Aug 4, 2020
Operator
Ladies and gentlemen, thank you for standing by and welcome to the Cardiovascular Systems, Inc. Fiscal Year, 2020 Fourth Quarter Earnings Conference Call.
At this time all participants are in listen-only mode. After the speaker's presentation there will be a question-and-answer session.
[Operator Instructions] I would now like to hand the conference over to your speaker today, Jack Nielsen, Vice President Investor Relations and Corporate Communications. Thank you.
Please go ahead, sir.
Jack Nielsen
Thank you, Christine. Good afternoon and welcome to our fiscal 2020 fourth quarter conference call.
With me today are Scott Ward, CSI Chairman, President, and Chief Executive Officer; Rhonda Robb, Operating Officer; Jeff Points, Chief Financial Officer; and dr. Ryan Egeland, Chief Medical Officer.
Approximately 30 minutes ago, we issued a press release announcing our full year and fiscal 2020 fourth quarter results. You may find a copy of this release on the Investor Relations section of our website.
Here, you may also find an earnings presentation that includes additional details on our performance and outlook. In a few moments, CSI management will discuss results for our fourth quarter, which ended on June 30, 2020.
After our prepared remarks, we will entertain your questions. During today's call, we will make forward-looking statements.
These forward-looking statements are covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include statements regarding CSI's future financial and operating results or other statements that are not historical facts. Actual results could differ materially from those stated or implied by our forward-looking statements due to certain risks and uncertainties, including those described in our most recent Form 10-K and subsequent quarterly reports on Form 10-Q.
In particular, the COVID-19 pandemic has created risks and uncertainties for our business, results of operations, financial condition and prospects, which we will discuss on this call. CSI disclaims any duty to update or revise our forward-looking statements as a result of new information, future events, developments or otherwise.
We will also refer to non-GAAP measures because we believe they provide a useful information for our investors. Today's press release contains a reconciliation table to GAAP results.
I will now turn the call over to Scott Ward.
Scott Ward
Thank you, Jack. Good afternoon everyone and thank you for joining us today.
I hope that you and your families are healthy and are continuing to successfully navigate this pandemic. Today we reported Q4 revenue of $42.5 million a decline 38% compared to last year.
The quarter came in better than expected, and we are encouraged that our revenue steadily improves throughout the quarter. We are very proud of how our company has responded to the coronavirus crisis.
Our customers will never forget how we engage them and responded to their needs, how we continued to support cases occasionally against all odds, how we took action to protect their safety and how we offered education programs to help them optimize care and financially survive during a pandemic. CSI came together as a community to assure that our customers knew we stood with them throughout this crisis.
We enhanced our brand during Q4 and our customers have been exceedingly grateful for our support. For the quarter worldwide peripheral revenue decreased 36% to $30.6 million and performed better than expected.
Hospital-based critical limb ischemia and limb salvage programs remained active throughout the quarter and the treatment of [indiscernible] patients is rebounding as hospitals are performing more elective procedures. In addition, office based labs have helped lead the recovery and our average daily sales and we believe that they will play an increasingly important role in the treatment of peripheral artery disease going forward.
Fourth quarter worldwide coronary revenue decreased 41% to $11.9 million. At the outset of the pandemic, there was a well-documented decline in STEMI activations patients had so much anxiety about contracting the virus that they avoided hospitals and stayed home even when they were having a heart attack.
Consistent with our expectations cath lab capacity and referral channels are slowly ramping back up and we anticipate coronary procedures will steadily improve throughout the remainder of the calendar year. The recovery has been asymmetric across the United States with a stronger improvement in the south and west regions of the country.
Although there has been a recent surge in coronavirus cases, it seems that healthcare facilities around the country have adapted and are successfully performing both elective and emergent procedures while simultaneously caring for patients hospitalized with COVID-19. So the chaos we experienced in March and April has begun to subside and the recovery is now underway.
Due to the steady improvement in our procedure volumes in May, June and July, we have increased confidence in our ability to forecast sales. And we have issued guidance for Q1 revenue in the range of $55 million to $58 million.
In issuing this guidance we have considered a number of favorable and unfavorable factors that will influence our revenue, but taken in total we think our revenue will rebound to approximately 85% to 90% of prior year sales. In a moment Rhonda will provide additional information regarding our R&D pipeline and commercial progress.
But first I will ask Jeff to provide you with additional details regarding our financial results and our first quarter revenue guidance. Jeff?
Jeff Points
Thank you, Scott. Good afternoon, everyone.
As Scott mentioned fourth quarter revenue of $42.5 million represented a 38% decrease compared to last year. In total, we sold nearly 14,500 atherectomy devices during the quarter representing a 37% decrease compared to last year.
Worldwide peripheral revenue decreased 36%, to $30.6 million. Worldwide coronary revenue decreased 41% to $11.9 million.
The revenue generated in the U.S. and international markets was as follows: total U.S.
revenue decreased 38% to $40.5 million. Domestically peripheral unit volumes decreased 35%.
Domestic coronary revenues declined 44% from last year, primarily driven by lower atherectomy unit volumes. International revenue decreased 17% to $2.1 million.
Travel restrictions and our inability to support new accounts has slowed our progress in international markets. In Q4 gross profit margin dipped to 76% as a result of lower volumes.
Operating expenses of $47.1 million, decreased $6.4 million or 12% compared to last year. SG&A declined $9 million compared to last year due to lower sales and other incentive compensation, as well as actions taken to reduce variable spending.
R&D expenses increased approximately $2.4 million versus last year and includes a non-cash charge of $3.3 million related to patents within our product portfolio on pipeline that are no longer tied to current or future commercial activities. As you know, we have a growing path portfolio of over 220 patents for orbital atherectomy and products in development.
This non-cash charge was partially offset by lower expenses related to the pausing of our ECLIPSE clinical trial. Fourth quarter net loss was $15.2 million.
Adjusted EBITDA was a negative $10.6 million. On the balance sheet, we ended the quarter with over $232 million in cash and marketable securities and no long-term debt.
The increase in our cash position compared to Q3 was related to an equity issuance in June, where we raised $135 million in net proceeds. This issuance further strengthens our balance sheet and assures we remain well capitalized throughout the recovery of the pandemic.
For the fiscal year ended June 30, 2020 revenues declined 4.6% to $236.5 million. Gross margin remained strong, but decreased slightly to 79.4% compared to 80.8% in the prior year, primarily driven by growth in lower margin segments such as office based labs, interventional support devices and international, along with lower volumes caused by the pandemic.
Operating expenses increased $13.4 million or 6.7% to $214.6 million. Net loss was $27.2 million or $0.79 per basic and diluted share for the full year compared to a net loss of $0.3 million or $0.01 per basic and diluted share in the prior year.
That concludes my review of Q4 and full year financial results. I will now provide some commentary on what to expect for the first quarter of fiscal 2021.
As we discussed our expectations for Q1, please note that we remain in a very dynamic environment and along with the rest of the country, we continue to monitor the many models that predict various scenarios for the severity and duration of the COVID-19 outbreak. However, as Scott mentioned, procedure volumes steadily improved throughout Q4 and even into July as hospitals resume our emergent and elective procedures.
We believe this trend will continue and we are forecasting, a strong, sequential increase in revenues for Q1 compared to Q4. Our first quarter revenue guidance of $55 million to $58 million, represents sequential revenue growth of 29% to 36% compared to Q4.
This range also represents approximately 85% to 90% of our Q1 revenue one year ago. In addition, our international business, especially operations outside of Japan, are expected to continue to be negatively impacted by the pandemic.
As a result, we expect international revenue may slightly decline over the next two quarters. Similar to Q4 our anticipated reduction in volumes and Q1 compared to the prior year will have a modestly negative impact on gross margin.
Recall that a significant portion of our cost of goods sold is related to burden. A fewer devices manufactured is expected to result in gross margins, approximately equal to Q4 at 76% to 77%.
In total, we expect operating expenses and Q1 to range between $50 million and $52 million. This represents a decline of approximately 10% to 13% from the prior year.
Until procedure volumes returned to normal levels we intend to maintain several of the business continuity plans we implemented in March, which reduced operating expenses and capital expenditures across the business. Active management of operating expenses, combined with a strong balance sheet positions CSI to manage through this challenging time and remain poised to resume our double digit growth trajectory as elective and non-urgent procedures returned to previous levels.
Rhonda will now discuss our commercial developments. Rhonda?
Rhonda Robb
Great. Thank you, Jeff.
And good afternoon, everyone. As Scott mentioned, we have increased our efforts to serve our customers and support our patients throughout the pandemic we've supported cases and consistently delivered high quality products and services to our customers.
We expanded our digital footprint in all communications and increased customer engagement. Our updated take a scan website, launched a physician finder so that patients can locate physicians in our community performing limb salvage procedures throughout the pandemic.
In Q4, 3,200 patients clicked through to identify a physician. Our field sales representatives and CSI executives have remained in close contact with each of our customers to understand their needs.
These frequent conversations enable CSI to meet each one of our customers where they need us. During the quarter, we took action to assure the safety of our employees, customers, and their teams.
Lower procedure volumes, due to the pandemic reduced cash flow at many facilities. We responded by offering expanded pricing and contracting programs to help facilities based with near-term financial constraints.
Our field sales representatives are also increasingly supporting cases in person and virtually flexing to the needs of each individual physician that we serve. Demand for professional education programs increased dramatically.
During the fourth quarter, over 1,200 physicians attended our virtual programs nearly 3 times our normal course attendance. In many cases, we partnered with societies to develop specialized content, content we knew our customers desired.
For example, we partnered with OASIS to deliver educational programming, to help our customers understand the financial resources available through COVID and the operating of an outpatient lab in the wake of a pandemic. With [indiscernible], we developed a program specific to managing limb salvage during a pandemic.
With SCAI, we produced a new coronary program. In total, we are encouraged by the level of engagement and interest in our professional education programs.
We look to expand these efforts and to continue to leverage virtual education programs going forward. Each of these actions strengthened our brand and demonstrated to our customers that CSI remains a key partner in the care of their patients.
During Q4, we also demonstrated how innovation can help physicians effectively treat their patients. In peripheral, our low profile devices that allow for a variety of access points are resonating with physicians seeking to treat peripheral lesions, while reducing procedure time and bleeding complications related to traditional femoral access.
As a result, we’re seeing increased interest in the use of radial access and other alternate sites of access that reduce bleeding complications and accelerate time to ambulation. We anticipate further adopted to enhance the consistent flow of patients from intake to discharge.
Last week at the New Cardiovascular Horizons, or NCVH Conference, data from the our REACH peripheral study was shared virtually as a late breaker. We’ve demonstrated that the use of orbital atherectomy in radial peripheral vascular interventions has a high rate of procedural and treatment success and is effective in reducing residual stenosis across all lesions.
98% of patients achieved procedural and treatment success. There were no reports of serious transradial access related events.
Additionally, the study demonstrated short recovery time and length of stay, which are key factors in patient satisfaction at a particular interest during this pandemic. During the quarter, we also found that physicians are increasingly interested in performing full leg revascularization in one procedure.
Our Exchangeable platform with GlideAssist offers a low profile device designed to access the vasculature through multiple access points. This platform is designed to serve up to 50% of the peripheral patients that have multivessel disease throughout the leg.
Exchangeable enables the use of up to three crowns so that a physician can treat lesions above and below the knee and provide full leg revascularization in an efficient, single procedure. This product have been well received by physicians and their patients who will be motivated to complete treatment in a single session as opposed to scheduling multiple interventions.
Exchangeable is sold at a premium and help drive an increase in our hospital peripheral ASP during the fourth quarter. We also made progress in one of our longer term innovation projects.
In Q4, we successfully completed a pre-submission meeting with FDA on our pVAD EFS [ph] study protocol. We remain cognizant of AHA, data presented last fall in the high-risk PCI support space and believe this may increase the number of patients and lengthen the follow-up requirements in our pivotal IDE study.
Nevertheless, we are pleased that the alignment and the process that is developing with FDA and we continue to target first-in-human late in fiscal 2021. Turning to our patent efforts.
One-year ago we set out to invalidate three key patents related to the development of an IVL System. In July the Patent Trial and Appeal Board issued its final rulings and invalidated 50 out of the 51 challenge claims across three key IVL patents.
Our successful IP challenge provides CSI the optionality to pursue development of an IVL System at our discretion. In some we've strengthened our business and brand in a number of important areas that position CSI to resume double-digit revenue growth and expand our market leadership position during fiscal 2021 and beyond.
Turning to our key revenue drivers in the first half of fiscal 2021; I previously mentioned our innovation and peripheral with our radial and exchangeable platform. We will continue to demonstrate the benefit of these products going forward.
This fall we will also begin offering peripheral support devices, when we launched the Wirion, embolic protection device. We liked this filter because it is the only distal embolic filter that can be used with any commercially available peripheral atherectomy system to capture all forms of embolic debris, including thrombus.
The device can also be used with any [indiscernible] making it an incredibly versatile system that can be used in cases where the risk of distal embolization could be higher. During the second half of fiscal 2021, we plan to introduce full lines of peripheral support products, including angioplasty balloons, catheter, and a full complement of radial access support devices representing up to $1,800 of incremental revenue for every peripheral OAS sold.
Now we know this strategy works. In the last six months of fiscal 2020 we sold over $500 of support products for every coronary OAS sold.
And remember peripheral atherectomy represents 80% of our unit sold. So leveraging our large domestic sales channel by selling a growing number of peripheral products is expected to accelerate revenue growth.
Of course, the timing of our product development and launch milestones does represent our best estimates at this time. Naturally COVID-19 and other factors could result in changes to the timing of these events.
Internationally, we are encouraged by a recent ruling in Japan that now allows facilities without surgical backup to conduct coronary atherectomy procedures. This dramatically expands the number of potential facilities where we can train and educate from 400 to over 700.
In Europe, we anticipate CE Mark for our coronary atherectomy device during the first half of fiscal 2021, with most of our onsite training professionals grounded due to COVID. Our near term revenue expectations are modest.
We look forward to updating you on our plans once approved. Also we recently submitted our coronary and peripheral OAS for approval in Canada.
Overall, we continue to execute on our international expansion strategy. However, we do anticipate that the effects of the pandemic will reduce international revenues during the first half of fiscal 2021.
In clinical, we will resume patients in our ECLIPSE Trial later in fiscal 2021 when the disruption caused by the pandemic for further subsides. We will be monitoring the status and renewal of research activities and semi-urgent procedures across the country and we'll engage with our principal investigators to ensure that our data is not influenced by the pandemic.
This will certainly push out the timing of the readouts that’s on ECLIPSE, but with 1,364 patients enrolled to-date in this important study, we will remain patient and we'll make sure we can definitively answer the question of how best to treat severely calcified coronary lesions. With the lower extremity revascularization code set under review, starting in October.
It's important to know that peripheral atherectomy as a category has both proven safety and outcomes with decreased adverse events, shorter length of stay, lower major amputation rates and lower mortality rates. When compared to stent, PTA and surgical bypass.
CSI has taken an important leadership role and generated unprecedented peripheral medical evidence that sets CSI apart from all competitors, more than 4,800 real world patients and over 7,000 lesions treated in clinical studies have proven that OAS is a safe, durable life changing and life sustaining cost effective solution. These data include LIBERTY 360, the largest real world study of endovascular device interventions.
We will continue to leverage ongoing data from LIBERTY 360, the largest real world study of endovascular device interventions to drive the use of peripheral OAS. In the fall timeframe, you will see a LIBERTY OAS publication that will provide further evidence to support the economics for treating more complex patients, as well as more complex lesions like severe calcium, below the knee lesions and CTOs with OAS.
It will show important data reflecting that the addition of OAS to a procedure lowers costs at one and two years compared to the overall study and to other technologies. This positions OAS very well for payers focused on more term, long term, long-term outcomes.
Although there's CPT editorial panel process can be a complicated and opaque process. We will do our best to keep everyone apprised of updates.
We continue to anticipate that the development of a new code set may require a work group, which could push the introduction of new codes into 2023 or later. In the meantime, we believe several of the societies will advocate to protect atherectomy reimbursement and may seek differentiation based on lesion length and case complexity, which may favor our technology that is used to treat long severely calcified lesions above and below the knee.
That concludes my prepared remarks. I will now turn the call back to Scott for his closing comments.
Scott Ward
Thank you, Rhonda. Well, the information that we've shared with you today should illustrate that we are managing this crisis exceptionally well.
And we are poised to resume our previous growth trajectory when this pandemic subsides. Although the pandemic has changed many aspects of how we do business, it has not changed our strategic intent to become an innovative global medical device company focused on treating the most complex patients living with peripheral and coronary artery disease.
We continue to invest in sustaining our market leadership and achieving attractive, consistent growth in our core business, driving incremental growth by expanding our product portfolio, delivering higher revenue per procedure and accelerating the growth of our core business through a steady cadence of commercial launches globally. Despite the coronavirus, we are making strong progress on these objectives and we are well positioned to emerge from this crisis as a stronger and broader company.
For example, over the past two years, we have launched 12 new products. We have expanded our evidence based significantly with greater than 70 manuscripts published in peer reviewed journals.
Our products have been highlighted in over 100 podium presentations delivered at major medical conferences. And we have expanded internationally with a presence now in 13 countries, including Japan, where we have rapidly gained market share.
In addition, we completed an equity financing in June that generated an additional $135 million in capital. This additional financial strength assures that we have the resources required to endure through the coronavirus crisis and provides flexibility to be opportunistic in adding new products to our portfolio.
Although nothing is imminent, we may consider adding products that will enhance the quality of care for our patients, leverage our commercial footprint and expand our core technologies. In closing, I want to assure you that the strength, capacity and key growth drivers for our business remain vibrant and robust.
We look forward to the day when we can focus solely on our mission to address that other pandemic called cardiovascular disease, which still today remains the number one cause of mortality in the United States. I would like to thank all of our CSI employees for their perseverance, dedication and compassion and delivering exceptional support to our customers and patients during this extraordinary time.
I would also like to thank all of you for your continued interest in CSI, and we will now take your questions. Christine, if you would please repeat the instructions that would be great.
Thank you.
Operator
Thank you. [Operator Instructions] Your first question comes from the line of Chris Pasquale from Guggenheim.
Your line is open.
Chris Pasquale
Thanks. Appreciate taking the questions.
Scott, to start with, I'd be curious if you can shed any light on how June and July sales compared to year ago. I'd love to get a better sense for the incremental improvement.
That's assumed in guidance relative to where things stand today?
Scott Ward
Yes. I can comment on June, Chris, and I think you have been issuing reports based upon it, an advisory committee that you've assembled, and I think actually they have served you well.
I think you've been estimating recovery in that 80% to 90% range versus prior year, and I would say in June that we had climbed to about that range.
Chris Pasquale
Okay. So fair to say that the guidance for the first quarter assumed that the pace of recovery slows, but you do continue to make sequential improvement month-by-month.
Scott Ward
Yes. I think that's fair.
I think we actually see – we don't really believe that it'll slow, but we think it'll flatten out.
Chris Pasquale
Okay. And then the decline in STEMI admissions was one of the more surprising aspects of what we saw in the early days of the pandemic.
It still seems like coronary is lagging a bit. How much has that particular STEMI dynamic changed or improved?
Scott Ward
Yes. So the STEMI dynamic has improved a bit, but I think the fundamental issue we still have is in the coronary referral channel.
And I think I'd like Dr. Egeland, our Chief Medical Officer, just to address that briefly.
Ryan, do you want to talk about that?
Ryan Egeland
Sure. Yes.
No, thanks for the question, Chris. I think, part of the issue is outside of ACS patients, there's a reduction obviously in the diagnostic resources as a result of the pandemic, and that of course reduces the number of patients that ultimately are diagnosed with non-emergent disease.
And then I think the second thing that has become more apparent is that these patients that are advanced in disease, they have significant symptoms, complex disease, but may not necessarily present with an urgent inciting incident that creates an emergent procedure. And so some of those patients may elect, although they're not managed effectively with medications, they may elect not to come in the course of the pandemic.
And so that's another contributing effect. We expect both of those really to, to become less pronounced over time.
Chris Pasquale
Thanks.
Operator
Your next question comes from line of Kristen Stewart from Barclays. Your line is open.
Kristen Stewart
Hi. Thanks for taking the question.
Just too kind of go back to the reimbursement decision to kind of open the codes here in October. The comments were helpful, just in terms of this taking a long time.
I was just wondering if you could maybe just share some of your thoughts on opening the number of codes and whether or not we feel that could be more positive in terms of changing the number of codes from 16 to 32, if you feel like that opens the door to maybe reflecting more of the variation in the type of procedures that are being treated in peripheral, and maybe that being a good thing for you guys as you treat more complex lesions as well?
Scott Ward
Yes. Thanks, Kristen.
I really appreciate that, and welcome to you. Quite honestly, we are really pleased that that the lower extremity codes are now on the agenda in October.
We've been shadow boxing against an unknown opponent here for a while. So we look forward to gaining clarity.
I should say, in regards to your question, when – when you've indicated the increased number of codes we don't at this time have a lot of visibility to exactly what's planned. This is clearly a very complex area of medicine with a lot of different procedures and a lot of different products that are used in the care of these patients.
So it's difficult to comment on that specifically. I would point out however that we have a really unique case mix at CSI and we have been focused on treating patients that generally have a much higher burden of disease.
So we focus on treating patients that have longer lesions, and we focus on treating patients that have severely calcified lesions. These are usually really complex cases.
So, these are difficult patients to treat. We have a high focus on patients that have below the knee lesions and of course, many of our patients have critical limb ischemia and we're, we're very heavily involved in limb salvage procedures.
So we do think that based on this large number of codes that the AMA may stratify the codes by lesion complexity and by length. And if they do that, we think this will be an advantage for CSI.
If reducing reimbursement in my view for CLI and limb salvage and some of these other complex cases with real high disease burden. It just doesn't seem to make sense.
So we're confident that any reduction that may come along would be small and probably would not reduce utilization and would not affect our pricing. So this is where we're at right now.
It's about as much as we can say, based upon the information that's available. We'll certainly keep you updated as we know more.
As many people have indicated, we have filed as an interested party, and perhaps we'll learn more in a few weeks, but at this time that's – that's about as much as we can address this topic.
Kristen Stewart
Thanks very much.
Scott Ward
Thank you, Kristen.
Operator
Your next question comes from the line of Mike Matson from Needham. Your line is open.
David Saxon
Hi. Good afternoon.
This is David Saxon on for Mike. Thanks for taking the question.
You called out OBLs as leading the recovery for average daily sales. So just wondering if you could put some numbers behind that?
And as you see that shift to OBLs, just wondering what the longer term implications are for pricing and margins if that mix proves to be a little more durable?
Scott Ward
Yes. Our OBLs, I'm going to have Jeff address this question in a moment, but actually the OBLs have really led our recovery in peripheral.
We we've seen OBLs in, in, in certain places like Texas and Florida, where perhaps the healthcare community, the hospitals have been more severely affected. We've seen the office based labs continue straight through and not be shutdown.
So in that context, they, the OBLs have continued to lead the rebound and certainly we've benefited from that. So Jeff, do you want to address the...
Jeff Points
Yes. Just to follow-up on that?
You mentioned U.S. peripheral business was down 36% year-over-year, but if you just break that out in the – in any OBL space, we actually saw decline in the low-30s and the peripheral space we saw it in the upper-30s, so we would expect that trend to continue here as we go into Q1.
David Saxon
Okay. Thank you.
And then just on the IVL patents, I mean, it sounds like this is final. So can you confirm that?
And I mean, it sounds like you're maybe planning on developing your own device, so any color there and that would be very helpful? Thank you.
Scott Ward
Yes. The PTAB decision is open for appeal.
We don't know if it will be appealed at this time. I can also say that at this time, we are not really commenting on the nature of our R&D pipeline as it relates to the IVL.
So we'll ask you to stay tuned on that.
David Saxon
Okay. Thank you.
Scott Ward
Thank you.
Jeff Points
Thanks, David.
Operator
Your next question comes from the line of Danielle Antalffy from SVB Leerink. Your line is open.
Danielle Antalffy
Hey, good afternoon, everyone. Thanks so much for taking the question.
Just a high level questions, Scott, if you would on the reimbursement aspect of this. I mean, there's a lot of debate around that, but at the end of the day, like how much do you fit – How much of a moneymaker from a volume perspective is this for the hospital and/or the OBL?
And does it in your view, how much does that really even impact the actual adoption of these devices? But that's my first question.
I have one follow-up.
Scott Ward
Sure. Danielle, thank you for that.
I think actually the – when you consider atherectomy and the utilization of atherectomy in hospitals and OBLs, it is not a large contributor to the revenue. If you just simply look at the atherectomy as a portion of the overall spending in this code set, it's a smaller percentage of the total.
There are sites, of course, who focus on limb salvage and who focus on CLI. And I think in those hospitals and in those OBLs, you would find that – the use of our devices is a higher percentage of their overall revenue streams.
But generally speaking, it is not a major contributor to the revenue streams for these hospitals or for many OBLs. So hopefully that's helpful.
Danielle Antalffy
Yes. No, that is, and I guess another way to sort of ask the question, I mean, if reimbursement were to come down, would it be so detract so much from revenue that it would inhibit use?
I guess that's what I'm trying to get at here?
Scott Ward
No. As I said, I don't think that reimbursement – first of all, I don't think reimbursement for atherectomy is going to come down that much.
And in particular, as it relates to our company, we're focused on these more complex, longer lesions where we believe the societies are advocating for actually increased payment because managing those patients just takes longer and is more complicated. So we really don't think reimbursement is going to come down that much.
It just doesn't make sense that you would reduce reimbursement for the care of these more complex patients. In terms of the utilization of our product, I think, it would have to come down a lot to affect it because our product, like I said, we treat a very unique set of patients and really we have a very unique product.
We're the only company that sells a device for the treatment of these severely calcified and long lesions. So as a result there just simply aren't many alternatives in the marketplace for the care of these patients, frankly, there's none.
And so as a result of that, we believe that we will continue to have a very strong place in the treatment continuum for the care of patients that have CLI. Got it.
Thanks so much.
Scott Ward
Thank you, Danielle.
Operator
Your next question comes from the line of Suraj Kalia from Oppenheimer. Your line is open.
Suraj Kalia
Good afternoon, everyone. Scott, can you hear me all right?
Scott Ward
Yes, Suraj I can. Thank you.
Suraj Kalia
Perfect, hope everyone is safe and healthy. So Scott, forgive me, was just jumping in between calls.
I don't know if the question is being asked in inventory, but are you seeing any shifts in inventory in the field specifically related to any, this is more of a broader question, whether it's ideal, whether its atherectomy just given hospital financial situation should we be concerned paying attention to that specific aspect of the stage?
Scott Ward
Well Suraj yes, so I think over – beginning in March, hospitals really began to conserve their cash and they have not replenished inventories. And I would say, as you look at our current revenue streams, it very much reflects our organic growth.
And what you're really seeing now is a revenue run rate that very much correlates to our case loads.
Suraj Kalia
Got it. Scott did you talk about ECLIPSE enrollment status?
Scott Ward
Yes, Rhonda did address that. Did you have a specific question related to ECLIPSE?
Suraj Kalia
Just curious, the number last week was around a 1,000 patients enrolled. I wasn't sure if you gave an updated number or…
Rhonda Robb
Sure, we actually made the decision, when COVID hits to suspend enrollments. Our customers really want it to focus their hospital resources on caring for COVID patients during the pandemic.
And so we are working with our PIs to identify when would be best to restart ECLIPSE. So the enrollment rate has remained stable since our last updates.
And we'll look at the best timing to resume when hospitals, and the physicians and investigators are comfortable doing so. But anticipate at some time in FY2021 likely just not in our Q1.
Scott Ward
And we currently are at about 1,364 patients.
Rhonda Robb
Yes.
Suraj Kalia
And if I could squeeze one more in Rhonda maybe, and I appreciate the element of secrecy and you don't want to give too much information right now, but between now and your FIM later in FY2021, [indiscernible] are we doing to see any glimpse on bench testing of pre-clinicals published or otherwise at a scientific presentation. And specifically, the reason I asked is because, this is pretty well documented existing commercial purposes devices for high risk PCI, pretty high hemolysis rates, and now mortality.
For people like us, just to take a step back and see on a relative basis, how – obviously there are translational leisures, but would love to get some perspective before your first [indiscernible]. So any color would be great.
Rhonda Robb
Yes, we currently don't have plans to release any of our bench or engineering testing data. We are laser-focused in continuing to work productively with the FDA on that EFS protocol.
And as I mentioned in my comments, we have alignment to that. So that's a really exciting step and just kind of focused on that pathway moving forward.
And as we get through EFS and then subsequently moving pivotal, that may be the time at which we would begin to publish more information and put more information out there with regard to the performance of our device.
Operator
Your next question comes from the line of Brandon Vazquez from William Blair. Your line is open.
Brandon Vazquez
Hi, thanks for taking the question. First, just in terms of patient pipelines and diagnoses during the ongoing pandemic have you guys noticed that patients are kind of coming back into your [indiscernible]?
And do you feel comfortable that kind of the pipeline of patients is coming back so that there's not maybe some pockets of volatility as we move through the next few quarters?
Scott Ward
Well, I think we'll certainly see pockets of volatility and some of that will be caused by just the rolling outbreaks of COVID-19 across the country. As you look at – if we normalize that across the United States in total, I would say that we are seeing a restoration of the patient pipelines in peripheral.
Certainly as we look at our below the knee, which is mainly a critical limb ischemia patient population, we did not see much of an impact in our patient referral pipelines there. For our chronic and patient population, mainly above the knee, we are beginning to see a restoration and a recovery in the referral channels in that segment.
And as Dr. Egeland referred to her earlier, we continue to see a bit of a depleted or let's say disrupted referral channel in coronary.
And as we've said before, we expect that that will improve and probably continuously improve over the course of the remainder of this calendar year. But at this time, yes, we do continue to see some disruption in our coronary segment as has been reported by others operating in that market as well.
Brandon Vazquez
Got it. And then I'm turning over to the balance sheet quickly you guys have always had a healthy, strong balance sheet.
And the recent capital raised just made that a little bit stronger. Do you think that the recent the recent capital raise can help you pull forward any of your commercial initiatives put further investments in any of your pipeline products, maybe pull some of that forward or is this – should we think about this more of just additional capital to kind of weather the uncertainty going forward?
Scott Ward
Yes, I think actually for us, this is additional capital that we will use to assure our financial security and to assure that we are positioned to weather the storm. We also think that this additional capital gives us additional flexibility to consider potentially dislocated assets that are in the market right now.
And we are, as we've talked about before, we are considering potentially adding products to our portfolio that that would bring new technologies to our company, improve the quality of care for our patients and might also add revenue per procedure. So that's our intent in using this additional financial flexibility that we have.
I would also note that last quarter we were successful as well in updating our debt financing. And we now have access to about $50 million of debt, although we haven't drawn upon that, we don't have intention to.
Brandon Vazquez
Thank you.
Operator
[Operator Instructions] Your next question comes from the line of Jayson Bedford from Raymond James. Your line is open
Jayson Bedford
Good afternoon. And thanks for squeezing me in.
Just, I guess, a few questions just on site-of-service, can you remind us how big the OBL business is as a percent of peripheral?
Scott Ward
Yes Jayson, it remains about 30% of our peripheral business.
Jayson Bedford
Okay. And then you mentioned that OBLs will play an increasingly important role going forward.
Can we assume the lesions treated in the setting are shorter, less complex lesions?
Scott Ward
Yes, I think that's a reasonable assumption, generally, Jayson. But I think for us, we focus mainly on office space labs who are treating more complex patients.
So most of our sites really are more focused on the treatment, frankly, they're limb salvage centers and they are more focused on the treatment of these more complex, longer lesions. So that is and has continued to be, we are focused in the OBL segment.
Jayson Bedford
Okay. And so just Scott, in terms of your expectation around the AML AMA panel, your expectations that are going to stratify the codes by lesion, length and complexity, not so much by setting.
Scott Ward
We think that's the case. Yes, that's correct.
We don't have any information on this Jayson. We just understand that the interests right now, the interest of the medical societies appears to be focused on stratifying the care of these patients based upon the complexity and length of the lesions treated.
Jayson Bedford
Okay. Okay, so last couple, in terms of your ability to add new centers in the quarter, can we assume that you added fewer centers or was that pretty steady?
Scott Ward
No, we definitely added fewer centers. Jeff, do you want to address the number of centers?
Jeff Points
Yes, Jayson, that's exactly right on the corner of side, we added 12 and then the peripheral side we added 25, the majority of which were OBL centers.
Jayson Bedford
Okay. Okay.
Fair enough. And then just last for me, you kind of hinted at it, but with the cash balance you guys are clearly well-funded.
I thought you hinted a little bit potentially some in M&A to help grow the business. Can you just give us some parameters around the size and characteristics you're looking for with M&A?
Jeff Points
No, I'd rather not. I think the characteristics that we described are generally, as I indicated, Jayson, it's just products that are currently fit within our current commercial footprint, products that obviously we use for the care of the patients we currently see.
And then finally, we would be looking at adding kind of wholesale new technologies to our portfolio.
Jayson Bedford
Okay. Thank you.
Jeff Points
Okay.
Operator
There are no further questions; I will turn the call back over to Scott Ward.
Scott Ward
Great. Well, thank you very much.
And with that we will end the call. I thank all of you for your interest in CSI.
And we'll give you another update next quarter. Thank you.
Operator
Ladies and gentlemen this concludes today's conference call.