.

Finally, to secure regulatory approvals for PerClot and PROACT Mitral in the U.S. and BioGlue, in China. I will walk you through an update on each of these three initiatives. Starting with AMDS, this is the world's first arch remodeling hybrid device for use in the treatment of acute type A dissections. We remain very optimistic on the product line given our experience today.

As noted earlier, during the fourth quarter revenues increased 20% on a pro forma constant currency basis over the fourth quarter of 2020. Increases were driven by continued strength in Europe and regulatory approval in countries outside of EMEA and the US.

Second NEXUS posted quarterly revenues of 233% increase on a constant currency basis compared to the fourth quarter of 2020. Given the anticipated decline in COVID-19, infection rates associated with hospital staffing shortages and travel restrictions, as well improved physician adoption we anticipate an uptick in Nexus procedures in 2022.

Third, E-nside. This is our newest device in our portfolio to treat thoracoabdominal aneurysms with endovascular stent grafts. Our revenues in this product line, which include E-nside and E-xtra Design grew 39% on a constant currency basis when compared to Q4 2020.

Fourth, E-vita Open NEO. This is our newest product in the frozen elephant trunk category. This is used to treat dissections and aneurysms in aortic arch. Revenues from this product line which include E-vita Open Plus and NEO grew 73% on a constant currency basis compared to Q4 2020.

Regarding E-nya, we've decided to make modifications to the delivery system based on customer input and anticipate re-releasing this product in early 2023. We anticipate the demand for these products will continue to build as market adoption improves, COVID-19 infection decrease or become less virulent, and hospital staffing shortages abate. Most of these products were fully launched during the COVID-19 pandemic or shortly before and therefore have not seen their full potential in an environment not significantly hampered by the effects of the pandemic.

In addition, while NEXUS and AMDS both launched shortly before the pandemic, they also benefited from our larger more experienced sales force in Europe. Given the positive feedback, we received in our newly offered products, I believe our growth in these product lines would have been even greater in the absence of the pandemic.

Moving on to our next initiative, international expansion in Asia Pacific and Latin America through new regulatory approvals and commercial footprint expansion. I'm pleased to report that we are executing very well on this strategy. Our quarterly revenues on a pro forma constant currency basis increased in Asia Pacific and Latin America by 29% and 34%, respectively. Those are over the fourth quarter of 2020. We continue to expect these regions to be important contributors to our growth over the coming years as we continue to execute on the strategy.

Regarding our third initiative, we continue to make progress on achieving three regulatory approvals in major markets. Our first is to attain U.S. a lower INR label for the On-X mitral valve. We've submitted our PMA supplement to the FDA and it is currently under review. If our new label is approved, we believe lowering anticoagulation levels will be a significant clinical benefit for patients. We are in active dialogue with the FDA. We continue to expect to receive PMA approval for the lower INR label on the On-X mitral valve, like our lower INR label for aortic valve sometime during 2022.

If approved, we believe we will take significant market share in the U.S. with the On-X mitral valve, just as we've done and are continuing to do with the On-X aortic valve. For PerClot, as you know we filed the PMA with the FDA last quarter. We're working closely with the FDA. We still expect to receive approval from the FDA during the second half of 2022. If approved for approximately two years thereafter, we'll supply PerClot to Baxter and generate revenue.

Lastly, as it relates to the regulatory approval for BioGlue in China we remain actively engaged with NMPA expect to have more clarity about a possible approval pathway within the next couple of months.

In addition to our progress in each of these initiatives, we also continue to make strides in our midterm pipeline, with key products currently in the U.S. clinical trials and others expected to start later this quarter. These three products are PROACT Xa, NEXUS in AMDS.

We continue to make significant progress in enrollment in our PROACT Xa trial. This is our prospective randomized clinical trial to determine if patients with the On-X aortic valve can be maintained safely and effectively on Eliquis versus warfarin. We currently have enrolled 573 patients in this trial, and feedback from surgeons and patients participating has been excellent. We anticipate completing enrollment in the trial around the end of the second quarter of 2022. And assuming the trial meets its endpoints, we believe we can achieve FDA approval for this new indication by late ‘24 or early ‘25.

If approved by the FDA, we believe the On-X aortic valve, using Eliquis rather than Coumadin should become the market share leader in the aortic valve market in patients under the age of 70. As for AMDS, we recently received FDA approval to begin our pivotal clinical trial called PERSEVERE. The PERSEVERE trial is a non-randomized clinical trial in up to 25 sites in the U.S. We expect to enroll approximately 100 participants who've experienced an acute Type A dissection.

The combined primary efficacy and safety endpoints of the trial are the reduction in A, all-cause mortality; B, new disability aiding stroke, C, myocardial infarction, and D, new-onset renal failure requiring dialysis, as well as the re-expansion of the true human aorta. We anticipate enrolling the first patient this quarter and completing full enrollment by the end of this year. With a one year follow-up period, we anticipate we’ll receive FDA approval for AMDS in late ‘24.

In addition to the progress we've made on the PROACT Xa trial as well as the AMDS trial, we also wanted to update investors about our partner, Endospan and how they're making progress on their U.S. IDE trial for NEXUS called TRIOMPHE. As you’ll recall, we secured an option to potentially acquire Endospan. Due primarily to delays resulting from the pandemic, enrollment in the TRIOMPHE trial has been slower than anticipated. As a result, we do not believe enrollment in the trial will be completed until sometime in 2023. We therefore do not anticipate approval for the NEXUS system until sometime in 2025 at the earliest, given the time required for follow-up PMA submission and FDA review and approval.

Given this delay, as well as associated challenges related to market adoption during the pandemic, we've also fully impaired the value of the option to purchase Endospan and recorded an associated charge. Accordingly we pushed the potential capital need out at least one year if we decided to proceed. With that said we still remain bullish on the NEXUS technology and Ashley will provide more color in his comments.

If each of these three trials proceed as anticipated, we anticipate FDA approval for PROACT Xa, AMDS and NEXUS by late ‘24 or into ‘25 which would increase our addressable market opportunity by an estimated $1.5 billion.

With that, I'll now turn the call over to Ashley.

D. Ashley Lee

Thanks, Pat, and good afternoon everyone. Total revenues were $79.4 million for the fourth quarter, up 16.9% on a GAAP basis, and up 18.8% on a pro forma constant currency basis, both compared to the fourth quarter of 2020. Revenue has benefited from strength in aortic stent and stent grafts, On-X, cardiac tissues and the relaunch of TMR. On a year-over-year basis in the fourth quarter of 2021 aortic stent and stent graft revenues increased to 31% reflecting increased procedure volumes and revenues from our new product launches.

On-X revenues increased 14% and BioGlue revenues increased 8%, reflecting improved procedure volumes relative to the fourth quarter of 2020. And tissue processing revenues increased 17% benefiting from the release of tissue impacted by the Tris hold in 2020. On a pro forma constant currency basis compared to the fourth quarter of 2020 aortic stent and stent graft revenues increased 33%, On-X revenues increased 13%, BioGlue revenues increased 8% and tissue processing revenues increased 17%.

On a pro forma constant currency basis compared to the fourth quarter of 2019, On-X revenues increased 16%, aortic stent and stent graft revenues increased 37%, BioGlue increased 3% and tissue processing revenues increased 4%. On a regional basis fourth quarter 2020 revenues in EMEA increased 22%, Asia Pacific increased 28%, Latin America increased 31% and North America increased 12%, all compared to the fourth quarter of 2020.

On a pro forma constant currency basis, revenues in Europe increased 27%, Asia Pacific increased 29%, Latin America increased 34% and North America increased 11%, all compared to the fourth quarter of 2020. Gross margins were 64.7% in the fourth quarter, compared to 65.7% for the fourth quarter of 2020. The decrease was driven by higher than anticipated inventory obsolescence and inflationary impacts.

G&A expenses in the fourth quarter were $51.3 million, compared to $36.1 million in the fourth quarter of 2020. Excluding non-recurring acquisition-related and business development charges of $10 million in 2021, which primarily consists of a non-cash $4.5 million charge related to fair value adjustments for Ascyrus contingent consideration and a non-cash $4.9 million charge related to the impairment of the Endospan purchase option, and excluding $4.8 million in charges in 2020, primarily related to non-cash fair value adjustments for Ascyrus, G&A expenses were $41.2 million and $31.3 million respectively, in the fourth quarters of 2021 and 2020.

With the impact of the pandemic and physician adoption and sales of NEXUS, both historically and in the future, we evaluated the purchase option relative to the purchase price and forecasted operating results and determined that it was appropriate to take an impairment charge. The remaining increase in SG&A primarily relates to personnel-related expenses, including salaries, commissions, stock compensation and travel, as our spending returned closer to pre-COVID levels and additional expenses to support our expected future growth.

R&D expenses were $9.5 million in the fourth quarter, compared to $6.6 million for the fourth quarter of 2020, reflecting increased spending related to the PROACT Xa trial and investments to bring our aortic stent pipeline in the U.S. Fourth quarter interest expense of $3.9 million included approximately $2.5 million of expense related to our term loan B, $1.1 million related to our convertible debt, and approximately $300,000 in amortization of debt origination cost. Other expense in Q4 includes $2.9 million in realized and unrealized foreign currency translation losses.

Income tax expense of $4 million in the fourth quarter reflects valuation allowances against deferred tax assets. On the bottom line we reported GAAP net loss of approximately $20.1 million or $0.51 per diluted share in the fourth quarter. Non-GAAP net loss was $141,000, or $0 per share in the fourth quarter. GAAP and non-GAAP earnings includes a pretax loss of approximately $2.4 million, or approximately $0.05 per share related foreign currency translation losses.

Adjusted operating income was $5.7 million for the fourth quarter of ’21, compared to $11.1 million for the fourth quarter of 2020. Adjusted operating income reflects add backs of amortization expense, business development and other non-recurring charges to operating income.

As of December 31, 2021, we had approximately $55 million in cash, $317 million in debt, and the full $30 million available under our revolving credit facility. Adjusted EBITDA for the fourth quarter of 2021 was $10.8 million, compared to $12.1 million for the fourth quarter of 2020. Net leverage, as defined by our credit facility stood at 5.1 times.

On other balance sheet related items, Pat mentioned our Endospan relationship. As he mentioned, given pandemic-related delays and commercial traction in Europe to-date, we recorded an impairment in the value of the option related to this opportunity. While we remain positive on this product, the clinical timing delays push out any potential deal to acquire Endospan and any associated capital need by at least one year to 2025 or later.

Please refer to our press release for additional information about our non-GAAP results including a reconciliation of these results to our GAAP results.

And now for our initial 2022 outlook. We expect constant currency growth of between 9% and 11% for the full year of 2022, compared to 2021. Using a Euro-USD exchange rate of $1.13, Revenues are expected to be $319 to $325 million. The average Euro-USD exchange rate in 2021 was $1.18, resulting in a $6 million revenue headwind for 2022. Our guidance assumes an impact from COVID during the first quarter of this year, and a return to a more normal operating environment for the balance of the year, meaning limited deferred surgeries and staff shortages and more in-person selling.

Although we do not anticipate a significant improvement in operating margin and adjusted EBITDA in 2022, we believe that we can comfortably continue to invest in our commercial channels in Asia and Latin America, our R&D, pipeline and service our debt without having to raise additional capital.

I will turn the call back to Pat for his closing comments.

J. Patrick Mackin

Thanks, Ashley. So before we move to take your questions, I'll leave you with a few final thoughts. Our business momentum is strong, we believe we have the strategy, the products and the team in place to continue that trend. We just posted strong year-over-year revenue growth despite COVID-related headwinds. We expect this momentum to continue into 2022, particularly into the second quarter and beyond.

As explained earlier, we have three short term initiatives that will drive growth from now through the end of ‘24. First, we should see continued growth in On-X, and our new aortic stents and stent grafts, AMDS, NEXUS, E-nside and NEO. Second, we anticipate further upside for our investments in our channels and new regulatory approvals in Asia and Latin America. Third, in 2022, we expect to receive PMA approval in for PerClot and On-X PROACT Mitral in the U.S. And finally, we have a robust midterm pipeline with three U.S. PMAs that are currently enrolling, i.e. PROACT Xa, or NEXUS TRIOMPHE or about to start enrolling, AMDS, PERSEVERE.

Based on our enrollment projections for these three trials, we anticipate three PMA approvals in late ‘24 or into ‘25 and will expand our total addressable market by $1.5 billion. I encourage all of you to join us in New York City for our Investor Analyst Day on March 23. It will be an excellent opportunity for you to learn more about our strategy, our products, or R&D pipeline and our leadership team. If any questions you'd like to attend in person, please reach out to our Investor Relations team at investors@artivion.com.

Operator will you please open the line for questions?

Question-and-Answer Session

Operator

Thank you. At this time we will be conducting a question-and-answer session. [Operator Instructions] Our first question is from Cecilia Furlong with Morgan Stanley. Please go ahead.

Unidentified Analyst

Hey, thanks for taking the question. This is Calvin on for Cecilia. Just two kind of buckets of questions. First off, I want to ask about the AMDS trial progress. So wondering if you could speak a little bit more to your confidence in enrolling this within sort of a nine month period, as you spoke to in your prepared remarks. And how you think about potential COVID-related pressure on your enrollment that you've seen kind of in your other trials and also just initial thoughts on driving awareness around AMDS? And then I had a follow-up.

J. Patrick Mackin

Yeah, so I think maybe one good surrogate is the PROACT Xa trial. I mean, we started enrollment in that trial in May of 2020, about six weeks after COVID hit the U.S. And we've enrolled almost 570 patients during a pandemic. So we're on track to enroll 1,000 patient trial in two years under a pandemic.

I think the second thing about AMDS, we've got the ID approved, we should enroll our first patient this quarter. We have 25 centers. The trial’s about 100 patients. Those 25 centers represent the largest aortic centers in the country. I personally visited all of them. I know how many cases they do a year. And this is a lifesaving procedure. These patients are typically medevacked in at night.

So COVID’s the least of people's worries when it comes to Acute Type A dissections. So there's always the kind of the contracting and getting through IOBs [ph] and these kind of things. It takes time. But we feel that given the importance of this technology, the lifesaving nature of this procedure, that with the centers we're in and the volume that they do that we should enroll this trial pretty quickly.

Unidentified Analyst

Got it. Very helpful. The second one is just on margins. I have two checks. One is on gross margin. I wanted to dig a little bit into the sequential compression. So just curious what's reflected in 4Q, associated with kind of your tissue coming back versus inflationary pressures that you spoke to, and how you think about that jumping off into ’22? And then also on the R&D cadence in ‘22, between PROACT Xa ramping AMDS and other drivers, what would drive that R&D cadence in 22? And thank you so much.

J. Patrick Mackin

Yeah, so gross margins, as you know, are a combination of many, many moving parts. So clearly, the inflationary pressures from whether it's increased labor costs or increased materials are baked in there. The second thing we've seen in ‘21, is increased obsolescence primarily around, we were staffed up and had product in the field to support the normal growth rates. And we just had more exposure to obsolescence given the kind of the volume reductions.

And then third, as you mentioned, there's mix, whether it's international or product line. And we did see a higher return to growth of our cardiac tissue, which is a lower gross margin than our kind of our high end devices. So it was kind of a mix of all those things. And clearly the inflationary pressures was one that was unforecasted at the beginning of the year.

Oh, and then maybe you can comment on the R&D, Ashley?

D. Ashley Lee

Yeah. So we ended up fourth quarter at about $9.5 million in R&D. And clearly PROACT Xa continues to ramp up. We're going to be starting AMDS. But we're also going to have some R&D efforts that are going to be rolling off this year. We invested a lot of money in getting to the point where we could submit PerClot to the FDA.

So we are going to have some programs and PerClot might roll. Just recently wrapped up as well. So with all that being said, we think that R&D in 2022 is going to be in the high $30 million to the low $40 million, and a lot of it will just depend on the progress that we make with the programs.

Unidentified Analyst

Right, thanks so much.

Operator

Thank you. The next question is from Jeffrey Cohen with Ladenburg Thalmann. Please go ahead.

Jeffrey Cohen

Hi, Pat, Ashley, how are you?

J. Patrick Mackin

Good. Hey, Jeff.

Jeffrey Cohen

So firstly, could you talk a little bit about the aortic stent pipeline, and they had some manufacturers and throughput issues [indiscernible] you're checking, you're putting up a second source under development. What's the status there? And are you caught up? Have you caught up? What are the plans going forward?

J. Patrick Mackin

We grew 33% in the fourth quarter.

Jeffrey Cohen

So no issues on backlog whatsoever?

J. Patrick Mackin

We brought on a new selling [ph] suppliers as we mentioned. We built a new facility which is not up and running. But we've had no issues on the supply side that we put up depending on which number you want to look at, versus ‘20 we grew stents and stent grafts almost 30% and versus ‘19 we’ve grown 22%. So…

Jeffrey Cohen

Got it. Fantastic. Okay, and then could you comment a little bit on your channels and the size of the commercial force for Asia and Latin American how you're tackling that as far as direct versus distribution arrangements?

J. Patrick Mackin

Yeah, so we've talked kind of consistently over the last probably 18 months about we see this as one of our growth drivers. And we saw nice performance in both of those markets this quarter. I commented on the growth rates in Asia Pacific and Latin America. We're seeing 34% growth in Latin America and 29% growth in Asia. Those channels, we're expecting to build Asia out more, obviously, a bigger geography. So I think there's probably another, you know, 15 to 20 people, we'll be adding there over the next three years, probably half of that in Latin America.

And then we basically are fully staffed up and don't need to any more. So it's an investment that's actually returning right now, really nice growth rates. And we're also feeding the regions as they grow. So with when COVID hit, we kind of slowed it down. And then when things started loosening up, we started adding people back on. But we expect to have that investment probably flattening out itself in the next 24 months.

Jeffrey Cohen

Okay, perfect. And then lastly, for us, Ashley any comment on the $10 million integration segments and business development from Q4. Is that one time in nature or should we expect a further impacts into the first half this year?

D. Ashley Lee

Yeah, the fair value accounting for the Ascyrus contingent consideration is something that we will see every quarter going forward until the milestones are fully earned and paid and that's way out in the future. So going forward, our best estimate right now for Ascyrus, is maybe a $1.5 million per quarter. But again, that could change, based on a variety of factors, progress that's made, discount rate. So there are a lot of things, but that's our best guess.

For Endospan, the option is fully written off. So you won't see any charges related to that. We do have an obligation to pay them another $5 million once they reach 50% enrollment in their clinical trial. We anticipate them hitting 50% at some point this year. And whenever they reach that milestone, and we make that payment, there will be a $5 million charge approximately in other expense.

Jeffrey Cohen

Perfect. That does it for us. Thanks for taking the questions.

J. Patrick Mackin

Thanks Jeff.

Operator

Thank you. The next question is from Mike Matson with Needham and Company. Please go ahead.

Mike Matson

Yeah, thanks for taking my questions. I guess I just want to ask about the revenue guidance. So you just grew 19%, on a pro forma constant currency basis, you're guiding to around 10%. I understand there's some COVID impact expected, particularly in the early part of the year. But why the slowdown, I guess? And I guess as a follow-up to that just was there any kind of one-offs in the fourth quarter that helped your growth that aren't really sustainable, I guess? Maybe that's [multiple speakers] or…?

D. Ashley Lee

Yeah, I think the biggest issue Mike, and again this is one that's probably not common for a lot of companies of our size that have single products and are mostly in the U.S. I mean, almost 40% of our business is in Europe, and the euro’s dropped seven points in the last year. That's a $6 million headwind. So if people are kind of taking our Q4 number and trying to straight line it out to next year, it's the wrong math equation. I mean, the euro a year ago was $1.22, this quarter, and now it's $1.13. So we got a serious headwind when it comes to the euro, in Europe, and we have a big chunk of business there. So it's got nothing to do with our -- we're backing off, or what we think is going to happen is more -- a lot more to do with the headwind on currency.

J. Patrick Mackin

And the other thing Mike, too, is that 18% growth was against the fourth quarter of ’20, we were up 13.5% against the fourth quarter of 2019. So we're guiding to between 9% and 11% versus again, if the comparison is 2019, it was 13.5%.

Mike Matson

All right. Yeah.

J. Patrick Mackin

Yeah. I think the big thing people aren't catching is the currency. Because if you revalue 2021 revenues at the new currency, our $298.8 turns into like $293. It's the 7% drop, it's all currency. We're saying we're going to grow 9% to 11%. You just got to -- I'm not going to get set up with a --I can't control currency.

Mike Matson

Yeah, no, I understand that. I compliment you guys. So that's fine. Okay. All right. And then, so just want to ask about the first quarter specifically. It sounds like you're expecting some COVID impact there. I didn't really hear any specific revenue ranges or anything. It looks like consensus is just under $79 million, which would sort of imply 11% growth versus the first quarter ’21, if my math’s right. So that’s probably too high based on what you're saying, because your full year guidance. I mean, that's at the high end of the range for the full year.

J. Patrick Mackin

So that $79 million has no impact of the 6% drop in currency. So I think people need to readjust their numbers based on the 2022 currency. And we're giving -- we've given full year guidance 9% to 11%. And clearly COVID is an issue in the first quarter. I mean, January was slow. We -- in our checks with hospitals, they -- a lot of these hospitals had as many patients in January as they did at any point in the pandemic. They were reducing elective procedures.

The bigger issue is frankly hospital staffing. I think the good news is we're seeing, cases drop, hospitals empty out and staffing coming back. So we don't think it's going to persist, but we definitely think Q1 is going to be lighter than the rest of the year.

D. Ashley Lee

Yeah. Mike, this is Ashley. So I mean, to Pat's point talking about currency. Last year, we posted $71 million in revenue. And if you take into account the changes in FX rates that $71 million translates to $69 million. So that's really the base that you should be looking at. And if you just take the midpoint of our guidance that we guided to, which is 9% to 11% -- 10% on top of that is $76 million. And as Pat indicated, COVID’s really had an impact in at least, to date at the score.

Mike Matson

Yeah, okay. Understand. All right. And then just as far as On-X Mitral goes, so when you hopefully get that approval, for the lower INR, how quickly do you think the uptake will be on that? I mean, you've talked about it being, I think, a $40 million, if I remember right, opportunity. So how quickly can you get to $40 million, I guess there?

J. Patrick Mackin

Yeah, I think you've seen -- I mean, we have a great case study, right, because we've already done this. We did it on the aortic side, where we got the exact same -- it's the sister product, right. We had a lower INR for the aortic. It has to -- the paper has to get out. It has to get socialized and educated, you have to educate your physicians. The great news about PROACT Mitral is we've already done it with aortic, number one. Number two, the valves are already on the shelves. We have mitral valves in probably 500 accounts in this country.

So all it's going to happen, the label’s going to change and our reps are going to market the paper. So as far as like making new product and getting it out and all that which what happens with a lot of our other products that doesn't exist where we have product on the shelf. So I think we're going to see a steady increase in the Mitral, like we did with On-X aortic over the next, you know, three or four years.

Mike Matson

Yeah. Okay. All right. Thank you.

J. Patrick Mackin

Thanks, Mike.

Operator

Thank you. Our next question is from Suraj Kalia with Oppenheimer and Company. Please go ahead.

Suraj Kalia

Hey, Pat, Ashley. I hope everyone is safe and healthy.

J. Patrick Mackin

Hey, Suraj.

D. Ashley Lee

Hey, Suraj.

Suraj Kalia

Pat, On-X Mitral, love to get you guys' perspective, what has the reception been on the data? And if I could piggyback on the previous questioner, On-X Aortic right? If my math is right, like, within five years, you guys became pretty much the market leader in aortic. Just kind of map us the trajectory of On-X Mitral, if you could, knowing that this is, let's say, a $40 million, $40 million, $50 million opportunity in the U.S.

J. Patrick Mackin

Yeah, no, I think it's a good point. And you're dovetailing off of Mike Matson’s question. I mean, I'm looking at the On-X numbers. So compared to ‘20, ‘21 versus 20, we grew On-X 18%’ ‘21 versus ’19, if you think that's too easy, we grew 14%. So here we are five years after we acquired them, and after they got the indication. And given the pandemic, we had a little bit of slowdown during the pandemic, but we've basically grown On-X, double digits every year for the last five years.

So one of the things you see and you know this well from -- as a new paper gets out, you've got to educate your physicians, you've got to look to get the guidelines changed. And I do think we have a kind of a tailwind because we just did it for the last five years with On-X Aortic. So I think that the brand represents, a different valve within a coagulation. So I think the steps here are getting the publication out educating physicians, and obviously, we've got to get the FDA approval, right. We can't really do any of this stuff until we get the FDA approval.

Once we get that, I mean, the product’s on the shelves, our reps know that surgeons and will present the data. The feedback we've had has been excellent. We've got a lot of market research. I mean again it's a little bit like the aortic valve in that why wouldn't you want to lower INR, if you're a patient who's going to get a mitral valve? We've shown that we can protect the valve with less Coumadin in the aortic position. And that was very well adopted. And now we've done it with the mitral valve.

So I think it's -- you don't get it all, you don't get all $40 million in one year. Nobody knows that, right? It's technology adoption and uptake, but I do think it's going to probably go faster than the aortic did.

Suraj Kalia

Pat PROACT Xa, 570 patients enrolled so far, if I heard you guys correctly.

J. Patrick Mackin

That's right. That's correct.

Suraj Kalia

Do you need to or do you anticipate a pickup in enrollment to maintain the Q2 timing for finishing up enrollment?

J. Patrick Mackin

Yeah, I mean, I think we continue to add centers. So we've got 60 centers signed up, we have 55 on board at this point. So we've got five more centers coming in. And we typically see a bolus of patients when a new center comes in. And we've seen nice enrollment, I do think -- I think it's not misstating it. When you see a massive surge in a hospital, like in January, I think it's fair to say that clinical trials probably get impacted. People are busy in doing other things. So I think it's helpful for us as things kind of calm down on the COVID front with the hospital, that it should help.

But we're -- I mean, we're very aggressive. We're having regular investigator meetings, but we've got the centers all up and running. It's now a matter of just putting the foot down and getting these patients in.

Suraj Kalia

Fair enough. And Pat, the last question from my side, and I'll hop back in queue. So Pat you've been there seven years, right? Take a step back, and obviously, you have transformed the company. And I'm curious, as you look at it at the current junction, how would you characterize, let's say, average rep productivity, average revs per account? What do you see as optimal levels? What does the gap analysis tell you? And how do we fill that gap? Gentlemen, thank you for taking my questions.

J. Patrick Mackin

Yeah, thanks. Yes, I think it depends on the region, right. So if you at Europe, we've thrown a lot of new products at them, right. We acquired JOTEC, and we brought on Endospan with the NEXUS and then we brought on AMDS. We've launched -- we launched E-nside, we've launched NEO. So it's like, we've got kind of a plot where -- a treasure of products in Europe, they got the whole pipeline. So I would say that that that group is extremely busy.

The U.S. team as a kind of comparison, they haven't really got any of the new stuff. But they've got PROACT Mitral come in, and they're very well positioned for that. So we've got kind of 60 feet on the street in the U.S. They're well positioned for PROACT Mitral, they're well positioned for PROACT Xa, when it comes, they are well positioned for AMDS. And I think that's one that people don't necessarily grasp. In a lot of these businesses that I've been in, you really got to add a lot more reps, when you bring in new products.

We don't need any more reps. I can add, $400 million with the new revenue into the U.S. and not add a single rep. So I think that's one of the real kind of secret sauces of Artivion is once we finish our investment in Asia Pacific and maybe some spotty things here and there in Europe, as we maybe go direct in countries and we’re mostly direct there now, we're going to kind of flatten out our investment in direct distribution. And all these new products that come through, we're going to see significant drop through to the bottom line, accelerating growth and accelerating gross margin as well as just sheer drop through because we don't have to add any more reps.

So I think it's a unique thing about cardiac surgery in particular, where you can cover a lot of accounts without a lot of reps.

Okay, operator, any more questions.

Operator

Mr. Mackin, there are no further questions at this time. I would like to turn the floor back over to management for closing comments.

J. Patrick Mackin

Okay, yeah. Well, first of all, thanks for joining today. And we appreciate you spending some time with us. And we've tried to simplify the story to a pretty digestible plan, which is phase one or the current growth initiative number one is our new products, right? We are showing significant growth. Our On-X platform grew this year 18% versus ‘20 or 14% versus ‘19. Our stents and stent grafts grew 28% versus 2020 or 22% versus 19. So any competitor, we're talking about nice growth that is driving the growth of Artivion.

So that's our first pillar in our growth. The second is Asia Pacific, Latin America. We've talked about the growth rates in those two regions. We continue to invest in those areas. The third is we've got two PMAs that should come through this year, PerClot, which will give us a $25 million payment from Baxter and then revenue that we sell to them. And then PROACT Mitral which we talked a lot about on the call.

And then the fourth piece of the puzzle is three PMAs. We're enrolling PROACT Xa. We're 57% of the way done with that trial. Expect enrolling in the first half of this year. We expect to enroll our first patient in the second trial, PERSEVERE, which is AMDS. And we're still pursuing FDA approval with the NEXUS device. So I think we've got a great story. And we're looking to deliver the numbers we talked about and look forward to updating you on the next call. So thanks for attending.

Operator

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.