TransMedics at 45th Annual William Blair: Transforming Organ Transplants

On Tuesday, 03 June 2025, TransMedics Group Inc (NASDAQ:TMDX) presented at the 45th Annual William Blair Growth Stock Conference, showcasing its advancements in organ transplantation technology. The company highlighted its innovative Organ Care System (OCS) and National OCS Program (NOP), which are driving significant growth in transplant volumes. While the company’s initiatives show promise, challenges remain as they aim to expand their technology to other organ types.

Key Takeaways

• TransMedics’ OCS technology maintains organs in a living state outside the body, improving transplant success rates.
• The National OCS Program (NOP) has facilitated over 9,000 transplants, moving 76% of liver transplants to daytime.
• The company is expanding into kidney transplants and launching Gen two heart and lung technologies.
• Financially, TransMedics is generating free cash flow with a strong run rate of $600 million in the U.S.
• The company’s logistics integration reduces transplant costs and increases efficiency.

Financial Results

• Strong run rate of approximately $600 million in the U.S.
• Growing top line with healthy bottom-line leverage.
• Generating free cash flow, indicating robust financial health.

Operational Updates

• NOP operates 17 hubs across the U.S., with nearly 300 clinical specialists.
• Vertically integrated logistics include 20 aircraft and over 100 pilots.
• The program can access any donor within a two-hour radius from its hubs.
• NOP Connect, a digital ecosystem, will launch in Q3 to enhance transparency in the transplant process.

Future Outlook

• Launch of Gen two heart and lung technologies expected in late Q2, early Q3 of 2024.
• Expansion into kidney transplants could add 30,000 procedures annually in the U.S., with additional growth in Europe and Australia.
• Development of Gen three technology aims to achieve 20,000 to 30,000 transplants over the next three to five years.

Q&A Highlights

• TransMedics does not charge transplant programs if the organ is not transplanted using their device.
• The integration of logistics eliminates 50% of round trip costs for DCD transplants.
• The company targets 10,000 transplants by 2028, with a goal of increasing to 20,000 to 30,000 in the following years.

In conclusion, TransMedics is positioning itself as a leader in organ transplantation innovation, with a focus on expanding its technology and improving transplant efficiency. For more detailed insights, please refer to the full transcript below.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Ryan Daniels, Analyst, William Blair: All right. If the music has slowly faded out, I’ll fade in. Thanks for coming everyone to the TransMedics presentation. For those of you whom I’ve not yet met, my name is Ryan Daniels. I cover health care services and HCIT for William Blair.

So a little bit unique to have a services analyst covering the company, but it is a big component of their business. I’m joined on the stage by doctor Walid Hassanein, who’s the company’s founder, president, and CEO. He’s gonna go through the presentation, and then we’ll go up to Jenny a for the breakout and Gerardo Hernandez, is the CFO upfront, will be joining for that as well. A couple of quick points. Again, we’ll be up in Jenny a for the breakout and you can see our website for disclosures.

A little bit more meaningful, this is a really interesting presentation for me. I found TransMedics several years ago because my dad had liver cancer. And as a health care analyst and someone who’s done diligence for two decades in my life, if he was gonna get a transplant, I wanted to know everything about it. And so I started doing a lot of diligence on the industry and the best techniques and technologies and that’s how I came across the organization. And it kind of determined that there’s nothing that I wouldn’t do to make sure he was at a transplant center and getting an organ off a transmedic system.

Now fortunately, he didn’t need that transplant. They were able to remove the portion of his liver that had cancer and he’s doing great today. But so I found the company and and really was so impressed out of the box about the organization, the technology they created, and really the innovation and the innovative culture. And it’s only advanced since then becoming, I think what we’ll leave will probably describe as somewhat of the Amazon.com for organ transplant. You know, teams that can go harvest it, capture it, transport it, monitor it, do everything for these transplant centers.

And it creates a ton of value for them well above and beyond just the actual machine, which is where it all started. Service component is very important. So with that, let me turn the microphone over. And again, we’ll do the formal session here and then move upstairs to Jenny A for the burn cut. So really appreciate the team attending for the first time this year and thank you all for your attendance.

Walid Hassanein, Founder, President, and CEO, TransMedics: Thanks Ryan. Thank you all very much for spending the afternoon with us. And Ryan, we’re grateful for the opportunity to be here. It’s always fun to be in Chicago. This is my disclosure forward looking statement.

As Ryan mentioned, we are in a very unique and exciting space called organ transplantation. So let me spend a couple of minutes of orienting many of you in the room who might not heard a lot about organ transplant, about why this is a very exciting field and very unique field that we happen to know everything about and how are we leveraging these unique attributes of this very important therapy to create a multibillion dollar business. And I lost my slide again. Basically, organ transplant is the gold standard for treating a very complex disease condition called end stage organ failure. It’s the gold standard because two critical facts.

One, it gives the patient the longest life expectancy and the best quality of life after an organ transplant, which both results in a very hidden secret called the fact that organ transplant is the most cost effective, most cost efficient therapy for treating these very long, chronic, expensive disease conditions. This is why every payer on planet Earth is promoting more and better organ transplant. So if it is the gold standard, if it is providing the patient with the best quality of life and the longest life expectancy, were the problems? And it’s the most cost efficient way. The problems are we don’t have enough organs to go by to meet the huge demand for organ transplant.

And when we do, there’s significant room for opportunity to improve post transplant clinical outcomes. So that’s where we start. So we say, okay, how is a medical device company going to change these facts? To understand that, let’s go back one step further. So if you look at the last four decades in the history of organ transplantation, organ transplant has seen significant innovation both in the pre transplant phase and the post transplant phase.

In the pre transplant phase, we developed new medical management procedures to manage the patients better. We developed circulatory support technologies, renal dialysis, liver dialysis. In the post transplant phase, we developed new immunosuppressives, anesthesia management, and postoperative care. But the missing link that did not see any innovation until TransMedics was created was this piece of what we call the Achilles heel of organ transplant, which is the piece of organ preservation. And that’s a very important piece.

Why do we say that? Because when you look at the historical way of organ of technologies to preserve organs, it was literally relegated to igloo cooler filled with ice and the organ is put in a sterile ziplock bag moved from donor to recipient. This rudimentary approach was great forty five years ago when the average donor age was 18. Today, the average donor age is approaching 45. Hypertensive, had a stroke, have probably some form of renal disease, some COPD.

This technology or this technique had three major limitations. One, when you take an organ out of the living environment of the human body and deprive it of oxygen, you subject the organ to a decay curve called ischemia. It’s time dependent, so it means that if the organ spends more time deprived of oxygen, the organ may never function again. So that right away limited the access of the available donors to time and distance limitations. But that was not the case.

That was not the only limitation. Two other limitations that are really plaguing or plague this cold storage technique, which is the lack of resuscitative and lack of assessment capabilities, which these are two fancy words that you had, as a surgeon doing an organ transplant, you had to make a bet four hours before the organ arrives to your hospital whether this organ should be transplanted or not based on an environment of a dying body that is four hours away. Meaning you had to be protective of your patient. You had to say no to many organs if you had any doubt that this organ may not function well because you could not improve its functionality and you could not assess the organ once it’s removed from the donor body. These three limitations result in the biggest hidden secret in organ transplant field: that we lose the vast majority of the donor pool every year.

This utilization curve, this graph here, is published data on the UNOS webpage. In The U. S, last year, we had nearly 17,000 donors, split between 10,000, roughly speaking, DVD and 7,000 DCD. Of those, we only used about 3,500 lungs, 4,000 hearts, and 7,000 livers, leaving the vast majority of the donor pool completely untouched, unutilized. That’s where TransMedics saw a huge opportunity to transform the field of organ transplantation by focusing on these organs and these types of donors that never been used for organ transplant or seldomly were utilized for organ transplant.

So what did we do? We developed the first and best in class technology to keep human organs alive and well and not suffering from ischemic damage or lack of resuscitative capabilities or assessment capabilities outside of the human body. We call this technology the OCS or short for Organ Care System. We developed the largest body of multicenter global level one clinical evidence to get this technology approved in The U. S.

And provide the evidence to access the market in The U. S. And over the last three years, we developed another first and best in class service network around our technology. We call it the National OCS Program or Network. And we’ll talk about that throughout the slides.

But to understand how unique the Oregon Care System is compared to the Igloo Box, let’s highlight four key points. And these are very important because I see some analyst reports, I see some GLG research reports, and they talk very emphatically about all these competitors that are coming into the field of organ transplant. None of these competitors are really a competitor. They don’t hold a candle to what we’re going to talk about to you here today. So first, to become a competitor, you need to develop technology that addresses these four points.

One, you need to eliminate ischemia during preservation, meaning the organ has to be constantly perfused with blood and oxygen. There’s only one technology on planet earth that does that today. That’s called the organ care system. Two, you have to maintain the organ in an active living condition, metabolically active. Why?

So you can optimize it. You can improve it. You can give it a metabolic enhancer. You can give it medication. Three, you need to keep the organ functioning outside of the human body functioning as it is functioning in the human body.

Why? So we can assess it up to the minute it’s ready to be transplanted. There’s only one platform that is approved by FDA for more than one organ that can deliver all of the four elements that I just described. And this is what the organs look like in our platform. They’re not sitting idle on ice like a six pack.

The heart is beating, the lung is breathing, the liver is producing bile, and the kidney. Our next organ in the franchise is making urine. This is huge to the clinical community because all these organs that are being wasted because of a doubt in the mind of the surgeon and the lack of capabilities that exist with cold storage, we can address all these based on the Organ Care System technology. This is our three approved platforms in the OCS Lung, Heart, and Liver. That’s how we created a franchise that is on a run rate of approximately $600,000,000 strong in The U.

S. Today. Kidney is our next frontier. Kidney would add 30,000 procedures a year to our total addressable market in The U. S.

Two And A Half Years ago, three years ago, we decided that developing the technology is not enough. We wanted to make a big impact on these organs that are currently being wasted. We wanted to make that impact because we did not want to be another preservation technology. We wanted to deliver technology to grow the national volume of organ transplantation in The U. S, which has not seen any growth for the last forty years, more than one percent to two percent annually.

So we developed something called the National OCS Program or NOP for short. Today, the NOP is a national network operating in synchrony in The United States out of 17 hubs. We have our own procurement surgeons. We have nearly 300 clinical specialists spread across The United States. We can access any donor in The United States within a two hour radius from those 17 hubs.

And we have vertically integrated logistics into the network into the NOP network to control our own destiny. Every organ transplant needs to move from donor to recipient, and when they need a flight, they cannot fly commercially. They have to fly on a chartered flight. And we saw significant inefficiencies in the historical model that used to use mom and pop charter operators, which used to don’t have the right plane capabilities to go from Alaska to Tampa. We do that quite routinely today, all resulting in significant cost inefficiencies and inefficiencies in utilization of donor pool.

And we said if we spend twenty years of our life and 400,000,000 or $800,000,000 to develop the technology, we need to make sure that every organ that needs to be transplanted goes to an actual patient and doesn’t get unutilized. I can sit here and tell you how efficient the NOP is, but let me share with you some data. So please forgive me, this is a video which has a sound to it. The purpose here is not to pound on our chest and tell you how great we are, but it’s really to show you, especially the people who are listening to our story for the first time, of how much infrastructure has gone into creating this NOP that really gives us a huge leverage on our growth capabilities going forward. And I I I rather than interrupting the video, then I will address the video is geared to give you a a detailed overview of how we run the operation.

Then I’m going to translate it for you afterwards on what does that mean to our customers, to our patients, to our transplant programs. How can I yes? Can you do that?

Andre Costa, Vice President of Transplant Logistics, TransMedics: Hello, and welcome to TransMedics. I’m Andre Costa, vice president of transplant logistics. At TransMedics, we are hard at work to deliver on our mission to save more patients’ lives by becoming the trust Hello, and welcome to TransMedics. I’m Andre Costa, vice president of transplant logistics. At TransMedics, we are hard at work to deliver on our mission to save more patients’ lives by becoming the trusted partner to transplant stakeholders, delivering the highest quality technology, service, and clinical care.

Our vision is to increase the number of organ transplants by expanding access to more donor organs via our OCS technology. To provide greater access to the OCS across the country, we launched our national OCS program or NOP. Today, the NOP consists of an expanding network of 17 hubs strategically placed across The United States. We have over 250 clinical staff working across these hubs, cardiothoracic and abdominal procurement surgeons, as well as highly trained clinical experts who specialize in perfusion management and the operation of the OCS. These always on call teams are ready to deploy our OCS devices and perfusion modules at a moment’s notice.

In 2023, we created TransMedics Logistics to provide air and ground transportation 100% dedicated to transplant missions for the NLP network. Today, TransMedics Aviation consists of a growing team of over 100 pilots and a fleet of nearly 20 highly efficient aircraft. In a maximum of two flight hours, we can reach anywhere in The Continental US. All our jets are twenty twenty one or newer models featuring the latest WiFi connectivity and the highest safety standards in the aviation industry. As a fully integrated end to end service network, all the components of the NOP work in synchrony to deliver on demand services to our partners, from our hundreds of OCS devices to our clinical staff and now our pilots and ground transportation teams.

To manage the NOP network twenty four hours a day, three hundred and sixty five days a year, we created this, the NOP Logistics Command Center. Located at our headquarters in Andover, Massachusetts, the command center was launched in early twenty twenty four. Since then, this space has become the base of operations for all TransMedics NOP. It’s from here that we securely coordinate every aspect of our missions. Inside the command center, we have logistics managers, aviation specialists, ground transportation coordinators, and everything in between to handle every aspect of our missions.

It’s a carefully orchestrated process with one goal in mind, to save lives. This 25 foot eight k resolution screen behind me provides full visibility to our team of each mission happening across the country and tracks all available resources in real time. This allows us to simultaneously manage dozens of missions, not in isolation, but as a network, and to make course corrections immediately if needed be. Available surgeons and clinical staff, as well as our OCS devices, are represented by a series of icons at each hub that let us know what’s available and where, and every organ type is represented by a different color. When a new case is initiated by a transplant center, it displays on the map as a new case alert.

Our team immediately begins coordinating every detail necessary to organizing the ground transportation of our clinical teams to coordinate the most efficient flight routes to the recipient, all while making sure every organ gets where it needs to go safely and timely. Before any case assignment or team deployment, the command center’s algorithm developed in partnership with MIT enable our logistics managers to run multiple different scenarios that take into account the location of the donor and recipient, donor OR time, and the probability of case progression to match them efficiently with our available resources. Our logistics managers then analyze different travel route options to determine the optimal logistics for each phase of the mission. Once the proposed logistics is approved by the transplant center, represented by an active case card that details the mission’s current status, the type of organ being transported, and the HH to the transplant center. No matter the stage of an active case, we have full visibility of its minute by minute status, so our command center team always has a clear picture of the case’s timeline and the status of each in transit organ.

As a major component of our logistics management, the command center enables full visibility and control of our aviation operation. Whether our plane is flying a mission, it’s in maintenance, or ready to deploy, we have up to the minute data on its status and location. Our aviation team monitors everything from real time weather data, pilots duty times, and each plane’s status twenty four hours a day, ensuring that our fleet can be ready and in the right location to be deployed at a moment’s notice. The NOP Logistics Command Center effectively coordinates every aspect of TransMedics missions between our NOP clinical teams, OCS technology, and dedicated air and ground transportation so that we can deliver better service for our customers and their patients. These innovations in our fully integrated network enable us to make progress every day towards our mission of making donor organs available to all who need them.

The command center is the heartbeat of the entire NLP network, ensuring that every organ gets where it needs to go, and every life we touch has the best chance for a successful outcome.

Walid Hassanein, Founder, President, and CEO, TransMedics: So that’s how we run the NOP and the vertical integration of our logistics. So what does that mean? For the last two years, we’ve done more than 9,000 successful transplants in the NOP model, as you’ve seen it. We single handedly were responsible for the first in many decades double digit growth of heart and liver transplant in two successful years over the last three years consecutively. And that was primarily driven by the use of OCS and OP.

And finally, we saw something that we did not anticipate that more than seventy six percent of liver transplantation moved from being a middle of the night operation to a daytime operation. And that alone was one of the major catalysts to adopting OCS technology in liver transplantation. It’s for two reasons: not only it has a better work life balance for the entire staff operating in very busy transplant program, but it has huge cost efficiency because when you run a transplant program in the middle of the night doing a case at three in the morning, you’re paying your entire staff, support staff, double time. You can and you could seldomly do more than one or two transplants a day. Today we routinely see three and up to four transplants happening between the hours of seven a.

M. And six p. M. Here’s the data to prove it. This is the actual data from the National Data Registry in The United States showing the growth in heart and liver transplant or liver and heart transplant successfully consecutively.

And here is the actual utilization of OCSNOP versus the total transplant volume for those same years, showing that OCS was the primary driver of that growth in volume. This is the rate of morning hour transplants. Again, all reported, all published data on the UNOS database. And this is from two different large transplant institutions, one in the West Coast and one in the East Coast, showing that they’re doing three and four liver transplants in one day. That never happened before the OCSNOP happened.

So it was available to help the transplant program achieve this goal. Then for people who think that we’ve already maxed out on our growth, you could not be less accurate. We have significant growth opportunities in front of us. The near term, that second wave of growth or year of growth as we call it, is coming later this year into 2026. It’s really a catalyst for 2026 and beyond.

We’re launching Gen two heart and liver I’m sorry, heart and lung technologies that would make morning hour transplants and cardiothoracic transplantation a clinical reality. We’ll eliminate any doubts about the length of perfusion on heart and lung transplant, will enable us to move from being a preservation technology or preservation company to an organ enhancing company, which gives us significant growth opportunity in both DVD and DCD heart and lung transplant. The other thing that we’re very excited about near term is launching of our digital ecosystem. Ryan said we’re the Amazon Prime of organ transplant. We’re going to change that into the Uber of organ transplant, and we’ll show you that in a minute.

We’re not stopping here. Kidney alone, we’d add 30,000 additional procedures annually to this growth catalyst in The U. S. Alone and another 45,000 in Europe and Australia. So next gen clinical programs.

What is the purpose? It’s to deliver superior outcomes and make daytime organ transplant a clinical reality and make us an organ enhancement, not just an organ preservation. We are deploying new technologies across the board from new solutions, new pharmacological enhancers to new devices. Timeline, we’re actively engaged with FDA. We expect that approval will be in hand sometime in late Q2, early Q3 to put us right on track to launch these clinical programs late this year as we anticipated in the beginning of the year.

NOP Connect. This is one area that we’re very, very excited about. This is what we’re calling the Uber of organ transplant. Think everything we talked about NOP will be launched and run-in full transparency and full visibility to the clinical surgeon, to the administrator of the transplant program, at the third party OPO staff and TransMedics’ NOP staff, managing the entire procedure as if they’re launching or requesting an Uber ride with full transparency and security that they keep the record with the patient. This is already launched for the NOP component.

We’re deploying it at the transplant program at the beginning of Q3. Financial highlights speak for themselves. We’ve been extremely fortunate to be in this growth trajectory. Again, we’re not stopping here. This is not the peak.

This is just the first of many peaks that we were planning to undertake. One thing is we’re not just growing the top line, we’re growing the top line with very healthy bottom line leverage. And with Gerardo on board, we can see even more improvement on that front. We created these unique capabilities. We created this unique business, but we put significant moats around it.

IP is the least of our concern or the least of our reliance, even though we have one of the biggest IP portfolio in the industry. But the addition of NOP and the addition of the service model and the vertical integration of logistics give us a significant, significant, unique advantage competitive advantage in the marketplace. And again, we’re not stopping here. We’re already investing in Gen three technology that would be highly optimized for more NOP to go from the 10,000 transplant target by 2028 to twenty or thirty transplant target over the following three to five years. With that, I’m with one minute to spare.

I was worried that we might run out of time, but I appreciate you taking the time and I’m happy to address any questions here or upstairs. And we’re generating free cash flow. I think it was about a year ago, and it was an uneducated perspective that now these centers are one of our biggest users for two very straightforward reasons. No other company, technology, or logistics partner give the transplant program zero, zero cost if the organ is not transplanted. TransMedics does.

We don’t charge the transplant program a dime if the organ is not transplanted when it’s on our device. The second thing with the integration of the logistics, because we control logistics, when we go to a DCD run today, third party charges the transplant program the full cost of a round trip to the donor and back. We eliminate 50% of the of the cost. And that’s across The United States. Every center gets the same deal.

We do that because we we are delivering the most cost effective and efficient way and we want to share the cost efficiency of running our our network with the transplant program because we’re in this for the long term. We’re not in this to make a quick buck like the charter operators do. We’re in this for transplantation. We’re not a logistics supplier. Again, during President Trump one point zero, he had the presidential act to revamp organ transplant system in The U.

S. To increase organ utilization and minimize the wastage. So we delivered on that while the government is still trying to figure out how to do that. The new head of CMS, Doctor. Oz, he’s a transplant surgeon by training.

So and again, transplant is the most cost efficient treatment to these very, very expensive disease conditions. This presentation has now

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