Anthony Petrone

Anthony Petrone inquired about the structure of Embecta's generic GLP-1 contracts, asking how they are negotiated during clinical development versus commercial phases, including contract length, minimum quantities, economics, and the 'stickiness' of Embecta's products within drug-device combinations. He also asked about Embecta's capital deployment strategy, specifically regarding potential tuck-in M&A opportunities given the company's improving leverage ratios and free cash flow generation.

Answer

Dev Kurdikar (President and CEO, Embecta Corp) detailed that early GLP-1 discussions involve NDAs, vendor qualification, quality agreements, and initial contracts for development quantities, with commercial contracts to be finalized upon drug approval. He highlighted that Embecta would supply bulk pen needles for co-packaging, ensuring stickiness due to regulatory inclusion, configured co-packaging lines, and demonstrated reliability of supply, requiring no significant CapEx and expecting incremental margin drop-through. Regarding capital deployment, Dev Kurdikar reiterated unchanged plans: $600 million in free cash flow over three years, primarily for debt paydown, maintaining the dividend, and being open to opportunistic organic and inorganic investments, including M&A, as leverage decreases.

Anthony Petrone inquired about the structure of Embecta's generic GLP-1 contracting, specifically how agreements are formed during the clinical development phase and what commercial contracts might look like, including duration, minimum quantities, and economic terms. He also asked for an update on capital deployment plans beyond GLP-1 and immediate CapEx needs, particularly regarding tuck-in M&A opportunities.

Answer

Dev Kurdikar (President and CEO) detailed the contracting process, starting with NDAs, vendor qualification, quality agreements, and initial orders for development work. He explained that Embecta would supply bulk pen needles for co-packaging, with generic manufacturers responsible for regulatory submissions and marketing. He highlighted the stickiness of being specced into drug master files, co-packaging line configurations, and Embecta's demonstrated reliability of supply. He noted that these are bulk pen needles requiring no significant CapEx, expecting incremental margin drop-through. He also mentioned expanding discussions to other devices like pen injectors. Regarding capital deployment, Dev Kurdikar reiterated that plans are unchanged from Investor Day, with $600 million in free cash flow over three years primarily for debt paydown, maintaining the dividend, and being open to opportunistic organic and inorganic investments as leverage decreases.

Anthony Petrone of Mizuho Financial Group asked about the potential ancillary tailwind to the pen needle business from the CMS competitive bidding proposal for CGMs and pumps. He also questioned the impact of US-China tariffs and the broader geopolitical backdrop on Embecta's P&L and demand in China.

Answer

CEO Devdatt Kurdikar acknowledged that the CMS proposal could theoretically be a positive tailwind but stated it is too early to quantify any impact. On China, Kurdikar noted that while tariff rates were reduced, the company expects a minimal impact in fiscal 2025 due to product exemptions. He confirmed that the company is observing a preference for local Chinese brands amid the uncertain geopolitical environment, a factor that has been incorporated into the updated financial guidance.

Anthony Petrone questioned if there was any evidence of customer stockpiling ahead of potential tariffs and asked for an update on the market dynamics between multiple daily injection (MDI) therapy and insulin pumps for type 2 diabetes.

Answer

CEO Devdatt Kurdikar stated that the company saw no evidence of tariff-related stockpiling in the U.S., noting that most of its products benefit from medical use exemptions and that imports from China are minimal. Regarding market dynamics, he explained that key indicators like insulin pen prescriptions show stability, and the sheer scale of the MDI market means any shifts from pump adoption will take time to materially impact their business.

Anthony Petrone asked about the recent data showing a greater than 50% reduction in infections with ASCENIV versus standard IG therapy, inquiring about expected publication details, avoided adverse events, and potential cost-benefit analysis.

Answer

President and CEO Adam Grossman confirmed the statistically significant data from a robust patient cohort, highlighting the real-world reduction in infections (2.1 to 0.9 per year) for complex PI patients. He noted the data reinforces prescriber confidence and strengthens payer coverage, with plans for peer-reviewed publication in early 2026 and presentations at the Clinical Immunology Society 2026 annual meeting. He also mentioned ongoing analysis and medical education ramp-up.

Anthony Petrone inquired about the detailed findings from the ASCENIV study showing over 50% infection reduction, including publication plans, expected adverse event data, and cost-benefit analysis. He also asked how the new efficacy data for ASCENIV might influence demand, accelerate the growth curve, and align with improved supply. Finally, he followed up on the 5% hit rate for high-titer plasma collections at new centers, asking if this rate could improve over time with partnerships and proactive donor outreach.

Answer

President and CEO Adam Grossman expressed satisfaction with the statistically significant data, highlighting a reduction from 2.1 infections per year on standard IG to less than one on ASCENIV (p<0.05). He noted the data reinforces prescriber confidence and strengthens payer coverage, with plans for peer-reviewed publication in early 2026 and presentation at CIS 2026. He stated that ASCENIV saw record utilization in Q3 and Q4, reinforcing the data, and mentioned some private payers are moving ASCENIV up in step edits. He expects strong double-digit growth driven by data, patient testimonials, and medical education. CFO Brad Tade added that raised 2026 guidance reflects 24% revenue growth, 51% adjusted EBITDA growth, and 61% adjusted net income growth. Regarding plasma collection, Adam Grossman clarified that while the hit rate itself might remain consistent, the *volume* of high-titer plasma collected by third-party suppliers is expected to grow due to their strong performance and financial incentives, emphasizing the robust supply chain and confidence in meeting future demand.

Anthony Petrone from Mizuho Financial Group questioned the conservative nature of the reaffirmed 2025 and 2026 guidance, given positive developments like yield enhancement, and asked for a cost-benefit analysis of Ascentive in a hospital setting.

Answer

CEO Adam Grossman and CFO Brad Tade reiterated their conservative approach to guidance, aiming to beat expectations. They confirmed that while yield enhancement benefits are not in 2025 guidance and are risk-adjusted for 2026, they anticipate a reacceleration of growth in the second half of 2025. Grossman explained that while formal health economics data is pending, Ascentive's value proposition lies in preventing hospitalizations for high-risk patients.

Anthony Petrone asked about the updated 2025 and 2026 guidance, questioning why it excludes contributions from the new yield enhancement process and when those lots might impact revenue. He also inquired about the current demand backlog for ASCENIV and the company's capital allocation priorities among debt reduction, R&D, and the new $500 million stock repurchase authorization.

Answer

President and CEO Adam Grossman explained the company's conservative guidance approach, prioritizing the sale of existing inventory before recognizing revenue from the newly approved enhanced-yield lots. He confirmed manufacturing at the new scale is underway and expects OpEx to normalize and decrease sequentially. Grossman asserted that strong forecasted free cash flow allows ADMA to pursue all capital allocation priorities simultaneously. CFO and Treasurer Brad Tade reinforced that the combination of revenue growth, margin expansion, and OpEx normalization positions the company strongly for the second half of 2025.

Anthony Petrone asked for clarification on what is included in the long-term guidance, specifically regarding supply agreements and yield enhancement, and inquired about the potential financial impact of the yield enhancement, working capital needs, and the company's capital structure strategy.

Answer

President and CEO Adam Grossman confirmed that 2025 guidance excludes the yield enhancement, while 2026 guidance includes a heavily risk-adjusted estimate, suggesting potential upside. He affirmed the yield enhancement offers a 20% increase in bulk product. CFO Brad Tade added that while inventory levels will see slight upward pressure, the company expects to generate significant cash in 2025 and will be opportunistic about its use, including potential debt reduction to improve its capital structure.

Anthony Petrone from Mizuho Group asked about donor churn rates and safety stock levels for high-titer plasma, and questioned the potential impact of the new U.S. political administration on the plasma industry and ADMA's operations.

Answer

President and CEO Adam Grossman acknowledged that donor churn is a natural occurrence but stated the company is actively working to maximize donor retention. He confirmed that plasma safety stock is not yet at desired levels, which limits ASCENIV production. Regarding the political landscape, Grossman expressed confidence, citing historical bipartisan support for plasma-derived therapies and highlighting ADMA's unique position as a 100% U.S.-based manufacturer, which he views as a strategic advantage. CFO Brad Tade added that opportunistic spot sales of plasma are used to align inventory with production needs.

Anthony Petrone asked about the timeline to fully transition from 10-Day to 15-Day G7 and its impact on gross margin. He also inquired about reasonable penetration targets for Type 2 basal only (currently 20-25%) and Type 2 non-insulin intensive hypo risk (under 5%) over the long-range plan.

Answer

Jereme Sylvain, CFO, noted that historical transitions (G5 to G6, G6 to G7) take a couple of years, but the goal is to accelerate for 15-Day. He expects significant margin impact and opportunities for business growth in new markets (e.g., with Dexcom ONE+) as the transition progresses. He stated that basal insulin is expected to reach about 60% penetration over time, similar to Type 1 and Type 2 intensive. For Type 2 non-insulin hypo risk, while currently under 5%, he expects it to grow significantly (10%, 15%, 20%) with coverage, representing millions of people, though a specific long-range target was not given.

Anthony Petrone asked about the expected timeline for the full transition from 10-day to 15-day G7 sensors and its impact on gross margin. He also inquired about reasonable long-range penetration targets for Type 2 basal only (currently 20-25%) and non-insulin intensive hypo risk (currently under 5%) segments.

Answer

Jereme Sylvain, CFO, noted that historical transitions took a couple of years, but the similar form factor of 10-day and 15-day G7 might accelerate this, though it requires a different script. He stated that the impact on margin from moving from three 10-day sensors to two 15-day sensors can be significant, also enabling top-line growth in new markets. He estimated basal market penetration could reach about 60% over time. For non-insulin Type 2 hypo risk, he acknowledged it's a large, diverse population, and while current penetration is under 5%, he expects it to grow significantly (10-20% or more) with expanded coverage, representing millions of new users.

Anthony Petrone of Mizuho Group inquired about Stelo utilization intensity between prediabetic and non-diabetic users, its primary sales channel, and the potential impact of the new Amazon storefront.

Answer

CFO Jereme Sylvain stated that utilization is currently highest among users identifying as Type 2, followed by prediabetic, then non-diabetic. He noted the primary channel is still stelo.com as the Amazon launch is recent, but he expects Amazon to become a much larger part of the distribution mix due to its broad reach.

Anthony Petrone asked if the PET/PET CT backlog is driven by Flyrcado and if the existing install base supports the $1 billion target, or if new capital is needed. He also inquired about the expected offset of the -$0.45 tariff headwind for 2025 into 2026.

Answer

President and CEO Peter Arduini stated that converting just 25% of the current PET myocardial perfusion market to Flyrcado would yield $1 billion in revenue without adding new scanners, though PET system installations are increasing. VP and CFO Jay Saccaro confirmed tariffs would be a tailwind in 2026, with less impact than the $265 million in 2025, due to supply chain changes, USMCA certification, free trade zones, and selective pricing.

Anthony Petrone asked about the extent to which GE HealthCare's PET/PET CT backlog is driven by Fercato, whether the existing install base supports Fercato reaching $1 billion in revenue, or if new capital is needed. He also inquired about the expected offset of the $0.45 net negative tariff headwind from 2025 into 2026.

Answer

President and CEO Peter Arduini stated that converting just 25% of the current PET myocardial perfusion market from rubidium to Fercato would generate $1 billion in revenue without needing new scanners, though PET system installations are increasing across cardiology and oncology. VP and CFO Jay Saccaro confirmed a $265 million tariff impact for 2025, expecting less in 2026, which will act as a tailwind to earnings growth through structural supply chain changes, USMCA certification, free trade zones, and selective pricing.

Anthony Petrone asked if semiconductor impacts are included in the tariff guidance and for an estimate on the potential reduction of tariff impact in 2026. He also asked for a refresh on Flyrcado's revenue assumptions and key adoption drivers.

Answer

CFO James Saccaro confirmed semiconductor impacts are reflected in the guidance and that the company has a pathway to a sub-$0.85 impact in 2026, though it's too early to quantify. CEO Peter Arduini added that price is a potential lever but the focus is on cost offsets. On Flyrcado, he reiterated revenue targets and said adoption rate is the key driver, not the installed base of PET/CT scanners.

Anthony Petrone asked about the strong Q4 adjusted EBIT margin of 18.7%, how this performance aligns with the long-range plan of high-teens to low-20s by 2028, and whether a normalization in China could lead to further upside.

Answer

CFO Jay Saccaro explained that the Q4 margin strength was driven by volume, mix, price, and productivity, which fully offset inflation. He noted that about 100 basis points were from one-time items and cautioned against extrapolating from a seasonally strong quarter. However, he expressed increased confidence in achieving the "20%-plus" long-term target. CEO Peter Arduini added that the company is on track with its strategy, with higher-margin new products expected to launch in 2026 and beyond, supporting future margin expansion.

Anthony Petrone from Mizuho Financial Group asked about the expected timeline for the IOL market to stabilize amid intense competition and questioned the extended 12-month review period for the STAAR Surgical acquisition.

Answer

CEO David Endicott projected that the IOL market would remain highly competitive for the next 18-24 months as new products launch. He explained the lengthy STAAR transaction timeline is due to international regulatory reviews, particularly in China, and highlighted the long-term potential of combining Alcon's optics with STAAR's collamer platform for a presbyopia-correcting ICL.

Anthony Petrone asked how the new PRECISION7 contact lens is tracking against expectations and requested a recap of the differentiation and market share potential for the dry eye candidate, AR-15512.

Answer

Chief Executive Officer David Endicott confirmed that PRECISION7 is tracking well and addressing a need in the large reusable lens category where Alcon is under-indexed. For AR-15512, he emphasized its unique mechanism as an agonist for natural tear production, which differentiates it from existing treatments. He reiterated the $250M to $400M peak sales outlook, adding that he is now leaning toward the higher end of that range.

Anthony Petrone asked if the Unity system launch would involve bundled deals to drive consumable and IOL share, and inquired about the U.S. dry eye market and the differentiation of AR-15512.

Answer

CEO David Endicott indicated the sales strategy for Unity will focus on its standalone value proposition of improving OR efficiency and throughput, which inherently drives consumable use. For dry eye, he noted the market is attractive and that AR-15512 is differentiated by its fast onset of action and ability to show significant improvement in patient signs, a key clinical differentiator.

Anthony Petrone asked about operating margins, noting that after excluding the inventory provision, the underlying margin appears strong and questioned if this implies momentum. He also asked for the latest thoughts on capital allocation and M&A strategy, referencing market speculation about a larger deal.

Answer

CFO Tim Stonesifer explained that while the inventory provision was a headwind, the company is maintaining its margin guidance because it is committed to increasing investments in R&D and new product launches in the second half of the year. CEO David Endicott addressed M&A by reiterating that Alcon's priority remains technology-focused, bolt-on acquisitions in the $50-$500 million range to fill gaps in strategic areas like glaucoma, refractive, and pharmaceuticals.

Anthony Petrone asked about the renal denervation (RDN) opportunity, seeking views on the best-case outcome from the upcoming CMS coverage decision and how RDN ranks in its potential to transform Medtronic's growth.

Answer

Chairman & CEO Geoff Martha expressed high confidence in RDN, stating that 'all the dominoes are falling' for it to become a massive market, supported by positive feedback to CMS and inclusion in physician guidelines. He suggested RDN has the potential to be even bigger than CAS and could be 'the biggest thing that we ever do' given the vast patient population.

Anthony Petrone asked for clarification on the addressable market for renal denervation, wanting to know what portion of the 16 million Medicare patients with uncontrolled hypertension can be treated now with the new TPT/NTAP payment versus what portion requires a future National Coverage Decision (NCD).

Answer

Sean Salmon, EVP & President of the Cardiovascular Portfolio, clarified that the TPT payment addresses the Medicare fee-for-service population, which is roughly half of all Medicare beneficiaries. The other half, covered by Medicare Advantage, would still require broader coverage decisions. He reiterated that the total patient population is very large and that establishing coverage and treatment centers is the key focus.

Anthony Petrone from Mizuho Financial Group asked how the European clinical data for the cardiac clamp and 360 catheter will be utilized in their respective US IDE and PMA applications. He also inquired if the PMA submissions would be modular, how much the TAP program could accelerate timelines, and what the directional trend for R&D spending would be in the second half of the year.

Answer

CEO Paul LaViolette stated that the extensive European human data for both devices is included in the IDE submissions to the FDA, providing a strong foundation for safety. He confirmed the company plans to use modular PMA submissions for efficiency, noting the shared console across devices creates synergies. CFO Jon Skinner then addressed the P&L, confirming that R&D spending and overall operating cash burn are expected to increase in the second half of 2025 to support the two IDE clinical trials and initial commercialization activities.

Anthony Petrone of Mizuho Financial Group inquired about the use and publication plans for the European clinical data for both the cardiac clamp and catheter in US regulatory submissions. He also asked about the potential for modular PMA submissions, the timeline benefits of the TAP program, and the expected trend in R&D spending for the second half of the year.

Answer

CEO Paul LaViolette stated that the extensive European human safety and performance data for both devices is included in the IDE submissions to the FDA, which is beneficial for approval. He confirmed plans to present clamp data at the EACTS meeting in October. LaViolette endorsed a modular PMA submission strategy for its workflow benefits and noted the TAP program has been excellent for accelerating regulatory interaction. CFO Jon Skinner confirmed that R&D spending and overall cash burn are expected to increase in the second half of the year to support the two IDE trials and commercial activities.

Anthony Petrone of Mizuho Financial Group asked about the U.S. growth dynamic between new physician adds and penetration, the underlying health of the U.S. breast augmentation market, and the revenue impact from shipping issues in APAC.

Answer

CEO Peter Caldini stated that the focus is shifting more toward increasing utilization within existing accounts, though new account acquisition continues. He believes Establishment Labs is helping grow the overall market and has not seen a consumer slowdown. CFO Raj Denhoy clarified that the company incurred higher shipping *costs* from using air freight to meet demand, but there was no material revenue *impact* from shipping delays.

Anthony Petrone requested an update on U.S. account penetration targets, including the goal for top plastic surgeon accounts and the expected timeline to achieve consistent reordering. He also asked about the performance of Mia accounts in Europe, specifically if the target of $1 million in annual production per site remains valid.

Answer

CEO Peter Caldini stated that U.S. account penetration is exceeding expectations and the company expects to be near its target number of accounts by year-end. For Mia in Europe, he confirmed progress with 75 accounts in 42 cities, noting that two accounts are already performing at a $1 million per month run-rate, validating the business model.

Anthony Petrone asked for an update on the U.S. Motiva launch, including the number of active accounts and ordering patterns, and whether the $35 million guidance includes potential Ergonomix2 clearance. He also inquired about the global macroeconomic backdrop.

Answer

CEO Juan Jose Quiros reported strong U.S. momentum with 650 accounts onboarded, 450 of which have ordered, and an 88% reorder rate. He confirmed the $35 million U.S. guidance for 2025 does not include any new product approvals. Regarding the macro environment, he noted stabilization in Latin America and conservative guidance for mid-single-digit growth in EMEA and APAC.

Anthony Petrone from Mizuho Group asked about the U.S. sales force buildout cadence, its SG&A impact, upcoming FDA catalysts for Ergonomix2 and Mia, and the risks and potential upsides to the OUS growth forecast, particularly in China and Brazil.

Answer

CEO Juan Jose Quiros reiterated the rapid sales force expansion to 40 reps by year-end and highlighted the company's clear path to profitability, driven by U.S. gross margins and disciplined spending. Executive Rajbir Denhoy re-emphasized that the OUS forecast is a conservative start, with potential upside from China and a market recovery in Latin America.

Anthony Petrone asked about the timing for the full deployment of Plasma share gains and their potential impact on growth. He also questioned the competitive dynamics for Vascade MVP in electrophysiology following the PFA launch, asking if centers were lost and what the strategy is to regain attach rates.

Answer

CEO Christopher Simon stated that share gains are on track and will be the primary driver of the guided 11-14% organic growth for Plasma this year, with some benefits extending into FY27. He highlighted customer diversification, with no single customer representing more than 10% of total revenue. Regarding Vascade, Simon described the current softness as executional, not structural, and reaffirmed the product's strong clinical value proposition. He outlined decisive actions being taken, including new leadership hires and a more clinically focused sales force, to regain momentum against competitors.

Anthony Petrone of Mizuho Financial Group asked for details on VASCADE XL's penetration in top EP sites and the regulatory timing for the reconfigured larger French size catheter. He also inquired how the Plasma division's margins would be affected by the CSL roll-off and new contracts coming online.

Answer

CEO Christopher Simon stated that among the top 600 EP accounts where PFA is roughly 60% penetrated, Haemonetics is present in 85% of them, making utilization the key growth driver. He noted the larger French size catheter is in a clinical trial to strengthen the label, but regulatory timing is uncertain. Regarding Plasma, he explained that new contracts feature advanced technology, significantly improving the segment's margin profile to the mid-50s, which is better than original LRP targets.

Anthony Petrone inquired about the plasma business, seeking to decouple the CSL contract impact from underlying trends like share gains and pricing, and also asked about the VASCADE franchise's growth drivers and the adoption of VASCADE MVP XL.

Answer

CEO Christopher Simon clarified that the CSL contract roll-off is proceeding as expected. He stated that underlying plasma collections, excluding CSL, grew in the low-single-digits, boosted by share gains and technology upgrades. Regarding VASCADE, Simon explained that strong growth in VASCADE MVP and MVP XL was moderated by competitive pressures on the base VASCADE product used in PCI, which constitutes about 15% of vascular closure revenue.

Anthony Petrone inquired about the adoption and pricing of the VASCADE MVP XL device, its rollout plan for the second half, and the underlying volume versus price dynamics of the Plasma business excluding CSL.

Answer

CEO Christopher Simon detailed that the VASCADE MVP XL launch is progressing well, having been introduced in 200 of the 600 target accounts, with expectations for high 20s percent growth in the second half. He noted its premium pricing is justified by a larger collagen plug and will become margin accretive. For the Plasma business ex-CSL, Simon explained that revenue grew due to premium pricing from technology upgrades, which more than offset a mild decline in collection volumes, and highlighted ongoing market share gains with the NexSys platform.

Anthony Petrone from Mizuho Financial Group asked about the opportunity for the t:slim and Abbott Libre 3 sensor combination, specifically how much of the Libre 3 installed base represents 'white space' for Tandem.

Answer

President & CEO John Sheridan stated the opportunity is huge, citing Abbott's previous figures of 300,000-400,000 U.S. Libre 3 users who are not on pump therapy. He pointed to the success of a competitor in OUS markets that gained about 50,000 users with a Libre integration as existence proof. He confirmed the full U.S. commercial launch is planned for the fall and that market research indicates strong interest.

Anthony Petrone asked about the expected contribution from the Control-IQ Type 2 indication that is factored into the 2025 guidance and its expected progression.

Answer

CEO John Sheridan noted it was too early to measure the benefit, while CFO Leigh Vosseller added that guidance includes only a modest contribution for 2025. She mentioned that while commercial coverage is strong, more onerous Medicare access is a near-term gating factor the industry is working to improve.

Anthony Petrone of Mizuho Financial Group questioned if a positive interim result for inhaled clofazamine could accelerate its approval timeline, asked about the potential size of the required pulmonology sales force, and inquired about the expected utilization intensity for Afrezza in pediatric patients.

Answer

CEO Michael Castagna confirmed that positive interim data for clofazamine, combined with its Fast Track and QIDP designations, could lead to a faster review. He stated it was too early to specify the sales force size but noted it wouldn't be a huge footprint. Regarding pediatric Afrezza use, both Castagna and Dominic Marasco suggested that parents' concerns about hypoglycemia and the active lifestyle of children could lead to more consistent, full-time use compared to adults.

Anthony Petrone of Mizuho Securities inquired about expectations for patient adherence and uptake for pediatric Afrezza. He also asked if the Danbury facility has sufficient capacity to handle the entire pipeline's success without major new CapEx.

Answer

Executive Michael Castagna expressed optimism for pediatric adherence, citing motivated parents and positive trial data. He confirmed the Danbury facility has significant capacity, built originally for the large diabetes market, and that most pipeline-related CapEx is already behind them, with no new plant needed in the next 5 years to support growth.

Anthony Petrone from Mizuho Financial Group asked for specifics on the financial contribution from the LMI acquisition baked into guidance, the underlying PSMA PET market growth rate, and whether share losses have stabilized.

Answer

CFO Bob Marshall specified that the LMI acquisition is expected to contribute $40-45 million in revenue and $0.04 of EPS in 2025. President Paul Blanchfield added that while Polarify volumes are expected to grow in the low single digits, the broader market is growing in the mid-to-high teens, implying further share loss. He also forecast continued net price declines in Q3 and Q4.

Anthony Petrone inquired about the competitive dynamics and sales trends for PYLARIFY in the first quarter, the strategic rationale for divesting the spec business, and the expected timing for the release of positive MK-6240 clinical data.

Answer

President Paul Blanchfield acknowledged short-term competitive disruption for PYLARIFY among smaller, non-contracted sites due to reimbursement changes but affirmed the company's strategy to maintain market leadership. CEO Brian Markison and CFO Robert Marshall explained the spec divestiture streamlines the company to focus on core growth areas like PET and theranostics, noting it will also be accretive to gross margins. Markison stated the company is focused on the MK-6240 NDA filing before showcasing the data.

Anthony Petrone asked about the competitive dynamics for PSMA PET imaging following the new reimbursement changes and the potential impact of a competitor's reformulated agent.

Answer

CEO Brian Markison dismissed the threat from a competitor's Gallium-based agent. President Paul Blanchfield highlighted the new CMS payment policy as a long-term positive for the radiopharmaceutical diagnostic space. Chief Commercial Officer Amanda Morgan emphasized that most customers are secured under multi-year contracts, and Lantheus will leverage PYLARIFY's clinical and commercial differentiation, including its supply chain and payer access, to maintain market leadership.

Anthony Petrone sought clarification on the final 2025 CMS reimbursement rates for PYLARIFY, noting market confusion, and also asked for an explanation of the implied lighter Q4 guidance compared to the first nine months of the year.

Answer

President Paul Blanchfield confirmed the final 2025 CMS payment rate for PYLARIFY is effectively the same as the current rate, which sustains access for Medicare fee-for-service patients. CFO Robert Marshall addressed the Q4 guidance, stating that while PYLARIFY revenue is expected to improve sequentially, the step-down in EPS is primarily due to a planned increase in R&D expenses.

Anthony Petrone of Mizuho Financial Group asked about the potential to expand into the general surgeon channel, the timeline for full SleepSync implementation, and the rate at which patients who fail a DICE procedure are trying GLP-1 drugs.

Answer

CEO Tim Herbert noted that eliminating the pressure-sensing lead with Inspire V creates a new opportunity to engage general surgeons. He stated the goal is to have the vast majority of sites implemented on the SleepSync patient management system. Regarding GLP-1s, he explained that patients who fail the DICE procedure typically have a high BMI, and these are precisely the patients who can use GLP-1s to lose weight and become eligible for Inspire therapy.

Anthony Petrone from Mizuho Financial Group asked about provider capacity heading into the second half of the year. He questioned if the current ENT surgeon base is sufficient to handle the expected bolus of volume from warehoused patients and also requested an update on the Sleep Sync platform.

Answer

CEO Tim Herbert outlined several factors that will increase capacity: the shorter Inspire V procedure time, attracting new ENTs who were previously reluctant, and training new graduates. He noted that capacity remains the key focus. Regarding Sleep Sync, he explained it is crucial for helping high-volume centers manage more patients and that the new Inspire V programmer integrates directly with it, streamlining data management.

Anthony Petrone asked how many U.S. centers currently have Inspire V, when a full launch is expected, and what the uptick in daily cases has been at early adopter sites.

Answer

Chairman and CEO Tim Herbert stated that after initial cases in Singapore and Pittsburgh, they have opened a couple of additional U.S. sites with more planned. He emphasized that the primary limiting factor for a full launch is building sufficient product inventory. He did not quantify the uptick in case volume but noted the company is learning from the limited market release and will scale up as inventory allows before a broad launch.

Anthony Petrone from Mizuho Americas asked if Inspire is already seeing a halo effect from GLP-1 drugs in the 32+ BMI patient category and how an on-label GLP-1 for sleep apnea might affect the patient funnel. He also requested a recap of the studies currently included in the R&D line item.

Answer

CEO Tim Herbert noted that most current patients have a BMI under 32 and reiterated that GLP-1s are a future tailwind that will help more patients become suitable candidates for Inspire, though the timing is uncertain. CFO Rick Buchholz explained the R&D spend includes investments in the SleepSync digital platform, the PREDICTOR study, and the new programmer, with the recent step-down in expense related to prior-year pre-launch inventory costs.

Anthony Petrone of Mizuho Financial Group asked about the potential impact of the CMS competitive bidding proposal and ResMed's strategy regarding alternative therapies like oral drugs and nerve stimulation.

Answer

CEO Michael Farrell stated that the competitive bidding impact should be manageable as Medicare and private payer rates are now more aligned. Regarding strategy, he positioned CPAP as the 'gold standard' and other treatments as secondary or tertiary, emphasizing ResMed's goal to maintain the patient relationship regardless of therapy choice.

Anthony Petrone of Mizuho Financial Group posed a two-part question regarding the potential impact of the CMS competitive bidding proposal and ResMed's broader strategy to be a 'one-stop-shop' for sleep apnea, including its view on oral drugs and nerve stimulation.

Answer

CEO & Chairman Michael Farrell stated that ResMed has extensive experience with competitive bidding and believes the current environment is more benign than in the past, with Medicare and private payer rates now aligned. On strategy, he positioned PAP therapy as the 'gold standard,' with dental devices as 'silver' and other options like drugs or implants as 'bronze,' emphasizing ResMed's goal to maintain a relationship with patients across all therapies.

Anthony Petrone from Mizuho Group asked for an update on the impact of GLP-1 medications on the new patient funnel for CPAP therapy.

Answer

CEO Michael Farrell stated that ResMed is not waiting for pharmaceutical companies to drive demand. Instead, ResMed is proactively running targeted continuing medical education (CME) programs for high-volume GLP-1 prescribers. He confirmed these efforts are already having a measurable impact, leading to increased patient referrals and prescriptions, and are demonstrating a positive return on investment.

Anthony Petrone from Mizuho Group asked about the future reimbursement landscape for GLP-1s and CPAP, specifically whether commercial payers might eventually require patients to try CPAP first before covering a GLP-1 for sleep apnea.

Answer

Executive Michael Farrell stated that while private payers often follow Medicare, the situation is complex as GLP-1s target broad obesity, not just sleep apnea. He highlighted that Eli Lilly's own data and educational materials follow AASM guidelines, positioning PAP therapy as the frontline gold standard. He believes the data supports combination therapy as the most effective approach, which should influence payer decisions and physician behavior as consumer advertising for GLP-1s increases.

Anthony Petrone asked about ResMed's pricing strategy going forward and whether U.S. DME partners were changing their purchasing patterns by holding more inventory.

Answer

CEO Michael Farrell stated that he expects a generally "benign pricing environment" ahead, though some targeted increases on high-cost components may occur. He also confirmed there have been no major changes in U.S. HME purchasing patterns, as ResMed partners with them to maintain efficient, but not excessive, inventory levels.

Anthony Petrone of Mizuho Financial Group inquired about the potential timing for a decision on selling versus spinning off NewCo. He also asked about the quarterly revenue cadence and synergy potential for the newly acquired BioTronic business.

Answer

CEO Liam Kelly stated that a spin-off would target mid-2026 but could not provide a specific timeline for a potential sale, emphasizing that significant progress has been made with preliminary buyer meetings. For BioTronic, he confirmed the guided Q3/Q4 revenue cadence ($99M/$105M) and highlighted revenue synergies from improved cath lab access and portfolio cross-selling opportunities.

Anthony Petrone from Mizuho Financial Group asked how the $55 million tariff impact would be split between the future RemainCo and NewCo, and requested more detail on potential cost and revenue synergies from the Biotronik deal.

Answer

CFO John Deren stated it is too speculative to break down the tariff impact by the future entities. CEO Liam Kelly explained that Biotronik synergies are primarily channel-based, leveraging each company's sales force in their respective strongholds (Americas and EMEA) to cross-sell products, supported by continued investment in Biotronik's R&D.

Anthony Petrone inquired about the spin-off's structure, including parent ownership and debt allocation, and asked about the potential for top-line and cost synergies from the Biotronik acquisition.

Answer

CEO Liam Kelly stated that the capital structure and ownership details will be determined later and disclosed in the Form 10, with the goal of creating two strong, independent companies. Regarding synergies, he highlighted the significant top-line opportunity from combining sales channels, enabling Teleflex to sell its peripheral-indicated products through Biotronik's established channels and creating a more comprehensive cath lab offering.

Anthony Petrone requested an update on the Palette and UroLift sales force integration, asking about cross-selling synergies. He also inquired about the potential market opportunity for Barrigel in the post-radical prostatectomy setting following a new clinical trial enrollment.

Answer

Liam Kelly, Chairman, President and CEO, reported that the Palette integration is nearly complete and has exceeded expectations, leading to a guidance raise for the product. He noted the primary synergy has been a 'halo effect' benefiting Barrigel sales due to the larger sales force. Kelly highlighted the post-prostatectomy indication as a significant, approximately $100 million future market opportunity where Barrigel's NASHA technology offers a unique advantage.

Anthony Petrone of Mizuho Financial Group asked for clarification on the proposed classification of wounds into levels one, two, and three and its potential impact on volumes. He also requested an updated view on the expected market shakeout and where Mimetics' market share could ultimately land.

Answer

CEO Joseph Capper responded that it is too early to determine the impact of the wound classifications and that more clarification is needed from CMS. On the market shakeout, he reiterated his belief that a significant portion of the current market spend will disappear due to both lower pricing and a reduction in overutilization. Capper expressed confidence that Mimetics will win in a rational market where product selection is based on clinical performance, safety, and efficacy.

Anthony Petrone of Mizuho Group asked if the latest LCD delay would cause near-term shifts in physician purchasing patterns and sought perspective on the Department of Justice potentially tackling the estimated billion-dollar-plus in fraudulent claims in the sector.

Answer

CEO Joe Capper acknowledged that the delay would likely cause shifts in ordering patterns as more providers learn of the high-reimbursement opportunities. He stated his belief that the Department of Justice is aware of the issue and that the new CMS administration, which is focused on eliminating fraud, waste, and abuse, views the situation as 'low-hanging fruit.' He emphasized that the core problem is pricing, which CMS has the authority to address, and that all key government stakeholders are aware of the escalating issue.

Anthony Petrone of Mizuho Financial Group inquired about the iDose TR adoption cadence, asking to distinguish between utilization growth from early adopters versus new physician adds. He also requested an update on managed care coverage progress.

Answer

President & COO Joe Gilliam described the adoption as a mix of both new physicians starting to use the product and early adopters increasing their utilization and expanding into commercially covered patient populations. He emphasized a methodical, account-by-account approach to managed care, ensuring practices are set up for success with benefits verification and prior authorizations before scaling.

Anthony Petrone asked about iDose utilization patterns in the advanced Noridian region, inquiring about volumes for heavy users versus laggards, and asked about plans to use the balance sheet to cover patient out-of-pocket costs.

Answer

President and COO Joseph Gilliam confirmed that in the Noridian region, there is a full spectrum of adoption, including customers performing 15-20 iDose procedures a month as well as others who are just beginning. He also affirmed that the company intends to implement a $0 co-pay program for commercial patients to ensure out-of-pocket costs are not a barrier to access.

Anthony Petrone asked for specifics on the two MACs that recently issued professional fees, including the timing and when their billing cadence might align with Noridian's. He also requested modeling guidance on the expected headwinds for the U.S. MIGS and U.S. Corneal Health businesses.

Answer

President and COO Joe Gilliam stated the new professional fee schedules were announced in mid-January. He emphasized that building physician confidence and consistent payment flow is a multi-quarter journey. Gilliam then provided detailed guidance: Corneal Health expects low single-digit growth; International Glaucoma high single-digit growth; and the non-iDose U.S. business is projected to be flat to down low-single-digits. This implies iDose revenue expectations are "well north of $100 million" for 2025.

Anthony Petrone inquired about the timing for securing Medicare Advantage policies for iDose TR and the company's strategy for patient assistance programs, particularly regarding the Medicare donut hole.

Answer

President and COO Joseph Gilliam explained that while some Medicare Advantage coverage exists, the company will methodically begin to support and drive this segment over the course of 2025. He clarified that patient assistance programs are for commercial patients only. For iDose, a Part B procedure, the donut hole is not a primary issue as most Medicare patients have supplemental insurance covering out-of-pocket costs.

Anthony Petrone asked for an update on Panther Fusion penetration and utilization, its pricing relative to other assays, and whether to expect an inventory build for the new mammography gantry launch.

Answer

CFO Karleen Oberton clarified the goal is for every lab, not every Panther system, to have Fusion capability, with over a third of customers now having it. She noted Fusion assays carry a price premium. She also stated that no significant inventory build is anticipated for the new gantry launch, as many components are shared with the current system.

Anthony Petrone asked about the company's semiconductor inventory and potential supply chain risks for the next gantry cycle. He also inquired about the status of contracting cycles with major lab operators for the molecular diagnostics business.

Answer

COO Essex Mitchell stated that Hologic does not foresee any near-term issues with semiconductors, having expanded its network after previous challenges. CFO Karleen Oberton declined to comment on specific customer contracts but pointed to the strong low-double-digit underlying growth in the molecular business (ex-HIV headwinds) as evidence of strong customer relationships.

Anthony Petrone asked about the company's path back to its medium-term mid-single-digit growth target and whether the H5N1 bird flu assay development could be a meaningful contributor this year.

Answer

CEO Stephen MacMillan stated that while the current year is experiencing a cyclical dip below the target, he is confident in returning to mid-single-digit growth. He cited strengthening surgical and diagnostics businesses, along with a future rebound in Breast Health driven by a new gantry, as key drivers. Regarding H5N1, Mr. MacMillan compared it to the Zika virus development, noting that while Hologic is prepared to support government needs, he would not assume significant revenue, and any contribution would be considered upside.

Anthony Petrone questioned the timing of the Breast Health gantry replacement cycle for systems installed between 2014-2017. He also sought details on the Gynasonix acquisition, specifically regarding the Sonata system's installed base and its synergies with the existing GYN Surgical portfolio.

Answer

Chairman, President and CEO Stephen MacMillan indicated that the gantry replacement cycle would be a rolling, durable process rather than a large bolus. Chief Operating Officer Essex Mitchell added that while details on Gynasonix's installed base would be shared post-closing, the acquisition is highly complementary as it targets the same customers and procedures as Hologic's current surgical team.

Anthony Petrone from Mizuho Financial Group asked about the status of the U.S. TAVR patient backlog and potential workflow improvements. He also inquired about the market potential for treating severe asymptomatic mitral regurgitation.

Answer

Larry Wood, Corporate VP of TAVR, clarified that the recent strength came from a renewed focus on referrals, not a reduction in the typical 3-6 month patient workup time. Daveen Chopra, Corporate VP of TMTT, noted the mitral market is in its early stages, and the immediate focus is on treating the large, underserved symptomatic population with a portfolio of both repair and replacement technologies.

Anthony Petrone from Mizuho Financial Group asked about the U.S. TAVR patient backlog and potential workflow improvements. He also inquired about the market opportunity for treating severe asymptomatic mitral regurgitation and the potential impact of upcoming competitor data.

Answer

Corporate VP Larry Wood clarified that what appears to be a backlog is the normal 3-6 month patient workup process, but noted a renewed clinical focus on timely referrals. On mitral, Corporate VP Daveen Chopra emphasized that the market is still in early stages, and the immediate focus is on expanding treatment for symptomatic patients with a portfolio of both repair (PASCAL) and replacement (SAPIEN M3) technologies.

Anthony Petrone inquired about the decision to reiterate 2025 guidance despite the pause in the Mercy Health contract, asking for a breakdown of the offsetting factors from U.S. and OUS performance. He also asked for details on the direct-to-consumer (DTC) marketing strategy, including channels and target patient populations for the Eversense 365 sensor.

Answer

Tim Goodnow, an executive, explained that strong early launch metrics, high conversion rates for the Eversense 365, and the anticipated European launch are expected to more than compensate for the Mercy contract delay. Goodnow stated that DTC marketing focuses on geo-targeted social media like Facebook, TikTok, Instagram, and YouTube, with the Medicare population being a particularly successful target segment following recent positive reimbursement updates.

Anthony Petrone from Mizuho Securities asked for quantification of the consigned inventory in China for tariff mitigation and the company's strategy for 2026. He also inquired about any changes to the global pricing strategy for Visian ICL, particularly in China and the United States.

Answer

CEO Stephen Farrell explained that the combination of existing and newly consigned inventory in China is sufficient to mitigate tariff impacts through early 2026. He stated the long-term plan involves ramping up the Swiss manufacturing facility. Regarding pricing, Farrell confirmed 'no major changes,' emphasizing the high value of the EVO ICL, though the company will continue to evaluate all levers for growth.

Anthony Petrone of Mizuho Financial Group asked for quantification of the consignment inventory in China used for tariff mitigation and inquired about the company's current global pricing strategy for Visian ICL.

Answer

CEO Steve Farrell stated that the consignment inventory, combined with existing stock, is sufficient to meet most of China's demand through early 2026, mitigating tariff impacts. He detailed the rapid, multi-continent effort to ship this inventory. Regarding pricing, Farrell affirmed that there are no major changes to the strategy. He emphasized the high value EVO ICL provides to patients and surgeons, and while price is a potential lever, the focus remains on the product's life-changing value.

Anthony Petrone of Mizuho asked whether the large, unrecognized December order was from STAAR's new or legacy distributor in China. He also inquired about the availability of monthly ICL consumption data, its correlation with retail sales trends, and any observed procedure trends in January and February. He followed up with questions on stimulus timing and the potential impact of the U.S.-China trade war.

Answer

CFO Patrick Williams confirmed the order was from the newer distributor, whose focus is on market expansion. He noted that while sell-through data is being refined, they observed a mid-single-digit year-over-year increase in January but cautioned against treating it as a definitive trend. CEO Tom Frinzi acknowledged they are monitoring the same stimulus news as the market. Patrick Williams added that Chinese consumers have significant savings, and a boost in confidence could unlock demand.

An analyst on behalf of Anthony Petrone from Mizuho Securities asked about distributor stocking trends in China, scheduling volumes at the Aier Group, and the outlook for when the underlying U.S. refractive market might stabilize.

Answer

Tom Frinzi, Chair, President and CEO, acknowledged that a slowdown in China's high season led to slightly more inventory in the channel but deemed the level appropriate for when the market turns. Patrick Williams, CFO, added that the updated U.S. guidance for 20% full-year growth already contemplates a continued downturn in the broader laser vision correction market, where STAAR continues to gain share.

Anthony Petrone from Mizuho Securities asked about the contribution from STAAR's second distributor in China, any price tailwinds in the region, and potential government stimulus impacts. He also asked if the increased U.S. guidance was driven by major account wins or broader new account openings.

Answer

Executive Thomas G. Frinzi noted it's too early to tell the impact of Chinese stimulus but local intelligence is encouraging. Executive Patrick Williams confirmed a ~300 bps pricing tailwind from new distributor deals was already factored in. Regarding the U.S., Frinzi confirmed the 'Highway 93' initiative is the key driver, with those accounts growing significantly faster (29%) than other accounts (19%).

Anthony Petrone of Mizuho inquired about contact lens inventory trends at distributors and retailers, potential destocking risks from tariffs, and the business implications of the U.S. executive order on IVF.

Answer

CEO Al White stated that while there's always a slight risk of inventory tightening, he doesn't see it as significant for Cooper due to contractual obligations with partners. On the IVF executive order, he views any government activity supporting expanded access as a net positive for the industry, noting that Cooper's products are a small part of the overall cost of treatment, which is heavily driven by pharmaceuticals.

Anthony Petrone of Mizuho asked for an update on CooperVision's silicone hydrogel (SiHy) daily lens mix, the potential for that mix to shift more toward toric lenses, and the resulting margin implications. He also sought clarity on the MiSight inventory contraction in October.

Answer

CEO Al White explained that fitting toric lenses is more complex but is a growing and high-margin area, expecting it to outpace overall market growth for years. He believes all competitors will continue to highlight strength in torics. Regarding MiSight, he attributed the Q4 inventory contraction to distributors tightening their inventory levels, a dynamic he expects may cause some fluctuations in the high-growth product going forward.

Anthony Petrone asked about CooperVision's pricing dynamics, including visibility and whether a 200 basis point increase is the new normal, and the margin uplift from toric lenses. He also inquired about the competitive landscape for PARAGARD, given a potential new copper IUD entrant.

Answer

CEO Al White indicated that annual price increases of 2-3% are reasonable to offset inflation and that the mix shift to higher-value toric and multifocal lenses is accretive to operating margins long-term. Regarding PARAGARD, he expressed confidence in its market position, highlighting its 10-year indication and a newly launched single-handed inserter that improves ease of use and addresses practitioner feedback.

Anthony Petrone inquired about the new plasma collection centers, specifically the timeline for the third center to reach peak revenue and the mix of specialty versus normal plasma. He also asked about the adjusted EBITDA margin profile of the plasma collection operation and the company's business development and M&A strategy, particularly within the hyperimmune globulin space.

Answer

Executive Amir London stated the third plasma center in San Antonio will open this month and is expected to take 24-30 months to reach its $8-$10 million peak revenue target. He detailed that approximately 20-25% of collections will be specialty plasma for internal use, improving cost of goods, while the rest will be normal source plasma sold to third parties at a 10-25% gross margin. For M&A, London confirmed the focus is on synergistic assets, including drug-derived products and distribution businesses, that leverage their commercial footprint in areas like transplant centers and infectious disease.

Anthony Petrone asked about the DTD program, inquiring which of the secondary endpoints would be most critical for gauging success and driving the decision to commercialize. He also requested an update on the expected timeline for the CMS review process.

Answer

Chief Innovation Officer Ahmet Tezel deferred comment on specific endpoints until the data is published in Q4. CEO Vladimir Makatsaria clarified that the commercialization decision is not endpoint-driven but will be 'purely driven by the reimbursement decision of CMS.' He reiterated that the formal CMS application will occur in Q1 2025 after all publications are released, with a review process that typically takes about a year.

Anthony Petrone from Mizuho Group asked about the 2025 go-to-market strategy, noting that the FARAWAVE NAV catheter's exclusivity to the OPL mapping system creates a bundled offering against competitors.

Answer

CEO Michael Mahoney clarified that the system is not 'closed'; physicians can still use FARAPULSE with competitor mapping systems. CMO Dr. Ken Stein added that the original FARAWAVE catheter (without the NAV sensor) will remain available for this purpose. However, they believe the user experience and differentiated features of the FARAWAVE NAV with the OPL system will be compelling enough for physicians to want to use it.

Asked for more detail on competitive pressures, distinguishing between large incumbents and new entrants, and inquired about the R&D pipeline, specifically the timeline for a new SCS product and developments for PDN.

Answer

Competitive pressure comes mainly from large incumbents at 'splitter' accounts, not new entrants. The company is not exiting accounts. The R&D pipeline includes a next-generation SCS platform in early 2026 and a potential key publication for its PDN therapy in 2025 that could drive adoption through inclusion in clinical guidelines.