Ben Haynor

Ben Haynor asked for more details on Treace Medical Concepts' new products expanding the Total Addressable Market (TAM), specifically the SuperBite variable pitch compression screw system and SpeedXM Fusion system, including their development timelines and early surgeon feedback. He also inquired about which of the new osteotomy solutions (Nanoplasty, Percuplasty, SpeedMTP) surgeons are adopting first and how they integrate into their existing surgical algorithms.

Answer

CEO John Treace explained that the SuperBite screws and SpeedXM Fusion system have been in development for approximately 18 months, with extensive work with elite surgeons and cadaveric testing, receiving positive feedback for their refined features and high performance. He noted that SpeedMTP is gaining significant traction as Treace's first dedicated offering for MTP fusion, appealing to 20% of bunion patients with arthritis and isolated MTP arthritis patients. For MIS osteotomy, Nanoplasty is designed for surgeons new to MIS due to its use of conventional saws, while Percuplasty targets experienced MIS surgeons with superior screw designs and a highly acclaimed jig system.

Ben Haynor from Lake Street Capital Markets asked for more details on the new products expanding Treace Medical Concepts' total addressable market (TAM), specifically the SuperBite variable pitch compression screw system and SpeedXM Fusion system, including their development and early surgeon experience. He also inquired about which new osteotomy solutions surgeons are adopting first and how they integrate into their practice.

Answer

CEO John Treace stated that SuperBite screws, in development for about 18 months, are refined and add breadth to the sales line, while SpeedXM, for fusing larger mid/hindfoot bones, will roll out mid-year. Regarding osteotomy solutions, he explained that the SpeedMTP system is gaining traction for MTP fusion. Nanoplasty is designed for surgeons new to minimally invasive bunion surgery, using conventional saws, while Percuplasty targets surgeons with existing MIS proficiency, featuring superior screw designs and a highly acclaimed jig system.

Ben Haynor asked about Butterfly's internal development pipeline, specifically the expected timing for P5.1 FDA submission and updates on new form factors like iQ Station or wearables. He also requested more details on the POCUS Innovators Forum and inquired if the Midjourney revenue share potential, rather than a royalty, implies a service offering over a device offering.

Answer

Joseph DeVivo, Chairman and CEO, stated that P5.1 is expected to be in a next program by early 2027, with production now and clearance by then. iQ Station is on the roadmap for late 2027. For wearables, DeVivo clarified that the technology isn't the challenge; the business use case is, and the success of home care will determine the right use case and timing. Regarding the POCUS Innovators Forum, DeVivo described it as a gathering of 60 leading POCUS thought leaders from various specialties, serving as a crucial platform for feedback that directly informs product development, such as Compass AI. On Midjourney, DeVivo emphasized it as a partnership where Butterfly is 'all in' to ensure Midjourney's success, investing and amplifying their use case rather than merely selling chips.

Ben Haynor from Lake Street Capital Markets inquired about Butterfly Network's internal development pipeline, specifically the expected FDA submission timeline for the new P5.1 chip and updates on new form factors like iQ Station and wearables. He also asked for more details regarding the recent POCUS Innovators Forum and whether the 'revenue share' phrasing for Midjourney, as opposed to 'royalty,' implies a service offering.

Answer

CEO Joseph DeVivo stated that the P5.1 chip is expected to be integrated into a next-generation product for early 2027 clearance, with iQ Station targeted for late 2027. He clarified that wearables are market-driven, with the success of home care determining their use case and timing, rather than an R&D challenge. DeVivo described the POCUS Innovators Forum as a valuable event bringing together diverse specialists to discuss needs, which directly informed developments like Compass AI, and expressed plans to expand attendance. Regarding Midjourney, DeVivo emphasized a partnership approach, focusing on mutual success and amplifying their use case rather than a transactional chip sale or royalty.

Ben Haynor from Lake Street Capital Markets asked for more specifics on the home care pilot, including the magnitude of the readmission reduction and the criteria for expanding to more states. He also questioned if the IQ Station could help access traditional hospital ultrasound budgets and requested an update on the next-generation P5 chip.

Answer

President, CEO & Chairman Joseph Devivo stated that while partner data is confidential, the pilot cut readmissions 'at least by half.' He explained the first state-wide rollout is to prove these results are transferable at scale. Devivo confirmed that the IQ Station is designed to compete with POCUS carts and access existing hospital capital budgets. He described the upcoming P5 chip as a 'generational step up' in image quality that he believes will make Butterfly's technology the clear choice over legacy systems.

Ben Haynor from Lake Street Capital Markets asked about ATEC's success in attracting sales talent, inquiring if the company continues to recruit top-tier individuals and if there are any specific territories showing notable strength in sales force penetration.

Answer

CEO Pat Miles stated that ATEC's hiring algorithm is performing as expected, indicating that the company is a "preferred destination" for sales talent. He noted strong demand for ATEC's portfolio from both surgeons and prospective sales professionals, without detailing specific territorial dynamics.

Ben Haynor with Lake Street Capital Markets asked about ATEC's success in attracting sales talent, specifically if the company is still able to recruit top-tier individuals and if there are any specific territories showing new or increased strength in sales penetration.

Answer

CEO Pat Miles stated that ATEC's hiring algorithm is performing as expected, indicating that the company is a 'preferred destination' for sales talent. He noted strong demand for ATEC's portfolio from both surgeons and sales professionals, without providing specific territorial details.

Ben Haynor inquired about ATEC's penetration in geographies where it has been historically under-indexed and how adoption, particularly with EOS, accelerates on a regional basis.

Answer

Chairman & CEO Pat Miles responded that the EOS image is the "most coveted image in Spine" and foundational for alignment. He explained that academic institutions are enthusiastic about ATEC's ability to translate EOS data into predictive informatics to improve surgical durability. This enthusiasm for the ecosystem's potential is driving adoption and interest in previously underserved areas.

Ben Haynor asked about the tracking of Wound Care cost efficiency throughout the year and requested details on the categories of new DME products.

Answer

Carrie Lachance, Chief Executive Officer, and Barry Steele, Chief Financial Officer, explained that the new system enhances Wound Care efficiency by allowing for more productive volume ramping and growth, rather than directly reducing existing costs. Carrie Lachance mentioned accreditation for new products like Foot Defender and HidraWear (in the Ostomy category) but preferred not to disclose further details until their reimbursement and success are proven.

Ben Haynor sought clarity on the Medicare prior authorization, asking if specific CMS requirements are known and if data collection is familiar to clinicians. He also asked about the impact of the recently launched bronchiectasis drug on market growth.

Answer

Elaine Birkemeyer, Chief Financial Officer, stated that Tactile is learning day-by-day about Medicare's specific prior authorization requirements, but their understanding of successful claims should translate well. She highlighted leveraging new AI technology to facilitate the process and improve turnaround times. Sheri Dodd, Chief Executive Officer, noted that the bronchiectasis drug has increased disease awareness, leading to an uptick in the airway clearance business. She emphasized that the drug therapy and AffloVest are complementary, with the drug reducing inflammation and AffloVest addressing mucus clearance, making it an attractive and growing market.

Ben Haynor sought clarity on the Medicare prior authorization requirements, asking if Tactile Medical has specific CMS demands and if clinicians are accustomed to collecting the necessary data, or if the primary challenge is CMS turnaround time. He also asked about any observed impact of the recently launched bronchiectasis drug on market growth for airway clearance products.

Answer

CFO Elaine Birkemeyer stated that Tactile Medical is learning the specific Medicare prior authorization requirements day by day, leveraging their understanding of successful post-claim submissions. She noted that while they are clear on forms, technical aspects of submission and specific prior auth differences are still being learned, but new AI technology is being leveraged to improve efficiency and turnaround time. CEO Sheri Dodd explained that increased awareness of bronchiectasis, partly driven by pharmaceutical entrants, has positively impacted demand for AffloVest. She clarified that drug therapy and AffloVest are complementary, as the drug reduces inflammation while the device moves mucus, leading to a mutually beneficial market expansion.

Ben Haynor asked about the impact of new reimbursement codes on Sensus Healthcare's system mix (SRT vs. IG-SRT) and financing options (FDA vs. outright sale/lease). He also questioned the change in interest from private equity-backed groups due to reimbursement certainty, the progress and rollout strategy for Sentinel 2.0, and the outlook for service revenue.

Answer

Chairman and CEO Joe Sardano explained that new codes would likely shift smaller centers towards outright purchases or leases, preferring to retain all revenue, and a tendency towards SRT-100 with handheld ultrasound for cost savings and better margins. He noted increased interest from private equity groups reevaluating acquisition methods due to clearer reimbursement. Joe Sardano also indicated a broad rollout for Sentinel 2.0 in the near future. CFO Javier Rampolla stated that service revenue is expected to remain around 10% of total revenue, with no significant change anticipated.

Ben Haynor asked about the market's reaction to the new reimbursement codes, specifically how it might impact the system mix (SRT vs. IG-SRT) and customer acquisition models (Fair Deal Agreement vs. outright sale or lease). He also questioned the change in interest from private equity-backed groups, the development and rollout strategy for Sentinel 2.0, and the outlook for service revenue, considering the former largest customer's installed base.

Answer

Chairman and CEO Joe Sardano explained that private equity groups still favor Fair Deal Agreements but are also considering leasing, while smaller practices (1-20 centers) show stronger interest in outright purchases or leases due to guaranteed reimbursements. He noted a tendency towards the SRT-100 with a handheld ultrasound for better margins and cost savings. Joe Sardano and Michael Sardano added that private equity groups are reevaluating acquisition methods, with increased interest due to clear reimbursement codes. Joe Sardano indicated a 'more broad rollout' for Sentinel 2.0 in the near future. CFO Javier Rampolla stated that service revenue remains consistent at approximately 10% of total revenue, with no significant change expected.

Ben Haynor of Lake Street Capital Markets inquired about the relationship between the proposed CMS physician fee schedule and the separate Local Coverage Determination (LCD) affecting ultrasound reimbursement. He also asked if the LCD uncertainty had impacted customer interest, treatment volumes, or progress toward the company's goal of 1,000 installed units.

Answer

CEO Joseph Sardano and President Michael Sardano clarified that the LCD and the physician fee schedule are two separate matters. They explained that the LCD, which they are actively lobbying against and believe will not be implemented, only questions the frequency of ultrasound use. Conversely, they are very optimistic about the proposed physician fee schedule, which would increase the SRT delivery code reimbursement by over 300%. They acknowledged the LCD created a temporary market pause but believe a favorable resolution will accelerate system installations.

Asked for more detail on the progress of discussions with private equity groups, whether the company plans to report a 'patients-treated' metric for Fair Deal Agreements (FDAs), the expected ramp-up time for patient volumes at new sites, and whether the Q4 increase in G&A expenses was a one-time event.

Answer

The company has signed one large group to an FDA and is in advanced discussions with 3-4 others. They plan to report a patient-treated metric once numbers are significant. There is an approximate 3-month lag from signing an FDA to recognizing revenue due to site setup (8 weeks) and billing cycles (45-60 days). The spike in Q4 G&A was attributed to one-time professional fees and compensation adjustments, and is not expected to be the new run rate.

Ben Haynor followed up on sales representative productivity, questioning the expected decline from $1.2 million to the $1 million-$1.1 million guidance despite a modest 5% increase in rep headcount. He also asked about any specific trends or occurrences influencing the differential growth rates between government and commercial payers, noting the faster growth in government payers. Finally, Haynor inquired about the board's frequency in revisiting the share buyback program's sizing and repurchase rapidity.

Answer

Chief Financial Officer Brad Nagel explained that rep productivity is influenced by factors such as payer mix (e.g., higher Medicare growth in Q2 boosted productivity), CRM efficiency gains, and pricing dynamics, which support the $1 million-$1.1 million guidance. Regarding payer mix, Mr. Nagel noted that while there's volatility, no significant long-term trends are expected to favor one payer type over another. President and CEO Jim Cunniff added that 25 new private payer contracts, adding 2.9 million covered lives, aim to reduce out-of-network challenges and improve access. On the share buyback, Mr. Nagel stated that the $10 million authorization in Q1 is continuously monitored opportunistically based on cash position and share pricing, referencing last year's two $5 million tranches.

Ben Haynor asked how often Electromed's board revisits the sizing and rapidity of the share buyback program.

Answer

Brad Nagel, Chief Financial Officer, explained that last year, two $5 million tranches were authorized and repurchased fairly evenly. This year, a full $10 million was authorized in Q1. The company continuously monitors cash position, share pricing, and opportunistically evaluates buybacks to maximize shareholder value, but cannot promise future authorizations.

Ben Haynor of Lake Street Capital Markets asked about the impact of ALJ decisions on formalizing payer policies, whether payer criteria are becoming clearer, pipeline attrition metrics, how to replicate German success in the U.S., and growth expectations for AlterG and MyoCycle.

Answer

CEO Mark Grant explained that a high win rate in ALJ cases is key to bringing payers to the table to formalize processes. He noted that near-term claims are being processed more smoothly, indicating progress. Grant stated that pipeline attrition is currently low and the focus is on process formalization. To replicate German success, he emphasized focused execution, new channel partners, and operational rigor. He also confirmed the company expects growth from both AlterG and MyoCycle.

Inquired about the degree to which the new CorLife and MYOLYN partnerships are factored into the 2025 revenue guidance and asked for clarification on the reasons for patient attrition with the ReWalk system.

Answer

The impacts of the CorLife and MYOLYN partnerships are factored into the 2025 guidance, but conservatively, as they are new arrangements. The CorLife deal provides a significant conduit into the workers' compensation market, while the MYOLYN expansion opens up the much larger home-use market. The patient attrition mentioned was due to seasonal factors and patient-specific deferrals (e.g., illness), which are not unusual and are viewed as delays rather than lost sales.

Asked for specifics on ReWalk placements (Part B vs. other), Q4 AlterG guidance, the status of supplemental insurance payments, Medicare accounts receivable aging, and the development of a standardized claims process.

Answer

The company does not break down placements by payer. Q4 AlterG sales are expected to improve over the prior year. Supplemental insurance payments are contingent on the primary Medicare claim being processed, so they are also delayed. Medicare A/R doesn't go back far, and a reserve is already in place for potential non-payment. They have made significant progress in standardizing the claims submission process but noted that CMS is also on a learning curve.

Ben Haynor from Lake Street Capital Markets requested an update on the telehealth pilot, including its rollout strategy and potential pricing. He also asked about interest from other hospitals following the CHKD partnership and whether any adoption trends are emerging for BabySat in states with Medicaid coverage.

Answer

President Jonathan Harris explained that the telehealth pilot integration is taking longer than expected but is targeted for a Q4 launch, with pricing yet to be determined. He confirmed that dialogue with other hospitals has increased since the CHKD announcement and that it's still too early to identify specific adoption trends for BabySat in Medicaid-covered states.

Asked for updates on the telehealth offering's rollout and pricing, interest from other hospitals following the CHKD partnership, and any observable adoption trends for BabySat via Medicaid.

Answer

The telehealth pilot is planned for a Q4 launch, with pricing yet to be determined. The CHKD announcement has spurred increased dialogue with other hospitals. It is still too early to identify significant adoption trends for BabySat through Medicaid channels, as it's a slower process.

Inquired about the long-term retention potential for the Owlet360 subscription, the details of its recent launch, international adoption dynamics, and progress with hospital and NICU partnerships.

Answer

The company stated it is in the 'super early days' of the Owlet360 subscription but believes continued feature rollouts, including telehealth, will drive engagement and retention. The late January date marked the public launch after a beta, with very positive initial feedback. Internationally, it's still early for adoption to accelerate, but Germany is a strong, growing market post-CE clearance. Regarding hospitals, their partner AdaptHealth is helping them get into NICUs, and physicians are now starting to recommend Owlet products.

Ben Haynor of Lake Street Capital Markets questioned the company's preference between acquisition versus de novo expansion for its OPSB business and asked if the anticipated 'halo effect' from the EOS portfolio development is already materializing.

Answer

CEO Dave Bailey clarified that the company prefers Greenfield (de novo) expansion in established territories and acqui-hires in new jurisdictions to build an initial footprint. He confirmed that the 'halo effect' from their investment in the EOS portfolio is already benefiting the broader scoliosis business by creating new opportunities with customers for their existing fusion products.

Ben Haynor of Lake Street Capital Markets inquired about the quantifiable value of deferred Enterprise Health sales, the projected timeline for the Personal Health business to surpass the Enterprise segment, progress on the patient claims process with partners like Pria, and the content scope of the new Ekso University platform.

Answer

CEO Scott Davis quantified the two deferred multi-unit sales at approximately $1.4 million, with a significant portion expected to close in Q3 2025. He projected the Personal Health business could overtake the Enterprise segment by 2027, driven by new distribution partners and a growing patient pipeline. Davis also noted positive progress in the claims appeal process, with an Administrative Law Judge (ALJ) approval in Q2, and explained that Ekso University will offer broad neuro-rehabilitation content beyond just exoskeletons to educate the entire industry.

Asked about the timing and financial implications of the additional cost savings, the drivers behind the updated guidance, and the potential for the upcoming Ayon launch to cause customers to delay current purchases (the Osborne effect).

Answer

The executive clarified that cost savings are part of a multi-year effort with no additional charges beyond what was stated, and the updated guidance reflects capital market weakness, not a change in disposable utilization. They do not anticipate an "Osborne effect" from the Ayon announcement; instead, they believe it will incentivize near-term upgrades to the required Apyx One generator.

The analyst asked about the nature of future milestone payments from AbbVie and inquired about the progress and expectations from the cross-promotion collaboration with Stratasys.

Answer

The company stated they cannot disclose the specific nature of the remaining $26 million in milestone payments from AbbVie. Regarding the Stratasys collaboration, the current focus is on developing the printing process for the breast implant using Stratasys's Origin One printer. Significant BioInk sales from this partnership are expected at a later stage.

Ben Haynor from Alliance Global Partners asked if the company's M&A strategy had changed due to COVID-19 and whether the current financial environment might make insurers more willing to consider reimbursement for their tests.

Answer

CFO Fred Knechtel mentioned that while there were some inbound M&A calls early in the pandemic, activity has slowed, and the company is internally focused on its rebound. President and CEO Jack Stover added that travel restrictions and the continued ability of small companies to raise capital have also cooled the M&A landscape. Regarding reimbursement, Stover stated the process remains highly data-driven, but he is pleased with the progress his team is making in converting agreements to contracts, attributing it to the company's growing stability and data.