Feb 3, 2022
Operator
Good morning. Welcome to today's Cardiovascular Systems Inc.
Fiscal Year 2022 Second Quarter Earnings Conference Call. My name is Candice, and I will be your operator for today's call.
[Operator Instructions] I would now like to pass the conference over to our host, Jack Nielsen, Vice President of Investor Relations. Jack, please go ahead.
Jack Nielsen
Thank you, Candice. Good morning, and welcome to our fiscal '22 second quarter conference call.
With me today are Scott Ward, CSI Chairman, President and Chief Executive Officer; Rhonda Robb, Chief Operating Officer; and Jeff Points, Chief Financial Officer. Earlier this morning we issued a press release announcing second quarter results.
You may find a copy of this release on our Investor Relations section of our corporate website, here you may also find an earnings supplement that includes additional details on our performance and outlook. 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 conditions 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 useful information for our investors. Today's press release contains a reconciliation to GAAP results.
I will now turn the call over to Scott Ward.
Scott Ward
Thank you, Jack. Good morning everyone and welcome to the call.
Today, we reported Q2 worldwide revenue of $59.1 million representing a 1.3% sequential increase, but a decrease of 7.8% versus the prior year. This revenue performance reflects another quarter where our business continue to be pressured primarily by lower procedure volumes related to hospital capacity issues and staffing shortages caused by COVID-19.
Our recovery from the Delta variant was suppressed by the arrival of Omicron in December. Consistent with past surges, the impact was more acute in the peripheral claudication segment of our business, which is deemed more deferrable and is more susceptible to the long-term havoc created by COVID.
We now know that staffing turnover and shortages caused by COVID have had a chronic dampening effect on the entire peripheral vessel preparation and atherectomy market. The latest market data from independent sources indicate that the peripheral vessel preparation and atherectomy procedure volumes are down 10% to 12% versus the prior year.
The good news is that we continue to believe this is temporary and that many of these procedures will be regained as the Omicron search fades, the healthcare system recovers and patients return to hospitals and clinics for a long overdue interventions. It is difficult to predict the exact timing, but we expect the backlog of cases to gradually flow through our accounts at some point after this latest wave recedes.
We are also encouraged that the fundamentals in our business like new accounts, new customers trained and new contracts all improved sequentially in Q2, and we continue to gain share and achieve strong growth in our international markets. In addition, we achieved sequential growth in our U.S.
coronary business in Q2 and we believe that we are recovering some market share. We expect this to continue as cath labs and physicians return to the consistent use of atherectomy in their standard daily clinical practice.
We believe we have the preeminent sales force in the U.S. market.
The work we do improves the quality of life, prevent imputations and saves lives for thousands of patients every year. Our morale has remained strong and our employees have diligently supported our customers and patients throughout this latest surge.
So even though COVID has caused us to adjust our near-term outlook for this fiscal year, we are excited about our future and we expect to return to growth supported by improving market dynamics, our innovative product pipeline, and expansion in large and fast growing markets. In a moment, Rhonda will provide additional information regarding our commercial progress, but first Jeff will provide you with additional details regarding our second quarter financial results and our revised revenue guidance.
Jeff?
Jeff Points
Thank you, Scott. Good morning, everyone.
Financial results for Q2 were as follows; worldwide coronary revenue increased over 4% sequentially to $20.2 million while also increasing slightly from the prior year. In the U.S., coronary revenue grew sequentially 3% from Q1 and decreased 7% to $16.7 million over the prior year period.
Outside the U.S., coronary revenue increased 60% over the prior year period, the $3.6 million as a result of continued strength in Japan, combined with the launch of coronary OAS in Europe. Worldwide peripheral revenues were flat sequentially at $38.9 million while decreasing 11% compared to the prior year.
In the U.S., peripheral revenue was also flat sequentially, while decreasing 12% compared to last year. Turning to expenses, gross margin was 69.4% for the quarter.
Excluding a one-time charge of $2.8 million related to the voluntary recall of our WIRION Embolic Protection System, gross margin was 74.3%. Q2 gross margins also reflect lower OAS volumes and an increasing mix of ISD and international revenues.
Operating expenses totaled $49.6 million, which was about flat with last year. Net loss was $9 million or $0.23 per share.
We ended the quarter with $176 million in cash and marketable securities, and no long-term borrowings. Turning to our outlook.
Our sales have been constrained by Omicron since the surge began in December and this trend has continued in the February. Based upon forecasts from public health experts, we expect the hospital capacity constraints could begin to ease in late February and our procedure volumes may gradually begin to improve in mid-March.
As a result, we expect domestic revenue to decline sequentially in the third quarter and gradually improve in fourth quarter. Although the timing and magnitude of the recovery is difficult to predict due to the dynamics introduced by labor shortages, we do expect sequential growth to resume in fourth quarter.
To accommodate the new constraints hosed by Omicron and the related staffing shortages, we are adjusting our guidance for the fiscal year ending June 30th, 2022 as follows. Revenues of $235 million to $245 million, gross margins of approximately 73%, net loss in a range of 15% to 18% of revenues and an adjusted EBITDA loss in a range of 47% of revenues.
To close, we are hopeful that Omicron will be followed by a period where COVID is less disruptive and we will get back to consistent sequential growth. I will now turn the call over to Rhonda, who will provide our commercial update.
Rhonda Robb
Thank you, Jeff, and good morning everyone. Today, I will provide my thoughts regarding Q2 and share some of the key performance drivers for the back half of fiscal '22.
In the U.S., peripheral revenue declined 12% and as Scott noted in opening comments the entire market for vessel preparation had declined 10% to 12% versus last year. We believe that the market decline is due to patient behavior, incidental COVID and chronic staffing issues.
As a result, many patients are being medically managed for longer periods of time. As such we believe and our market research collaborates that there is a backlog of patients that need to be treated.
We do believe that some of these procedures will be recovered. And we are working with our customers to prepare for a rebound.
However, the pace of the recovery is difficult to predict. The recovery is likely to progress more rapidly in our OBLs where the barriers to increasing procedure volumes are much lower.
Throughout the pandemic, the OBL side of service has proven to be more resilient than the hospital settings and the migration of peripheral patients to the OBL side of service continued in the quarter. OBL volumes increased 7% sequentially and now represents 51% of our peripheral procedures.
We are pleased that the market dynamics in the OBL setting have stabilized and our sales organization have recaptured market share since Q1. Although it's still early and OBLs are coping with COVID, we are not seeing much impact from the PFS changes implemented on January 1st.
Our OBL customers are not happy about these changes, but they are striving to drive efficiencies and we're supporting them with a series of programs and initiatives that will build and support high volume OBL account that are focused on the care of critical limb ischemia and other forms of complex PAD. Our customized outpatient resources program will include procedural education, inventory management, volume based pricing programs, clinical support, claims assistance and other initiatives that will transcend future reimbursement changes and assure efficient and effective care for our patients in the OBL setting.
Customer education has always been a key core competency at CSI, and we are focused on training new physicians and adding new accounts. In Q2, we trained 61 new physicians, and 52 new peripheral accounts adding to our future pipeline of OAS users in the U.S.
Sales of our peripheral IFCs increased to $1.2 million in the quarter following the successful launch and adoption of the J (ph) balloons. We are going to launch into approximately 25% of our U.S.
PAD income and expect this to ramp considerably in the next 2 quarters, given the significant number of large contracts secured and effective January 1. J (ph) balloons represent a significant opportunity to increase our revenue per case to approximately $100 per OAS by the end of our fiscal year.
Turning to coronary. Our U.S.
coronary revenue grew sequentially 3.1% to $16.7 million. This is an important step up following the launch of coronary IVL last February.
Over the past year, a lot of cath labs began trialing IVL to see where the device would fit in their treatment algorithm. And as that trialing is outdrawing to a close, we are driving a rebound in our coronary business as cath labs resume the use of atherectomy for the treatment of lesions with intimal and nodular calcium, heavy stenosis, eccentric and [indiscernible] and multivessel disease.
Of course, these are typically OAS cases, and we are encouraged that our customers are returning to the consistent use of atherectomy in their standard daily clinical practice. We continue to serve a high demand for customer training and coronary atherectomy.
In Q2, we began training over 200 fellows, certified 101 new users and opened 11 new coronary accounts in the U.S. We look forward to working with these physicians to complete their certification in the months ahead and are excited by the enthusiasm we are seeing in the expanded utilization of our products.
Our training pipeline remains strong and is an important indicator of future growth. During Q2, we sold $751 of support products for every coronary OAS sold.
This was roughly flat with Q1, but was over $200 higher than the prior year period. In total, sales of coronary support products were $2.7 million in the quarter.
We still have a large opportunity here since this product group is relatively new, and we continue to make our customer base more aware of our product offerings. We are also expanding our coronary ISD portfolio and following the recent FDA PMA approval, we are in the process of launching the ScoreFlex NC scoring balloon in the United States.
This one balloon creates a local stress pattern to facilitate safe and controlled plaque modification. ScoreFlex NC has the highest rate adverse pressure in the United States and is indicated for the dilatation of a de novo [indiscernible] coronary lesion and instant restenosis.
Scoring balloons represent a growing $50 million market in the U.S., and we believe ScoreFlex NC backed by compelling clinical data will continue to be well received. Turning to international.
We are really pleased with our Q2 international results with revenue growing 62% to $3.7 million. We continue to gain share in competitive atherectomy and ideal accounts with strong progress in Japan and Europe.
Like the U.S., we continue to serve strong demand for physician training and certification in our international markets. We certified over 70 coronary interventionalists outside the U.S.
and launched our coronary device in 6 countries during Q2, and we remain on track to be commercial in over 30 countries by fiscal year-end. During the back half of fiscal '22, we expect to continue strong revenue growth despite COVID as we drive adoption and launch OES in several new countries.
We are on pace to deliver $15 million to $16 million in revenue in FY '22. In closing for Q2, we strengthened the fundamentals of our business with strong progress in new customers trained, new accounts, new contracts and new product launches.
And of course, we're also pleased with our share gain recapture and strong growth in international markets. I'll now turn the call back over to Scott.
Scott Ward
Thank you, Rhonda. We are obviously operating in a very dynamic environment, which is really so defined by COVID but we are encouraged by our performance in Q2.
As you just heard from Rhonda, with a lot of very favorable outcomes on many of our leading indicators. So despite all the chaos, we really do have some great opportunities, and we're making strong progress in our efforts to transform CSI into a multiproduct, multinational company capable of delivering consistent and profitable growth.
Looking forward, we will continue to protect and grow our core orbital atherectomy business, while we expand globally and develop a robust portfolio of new products. Over the next 18 months, we plan to introduce new products to serve our customer base, drive higher revenue per procedure and expand the use of orbital atherectomy.
In the near term, we will launch the ScoreFlex MC, which will be the first noncompliant coronary scoring balloon in the U.S. And next fiscal year, the 2.0 MACE, which is a large vessel crown that will expand our offering to treat soft and mixed plaque in the larger vessels above the knee, and we will also launch an innovative line of coronary microcatheters for accessing chronic total occlusions.
Longer term, our pipeline includes several products representing some of the fastest-growing segments in the market, including everolimus drug-coated balloons for coronary and peripheral applications, a pVAD for high-risk PCI and IVL balloons for peripheral and coronary artery disease. And I'm happy to report that we're making really great progress on each of these programs.
Last quarter, we announced the first in-human experience for the coronary drug-coated balloon. Our R&D team recently completed several important development and preclinical milestones for our pVAD device, and we expect to conduct our first-in-human clinical experience with that device in an OUS trial later this fiscal year.
And most recently, we announced the development of IVL balloons for the treatment of peripheral and coronary artery disease. So I think you can see that we've assembled an impressive portfolio that diversifies our growth platforms and expands our total addressable market from about $1.8 billion today to over $12 billion in the future.
We have a great team, our greatest asset at CSI is our people, and we have made strong progress in the execution of our product pipeline. I'm confident that we will overcome our near-term challenges and restore growth to our business while we transform CSI to become a leading innovator in the care of patients with cardiovascular disease.
I would like to thank our CSI employees for their continued resilience as we continue to deliver 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.
So Candice, if you would please repeat the instructions, that would be great. Thank you.
Operator
[Operator Instructions] Our first question is from Mathew Blackman from Stifel. Your line is now open.
Please go ahead.
Mathew Blackman
I've got a few here. Maybe just for start, you've mentioned a couple of times that you think you regained share in the quarter versus the first quarter.
Can you maybe just talk a little about the competitive environment in the second fiscal quarter and how you thought about competitive headwinds in the new guidance range and then I have a couple of follow-ups?
Scott Ward
Yes, thank you Matt. I think where we probably made the most important improvement is in our coronary business, where you noted that we grew sequentially quarter-over-quarter.
We are also seeing that the trialing now of IVL balloons is really drawing to a close and at least in many of our accounts and I think in those accounts that trialed early in let's say the IVL launch. We now are beginning to see a recovery of our procedures in those accounts that is really coming back about to our normal pace.
So we're excited about that, our organization is doing a great job and continuing to work closely with our customers, educating them on the proper lesions in which to use orbital atherectomy and we're also seeing the results of that as physicians are returning to adopting our device on a regular basis, so good news there. I think as we, as we look forward, we do expect to see continued improvement in that coronary segment in the second half of this fiscal year.
We are, as we have talked about before, we continue to anticipate some potential competitive headwind as it relates to the launch of IVL for the above the knee segment in peripheral. Although we now think that will be fairly muted as we've got just a short amount of time it's early days but we haven't seen a large impact from IVL in the ATK segment.
That may progress over the course of the second half. If it does, we don't think it will be a large impact, but it is a change in the competitive dynamic and I think that addresses your question.
Matt, if I haven't fully addressed it, please ask a follow-up on that.
Mathew Blackman
Yes, no I think you covered it Scott, appreciate it. And then maybe one for Jeff now I'll squeeze in one for Rhonda.
I mean Jeff on the P&L guidance the full year gross margin, our margin guide at 73%. I don't think, in fact you'll get back to the, what's called the mid-70s that you hit in the first quarter.
So is that all volume headwinds as we think about the back half gross margin or you're seeing any upward pressure on costs, supply chain, things like that. And then maybe sneak this one in for Rhonda on the large, kind of it sounds like timing maybe slip a bit into next fiscal year.
I think you were previously saying later this fiscal year. So did I hear that right.
And as we think about commercialization's so the commercialization of the large crown is that plug-and-play or accounts going to have to get re-certified, retrained just any help on that front would be appreciated? Thanks.
Jeff Points
Yes Math, thanks for the question on gross margin. As we look to the back half of the year, that is really, if we compare to kind of the original guidance we provided that difference is really all volumes at this point.
If we get back to normal volumes, we would be kind of in that mid-70 range and it will be a little bit lower here in the back half and that's just because of the lower volumes.
Rhonda Robb
And Matt thanks for the question. So, for timing on the large vessel now we're calling at the 2.0 MACE.
We expect, we're working very closely with the FDA and that's going really well. We expect to have actually approval later in the quarter.
So, realistically, kind of timing for launch will be kind of that early FY '23 timeframe. So that's the status update there.
And when you say, plug-and-play. I mean, I think yes to a degree it will work with our existing handles, we will of course train and educate as we always do with that device.
But I think it's going to be a really straightforward launch into a huge market that will give us access to ATK procedures, which are about 60% of atherectomy procedures out there.
Operator
Our next question comes from Michael Matson from Needham and Co. Michael, your line is now open.
Please go ahead. Unfortunately, your question -- there is no audio in your question.
Can I ask you to re-register please Michael. Our next question is from Chris Pasquale from Guggenheim Securities.
Your line is now open. Please go ahead.
Chris Pasquale
Rhonda, talked about the initiatives you guys have underway to help your OBL customers cope with reduced economics in that setting with OBLs now accounting for the majority of the U.S. PAD mix.
What impact do you expect there to have on your own business. Should we assume some incremental pricing pressure over time as they take advantage of volume discounts and the like or do you expect to be able to maintain stable trends even as you help them become more efficient.
Scott Ward
Thanks Chris. I think that we expect now our OBLs to stay fairly consistent and actually to return to the good strong growth rate, that you've seen in the past.
I would note that our OBL segment has always been had more difficult pricing pressures and that most likely will continue. We've seen pricing erosion there in the mid-single digits, typically.
And I would anticipate that we'll continue to see that going forward.
Chris Pasquale
Okay. And then can you just update on the WIRION builds or after the recent recall, what's the path to getting that product back to the market.
How should we think about timing there?
Scott Ward
Yes, so the timing on that is still a bit to be determined. We have now just completed the -- recall or we're just about complete with it in terms of bringing back the devices.
We will be making improvements in that device. We'll be improving the retrieval catheter and some of our used procedures.
And as we assess that, we'll then be in a better place to give you a better sense of timing will probably be able to do that next quarter.
Operator
Our next question comes from Danielle Antalffy from SVB Leerink. Your line is now open.
Please go ahead.
Danielle Antalffy
Rhonda, I have a question for you and then Scott, a question for you on the MACE product. ATK I appreciate it's a large market opportunity, but also more competitive, and I guess just would love a little bit more color on the rationale behind investing in this product.
Is it more about the breadth of the portfolio, strength into your competitive positioning. Do you think this is a higher growth market than maybe I had been assuming, so just a little more color there would be great?
Rhonda Robb
Thanks Danielle for the question, much appreciated, I mean it is a large market and as I mentioned in my earlier comments that constitutes about 60% of atherectomy procedures, we currently do perform procedures in ATK today. But with this device we'll have better access to a new plaque morphology that we typically don't treat with OAS today and that's soft and mix plaque.
So we're looking forward to it, it's going to be a new market, it leverages our existing platforms with actually really pretty efficient for us to develop this and get it launch because it does work with our existing handle. And so from that standpoint, it's really a cost effective way for us to access a really big market.
Danielle Antalffy
Okay, thanks for that. And then Scott, question for you or Rhonda maybe this is for you to on the coronary side of things.
Great to hear that you're regaining share. I guess one of the things that we've been hearing in our due diligence here on vessel prep in general is that, the market has been expanding and now that the trialing seems to be coming to a close -- your accounts at least.
What are you seeing from IVL's into the market from a market expansion perspective and just getting more patients to undergo vessel prep then prior to IVL anything of note there I know COVID complicate things, but just curious even anecdotally, what you're seeing?
Scott Ward
Yes, thanks Danielle. We are most definitely seeing IVLs expand the market.
I think they are broadening to a completely different customer group that historically, maybe has not treated calcium in the past. I think that is actually having a beneficial impact on the market as those efforts are raising the awareness of calcium and also making it evident that severely calcified and even moderately calcified lesions should be treated before stents are placed and that hasn't always been the case.
So definitely improved awareness, strong market expansion out, beyond the tertiary care centers now into more community hospitals and other areas. And also expanding the use of interventional procedures for treating calcium, let's say to less severe lesions which -- all of which has really been very beneficial.
And I think is an indication of things to come as we do expect that that market expansion will continue and that IVL's in particular in the treatment of coronary lesions will continue to be adopted and done well. Having said that, I think we also are seeing that physicians recognize and understand in their own practice that one they come across severely calcified lesions where they have a high degree of stenosis or a nodular lesions where there's a lot of intimate calcium but these are cases where they really do need to use atherectomy and we're seeing them come back to that in their more standard daily clinical practice, which is what we expected.
This is happening as the trialing is kind of drawing to a close and we see individual physicians and cath labs kind of returning to their more standard practice. So good news for us, and we expect to see that trend continue now as we head into the second half of our fiscal year here.
Operator
Our next question comes from Mike Matson from Needham and Co. Your line is now open.
Please go ahead.
Mike Matson
So I wanted to follow-up on Rhonda's comment on the OBL reimbursement changes. I guess one concern that I have around that, was that it could lead to more some increase incentive for the customers to maybe move some of the lower cost products out there?
You did mentioned value-based pricing, which I think you have talked about in the past with the OBL setting, but can you just provide some more detail there. Is this something that's putting some additional price pressure on you?
Scott Ward
No, I don't think it's putting additional price pressure on our business, Mike. I think we would expect to see that continue.
And just to recall, and you noted this that about 3 years ago, we changed our approach to office based labs and began developing deep partnerships with select labs, where we do provide a wide range of support including procedure support and inventory management and we do volume based pricing programs. So those initiatives have been in place, they kind of built into our base and I think that you can expect to see that continue going forward.
So I don't really envision that the reimbursement changes in office based labs will fundamentally change the business model that we have deployed to that side of service. I would say that probably one of the things that has been fairly encouraging to us over the course of the past month, is that our OBL customers are not on salary, they're not on a hospital salary.
So their procedure volumes, is what determines how they do month-to-month, and we do expect to see the OBLs return to a stronger performance as Omicron recedes. And at least thus far, our customers are driving towards achieving higher volumes in their practices.
And that is how they're responding to these pricing challenges. As Rhonda said, I don't think any of the customers are happy about it, but they are really striving to improve efficiencies in their practices.
And we're in there working right alongside them and working with them to help them make that happen and to really increase their volumes as they deal with Omicron coming back as well as this pricing challenge at the same time. But early on at least here in January, the indications are relatively positive that the office-based labs that we work with will overcome these challenges.
Mike Matson
And then I just had a couple on the IVL news that you're developing -- a product there. So I guess, my understanding is it took sharply about 2 years from their first in human to getting the product commercialized.
So can you maybe comment on, does that imply sort of like a fiscal 2025 launch and is there any way to us to accelerate that. And then, can you just talk about coronary versus peripheral, are you going to go after both or going after one, before the other?
Scott Ward
Thanks Mike. We will be pursuing both coronary and peripheral IVL balloons.
We would anticipate our peripheral launch to occur probably late FY '23 or early FY '24. So that is out, let's say 18 to 24 months from now.
And you made a note of the timing from first in human of course, we have the benefit now of being second coming into this market. And recall that the peripheral approval is a 510(k) approval.
We are working with the FDA now on what requirements, they will see as being important for that launch. And then we'll be able to be more specific about the timing as we get greater clarity from the FDA.
The coronary clinical trial requirements that coronary approval is a PMA approval as you know and that will likely be FY '25, FY '26 before we see approval for that coronary segment. We may launch outside the United States earlier than that, but that's what we would anticipate in the U.S.
Operator
Our next question is from Suraj Kalia from Oppenheimer. Your line is now open.
Please go ahead.
Suraj Kalia
So Scott, couple of questions, the first one either for you or for Jeff so, the updated guide is approximately 20% lower than your original guide. So can you give us a breakdown of the relative impact of COVID versus IVL so that as we structure the remaining 2 quarters and the outlook over this calendar year we can put the different pieces together?
Scott Ward
Yes Suraj, thank you for that question. The vast majority of the impact is Omicron and the related staffing shortages and labor shortages that are impacting the market broadly.
I think as we look at our performance in January and now into early February. As you've heard from many companies reporting, we are seeing reduced procedure volumes, largely due to the acute impact of Omicron.
We do expect in our markets that we will see some restoration of normal commercial activities probably beginning in the mid-March timeframe. And then we are anticipating that we will see a slow and gradual recovery after that.
It will be slower than what we've seen in the past, if you recall last year when we had that January outbreak, the market actually recovered fairly fast, and in March and April, there was a backlog of patients that were rapidly treated. And what's different this year is that hospitals are dealing with these staffing shortages and we find that in many cases hospitals are triaging cases there.
They're coming back and doing their most severe cases first and frankly the treatment of patients with intermittent claudication, are not arriving on the high end of that priority list. So we are expecting that will result in a slow and gradual recovery in our peripheral hospital segment and that would largely be the patients that have intermittent claudication.
So that is some of the, basically the rationale for that guide naturally if the Omicron wave recedes more quickly or if these staffing shortages are addressed more rapidly, we would anticipate that our guidance may improve. I have to say though, Suraj at this point our conclusion is -- there is not strong evidence that this shorting of the staffing shortage and the labor shortage that is impacting hospitals in particular, we don't think that's going to resolve quickly.
We think that this is going to take some time to recover. So I hope that helps in regards to your question.
Suraj Kalia
Got it. Scott, then my second question I'll just position it for you or Rhonda and this is 2 part question.
First, what percent of your cases are being done independently on site, i.e. just to give us an idea in terms of leverage ability once Omicron disappears?
And the second thing to the extent that you can -- Rhonda you or Scott can talk about this on your IVL approach, what is the specific competitive attribute that you'll are targeting is it imagers per catheter, number of pulses per catheter, deliverability or size limitations because these are issues in the current platform. I'd love to get again any color you could share?
Thank you for taking my questions.
Scott Ward
Yes, thanks Suraj. About 2/3 of our cases, we cover about 2/3 of our cases so about 1/3 are conducted independent.
Now as we have been impacted by Omicron and our reps have not had easy access to our accounts over the course of really the past couple of months. That number has reduced pretty significantly.
So we're not covering 2/3 of our cases at this point. However, our sales teams have been collaborating very closely with our customers during this time working to identify where the backlogs exist, getting prepared and really interacting with our customers to understand how can we help them best if and when this volume comes back.
There are many issues in these hospitals. For example, the technicians that support cases in cath labs, we have seen a fair amount of turnover in that particular part of the workforce.
We've got to get back in, train and educate those cath labs techs, we've got to train and educate others in the support and care network there, so that they know how to manage patients that have been treated let's say with orbital atherectomy or frankly that are just being treated for intermittent claudication or CLI or coronary lesions. So our field sales organization and the fact that we have a substantial organization actually positions us very well to provide outstanding support to our customers in conducting these cases but also training and educating their new staff as they are dealing with the turnover that they're experiencing.
So I think, we're well prepared to deal with this. We've done it before, and if and when this wave comes back through will be in a good place to manage it.
In terms of the competitive attributes of the IVL, yes our IVL will address some of the limitations of the product that are currently in the market. We will be talking more about that as we get closer to commercial launch, but I think that you articulated quite well, some of the key areas that -- that need to be addressed in the areas that we will be addressing in our product.
Operator, I think we're ready for the next question.
Operator
Our next question comes -- our final question comes from Brandon Vazquez from William Blair's. Your line is now open.
Please go ahead.
Brandon Vazquez
First just wanted to follow-up on kind of the backlog that we're talking about here. I appreciate the color around it.
I know that staffing shortages can impact the market's ability to treat this backlog. I would think maybe the OBLs could maybe be a source of alleviating that backlog, is that a fair statement?
And if so, it seems like you guys might be in a good position to kind of benefit from that backlog coming in. So kind of curious, is that a fair statement and then, is that kind of benefit potentially baked in the guidance or not or could that be a little upside as we move through the year?
Scott Ward
Yes, I think that the OBLs usually do bounce back more quickly, largely because the barriers to patient care and their ability to increase their volumes quickly are there -- that the barriers are much lower. So we may see that happen in the office-based labs.
We in our current guidance are anticipating that the Omicron impact will really impact nearly all sites of service through that March 15 timeframe. And then after that we will see some recovery begin.
I think geographically this will be asymmetric across the United States. So in the South where office-based labs are more prevalent, we may see the office-based labs in, let's say, Florida, Texas that those parts of the country rebound more quickly than other parts of the country.
So that is most definitely an opportunity and we're prepared to address that there Brandon. Did you have another follow-up question on that?
Brandon Vazquez
No, that was good on that. I did have one follow-up separate to that but appreciate the color there.
It looks like international, the international was a big market for you guys and obviously COVID delayed that for a while. It seems like this may be the first quarter where you're starting to dip your toe back into the international markets?
Can you just talk a little bit about where you're kind of seeing some early momentum there and where you're making investments in the international markets that will drive growth in the next 12 to 18 months?
Scott Ward
Yes, thank you for that question. Our international markets actually have been growing nicely despite COVID even over the course of the, really the past 4 quarters.
So we're really pleased with our launch of our business outside the United States where we are taking share from IVLs, we're taking share from other atherectomy devices as well mainly in the coronary segment. So we focus principally in coronary outside the United States.
We have gained really strong share in Japan and our launch in Europe. Our coronary launch in Europe has also progressed very well.
So we now are launched in 22 countries and we expect by the end of this fiscal year, we will get to about 30 countries. So here is a circumstance where we have a marketplace that has never had access to orbital atherectomy before and we're able to now engage with our customers there.
Train and educate them on the use of this technology, they see the benefits of this technology in the care for their patients. They adopt it and incorporate it into their daily practice.
So we're excited about that. And we did this quarter with very strong growth there about 62% year-over-year and about 3.7 million.
We are expecting to continue on about that run rate and that would lead us to probably having $15 million to $16 million of revenue in our international segment of our business this fiscal year which would be obviously very strong growth and we're not done there. We expect that to continue going forward as we launch into these new markets and continue to grow our business there.
Operator
Thank you. There are no additional questions waiting at this time.
So I'll pass the conference over to the management team for closing remarks.
Scott Ward
Excellent, thank you very much, and thanks everybody for your continued interest in CSI. We look forward to giving you another update next quarter.
And with that, we'll conclude our call. Thank you.
Operator
That concludes today's conference call. You may now disconnect your lines.