David Turkaly

David Turkaly inquired about the pipeline for new potential partners, beyond the existing and evolving partnerships.

Answer

CEO McKeel Hagerty highlighted that partnerships have been a key growth driver for nearly 20 years, noting the time required for implementation. He expressed excitement about the new Liberty Mutual and Safeco partnership, which represents a significant win as they were previously competitors. Mr. Hagerty confirmed active discussions with other potential partners, including larger, mid-tier, and smaller insurers, as well as exploring different types of partnerships to expand the pipeline, with more announcements expected when appropriate.

David Turkaly asked for clarification on the timing of a $150 million share buyback, a breakdown of the $52 million quarterly headwind from portfolio transitions, and when to expect the company's next Long-Range Plan (LRP).

Answer

CEO Christopher Simon clarified that the $150 million buyback occurred last quarter, not in the current one. He broke down the $52 million headwind as approximately $35 million from the CSL U.S. disposables transition and $17 million from the whole blood business divestiture. Regarding the next LRP, Simon stated it would come 'when ready,' likely in the 'spring or summer,' after the company has fully delivered on its current plan and demonstrated a strong 'say-do ratio.'

David Turkaly sought confirmation on the long-term outlook for plasma collections growth, asking if it should be considered a floor for Haemonetics' growth. He also asked for clarification on the drivers for the revised Hospital segment guidance.

Answer

CEO Christopher Simon clarified that the mid-to-high single-digit growth forecast refers to committed fractionation capacity expansion, which he views as a strong proxy for end-market demand and a floor for collections growth. He reiterated that the Hospital guidance change was driven by softness in the base VASCADE product, which offset strong growth from VASCADE MVP and MVP XL.

David Turkaly of Citizen JMP sought to confirm if his calculation was correct that, based on the second-half 2025 run-rate, Polarify revenues in 2026 could be flat to slightly down compared to 2025.

Answer

CFO Bob Marshall confirmed this was "not an unfair assumption," acknowledging that the current pricing dynamics will annualize through the first half of 2026. President Paul Blanchfield reiterated that the immediate priority is stabilizing Polarify in 2025 to set up the franchise for long-term success.

David Turkaly inquired whether the company has seen any direct evidence of customers switching away from PYLARIFY to competing agents at either large or small accounts following the recent reimbursement changes.

Answer

CEO Brian Markison acknowledged a 'stroke of the pen risk' for switching among smaller, later-adopter accounts that are more price-sensitive and were not the company's initial strategic focus. He emphasized that the company's primary efforts have been concentrated on securing its major, high-volume accounts, where switching has not been a significant issue.

David Turkaly asked for clarification on the drivers for a return to sustained double-digit growth in 2026, questioning if it relies on the core business or pipeline assets.

Answer

CEO Brian Markison confirmed that the growth will be led by PYLARIFY and DEFINITY. However, the acceleration to double-digit growth is expected to be driven by up to three potential new launches in 2026: PNT2003, and, pending acquisition closures, Neuroseq and OCTEVY. These new products would supplement the core portfolio to drive the growth profile.

David Turkaly of Citizen JMP asked for explicit confirmation on whether any issues or observations were raised by the FDA during recent BLA-related inspections and inquired about any discussions regarding the specifics of the product's future label.

Answer

President and CEO Michael Dale stated that the BLA process is on track and that the current work revolves around adapting the quality system from a device to a biologic standard, which is an expected step. He noted that discussions with the FDA regarding the product label were just beginning and that the company could not provide any guidance on the topic until the process is complete.

David Turkaly from Citizens JMP questioned the sustainability of the 3% price increase and asked which of the ongoing clinical efforts, beyond the BLA, might have the most significant near-term financial impact.

Answer

CEO Michael Dale responded that pricing is evaluated annually and did not provide a specific timeline for the sustainability of increases. Regarding clinical efforts, he emphasized that the studies are affordable and can be funded by operations. He stressed the strategic necessity of generating Level 1 evidence to support surgeon confidence and, crucially, to strengthen coverage and payment policies, stating, "if we don't start this stuff, it never gets done."

David Turkaly of Citizens JMP Securities inquired about the adequacy of current manufacturing capacity to support the company's long-term growth plans and asked for guidance on the appropriate share count for 2025 financial models.

Answer

CEO Michael Dale confirmed that Axogen has sufficient manufacturing capacity for the duration of its current multi-year planning period. Regarding the share count, Dale and CFO Nir Naor advised using the currently reported number, noting the company expects to self-fund its growth and does not anticipate a near-term equity raise.

David Turkaly of Citizens JMP asked new CEO Michael Dale what his biggest surprise has been since joining AxoGen. He also asked for clarification on the mention of 'prostate' as a potential opportunity.

Answer

CEO Michael Dale responded that his biggest 'recognition' was how early the company still is in its market development journey. Regarding the prostate opportunity, he generalized that elective procedures outside of trauma offer a more controlled environment, allowing Avance the potential to work with even higher efficacy, representing a significant future opportunity.

David Turkaly from Citizen JMP asked for more detail on the number of interventional physicians using SI-BONE's products and their adoption patterns. He also inquired about the potential for Granite procedures to shift to an outpatient setting.

Answer

CEO Laura Francis explained that while they don't break out the specific number, interventionalists are a strong growth driver, preferring iFuse Torque and iFuse Intra. She noted that surgeons still account for the majority of volume. Regarding the outpatient shift for Granite, Francis confirmed significant tailwinds from proposed CMS changes, including a new Level 7 APC payment for lumbar fusions and the removal of open SI joint fusion from the inpatient-only list, which could accelerate the move to lower-cost sites of service.

David Turkaly of Citizens JMP Securities asked if SI-BONE's recent ~25% growth rate could be sustained above 20% and questioned the drivers behind achieving the $2 million territory productivity milestone.

Answer

CEO Laura Francis highlighted the strong Q1 execution and broad-based demand as foundational for the year. CFO Anshul Maheshwari noted that long-term secular tailwinds, including a differentiated product portfolio and reimbursement advantages, support sustained growth potential. Francis attributed the productivity gains to the hybrid sales model, where agents cover long procedures, freeing up territory managers for market development, and stated they can exceed the $2 million mark.

David Turkaly asked for an update on the competitive landscape in the spine market and requested clarification on the 40% growth in physicians using multiple SI-BONE products, including the current user mix.

Answer

CEO Laura Francis stated that SI-BONE is competing effectively as the market leader due to its extensive product portfolio, educational approach, and clinical data. CFO Anshul Maheshwari confirmed the 40% growth metric, noting that while the specific percentage of active doctors using multiple products isn't disclosed, it's a key indicator of the strategy to drive procedure density, with nearly half of new physician adds performing multiple procedure types.

David Turkaly asked for color on management's confidence in the Life Sciences segment's projected rebound to 6-7% growth and inquired about the key factors enabling double-digit EPS growth despite significant tariff headwinds.

Answer

President and CEO Daniel Carestio confirmed confidence in the Life Sciences forecast, citing strong recurring revenue and a robust capital equipment backlog entering fiscal 2026. SVP and CFO Michael Tokich detailed the fiscal 2026 outlook, noting that benefits from restructuring savings and lower litigation costs are expected to offset headwinds from tariff impacts and higher incentive compensation.

David Turkaly of Citizens JMP requested updated annual growth expectations for the OviTex and OviTex PRS product lines based on Q1 results. He specifically asked if the 3% volume decline in PRS during the quarter should be considered a one-off event.

Answer

CFO Roberto Cuca confirmed that PRS is expected to continue growing faster than OviTex, as it is earlier in its product cycle, though its growth rate will moderate over time. CEO Antony Koblish added that the PRS business is sensitive to procedure mix but that the company remains bullish on its long-term prospects. Both executives affirmed the Q1 PRS volume decline was a one-off event, with Cuca reiterating that PRS revenue still grew year-over-year due to a stronger average selling price.

David Turkaly asked for the reasons behind the recent aggressive poaching by smaller wound care companies and sought clarification on the specific roles of the employees who departed TELA in Q4.

Answer

CEO Antony Koblish explained that certain smaller wound care companies with favorable reimbursement positions are offering significant financial guarantees to attract talent, and it was simply 'TELA's turn' to be targeted. He confirmed the Q4 departures included 11 Territory Managers, as well as plastic surgery directors and a regional manager, but noted that the company has since backfilled these positions effectively.

The analyst asked for color on the drivers behind the 4% increase in sales rep productivity and inquired about the market size and competitive landscape for the new short stem tibia implant.

Answer

The executive attributed the rise in rep productivity to the effective combination of hiring new reps and the successful launch of new technology that is driving deeper penetration in existing accounts. Regarding the short stem tibia, he explained it addresses complex primary ankle cases, expanding the total ankle market, but noted that quantifying the specific patient volume is difficult as it's also based on surgeon preference.

Asked for more details on the 7% increase in sales force productivity and inquired about any selling day impacts in the current quarter and the second half of the year.

Answer

Management explained that sales force productivity is driven by new products and medical education, and can fluctuate as new reps are added. Regarding selling days, there was no impact in Q2, but there will be one additional selling day in Q3 2024 compared to the prior year.

Asked for specifics on the bunion market's growth and the company's performance within it, inquired about selling day variations for the rest of the year, and asked for confirmation on the interest expense run rate.

Answer

The company described its bunion strategy and stated all subsegments are seeing strong growth, without providing specific numbers. They confirmed Q2 2024 has two more selling days than Q2 2023, and the rest of the year is consistent. The Q1 interest expense is a reasonable run rate for the year.

Asked about the sales rep hiring plans embedded in the 2024 guidance and for confirmation on Q4 inventory levels and whether large write-downs are now finished.

Answer

The company expects more balanced growth in 2024 from both new rep additions and increased productivity from the existing sales force. They confirmed Q4 inventory was as expected and that significant write-downs of that magnitude are not anticipated going forward, with a focus on improving cash flow.

David Turkaly asked for confirmation on the primary geographic location of the OEM business. He also requested an update on the performance of the MANTA large-bore closure device and the trends in its underlying procedures.

Answer

Liam Kelly, Chairman, President and CEO, confirmed that the vast majority of OEM revenues are based in the Americas. Regarding MANTA, he stated that the product continues to penetrate the market for TAVR and EVAR procedures. He noted that the company is now focusing on deeper penetration within EVAR, where it has found pricing to be more favorable compared to TAVR.