Michael Polark

Michael Polark asked for specifics on which business lines are driving market share gains in the Healthcare segment and requested a follow-up on the drivers behind the quarter-to-quarter growth volatility in AST services during late fiscal 2025.

Answer

President and CEO Daniel Carestio attributed Healthcare market share gains to the comprehensive strength of the entire portfolio and enterprise solutions in North America, rather than a single product line. Regarding AST, he explained the Q4 growth moderation was due to timing, with an extraordinarily strong December followed by an abnormally slow customer plant restart in early January, not tariff-related front-loading.

Michael Polark sought clarification on what 'stable' medtech customer demand meant for the AST segment and asked about management's confidence in sustaining the 10% growth rate. He also questioned if the Healthcare Capital revenue level was being intentionally managed down to create an easier comparison for fiscal 2026.

Answer

President and CEO Daniel Carestio clarified that 'stable' medtech demand signifies a return to more normalized low-single-digit volume growth. He expressed cautious optimism about the 10% AST growth trend but was not ready to 'declare victory.' He also stated it was too early in the planning process to comment on managing Healthcare Capital revenue for fiscal 2026.

Michael Polark of Wolfe Research, LLC asked for specifics on market share gains within Healthcare's recurring revenues and inquired about capital allocation strategy, including M&A and buybacks. He also followed up on the drivers of medtech customer trends in AST and the reasons for margin improvement in Life Sciences.

Answer

CEO Daniel Carestio attributed Healthcare share gains to a broad-based effort following capital placements and strong procedure volumes. On capital allocation, CFO Michael Tokich noted a robust pipeline of tuck-in deals and a $100M share repurchase in H1. Carestio explained that AST medtech trends are related to customer inventory management and that Life Sciences margin strength is entirely due to a favorable mix shift towards high-margin consumables.

Michael Polark inquired about the drivers of Insulet's strong international performance, specifically asking if volume-side factors like first-fill dynamics or distributor stocking, similar to the U.S. Omnipod 5 rollout, are influencing growth and should be considered for international projections in the coming years.

Answer

Ashley McEvoy (President and CEO) confirmed robust, durable international growth driven by upgrades from Omnipod DASH to Omnipod 5, benefiting from price materialization and accelerated volume uptake. Flavia Pease (CFO) clarified that there was no material impact from distributor stocking in Q3 or prior quarters, with volume being the primary driver of international growth, alongside some price mix realization.

Michael Polark questioned the sustainability of Insulet's strong international performance, asking if any volume-side dynamics, such as first-fill or distributor stocking, should be considered for 2026, similar to the U.S. Omnipod 5 rollout.

Answer

Ashley McEvoy, President and CEO, confirmed robust and durable international growth, driven by upgrades from Omnipod DASH to Omnipod 5, positive price materialization, and accelerated volume uptake. Flavia Pease, CFO, clarified that there was no material impact from distributor stocking in the quarter or recent quarters, with volume being the primary driver of international growth.

Michael Polark asked for details on the upcoming Omnipod 5 launches in the Middle East, including the expected timing, the current size of the business in that region, and the scale of the opportunity compared to larger European markets.

Answer

Chief Product and Customer Experience Officer Eric Benjamin projected the Middle East launches would occur between late 2025 and early 2026. He characterized these as smaller markets compared to major European countries but placed them within a broader international strategy that includes maturing markets like the U.K. and Germany, as well as nine other countries launched in early 2025, all tapping into a large, underpenetrated type 1 population.

Michael Polark of Wolfe Research asked about the impact of the ongoing sales force expansion on the 2025 guidance, seeking to understand how much growth is dependent on these new hires.

Answer

President and CEO Jim Hollingshead clarified that the guidance fully incorporates the planned rollout of the expanded sales force. He noted that hiring has progressed well, with 75% of roles filled, and that the expansion involves adding reps to the existing commercial model to reach more call points, rather than creating a separate Type 2 force.

Michael Polark requested quantification of the sales force expansion for the Type 2 market and asked how many of the 22,000 prescribing HCPs have prior experience with Insulet products for Type 2 patients.

Answer

President and CEO Jim Hollingshead declined to provide specific headcount figures but explained the strategy involves extending their commercial model into high-prescribing PCP practices. He estimated this expansion will increase their reach from approximately 30% to over 40% of the insulin-intensive Type 2 patient population during 2025.

Michael Polark asked if Nelson Labs could reasonably expect to return to growth in 2026 following the expert advisory services headwind, and inquired about any potential pull-forward of Sterigenics orders from med tech customers in Q2 or Q3 due to anticipated Trump tariffs.

Answer

Chairman and CEO Michael Petras agreed that a return to growth for Nelson Labs in 2026 is a logical conclusion, without providing formal guidance. He stated that commercial reviews showed very minimal, non-material impact from any pull-forward of orders related to Trump tariffs, citing only minor last-minute requirements in a couple of facilities.

Michael Polark from Wolfe Research asked if the strong sterilization growth was a broad market normalization post-destocking, questioned the implied volume slowdown in Sterigenics' 2H guidance, and inquired about the sustainability of the lower adjusted tax rate.

Answer

CEO Michael Petras agreed that the growth reflects a market normalization with volumes now matching end-market demand. CFO Jonathan Lyons clarified that the 2H Sterigenics guidance includes caution for non-routine downtime but that the underlying business outlook is strong. Lyons also confirmed the new lower tax rate is appropriate for 2025 and is expected to improve further over time as the company grows.

Michael Polark asked about the company's expectations for the EPA's review of the ethylene oxide rule. He also sought to confirm the impact of the one-less-selling-day on the Sterigenics segment's Q1 growth rate.

Answer

CEO Michael Petras responded that the outcome of the EPA's review is uncertain, and the company will continue to move forward with its planned NESHAP facility enhancements until directed otherwise. CFO Jonathan Lyons confirmed the analyst's interpretation that after adjusting for the one less selling day, the underlying constant currency growth for Sterigenics was effectively higher than the reported 3.9%.

Michael Polark of Wolfe Research followed up on tariffs, asking if cobalt was historically exempt and if other risks exist. He also questioned the apparent disconnect between Sterigenics' growth and a competitor's recently accelerated performance.

Answer

CEO Michael Petras stated that cobalt has been exempt from tariffs in the past but the company awaits clarity on any new policies. He noted contracts are structured for customers to bear such costs. Regarding competitive performance, he explained that growth rates can differ quarter-to-quarter but tend to balance out over time, attributing the current variance to factors like geographic and end-market mix. He expressed confidence in Sotera's competitive position.

Michael Polark of Wolfe Research asked about the size of the Expert Advisory Services business and the drivers of its recent strength. He also requested an update on the U.S. EO facility upgrades and whether the NESHAP rules are final or subject to change.

Answer

CEO Michael Petras explained the strength in Expert Advisory Services was driven by helping clients with regulatory compliance issues. CFO Jon Lyons sized the business at roughly low-double-digits as a percentage of Nelson Labs' revenue. Regarding NESHAP, Petras stated the company is far along in its upgrades, with total spending expected to be around $165-170 million, and believes the rules are set.

Michael Polark asked for a breakdown of the 'few hundred basis points' impact on gross margin from scrap and freight, specifically the 50/50 split, and how that runs out into 2026.

Answer

Jereme Sylvain, CFO, confirmed that the impact on gross margin from scrap and freight was roughly 50/50. He expects the freight component to significantly decrease in 2026 as the majority of product moves via ocean freight, and the scrap component to dissipate as deployment issues are resolved, leading to a more normalized margin rate.

Michael Polark followed up on gross margin, asking for a breakdown of the 'few hundred basis points' impact from scrap and freight, and how these components are expected to trend through the rest of the year and into 2026.

Answer

Jereme Sylvain, CFO, clarified that the impact on gross margin from freight and scrap was roughly 50/50. He expects the freight component to decrease significantly in 2026 as the majority of product from Malaysia transitions to ocean freight. He also anticipates the scrap component related to sensor deployment issues to dissipate, leading to a more normalized margin rate in 2026.

Michael Polark of Wolfe Research asked about the path to broader Medicare coverage for non-insulin Type 2 patients, the potential impact of new HHS leadership, and the timing for the readout of the related randomized controlled trial (RCT).

Answer

CEO Kevin Sayer stated they are pleased with positive administration comments and are working through normal CMS channels with supporting evidence. COO Jacob Leach added that the RCT enrollment should finish in H1 2025, with an initial data readout expected late 2025 or more likely early 2026.

Michael Polark questioned the rationale for providing a single point estimate for 2025 revenue guidance ($4.6 billion) instead of the company's historical practice of giving a range.

Answer

CFO Jereme Sylvain explained that after a 'unique year' in 2024, management felt it was important to provide their single best estimate for 2025. The goal was to ensure alignment and get everyone on the same page rather than providing a high and low end for the forecast.

Michael Polark asked how Dexcom will price Stelo through new DME and physician channels, given that these partners will require a margin, potentially altering the direct-to-consumer price point.

Answer

CFO Jereme Sylvain explained that this was always part of the long-term plan. While partners earn a margin, Dexcom avoids certain OpEx like shipping that it incurs on direct sales. He stated the cost to Dexcom is 'incredibly low,' making the partner channel model efficient and comparable to the pharmacy channel, with a similar expected impact on operating margin.

Michael Polark of Wolfe Research inquired about the progress of PFA technology in treating persistent atrial fibrillation, specifically asking for confirmation on FARAPOINT's year-end 2025 timeline and whether the combination of FARAWAVE (with its recent FDA label for persistent AF) and FARAPOINT will significantly accelerate PFA penetration in persistent AF cases in 2026, noting current higher penetration in paroxysmal cases.

Answer

Chief Medical Officer Dr. Ken Stein confirmed that de novo persistent AF ablation is already "in high gear," citing the ADVANTAGE trial's superior long-term outcomes and single-digit redo rates with FARAPULSE. He noted the FARAWAVE catheter's suitability for pulmonary vein isolation plus posterior wall ablation. For more complex cases like redo procedures, Dr. Stein mentioned FARAPOINT as an adjunct, along with the FARA FLX catheter in clinical trials and the Cortex technology acquisition for precision mapping of AF sources, which will address unexplained recurrences. He reiterated high uptake of FARAWAVE in de novo persistent AF and expects it to continue.

Michael Pollard asked about the progress of Therapulse PFA technology for persistent AF, specifically if it's on track for year-end 2025, if this combination will significantly boost PFA penetration in persistent cases, and if 2026 will be the year for persistent AF to gain higher traction.

Answer

Chief Medical Officer Dr. Ken Stein confirmed that de novo persistent AF ablation is already seeing high uptake, driven by the Advantage trial results which showed excellent long-term outcomes and low redo rates. He noted that the Therawave catheter is well-suited for this strategy. For more complex cases like redo procedures, future advancements such as Therapoint, the Theraflex catheter (in clinical trials), and Cortex technology for precision mapping will be crucial. Dr. Stein reiterated expectations for continued high uptake of Therawave in the de novo persistent population.

Michael Polark of Wolfe Research asked for an explanation of Boston Scientific's low tax rate, its expected durability, and potential risks from future policy changes like Pillar 2 or the expiration of TCJA provisions.

Answer

Daniel Brennan, Executive Vice President and CFO, explained that the low tax rate is a durable result of the company's complex global structure, including manufacturing locations and IP domicile. He reiterated the known potential for a 200-300 basis point headwind in 2026 from the sunsetting of TCJA, but noted he is optimistic that ongoing discussions in Washington may mitigate this potential impact.

Michael Polark questioned the low single-digit growth in the Structural Heart Valves (TAVR) business during Q4, asking if it was influenced by the ACURATE IDE trial results and requesting an update on the franchise's path forward in the U.S.

Answer

CEO Mike Mahoney confirmed there were no new updates on the U.S. TAVR strategy, as discussions are ongoing. He acknowledged that the U.S. trial results did have some impact on the European business. Despite this, he noted that the European TAVR team had a strong year and is now launching the next-generation ACURATE Prime valve, primarily to existing customers.

Michael Polark of Wolfe Research LLC questioned the significant year-over-year decline in the 'true incremental' new contract value metric, asking for the drivers and whether the recent sales force changes were a contributing factor.

Answer

CFO Micah Young clarified that the metric's fluctuation is highly dependent on the timing of large contract bids and is not related to the sales force changes. He noted that the company is on track for a solid year of contracting with a strong pipeline for the second half, and pointed to a 7% year-over-year increase in unrecognized contract revenue as a positive indicator.

Michael Polark of Wolfe Research requested clarification on why a large tender led to lower-than-expected consumables, sought details on the sales force restructuring, and asked about any potential tax benefits from the Sound United sale.

Answer

CFO Micah Young attributed the lower consumables to the 'lumpiness' of large tender orders, calling it a timing issue that will normalize. CEO Katie Szyman explained the sales force shift from small, dedicated product teams to a generalist model is intended to leverage the full sales team's reach for advanced products. Young confirmed that at the current sale price, no tax benefit is expected from the Sound United divestiture.

Michael Polark asked for an explanation of the divergence between Masimo's strong pulse oximetry growth and a competitor's decline, and also inquired whether cost savings were being redeployed into areas of strength.

Answer

CFO Micah Young attributed Masimo's outperformance to market share gains from strong recent contracting and a late-year spike in respiratory illnesses that drove demand. He clarified that cost initiatives were focused on refocusing the company on its core healthcare business by reducing overhead and eliminating unproductive spending, with the resulting margin improvement being an 'output' of that strategic realignment rather than a redeployment of savings.

Michael Polark asked for specific examples of products being deemphasized as part of the portfolio review and inquired about the Board's perspective on the investment and pursuit of the Apple trade secrets litigation.

Answer

COO Bilal Muhsin and Interim CEO Michelle Brennan identified Opioid Halo (for home use) and Bridge as deemphasized products. Brennan added that feasibility studies for noninvasive cancer, bilirubin, and diabetes monitoring were discontinued. CFO Micah Young clarified the focus is shifting away from the direct-to-consumer opioid monitoring market. Regarding litigation, Brennan affirmed the company's commitment to defending its patents, and Muhsin confirmed the trial had begun but offered no further updates.

Michael Polark sought clarification on whether the initial FDA approval for Genio is expected to carry a contraindication for patients with complete concentric collapse (CCC) and asked about the company's position on requiring a DISE procedure pre-implant.

Answer

CEO Olivier Taelman stated the company expects CCC will not be on-label but, importantly, will also not be listed as a contraindication, making it an off-label physician decision. He confirmed Nyxoah will not promote off-label use, and physicians would need to perform a procedure like DISE to screen out CCC patients to remain on-label with the initial approval.

Michael Polark of Wolfe Research, LLC asked if exiting the DIXI distribution agreement would cause a loss of upstream visibility in the patient funnel and how NeuroPace plans to maintain that visibility.

Answer

Executive Joel Becker acknowledged that the DIXI partnership provided valuable visibility into the diagnostic process. He stated that the company has internalized these learnings and can continue to gain visibility using the RNS System itself. He emphasized their commitment to a smooth transition for shared customers, which will help maintain the relationships and visibility built over the past three years.

Michael Polark of Wolfe Research asked for clarification on the timing and venue for the release of top-line data from the NAUTILUS pivotal study, which was mentioned as potentially coming in the next few months.

Answer

Executive Joel Becker detailed the process, stating that after patient follow-up is finalized in March, the data will be monitored, analyzed, and shared with the FDA. A public data readout is planned between achieving data lock and the formal submission to the FDA in the second half of 2025. While a specific venue hasn't been chosen, he emphasized that the first-of-its-kind trial warrants a high-profile publication and presentation, and they will be submitting to significant forums.

Michael Polark asked if the planned Q1 2025 Investor Day could be timed to coincide with the initial top-line data from the NAUTILUS trial. He also inquired about the expected revenue trajectory for device replacements and the pharma collaboration in 2025.

Answer

Executive Joel Becker remained non-committal on aligning the Investor Day with NAUTILUS data, stating the timing depends on multiple factors. CFO Rebecca Kuhn addressed the revenue lines, confirming that replacement revenue has likely hit its 'trough' but declined to forecast 2025. For the pharma collaboration, she noted revenue recognition would have minor quarterly fluctuations but would not be dramatic.

Michael Polark asked why the current retail pharmacy store closures are more impactful than past trends and requested details on the new efficiency program, including its focus and the annualization of its expected savings.

Answer

CEO Devdatt Kurdikar clarified that the scale and pace of the current store closures prompted a prudent guidance adjustment, though he declined to name the specific retail chain. CFO Jake Elguicze explained the new restructuring program is focused on rightsizing the organization, primarily in SG&A, now that separation activities are largely complete. He confirmed that annualizing the second-half savings of $7-8 million to about $15 million for fiscal 2026 is a reasonable expectation.

Michael Polark asked if there could be residual value in the discontinued patch pump program, questioning if another company might acquire the asset. He also sought to confirm if the announced cost savings were exclusively from the pump program's termination or if they included other restructuring efforts.

Answer

CEO Devdatt Kurdikar stated that while their market check did not produce a viable option to monetize the asset, the company would remain open to discussions if another party expressed interest in the IP or asset in the future. CFO Jake Elguicze confirmed that the announced restructuring and annualized savings of $60-$65 million are tied specifically to the discontinuation of the pump program, aligning with the approximately $63 million spent on it in fiscal 2024. He added that the company will continue to seek further cost optimizations.

Michael Polark asked about the drivers for the increased revenue guidance for the difficult-to-treat depression (DTD) business and sought details on the OSPREY trial's 72-minute procedure time and the company's preliminary pricing strategy for the device.

Answer

CFO Alex Shvartsburg explained the DTD revenue uptick reflects a strategic shift for the small commercial team, which is now focused on driving the commercial patient funnel after previously prioritizing RECOVER trial enrollment. On OSPREY, Chief Innovation Officer Ahmet Tezel attributed the efficient 72-minute procedure time to the proximal electrode placement, which minimizes tissue dissection. He noted it's a straightforward procedure for experienced surgeons. Alex Shvartsburg deferred on specific pricing details but stated the team is working on securing appropriate coding for the therapy.

Michael Polark from Wolfe Research asked about the financial assumptions for the obstructive sleep apnea (OSA) program within the 2025 guidance, including spending levels, hiring plans, and the launch timeline following a 2025 submission. He also questioned the reasons for the OUS epilepsy disappointment in the quarter and the company's confidence in its guided acceleration for 2025.

Answer

CEO Vladimir Makatsaria expressed high confidence in the OSA opportunity, citing a large unmet need and differentiated technology. CFO Alex Shvartsburg detailed that after spending $27 million on OSA in 2024, an incremental $8 million is planned for 2025, shifting from clinical to product development spend. Chief Innovation Officer Ahmet Tezel projected a 9-12 month FDA review for the PMA, followed by a limited launch. Regarding OUS epilepsy, Shvartsburg attributed the weakness to isolated personnel issues that have since been remediated, expressing confidence in returning to high single-digit growth in 2025.

Michael Polark inquired about the U.S. epilepsy business, specifically the likelihood of achieving a Level 6 payment code and the potential impact on pricing and volume. He also presented a 'fishing expedition' calculation for 2025 EPS growth based on the updated 2024 guidance and tax headwinds.

Answer

President of Stephanie Bolton, Stephanie Bolton, expressed encouragement about the Level 6 coding prospect, stating it would address economic headwinds for implanting centers and could drive greater VNS utilization. She noted it would also provide future pricing flexibility. CEO Vladimir Makatsaria added that reimbursement is a key barrier to market penetration. CFO Alex Shvartsburg acknowledged but did not confirm the 2025 EPS calculation.

Michael Polark of Wolfe Research asked for the total number of Inspire V implants conducted worldwide to date to gauge the evidence base ahead of the full launch. He also requested more specific guidance on Q3 sequential growth to better understand how back-end loaded the full-year guidance is.

Answer

CEO Tim Herbert declined to provide a specific number of Inspire V implants but emphasized that the company has significant evidence from pre-approval studies, qualification data, and the limited commercial release. CFO Richard Buchholz addressed the cadence, reiterating that Q4 is historically the strongest quarter and is expected to be even stronger this year due to the launch dynamics, but did not provide specific Q3 growth guidance.

Michael Polark asked for an updated long-term view on the potential size of the U.S. center base, as the company will no longer report this metric.

Answer

Chairman and CEO Tim Herbert did not provide a specific number but emphasized a long runway for growth, stating they want to continue expanding consistently. He highlighted that the company is in the very early stages of penetrating national accounts and Ambulatory Surgical Centers (ASCs), and a new internal group is now focused on these targets to drive adoption, especially with the Inspire V launch.

Michael Polark of Wolfe Research asked for confirmation of the number of center deactivations during the quarter, noting the difference between new centers added and the net change. He also asked for the criteria used to deactivate centers.

Answer

CEO Tim Herbert confirmed there were deactivations and explained the primary reasons are a surgeon moving to a new facility or a site becoming inactive for a period. He stated that they remove inactive sites from their website to ensure patients are not directed to centers that cannot provide the therapy, but noted that sites can be reactivated if they bring on new, trained surgeons.

Michael Polark from Wolfe Research requested a framework for Q2 EPS expectations and asked for more color on the OEM business decline, which seemed large even after accounting for the known contract loss.

Answer

CEO Liam Kelly reiterated that Teleflex does not provide quarterly EPS guidance but directed him to the Q2 revenue guidance of $769 million to $777 million. He emphasized that the OEM performance was exactly as expected, with Q1 being the low point, and that improving order rates late in the quarter support the outlook for sequential improvement.

Michael Polark questioned the strategic logic for moving the intra-aortic balloon pump and anesthesia businesses to NewCo, given their perceived synergies with RemainCo's vascular access and critical care focus.

Answer

CEO Liam Kelly clarified that while debated, the balloon pump's separate sales force, manufacturing footprint, and margin profile made it a better fit for NewCo. For anesthesia, he explained that the synergistic emergency medicine portion will stay with RemainCo, while the rest of the business has fewer synergies and a growth profile more aligned with NewCo.

Michael Polark requested a deeper understanding of the OEM customer's decision to in-source a component, asking about the ongoing relationship, the nature of the product, and whether this poses a risk for other products or customers.

Answer

Liam Kelly, Chairman, President and CEO, explained that the component is a unique part made for a single, large customer for many years. He suggested the customer's decision was likely driven by a need to address manufacturing absorption issues at one of their own plants. He noted the product was less complex than most of Teleflex's OEM offerings, making it feasible for the customer to bring in-house and implying a low risk of this recurring with more complex products.

Michael Polark sought clarification on the Sigi pump charge, asking why the original AMF shareholders would agree to a renegotiated deal with a lower potential earn-out.

Answer

CEO John Sheridan explained that the deal was favorable for both parties on a discounted cash flow basis. He emphasized that the primary driver for Tandem was gaining full control over the development process and timeline, which the new agreement facilitates.

Michael Polark of Wolfe Research asked for the specific growth rate of new U.S. pumpers in 2024 to better contextualize the 2025 guidance.

Answer

Leigh Vosseller, Executive Vice President and Chief Financial Officer, clarified that their focus is on MDI conversions, as competitive conversions declined as expected. She stated that MDI conversions returned to growth in Q2 2024 and experienced double-digit year-over-year growth in Q2, Q3, and Q4, which is a key underpinning for the 2025 guidance.

Michael Polark asked about the timing and potential scale of the upcoming renewal opportunity in markets outside the U.S.

Answer

EVP and CFO Leigh Vosseller explained that the OUS renewal opportunity has not been meaningful until now. With initial launches in 2018-2019 and larger markets in 2020, she stated that 2025 will be the first year with a "more meaningful" renewal opportunity. The company is working with distributors to apply lessons learned from the U.S. market.

Michael Polark requested clarification on the 8-9% organic revenue growth guidance for 2025, asking how the divestiture of the lower-growth spine business affects the underlying growth rate of the remaining company.

Answer

CEO Kevin Lobo explained that while divesting the spine business provides a slight benefit to the overall organic growth rate, the impact is relatively small. He noted this modest tailwind is expected to be largely offset by the headwind of having one fewer selling day in 2025, making the 8-9% range a solid guide.