Abiomed Inc (NASDAQ: ABMD) Q4 2020 Earnings Call Transcript

Abiomed Inc (ABMD) Q4 2020 earnings call dated Apr. 30, 2020

Corporate Participants:

Todd A.Trapp — Vice President and Chief Financial Officer

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

Seth Bilazarian — Chief Medical Officer

Analysts:

Margaret Kaczor — William Blair — Analyst

Raj Denhoy — Jefferies — Analyst

Chris Pasquale — Guggenheim — Analyst

Danielle Antalffy — SV8 Leerink — Analyst

Matthew O’Brien — Piper Sandler — Analyst

Calvin Chu — Morgan Stanley — Analyst

Chris Cooley — Stephens — Analyst

Jayson Bedford — Raymond James — Analyst

Presentation:

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Fourth Quarter 2020 Abiomed Earnings Conference Call. [Operator Instructions].

I would now like to hand the conference over to your speaker today, Mr. Todd Trapp. Sir, you may begin.

Todd A.Trapp — Vice President and Chief Financial Officer

Thank you, Crystal, and good morning and welcome to Abiomed’s fourth quarter fiscal 2020 earnings conference call. This is Todd Trapp, Vice President and Chief Financial Officer, and we are here with Mike Minogue, Abiomed’s Chairman, President and Chief Executive Officer; and Dr. Seth Bilazarian, Abiomed’s Chief Medical Officer. The format for today’s call will be as follows; first, Mike will discuss fourth quarter business and operational highlights and then I’ll review our financial results, which were outlined in today’s press release. Next, Dr. Seth Bilazarian will provide a clinical update relating to COVID-19 and the role of Impella and ECMO in treating these patient, including two case presentations. After that, we will open the call to your questions. Related documents can be found on our website under the Investors section.

Before we begin, I would like to remind everyone that today’s call includes forward-looking statements. The company cautions investors that any forward-looking statements that involves risks and uncertainties, and are not a guarantee of future performance. Actual results may differ materially due to a variety of factors identified in our earnings press release, and our most recent 10-K and 10-Q filed with the SEC. We do not undertake any obligation to update forward-looking statements. This presentation also contains some scientific discussions of future medical devices and indications, which have not been declared, approved our otherwise evaluated by the U.S. Food and Drug Administration. It is intended for investors only, it is not to be used for medical treatment purposes. Nothing herein constitutes a claim regarding the safety or efficacy of future products or indications.

With that, let me turn the call over to Abiomed’s Chairman, President and Chief Executive Officer, Mike Minogue.

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

Thank you, John. Good morning everyone. I’d like to start by saying, I hope you and your loved ones are staying safe and healthy. Everyone that Abiomed would like to express our thanks to the frontline healthcare workers and medical community for all they’re doing to support patients and provide much needed medical care. Also I appreciate our employees, who continue to directly support patients 24/7 at hospitals, and our headquarters, manufacturing service and shipping teams, who continue to come to work to make and ship our Impella heart pumps. At Abiomed our culture of patients first drives our execution and this crisis is bringing out the best of our employees and customers. We are helping hospitals and caregivers by donating and shipping protective gear, including gloves, shields, surgical masks and N95 masks, directly to hospitals and government agencies serving our communities.

In addition, we help manage patients on site and online in the cloud with Impella Connect, at over 130 hospitals. We’re also stepping up the rollout of Impella Connect, which is a HIPAA compliant service, that allows Abiomed personnel to remotely monitor the Impella console and interact with the medical providers appropriately on hemodynamic management, alarms and weaning. We provide this on-site and on-phone support at no additional cost to our customers, as part of our commitment to improving outcomes. We currently have identified more than 100 COVID-19 cases now in our Impella quality assurance or IQ database. Every Friday, we host 200 plus physicians on our COVID-19 Skype call, to identify lessons learned in treating COVID-19 patients with cardiogenic shock, myocarditis or organ failure and review specific case studies on Impella and ECMO support. And finally, we’ve created an online Abiomed prayer community and an Abiomed charitable foundation, to help employees and those in need.

Now, looking back at the fourth quarter. In February, we saw our U.S. business stabilize through the first half of March, despite two misleading publications by AMEN and DRUBA [Phonetic]. Appearing in print, we believe that our actions to educate the medical community on the lack of the validity of the studies, to highlight 14 years of FDA audited Impella data and to present more recent and robust publications, we are having the desired impact with positive momentum in early March. However, the business was negatively impacted in the second half of March from the COVID-19 pandemic. As a result, Abiomed delivered $207 million in revenue, flat year-over-year with an operating margin at 28.1%. We believe that COVID-19 reduced Q4 revenues by $17 million or 8 points of growth.

For the full fiscal year, revenue of $841 million increased 9% versus fiscal year of 2019, with operating margins of 29.6%. Todd will provide more details on the financials shortly. For today’s call, I will cover our business in the COVID-19 environment, highlight our key fiscal ’21 goals to transition to Abiomed 2.0 and provide updates on new products and our strategic acquisition of ECMO technology announcement.

So first, I will highlight our Q1 plans to adapt and execute. We are preparing for the worst and hoping for the best. Our company priorities have aligned around supporting patients and customers, protecting the safety of our employees and their families, and manufacturing our life-saving heart pumps. Our number of Impella patients in the U.S. and E.U. declined approximately 45% from mid-March into April from last year. Heart failure remains the leading cause of death and it will continue to increase with COVID-19 in the overall population. However, in the short term, our Impella procedures have limitations, because many patients are staying home in compliance with local and federal regulations, and out of fear, they are not going to the hospital. We have seen that these delays will worsen outcomes as reported by agencies around the world. Unfortunately until governments and healthcare officials allow physicians to ramp-up patient treatment with acute symptoms, elective, urgent and emerging patients will be limited.

In the long term, there will be an increased need for Impella support, because eventually the high risk and cardiogenic shock patients will emerge from home with worse angina, acute heart failure or myocardial injury post COVID-19 recovery. The coronavirus initially attacks the lungs, and for some, leads to failure of the heart and kidneys, with right heart failure from pulmonary embolism, myocarditis or cardiogenic shock. We see Impella as a viable and valuable solution for these extremely sick patients in shock with heart failure, and in the coming months, more case studies will be published.

For the fiscal year, we have designated a three phase red, yellow green plan for the company to face the realities of the current market and to keep our team engaged and focused on our goals. This approach will allow us to come out of the pandemic, ready to grow the business and help patients with our life saving technology, when demand returns.

Our Q1 environment is called red due to the restrictions noted on elective cases and access to most hospitals, along with limitations on headquarters operations. During this red phase, we are supporting patients, maintaining inventory, accelerating Impella Connect, reducing costs and investing in innovation to meet the needs of the next phase of recovery. We’ve also taken steps to mitigate the negative business impact of coronavirus. We’ve adjusted our costs to more appropriately match our revenues in Q1.

These reductions are designed to share the burden across the business and start with salary cuts for the leadership team. This will protect our cash reserves, preserve full-time jobs. allow for investment in innovation and position us to achieve our fiscal ’21 Abiomed 2.0 goals. Overall, this red action plan is intended to last through Q1. We are focused on controlling our own destiny by increasing our revenue and patient utilization sequentially in each month through June. Our employees already are wearing protective gear and masks that we’ve been able to provide and during this time, we also plan to be testing our employees for the COVID-19 antibody.

We have adapted our business model with more interactive and online internal and external training, education and patient support. This is what we call Abiomed 2.0, which encompasses SmartAssist, Impella Connect, CAMP-PCI, which is interactive in online training and education, Abiomed 2.0 will augment and accelerate our training, data and time playbook in fiscal ’21.

We believe that the recent elective procedure guidance by government agencies and CMS has started the recovery phase or yellow phase in selected areas of the country. We think this increases utilization into the summer months. This yellow summer phase will allow for more Protected PCI and the return of protocols for STEMI heart attacks and cardiogenic shock. Medical societies and government agencies have also initiated media campaigns to advise the public to seek immediate healthcare support when experiencing heart failure.

Finally, in the second half of the fiscal year, we transitioned to phase green, as we are back supporting more patients in the hospitals, providing internal and external training and education online with CAMP-PCI and virtual proctoring, and manufacturing again at a higher capacity in both Danvers, Mass., and in Aachen, Germany.

Independent of these three phases, we will remain fanatical on achieving our fiscal ’21 Abiomed 2.0 goals on product innovation, Impella Connect, and CAMP-PCI. We will prioritize and fully fund these initiatives, because we have the benefit of our solid balance sheet with no debt. Abiomed 2.0 will drive accelerated roll out of our remote interface technology with SmartAssist and Impella Connect. The SmartAssist platform is now used in 900 of our 1,441 U.S. sites and assists 80% of Impella procedures. Within the fourth quarter, we also expanded Impella Connect to 50 new sites and today we are in 131 hospitals and more than 200 additional hospitals already have the hardware installed and simply require the hospital Wi-Fi permission. Abiomed plans to transition the majority of our hospitals to online Impella Connect monitoring in fiscal ’21. This captured console data will further help us create and improve new AI algorithms to optimize patient care. No other company in this space has this capability.

Abiomed 2.0 will launch CAMP-PCI, which stands for coronary artery myocardial protected PCI. CAMP-PCI is the largest online and interactive education and training endeavor in the company’s history. It will be led by a faculty of experts in the field of high-risk PCI and circulatory support. This online password protected training platform gives us the ability to reach thousands of physicians remotely and share best practices, techniques and technologies to achieve more effective and complete PCI. We are launching CAMP-PCI this quarter and will conduct a virtual user meeting for the faculty and top users in June. We are focused in fiscal ’21 on advancing our innovation overall, starting with the rollout of Impella 5.5 with full market release in the U.S. The limited launch of Impella 5.5 with SmartAssist is progressing well, and is now in 69 of our top sites with publications pending on over 300 patients. Built for surgeons, the Impella 5.5 is the most blood compatible heart pump on the market. It is the only forward flow, fully unloading pump, designed to be weanable, with SmartAssist AI algorithms. Since it is inserted through the axillary artery, it does not require a sternotomy, and allows for immediate patient ambulation, which has been shown to improve outcomes.

While COVID-19 travel restrictions in March delayed our first in-man study for Impella ECP, we were ready and confident. We will deliver on key milestones for this nine French 3 plus liter heart pump ideal for high-risk PCI. We plan to enter the U.S. later in the year, with an early feasibility study for Impella ECP, and the application was submitted to the FDA yesterday.

Additionally, the late majority of adopter customers want smaller access and closure today. We made significant products on our new expandable and recoilable sheath for Impella 2.5 and Impella CP. We plan to submit a 510(k) application in Q2 for the expandable sheath for Impella 2.5, followed by Impella CP. We are confident that both Impella ECP and our new sheath product for Impella 2.5 and CP, will allow us to break the small bore barrier in percutaneous heart pumps, and utilize 9 French closure devices. Abiomed would like to also recognize and thank the FDA for their fast execution for all of our many submissions and studies, with efficient online calls and real-time reviews.

We are also making strategic investments in innovation and are pleased to announce the acquisition of Breethe, after several years of interacting with Dr. Bart Griffith, Founder of Breethe and Professor of Surgery at University of Maryland. He is a pioneer in the field of heart and lung transplantation and ECMO overall. Many physicians over the years have asked Abiomed to bring this technology into our portfolio, because of our ability to support patients, teach best practices, and collect critical data for research. This ECMO technology will allow us to treat cardiogenic shock patients requiring oxygenation, who are already being supported with Impella, about 10% of our patients, add ECMO pediatric offerings and treat a new patient population with respiratory failure. This acquisition provides Abiomed with the opportunity to innovate traditional ECMO technology, focusing on patient ambulation and recovery from acute respiratory failure, such as ARDS, H1N1 SARS and COVID-19.

For many patients with cardiogenic shock, Impella is the optimal technology, because it unloads the left ventricle, it perfuses end organs, and allows the heart to rest and recover. Abiomed recognizes patients in cardiogenic shock or cardiac arrest, they also need oxygenation. ECMO perfuses the end organs, but does not unload the left ventricle, which increases the option demand of the myocardium or heart muscle in these patients.

For patients in cardiogenic shock requiring oxygenation, Impella and ECMO called ECPELLA, work together to unload the heart and oxygenate the body. We have already supported and collected data on more than 8,000 ECPELLA patients in our IQ database and ECPELLA now becomes an important role in expanding our patient population.

Breethe is the life work of Dr. Bart Griffith, based on his desire to have a portable, integrated all in one artificial lung system that is compact and easy to manage. Abiomed and Breethe are now in the process of completing the 510(k) clearance and planning a limited market release in our fourth quarter of fiscal ’21, we will cover ECMO in more detail during our virtual Investor call in May.

As an example of what Abiomed 2.0 will look like in the future, I would like to cover a patient story. We recently had a very sick 43-year-old woman with COVID-19 and shock on Impella 5.5 with SmartAssist, Impella Connect and VV-ECMO. Her ejection fraction was below 10%, which means her heart was barely working. A team of Abiomed physicians and scientists, along with the local team and call center efficiently monitored her several times a day, watching every waveform and alarm. The treating physician and caregivers interacted with Abiomed at every level, and evaluated the waveforms to optimize oxygenation, weaning, and right heart support. The physician in charge believes this technology and engagement improved the management experience and the ultimate outcome. I am pleased to share that this young woman was ex-planted and discharged home with her native heart and a nearly normal ejection traction.

In closing, Abiomed will be smart, disciplined and innovative in fiscal ’21. Our operational discipline allowed early profitability as a company, and built a sizable cash position with no debt. We have built a brickhouse and substantial IP portfolio. We will endure the challenges and come out stronger, as Abiomed 2.0, because of the investments in innovation to have products that are smaller, smarter and more connected in the cloud with AI algorithms for heart recovery. We will share the sacrifices to reduce expenses and take great pride knowing that our people and Impella heart pumps are helping save lives during this global crisis.

Above all, I remain grateful to my employees and customers and confident in the technology and opportunities for Abiomed. I will end how I started, by recognizing all the heroes at the hospitals taking care of our communities. May god bless them and their families.

I will now turn the call over to Todd, our CFO.

Todd A.Trapp — Vice President and Chief Financial Officer

Thank you, Mike, and thanks for joining the call. I hope everyone listening and your families are staying safe.

Turning to the quarter, we delivered revenue of $207 million, flat versus prior year. We were still feeling some of the impact in January and February, due to two misleading publications in print within the quarter. As Mike mentioned, in the first half of March, we were beginning to see a positive momentum, based on the actions to educate the medical community on Impella FDA studies. Through the first weeks of March, U.S. patient utilization was up 11% for the month. In the second half of the month, we experienced a dramatic drop in patient utilization due to COVID-19. The impact was broad based across the U.S. and in Europe. We believe that COVID-19 pandemic impacted our topline by $17 million or 8 points of growth in the quarter.

By geography, U.S. revenue declined 2% to $172 million with a 5% decline in U.S. patient utilization. In the U.S., at the end of our fiscal Q4, the Impella 2.5 and CP have reached 1,441 sites. The Impella 5 0 has been placed in 649 sites and the RP is in 533 sites. The new Impella 5.5 with SmartAssist is now in 69 sites. We continue to receive positive feedback from the surgeons on this new breakthrough technology. The reorder rate in the quarter was slightly above 100%, consistent with the rate from prior year. Average combined inventory at the hospitals for the Impella 2.5 and CP was approximately 4.7 units per site, in line with the inventory levels we saw last quarter.

Outside the U.S., revenue totaled $34 million, up 15% on constant currency driven by continued strength in Japan. Our European revenue increased 6% on a constant currency basis. As previously stated, our business in Europe saw a significant deceleration in utilization in the second half of March, due to COVID-19, primarily in Italy, Spain, and Germany. Our Q4 performance in Japan was in line with our expectations, as we delivered $8.4 million in revenue. We opened six new sites in Q4, ending the year with 115 sites. As a reminder, we had communicated that we would open less sites, as the team focused on a post-approval study and a broader CP launch at existing sites.

In Japan, we did not see a material impact on patient utilization from the virus in the quarter. However, our business has softened in recent weeks, as COVID cases in Japan rise after a state of emergency was declared on April 7th.

Gross margin was 80.9% in the quarter compared to 83.2% in the prior year. The year-over-year variance was driven by the SmartAssist launch, Impella Connect, and lower production volumes we introduced Impella CP with SmartAssist at 283 new sites in the quarter. Our SmartAssist platform is designed to improve outcomes, with real-time intelligence, providing smart advanced metrics to better position, manage and wean patients in the ICU.

In the fourth quarter. R&D expense totaled $25 million, roughly flat versus prior year. We continue to invest in clinical research and in new product development for our small bore devices, like the expandable sheath in ECP. SG&A expense for the fourth quarter totaled $84 million, up 3% versus prior year. In the quarter, we increased our U.S. field team by 30 reps. These new reps will have the normal learning curve, and we believe putting more feet on the street, will enable us to go deeper in hospitals and drive higher Impella utilization, once the pandemic is more contained, and eventually subsides. In the quarter, operating income was $58 million, translating to an operating margin of 28.1%. The year-over-year margin performance was a function of our ongoing growth investments, which more than offset some favorability from stock based compensation.

GAAP net income for the quarter was $32 million or $0.70 per diluted share versus $1.60 in Q4 of 2019. The year-over-year performance was primarily driven by a mark-to-market adjustment on our Shockwave investment. Our reported tax rate for Q4 was 19% versus 25% in the prior year, due to excess tax benefits and increased usage of foreign tax credits.

Now turning to our full year performance; for fiscal year ’20, we delivered revenue of $841 million, an increase of $72 million or 9% versus prior year. We saw solid growth across the globe from continued adoption of the Impella platform. Japan had a strong year, delivering revenue of $35 million, up 101% from 2019. Operating income was $249 million, up 11% compared to the prior year. We expanded operating margins 40 basis points to 29.6%, while continuing to make the necessary investments to support our future growth. Net income for the year was $203 million or $4.43 per diluted share versus $5.61 in the prior year. The year-over-year variance was driven by a higher tax rate from excess tax benefits and our mark-to-market on our Shockwave investment.

As we look ahead, we are focused on liquidity in this uncertain environment, and I want to highlight our robust position. Our balance sheet remains strong. In Q4, we generated $87 million of operating cash flow and $315 million for the year. As a result, we ended fiscal year ’20 with $651 million in cash, up 27% versus prior year, with no debt. We will continue to be disciplined and have the capital necessary to stay focused on the long-term.

Now turning to our fiscal year ’21 outlook and guidance; as we described in our press release, because so much depends on factors beyond our control, such as the duration or extent of the COVID-19 crisis and recovery, there is simply not enough visibility to provide a reliable estimate for Q1 or full year fiscal ’21 at this time. As Mike mentioned, Q1 is our red phase, and April run rates were down 45% versus prior year. We will continue to monitor the uncertain environment, and provide an update on full-year guidance when appropriate. We have adjusted our costs as described in our 8-K. This will protect our cash reserve, preserve full-time jobs, allow for investment in innovation and position us to achieve our fiscal goals. These actions, taken since March have included a hold on hiring, eliminating non-critical consultants, contractors and temporary workers, reducing discretionary spending, and implementing alternate work schedules for the Aachen and Danvers production teams.

Our CEO and COO have reduced their salaries by 100%, VPs and Directors have reduced their salaries by 50% and 20% respectively for the quarter. As a Board also — the Board of Directors have reduced their cash retainers by 50% for Q1. Again, these reductions are designed to share the burden across the business and start with salary cuts of the leadership team. For non-Director employees at Danvers and Aachen headquarters, they will be taking a minimum of one week furlough or unused vacation. This strategy allows personnel to remain Abiomed employees and will allow us to quickly ramp up when demand returns.

Our commercial field team will work on monthly operating plans to allow for flexibility and the potential to increase sequentially each quarter. We will adjust as the quarter progresses. Overall, these cost actions are intended to last through Q1, but we will continue to monitor the environment and extend these actions if necessary.

Before I conclude, one housekeeping item to mention; as expected, due to the current situation and social distancing, we will not be hosting a full Investor Day in person at our headquarters on May 27. However, we are adapting and we will be hosting a condensed virtual Investor event, focused on innovation, clinical data and ECMO acquisition on the same day. Details will be forthcoming.

In conclusion, I want to personally thank our customers for their continued support and express my gratitude for our talented and loyal employees, during these very challenging times. Throughout the year, I have stayed in close touch with reps and physicians, who allowed me to join them in the fields and I have been inspired by all of our patient stories. It is these experiences, coupled with our innovation, our clinical data and our dedicated field team that gives us the confidence in our ability to not only manage through this crisis, but to emerge from it stronger.

Now I will turn the call over to Dr. Seth Bilazarian.

Seth Bilazarian — Chief Medical Officer

Thanks Todd. I’m glad to join the call today and provide commentary on what Abiomed’s medical office is learning from our physician customers with our COVID-19 physician advisory board, which includes representatives from Italy, Germany, Canada, Japan and the U.S. We will conduct our sixth weekly call tomorrow with over 300 physicians from around the world. The weekly calls with the physicians share literature updates, focused on cardiovascular complications of COVID-19. Each week, a short literature review is provided and cases are presented from hospitals around the world.

The literature on cardiovascular complications is evolving rapidly. COVID-19 itself can affect the heart in a variety of ways, as highlighted on the slide 15 in the deck, and may directly affect the myocardium, causing myocarditis or via a hyper coagulable state presenting as an acute coronary syndrome, with clot resulting in myocardial infarction, or as a pulmonary embolism or critical limb ischemia or stroke. Many of these severely sick patients are candidates for mechanical circulatory support and ECMO. However most have not received either therapy because of the resource constraints in hospitals. Impella has the potential to increase end organ perfusion and reduced cardiac workload and shock related to these COVID-19 presentations, and they also stabilize patients, while anti-viral or anti-inflammatory therapies are deployed. Additionally, Impella is FDA approved for myocarditis, based on clinical data showing a direct disease altering effect by inhibiting the mechanotransduction pathways of inflammation. The Impella and ECMO platforms are effective tools to tackle the hemodynamic features of COVID-19, which might require univentricular left or right ventricular support in unloading, using the Impella CP 5.0 or 5.5 or the Impella RP. Also, the configuration of biventricular support referred to as BiPella, with biventricular support using Impella in both the left and right ventricles or combined with ECMO and an ECPELLA configuration.

In addition to the case that Mike shared, I’d like to highlight two recent cases presented on our Friday calls that highlight the versatility of the Impella platform to support varied patient presentations. The first case was a 57 year-old patient with recently confirmed positive COVID-19 tests, who presented with a deep venous thrombosis and pulmonary embolism, due to the hyper coagulable effects of COVID-19. The patient had massive pulmonary embolism, and was cared for masterfully by doctors Ted Schreiber and Amir Kaki at St John’s Ascension Medical Center in Detroit. The patient had enormous clot in transit in the right atrium, that was successfully retrieved using an AngioVac, and then the patient sustained cardiac arrest requiring CPR. The patient had the Impella RP rapidly deployed with almost immediate restoration of systemic pressures, and an incredibly impressive image shown in the slides 17 and 18. The patient’s blood pressure rose from a systolic blood pressure of 60 millimeters of mercury to over 140 in 10 seconds. The patient recovered and was discharged. The case highlights the lifesaving value of early recognition of right ventricular failure, and appropriate early implementation of the Impella RP to support patients, and this is an example of the univentricular support critically needed in some patients. This case was highlighted on an ACC tutorial with over 22,000 impressions, and I urge you to look at it, the link is in the slides, to see the video of the clot being extracted and the amazing blood pressure recovery after Impella RP.

The second case of a COVID-19 effective patient was published in the Journal of ASAIO, is highlighted in slide 20. This is a 52-year old man recently discharged after an acute myocardial infarction at Freiburg, Germany. The patient in our presentation initially interpreted as acute congestive heart failure, but the patient rapidly declined requiring high levels of oxygen and then ultimately develop cardiogenic and vasoplegic shock. The patient was supported with Impella CP with SmartAssist, and initially VA then switched to VV-ECMO, with support over 17 days before the patient’s status adequately stabilized, to allow removal of support. This case highlights the value of the left side of support, in combination with ECMO platforms.

In the intermediate term, we suspect that delayed care will result in more advanced heart failure for patients and a greater need for mechanical circulatory support. In addition, one of the longitudinal hazards of SARS infections like COVID-19 in the past, has been metabolic derangement, such as cholesterol or lipid abnormalities, which increase patient risks for atherosclerotic disease in future years. All of these unfortunate outcomes of COVID-19 infection provide an opportunity for Abiomed and the Impella platform to improve patient outcomes, and to continue our mission of heart recovery.

I’ll now turn the call back over to Todd Trapp.

Todd A.Trapp — Vice President and Chief Financial Officer

Thank you, Seth. So Crystal, I think it’s now time to open up the call for questions.

Questions and Answers:

Operator

[Operator Instructions]. And our first question comes from Margaret Kaczor from William Blair. Your line is open.

Margaret Kaczor — William Blair — Analyst

Hey, good morning guys. Thanks for taking the question. First one for me is just a little bit of a follow-up on the COVID-19 comments that you made. So can you give us a sense of the impact of COVID-19 on the referral networks for high-risk PCI cases, because it does sound like cases are down 45%. But I guess does it get better from here, just patients come back into certain facilities and get tested, or is there a little bit of a gap period. between that time?

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

Margaret, thanks for the call. So I would answer that in a three phased component. So currently red, the referrals aren’t happening, because the cath labs and the surgical suites are essentially closed down at many of these centers that are hardest hit, areas, like New York, Detroit and what we’ve seen is, that many of the intervention cardiologists and surgeons, especially the younger ones, are treating patients in the ICU and all the ICU beds and overwhelmed areas are full. From a referral perspective, the delays that have been happening where people are not showing up in hospitals with chest pain will continue to build, and what you’ve also seen is by all these societies, cardiovascular societies, is differentiating cardiovascular disease, as not truly being elective, right. There is a difference between somebody having chest pain and having a PCI versus someone having an orthopedic procedure. So that’s the first component.

The second is, they’ve already started national campaigns and this is happening as well in Europe, to advise the general public to seek medical support if they’re having chest pain or other heart failure condition. So we’re in the red phase now. There are certain pockets of the country now where those guidelines are opening up, so they are starting the yellow phase. We think that progresses to the end of the summer, and then we expect it to go back open by the time we get to the second half of our fiscal year.

Margaret Kaczor — William Blair — Analyst

OK. So it sounds maybe the 45% — hard to know, I know you guys aren’t setting guidance, but maybe that’s a worst case scenario and maybe gets better. Like you said, as you go through that yellow phase and the green phase and so on?

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

Correct. We’re trying to prepare for every worst-case scenario, but we do believe that the early weeks of April and the end of March were really the most severe, and that’s why we are really focused on sequential growth weekly, as we end the Q1.

Margaret Kaczor — William Blair — Analyst

OK. And then just one more in terms of the acquisition of Breethe, you referenced that 10% of cases maybe, could be good candidates. Can you walk us through what you expect that mix of Impella and ECPELLA to look like, let’s say five years from now and how do you think clinicians will approach these for the device between now and then? Thanks.

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

Good question. So thanks for the comment on ECMO. Currently, where about 10% of our patients get ECPELLA for us and that’s what’s represented in the IQ database. We also believe that when you combine unloading with oxygenation, you get better outcomes, which is why many of our physicians over the years have asked us to add it, and there is multiple publications that we’ve referenced in the press release, demonstrating that ECPELLA; so a patient in shock that requires both hemodynamics and oxygenation, ECPELLA gets better outcomes than ECMO only. And that’s well documented over the years.

I would say that in the next five years, we’re going to continue to innovate and because we combine the technologies and we’ve got the world’s smallest heart pumps and we can do left and right side support, you’re going to see real new innovation come to that space. This COVID-19 time has shown that many of the technologies that are out there for oxygenation and hemodynamics are already 20 years old and their 510(k) technology. So they haven’t been put through a PMA, safe and effective process. And so we’re going to bring that same discipline and innovation. The integration of our waveforms, the integration of what’s happening to these patients and we’ll be able to optimize both oxygenation and unloading, because the endgame and goal is to keep the patient alive and send him or her own home with their own heart like the case example I gave, of the 43-year-old woman.

Margaret Kaczor — William Blair — Analyst

Thanks guys.

Operator

Thank you. Our next question comes from Raj Denhoy from Jefferies. Your line is open.

Raj Denhoy — Jefferies — Analyst

Hi thanks. Good morning everybody. I wonder if Mike, maybe I could start with what you — the comments you made around early March, as you were still recovering from the AHA issues from last year, you noted that you were starting to see some growth, and so I’m curious what was actually happening, if you could provide some more detail about what was perhaps resonating, what was starting to turn the corner with some of these accounts that maybe had pushed back on Impella, initially?

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

Sure Raj. So the two misleading papers went to print, but that also gave us an opportunity to further analyze them and educate the community. So starting with, we just looked at the data, the validity of that information. We were able to acquire the information for the AMIN paper and have insight into that. There is a reason that the outcomes weren’t given, just odds ratios, because they were sensitive at the time, and there were sicker patients in the Impella population, which is what we expected. We also have evaluated the other paper for the exact time period in the IQ database and shown that patients that got Impella before the PCI had better outcomes, and the JAMA paper mixed in bailout patients with our pre-PCI. It’s important to note that Abiomed has a technical bulletin that has been out for over a year, that have been submitted to the FDA showing that we get better outcomes and optimize safety and effectiveness for patients in shock when you put the Impella in before the PCI. And we reiterated, all the papers and publications that are out there from better and more robust databases, to demonstrate that, which includes also NCSI.

And then one other paper had come along, that was generated by multiple centers, but the first author and senior author was from Cleveland Clinic. again showing that if you do a better job with high-risk PCI with Impella, you get better outcomes and you also reduce length of stay. So that also was published. These last six months has been an exciting component of production of new papers, and what you’ll see for the next six to 10 months is a slew of papers coming out for high-risk PCI for shock, and it’s really being granulated and done by our best users that have already been publishing their data. And so I think you’re going to see over the next six months, really the validation that Impella supporting high-risk PCI, enables better outcomes and that’s kind of the component of what CAMP is about, is optimizing the PCI, that achieves higher EF post procedure. You’re not doing the PCI to do a PCI, you’re doing the PCI so that you can have the patient see an improvement in EF, and you’re going to consistently continue to see real data from sites that are doing it today, getting better outcomes in cardiogenic shock.

So that’s been very helpful. We also use the opportunity to explain the history of all the studies, and I think one of the benefits of CAMP and doing these user meetings, is be able to put in front of our user base, the history of Impella from 2006-2020, all the FDA data, all the existing post approval studies, and really demonstrate that this is the most studied heart pump in the history of the FDA, as well as what we’re competing with, is technologies that are 20 plus years old, that don’t have a single FDA study. Aand so I think the credibility and most important, and the fact that these physicians can refer back to patients that they sent back to the referring community, the referring physicians that have better outcomes and improvement in EF, is really what we again validated our story and provided that momentum back.

Raj Denhoy — Jefferies — Analyst

[Multiple Speakers] on the road shows?

Todd A.Trapp — Vice President and Chief Financial Officer

Hey Raj, just quickly too, I think one of the things we highlighted last call that we will be conducting some roadshows in February and early March, and we hit seven cities, anywhere from Dallas to Minneapolis, and I would say, it was all about clarifying, educating and really just kind of displaying our future innovation and clinical roadmaps and we attracted your attendance for those road shows and then the utilization before and utilization after, and we started seeing some traction from those road shows. Unfortunately they got cut a little bit short because of COVID-19, but some of those road shows were starting to pay a little bit of dividends as well from a patient utilization perspective.

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

And the intent of PCI is to make that show online in the path for protective environment, where physicians are presenting to other physicians and as part of that community, the user base can ask questions and receive responses on an ongoing basis, on any subject.

Raj Denhoy — Jefferies — Analyst

Right, right. So I had a couple of questions on COVID as well, and I guess the first one is sort of related to that. So now that we’re in this period where you can’t directly engage with physicians one on one, how are you now transitioning that in the sense that do you think it will be as effective in education and overcoming some of these misperceptions perhaps, now that you can’t engage directly with physicians one-on-one?

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

So Raj, we feel fortunate, because we were already planning for Abiomed 2.0. You all have heard us talk about this over the last several earnings calls. So SmartAssist and Impella Connect gives us that real-time connection to physicians, while the patient is on support, it lets us all communicate. CAMP-PCI was already in process and the faculty has already been selected, they’ve actually been here to headquarters for multiple meetings, which now we’re launching. We implemented Skype over 18 months ago globally, and we automated our finance and customer center. So we talk to physicians quite regularly now on Skype, on calls, we’ve been incredibly productive on working on PROTECT 4. We’ve already selected our executive committee. We’ve selected the country leaders and the technical committee, and we’ve been frankly using the time and the new tools that are out there, that have made us very effective. I personally — I conduct FaceTime or Skype calls each week with multiple physicians, and as Seth mentioned, we have 200 plus people calling in every Friday. So Seth, maybe you could comment on your interaction?

Seth Bilazarian — Chief Medical Officer

Yeah, I think that’s all true what Mike summarized, but what I’d add is that, for the last several years, we’ve really been building our digital assets with protectedpci.com, a variety of video and other educational platforms. The growth last year was exponential, well before COVID-19, with our recently introduced frequently asked questions page, to really help clarify utilization issues, raising awareness about the product in our therapeutic areas. So that’s already been in place. Of course, we expect to expand it and enrich it with CAMP, and have it be not open to the public, but be protected — password protected environment.

So I think that we are well positioned. There isn’t anything like sitting with the person, but we think that we are well positioned to be in a remote virtual environment for education and interaction with our physician customers. We’ve also well…

Raj Denhoy — Jefferies — Analyst

Understood, maybe just my…

Seth Bilazarian — Chief Medical Officer

If I just make one more comment is that, we are well along and expect in this quarter to demo our first use of virtual proctoring, where we will be able to use technology platforms with a remote proctor to essentially be standing by virtually in the cath lab, with a physician, to step by step instruct the physician on any areas about use of Impella or a Protected PCI case. So that was already also underway before COVID-19 and we will be demonstrating that in the next four to six weeks.

Raj Denhoy — Jefferies — Analyst

Understood. Maybe — and my last one was just a clarification, so the 45% fall off you saw in April, was that equally balanced between high-risk PCI and shock or did you see a heavier fall off in one or the other?

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

It’s heavier in high-risk PCI and then it gets lower when you start getting into the shock patients. However, in many of these cities, cardiac arrest patients weren’t necessarily being resuscitated or weren’t necessarily being taken to emergency rooms, and unfortunately, some of them that did get to the emergency rooms, didn’t get further treatment, door to balloon time, which is how fast you get from the ER to the cath labs has more than tripled in most cases, and many patients just get lytics or blood thinners and sit in the ER, or because they don’t have the ability to treat them. So it’s a tough time for many out there, but it’s going to come back, but that’s why the elective cases get hit. But overall, everything is down when the cath labs and surgical suites aren’t being utilized.

Raj Denhoy — Jefferies — Analyst

OK, thank you.

Operator

Thank you. Our next question comes from Chris Pasquale from Guggenheim. Your line is open.

Chris Pasquale — Guggenheim — Analyst

Thanks. A lot to ask about. Wanted to start with making sure I understand the red to green progression. So is the right way to think about it that, 1Q is red, 2Q is yellow, and then the back half of the year is green, and what is the plan actually assumed for procedure activity in the green phase? Are you baking in any sort of catch-up from lost cases or just sort of back to pre-COVID levels?

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

So Chris. Thanks for the question. That’s the plan. Now if red extends past Q1, we will extend our our plan of attack for Q1. If we start to see it ramp a little faster, which we hope to start seeing each week now, then we’ll get to our yellow phase earlier. I can’t put an exact week or month on it, but that’s the way we see things progression, and we’ve already seen some signal right now in the last week, with some of the new parameters that have been put in place to treat elective procedures.

In the back half, green, we do expect that there will be a little bit of catch-up, but we also know that there is going to be limited time or space in the cath labs. But we’re also excited because on top of all those things, we now have new patients that we’ll be able to treat. So the 5.5 full launch is happening. We think we’re going to see a little bit of a rebound in the Impella RP, and by the end of the fiscal ’21, we expect to be piloting and starting with ECMO. So these will all be better products, new patients, and also adding in those patients requiring oxygenation.

Chris Pasquale — Guggenheim — Analyst

Thanks. And I appreciate the visibility is unusually poor right now, so not surprised at all by the decision to pass on giving guidance. But can you share any color on how you were thinking about what FY ’21 would look like prior to the world changing in the past six weeks?

Todd A.Trapp — Vice President and Chief Financial Officer

Yeah, I mean it’s a good question Chris. I mean whilst we are coming off of a Q4 where we had some noise around the two misleading publications, I think we started to see, and as I mentioned, some positive momentum in March, given some of the initiatives that we laid out and so again, up until March, we were seeing 11% growth in U.S. patient utilization. So as we thought about next year, we are excited about some of the things that Mike highlighted, we had the 5.5 launch, we had the expandable sheath coming in the fourth quarter. We’re launching CAMP, all these online interactive training curriculums. So we felt we were going to set up for a pretty solid fiscal year ’21, based on kind of what we we were seeing exiting Q4 and all the initiatives that we had on our plate.

Chris Pasquale — Guggenheim — Analyst

Thanks.

Operator

Thank you. Our next question comes from Danielle Antalffy from SV8 Leerink. Your line is open.

Danielle Antalffy — SV8 Leerink — Analyst

Hey, good morning guys. Thanks so much for taking the question. I had two questions. Just one, sorry to belabor the COVID point, Mike and Todd, but just curious about — from a recovery perspective, I mean I guess and I appreciate the commentary around the different phases, but logistically, like how are you thinking about the ability for hospitals to recover some of these procedures, and do you expect any procedures to sort of be lost unfortunately, some of these patients might perish or drop out of the system somehow? How should we be thinking about that? V-shaped, U-shaped, a little more color there? And then one follow-up on the ECMO, the Breethe acquisition?

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

Danielle, thanks for the question. On the recovery, logistically, we think it’s going to be different around the country, and so that’s why we’re managing and watching and have access to all the patients in the different parts of both, Europe, Germany and the U.S. and less of an impact in Japan. Relative to what happens with the delay, unfortunately these patients, some of them may not have made it through this COVID crisis. However, there is going to be a large population of people now that are sicker and worse off. There is going to be some carry-forward for those patients that likely need some type of support, and we also know that in some cases, they are trying to go with the least invasive approach, meaning that not — patients that may have in the past, got — have gotten open heart surgery or CABG, may opt for something less invasive, that will allow them to go in and out of the hospital within a day or two.

So those are the trends we’re watching. And I do think that heart failure, coronary disease was already the number one killer. COVID-19 will have a negative impact overall, because it attacks the lungs, but also those who get really sick, it impacts them and we likely will see myocarditis and cardiomyopathy increase over time as well.

Danielle Antalffy — SV8 Leerink — Analyst

OK, thanks. And then just really quickly on Breethe. I mean that acquisition makes a ton of sense to me. Congrats on that. Just curious about how that could position you from a sales perspective? I mean, is there an opportunity to, I don’t know if bundling is the right word, but sort of drive sales synergies? I mean there is a lot of centers, the ones with the AHA presentations that prefer ECMO. So is there an opportunity for you guys to leverage and get into those centers in a bigger way with the Impella as well? Thanks so much.

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

So to be clear, the leaders in this space of circulatory support and then those that have published most of the data, are our existing customers. There certainly are some people that still use balloon pumps and I’d qualify the sites that produce the paper are balloon pump users and big ECMO users. However, the technology for ECMO has an absolute role for oxygenation, and yes, we believe there is great synergy, not just in the distribution and in our organization to collect the data, but also in improving outcomes. It’s one thing to have somebody survive, it’s another thing to have them survive and be discharged home with their native heart. And the optimization and the information that we have, learned with Impella itself, will really allow us to even leapfrog into ECPELLA. And remember every time we leapfrog this technology with a new breakthrough, we file more IP, which currently stands at 850 patents and over 700 pending.

So we will continue to innovate in this space and you will likely see us transform that treatment to make it easier to improve survival, but also maximize and optimize native heart recovery.

Danielle Antalffy — SV8 Leerink — Analyst

Thank you so much.

Operator

Thank you. Our next question comes from Matthew O’Brien from Piper Sandler. Your line is open.

Matthew O’Brien — Piper Sandler — Analyst

Good morning. Thanks for taking the questions. Mike, to your point about less folks coming in right now because of fear of COVID, we’ve been hearing a lot about that as well, more more structural damage is going to be caused as a result of this to these patients. So kind of two questions in one here; when do you think these patients will start presenting, is it the second half of this year? And when they do present, given all the damage that they’re causing to their heart, are they going to be more complicated patients to treat? So you’re going to see more use of CP, biventricular, 5.5, how do we think about potentially addressing this patient population that’s coming in with more damage to their their heart muscle?

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

So Matt, that is the theory we believe that will play out. It’s unfortunate for many patients, that — patients that that’s going to happen. One of the great things about having Impella Connect having the largest field distribution team and also having Impella Connect ramping up, is that we have really great visibility to every hospital, every physician, and we already have a network with the call center. So we know when patients are getting supported, if you’re an Impella Connect site, the patient goes on, it’s in the cloud and we know about it, and we’re really going to be able to customize and focus on the types of patients that are out there. Yes, they’re going to be sicker and more complicated and as I said, we’ve already seen the impact, a little bit of some sequential growth with the announcements that elective procedures are opening back up, as well as the media approach that the CV, cardiovascular societies have taken recently.

So we want to be there to help our patients, but we only want to help patients that it’s appropriate, and that’s why when we do the COVID-19 calls on Fridays, we really zero-in on the areas that we can help and all of the patients that we’ve seen so far, have benefited from either the Impella RP, Impella CP or the Impella 5.5. And so we’re excited to have the opportunity to step in here with this crisis, but we also know that there is some tough times ahead and there’s going to be a lot more sick people with heart failure.

Matthew O’Brien — Piper Sandler — Analyst

OK, that’s helpful. And then the expandable sheath commentary, I thought was really positive. Can you talk about how the interaction with FDA has gone? Do you feel really comfortable with the submission timing and potential approval? And then, any sense for when you may get the CP, they may submit for CP and then again, bundle within that? I think it was a fair number of doctors that are waiting for that specifically? Can you kind of try to quantify some of the conversations you’ve had over the years as far as what that may do to the business, as you get those products later this year and into next year?

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

Sure. So we feel blessed that we have the ability to have so much innovation and have the balance sheet to continue to move forward. If you think about our plan of what we were already doing this year, we’re going to accelerate it. So if we thought maybe Impella Connect would take three years, we’re going to try to get it all done this year, and we’re staying on track with all of our new products and submissions. So I do want to complement the FDA. As a little company, we probably have a ton of submissions in there for both new products or new studies or post-approval studies and they’ve been seamless and efficient and they’ve done reviews with us online and in real time. And so we feel very good where we are.

The expandable sheath, remember, we’ve already done 16 plus patients and we feel great about it. The submission is going to go in for 510(k) in Q2 for 2.5. That’s a 90 days submission at max, and we’ll follow it shortly after with — for the CP.

For the ECP, we are going to plan. The submission went in yesterday. So we’ll be doing patients in the U.S. and the early feasibility study for high-risk PCI, and we’re excited and hope to have that by the end of the summer or the beginning of the second half, and that’s another breakthrough technology that’s 9 French 3 plus liters, there’s nothing like it. But the intent for all of these technologies is that we’ll be able to close the femoral hole with a 9 French closure device, and that’s a game changer and that’s really going to help us with our training data and time.

Matthew O’Brien — Piper Sandler — Analyst

Got it. Thank you.

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

Thanks, Matt.

Operator

Thank you. Our next question comes from David Lewis from Morgan Stanley, your line is open.

Calvin Chu — Morgan Stanley — Analyst

Hi, good morning. This is Calvin on behalf of David. Two quick ones from me, could you please just provide some more detail on the methodology that you used to quantify the $17 million COVID impact for the quarter? Was this an estimate based on the run rate of the first 2.5 month, and then applying that run rate to the quarter, or is it a geography based approach as well? Any color you can provide there would be a helpful? And I have a quick follow-up.

Todd A.Trapp — Vice President and Chief Financial Officer

Good, thanks for the question Calvin. So yeah, what we did is, we just took the patient run rate through May 14. So the first two weeks of — I’m sorry, March 14 and we just kind of extrapolated that out for the rest of the quarter and said if those — the performance we saw in the first two weeks of March continue, we would have seen X amount from a patient perspective and then used an average selling price to come up with that $17 million. We use that same methodology here in the U.S. as well as over in Europe.

Calvin Chu — Morgan Stanley — Analyst

Understood. And second question is just, do you intend to run clinical trials around the ECPELLA therapy in the future? Can you comment on the strategic trajectory for that therapy going forward? Thank you.

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

Sure Calvin. In the press release we did last night, we actually put three studies and publication that are already in process. The next phase of this will really be starting to integrate the waveforms, things we can do with SmartAssist, where you can time the Impella, you can look at the waveform and predict recoverability, and you can also match it with the oxygenation needs of the patient. So one example of what we’re already doing with our AI for SmartAssist, is we look at waveforms and we can determine whether or not we can predict right heart failure. Or we look at waveforms for the last five to 10 minutes on a patient, and we can predict the next five or 10 minutes of what’s going to happen to the patients hemodynamics, which is critical if you’re doing a high-risk PCI and you’re thinking about explanting the device and sending to the patient with ICU. Or if you’re just treating a patient in the ICU and you want to recover them.

So there’ll be a lot more that can come. But again the Impella technology combined with ECMO gives a whole new capability in treating patients that before, you really didn’t have smart devices and you really weren’t able to evaluate what’s happening with the myocardium for the patient in the ICU.

Calvin Chu — Morgan Stanley — Analyst

Thank you.

Operator

We’ll take our next question from Chris Cooley from Stephens. Your line is open.

Chris Cooley — Stephens — Analyst

Good morning and thank you for taking the questions. Todd, just wanted to congratulate you guys on the Breethe transaction and I know we’ll probably hear more about this at the upcoming Investor Day, but I’d appreciate if you could maybe elaborate a little bit more here, you’re regarding your views maybe competitively on low-flow and more specifically below 2 liters, just when we think about ECMO in general and the complications associated with that, how do you potentially see the Breethe device? Obviously you have a favorable view of it there, but how do you see that versus other competing technologies, and more specifically, from the low flow versus high flow rate? Then I’ve got a follow-up.

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

Chris, could you just clarify the low flow comment? What specifically you’re referring to?

Chris Cooley — Stephens — Analyst

Sure. Just the flow rates here basically, sub 2 liters in that?

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

So just to clarify, make sure I understand. So the ECMO flow, if you do smaller cannula and you do it through the peripheral, you can get limitation for some of these, you’ll see that it’s 2 liters, 2.5 liters. You’ll also see the trend at many of these centers has been to go smaller, smaller cannula with less flow, with the thought process, that it can get better outcomes, because you weren’t completely overloading the heart, right? ECMO perfuses a body at the expense of the heart. The devices can run up to 5 liters plus, as can the Breethe, but if you do that for too long, you’re essentially going to send overstress and overwork the native heart, which is going to cause a larger infarct. And so what you’d end up with, in some cases, the patient that has survived, but now has to go onto a transplant.

And what, what our focus is and this technology, is really simplifying the setup, providing a smaller compact all-in-one device that will make it easier to ambulate a patient and plan out a strategy where you’re weaning off ECMO and you’re weaning off Impella together, so you’re treating not just the body, but the heart and with the ultimate goal to recover. So you’ll see more of this — the details on this. Dr. Bart Griffith is a pioneer in this space, this has been his life’s work. I’ve worked with him for over eight years and we’ve invested in this type of platform and technology now for the last two years. So we’ve been very focused on adding this to our portfolio. This process started two years ago and as I stated, we already had plans to do this and feel that now is the best time to have ECMO directly in our portfolio, especially with an increase in these respiratory acute failures.

Chris Cooley — Stephens — Analyst

Thanks. Appreciate the color. And then just lastly for me. I know it’s — again challenging to say the least, in looking ahead. But when you think about the three phases, red, yellow and green, when we think about the yellow phase, am I correct to assume that as you’re exiting the yellow phase, you’re seeing positive volume growth, or is this I just want to make sure I kind of understand the parameters around the transition from yellow to green. Is that a — going flat just trying to get a better feel for kind of how you are defining the yellow phase? Thank you.

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

Sure Chris. That’s a great question, because we’re talking about sequential growth from March and April. At some point, that will start to crossover where you’re looking at positive growth year-over-year and so that’s a great question. It’s too soon to tell you that specific. Right now for Q1, it’s really on sequential growth over the last month, over the last week. But we do expect when we get back to the second half to be net positive, that’s what we would consider to be green. But again, we’re similar to all the other companies that are out there, that are waiting to see how the hospitals respond. We do feel that our patients are sicker. Our elective cases are truly not elective like, having cosmetic surgery or needs. They are still having heart failure. Many of them are still being admitted to the hospital with acute on-chronic. And we do expect unfortunately for many people, coronary artery disease is going to grow, and we think that with COVID-19 it’s going to grow even more.

And so it’s our job to be prepared as this ramps back up and we get into the positive. But what you’ll see as we go along in your and you’ll see each quarter, we will give you full transparency to that number, just like we did today and we’ll give you full transparency throughout the year.

Chris Cooley — Stephens — Analyst

Thank you.

Operator

Thank you. Our next question comes from Jayson Bedford from Raymond James. Your line is open.

Jayson Bedford — Raymond James — Analyst

Good morning and I hope everyone is safe. Just a couple of quick questions here. The down 45% from mid-March through April, is that a worldwide number or was that in reference to the U.S.? if it is a worldwide, can you just talk about what you’re seeing in the U.S., if it is different?

Todd A.Trapp — Vice President and Chief Financial Officer

Jayson, it’s a good question. I would say the 45% to 50% for halfway through March through April was a a worldwide number. As you can imagine, we were seeing most of that impact in, I would say the U.S. as well as in Europe. Although we did start seeing a little bit more softness in Japan, but it’s predominantly a Europe and U.S. number.

Jayson Bedford — Raymond James — Analyst

OK. And just on the international business, growth slowed a bit. I fully understand the COVID dynamic. But I think you mentioned an impact in Germany from the publications. That doesn’t feel like that was an issue last quarter. So can you just talk about what you’re doing in Germany maybe to combat the negative messaging from those publications?

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

Jayson, it was essentially the same approach in Germany. And I think we did see benefit as well — just education helps clarify any of the misperceptions, and we have a very good German physician base and we continue to do same actions that we did in the U.S.

Jayson Bedford — Raymond James — Analyst

All right, thank you.

Operator

Thank you. And that does conclude the question-and-answer session for today’s conference. I’d now at the turn the conference back over to Mike Minogue for any closing remarks.

Michael R. Minogue — Chairman of the Board, President and Chief Executive Officer

Thank you everyone for taking the time today, and we are happy to follow-up with any questions, that ask for more detail. Be safe and have a great day.

Operator

[Operator Closing Remarks].