Tactile Systems Technology, Inc. (NASDAQ:TCMD) Q2 2023 Earnings Call Transcript

And this DME, I think, had taken advantage of that relaxed criteria a bit more. So they’re pivoting back to the original criteria. And I think we expect that we’ll probably see a little bit of slowed placements with them as a result. I think the important balance is we have seen growth from all of the top — other top 10 within our list of DME customers. And I think that it’s largely because they’ve maintained the original criteria all the way through. I didn’t necessarily want to retrain their reps or their HCPs. So that’s a little bit of background on it. I think we were certainly fortunate, as I said, at the same time to see such strength in our lymphedema business which was more than offsetting and we expect that to continue through the balance of the year as well.

Operator: Next question comes from the line of Margaret Kaczor with William Blair.

Margaret Kaczor: I wanted to start out with lymphedema, obviously doing quite well, nice meaningful increase in guidance. How much of that is on Entre Plus, I guess? And what is implied of Entre Plus not only this quarter, Q2 but also going forward? The real question, I guess, behind all of this is any details, I guess, over percentage of Flexitouch accounts that tried or purchased Entre Plus and your sense of market share on the back end of that launch and has it increased?

Elaine Birkemeyer: Margaret, it’s Elaine. I’ll start and I’ll ask Dan to fill in here. But — so for the quarter, we saw growth in both our basic and advanced pumps, the Entre and Flexitouch. We did see faster Entre growth. And again, this — we really walked into this quarter with the new product with a focus across both products. The basic pump category is an important one for us. Many payers require a basic pump trial first before moving to a more advanced pump if the patient’s condition warrants it. So it’s an important area for us to be in. So we saw, I think, the reception of our Entre Plus product that was very favorable with our patients and our physicians help drive that strength as well as just kind of that balanced focus across the entire kind of portfolio there.

We do expect to see those trends as we move into the back half of the year. And I think that’s what having strength in both of those products is what helped led us to taking up our guidance for the lymphedema product in the back half of the year for the full year, too.

Daniel Reuvers: Yes. And I would just add too, Margaret, that I think to your question about share, we don’t have specifics but I think that given the kind of strength we’ve seen in our Entre Plus, we certainly would expect that we picked up a bit of share here recently. I think it also positions us well with our patient base. So those that become eligible for Flexitouch, we’ve established that relationship. We’ve started to provide the basic therapy available to them. And hopefully, with the continued expansion of Kylee, continue to maintain that relationship with those patients through their journey.

Margaret Kaczor: Okay. I appreciate that. And then on the AffloVest side, I’ll maybe push a little bit more specifically on that. Seems like second half growth for AffloVest maybe is in the low single digits despite having an easier comp in fourth quarter of ’22. So I’m just curious, how do you look at recovery within that business? And as you look at growth drivers, are you just not penetrating a lot of the HME accounts so you could go deeper that way where you’re kind of broadening out your breadth? Or do you expect this one DME to come back eventually with good growth?