Eric Anderson

Eric Anderson, on for Josh Jennings at TD Cowen, requested clarity on achievable development milestones for the remainder of the year and inquired about the company's confidence in its balance sheet to fund development through its next phase.

Answer

CEO Stephen From stated it was too early to set new milestone dates, pending a 4-6 week internal assessment to ensure future guidance is reliable. Regarding funding, From expressed strong confidence, stating he joined because of the company's unique technology and clear market need. He believes that once a credible timeline is established post-assessment, the compelling value proposition will support the company's capital strategy.

Eric Anderson, on behalf of Josh Jennings, inquired about the expected revenue cadence for the remainder of 2025 and asked how the expanded CE Mark submission for the EU red blood cell product might change the total addressable market.

Answer

Kevin Green, VP - Finance & CFO, addressed the revenue cadence, noting a historical Q2-to-Q3 flattening in EMEA due to summer holidays and a strong Q4 jump. He also mentioned that some deferred revenue recognized in Q2 would not repeat. Obi Greenman, Chair, President & CEO, explained that the expanded red cell indication for all patient populations removes potential restrictions, opening up the full market opportunity sooner post-approval without the need for a phased rollout.

Eric Anderson of Cowen asked about the mix of outright capital sales versus financing for large capital items and whether this has shifted. He also inquired about the international commercial opportunity for Mako Spine and Shoulder.

Answer

VP of Finance & IR Jason Beach confirmed that both large and small capital businesses are performing well. Chair & CEO Kevin Lobo added that the only notable trend toward financing is with Mako robots in the ASC setting, but it's not a major shift. Regarding international Mako expansion, Beach noted the opportunity is large for the new spine and shoulder applications following their deliberate US launches.

Speaking on behalf of Josh Jennings, Eric Anderson asked if a competitor's recent restructuring of its ortho business provided any benefit to Stryker's performance during the quarter.

Answer

VP of Finance and IR Jason Beach declined to comment on specific competitor activities, stating that Stryker's policy is to focus on its own execution and the offensive strategy it is currently playing in the market.

Eric Anderson of TD Cowen asked for details on the technical dossier submission timeline for first-in-human testing, including the basis for the review time assumptions. He also questioned how recently announced hospital partnerships contribute to the current development process versus their expected role post-commercialization.

Answer

CEO Adam Sachs explained that the technical dossier is targeted for a mid-year filing, with timelines based on precedents from similar companies, which includes a buffer for regulatory feedback. Regarding hospital partners, Sachs clarified that while they are future customers, their current role is to help refine perioperative workflows and procedures, ensuring seamless integration of the V1.0 system into the clinical environment.

Eric Anderson, on for Josh Jennings, inquired about ATEC's international expansion strategy and its approach to pricing in the current medtech environment.

Answer

Executives Patrick Miles and J. Koning reiterated their 'narrow and deep' international strategy, focusing on Australia, New Zealand, and Japan, with no immediate plans to expand further. On pricing, Miles explained that ATEC's procedural approach, which increases the number of products used per surgery, helps offset traditional price erosion. Koning added that new product innovation and favorable mix also help manage low single-digit like-for-like price declines.

Eric Anderson, on for Josh Jennings, asked about the growth runway for the PTP and LTP procedural offerings, inquiring what inning the company is in regarding their market penetration and full potential.

Answer

Patrick Miles (Executive) stated that ATEC is in the 'super early innings' for both PTP and LTP, highlighting a vast market opportunity that is much larger than current sales reflect. J. Koning (Executive) quantified this by noting the U.S. lateral market is about $1 billion, where ATEC holds approximately 15% share, with a potential to grow to $3 billion by converting traditional posterior procedures.

Eric Anderson of TD Cowen asked for perspective on the evolution of growth drivers into 2025 and questioned how the launch of Cohealyx and PermeaDerm might impact gross margins.

Answer

CEO Jim Corbett highlighted a broad platform of 2025 growth drivers including RECELL GO, Mini, Cohealyx, and international expansion, all while reinforcing the path to profitability by Q3 2025 with minimal opex growth. He acknowledged Cohealyx and PermeaDerm have lower gross margin percentages but stressed their substantial contribution to operating margin dollars as they leverage the existing commercial infrastructure.