TransMedics Group (TMDX) Morgan Stanley 22nd Annual Global Healthcare Conference summary

Strategic shifts and growth drivers

• Accelerated integration of NOP (National Organ Procurement) due to early realization of its necessity for scalability and sustainability.

• NOP model standardizes organ procurement, reduces training burdens, and enables 24/7 service, driving significant growth.

• OCS (Organ Care System) and NOP have enabled double-digit growth in heart and liver transplants, especially in the DCD (donor after circulatory death) segment.

• Logistics network expansion to 20-22 planes is planned, with a focus on maximizing asset utilization before further fleet growth.

• Integration of logistics is critical to meet demand and capture previously untapped organs, not just for operational efficiency but to expand the transplant market.

Financial outlook and operational efficiency

• Q2 marked the first cash flow positive quarter, even with ongoing investments in fleet and infrastructure.

• Guidance for H2 is conservative due to seasonal transplant volume declines and scheduled aircraft maintenance to prepare for anticipated 2025 demand.

• Margin improvement is a priority, with future investment growth rates expected to be lower than revenue growth.

• Operating own logistics network allows cost efficiencies, including risk-sharing discounts for non-progressing donors and elimination of third-party margin stacking.

Clinical innovation and future programs

• Revamped OCS technology and clinical protocols aim to prove 24-hour organ preservation is superior to traditional methods, enabling more daytime transplants.

• Next-generation OCS and a digital ecosystem for NOP are in development, targeting a 2025 rollout to further streamline and digitize the transplant process.

• Clinical programs in 2025 will focus on expanding DBD (donor after brain death) utilization, targeting untapped market segments.

• Continued emphasis on generating level one clinical evidence to support adoption and market leadership.