Inari Medical, Inc. (NARI) Q4 2020 Earnings Call Transcript

Inari Medical, Inc. (NARI -0.29%)
Q4 2020 Earnings Call
Mar 09, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to Inari Medical, Inc. fourth-quarter 2020 earnings conference call. [Operator instructions] And now, I'd now like to introduce your host for today's program, Caroline Corner, investor relations. Please go ahead.

Caroline Corner -- Investor Relations

Thank you, operator. Welcome to Inari's fourth quarter and full-year 2020 earnings call. Joining me on today's call are Bill Hoffman, president and chief executive officer; and Mitch Hill, chief financial officer. This call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding the markets in which Inari operates; trends and expectations for Inari's products and technology; trends and demands for Inari's products; Inari's expected financial performance, expenses and position in the market; and the impact of COVID-19 on Inari's operations and Inari's customers' operations. These statements are neither promises nor guarantees and involve known and unknown risks and uncertainties that could cause actual results, performance or achievements to differ materially from any results, performance or achievements expressed or implied by the forward-looking statements. Please review Inari's most recent filings with the SEC, particularly the risk factors described in Inari's S-1 filing and in Inari's annual report on Form 10-K for the year ended December 31, 2020, for additional information. Any forward-looking statements provided during this call, including projections for future performance, are based on management's expectations as of today.

Inari undertakes no obligation to update these statements except as required by applicable law. Inari's press release for the fourth quarter and full-year 2020 results is available on Inari's website, www.inarimedical.com, under the Investors section and includes additional details about Inari's financial results. Inari's website also has the latest SEC filings, which you're encouraged to review. A recording of today's call will be available on Inari's website by 5:00 p.m.

Pacific Time today. Now I would like to turn the call over to Bill for his comments on fourth-quarter 2020 business highlights.

Bill Hoffman -- President and Chief Executive Officer

Thank you, Caroline, and thank you, everyone, for joining us today. As many of you know, based on our preannouncement of revenue and procedure volume in January, we enjoy the success of a productive fourth quarter. Most importantly, we treated a record number of patients. We are excited to share with you some of the detail about our nice progress, including an update on all of our growth drivers.

But first, as is now officially a tradition, in our third earnings call as a publicly traded company, I'd like to share with you a patient's story that will remind you about the powerful impact our technology and our team have on the lives of our patients. Late in January, a 32-year-old mother of two young children presented at a hospital in Pennsylvania with a systemic blood infection, endocarditis and an infected blood clot or vegetation in her right atrium and on the tricuspid valve in her heart. She was very sick. Surgery in which the chest is cracked, the heart is incised and the infected clot is removed is sometimes considered for these patients.

This young mom, however, like most patients with this condition, was far too sick for this sort of surgery. Still, her only chance for survival depended on removal of this infected clot. The physician team opted to utilize the brand-new Inari T20 Curve. The curve is a 20-French aspiration catheter with an angled or curved distal end that can be pointed directly at the clot which is often stubbornly adhered to the valve.

Two aspiration passes or Whooshes, as we call them, through the curve, and 20 minutes later, the entire infected clot was extracted. This eliminated, not only the mechanical issues caused by this clot, but also the source of the infection, enabling successful antibiotic treatment of the systemic infection. The physician who treated this young mom told me that, without the curve, the only other remaining option was palliative care in which the patient would have been kept comfortable but with no expectation for recovery. Instead, the patient recovered fully and was discharged to her home and to her children just a few days later.

This mom is not alone. We believe that just in the United States, there are approximately 20,000 patients who present with clot in transit or clots in the right side of the heart, either with or without endocarditis and vegetation. The T20 Curve represents a simple, safe and highly effective solution to this complex problem in a very sick patient population with otherwise limited and poor treatment options. In January, we received an FDA clearance for the T20 Curve, along with an indication specifically for clot in transit, the first such clearance for any thrombectomy system that does not require cardiopulmonary bypass.

The FDA clearance of the T20 Curve represents the first of several TAM-expanding products and a very robust pipeline of new products at Inari. We'll have more to say about this a bit later in the call. As a reminder, we are treating fewer than 5% of all the patients we believe can and probably should benefit from our devices in our core DVT and PE markets. We are still in the earliest phase of our mission, and we remain committed to this cause in ways that are far more important to us than business.

I'd like now to turn our attention to our Q4 financial performance. Our revenue in Q4 was $48.6 million, up over 144% from the same quarter last year and up 26% from Q3. As you know, we pay close attention to procedure volume as this metrics more closely than any other aligns with our mission to treat our patients. And over time, we believe it correlates strongly with revenue.

During Q4, our physician customers performed approximately 4,600 procedures, up 156% from the same quarter last year and up 24% from Q3. While our sequential growth of approximately 25% in both revenue and procedures was strong, we experienced a number of important COVID-related headwinds, both anecdotal and measurable. For example, the COVID surge pushed many hospitals beyond bed capacity, resulting in diversion of patients to other hospitals. When this occurred in our top centers, we saw a measurable decline in procedure volume.

Many times, all of the hospitals in an entire city had more patients than capacity, resulting in medical management of patients who might otherwise have been treated with flow FlowTriever or ClotTriever. Similar to what we have observed earlier in the pandemic, during Q4 and at least some geographic regions, we also believe patients suffering from VTE were likely reluctant to even present for care. Finally, we saw important restrictions to access to hospitals. This limited our ability to in-service and educate noninterventional stakeholders, including emergency physicians, pulmonologists, hospitalists and intensivists, about our devices and the benefits to patients of the Inari procedures.

Similarly, both physicians and administrators often had limited bandwidth to discuss the establishment of systematic processes for identification the triage of VTE patients that we believe will be important as we work to establish MI and stroke-like programs. Still, throughout Q4, we found the hospital environment mostly constructive despite the important increase and even acceleration in COVID diagnoses and hospitalizations. As highlighted several times in the past, to date, the characteristics of our products and procedures have proven perhaps more resistant to the impact of the pandemic than others in the med tech space, and we have continued to find ways to execute effectively in the COVID environment. We believe this is reflected in our growth.

For starters, our procedures are simple, require limited hospital resources and no ICU stay, all of which are important, given the significant resources and ICU requirements for COVID-positive patients. Our patients most often present emergently. So our procedures, particularly pulmonary embolism, are not usually designated as elective. Our sales professionals who typically cover approximately 90% of our procedures in person are often deemed essential to the procedure by the hospital, which preserves valuable face-to-face time with our physician customers and cath lab staff.

And we continue to use Clot Warrior Academy, our Zoom-based training platform accompanied by our online educational portal, to remotely communicate, train and educate physicians, nurses and tech in a highly effective manner. I'd like to turn now to our key growth drivers and to the progress we have made on each of them in the fourth quarter. First, we continue to expand our sales organization to target new hospitals and physicians. We estimate the size of our U.S.

target addressable markets in the 460,000 patients recently expanded to include the 20,000 clot in transit patients, similar to the young mom story we shared earlier. This represents a $3.8 billion revenue potential. We remain very early in our efforts to penetrate our core markets, and the effort will require a lot more sales professionals. We continue to believe that, when fully built out, our sales organization will rival in size the largest interventionally focused sales organizations in the market today.

We began Q4, as you know, with 120 territories, and we began Q1 with 130 territories. This is consistent with our historical cadence, excluding earlier pandemic anomalies, of adding about 10 territories per quarter. Increasingly, this expansion has and will provide opportunity to split territories to focus on our second growth driver, which is building awareness and driving deeper adoption at existing hospital customers. We believe as many as 85% to 90% of PE patients who can benefit from our FlowTriever system are nonetheless treated with conservative medical management or anti-coagulation alone.

Similarly, over 60% of DVT patients who can benefit from our devices are managed conservatively. Our goal is to access this patient population by educating and communicating regularly about the benefits of large volume clot removal with the noninterventional physicians who manage these patients, again, such as the emergency physicians, pulmonologists, hospitals and intensivists. We're doing this in several ways. We continue to leverage Clot Warrior Academy, and we have recently expanded it to include live cases, local hospital Clot Warrior Academy unplugged sessions and a leadership series for our key opinion leaders in both interventional and noninterventional specialties.

Since its launch in March 2020, Clot Warrior Academy has engaged over 2,800 customers, 70% of whom are physicians, across 150 live-streamed events, featuring over 50 physician faculty members. In addition, our CWA online portal has received over 1,000 unique customer visits to more than 100 online courses. We are continuing to build our medical affairs team and capabilities. We recently hired Dr.

Venkat Tummala, a world-class, high-volume interventional radiologist, as VP of medical affairs. This is a full-time position, and Dr. Tummala has exited his clinical practice. His broad clinical skills, deep technical expertise and strong social media presence in the interventional radiology community helped further our ability to communicate with a broad customer base.

He was previously a frequent contributor to Clot Warrior Academy and is now serving as co-host of these events, in addition to providing clinical support to customers worldwide. As we've discussed in the past, we continue to see interest from customers to establish more systematic processes for identifying VTE patients who might benefit from intervention and triaging these patients to the hospital-designated VTE experts. Such systems and processes are standard for heart attack and stroke patients but are virtually nonexistent for VTE patients. With the right resources and focus, we believe we can have a positive impact on these dynamics.

Our third growth driver is to continue to build upon our base of clinical evidence. Last quarter, we shared with you the interim results on 230 patients enrolled into our real-world, all-comer FLASH registry for PE. These acute data demonstrated excellent safety in dramatic on table improvement in a battery of hemodynamic variables. The day after our last earnings call, the 30-day follow-up from the same patient population were presented at the American Heart Association's scientific sessions.

We believe the 30-day data demonstrate the potential for FlowTriever to both interrupt the natural progression of the disease and impact patient recovery in positive and significant ways. The results show just one death at 30 days and a 6.7% readmission rate over that same time frame. By contrast, historical studies and registry on similar patient populations treated with anti-coagulation alone or with thrombolytic drugs have reported mortality of 5% to 15% and hospital readmissions of at least 25%. More recently, we also reported exciting results from CLOUT, our real-world, all-comer DVT registry.

A sub-analysis of challenging chronic clot patients showed that ClotTriever could achieve a 90% median clot removal. This was performed in a single 34-minute procedure, on average, with no thrombolytics. There were no device-related major adverse events, and the average blood loss was just 50cc. The results were even more remarkable, given the chronic nature of the clot.

Previous studies, like ATTRACT, for example, selected for patients with the most acute clot, focusing exclusively on patients whose symptoms were less than two weeks old. This CLOUT sub-analysis selected for patients whose clot was at least six weeks old. Older clot, as many of you know, is more firm and more adhered to the vessel wall, and therefore, more difficult to remove via other devices that rely on aspiration and/or thrombolytic drugs. The ClotTriever is purpose-built for this sort of clot.

It is designed to get between the vessel wall and the clot and to core the clot from the vessel wall. This sub-analysis confirms that it does this really well in a safe and consistent way. Finally, we are excited to share that we recently saw publication of the first-ever study in which a histopathological analysis was conducted on clot percutaneously extracted via ClotTriever and FlowTriever from DVT and PE patients. The study showed, not surprisingly, that PE and DVT clots are sub-acute to chronic in nature, containing limited fibrin.

Because fibrin is the pharmacologic target of thrombolytic drugs like tPA, the limited fibrin content shown in this study suggests why these drugs have limited impact on PE and DVT clots. We believe this is an important study and the first of many in which increasingly interesting questions will be asked and answered about these clots. We will have a lot more to say about chronic clot and the treatment of it in the coming quarters. Meantime, we continue to invest heavily in clinical studies and the production of data that is useful for expanding the market, driving adoption and informing the design of randomized and controlled trials that we remain committed to executing.

Our fourth growth driver is to continue to expand our product portfolio. On this front, we have enjoyed an exciting and highly productive few months. Earlier, I shared with you that we recently received FDA clearance of our T20 Curve, along with the clearance for clot in transit for the entire FlowTriever system. The ability of physicians to direct the large bore tip of the curve toward the clot has been useful, not only for clot in transit, but also for treating clot in very large diameter vessels, such as the inferior vena cava and the most proximal pulmonary arteries.

We have included the curve in our per-procedure pricing, so that it, like all devices in the FlowTriever system, can be used for a single price. This ensures that physicians can make appropriate decisions about which tools to use, either procedurally based exclusively on clinical need, without any concern for the impact on the hospital's procedural economic. We remain committed to the best possible patient outcomes above everything else. Next, we recently completed the limited market release of our FLOWSTASIS venous closure system.

FLOWSTASIS represents a simple and consistent method of tensioning the compression stitch often used to attain hemostasis after our procedures. We believe this device might have applications beyond Inari procedures as there are many medium- and large-bore catheter-based procedures in electrophysiology and structural heart that might benefit from a simple closure system that leaves nothing behind and does not involve suturing into the vein. Finally, we previously reported FDA clearance of our T24 FLEX, which is a much more flexible version of our 24-French aspiration catheter. You might recall that this flexibility makes the device more trackable, more deliverable and easier to use.

This has accelerated migration to the larger 24-French system, and it is now used in more than half of our PE procedures. This is important because the larger the diameter of the catheter, the stronger is the force on the clot and the more clot can be removed. As you know, we believe that maximization of clot retrieval is important to optimal patient outcomes. Looking further into 2021, we're excited about the robust lineup of new products and innovation in our pipeline.

Our fifth and final growth driver is expansion into adjacent and international markets. We've made important progress toward expansion into international markets, especially in Western Europe. We reported during our Q3 earnings call that we received an updated CE Mark for ClotTriever. We are pleased to report that we have now completed several successful ClotTriever procedures in Germany.

We are pleased also to report that we recently received an updated CE Mark for FlowTriever. We are seeing considerable enthusiasm for both devices as many European physicians have seen the positive readouts from our FLASH and CLOUT registries and investigator-initiated trials, and they've heard positive anecdotal stories from their American counterparts over the past year or two. Lockdown, limited access and other challenges caused by the pandemic have certainly created challenges for our initial European launch. But at the same time, we are encouraged by the interest we're seeing and the progress we're making.

We look forward to a much more constructive environment in Europe soon. Finally, in addition to our efforts in Europe, we have also begun work on the long path toward regulatory approval and reimbursement for our products in both Japan and China. Regarding opportunities in markets adjacent to our core DVT and PE markets, we have identified multiple unmet needs in the venous space and in the vascular space more broadly, and we continue to explore these ideas. We'll have more to say about these in upcoming calls.

I'd like to conclude by reminding you that we are committed to our mission to save and transform the lives of our patients. This cause is bigger than ourselves and much more important to us than business. We believe that nothing is more important than taking care of our patients. Any business success and consequent value creation that we might enjoy are never the goals but instead are merely byproducts of doing the right thing for our patients while taking care of our customers and our teammates.

We believe we are in the earliest phase of our mission and that we can and will grow sustainably and aggressively for many years to come. With that, I'd like to turn it over to Mitch.

Mitch Hill -- Chief Financial Officer

Thank you, Bill, and good afternoon, everyone. Inari revenues for the fourth quarter of 2020 were $48.6 million, compared to $38.7 million for the prior quarter and up $28.7 million or 144% from $19.9 million for the same period of the prior year. This year-on-year increase was driven by the continued expansion of our sales force, the opening of new accounts and deeper penetration of our products in existing accounts. Revenue was split between our two products as follows: 36% of our revenue was derived from the sale of ClotTriever products during the fourth quarter of 2020, compared with 38% in the fourth quarter of 2019; and 64% was derived from the sale of FlowTriever during the fourth quarter of 2020, compared to 62% in the same period of prior year.

Gross margin was 92.4% for the fourth quarter of 2020, compared with 89.2% in the fourth quarter of 2019. Gross margin increased due to a modest 3% increase in average selling prices year over year, as well as positive operating leverage in our manufacturing facility due to continuous improvement initiatives and the addition of a second production shift in Q4 of 2020. Operating expenses were $37.9 million in the fourth quarter of 2020, compared with $16.6 million for the same period of the prior year. R&D expense was $6.5 million in the fourth quarter, compared with $2.7 million for the same period in 2019.

The $3.8 million increase in R&D expense was primarily driven by an increase in headcount, as well as product development and clinical evidence development costs. SG&A expense was $31.4 million in the fourth quarter of 2020, compared with $13.9 million for the same period of the prior year. The $17.5 million increase was primarily due to personnel-related expenses as a result of increased headcount across our organization and public company compliance costs. Net income for the fourth quarter of 2020 was $7 million, compared with net income of $0.4 million for the same period of the prior year.

As I did with our Q3 results, I'd like to make a quick comment on the company's positive net income during Q4. As Bill mentioned a few minutes ago, we believe Inari is well-positioned for quarters and even years of sustainable revenue growth. We're not optimizing the company operations to produce net income. We plan to continue to invest aggressively in our growth drivers, and we do not necessarily expect to produce positive net income each quarter.

The basic and fully diluted net income per share for the fourth quarter were $0.14 and $0.13, respectively, and the weighted average basic and diluted share counts were 48.7 million and 55.2 million, respectively, compared with a basic and fully diluted net income per share of $0.06 and $0.01, respectively, and a weighted average basic and diluted share count of 6.2 million and 44.7 million, respectively, for the same period of the prior year. The number of shares last year is significantly lower because of the conversion of the preferred stock and additional common shares issued as a result of the IPO. In terms of our full-year 2020 financial results, revenue was $139.7 million for the full-year 2020, representing an increase of 173% over revenue of $51.1 million in 2019. Our product mix remained constant.

37% of our revenue was derived from the sale of ClotTriever products during 2020, compared with 38% in 2019; and 63% was derived from the sale of FlowTriever during 2020, compared to 62% for 2019. Gross margin increased slightly to 90.6% for the full year of 2020, compared to 88.4% in 2019. Operating expenses were $108.1 million for the full year of 2020, compared with $44.4 million in 2019. R&D expense increased by 155% to $18.4 million in 2020, compared to $7.2 million in 2019.

SG&A expense was $89.7 million for 2020, compared to $37.2 million for 2019. Net income was $13.8 million for the full-year 2020, and net income per share was $0.43 on a weighted average basic share count of 32 million and $0.27 on a diluted share count of 51.6 million compared to a net loss of $1.2 million and a loss per share of $0.20 on a weighted average basic and diluted share count of 5.9 million for the prior year. I'd now like to move on to a few balance sheet updates. Our cash of $114.2 million and short-term investment balance of $50 million at the end of the fourth quarter totaled $164.2 million, compared to $168 million at the end of the third quarter.

We have not yet utilized our $30 million revolving credit facility, although we ended Q4 with borrowing capacity into the credit line of approximately $20 million. Our cash flows from operating activities were $1.9 million in 2020, compared to cash used in operating activities of $4.9 million in 2019. As I've mentioned in previous quarters, Inari continues to operate and grow with a relatively neutral cash flow profile. I'd now like to turn to guidance.

While we continue to experience COVID-related challenges and uncertainties, we are comfortable providing forward-looking guidance as follows: For the first quarter of 2021, we are guiding to $54 million to $56 million in revenue. For the full-year 2021, we are guiding to $225 million to $235 million in revenue. With that, I would like to thank you for your attention. And I'll now turn the call back over to the operator for your questions.

Questions & Answers:

Operator

[Operator instructions]

Mitch Hill -- Chief Financial Officer

And Jonathan, this is Mitch from Inari. I thought I'd mention that Bill and I actually were just joined by Drew Hykes, who is our chief operating officer; and then by Dr. Tom Tu, who is our chief medical officer. We thought they could be helpful for some of the questions that may be asked.

Operator

Certainly. And our first question comes from the line of Bob Hopkins from Bank of America. Your question, please.

Bob Hopkins -- Bank of America Merrill Lynch -- Analyst

Great, and congrats on all the progress. I've two quick questions I wanted to ask. But the first thing I wanted to ask, because I was just wondering, Bill, if you could just sort of take a step back, and maybe Drew could chime in here, too. Just clearly, despite COVID, it looks like things are just inflecting in your business and in this category generally.

So I was just wondering if you could maybe take a little bit of a step back for us and just highlight like what do you think is driving the inflection now. Is it maybe just the cumulative effect of all the work that you've done over the past 18 months in the U.S.? Or wondering if there's anything more specific than that because it really is quite a remarkable last 12 months in terms of your performance in the United States. So just would love to start there with any kind of top-down comments.

Bill Hoffman -- President and Chief Executive Officer

Yeah. I'll jump in first, and then we'll have Drew fill in some details, if you like. So first of all, thanks for the good words, Bob. It's been a grind through COVID.

We found ways to execute crisply. I would say -- let me just say two things. First of all, I don't think there are any -- there's not one driver, and we've said this about our potential for growth going forward as well. There is not an inflection point.

There's not a one binary sort of catalyst that's going to drive things for better or for worse. This is a pure execution play, and I think all the variables from data to new products to crisp commercial execution and so forth play an equal role here. I will say this also. We had a VIP visit.

We do these pretty routinely. And there was a physician here just a few days ago, and he was telling me about a patient that he treated. And the patient was dying, right? The patient had that look. He said, "This patient has that look." And the patient was dying.

And everyone in the room knows that the patient recognizes if their potential to die is right now. And a few seconds later, he took out a big chunk of clot. In another few seconds after that, he took another big chunk of clot. The anesthesiologist commented that the -- what did you do, right? The heart rate is down.

The blood pressure is back up. The patient is joking about dinner and how bad the chicken sandwiches are going to be here at the hospital, and the whole mood changes, right? That is visceral, right? That has nothing to do with data, has nothing to do with the product per se or price, right? And there's a visceral component to this that I think cannot be overlooked, and I believe there's a cumulative effect to those sorts of experiences that are going on in cath labs all over the country. Drew, I'm sure you're probably going to add something, a little more of data like.

Drew Hykes -- Chief Operating Officer

No. I think those are all the key points here. I think it's the aggregate impact of all the growth drivers coming together. So it's the expansion of the field team and the methodical addition of new reps and territory expansion.

I think we are making progress in driving deeper and deeper penetration in our existing accounts. And some of the investments and programs we've developed along those lines, I think, are really starting to bear fruit. Some of the new products and some of the new R&D investments that we've made continue to improve the speed and the efficacy and the safety of the procedures. And then the clinical evidence portfolio building along with that, supporting all of the immediate impact that docs are seeing firsthand with hard, clinical evidence that supports the impact we're having.

So I think it's all those things taken together that's really driving the growth, Bob.

Bob Hopkins -- Bank of America Merrill Lynch -- Analyst

OK. I realize it's kind of a softball question but just wanted to get your overview taken. The second question I wanted to ask really quickly is just on -- you're starting to talk about some new opportunities, both in terms of outside the United States and then in the U.S. and specifically with closure.

And I was wondering if you could put any more kind of meat on the bone, if you will, in terms of quantifying the opportunity that comes from these new markets and new technologies, specifically, again, with the venous closure system.

Bill Hoffman -- President and Chief Executive Officer

Yeah. Thanks, Bob. I think we're maybe a little too early to be talking about quantifying these opportunities. I will say that we developed the FLOWSTASIS for our own procedures.

The full intent was just include this in our per-procedure price as part of our FlowTriever pricing and system. It certainly looks like there are opportunities beyond our procedures. There are lots of structural heart, electrophysiology and other venous closure type procedures for which we think this might be useful. It's a really simple method of tensioning the compression stitch that can very often be used to close venous wounds.

The venous pressure is much, much lower, of course. And so this is a really simple system. It doesn't leave anything behind, and it doesn't kind of get into the vein. There's no stitch into the vein.

So we like the simplicity. It's a pretty interesting story here. It seems to work through our limited market release, but we are certainly in the very, very early stages here. We just completed our limited market release.

We'll be getting into more full market commercialization. We'll have more to say on that in upcoming calls.

Bob Hopkins -- Bank of America Merrill Lynch -- Analyst

And have you included that in the guide that you gave to any meaningful degree?

Bill Hoffman -- President and Chief Executive Officer

No. We haven't really quantified any meaningful revenue for FLOWSTASIS. Certainly, nothing in the guidance would suggest there's a meaningful number for FLOWSTASIS.

Bob Hopkins -- Bank of America Merrill Lynch -- Analyst

All right. Great. I'll circle back. Thanks again.

Drew Hykes -- Chief Operating Officer

Yeah. Thanks, Bob.

Operator

Your next question comes from the line of David Lewis from Morgan Stanley. Your question, please.

David Lewis -- Morgan Stanley -- Analyst

Good afternoon, and congrats on the quarter and a very constructive guide. I want to start with the guide, and then I'll kind of maybe follow back up with Bill. But just thinking about the guide here, and I appreciate it's still COVID, but you've been doing anywhere from 15% to 25% sequential growth and obviously 13% sequential into the first quarter, even with, obviously, a tough January. If you kind of take out the first quarter, the guidance implies Q2 to Q4 low single-digit type sequential growth.

So is there sort of anything, momentum-wise, comps trends in the business that would drive that? Or is it just simply early in the year, and we're still dealing with some COVID dynamics? So let me just sort of flush out how you see the business sort of first half, second half or across the quarters, given that dropoff here into the second quarter.

Mitch Hill -- Chief Financial Officer

Sure, David. Thanks for that question. As you mentioned, the Q1 guidance would be about sort of a low double-digit sequential improvement compared to Q4. So that's something that we really feel comfortable and confident in.

This March 9, actually, today is the one-year anniversary of what we affectionately at Inari call the meltdown day. It's the day we were supposed to start our road show for the IPO last year. We didn't really know what would happen. After the meltdown day, we kind of shut things down a bit for those next couple of months, and we felt fortunate that we were able to do the IPO in late May.

But we've really operated under this COVID cloud for the past three quarters now. This is our third public report. I think we just want to kind of start out with something and not get ahead of ourselves, and we really look forward to updating our annual guidance as we move along through the year.

David Lewis -- Morgan Stanley -- Analyst

OK. That's super helpful. And then just my second kind of follow-up question is really sort of two-part. If we think about sort of the trends in PE versus DVT that we saw through the back half of 2020, is there any reason to believe that in a percent of mix where that PE-DVT mix materially changes in '21 and sort of what's implied in guidance? And then just, Bill, I wanted to push a little more on this international question.

I mean, it was -- our current estimates basically call for 0 international revenue, I guess, given the approvals and some commercial agreements you signed here in the first quarter that's looking a little conservative. So is there any international specifically modeled in your guide for 2021? Those two questions, and I'll jump back in queue. Thanks so much. Congrats again.

Bill Hoffman -- President and Chief Executive Officer

Yeah. Thanks, David. So with regard to the mix, one of the characteristics -- I don't know that we would have necessarily predicted this, but the mix has been remarkably consistent from quarter to quarter. With no -- there's no emphasis on one product versus the other, either nominally or through compensation or anything of that nature.

I think both of these markets are growing equally based on the way that we've chosen to communicate our story, based on the data that are emerging and product development, products being introduced into the mix and so forth. So we are not modeling any change in the percent of revenue or percent of cases represented by one product versus the other. It's been pretty consistent. They bounce around a percentage or two, but that's no change.

With regard to international, I think we've characterized this multiple times as being measurable but not really meaningful. So I don't think I would characterize any of the guidance as representing a significant chunk of international sales, and I think that's a pretty healthy way to think about it. The COVID environment in Europe is considerably more challenging than it is here in Europe. I suspect you're hearing that from most of our peers and other med tech companies.

And it's been -- that's been a challenge. And there's a lot of interest, a lot of enthusiasm. These physicians have seen and heard about Inari devices through data releases and through anecdotal communication back and forth with their American counterparts for a year or two. That's been highly favorable.

And so it's a little frustrating that with 20,000-something procedures total that we can't be on the ground training and getting people through their learning curve very quickly. So it's all Zoom-based, and those challenges persist. So I would just ask you don't get too far ahead of us here on international as well because there are some things, too, to work through, including reimbursement as well. So I'll leave it there.

David Lewis -- Morgan Stanley -- Analyst

OK. Thanks so much.

Bill Hoffman -- President and Chief Executive Officer

Thanks, David.

Operator

Thank you. Our next question comes from the line of Larry Biegelsen from Wells Fargo. Your question, please.

Larry Biegelsen -- Wells Fargo Securities -- Analyst

Hey. Good afternoon, guys. Thanks for taking the question, and congrats to really strong 2020.

Bill Hoffman -- President and Chief Executive Officer

Thanks, Larry.

Larry Biegelsen -- Wells Fargo Securities -- Analyst

Two for me. Let me start with just sales force adds and center adds that you expect in 2021. For sales force adds, should we think about 10 per quarter? And on center adds, I'm not sure I heard you give the Q4 number. But it looks like you added about, by my math, call it, 400 centers in 2020.

Is that accurate? And what should we expect for 2021? And I had one follow-up.

Bill Hoffman -- President and Chief Executive Officer

Would Drew take that one?

Drew Hykes -- Chief Operating Officer

Yeah. So Larry, on the sales force side, as you heard, we added 10 heading into Q1, so exactly in line with what our historical kind of average cadence have been. I think we're going to reserve the right to flex that up or down, depending on what we're seeing on the ground as we get into any specific quarter and what we're seeing in our target territories. But I do think that that 10 per quarter is a pretty good starting point to how to think about the rest of the year.

Keep in mind, if we bring on 10 incremental territories, we're actually hiring more bodies than that, given our promote-from-within kind of approach to sales leadership. On the center adds, I think, the number you quoted is about right. We believe we exited Q4 someplace north of 800 active accounts using the technology, and that's a combination of accounts that are using just FlowTriever, just ClotTriever or both technologies. We think about half of our accounts are using both technologies, so we have quite a bit of runway still, even within that group of 800 accounts to pull in the respective secondary technology where that's an opportunity for us.

Keep in mind, we think there's, call it, 1,500 potential targets. There's 1,500 cath labs in the U.S. There's 1,300-some hospitals with 200 or more beds, which would also be a way to gauge the ultimate opportunity here. So we still think we're in kind of early to mid-innings in terms of the account penetration at this stage.

Larry Biegelsen -- Wells Fargo Securities -- Analyst

That's helpful, Drew. And second from me. Could you talk about other new product launches in 2021 and data that we might see this year, just specifically on new products? Could you give us an update on FlowSaver? Thanks for taking the questions.

Bill Hoffman -- President and Chief Executive Officer

Well, Larry, if there's one thing we've learned -- let me say it's -- our history as a public company is don't overpromise on new products. We certainly stepped in that. The first opportunity we had in our first earnings call, we talked about FlowSaver, and we were dealt a curveball by FDA. So we expect to see that a little later on this year, but probably we shouldn't make the same mistake and tell you a month or week and date.

So we'll leave it there. But there are a number of other products beyond FlowSaver that we like. The pipeline is full. Some of these products are inclusive in our per-procedure pricing, so there'll be no new revenue, like FlowSaver perhaps, for example.

And some others would be TAM expanding, but we'll have much more to say about those as we get a little closer. There's FDA risk, of course. There's LMR risk, what will we see, will the devices be ready for prime time. So there's a few things to work through.

But we're very pleased with our pipeline.

Larry Biegelsen -- Wells Fargo Securities -- Analyst

And data, Bill?

Bill Hoffman -- President and Chief Executive Officer

Yeah, clinical. We have -- we continue to run -- sorry, we continue to run our FLASH and our CLOUT registries, 500 patients plus. We are going to expand our FLASH registry. We'll have more detail on that as it emerges here.

But I think we'll see some additional readouts over the coming quarters. There are any number of investigator-initiated trials that will get to the starting line, so to speak, here with regards to submission and publication. So we'll have other readouts on data coming down the pike here as well. And again, just as a reminder, we're -- none of them are inflection.

None of them will represent some sort of an important binary inflection point. They're all contributory to the same sort of story and execution play that we've been sharing with you all along.

Larry Biegelsen -- Wells Fargo Securities -- Analyst

Thanks for taking the questions.

Bill Hoffman -- President and Chief Executive Officer

Yeah. Thanks, Larry.

Drew Hykes -- Chief Operating Officer

Thanks, Larry.

Operator

Thank you. Our next question comes from the line of Bill Plovanic from Canaccord. Your question, please.

Bill Plovanic -- Canaccord Genuity -- Analyst

Hey, great. Thanks. Good evening, and thanks for taking my questions. A couple here.

Just first -- and I might have missed this. Was there any commentary regarding the FLAME study? And have you begun enrollment on that?

Bill Hoffman -- President and Chief Executive Officer

You did not miss anything. Let's let Tom take that.

Tom Tu -- Chief Medical Officer

Sure. Thanks, Bill. So you -- just to remind everybody, the FLAME study is our trial in massive pulmonary embolism. This is the most mortal of all PE conditions and is planned to be the largest contemporary trial in this disease state.

The trial design has been completed, and we are anxiously awaiting enrollment of our first patient.

Bill Plovanic -- Canaccord Genuity -- Analyst

OK. So you have ID approval, and you're good to go. You're just waiting to get the first patients enrolled.

Tom Tu -- Chief Medical Officer

Yes.

Bill Plovanic -- Canaccord Genuity -- Analyst

Great. And then how -- what is the size of this study? Are there any details you're willing to provide on time? How long do you think it will take to enroll and when we could see some of the first data off of this?

Tom Tu -- Chief Medical Officer

So massive pulmonary embolism represents about 5% of all pulmonary embolism, so it is not very common, and these are quite critically ill patients. So you can imagine enrollment in this study may be somewhat hard to predict. We anticipate it will probably be 18 months to complete the study, and we will -- we have no plans to present any preliminary data. So we hope to complete that study before reasonably.

Bill Plovanic -- Canaccord Genuity -- Analyst

OK. And then on just -- I was wondering, if you penetrate in your -- in over 800 facilities, I think that was roughly the number last quarter. But I'm trying to get a handle on, as you look at those facilities that you're in, have you been able to fully penetrate any? If so, what does that look like? And how long does it take to get there?

Tom Tu -- Chief Medical Officer

You want to dive in, Drew?

Drew Hykes -- Chief Operating Officer

Yeah. I think if you looked across those 800 accounts, Bill, you'd see evidence of accounts at different stages of their evolution and how they're thinking about VTE. You'd certainly see a group of accounts that are just starting. They're focused on initial outcomes.

They're getting used to the technology. They're adopting it into their existing treatment paradigm. You'd see a group of accounts that have progressed past that or in the middle. They are trying to understand the economic value proposition at that stage.

They're probably more proactively trying to identify these patients. They may be refining their clinical care pathways at the account level and really trying to proactively investigate and invest in these patients in a way that was not like they had thought historically. And then the last group of accounts are at the final end of their evolution, and they are accounts that have really made a proactive commitment to VTE program development, like you've seen with MI and stroke, for instance. They have a very sophisticated approach to this patient population.

They are making significant investment and time and other resources to manage these patients. And if you looked at our product adoption across those phases, you'd see obviously growing adoption across those phases. And at least in that last group of accounts, you'd see our technologies being used frontline as standard of care as the go-to option for both DVT and PE patients. That evolution takes a different amount of time based on the account dynamics and specifics, but we have seen accounts kind of move methodically through that evolution.

It gives us some confidence. We are developing a systematic approach to helping support that evolution with different programs and different investments and learning how to help support accounts move through that process.

Bill Plovanic -- Canaccord Genuity -- Analyst

Great. And today, Drew, what percent of your accounts do you think has kind of hit that end point to the final phase and you have the penetration you're looking for, the bucket at the beginning, middle end?

Drew Hykes -- Chief Operating Officer

So that last group has got to be our top, probably 10% of accounts are in that final group. So we're -- we've got a small number that have made that evolution. It gives us some confidence that we're doing the right things, but there's not many that have navigated their way all the way through that evolution yet.

Bill Hoffman -- President and Chief Executive Officer

If I could add just a bit of color there. There was a paper just presented out of -- published out of University Hospitals in Cleveland, which is a very old established PERT, Pulmonary Embolism Response Team, program. And they showed, not surprisingly, that patients who were admitted to the hospital or who see -- come into the hospital with the pulmonary emblem and see the PERT team as a hospital-designated pulmonary embolism experts, they not surprisingly do well on almost -- by almost every measure, on almost clinical measure you can imagine. The problem is that 70% of the patients who should have been seen by the PERT, by their own admission, by their own criteria, were not seen by PERT.

And that's the challenge that we face. Even in the best -- our best centers, the consistency with which these patients are identified and triaged to the VTE experts remains limited. Those aren't problems that you face that we see in MI and stroke. Most of those problems, certainly, in MI have been fixed a long time ago.

So there's a lot of heavy lifting to do with regard to surfacing, identifying and triaging these patients consistently through systems and processes. And we're spending quite a bit of time and energy with that -- kind of that last bucket, that bucket of customers that have progressed to that point.

Bill Plovanic -- Canaccord Genuity -- Analyst

Got it. That's very helpful. Thanks for taking my questions.

Mitch Hill -- Chief Financial Officer

Thanks, Bill.

Operator

Thank you. Our next question comes from the line of Danielle Antalffy from SVB Leerink. Your question, please.

Danielle Antalffy -- SVB Leerink -- Analyst

Great. Good afternoon, everyone. Thanks so much for taking the question. Congrats on a really strong year despite COVID.

And I just have two questions. So my first question is probably for you, and it's around -- you touched on it a little bit but like how to think about the guidance and the COVID situation we're in now and the COVID recovery. And I appreciate that a lot of your patients are urgent/emergent, but there is some component of the business that's likely driven by patients getting diagnosed, getting into the system. And I guess that's more what I'm focused on.

And is there any sort of recovery baked into the guidance? Or is it kind of just sustaining momentum from where we are today, and there's no sort of backlog that we should be thinking about here and if there is that sort of upside? That's my first question.

Bill Hoffman -- President and Chief Executive Officer

Yeah, yeah. I know the question you're asking. Thanks, Danielle. I think the short answer is there's no backlog.

Approximately 70% of both PE and DVT patients in the studies that we've conducted, in the way that we keep track of these things for FLASH and CLOUT, for example, present through the ER. So they are emergent by that definition. So I think this has protected us in ways that many of our peers and other med tech companies didn't benefit from devices that treat that sort of patient population. So we have benefited from that.

Through the pandemic, our procedures were probably a little bit more insulated from the pandemic challenges and the challenges that the elective procedures faced, for example. PE cannot be -- you either treat it at the moment that the PE presents or there's very limited capacity to treat it later. DVT, on some cases, can be delayed for a week or two. But the problem is, even when patients may have been entering a hospital that was on diversion, for example, come in with a painful, really painful and swollen leg and were sent home simply because there was no capacity.

I don't think most hospitals have any mechanisms for keeping track of those patients. And so again, the short answer is I don't think we're going to see a bolus of patients coming down the pike here for 2021 or beyond. I think those patients were either treated or not.

Danielle Antalffy -- SVB Leerink -- Analyst

OK, OK. Totally fair. And then my next question is a two-part question. So I'm really asking three questions, not two.

So Drew, this is probably for you, and both of these are probably sort of in your camp. So just trying to get a sense of same-store sales versus the new center adds and how to think about how that progressed in 2020 and how that will progress in 2021, sort of what's reflected in guidance. Anything you can say there?

Drew Hykes -- Chief Operating Officer

Yeah. I think the short answer is we like what we're seeing. We think the growth we're seeing is sustainable and not overly weighted toward the addition of new accounts. I'll give you a couple of metrics that I think support that belief.

In Q4, we believe about 90% of our cases in that quarter came from existing customers, only 10% came from new account adds in that quarter. And if you look at it through the lens of growth in cases, sequential growth in cases that we saw incrementally in Q4, it was balanced about 50-50 between existing accounts and brand new accounts acquired in that quarter. So we like what we're seeing there. We think there's a nice balance where we are seeing evidence of success in supporting accounts for broader and deeper adoption of the technology.

And I think you see that reflected in those metrics.

Danielle Antalffy -- SVB Leerink -- Analyst

Got it. Yeah. That was very helpful. And then last question for you.

So you gave some good color on half the accounts are using both devices. I'm just curious, what percentage of the accounts you're in today are not using FlowTriever? And what's the barrier to getting them to adopt that? Is it just a matter of time getting them to adopt FlowTriever? And I'm obviously asking, because it feels like that's where the longest growth runway is and where you guys obviously have the biggest, I think, competitive advantage and price advantage there?

Drew Hykes -- Chief Operating Officer

Yeah. No. I understand where you're coming from. I'm not sure I'd completely agree with some of the things that were kind of folded in there.

Maybe, first, of the 50% of accounts that are using both technology, it's really a mix of accounts that have adopted just ClotTriever or just FlowTriever. So we don't see it necessarily bias toward accounts just starting with ClotTriever and pulling in FlowTriever. It's really a balance between the two. And I think, going forward, we would anticipate continued kind of balance between the two.

We don't necessarily need to manage the growth of one of the platforms versus the other. At least historically, we haven't. They've really developed and grown organically right alongside each other at roughly the same growth rates. And I think that would be what we'd anticipate going forward as well.

Danielle Antalffy -- SVB Leerink -- Analyst

OK. That's fair. Thanks so much.

Bill Hoffman -- President and Chief Executive Officer

Thanks, Danielle.

Operator

Thank you. Our next question comes from the line of Marie Thibault from BTIG. Your question, please.

Marie Thibault -- BTIG -- Analyst

Hi. Good evening. Thank you for taking the questions. And Bill, Mitch, Drew and Dr.

Tu, congrats on a very strong year. I wanted to ask one more follow-on here on guidance. I wonder if you could parse out for us a little bit more of the COVID impact you've seen so far in Q1. And then because we haven't seen you as a public company without COVID impact, I'm wondering if you can sort of set out for us any seasonality or sort of how we should think about cadence throughout the year going forward.

Bill Hoffman -- President and Chief Executive Officer

Yeah. I'll dive into that. We get the seasonality question. Maybe not surprising, we get asked quite a bit.

We don't -- we have not seen it thus far. But I just was peeking at some numbers this morning in our -- Q4 of 2019 was the last quarter in which there was no COVID impact for all of us, of course. In 2019, we did less revenue than we are projecting for Q1. The entire year of 2019 was less revenue than we're projecting for Q1 of this year.

And so the point here is that we really don't have anything to compare to, right? We don't really know what a non-COVID or post-COVID environment looks like. So will we see seasonality? We have not seen it thus far. And is that because we're insulated from it in some way? Or is it because we were just very, very early in our growth phase and it will start to emerge at some other moment? I think we just don't know. And so with regard to guidance, we want to make sure that we're not getting out ahead of ourselves because there's any number of things that -- there's any number of potential risks.

And we've learned one thing through the pandemic -- well, we learned many things, I guess, but humility is one of them. So we just want to be a little thoughtful about the way we're thinking about guidance.

Mitch Hill -- Chief Financial Officer

And, Marie, if I can add to that just a bit. In terms of some of the signals that we see for COVID impact, actually, as Drew was talking about our accounts, we see the case mix fluctuate in the accounts, sometimes week to week, sometimes definitely month to month, depending on the relative sort of impact of COVID on that hospital. And that's something that we've noticed. You see the case mix for the year as a whole, it was kind of the 54, 46 thing that we sometimes see the case mix fluctuate and there could be a sort of a disproportionate number of PE cases in some months in some hospitals.

And that tends to correlate with a higher amount of COVID impact in that hospital. But then sometimes when the ICU beds kind of go down, then the case mix kind of returns to the historical relationships. I don't know that -- I don't think we went into that really level of detail in terms of thinking about how that would play out through the remainder of 2021. As I mentioned, we're hoping to continue to update as we go along here.

Marie Thibault -- BTIG -- Analyst

All right. That's really helpful. And I understand that there's no easy comparable, so I appreciate you helping me make sure there's nothing I'm overlooking here. I guess my follow-up would be around gross margins.

Your Q4 gross margins, again, very stellar. And I know in the past, there's been some talk about pricing trends and that gross margins aren't necessarily going to stay at this very healthy level. So I wondered if you could help us think about that, given some of the new products you have rolling out and then your earlier comments on the international opportunity, if there's any change there on the gross margin outlook.

Mitch Hill -- Chief Financial Officer

Sure. I can start that, Marie. So we're pleased, obviously, with the 92%-plus gross margin for the quarter up just a bit. As we think about 2021, we had a very productive Q4.

The efficiency of our manufacturing operation, the second shift we added, we're continuing to build up inventory. I think we've announced that we're moving into a larger office here in Orange County kind of midyear in 2021, so we're taking steps to prepare for that move. some of the things that we think -- and we're in a great position in terms of our average selling prices. They were up just a bit in Q4 as well, and so we feel like we're in a very strong position.

Should we ever need to respond from a competitive point of view to price -- sort of pricing, we could. We're not currently seeing that. And I think we've been successful selling our services to the hospitals based on the value of the procedure essentially compared to the alternative interventional techniques, which all involve a ICU stay. So they're not really positive contributors from a hospital point of view.

From a future-thinking point of view, as we put more products into the FlowTriever price per-procedure bag, that's something that could have a drag on the margin. I think as we're continuing to build our international business, that could likewise have a drag on the margin as we go forward. And we've talked in a longer-term sense about a kind of a low- to mid-80% gross margin target for the business. I think it may take us some time to get there.

I don't know if it's going to be one or two years or if it's going to be more of like a three- to five-year thing, but that's kind of how we are thinking about the business over a longer term for modeling purposes.

Marie Thibault -- BTIG -- Analyst

That's great. I appreciate the time tonight. Thank you.

Mitch Hill -- Chief Financial Officer

Thanks, Marie.

Drew Hykes -- Chief Operating Officer

Thanks, Marie.

Operator

[Operator signoff]

Duration: 61 minutes

Call participants:

Caroline Corner -- Investor Relations

Bill Hoffman -- President and Chief Executive Officer

Mitch Hill -- Chief Financial Officer

Bob Hopkins -- Bank of America Merrill Lynch -- Analyst

Drew Hykes -- Chief Operating Officer

David Lewis -- Morgan Stanley -- Analyst

Larry Biegelsen -- Wells Fargo Securities -- Analyst

Bill Plovanic -- Canaccord Genuity -- Analyst

Tom Tu -- Chief Medical Officer

Danielle Antalffy -- SVB Leerink -- Analyst

Marie Thibault -- BTIG -- Analyst

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