Michael Sarcone

Michael Sarcone asked if Dentsply Sirona still expects its U.S. business to achieve positive growth in Q4 2026 regardless of market conditions, and requested comments on current underlying market observations.

Answer

President and CEO Dan Scavilla reiterated that the return to health for the U.S. business is not market-dependent, and they aim to achieve positive growth through their own execution. He noted that the market does not appear radically different, remaining fairly stable, consistent with comments from counterparts, and that any market spike would be an additional benefit rather than a prerequisite for their goals.

Michael Sarcone from Jefferies asked if Dentsply Sirona still expects positive growth for its U.S. business in Q4 2026 regardless of market conditions, and for comments on the current underlying market trends.

Answer

President and CEO Dan Scavilla reiterated that the company's return to health is not market-dependent, and they aim for positive U.S. growth in Q4 2026 through internal execution. He described the market as 'fairly stable,' agreeing with counterparts' comments, and noted increasing optimism but no significant spike, emphasizing that market improvement would be an additional benefit, not a prerequisite.

Michael Sarcone of Jefferies inquired about the company's ability to expand margins in 2026, considering the full annualized impact of tariffs. He also asked for more details on the new initiatives aimed at addressing softness in the Connected Technology Solutions (CTS) segment.

Answer

CEO Dan Scavilla noted it was too early to project 2026 margins given market volatility but highlighted the company's global manufacturing flexibility. CFO Matt Garth added that the 2025 outlook already incorporates the tariff impact, which is being managed through efficiency programs. Scavilla declined to elaborate on specific CTS initiatives for competitive reasons, preferring to report on results after execution.

Michael Sarcone from Jefferies asked for a detailed explanation of the puts and takes influencing LeMaitre Vascular's gross margin throughout 2026. He also asked for an update on the M&A environment and the current pipeline.

Answer

CFO Dorian LeBlanc detailed that the gross margin improvement in 2025 (up 180 basis points adjusted) and the 2026 guidance (up another 170 basis points) are driven by pricing increases, removal of underperforming products (like Zio), and manufacturing efficiencies. These factors offset inflationary pressures and the mix shift towards faster-growing OUS business (which generally has lower ASPs). He noted that the RestoreFlow manufacturing transfer and new warehouse opening would create slight headwinds in the back half of 2026, but all costs are baked into the guidance. President Dave Roberts reiterated that the M&A pipeline is active, focusing on open vascular and cardiac surgery, with a revenue sweet spot of $15 million-$150 million.

Michael Sarcone asked for a detailed explanation of the puts and takes influencing LeMaitre Vascular's gross margin throughout 2026. He also repeated a question about the M&A environment and pipeline.

Answer

CFO Dorian LeBlanc highlighted a consistent gross margin story, with a 180 basis point improvement in 2025 (adjusted) and a guided 170 basis point increase for 2026. Key factors include pricing increases, removal of underperforming products (Zio), and manufacturing efficiencies, which offset inflationary pressures and OUS mix. He noted a slight headwind in H2 2026 from the RestoreFlow manufacturing transfer and new warehouse. President Dave Roberts reiterated a healthy M&A pipeline, focusing on open vascular and cardiac surgery targets with revenues between $15M-$150M.

Michael Sarcone of Jefferies inquired about the quantifiable impact of catheter stocking orders on Q2's strong unit volume growth and questioned the sustainability of the 8% price increase achieved during the quarter.

Answer

Chairman & CEO George LeMaitre estimated the catheter stocking impact was approximately $800,000 in Q2. Regarding pricing, he noted the current cadence is established for 2025 but declined to commit to a specific level for 2026, while confirming a price hike is planned for January 1.

Michael Sarcone of Jefferies asked for clarification on whether better-than-expected allograft sales drove the Q1 margin miss and questioned the moving pieces behind the updated full-year guidance, which featured a lower gross margin but a higher operating margin.

Answer

CEO George LeMaitre and President Dave Roberts confirmed that stronger-than-anticipated performance in the lower-margin graft category, particularly allografts which beat expectations by about $1 million, was the primary driver of the gross margin miss. LeMaitre explained the operating margin guidance change was influenced by the slightly lower gross margin outlook, offset by increased bullishness on sales growth, which prompted higher investment in the sales force and new offices like the one in Switzerland.

Michael Sarcone asked for more details on the newly carved-out launch team, requesting one or two examples of specific changes being implemented in the launch process to position the company for success. He also inquired about the split of the 70% procedure growth between older cohorts of existing customers versus newer cohorts.

Answer

President and CEO Larry Wood explained that the previous structure had a single field team supporting both existing procedures and new launches, leading to divided focus. The new dedicated launch team, under the capital organization, uses tenured personnel to standardize the launch playbook, ensuring comprehensive support from system sale through the first 10 cases. A Q4 pilot showed a 50% reduction in time to first 10 cases under this model. Regarding procedure growth, Mr. Wood stated that while 70% growth is good, the company has more ambitious goals. He noted that growth is highly variable across cohorts, with no single easy answer, and more details will be provided at the Investor Day.

Michael Sarcone asked for specific examples of changes in the launch process with the new dedicated launch team and sought color on procedure growth split between older and newer cohorts of existing customers.

Answer

Larry Wood, Chief Executive Officer, explained that the new launch team, comprised of tenured personnel and reporting under the capital organization, standardizes the launch playbook from the point of sale, focusing on training and support to ensure successful initial cases. He cited a Q4 pilot that showed a 50% reduction in time to the first 10 cases. Regarding procedure growth, Mr. Wood noted that while 70% growth is impressive, they have more ambitious goals. He stated that growth is 'highly variable' across customers, without a simple split between older and newer cohorts, and more detailed insights will be provided at the Investor Day.

Michael Sarcone of Jefferies asked for more detail on the expected revenue phasing for the second half of the year and for an update on the company's relationship with its sole-source ultrasound supplier in China.

Answer

EVP & CFO Kevin Waters provided key inputs for H2 modeling, including Q3 system and handpiece unit guidance and a typical seasonal step-down for international revenue. He also stated that the company is working closely with its Chinese supplier to ensure supply continuity while exploring long-term strategies to onshore production and mitigate tariff risk.

Michael Sarcone requested an update on the typical sales cycle duration and visibility into the sales funnel. He also asked about the competitive landscape, including where PROCEPT is taking market share and its view on prostate artery embolization (PAE).

Answer

Executive Sham Shiblaq confirmed the sales cycle remains a consistent 6-9 months, and Kevin Waters added that funnel conversion rates are stable. Executive Reza Zadno addressed competition, stating that PAE is not a significant threat due to durability issues. He reiterated that Aquablation primarily takes share from TURP and GreenLight, and from simple prostatectomy for larger prostates.

Michael Sarcone asked about AxoGen's 2026 revenue guidance of at least 18%, questioning its conservatism given the 21% exit rate in 2025, and inquired about key assumptions. He also asked about the impact of the CMS reimbursement increase for outpatient settings, potential pricing strategies, and the current split between inpatient and outpatient procedures.

Answer

CEO Michael Dale characterized the guidance as prudent, noting the larger base and the need for diligent management of customer creation processes, while aspiring for faster growth. Rick Ditto, a Medical Device & Life Science Executive at AxoGen, stated that the company does not break out revenue by care setting but views the CMS change as a de-risking event that increases site of care flexibility over time, with facilities renegotiating contracts. CMO Jens Schoener emphasized that while increased payments are positive, expanding coverage remains crucial. Michael Dale added that upper extremity procedures are most likely to shift to outpatient settings.

Michael Sarcone asked about AxoGen's 2026 revenue guidance of at least 18%, questioning its conservatism given the 21% exit rate in 2025, and requested details on key assumptions. He also inquired about the impact of CMS reimbursement increases for outpatient settings on pricing and the split of business between inpatient and outpatient procedures.

Answer

Michael Dale (CEO) characterized the guidance as prudent, acknowledging growth from a larger base and the need for diligent management of customer creation processes. Rick Ditto (Medical Device & Life Science Executive, AxoGen) clarified that the company does not break out revenue by care setting but views the CMS change as a de-risking event that increases site of care flexibility over time, with facilities renegotiating contracts. Jens Schoener (CMO, AxoGen) emphasized the importance of expanding coverage alongside payment increases. Michael Dale (CEO) added that upper extremity procedures are most likely to shift to outpatient settings.

Michael Sarcone of Jefferies inquired about the expected quarterly cadence for the rest of the year, considering historical seasonality and ramping sales rep productivity. He also asked about the drivers of recent commercial coverage wins and whether this progress could accelerate post-BLA approval.

Answer

President and CEO Michael Dale detailed seasonality by segment, noting that extremities procedures increase in the summer while breast reconstruction slows. He and Rick Ditto, VP of Global Health Economics, explained that recent coverage wins are driven by the publication of the RECON study data and increased clinician advocacy. They affirmed their belief that these coverage expansion wins can accelerate further once the BLA is approved, as it will strengthen the product's evidence-based value proposition for payers.

Michael Sarcone of Leerink Partners asked about the potential need for hospital recertification of Avance Nerve Graft post-BLA approval and the expected cadence for gross margin recovery after a weak first quarter.

Answer

Executive Jens Schroeder Kemp stated that Axogen does not anticipate major disruptions to hospital access or product availability, as the reimbursement pathway will remain unchanged. CFO Nir Naor explained that Q1 gross margin was impacted by significant one-time inventory write-offs but affirmed the full-year guidance, expecting improvement over the year with specific BLA-related costs anticipated in Q3. CEO Michael Dale added that process improvements impacting margins would be gradual over the 12 months following BLA approval, not a single stepwise change.

Michael Sarcone of Jefferies sought details on the assumptions driving the 15-20% long-term CAGR objective and the 15-17% revenue guidance for 2025, including the expected sales cadence throughout the year.

Answer

CEO Michael Dale explained the CAGR is based on historical data and planned expansions, such as doubling the breast business footprint, where they have a predictable customer creation model. CFO Nir Naor stated the 2025 guidance relies on existing momentum and staggered investments, with growth expected to accelerate in the latter half of the year as these investments mature.

Michael Sarcone of Jefferies asked about the long-term sustainability of the growth strategy focused on deepening penetration in primary accounts versus eventually needing to expand the customer base. He also requested details on the assumptions underpinning the Q4 guidance range.

Answer

CEO Michael Dale responded that the nerve repair market is still very immature, with significant room for growth by optimizing the business model, with specifics to come in early 2025. CFO Nir Naor added that the lower end of the guidance range accounts for potential disruptions, such as supply chain issues following hurricanes.

Michael Sarcone inquired about the latest observations regarding GLP-1s and any headwinds related to them that are factored into Inspire's guidance.

Answer

Tim Herbert, Chairman and CEO, stated that Inspire includes a basis in its guidance for GLP-1s. He believes GLP-1s will be a tailwind, particularly for high BMI patients who can lose weight to qualify for Inspire. Herbert noted that data is still emerging on the percentage of patients who resolve their sleep apnea with GLP-1s, and Inspire works with centers to ensure patients are cared for and, if appropriate, use GLP-1s for weight loss with a secondary benefit of sleep apnea reduction.

Michael Sarcone inquired about the latest observations regarding GLP-1 medications and any potential headwinds from them that have been factored into the company's guidance.

Answer

Tim Herbert (Chairman and CEO) views GLP-1s as a potential tailwind, particularly for high BMI patients who can lose weight to qualify for Inspire therapy. He noted ongoing data collection on sleep apnea resolution and confirmed that a 'little basis' for GLP-1 impact is included in the guidance.

Michael Sarcone of Jefferies inquired about the level of Medicare billing uptake since the July 1 software update and asked about the characteristics of the accounts that achieved over 20% growth with Inspire V.

Answer

CEO Tim Herbert explained that Medicare billing uptake was initially limited in early Q3 because centers first needed to complete the full training and system implementation for Inspire V. He characterized the high-growth accounts as the company's most accomplished, high-volume centers that participated in the limited market release, noting that their success serves as a model for broader rollout.

Michael Sarcone from Jefferies inquired about the physician response to the lower professional fee associated with the new CPT code for Inspire V. He asked if there was any evidence of surgeons increasing their procedure volume per day to offset the lower reimbursement.

Answer

CEO Tim Herbert responded that while they are monitoring the situation, the feedback has been positive. He believes the benefits of a simpler, faster procedure without the pressure-sensing lead far outweigh the modest fee reduction. He also noted that the new code includes an increased payment to ambulatory surgical centers (ASCs), which helps balance the economics for the healthcare system.

Michael Sarcone from Jefferies followed up on the Inspire V rollout, asking if renegotiating center contracts would be a significant undertaking. He also requested an update on how conversations with payers are progressing following the release of the PREDICTOR study data.

Answer

CEO Tim Herbert clarified that keeping the system-level price consistent with the current device minimizes the burden of contract renegotiations, making it primarily a logistical process. On the PREDICTOR study, he reported that payers are receptive to data that can streamline the patient pathway. He explained the proposed algorithm for identifying candidates without a DISE procedure and noted that ongoing physician publications will support these discussions.

Michael Sarcone inquired about the quarterly phasing of top-line revenue and margins for 2026, the financial contribution of the 2025 product launches (Solaria and ApexRF), and anticipated contributions from new products in 2026.

Answer

Yair Malca, InMode CFO, indicated that the quarterly distribution for 2026 is expected to be similar to 2025. Moshe Mizrahy, InMode CEO, stated that the Solaria and ApexRF products contributed approximately $15 million in 2025. For 2026, Mr. Mizrahy described two new platforms: a proprietary Morpheus technology combined with Erbium YAG laser and a Pico laser acquired from a Korean company, but did not provide specific sales estimations.

Michael Sarcone from Jefferies requested clarification on the full-year guidance reduction, questioning why a relatively small first-half miss led to a larger $30 million cut, and asked about the expected Q4 revenue from the new urology platform.

Answer

CEO Moshe Mizrahy explained that the original forecast assumed a very strong second half, which now seems unachievable given the persistent market slowdown, necessitating the larger guidance revision. CFO Yair Malca added that any revenue contribution from the new urology platform in Q4 is expected to be 'minimal' and 'symbolic,' in line with the company's conservative approach to new product launches.

Michael Sarcone asked about the expected quarterly revenue seasonality for 2025, given the atypical pattern in 2024. He also inquired about supply chain risks, particularly concerning potential tariffs on components from various regions.

Answer

CFO Yair Malca stated that InMode expects to return to a traditional seasonality pattern in 2025, with Q1 being the slowest and Q4 the strongest quarter. CEO Moshe Mizrahy addressed the tariff concern, expressing confidence that their multi-supplier strategy and the strong U.S.-Israel relationship would mitigate any significant impact from potential new tariffs.

Michael Sarcone asked about Align Technology's system sales, particularly concerning the end-of-life strategy for older iTero systems, and how the company is thinking about growth in 2026, differentiating between replacement cycles and de novo placements.

Answer

President and CEO Joseph Hogan confirmed that older Element iTero scanners (Element 1s and 2s) are being phased out, with efforts to transition doctors to newer products like Lumina. He stated that this transition is not expected to be a major variable impacting next year's success. CFO John Morici added that the company offers trade-in allowances to encourage adoption of Lumina, which is more efficient and captures better images.

Michael Sarcone asked about Align Technology's outlook for system sales growth in 2026, specifically the balance between replacement cycles for older iTero systems and de novo placements, given the company's plans to end-of-life some older models.

Answer

CFO John Morici acknowledged the end-of-life for some older Element iTero scanners and efforts to transition doctors to newer products like Lumina. He did not provide a specific breakdown for 2026 growth but indicated that the transition is not expected to be a major variable impacting next year's success. President and CEO Joseph Hogan emphasized the company's goal to encourage doctors to upgrade from older scanners (Element 1s and 2s) to Lumina through trade-in allowances, highlighting Lumina's efficiency and improved image capture.

Michael Sarcone from Jefferies asked about the regional payer issues with Medicare Advantage plans, the company's mitigation efforts, and the reasons for the deceleration in HIFU procedure growth from over 30% to mid-single digits.

Answer

CEO Ryan Rhodes explained that the company is proactively addressing regional Medicare Advantage challenges through market access partners to accelerate pre-authorizations, with early signs of improvement. He noted that while procedure growth has slowed, it saw a quarter-over-quarter increase and the company is hyper-focused on driving it by training new urologists and leveraging compelling clinical data from the HiFi and FARP studies.

Michael Sarcone inquired about the challenges with payer approvals, asking for more details on the timing, scope (Medicare Advantage vs. others), and ultimate success rate of securing procedure authorizations.

Answer

Ryan Rhodes, an executive, clarified that the approval challenges are primarily concentrated within Medicare Advantage plans. He noted that while the process can be longer and involve appeals, the company, with the help of a consulting firm, is seeing significant progress and wins the majority of these appeals. Ken Mobeck, another executive, added that despite these headwinds, the company is maintaining its full-year HIFU revenue growth guidance of 16% to 25%, which incorporates procedure growth.

Michael Sarcone inquired about the challenges with payer approvals, specifically asking for more detail on the trend of longer review times, whether it was isolated to Medicare Advantage, and if it was leading to outright denials.

Answer

Ryan Rhodes, an executive, clarified the issue is primarily with Medicare Advantage plans and noted that while some denials occur, the company is winning the majority of appeals with the help of a consulting firm. Executive Ken Mobeck added that despite these challenges, procedure growth is factored into their annual guidance, and they remain confident in achieving the 16% to 25% HIFU revenue growth target for the year.

Michael Sarcone inquired about the challenges with the payer landscape, specifically the longer review and approval times for Medicare Advantage patients, and asked about the assumptions underlying the company's maintained HIFU sales growth guidance.

Answer

Ryan Rhodes, an executive, clarified that the approval challenges are primarily with Medicare Advantage plans and noted the company is actively managing the process with consulting partners, winning a majority of appeals. Ken Mobeck, another executive, confirmed that the 16% to 25% HIFU revenue growth guidance for 2025 already incorporates expectations for procedure growth and accounts for the lumpy nature of capital equipment sales.

Michael Sarcone inquired about the challenges with payer approvals, specifically asking for more details on the timing, scope (Medicare Advantage vs. broader), and ultimate success rate of securing procedure approvals.

Answer

Ryan Rhodes, an executive at EDAP, clarified that the approval challenges are primarily concentrated within Medicare Advantage plans. He noted that the company is actively working with a specialized consulting firm to navigate this, and while they are seeing more appeals, they are winning the majority of them. He confirmed the issue has not significantly broadened beyond this specific patient population.

Michael Sarcone of Citizens JMP inquired about the drivers behind the 16% to 25% HIFU sales growth guidance for 2025, asking for details on system placements versus procedure growth. He also asked about the long-term plan for the non-core ESWL and distribution businesses and the expected impact of this strategic shift on operating expenses.

Answer

Executive Ryan Rhodes explained that the HIFU growth forecast is driven by continued demand for Focal One systems, growing recurring revenue from procedures, and service revenue from the expanding installed base. Regarding the non-core segments, Rhodes stated the company is winding down legacy distribution agreements and will stop selling new Sonolith lithotripsy systems in H2 2025, though it will continue to service the installed base. Executive Ken Mobeck added that while lithotripsy revenue will decline, the remaining service business has a higher margin. Mobeck also noted that OpEx is expected to rise in the mid-single digits, with cost savings from the non-core wind-down being reallocated to support HIFU growth.

Michael Sarcone inquired about the current hospital customer environment, the strength of the Focal One sales pipeline, and whether second-half 2024 system placements are still expected to exceed the first half. He also asked for details on the utilization trends per account for Focal One procedures in the U.S.

Answer

An executive, Ryan Rhodes, confirmed that the company still anticipates a stronger second half for 2024 placements, noting some sales from Q3 slipped into Q4 and that momentum is building from recent scientific meetings. Regarding utilization, Rhodes explained that new accounts have a ramp-up period and are viewed as comprehensive programs. He stated that procedure volumes are increasing, supported by strong reimbursement, and that the company's bifurcated sales force (capital and clinical) actively monitors and supports adoption at each site.

Michael Sarcone inquired about the strength of the Focal One sales funnel, the outlook for placements in the second half of the year, the current hospital capital expenditure environment, and the logistical process for expanding sales within the VA Health Care System.

Answer

CEO Ryan Rhodes stated the sales pipeline is strong and growing, anticipating a stronger second half for 2024 placements. CFO Ken Mobeck added that the CapEx environment is characterized by longer sales cycles due to macroeconomic factors and extended hospital approval processes. Regarding the VA system, Rhodes explained their strategy involves leveraging relationships with major academic centers near VA hospitals, as faculty often hold dual appointments, and noted they are actively working on other interested VA locations.

Michael Sarcone of Jefferies asked how the company plans to mitigate potential commercial disruption from changes to the selling strategy and inquired about demand trends for the OviTex portfolio, noting a deceleration in unit volume growth.

Answer

President Jeffrey Blizard clarified the changes are not an overhaul but a mindset shift toward a patient-centric focus, building on the team's existing skills. CEO Antony Koblish added that Blizard was already familiar with the company's structure and supportive of the existing sales model. Regarding OviTex, Koblish explained the business is transitioning from a niche player in complex reconstructions to a broad portfolio provider, which involves driving adoption in high-volume procedures like inguinal hernia repair, temporarily affecting average growth metrics.

Michael Sarcone of Jefferies sought clarification on the tariff impact on gross margin, specifically asking about the timing and magnitude for 2025. He also asked how to model the potential impact for 2026 if the tariffs remain in place.

Answer

CFO Roberto Cuca explained that the tariff impact would begin in Q2 2025 and gradually phase in through Q3, resulting in a 50 to 100 basis point negative effect on gross margin. He also noted that gross margin typically improves throughout the year after a Q1 low. For 2026, Cuca suggested that the 50-100 basis point impact is the correct range to assume for a stable, ongoing effect. CEO Antony Koblish added that TELA is working collaboratively with its manufacturing partner to mitigate the impact.

Michael Sarcone asked about TELA Bio's willingness to compete with large financial guarantees to retain top-performing sales reps, particularly in the context of its goal to maintain flat operating expenses for the year.

Answer

CEO Antony Koblish affirmed that the company will do what is necessary to retain its best talent, emphasizing their high value and productivity. He expressed confidence that the newly enhanced compensation plan, which rewards performance near quota and offers significant upside for stretch goals, combined with the team-selling strategy, will effectively boost morale and retention, serving as a strong defense against future poaching attempts.

Michael Sarcone from Jefferies questioned the business trends observed early in Q4, the potential impact of OviTex IHR growth on average selling prices (ASPs), and sought more detail on the sales force training programs.

Answer

Executive Roberto Cuca confirmed a strong start to Q4, with October being a record first month of a quarter. Executive Antony Koblish explained that while higher OviTex IHR volume could lower overall ASP, this may be offset by balanced selling of higher-priced complex hernia products. Koblish also emphasized that their sales training model is 'perpetual' and a key competitive advantage, with a dedicated team providing continuous education.

Michael Sarcone from Jefferies asked for additional details to support the company's confidence in securing approval for DrugSorb ATR, given recent denial letters from both the FDA and Health Canada. He also requested an update on performance trends in Germany following the recent commercial team reorganization.

Answer

CEO Phillip Chan explained that their confidence in the regulatory process stems from a recent in-person FDA appeals hearing where they presented their full case with support from external cardiac surgery experts to senior FDA officials. Regarding Germany, Dr. Chan stated that while the reorganization is a work in progress, the 22% year-over-year and sequential growth in Q2 was very encouraging, and they believe the changes will continue to improve sales force effectiveness.

Michael Sarcone asked about the company's confidence in getting DrugSorb ATR cleared by the FDA via the appeal process, the potential path forward if the appeal is denied, and whether a new clinical trial would be required. He also followed up with a question about the company's visibility and confidence in reaccelerating sales growth in Germany in the second half of the year.

Answer

Dr. Makis Deliargyris, Chief Medical Officer, expressed strong confidence in the existing data and the appeal process, noting it's the most expedited path. He clarified that if the appeal fails, a new de novo submission could follow with a truncated review time, and importantly, the FDA has not requested an additional trial. CEO Dr. Phillip Chan addressed the Germany question, acknowledging macro challenges like hospital reform but emphasizing that the company is focused on improving its own sales execution and strategy, with promising developments already seen in Q2 that support the goal of returning to growth in the second half of 2025.

Michael Sarcone asked about potential impacts from the U.S. administration on FDA staffing, the key metrics for DrugSorb's controlled launch, and the planned size of the U.S. commercial team.

Answer

CEO Phillip Chan stated that FDA budget cuts are not expected to target review personnel. CFO Peter Mariani explained the controlled launch will focus on hospital logistics, VAC committee processes, and surgeon usage patterns. Mariani also outlined a plan for a 15-25 person sales force, which CEO Phillip Chan added would be supplemented by distributors.

Michael Sarcone of Jefferies questioned the dynamics of the U.S. iStent business, noting its Q2 decline and asking why performance is expected to improve to a mid-single-digit decline in the second half. He also asked for more detail on underlying cash flow generation.

Answer

President & COO Joe Gilliam explained that Q2 represented the 'peak of the headwind' from LCD changes and a tougher prior-year comparison, which eases in the second half. SVP & CFO Alex Thurman clarified that excluding ~$30M in one-time investments (an acquisition and a building purchase), the company generated over $4M in cash, and the goal remains to march towards cash flow breakeven.

Michael Sarcone asked if there were any changes to the expected contribution mix for iDose between traditional Medicare and commercial payers for the year, and sought to confirm the full-year operating expense growth expectation.

Answer

President and COO Joseph Gilliam reiterated that the company is not anchoring its 2025 forecast on significant contributions from commercial or Medicare Advantage, maintaining a methodical rollout strategy. CFO Alex Thurman confirmed that the expectation for full-year adjusted operating expense growth remains approximately 15% over the 2024 base.

Michael Sarcone requested an update on the iDose TRIO delivery system and its expected commercial timeline. He also asked how the 2025 iDose growth expectations are split between penetrating the Medicare population versus gaining traction on the commercial side.

Answer

Chairman and CEO Tom Burns explained that iDose TRIO, which reduces the incision size to ~1mm, is targeted for a 2026 commercial launch, pending a small FDA-required safety study. This timeline aligns with efforts to secure in-office payment codes. President and COO Joe Gilliam added that the 2025 iDose growth is almost entirely driven by progress with Medicare MACs. While some commercial volume is expected late in the year, the rollout will be methodical to ensure customers master the prior authorization process.

Michael Sarcone asked about the reimbursement pathway for Epioxa post-approval and inquired about the company's progress and targets for achieving cash flow breakeven and midterm profitability.

Answer

Chairman and CEO Thomas Burns explained Epioxa will use an existing T-code for the professional fee and the company will apply for a new J-code, which would likely predicate the commercial launch in mid-2026. CFO Alex Thurman stated the near-term focus is cash flow breakeven, not profitability, to allow for continued pipeline investment. He noted the company generated modest cash in Q3 but will prioritize R&D spending.

Michael Sarcone from Jefferies asked about expectations for quarterly cadence in the second half of the year and requested an update on Penumbra's market share in PE and DVT.

Answer

CEO Adam Elsesser anticipated traditional seasonality with a sequential build in Q3 and a strong Q4. On market share, he estimated Penumbra holds over 50% in DVT and has made a 'significant dent' in PE, attributing the success to the clinical benefits of the company's CAVT technology platform.

Michael Sarcone from Jefferies asked about the assumptions for China baked into the 2025 guidance, given its significant headwind in 2024. He also inquired about the potential impact of recent M&A activity in the space on competitive dynamics.

Answer

CEO Adam Elsesser and EVP Jason Mills explained that China will still be a headwind in the first half of 2025, though less than in 2024, before becoming de minimis in 2026. They noted that excluding China, underlying growth is accelerating. Regarding M&A, Adam Elsesser stated that while they welcome new ownership in the field, it does not change Penumbra's strategy or current momentum.

Michael Sarcone asked for an update on Penumbra's market share in the U.S. VTE market, across both PE and DVT. He also inquired about the hospital value analysis committee (VAC) process for the newly cleared Bolt 6X and Bolt 12, and their potential pricing.

Answer

CEO Adam Elsesser stated it was premature to give exact market share numbers but noted significant share shifts toward Penumbra, particularly in PE, driven by the speed and safety profile of Flash 2.0. He confirmed that the new Bolt 6X and 12 products will need to go through standard hospital VAC processes and that CAVT products generally have a higher price point than legacy non-CAVT systems.

Michael Sarcone, on for Matt Taylor, sought clarification on whether the $5 million tariff impact was a net figure including mitigation efforts, and asked about the company's confidence in the U.S. Epilepsy guidance given recent procedure deferrals.

Answer

CFO Alex Shvartsburg confirmed that the estimated $5 million tariff impact does account for mitigation strategies, including some marginal pricing actions. President of Global Epilepsy Stephanie Bolton addressed the U.S. Epilepsy outlook, stating the company remains confident in its long-term mid-single-digit growth trajectory. She emphasized the large, underpenetrated market for drug-resistant epilepsy and the company's focus on maximizing VNS therapy access as the market leader.

Michael Sarcone from Jefferies asked for details on the timeline for implementing tariff mitigation strategies, the potential EPS offset, and Teleflex's current positioning for more aggressive pricing.

Answer

CFO John Deren described the $55 million tariff impact as a 'worst-case' scenario before mitigation, highlighting strategies like optimizing USMCA exemptions and sourcing. CEO Liam Kelly added that spending controls are already in place and that the company plans to accelerate its planned 30-50 basis point price increase, targeting non-contracted business first if tariffs persist.

Michael Sarcone asked about Alcon's view on potential tariff risks and any related supply chain vulnerabilities.

Answer

CEO David Endicott acknowledged the dynamic is hard to read but stated Alcon is in a relatively fortunate position because it manufactures largely within the regions it serves (e.g., U.S. production for the U.S. market). While this doesn't eliminate supplier tariff risk, the company has identified these risks and created contingency plans. He emphasized that Alcon's geographic and product diversity provides a natural buffer against such issues.

Michael Sarcone asked about the key milestones Alcon needs to achieve before the broader commercial launch of Unity in Q2 2025. He also inquired about the factors influencing the launch timing for the next-generation PanOptix IOL and its potential economics.

Answer

CEO David Endicott explained that the pre-launch period for Unity is focused on fine-tuning the system and gathering robust data to prove its superior value and justify a premium price over the successful CENTURION and CONSTELLATION platforms. For the next-gen PanOptix, he said they are currently evaluating different optical designs to enhance performance and will decide on the final product and launch timing in the coming months, likely in the first half of 2025, adding it was too early to discuss pricing.

Michael Sarcone of Jefferies asked for an explanation of the flat sequential and down year-over-year recurring revenue, requested color on TULSA procedure volume growth in the quarter, and inquired about the breakdown of the four new system installations between capital sales and placements.

Answer

CEO Arun Menawat clarified that quarterly revenue fluctuations are more related to the timing of product shipments than underlying procedure volume and that the mix between capital sales and recurring revenue will continue to shift. He noted that while Q2 procedure volume was slightly lower than Q1, some hospitals paused capital decisions ahead of the reimbursement proposal. Menawat stated that most of the new installations in 2024 will be placements, which are expected to convert to capital sales over time as sites build economic models.