Jenny Rabinowitz

Jenny Rabinowitz asked about Carlsmed's strategy and investment in its two new platforms, the bilateral approach for aprevo Lumbar and the Cora personalized fixation portfolio, and how these initiatives align with the ongoing aprevo Cervical launch.

Answer

Michael Cordonnier, CEO and Chairman, explained that the bilateral aprevo Lumbar approach is expected to accelerate adoption in the posterior surgery market, which represents about 8% of the total lumbar fusion market. He noted that Cora marks Carlsmed's first expansion beyond the disc space, adding personalization to cervical plates as part of the original cervical portfolio plan. Both new platforms are in early stages with full commercial launches anticipated in the second half of 2026.

Jenny Rabinowitz inquired about the market opportunity and investment strategy for Carlsmed's new bilateral aprevo lumbar and Cora cervical plate platforms, specifically how they expand into new procedures or attract new surgeons, while the company is also launching its cervical product line.

Answer

CEO Michael Cordonnier explained that the bilateral aprevo lumbar aims to accelerate adoption in the posterior surgery market, which represents about 8% of the lumbar fusion market. He noted that Cora marks Carlsmed's first expansion beyond the disc space, adding personalization to cervical plates. Both new platforms are in early stages, with a full commercial launch anticipated in the second half of the year.

Jenny Rabinowitz asked for details on the two smaller product acquisitions completed during the quarter, specifically about the products and markets, and if such smaller tuck-in acquisitions should be expected going forward.

Answer

Kevin Lobo (Chair and CEO, Stryker) confirmed that small tuck-in acquisitions are part of Stryker's strategy. He described the NP Seal product as a negative pressure wound treatment without capital equipment, fitting into the orthopaedic instrument sales reps' bag. The second acquisition, Advanced Medical Balloons, offers a fecal incontinence product for the Sage business, representing a new market for Stryker. He clarified that these are primarily about optimizing existing call points rather than a broader wound strategy.

Jenny Rabinowitz asked for more details on the two smaller product acquisitions made during the quarter (Guard Medical's NP Seal and Advanced Medical Balloons) and whether such smaller product acquisitions should be expected going forward.

Answer

Kevin Lobo, Chair and Chief Executive Officer, described Guard Medical's NP Seal as a capital-free negative pressure wound treatment that fits well into the Orthopaedic Instruments sales bag. He explained Advanced Medical Balloons addresses fecal incontinence, a new area for the Sage business. He confirmed that small, tuck-in acquisitions are a consistent part of Stryker's strategy.

Jenny Rabinowitz of Goldman Sachs asked about Stryker's strategy for international expansion, balancing organic versus inorganic investment, and for reflections on the SURF acquisition's impact on the European orthopedics business.

Answer

Chair & CEO Kevin Lobo stated the SURF acquisition has been very successful, boosting international hip performance, and that its products will soon launch in the US. He emphasized the biggest international opportunity is penetrating existing markets with Stryker's portfolio, including recent US acquisitions like Inari. He noted that growth has been hampered by slow EU MDR approvals for key products like Pangaea and Insignia, but expects international growth to re-accelerate in the second half of the year.

Jenny Rabinowitz, on for David Roman, asked for the rationale behind raising organic sales and EPS guidance while maintaining the full-year free cash flow guidance.

Answer

CFO Wayde McMillan explained that while sales and earnings performance has been strong, free cash flow had a slower start to the year due to the timing of certain payments. The company is therefore maintaining the guidance as it has work to do in the second half to achieve the existing range, with improvements expected from working capital and lower deferred cash payments.