Penumbra, inc (PEN) Q2 2021 Earnings Call Transcript

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Penumbra, inc (PEN 0.22%)
Q2 2021 Earnings Call
Aug 9, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon. My name is Ashley and I will be your conference operator today. At this time, I would like to welcome everyone to Penumbra's Second Quarter 2021 Conference Call. [Operator Instructions] Thank you.

I would like to introduce Ms. Jee Hamlyn-Harris, Investor Relations for Penumbra. Ms. Hamlyn-Harris, you may begin your conference.

Jee Hamlyn-Harris -- Investor Relations

Thank you, operator. And thank you all for joining us on today's call to discuss Penumbra's earnings release for the second quarter of 2021. A copy of the press release and financial tables, which include the GAAP to non-GAAP reconciliation, can be viewed under the Investors tab on our company website at www.penumbrainc.com.

During the course of this conference call, the company will make forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial performance, commercialization, clinical trials, regulatory status, quality compliance and business trends. Actual results could differ materially from those stated or implied by our forward-looking statements due to certain risks and uncertainties, including those referenced to the 10-K for the year ended December 31, 2020 filed with the SEC.

As a result, we caution you against placing undue reliance on these forward-looking statements and we encourage you to review our periodic filings with the SEC, including the 10-K previously mentioned for a more complete review of these factors and other risks that may affect our future results or the market price of our stock, including but not limited to the impact of the COVID-19 pandemic on our business, results of operations and financial conditions. Penumbra disclaims any duty to update or revise our forward-looking statements as a result of new information, future events, developments or otherwise.

On this call, certain financial measures are presented on a non-GAAP basis. A reconciliation of GAAP to non-GAAP financial measures is provided in our posted press release. We anticipate the prepared comments on today's call will run approximately 18 minutes. Adam Elsesser, Penumbra's Chairman and CEO, will provide a business update; Maggie Yuen, our Chief Financial Officer, will then discuss our financial results for the second quarter; and Jason Mills, our Executive Vice President of Strategy, will discuss our updated 2021 guidance.

With that, I would like to turn over the call to Adam Elsesser.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Thank you, Jee. And welcome back from your maternity leave. Good afternoon, everybody. Thank you for joining Penumbra's second quarter 2021 conference call.

Our total revenues for the second quarter were $184.3 million, a year-over-year increase of 75.3% as reported and 72.7% in constant currency and a 9% sequential increase from the prior quarter. For the second quarter of 2021, we recorded operating income of $10.3 million or 6% of revenue compared to an operating loss of $18 million during the same period last year.

Our vascular and neuro businesses performed well in the quarter, driven by the breadth and robustness of our product portfolios, diligent work by our outstanding sales teams as well as an uptick in elective procedures likely caused both by the fact that COVID vaccination rates increased in some locations and the backlog of elective cases. We obviously are paying close attention to the current news about the spread of the Delta variant. However, we are not seeing a negative impact on our overall business and believe any future impact will not be different than any of our peers in this industry.

Overall, notwithstanding the news, we are optimistic about our ability to help more and more patients and continue to see a lot of opportunities in our target markets to drive strong durable growth over the coming years. And we continue to see a strong symbiosis between our thrombectomy and embolization franchises in both neuro and vascular through which purposeful innovation in one area augments our presence in both.

We also are adding great new people to the Penumbra team both in our commercial organization as well as in our senior leadership team.

Starting first with our Vascular business. We reported growth of 117.6% year-over-year to $100.7 million in the second quarter. We are doing important work in four large areas of patient need: arterial, venous, coronary and embolization. Our growth is a function of strong adoption of our products in each of these areas as more physicians begin to learn the benefits of our advanced therapies to treat their patients.

The recent launch of Lightning 7 targeting the arterial anatomy has gone extremely well following on the success we are having with Lightning 12 for the venous anatomy since its launch last year. We saw strong growth in both existing and new physician customers using our catheters for arterial thrombectomy in large part due to the early success of Lightning 7.

In total, there is still a huge opportunity to expand our presence in both arterial and venous going forward. The Lightning technology, which is now a critical component to both arterial and venous, is being very well received by physicians, an increasing number of whom are adopting single session therapy owing to the benefits that accrue in patient outcomes as well as lower cost to the healthcare system. As many of you know, we are running clinical trials in PE, the venous and arterial vasculature with Lightning, to further learn and help educate our customers on its benefit.

We still have a lot of work in front of us to bring Lightning to all the patients who could benefit. We estimate approximately 90% of applicable patients who have venous arterial clot are not -- are still not being treated with single session therapy. We continue to invest in therapy development initiatives and clinical evidence to expand the reach of these important products.

Staying in the vascular franchise, both our coronary thrombectomy and peripheral embolization franchises also had record quarters in Q2. With CAT RX, we are growing our presence within the coronary thrombectomy market and we continue to invest in important clinical work to expand the use of this unique product. For instance, new data was presented at ACC 2021 in May, highlighting the safety and efficacy of CAT RX in patients with high thrombus burden in the coronaries. This work is helping us increase momentum with CAT RX in both academic and high volume institutions.

On the embolization side, we saw an increase in elective procedures during the second quarter as COVID-19 vaccinations increased in the US during the spring and likely enabled hospitals to ramp up procedure volumes. Given the current state of vaccinations and the spread of new variants of the virus, it is possible that this increase in elective cases normalizes a bit in the third quarter. That said, we expect growth trends to continue in this business, not just in the United States but within international markets as well over the long-term.

In sum, all four of our vascular franchises are contributing to strong growth in our vascular business, guided by portfolio breadth and purposeful innovation. We continue to see many attractive opportunities for continued growth and investment in our people, products, clinical studies and markets going forward.

Let me turn to our neuro business, which also performed well in the second quarter. We reported neuro revenue of $83.6 million worldwide, up 42% year-over-year. I am so proud of our neuro team for the great work they have done in recent quarters in the face of a product recall and competitive market dynamics. But now, we can look forward to a very exciting future for our stroke, access, embolization and neurosurgical franchises.

The early cases with our new RED 62 distal stroke catheter have gone very well. Being able to more easily track a robust catheter into the distal anatomy is being well-received by our physician customers. As we continue to expand RED 62's presence, over the coming months, we are excited to also introduce RED 68 catheter, which recently received FDA clearance and the third catheter in the RED series for which we expect clearance later this quarter. We look forward to having all three of these new products for our physician customers to treat their stroke patients.

Further, the [Technical Issues]

Operator

[Operator Instructions] Thank you for your patience. We will now resume the call.

Adam Elsesser -- President, Chairman and Chief Executive Officer

All right. Sorry, guys. I really apologize. We had a malfunction with our phone here and I apologize.

I'm going to start where I think we left off, which is further the breadth of our neuro portfolio shine through again this quarter. Both our embolization and neuro access portfolio has had record quarters. BMX96, which launched late last year, continues to see increased adoption and utilization across the neuro interventional field. In sum, our neuro business continues to build back significant momentum thanks to the same foundational elements that have made this team and franchise the best of its kind in the world for many years.

Our focus on innovation that delivers better outcomes for patients and a broad portfolio of unique products that help our physician customers treat more patients successfully. Our neuro team is energized, engaged and prepared to deliver. And our innovation engine is running extraordinarily well. In the near future, we look forward to discussing our new paradigm in stroke intervention, THUNDERBOLT.

Moving to our virtual reality business. We have made enormous progress with our REAL VR platform and are increasingly optimistic. This proprietary platform can help millions of patients across many different clinical and cognitive healthcare conditions. In order to help many distinct patient groups throughout the variety of healthcare settings, a few things are very important. First, proprietary VR technology that can deliver a fully immersive mobile experience for patients. Second, a platform that is adaptable, thus applicable to many distinct healthcare settings. Third, a VR experience that can be customized for the needs of patients within each setting. And fourth, a purposeful engaging rich content library that meets the needs of patients in different settings with different healthcare needs.

With this in mind, we'll be offering three hardware configurations in the REAL System, the I-SERIES, the T-SERIES and the Y-SERIES. The Y-SERIES being a subsequent model of our current product. We will be showing the I-SERIES publicly for the first time at the HIMSS meeting this week.

We are very excited about the progress we've made across each of these areas, particularly with the help of our extraordinary partners, Sixense. And we're looking forward to working closely with a robust VR community and therapeutic healthcare to leverage the REAL VR platform to help many patients over the coming months and years. We plan to host an Investor Meeting at Penumbra's Campus in Alameda, California on Tuesday, September 21, focused exclusively on our REAL VR franchise. Specific details will follow shortly and we'll of course be subject to local rules that may change regarding in-person events. We hope you all can join us.

Turning to an update on our international business. We are pleased with continued growth on several fronts during the second quarter. We made solid progress in China, Japan, Europe and Canada and continue to see additional opportunities to grow our business in these and other geographies, including Latin America and Asia-Pacific over the next several years. We plan to expand our product offerings in both neural and vascular within many international markets, while REAL VR represents a longer-term attractive opportunity for future growth outside the US as well.

I'll now turn the call over to Maggie to go over our financial results for the quarter.

Maggie Yuen -- Chief Financial Officer

Thank you, Adam. Good afternoon, everyone. Today, I will discuss the financial results for the second quarter 2021. Additional details will be contained within our quarterly report on Form 10-Q.

For the second quarter ended June 30, 2021, our total revenues were $184.3 million, an increase of 75.3% reported and 72.7% in constant currency compared to the second quarter of 2020. Our geographic mix of sales in the quarter were 69.7% US and 30.3% international. US and international reported growth of 64.5% and 106.4% respectively compared to the same period in 2020.

Moving to revenue by franchise. Revenue from our vascular business grew to $100.7 million in the second quarter of 2021, an increase of 117.6% reported and 115.8% in constant currency compared to the same period last year. Compared to prior quarter, revenue from our vascular business grew by 12.9%, driven by strong performance in peripheral thrombectomy and increases in embolization procedure volume in the US.

Revenue from our neuro business was $83.6 million in the second quarter of 2021, an increase of 42% reported and 38.8% in constant currency compared to the same period a year ago. Compared to our performance in this period last year with this COVID-19 impact, we see material growth across neuro access, embolization and neurothrombectomy businesses, and growth in all regions. I'm pleased to report all international regions grew sequentially compared to the prior quarter.

Gross margin in the second quarter was 64.4% compared to 61.8% in the same quarter last year due to volume leverage and we continue to invest in resources to meet demand and new product launches in the second half of 2021. Looking forward to the balance of this year, we expect our gross margin will normalize to around the same levels as the first six months of the year.

Total operating expense for the quarter was $108.4 million or 59% of revenue compared to $82.6 million or 79% of revenue for the same quarter last year. Our research and development expenses for Q2 2021 were $17.7 million compared to $22.7 million for Q2 2020. We expect R&D investment to accelerate in the second half of 2021 for new product launches and THUNDERBOLT.

SG&A expenses for Q2 2021 were $90.6 million compared to $59.9 million for Q2 2020. We had temporary cost reduction measures during this quarter in the prior year such as executive salary reduction, while we continue to invest in commercial resources to support increasing demand for our products. In addition, most domestic travel and other in-person activities are returning to 2019 levels.

For the second quarter of 2021, we've recorded operating income of $10.3 million or 6% of revenue compared to an operating loss of $17.6 million for the same period last year. We ended the second quarter with a cash, cash equivalents and marketable security balance of $239 million, a steady working capital.

And now, I'd like to turn the call over to Jason to discuss our 2021 guidance.

Jason Mills -- Executive Vice President, Strategy

Thank you, Maggie. And good afternoon, everybody. With the update of our second quarter results, we are formally increasing our 2021 revenue guidance range to $720 million to $730 million, which would represent 28% to 30% growth over 2020 revenue of $560.4 million. This updated guidance compares to our previous 2021 guidance range of $695 million to $705 million, given on our first quarter call in May. We see multiple drivers of growth going forward and thus expect our total revenue to increase in the second half of the year as compared to the first half. We anticipate strong growth in the third quarter compared to the year-ago period, during which we had one of our best product launches ever in Lightning 12.

On a sequential basis, we expect our revenue in the third quarter to approach our strong second quarter results, as we account for the mixed dynamics of the current environment. Thinking further ahead to the fourth quarter, we expect solid sequential growth via continued strong trends within our vascular business as well as increasing contribution from new products in neuro, namely the RED series of catheters for stroke intervention.

Overall, consistent with our approach to setting guidance in the past, our updated 2021 revenue guidance represents our current views on our markets, timing of new product launches and other relevant inputs.

I will now turn the call back to Adam for closing remarks.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Thank you, Jason and Maggie and Jee. This past year-and-a-half has brought huge challenges and unspeakable loss throughout the world. However, it has also shown how resilient we all are, especially with the continuous wave of changing news. It is with these ideas in mind that the extraordinary team at Penumbra continuously year-after-year looks at areas where people are suffering from medical conditions and works to find new solutions to make them better. This drive has been -- has not been more visible -- has been more visible during this past year-and-a-half than ever before. And it is the reason we are so well-positioned to help more and more people in the months and years ahead.

I want to thank everyone on the Penumbra team for doing so much to help so many. Thank you for your attention. And now, I would like to open the call to questions. Operator, please go ahead.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Your first question comes from the line of Bob Hopkins with Bank of America. Your line is open.

Bob Hopkins -- Bank of America -- Analyst

Great. And congratulations on a fantastic quarter. I just have two quick questions. First on the pipeline side, and those were some nice updates, thank you for that. Just curious on THUNDERBOLT, can you give us a sense as when we'll learn more about that product? And then, on REAL, appreciate that it's been shown at a meeting this week, but maybe you can give us a sense for when that will be -- this latest version will be in full launch. Thank you.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Yeah. Bob, great questions and thanks for your comments. As it relates to THUNDERBOLT, I promise you, we will tell you as soon as we can. Obviously we don't always control the full side of that timing, but we will as soon as we can. And obviously, I'm anxious to share what I can with you when it's possible. So, stay tuned. We will let you guys know as soon as possible.

As it relates to REAL, we're getting it out there in the earliest stages and showing it at this obviously important conference, the HIMSS Conference with the healthcare community. We'll update you all at the Investor Day on September 21 with much more detail on timing and sort of what does that whole look -- business look like. I mean, I think it will make a lot more sense after the Investor Day.

Bob Hopkins -- Bank of America -- Analyst

Okay. So stay tuned basically.

Adam Elsesser -- President, Chairman and Chief Executive Officer

But I said it nicely.

Bob Hopkins -- Bank of America -- Analyst

You did. You always do. So, on the vascular side of things, specifically on mechanical thrombectomy, so I'm just wondering if you can give us or just a little more detail on the phenomenal results here. So, you've got arterial venous and coronary here, can you just give us a sense, is arterial still over 50% of that business and are all these different indications growing at a higher rate or is there a real divergence in the growth rates among those three? And I'll get back in queue. Thank you.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Yeah, it's a great question. The growth rates are all strong. Do they change a little bit based on our product launch? Of course, they do. We obviously saw Lightning 12 have a significant trajectory when we launched it. Lightning 7 has done well. But all of the franchises are doing well. And I'm very, very optimistic about how they will all contribute to our growth as we continue on

Bob Hopkins -- Bank of America -- Analyst

Is arterial still over 50%?

Adam Elsesser -- President, Chairman and Chief Executive Officer

I don't think we've broken down those numbers, but...

Jason Mills -- Executive Vice President, Strategy

Yeah, Bob. It's Jason. We have not broke down those numbers specifically. What we've said in the past is that the venous mix has obviously increased significantly since we launched Lightning 12. And that continues to the venous and arterial, besides the businesses are now both growing quite well. So we're not going to break it out specifically.

The numbers I will talk to though that are very similar with those two genres are the penetration rates. Obviously we have -- we think -- somewhere around 90% of the applicable patient populations that can be helped by both products and both genres to go here with single session therapy. I know you've heard us say that in the past, but I think it's worth reminding everybody.

Bob Hopkins -- Bank of America -- Analyst

Thank you.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Thanks, Bob.

Operator

Your next question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open.

Larry Biegelsen -- Wells Fargo Securities -- Analyst

Good afternoon. Thanks for taking the question. And like Bob said, congratulations. One just, Adam, on the COVID trends and the second half guidance and one on vascular embolization, which was quite strong this quarter. So, first, on the recovery, I heard your prepared remarks. It sounds like so far so good, Adam, in terms of trends through July and August. And when I look at the second half guidance, third quarter sales approaching Q2, that's a little bit lower than we've seen sequentially and even looking at the guidance what it implies for Q4, it's a little bit lower than what we saw in 2018 and '19. So, my question is, is there some conservatism built into the guidance from a potential impact from COVID? And I had one follow-up.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Yeah. Let me sort of just give a quick general sort of trend answer and then Jason maybe can pick up on the specific guidance question and why -- what our sort of quarter by quarter implication was versus the actual guidance number. Overall, we feel extraordinarily comfortable and confident about the business. Obviously, the guidance -- the number itself is not an insignificant raise and that gives us a lot of confidence. The news, and we put that in the prepared remarks, that's going on and what is happening, you do have to sort of just catch your breath for a second. There are a few other specifics that Jason can cover. But I would look at the full range of the back half of the year as the relevant question and that we feel incredibly strongly about.

But, Jason, if you want to add a few things?

Jason Mills -- Executive Vice President, Strategy

Yeah. Just a few things to point out. The guidance increase, obviously, we feel -- obviously feel good about and the increase is a healthy step above the number in the quarter relative to the expectations. And so, I think, as you look at sort of the preponderance of the year, what's transpired is fairly positive across our business in both nuero and vascular driving stronger growth than expected.

As it relates to the sequential comments or questions that you had, we made comment in the prepared remarks obviously about elective procedures in the second quarter. Thankfully, we saw during the quarter vaccinations increase throughout the country. That obviously gave the ability for hospitals to do more elective cases. And we think that that probably helped get into the elective cases or the volume on the embolization side, specifically in peripheral embolization, around $3.5 million to $4 million. So, we benefited from that during the quarter and we're hoping that continues. But we have to be cognizant of the current environment with respect to the Delta variant.

Larry Biegelsen -- Wells Fargo Securities -- Analyst

That's very helpful. Thank you. And on the peripheral embolization, even taking into account, I guess, a $3 million to $4 million maybe catch up, Jason, if that's what you were referring to a second ago, still had a quite a good quarter, Adam. So I'm just curious, by our math, over $40 million in the quarter a new high. So, how do you see that playing out and what are the growth drivers because you know that's probably the least understood of your businesses? Thanks, guys.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Yeah. Thank you, Larry, for that question. We are continually pleased and thrilled to watch and be part of that business. We continue to innovate in the embolization on the peripheral side for a while. We've added a number of new products over the past couple of years and including -- there would be LP line last year. And the benefit of that technology is really extraordinary. And we've seen it over and over again. As people start to try it, they migrate to it. The success we're having, it's not -- the field is not as sort of established, if you will, as one might have thought. And there's a lot of room for innovation and a lot of sort of conditions that can use coil technology that might not be in using other things that they can now move to coils because the, sort of, unique nature of our coil technology which, as you know, they tend to be bigger, softer, easier to deploy in many cases. And we're really finding that is starting to continue to win over new converts.

So, I think there's a lot of continued room to grow that business both here in the US as we said but also internationally in the years ahead.

Larry Biegelsen -- Wells Fargo Securities -- Analyst

Thank you.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Thanks.

Operator

Your next question comes from Bill Plovanic with Canaccord. Your line is open.

Bill Plovanic -- Canaccord -- Analyst

Great. Thanks. Good evening. Thanks for taking my questions. First, I'd just like to start off, with the neurovascular business, I mean that's a number that we haven't seen since 2019 there, almost reaching new highs. And I'm just kind of curious, the impact to the JET 7 Xtra Flex recall, I hate to bring up the past, but just making sure where are we in terms of moving through that? How many accounts did you think you lost or ended up coming back and kind of are we done seeing any impact from that and it's kind of base move forward from here?

Adam Elsesser -- President, Chairman and Chief Executive Officer

Bill, that's a really good question. I think, the impact of that obviously, there was a lot of competitive trialing. And as people were looking to find a replacement for the Xtra Flex catheter, I think -- we think and our commentary supports this, with the new RED series, both the really great success we're seeing right out of the box with RED 62 but also with RED 68 coming in the subsequent RED catheter coming sort of later in the quarter. I think we look at the back half, particularly in the fourth quarter as an opportunity to really reestablish ourselves in the stroke field and we're looking forward to it. So, there is a real need for continued innovation in this field. That's obvious talking to customers.

We just had a really successful SNIS meeting. It's the first in-person medical meeting I've been to in a long time since the pandemic. And the support we heard from physicians, the excitement around the fact that we are continually innovating, notwithstanding the recall and everything, it was as strong as I've heard it, in a long, long time. And it gave me a huge amount of confidence that we're doing the right thing, we're on the right track, and we're getting a lot of encouragement from our physician customers. So, I'm pretty excited about how our stroke business will unfold over the next sort of two to three to four quarters.

Bill Plovanic -- Canaccord -- Analyst

Okay. And then, if I could, follow-up with your SG&A spend was up about $10 million on about $15 million of revenue. So, it seems like you're investing forward pretty significantly. Is that in people? Is that US, OUS? Any color would be greatly appreciated. Thanks.

Maggie Yuen -- Chief Financial Officer

Yeah. Previously we did continue to invest in commercial resources in terms of human resources. But at the same time, a lot of the domestic travel and in-person activities, we also see it rapidly come back to pretty much pre-COVID level. And then at the third leg will be we continue to invest in G&A infrastructure to prepare us to scale.

Bill Plovanic -- Canaccord -- Analyst

Great. Thanks for taking my questions.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Thanks, Bill.

Bill Plovanic -- Canaccord -- Analyst

Thanks, Bill.

Operator

Your next question comes from the line of Robbie Marcus with JPMorgan. Your line is open.

Robbie Marcus -- JPMorgan -- Analyst

Oh, great. Congrats on a great quarter.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Thanks, Robert.

Robbie Marcus -- JPMorgan -- Analyst

Maybe another financial question here. There's not much to nitpick at the quarter. But one thing, gross margin came in a little bit below where the Street was thinking. Anything one-time in nature or anything we should know and how should we think about maybe the balance of third and fourth quarter?

Maggie Yuen -- Chief Financial Officer

Yeah. Thanks for the question, Robbie. There is no major one-time cost charges in the gross margin. I think, in the last quarter, we did mention that the gross margin can often slightly fluctuate with product mix [Phonetic]. This quarter, it's just slight fluctuation of some product mix. We have no plan to remove any of the COVID safety measure and cost structure that we have put in place, given the current Delta variant cautions that we have. But meanwhile, we continue to maintain strong productivity and we continue to invest in our capacity as well. So, we do expect the second half of 2021 the gross margin will be continued at similar level as the first half of the year.

Robbie Marcus -- JPMorgan -- Analyst

Okay. Great. Maybe just a quick follow-up. REAL VR looks like four or three versions you're spreading out. Can you give us any sense of what each are tailored for? What the market receptivity has been like so far? And what you think the demand is in the field now that there's better reimbursement that allows for remote usage of this? Thanks.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Yeah, it's a great question. And without solely saying, please come to our Investor Day on September 21. I'll try to just give a little bit of very general color, because I really don't want to steal the thunder of the team presenting really in great detail. The key here, as you know, we initially worked on a product solely tailored for a very specific group of patients. Those were folks who had some form of neurological damage in the brain, typically from ischemic stroke could have been a different type of damage and they needed to recover some physical movement. And the REAL System was the first application which you all saw at our first Investor Day was called Happy Valley that focused on that.

We are clearly aware of the huge just extraordinary sort of body of clinical data that supports the use of VR in a host of other conditions. And we'll go through this again at the Investor Day, but not just that relatively obvious use case but into mental health, in memory and depression and anxiety and a number of other things that people really suffer from and the benefits of BR. So the hardware configurations are really geared toward being appropriate for the variety of settings and types of needs that we're tackling. And we'll go through that in greater detail.

We're not yet sort of commercializing all of these. As I said, the I-SERIES is simply being shown this weekend at the HIMSS meeting. We'll go through the timetable of -- and the plan around commercializing at the Investor Day in a month as well.

Robbie Marcus -- JPMorgan -- Analyst

Great. Thanks a lot.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Yeah. Thanks, Robbie.

Jason Mills -- Executive Vice President, Strategy

Thanks, Robbie.

Operator

Your next question comes from the line of Joanne Wuensch with Citibank. Your line is open.

Joanne Wuensch -- Citigroup -- Analyst

Thank you for taking the question and nice quarter. Two things I want to talk about or ask about. One was, you used the word called symbiosis at the beginning of this call. And I'd like you to expand on that a little bit, and maybe it's a portfolio management term but that would be helpful. And then my second question has to do with the RED series. I'd like to get a better understanding of which or what is the difference between each one of these aspiration catheters and what we can look forward to in the third iteration of the series? Thank you.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Yeah. Great question. The word -- I like the word symbiosis. It is really how the two distinct -- at least how we're interpreting the meaning and if we got it wrong, I apologize, but really the two distinct parts of our business in both Neuro and Vascular, the coil business and the thrombectomy business which are treating different diseases, how those franchises -- those product lines have worked sort of in the field with our customers? How one success in one area has sort of opened up opportunities in the other? How innovation in one has been led to sort of an interest in the rest of our portfolio from physicians?

And it's really been remarkable. And it's something that to me is kind of as pure as it can be, which is the -- as we enter new -- the company and our products to new physicians, who don't know us, the performance of just a pure clinical performance and utility of our products, on one side, is allowing interest and access to the rest of our business. So that's what we meant by that.

As it relates to the RED series, RED 62, as we've talked about, is a brand-new catheter particularly sized to treat typically more distal clots, an area that we think can have more innovation, need more innovation. The reaction to that product has been really, really strong so far. First of all, its trackability is really doing really well. We're also hearing some people using it in more proximal locations like the M1, which to me is a testament to its trackability and ability to hold its shape when you're aspirating through it.

RED 68, obviously the size of RED 68 mirrors the workhorse product for many years, the ACE68. We've just improved the trackability of that catheter in a nice way. And then the next one that's coming, we haven't really announced or talked about, but we will certainly clear and looking forward to having that on the market as well. So really the goal of all these catheters is what it's always been is tractability first. You can't do much until you can easily get it there and then it's ability to hold its shape and effectively and safely aspirate out clot.

Joanne Wuensch -- Citigroup -- Analyst

Thank you.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Yeah. Thank you.

Jason Mills -- Executive Vice President, Strategy

Thanks, Joanne.

Operator

[Operator Instructions] Your next question comes from the line of Margaret Kaczor with William Blair. Your line is open.

Margaret Kaczor -- William Blair -- Analyst

Hey, guys. Thanks for taking the question.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Hi.

Margaret Kaczor -- William Blair -- Analyst

Just wanted to follow up on vascular a bit. I think you guys had referenced physicians are increasingly adopting single session therapy. So, I was curious if you're sensing that that's a broader market trend. Is that being driven by something that you're doing or specific to you all? And what I'm trying to get is, are clinicians just broadly saying, I get this, I'm here, I'm ready to go and so this is just true market penetration or is it still kind of early stage where they'd better see a few cases and increasingly move more patients on?

Adam Elsesser -- President, Chairman and Chief Executive Officer

Yeah. I think it's a really, really good question. I would still put us in the early stages. It's starting to happen. That term for example is out there. A year ago, year-and-a-half ago, no one would have talked about it as the goal is to do single session thrombectomy. So, the very fact that we use that term, you use that term it become very obviously that is a purposeful goal. That is not, that is good. And so that for me is a great sign to the field. And I think, there are lots of other companies pursuing this. I think that's been very, very valuable to the field. Unlike in some areas where the field is crowded and competitive in a negative way in other markets this is -- it's so large and so under tapped that I think it's been very beneficial to have companies all sort of in sync on the goal.

And then, doctors start to move in that direction. The best technology will ultimately win out. And obviously we feel very confident that between this current version and future versions, we're going to stay in a really good spot. But I still think we're in the early stages. We're still -- the vast, vast majority of applicable patients or eligible patients are still not getting single session therapy. They're getting multiple day dripping of TPA and that means we have a lot of work in the years ahead.

But it feels like the conversation from hearing what the field saying, you can now have it. There's some open mindedness at least in the beginning. So, I think there's the beginning of momentum. How long will it take? How much effort it will be? I think we're looking at you know years of work, not months of work. But it feels like we've turned a little bit of a corner here.

Margaret Kaczor -- William Blair -- Analyst

Okay. So, maybe let's take that a little bit further. In some of those existing accounts where you guys are in already, are you seeing clinicians maybe self-selecting certain patients either by risk profile or indication and that's how you're seeing kind of adoption in the field?

Adam Elsesser -- President, Chairman and Chief Executive Officer

Yeah. I don't know if I can be -- answer that with the kind of specificity that the question warrants. I'm sure there are physicians who are -- who still do a little of each. I don't know of those people, but I don't want to say they're not -- it's not true. That doesn't sound impossible to me. Certainly, the customers that are making up the bulk of our current business are mostly people who have sort of turned that corner and believe in it and believe in the benefits of the technology and so therefore are using it in all or almost all of their cases.

Margaret Kaczor -- William Blair -- Analyst

Okay. Fantastic. Thanks, guys.

Adam Elsesser -- President, Chairman and Chief Executive Officer

Thank you.

Jason Mills -- Executive Vice President, Strategy

Thanks, Margaret.

Operator

There are no further questions at this time. Ms. Hamlyn-Harris, I turn the call back over to you.

Jee Hamlyn-Harris -- Investor Relations

Thank you, operator. On behalf of our management team, thank you all again for joining us today and for your interest in Penumbra. We look forward to updating you on our third quarter call.

Operator

[Operator Closing Remarks]

Duration: 53 minutes

Call participants:

Jee Hamlyn-Harris -- Investor Relations

Adam Elsesser -- President, Chairman and Chief Executive Officer

Maggie Yuen -- Chief Financial Officer

Jason Mills -- Executive Vice President, Strategy

Bob Hopkins -- Bank of America -- Analyst

Larry Biegelsen -- Wells Fargo Securities -- Analyst

Bill Plovanic -- Canaccord -- Analyst

Robbie Marcus -- JPMorgan -- Analyst

Joanne Wuensch -- Citigroup -- Analyst

Margaret Kaczor -- William Blair -- Analyst

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