Good afternoon, and welcome to TransMedics Fourth Quarter and Full Year 2021 Earnings Conference Call. [Operator Instructions]. As a reminder, this call is being recorded for replay process. I would like to turn the call over to Brian Johnston from Gilmartin Group for a few introductory comments.

Thanks, operator. Earlier today, TransMedics released financial results for the quarter ended December 31st, 2021. A copy of the press release is available on the company's website. Before we begin, I would like to remind you that management will make statements during this call that include forward-looking statements within the meaning of 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, are examination of operating trends, the potential commercial opportunity for our products and our future financial expectations, which include expectations for growth in our organization, regulatory approvals and reimbursement, and guidance and/or expectations for revenue, gross margins, and operating expenses in 2022 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 quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November 9th, 2021. TransMedics 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. This conference call contains time-sensitive information that is accurate only as of the live broadcast today, February 23rd, 2022. And with that, I'll turn the call over to Waleed Hassanein, President and Chief Executive Officer.

Thank you, Brian. Good afternoon, everyone, and welcome to TransMedics fourth quarter and full year 2021 earnings call. Joining me today is Stephen Gordon, our Chief Financial Officer. 2021 was a milestone year for TransMedics as we achieved every one of our strategic goals, catalyzing our potential commercial growth for 2022 and beyond. We secured 2 FDA PMA approvals and successfully launched the OCS Heart and Liver Systems commercially in the U.S., thus achieving our goal to end the year with access to 3 critical transplant markets. We also filed our PMA supplement for DCD heart indication for our OCS technology, while launching and expanding our National OCS Program, which now covers 11 major U.S. regions. Q4 2021 marked our first fully commercial quarter in which all 3 OCS products contributed to our commercial revenue, and the results speak for themselves. Net revenue for the fourth quarter was $9.7 million, representing 27% growth from Q4 2020 and 80% growth from Q3 2021. Net revenue for the full year 2021 was $30.3 million, representing an 18% growth over the prior year. We believe these results represent a strong first step towards achieving our commercial growth goals. As we move forward, we expect to benefit from several key catalysts through 2022. The first catalyst would be several OCS-related clinical data readouts and strategic presentations that will be presented at the upcoming 2022 Annual Meeting of the International Society for Heart and Lung Transplantation or ISHLT. This meeting will be held in Boston from April 27th to 30th. These presentations will feature the OCS DCD Heart Trial full results and 1-year outcomes, the OCS EXPAND Heart trial 2-year follow-up outcome data, benchmarked against standard criteria hearts in the U.S., EXPAND Lung Trial 5-year follow-up data, an overview of the OCS Heart Perfusion Registry structure in the U.S., the first-ever presentation highlighting the TransMedics National OCS Heart and Lung Program at a major scientific society meeting, and finally, TransMedics will be hosting a symposium to share our strategic vision for how we plan to leverage the OCS technology, the clinical indications approved, and the National OCS Program to potentially increase heart and lung transplant volumes in the U.S. Our second expected 2022 catalyst will be the FDA approval of the OCS DCD Heart indication. We submitted our PMA supplement for the DCD indication in November 2021, and we continue to expect approval by midyear. This indication will position the OCS as the only FDA-approved technology for both DBD and DCD heart transplantation. It's important to note that DCD donors are rapidly growing in the U.S. They represented 30% of the overall donor pool in the United States in 2021 according to the national transplant database. As a reminder, we announced very strong top line results from our OCS DCD Heart trial in Q4. And as mentioned above, we will unveil the full dataset at the upcoming ISHLT meeting. Our third catalyst will be the further expansion of our National OCS Program or NOP. Given that this represents a major catalyst for our business, allow me to spend few minutes to remind you of the vision of the NOP and its potential transformative value to transplant programs in the U.S. From a high level, the NOP is allowing TransMedics to become a critical partner to major transplant programs in the U.S. by providing an end-to-end technology and clinical service solution for donor organ procurements. The value proposition of the NOP to transplant programs are clear and powerful. The national program enabled transplant centers to grow their transplant volumes by eliminating historical barriers such as ischemic time, distance, and resource constraints. The NOP also enabled transplant programs to better manage their transplant schedules by allowing transplant procedures to be performed in the morning rather than as an emergent procedure in the middle of the night, thus removing significant logistical frictions within the program. Finally, the NOP maximizes work-life balance for the clinical and surgical staff at these institutions, which has the potential to help alleviate some of the staffing concerns and facilitate talent attraction and retention at these transplant programs that utilizes NOP. In totality, we believe these unparalleled value drivers will help reduce central resource constraints and learning curves, thereby facilitating rapid clinical adoption of the OCS technology. In terms of our progress to date, throughout 2021, we established 11 NOP regions across the United States with the expectation to expand to approximately 15 regions by end of 2022. This will provide broad coverage to potentially procure organs from donors to recipients almost anywhere in the United States. It is important to note that each one of these NOP regions represents a launching point for OCS technology and clinical staff to perform donor procurement using OCS technology, either within the region or outside of the region. In addition, starting in early 2022, NOP or the national program will expand to enable NOP cases that can be initiated directly by the transplant program requesting that TransMedics procure and deliver organs to their program. This should maximize efficiency and adoption of the NOP. As we look ahead, our goal in 2022 is to expand the National OCS Program to include heart and liver procurements to drive OCS adoption across the 3 platforms. To facilitate our expansion, TransMedics has launched a broad awareness campaign of the National OCS Program across major transplant programs, CMS, and commercial transplant players in the U.S. To that end, we're planning to expand this awareness campaign by making key presentations at several major transplant conferences to further educate the broader transplant community about the National OCS Program. As I've stated before, we are confident that the National OCS Program will be a major driver for OCS commercial growth and overall transplant growth in the United States. Following the FDA approval of the OCS DCD indication -- the OCS DCD Heart indication, we see the NOP as the most significant catalyst for our commercial growth in 2022. We're looking forward to monitoring this impact of the NOP on OCS adoption throughout 2022 and beyond. Shifting now to key commercial infrastructure initiatives and provide some background on potential new metrics that we may use to track our commercial success moving forward. On the infrastructure -- the commercial infrastructure, through 2022, we will be focused on the following 4 key initiatives as demand for OCS technology increases. First, increasing the internal surgical expertise for the NOP. We have already established a world-class team of cardiothoracic surgical expertise composed of 8 full-time surgeons supported by 6 contract surgical consultants which are strategically distributed across the United States. We expect to continue to grow our cardiothoracic team to meet the demand. On the Liver side, we've started the build out of the surgical capabilities to match our cardiothoracic group. Second, expanding our clinical OCS perfusion regional support for NOP; we ended 2021 with 36 OCS perfusion specialists covering the 11 active regions discussed above. We expect to expand this team further through 2022 as we add Liver and Heart to the NOP program and open up new regions. Manufacturing infrastructure; we're actively working to expand our cleanroom production capacity to meet the anticipated mid- and long-term demand for our product. Finally, long-term technology upgrade; in 2021, we initiated the first phase of our next-generation OCS development program which will continue through 2022 with an emphasis on improving our OCS technology, electronics, supply chain. Let's move now to the potential new reporting metrics to track commercial execution going forward. To better measure the impact of the NOP program on OCS cases in the U.S. and our commercial traction generally, we intend to provide additional information starting on the Q1 2022 earnings call. Let me provide some background. As the utilization of the NOP expands further in the U.S. through 2022 and beyond, the historical way of tracking OCS centers may become less relevant given the potential flexibility afforded by the NOP to allow any transplant program in the U.S. to use OCS without the traditional initiation process and timeline. We're planning to report the NOP contribution to the total revenue per organ, per quarter. We hope that this additional detail will provide further clarity on our business progress towards maturing our commercial program. Now let me briefly discuss our views on potential headwinds and uncertainties that may negatively impact us in 2022. The most obvious is the COVID pandemic. Based on our performance in Q3 and so far in Q1, we see minimal impact of COVID Omicron on heart and liver transplant trends. However, as we stated before, lung will always be disproportionately impacted by any new COVID waves or variants. Finally, the global supply chain issues. So far, our team has done a good job managing our supply chain network, particularly in mitigating impacts from the shortage of semiconductors. However, this is an area that we cannot always control and may negatively impact us throughout 2022. Now let me finish with a summary of our expectations and thoughts for 2022. We believe our first fully commercial quarter in Q4 '21 results represent a very encouraging start. We look forward to building on this momentum through 2022 and deliver sequential quarter-to-quarter growth. We are extremely confident in our ability to drive significant growth leveraging all 3 FDA-approved OCS technologies, the broad transplant indications approved, and the National OCS Program. COVID and any new variants will always disproportionately negatively impact lung transplantation compared to heart and liver. As we stated before, our business today is more resilient after the commercial launch of the OCS Heart and Liver technologies. As much as we're excited about 2021 results, we are laser-focused on making 2022 even bigger success and truly transformative commercial year for the business. Based on above opportunities and potential headwinds and given that we are still in the early phases of full commercialization activities, we are providing an annual revenue guidance of a range between $49 million to $55 million for the full year 2022. This range represents a solid 62% to 82% growth over 2021. With that I will turn the call to our Chief Financial Officer, Stephen Gordon, to review our detailed financial results for the quarter and the full year.

Thank you, Waleed. I will now provide some additional detail on the Q4 results and other financial information for the quarter and the year. For the fourth quarter of 2021, our net revenue was $9.7 million. This is an increase of 27% in the fourth quarter of 2020 and an 80% sequential increase from the last quarter. In the U.S., net revenue was $7.2 million. U.S. net revenue also increased 27% from the fourth quarter of 2020 and the sequential growth was 132% from last quarter. The organ breakdown on U.S. revenue was $1.8 million of OCS Lung, $4 million of OCS Heart, and $1.5 million of OCS Liver. And ex-U.S. revenue was $2.5 million, up 25% from Q4 of 2020 and included $0.4 million of OCS Lung and $2.1 million of OCS Heart. Q4 revenue performance was driven predominantly by the FDA PMA approvals of both our OCS Heart and OCS Liver Systems in late Q3 of 2021, making Q4 our first full commercial quarter in which we had all 3 OCS products approved in the U.S. Early traction with OCS Heart and OCS Liver was partially offset by the impact of the recent COVID Omicron surge on lung transplant volume in Q4. Gross margin for the fourth quarter of 2021 was 72%. That's up from 63% in the fourth quarter of 2020, primarily reflecting our transition from clinical trial revenue to commercial revenue. The total operating expenses for the quarter was $18.3 million. This is 71% above Q4 of 2020 operating expenses driven by our investment in our commercialization, including the National OCS Program, as well as R&D spending on our next-generation technology and infrastructure and scale up throughout the company. And as a reminder, Q4 2020 was a very low spending quarter due to the COVID situation at that time. Our operating loss was $11.3 million in the fourth quarter of 2021 compared to $5.9 million in the fourth quarter of 2020. And our net loss for the fourth quarter of 2021 was $12.7 million compared to $6.3 million in the fourth quarter of 2020. And finally, cash, cash equivalents, and marketable securities were $92.5 million at the end of December -- as of December 31st, 2021, which equates to a reduction of $10.4 million from the balance at the end of Q3 2021. Weighted average common shares outstanding for the quarter were 27.8 million. Now let me share some detail on the full fiscal year 2021 results. For the full year, net revenue was $30.3 million, an 18% increase over the prior year, and the organ breakdown for the full year was: $9.9 million in U.S. Lung, $10.1 million in U.S. Heart, and $1.9 million in U.S. Liver, and outside the U.S. was $0.8 million of Lung and $7.6 million of Heart. Gross margin for the full year 2021 was 70% compared to 65% in 2020. And total operating expenses were $60.6 million for the full year 2021, up 41% from $43 million in 2020. Operating loss was $39.4 million for the full year 2021 compared to $26.4 million in 2020, and net loss was $44.2 million in 2021 compared to $28.7 million in 2020. Overall, 2021 was an extremely important year for TransMedics in which we transitioned our business from one focused on clinical trials and our regulatory pathway to a fully commercial multi-organ business. As Waleed discussed, we are looking forward to further realizing our commercial business in 2022 and are providing annual revenue guidance of $49 million to $55 million for the fiscal year 2022, and this represents 62% to 82% growth over 2021. And also, for modeling purposes, we expect gross margin to continue to grow, and we would expect to exit 2022 in the mid-70% range, and we expect expenses to grow in 2022 likely in the 25% to 30% range or around 1/3 of the rate of revenue. Now I would like to turn the call back to Waleed for closing comments.

Thank you, Stephen. In summary, we're pleased with our Q4 and 2021 performance, and we remain confident in our ability to build on this commercial success throughout 2022, particularly given our expectations to achieve several key regulatory and clinical catalysts in the near term. We look forward to leveraging our momentum in these catalysts to drive significant growth across all 3 transplant markets. With that, I will now turn the call to the operator for Q&A. Operator?

[Operator Instructions]. Your first question comes from the line of Bill Plovanic from Canaccord.

First question is just a guidance question. I think, Waleed, you said we should expect sequential -- even with the impact of COVID in the first quarter. Just back to Q1 to be above Q4 even taking into account that lung will be negatively impacted both in the U.S. and internationally?

Yes.

Okay. Second question, the U.S. heart number was much stronger than we expected. It seems like you're getting traction. Just wondering if you could provide us some clarity. I know you mentioned that the metrics will change to the NOP and organ per quarter. But I was just curious as you went out initially, and I don't think the NOP program is on Heart or Lung yet. Just kind of how many centers -- how broad is the initial commercialization? Or is this concentrated? How should we think about that for both Heart and Liver starting out, and then kind of rolling on that same question was just when do you expect to fully roll out NOP for Heart and Liver?

Thank you, Bill. Very important question. We -- as I stated in my previous call or last quarter's call that we expected to roll out Heart in Q4 in the NOP, but it's obviously early days, and we expected liver to roll in, in early 2022. In 2021, in Q4, there was, in fact, small contribution in both Heart and Liver from the NOP in Q4. It's still early. So we're going to start looking at these metrics starting in Q1 where we believe that there will be broader sample size, larger sample size that can give us some meaningful trends that we can look at going forward. So to answer the first part of the question, it concentrated number of centers in Q4 for both Heart and Liver, but we expected that. That was the first quarter that we had commercial activities on both fronts. When do we expect to Heart and Liver international program. We're already doing that in Q1 of 2022. And we will continue to do that throughout the year.

And then just if I could, how long -- a lot of these centers have experience, but how long does it take for you to go back to and get them scaled up again? And I understand this national program may circumvent some of that. But I'm just curious, as you get back out there, you mentioned all these people were raising their hand prior to the approval and just what's your experience since then.

Thank you, Bill. It's a mix. The national program facilitates some and some have done through their direct acquisition process. So that's -- I think that's the answer to the question. It's still a mix. And the national program facilitates the initiation a lot more quicker than going through the internal center processes that include supply chain, hospital supply agreements and all that wonderful stuff. But we -- in Q4, it was a mix between the 2 processes, and it helped in the results, but we expect that to streamline throughout 2022. And it's too early to kind of forecast which direction it's going to take, but we are bullish in the national program. So we hope to see continued traction on that front.

[Operator Instructions]. Your next question comes from the line of Mike Ott from Oppenheimer.

Congrats on a nice first quarter with all 3 indications. Waleed, today I believe you reiterated your expectation for FDA approval in mid-'22 of the PMA. I was wondering can you just confirm that that's regardless of whether or not there's a panel.

That is correct, Mike.

Okay. And then how has the FDA dialog been so far around DCD Heart?

Couldn't have been any better.

That's great. And then understanding that Lung tend to be the most impacted by COVID, how would you characterize both Omicron and staffing is impacting your current first quarter? Obviously, in an answer to a prior question, you mentioned you still expect sequential growth over 4Q '21. But how is the scene on the ground today, I guess?

Thank you, Michael. That's an important question. As I stated to Bill, we expect sequential growth Q1 over Q4. The driver behind no longer a long-only business. It's a lung business, it's a heart business, it's a liver business. And liver and heart are much less likely to be impacted by Omicron. And we're looking forward to keep driving the commercialization momentum here in Q1. And hopefully, we'll be discussing these results in May. So as we sit here today, Omicron is only impacting 1 out of 3 drivers to our growth, which is the lung, more improved processes within major transplant programs. The NOP is helping alleviate some of the staffing shortage at institutions. But lung will always be disproportionately impacted compared to harder. So we're fortunate to have access to commercial revenue and activities from heart and liver, but the NOP is also helping the lung close that gap a little bit of the impact of Omicron.

That's great to hear. And then finally, more of a big picture question. Is there anything that you're tracking out of Washington related to either OPO oversight or focus on outcomes or anything else that we and investors should be paying attention to?

Thank you, Mike. That's a very important question. There's a lot of Washington-based initiatives that are focused on organ transplantation. That's all I can share right now. There's a lot. The biggest ones are driven by CMS, and it is not necessarily just an OPO oversight. It's really focusing on expanding and increasing the utilization of donor organs for transplant across heart, lung, liver, and kidney. TransMedics is heavily engaged with all the Washington stakeholders in transplantation. And we hope that these initiatives and these engagements or interactions will have some meaningful impact sometime in late 2022 or just continue to educate the key stakeholders on the importance of new technologies into the transplant ecosystem to meet that goal of increasing organ utilization for transplant. So yes, there is a significant focus on organ transplantation in the U.S. in Washington driven by CMS and Congress, and we're heavily engaged in all of the above.

That's great to hear.

Your next question comes from the line of Josh Jennings with Cowen.

This is Bryan here for Josh. Maybe to start on the national program. I wanted to ask about the NOP per organ per quarter metric you referenced. Do you have an assumption of the percentage of revenue that will come from NOP utilization in '22? And how much do you expect that to vary by organ?

Thank you, Bryan. We are hoping to be -- to end 2022 at approximately 25% to 30% of our revenue per organ coming from NOP, approximate percentage by year-end. Is it going to vary by organ? Initially, probably yes. Some organs are more amenable to the national program than others. For example, liver, historically, there are many of the liver cases are being procured by different teams, not necessarily by the same programs team. Heart is going to be probably the most challenging because that is still a very conservative process. But we expect to, over the year, that we will start seeing momentum and penetration into these separate markets that lung, heart, and liver that we end the year, roughly speaking, between 25% and 30% overall revenue coming from the national program. That's our target for end of 2022. But in the beginning, it's going to be variable. And if we're looking at it, it's probably going to be led by liver and followed by lung and followed by heart in the beginning of the year and then hopefully it will catch up throughout 2022.

Okay, understood. That's helpful. And I wanted to ask about the clinical data. It sounds like you'll have a good amount of data coming out in April. Maybe just [indiscernible] generating physician awareness of liver and heart, your data there, and just where do you expect to be after these upcoming data readouts?

So, Bryan, we're never satisfied about the awareness. In fact, there are many programs that we're working on to continue to increase awareness. We'll talk about those at ISHLT, we'll talk about those at our next call. But right now, TransMedics will always be engaged in a broad campaign of maximizing awareness of the clinical data, the national program awareness the reimbursement process for the national program and direct position, and that will continue throughout 2022 on many, many fronts. And again, hopefully, at the ISHLT, a lot of these initiatives will be announced and also we can discuss them at the next call.

There are no further questions at this time. I would now like to turn the conference back to Waleed Hassanein for further comments.

Thank you, operator. I want to thank everybody for joining us on this call this evening. We wish you a pleasant evening, and we're looking forward to speaking again to announce the Q1 results. Have a wonderful evening, everybody. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.