Cardiovascular Systems Inc (CSII) Q3 2021 Earnings Call Transcript

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Cardiovascular Systems Inc (CSII)
Q3 2021 Earnings Call
May 6, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and thank you for standing by. Welcome to Cardiovascular Systems, Inc. Fiscal Year 2021 Third Quarter Earnings Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Jack Nielsen, Vice President, Investor Relations. Please go ahead.

John E. Nielsen -- Vice President, Investor Relations & Corporate Communications

Thank you, Christine. Good afternoon, and welcome to our fiscal 2021 third quarter conference call. With me today are Scott Ward, CSI Chairman, President and Chief Executive Officer; Rhonda Robb, Chief Operating Officer; Jeff Points, Chief Financial Officer; and Dr. Ryan Egeland, Chief Medical Officer.

Approximately 30 minutes ago, we issued a press release announcing third quarter results. You may find a copy of this release on the Investor Relations section of our corporate website. Here you may also find an earnings supplement that includes additional details on our performance and outlook. In a few moments, CSI management will discuss results for our third quarter, which ended on March 31, 2021. After our prepared remarks, we will entertain your questions.

During today's call, we will make forward-looking statements. These forward-looking statements are covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and include statements regarding CSI's future financial and operating results or other statements that are not historical facts. Actual results could differ materially from those stated or implied by our forward-looking statements due to certain risks and uncertainties, including those described in our most recent Form 10-K and subsequent quarterly reports on Form 10-Q.

In particular, the COVID-19 pandemic has created risks and uncertainties for our business, results of operations, financial condition and prospects which we will discuss on this call. CSI disclaims any duty to update or revise our forward-looking statements as a result of new information, future events, developments or otherwise. We will also refer to non-GAAP measures because we believe they provide useful information for our investors. Today's press release contains a reconciliation table to GAAP results.

I will now turn the call over to Scott Ward.

Scott R. Ward -- Chairman, President & Chief Executive Officer

Thank you, Jack. Good afternoon, everyone, and thank you for joining us today. This afternoon, we reported third quarter revenues of $63.3 million, a 3% increase compared to last year. As anticipated, the increase in vaccinations and simultaneous decline in COVID cases in February and March resulted in improved procedure volumes during the second half of the quarter.

Our third quarter revenues were led by our coronary franchise, which generated strong procedure volume domestically, increased sales of procedure support products and growing adoption of orbital atherectomy internationally. Peripheral revenues were flat as a strong growth in the OBL was offset by the temporary deferral of above-the-knee procedures for the treatment of claudication.

Office-based labs represented nearly one-half of our peripheral unit purchases during the quarter, as an increasing number of complex peripheral procedures were performed outside the hospital. Throughout the pandemic, we have seen the office-based lab emerge as an important site of service for complex procedures, and we expect this trend to continue even as the pandemic subsides.

As we look to the healthcare landscape today, most markets we serve have either returned to pre-COVID procedure levels or are now poised to do so. As a result, the momentum in our business that we built toward the end of Q3 has continued through early May, and we are optimistic that we will benefit from sustained growth in peripheral and coronary procedure volumes throughout the rest of Q4.

The improving healthcare environment aligns well with the planned commercial launch of our peripheral support devices. As we have stated, the introduction of peripheral angioplasty balloons, support catheters and embolic protection devices, will become an important growth driver for CSI, and we are preparing for the full launch of this portfolio this quarter.

Rhonda will provide additional details on this launch and our commercial progress in a few moments. But first, Jeff will provide the details regarding our financial results and our fourth quarter guidance. Jeff?

Jeffrey S. Points -- Chief Financial Officer

Thank you, Scott, and good afternoon, everyone. I will now provide a brief review of our Q3 financial results. For additional details, please refer to the earnings supplement slide deck on our website.

Worldwide coronary revenue increased 13% to nearly $21 million. In the U.S., coronary revenue increased 9% to $17.5 million, led by a 9% increase in units sold and a 24% increase in the sale of coronary support products. Outside the U.S., coronary revenue increased 36% to $3.5 million as a result of continued strength in Japan combined with the successful introduction of coronary OAS in Europe. Worldwide, peripheral revenues were about flat with the year ago period. However, we again experienced strong growth of peripheral atherectomy in the OBL side of service. OBL revenues increased 21% from the prior year. Peripheral units sold to hospitals declined about 6% compared to last year due to ongoing deferral of treatment for claudication.

Turning to expenses. Gross profit margin came in on plan at 77.9%. Operating expenses totaled $54.9 million, and included a one-time expense of $3.4 million for the acquisition of peripheral catheters from WavePoint Medical. Excluding this expense, operating expenses were about flat with last year and below our forecast.

During Q3 and in early Q4, we announced several strategic investments that we believe will drive future revenue growth. In addition to the WavePoint peripheral catheters that we will commercialize in early fiscal '22, we also announced a partnership with CVT to develop novel everolimus drug-coated balloons and an investment in the CarePICS digital health platform. We ended the quarter with $211 million in cash and marketable securities and no long-term borrowings.

As I move to our expectations for Q4, we remain optimistic that the increased vaccinations will have a positive impact on the healthcare system and procedure volumes in future periods. We note, however, that the COVID pandemic is not over and uncertain market dynamics may persist that could negatively impact our Q4 forecast. With that in mind, we forecast Q4 revenues to be in the range of $67 million to $70 million, representing a sequential quarterly increase of 6% to 11% and a year-over-year improvement of 58% to 65%.

Turning to expenses. Gross margins during Q4 will be impacted by two non-recurring factors. First, we will incur a one-time charge to cost of goods sold related to our recent decision to upgrade saline pumps that will be reaching end-of-service over the coming 24 to 36 months. The saline infusion pumps are capital equipment that provides saline and lubricant infusion during orbital atherectomy procedures and are typically provided at no charge to our customers. This is a normal course of action to replace the remaining older generation pumps over several quarters, beginning in early fiscal '22. Upgrading these pumps now will benefit our gross margin over time, while we assure uninterrupted support for our customers.

Additionally, as we stated at the outset of the pandemic, one of our primary goals was to invest in our business to assure that we were able to support our customers and patients throughout the duration of the pandemic. Over the past 12 months, we operated both of our production facilities to ensure that we maintained adequate safety stock in the event one of our facilities experienced a pandemic-related disruption. With the recovery now under way, we will reduce build levels during Q4 in an effort to eliminate the accumulated safety stock.

Combined, these factors will result in Q4 gross margins to be in the range of 70% to 71%. We anticipate gross margins to recover beginning in Q1 fiscal '22. Operating expenses are forecasted to be in the range of $53.5 million to $55.5 million. On the bottom line, we anticipate a Q4 net loss of $6 million to $7 million and an adjusted EBITDA loss of $1 million to $2 million.

I will now turn the call over to Rhonda, who will provide a commercial update. Rhonda?

Rhonda J. Robb -- Chief Operating Officer

Thank you, Jeff, and good afternoon, everyone. Today, I will provide a few thoughts regarding our Q3 results and we'll then discuss some of the key drivers for Q4 and beyond as we emerge from the pandemic. In Q3, our domestic peripheral business was approximately flat versus last quarter. Our typical growth in PAD was impacted by the surge in hospitalizations that began in December and continued through the first half of Q3. During this time, we saw a temporary reduction in the treatment of claudication, while the more complex patients those with CLI to these below-the-knee, continued to be treated.

Since mid-February, we have seen a considerable rebound in our PAD business. Revenue drivers within Q3 included the continued adoption of the exchangeable platform system and continued strength in the OBL. As Jeff noted, throughout the pandemic, we have seen an increase in the number of procedures performed outside the hospital. As Jeff mentioned, OBL revenues increased 21% compared to last year. OBLs have become an important site of service during the pandemic due to improved patient access and satisfaction as well as less restrictions on elective procedures as compared to the hospital setting.

Turning to coronary. Domestic coronary revenue increased 9% year-over-year. The pandemic-related disruption to hospital procedures early in Q3 was followed by a strong increase in procedure volumes in late February and throughout the month of March. As COVID admissions decreased, our reps are increasingly invited back into the cath lab to support physicians in the treatment of their most complex coronary patients, and we've taken this opportunity to focus on driving deeper penetration of OAS in existing and in new accounts.

Improving cath lab access is also helping us drive increased revenue per coronary procedure. During Q3, we sold $604 of support products for every coronary OAS sold. In total, sales of coronary support products totaled $2.4 million. I should also mention that throughout COVID, we have focused on and expanded many of our existing OAS contracts with large IDN and GPO groups to include our full line of coronary support products, and now soon to be launched peripheral products. Expanding these contracts unlocks new opportunities for growth. Today, our reps now may sell these support products into most of the largest hospital systems in the country, representing over 600,000 TDI and PCI procedures annually.

International revenues increased 20.5% in Q3 to $3.7 million led by continued strength in Japan. We executed an effective launch in Japan three years ago based on peer-to-peer training, and this approach continues to deliver exceptional results. We also received the CE Mark for our coronary OAS in January and are employing the same launch approach in Europe. However, due to the pandemic, we are currently certifying our new customers with remote training. This has proven to be an incredible accomplishment, especially when you consider we launched coronary in six European countries in less than two months. The reception by our customers has been overwhelmingly positive, and we look forward to continued adoption and momentum as the launch continues.

Looking ahead to Q4, we anticipate procedure volumes to show sequential improvement compared to Q3 as the vaccinations increase, as patients resume routine medical visits and as COVID admissions decrease. We are positioned to resume strong unit growth in both peripheral and coronary atherectomy going forward.

In peripheral, we anticipate growth in sales of our interventional support devices as we begin driving more revenue per case later this month with the launch of the Peripheral Jade Angioplasty Balloons. These are non-compliant balloons designed for the controlled opening of resistant lesions. In recent months, we've conducted over 400 product evaluations with 80 physicians at 60 facilities and have received exceptionally strong feedback regarding their overall performance. Jade will be an important component of our peripheral offering and is expected to drive meaningful revenue per case.

In addition, following the recent FDA clearance of our WIRION embolic protection system, we will initiate the full market launch of this product later this month. Our market tests received high marks from our customers with WIRION being evaluated in a variety of lesion types, locations and morphologies. It is wire-agnostic and can be used with any atherectomy device.

One final comment on peripheral. The Journal of Medical Economics recently published an article highlighting our LIBERTY 360 trial. Overall, the authors found that the use of orbital atherectomy resulted in lower mean cumulative PAD-related costs at both one and two years after the procedure. LIBERTY 360 continues to provide convincing data, demonstrating that orbital atherectomy provides durable and patient-relevant outcomes, while simultaneously reducing total healthcare costs in this extremely challenging and resource-intensive patient population.

In coronary, we will leverage improving cath lab access to drive increased sales of our core OAS and increased utilization of our support devices. With increased imaging utilization, there is better identification of calcium and recognition of the unique benefits of OAS and its mechanism of action. As a result, healthcare providers increasingly appreciate orbital atherectomy as a single device solution that's versatile, easy to use and treats a broad range of lesions by ablating and fracturing both superficial and deeper calcium pathology.

Turning to international. We look to build on the strong interest in coronary OAS in Europe, and we'll continue to remotely train and certify new physicians. In light of the recent surge in COVID cases in many parts of Europe, we will be very targeted with focus on sites that have experience in treating severe calcium along with the patient care experience and medical infrastructure to adopt OAS quickly. We also recently received approval from Health Canada for our peripheral OAS. And with our coronary approval in hand, we intend to launch both there in Q4.

That completes my prepared remarks. Dr. Ryan Egeland will now update you on a recent development regarding our plans to develop drug-coated balloons. Ryan?

Ryan D. Egeland -- Chief Medical Officer

Thank you. Rhonda. As you recall, in January, CSI entered a partnership with Chansu Vascular Technologies or CVT, developing everolimus-based drug-coated balloon portfolio. We're pleased to report that CVT has continued to demonstrate the effectiveness of its research and development strategy, and has recently received the FDA breakthrough device designation for the development of its coronary DCB.

The FDA breakthrough device program was designed to help patients receive more timely access to innovative devices, intended to treat life threatening or debilitating diseases where few or no approved products exist. Under this breakthrough program, the FDA will provide priority communication in its review of CVT's DCB development plans, and we're really pleased to be working with CVT to add everolimus DCBs to our product portfolio. This program will bring important new products to our customers as we seek to enhance treatment options for patients with the most advanced forms of peripheral and coronary artery disease. CVT remains confidently on schedule to launch first-in-human clinical trials for both the peripheral and coronary DCBs by calendar year end 2023, as we reported earlier.

I'll now pass the call back over to Scott.

Scott R. Ward -- Chairman, President & Chief Executive Officer

Thank you, Ryan. Our investment in CVT is just one example of the many recent actions we have taken to add new growth drivers and to diversify our business. We are poised to execute on an impressive portfolio of initiatives. And the next few quarters are extremely important to us as we expect an inflection in our growth rate driven by COVID recovery, our new product pipeline and renewed momentum in international.

In calendar 2019 and 2020, we launched several exciting products, including GlideAssist, Exchangeable and Radial OAS. Each of these have had a muted growth ramp directly related to the pandemic. As these headwinds subside, we remain very excited about these products and look forward to driving their adoption in a more normalized environment. Our new product pipeline is as robust as it has ever been. Our WIRION embolic protection device, the Jade peripheral angioplasty catheters, Zilient Guidewires and the ViperCross [Phonetic] family of peripheral support catheters will be fully launched over the next few months and will contribute meaningful incremental revenue in FY '22 and beyond. Aside from our product pipeline, we continue to invest in growing our international business. And we expect to see strong growth outside the U.S. with renewed momentum in Japan and the launch of coronary OAS in Europe.

Looking out longer term, we have positioned the company to sustain robust growth in the years ahead. We continue to make progress on our pVAD program, which we are targeting for fiscal '22. This product will provide access to an $800 million market in PCI support. Enrollment in our ECLIPSE trial is gaining momentum, and we are on pace to complete patient enrollment in about 12 to 18 months. We are targeting a report out on this trial in fiscal '24.

In collaboration with WavePoint, we are developing a portfolio of specialty catheters to be used in the treatment of chronic total occlusions and complex PCI. These CTO microcatheters will allow CSI to penetrate $100 million to $150 million market and will significantly increase our potential revenue per procedure, adding $1,500 in revenue opportunity per coronary case. We are targeting a launch date in fiscal '23 for the CTO portfolio.

Ryan described the everolimus drug-coated balloon program. The market for coronary and peripheral DCBs is estimated to exceed $1 billion in size over the next five years, and we're targeting first-in-human trials to begin in '23. And finally, we recently announced a small investment and exclusive acquisition option in CarePICS, a telehealth company, offering a digital platform designed to improve outcomes for patients with CLI and lower extremity wounds.

In closing, we look to the future with great anticipation and optimism. Our entire organization here at CSI is excited to execute on these opportunities, support our customers, improve patient care and accelerate our revenue growth beginning in the current quarter. I want to thank all of our CSI employees for their extraordinary dedication and commitment to our mission and the patients that we serve. Guided by our mission to save limbs and save lives, our exceptional team continues to make meaningful progress on our efforts to transform CSI into a multi-product company with worldwide reach.

We appreciate your continued interest in CSI, and we will now take your questions. Christine, would you please repeat the instructions for the Q&A. Thanks.

Questions and Answers:

Operator

Thanks. [Operator Instructions] Your first question comes from the line of Mike Matson from Needham. Your line is open.

Joseph Stokes -- Needham & Company -- Analyst

Hi, guys. This is Joseph on for Mike. I guess, just to start it off, can you maybe talk about the investment in CarePICS and how that fits with Cardiovascular?

Scott R. Ward -- Chairman, President & Chief Executive Officer

Yeah. Thank you, Joe. I appreciate the question. As we've shared with you over the years, the care of peripherals patients is really often times quite fragmented and physicians are often really unable to share information, data or diagnosis among themselves. So this fragmentation has really slowed patient referrals, it's led to poor patient outcomes and it just made it difficult -- the care of these patients more difficult.

So our shared vision of CarePICS is to have really the most robust referral network available to podiatrists, to skilled nursing facilities, home healthcare agencies, wound care providers, primary care physicians, really everybody that touches these patients and have them integrated with now our interventionist. So we believe that this multi-disciplinary case management approach that we'll be really facilitated on this platform that this can really accelerate patient access to the appropriate treatment at the right time, improve the quality of care and ultimately really reduce the frequency of amputations. So we really look at this as a way for us to consolidate and accelerate the referral channel in our business.

Joseph Stokes -- Needham & Company -- Analyst

Okay. Thank you very much. That's helpful. And then I guess, maybe moving on to Europe, can you tell us a little bit more about the coronary atherectomy market opportunity there? I guess, how big is the overall market? And how much share you guys expect to gain? And then also is there, I guess, an opportunity to sell the peripheral product in Europe as well? Thanks.

Rhonda J. Robb -- Chief Operating Officer

Sure.

Scott R. Ward -- Chairman, President & Chief Executive Officer

Yeah. Why don't I -- I'll just take that. It's a $50 million market in Europe. Remember that it's a distributed product, so we work through distributors there. But right now our launch is going extremely well. And I'll have Rhonda just go ahead and comment on that.

Rhonda J. Robb -- Chief Operating Officer

Yeah. As I said, we've launched into a number of countries with just really, really excellent reception to the product and to the clinical outcomes, in particular. As I said in my prepared comments, we're going to be very measured and directed in terms of our launch in Q4 just due to the continuation of COVID. But a $50 million market is really attractive. And I'm very optimistic for our share position in Europe that is consistent with our share in other geographies.

We do have peripheral there as well, and it has been going well and we're continuing to roll it out. That's a little bit more of a market development with peripheral is not as established in Europe as it is in the United States, for example. So we're working with the thought leaders throughout Western Europe to really raise awareness for the therapy, drive those patient referrals, drive better organization, ultimately a bigger market. I appreciate the question.

Joseph Stokes -- Needham & Company -- Analyst

Okay. Thank you very much. And then can you guys also just briefly touch on some of the pricing trends that you've seen for coronary and peripheral atherectomy?

Jeffrey S. Points -- Chief Financial Officer

Sure. So the pricing trends in coronary have continued to be very stable. And frankly, the pricing trends in both segments of our OBL and in-hospital segment for peripheral have also been stable. I think what we have seen in the past quarter was a mix shift where largely due to COVID-19 we saw just an increased growth rate and more patients being treated in the office-based lab setting than what we saw in the in-hospital setting. Otherwise our pricing there sequentially actually was quite consistent.

Joseph Stokes -- Needham & Company -- Analyst

Thanks for taking our questions.

Scott R. Ward -- Chairman, President & Chief Executive Officer

Thank you, Joe.

Jeffrey S. Points -- Chief Financial Officer

Thanks.

Operator

Your next question comes from the line of Danielle Antalffy from SVB Leerink. Your line is open.

Danielle Antalffy -- Leerink Partners -- Analyst

Hey, good afternoon, everyone. Thanks so much for taking the question. Scott or Rhonda, don't know who wants to take this question. But this is around the shot -- the competitive IVL or I don't think you guys necessarily characterize it as competitive, but the ongoing IVL launch, and Shockwave put up pretty decent numbers, was only two weeks or so of launch. Just curious about what you're seeing out there in the market from a filing perspective? And how you think the impact to your business could evolve as they go from sort of a more controlled launch to a broader launch? And then at a high level, long-term impacts to your -- to the coronary business? Thanks so much.

Scott R. Ward -- Chairman, President & Chief Executive Officer

Thank you, Danielle. I think it's early days, but you can see from our results that we had actually quite strong growth year-over-year in coronary. So I'm very pleased actually with the performance of our coronary business. Our coronary business continued to remain quite strong, really throughout third quarter despite the challenges that were posed by COVID.

So at this point, we really don't have data. It's too early for us to have data to really answer your question on market share. But I would say that really, right now, our market checks, albeit incomplete, have actually been quite positive. We feel that what we are seeing, as you somewhat described, is that the utilization of the IVL is likely to expand this market. And the treatment of these complex coronary patients is difficult and it often times does require multiple technologies, it requires different approaches, and in particular, the complexity of different types of lesions, obviously some can be cared for using our technology and some may require other technologies.

The one thing we do know for certain, and I think we're quite confident in is that our customers know how to use orbital atherectomy. They know when to use it and they know how to use it -- technique really to optimize patient care. They know how long it will take. They have experience and they have confidence. So when the device is required for use, we still believe that they will pull our device and use it in the care of their patients.

It also, I guess, I would say, it's been somewhat interesting to see as competition has entered this market, we have seen a real increase in awareness, and that is beneficial. The awareness now of calcium among the referring cardiologist, those cardiologists who may come across it in their day-to-day practice, they may choose to use a Shockwave balloon or an IVL balloon to treat their patient or they may come across that more difficult lesion now and say, OK, I recognize this as calcium and I'm going to refer it on to a center that is more trained and better able to care for these more complex patients.

So I think in the long run, we do expect this to expand the market, but we also do expect to continue to achieve that strong growth that we've delivered historically in coronary. And I think that is in that low-double-digit range, very consistent with what we were delivering prior to COVID. And we fully expect to get back to that and to maybe do better than that even in the short run here.

Danielle Antalffy -- Leerink Partners -- Analyst

Okay. That's helpful. Thank you for that. And then my next question is on the peripheral, it's around critical limb ischemia, and just sort of thinking conceptually about that piece of your business. I mean, I'd be curious to hear how much or quickly critical limb ischemia is growing for you guys? I don't know if you guys can parse the numbers that way. But -- and I'm asking the question because I feel like that's becoming an increasingly important piece of the CSI story. It's a market where it feels like you guys have a monopoly and the most, I guess, near-term opportunity, if I am mischaracterizing that, let me know, but where you have the most differentiation and have the biggest benefit to patients.

So I'd be curious to hear; a, how fast critical limb ischemia therapy is growing? B, how much awareness is growing there, because it sounds like that's a big piece of the market development? And then, c, how much -- like sort of what percentage you expect that to be of your business over the next, call it, year or two years or so? Thanks so much.

Scott R. Ward -- Chairman, President & Chief Executive Officer

Thank you, Danielle. The -- probably a lot of people will ask me, what are the key lessons that we've learned over the course of this pandemic. And I think, one of the most important observations we have made is just how important our device and our technology is in the care of patients that have critical limb ischemia. It has been both rewarding, and at times, quite remarkable to see that our patient population, our growth, the number of patients that we treat that have critical limb ischemia really has not been negatively affected by the pandemic, and that's extraordinary.

We have seen impact in the care of patients that have claudicant or that have claudication. But our CLI market has remained very stable and steady, which shows you that even in the face of a pandemic, these patients obviously have a very serious condition and our device is most often times consistently used in their care. And that's because our customer population knows how to use this product, they know how to care for these patients and they get good outcomes.

And so as a result of that, I think CLI -- I think you're right. CLI is a very important part of our business. I think we -- it is obviously the most complex patient population. This particular market is driven by the continued increase in the prevalence of diabetes. And as a result, we do expect unfortunately you see critical limb ischemia continue to increase. We believe that this market is growing right now at a rate in that 7% to 8% range, and we expect to see that continue going forward.

We also, of course, are now launching products that also target that very same patient population. There are patients that have critical limb ischemia and they have above-the-knee or below-the-knee lesions. And in the case of patients that have above-the-knee lesions, that's a place where we expect our WIRION embolic protection device to be utilized quite often and where we think that it can really make an improvement in the quality of care for those patients. So we are actually quite excited about our focus on critical limb ischemia. And as you've described, and I think appropriately so, it will become a continuously more important part of our business as we move forward.

I think I addressed all of your questions there. If there's anything I missed, let me know.

Danielle Antalffy -- Leerink Partners -- Analyst

Yeah. No, that was great. Thanks so much, Scott.

Scott R. Ward -- Chairman, President & Chief Executive Officer

Okay. Thanks.

Operator

[Operator Instructions] Your next question comes from the line of Suraj Kalia from Oppenheimer. Your line is open.

Suraj Kalia -- Oppenheimer -- Analyst

Hey, Scott. Can you hear me all right?

Scott R. Ward -- Chairman, President & Chief Executive Officer

Yes, Suraj. Thank you.

Suraj Kalia -- Oppenheimer -- Analyst

Perfect. So thank you for taking my questions. Scott, let me start out here on the coronary side, just following up on Danielle's question. So the coronary lesions that's being treated with OAS, at least the way we have thought about it it's stratified as the longer more complex lesions are OAS or atherectomy. The more focal lesions are for POBA and IVL. I just picked up a shift in your commentary about the entry of IVL. Did I get that wrong or are you still seeing it -- the market relatively stratified that way?

Scott R. Ward -- Chairman, President & Chief Executive Officer

We are absolutely still seeing it stratified that way. That's exactly what I'm referring to. I think as we look at our patient population, our patients are typically most -- the lesions we treat, I should say, are typically more stenosed and they are longer. And that is and it always has been the benefit of our device is, If you cannot pre-dilate that lesion, you can get a wire through it to get our device down and still be able to treat that severely calcified lesion, open it up and ultimately stent it. So that definitely is an advantage of our product.

Suraj Kalia -- Oppenheimer -- Analyst

Yeah. Got it. Scott, on the peripheral side, just if you could directionally give us some goalposts so that we can start getting our arms around it. How would you characterize the number of cases being done independently and just utilization rate per center?

Scott R. Ward -- Chairman, President & Chief Executive Officer

Just a question for you on the number of cases being done independently, do you mean the number of cases being performed in the office-based lab?

Suraj Kalia -- Oppenheimer -- Analyst

No, just without a rep on site. And specifically...

Scott R. Ward -- Chairman, President & Chief Executive Officer

I see.

Suraj Kalia -- Oppenheimer -- Analyst

Sorry, go ahead.

Scott R. Ward -- Chairman, President & Chief Executive Officer

No, I understand what you're saying now. I apologize. Yes, we actually support about two-thirds of our cases. So our reps are on site in our peripheral cases about 65% to 70% of the time. And I should note that may be a sales rep or a clinical specialist.

Suraj Kalia -- Oppenheimer -- Analyst

Got it. In the average cases per center, how should we think about that?

Scott R. Ward -- Chairman, President & Chief Executive Officer

I don't know how we should think about that. Jeff, do you have a sense of average cases per center, I suppose?

Jeffrey S. Points -- Chief Financial Officer

Yeah. Suraj, I think the way to look at it is we've got about 1,700 active accounts. So you can see how many devices that we sell per quarter. And you could assume about 1,700 active accounts.

Suraj Kalia -- Oppenheimer -- Analyst

Got it. Scott, one last question and I'll hop back in queue. And this is more of a -- sort of a global question, if I may, not only applicable to you guys, but if you could just kind of give a broader sentiment of what you are seeing in the field? And that specifically is related to discernible inventory pattern shifts that you're seeing pre-COVID, to COVID, to now. Because one of the themes that we are picking up in the field is there is inventory of certain suppliers in the field. I'm curious, what you're seeing if there is any shift, any changes that we could pick up and maybe drive some correlations about pull-through demand or excess supply? Any color would be great. Thank you for taking my questions.

Scott R. Ward -- Chairman, President & Chief Executive Officer

Thank you, Suraj. I would say that our experience is counter to what you just described. Our inventory in the field is as lean now as it's ever been. We -- prior to COVID-19, we had seen many of our customers purchasing on a rather infrequent basis, maybe purchasing only once or twice a quarter. And they would do this is not necessarily because they're buying in large volumes, but because their buyers, their purchasing agents just don't have time to deal with us every day. And so as a result, they want to be efficient about their purchasing.

As COVID came on board, we saw a lot more of our institutions moving toward much more frequent buying of far fewer devices. So as a result, today, our average daily sales really reflects our average daily procedures. And of course, we like that because it allows us to really lean out our business to understand our business exceptionally well, and frankly, to manage our manufacturing operations in a much more specific manner. So -- and that's exactly what we're doing.

I -- at least my perception of this is that we do not expect that to change. We think that hospital systems are going to continue to conserve their cash and that they're going to continue these patterns of buying our devices on an as-needed basis. Now that is, I shouldn't say that this is consistent across the board, most certainly there still are large hospital systems that do large purchases. But I would say the trend at this point is more toward JIT delivery. And in particular, as we look at our office-based labs, providing that JIT support, being present, supporting cases, this is our core competitive advantage, at least a part of it for that particular customer group.

So hopefully that addresses your question. If not, please let me know.

Suraj Kalia -- Oppenheimer -- Analyst

Forgive me, Scott. I should have been a little more specific. I wasn't referring to you guys, I was just saying on a global level. Just in terms of inventory shifts and any differences in ordering pattern. That wasn't a question or field check specific to CSI. Sorry about that.

Scott R. Ward -- Chairman, President & Chief Executive Officer

It's quite all right. No problem. I don't mind a bit. That's certainly the environment we're operating in.

Suraj Kalia -- Oppenheimer -- Analyst

Thank you.

Operator

There are no further questions at this time. I'd turn the call back over to Scott Ward.

Scott R. Ward -- Chairman, President & Chief Executive Officer

Okay, very good. Thank you, everyone. We appreciate your interest in CSI and we look forward to giving you another update next quarter. Thanks.

Operator

[Operator Closing Remarks]

Duration: 40 minutes

Call participants:

John E. Nielsen -- Vice President, Investor Relations & Corporate Communications

Scott R. Ward -- Chairman, President & Chief Executive Officer

Jeffrey S. Points -- Chief Financial Officer

Rhonda J. Robb -- Chief Operating Officer

Ryan D. Egeland -- Chief Medical Officer

Joseph Stokes -- Needham & Company -- Analyst

Danielle Antalffy -- Leerink Partners -- Analyst

Suraj Kalia -- Oppenheimer -- Analyst

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