Mike Matson

Mike Matson asked if Stryker is implementing a pricing increase for Mako 4 relative to the older version, and if the upcoming Mako Shoulder and Spine launches will involve upgrade fees that could become meaningful revenue drivers. He also inquired about the $200 million tariff impact for 2026, specifically if it will be fully absorbed and if mitigation efforts can reduce its overall impact over time.

Answer

Jason Beach, VP of Finance and Head of Investor Relations, Stryker, declined to disclose base robot pricing for competitive reasons but confirmed that extra applications require a one-time software fee upon installation. Preston Wells, CFO, Stryker, stated that the $200 million tariff impact for 2026 is net of mitigation activities and is built into the company's expectations. Kevin Lobo, Chair and CEO, Stryker, emphasized that despite the total $400 million tariff impact, Stryker is still driving meaningful margin expansion, demonstrating its built-in earnings power.

Mike Matson asked if Stryker is getting a pricing increase for Mako 4 relative to the older version, and if there are upgrade fees for customers wanting to add Mako shoulder and spine capabilities to existing systems, and whether these could become meaningful drivers. He also inquired about the incremental $200 million tariff impact for 2026, whether it will be fully absorbed, and if mitigation efforts can reduce this impact over time.

Answer

VP of Finance and Head of Investor Relations Jason Beach declined to disclose base robot pricing for competitive reasons but confirmed that extra applications like shoulder incur a one-time software fee, consistent with Stryker's Mako approach. CFO Preston Wells stated the $200 million incremental tariff is net of mitigation activities and built into expectations. Chair and CEO Kevin Lobo highlighted that despite a total of $400 million in tariffs, Stryker is still driving meaningful margin expansion, demonstrating its enhanced earnings power.

Mike Matson of Needham & Company asked for details on the new Broadway large bore catheter, including its launch timing and FDA clearance for aspiration. He also inquired about the trend of total shoulder procedures moving to the ASC setting and its impact on volume versus price.

Answer

Chair & CEO Kevin Lobo confirmed the Broadway catheter is approved and cleared for aspiration use in the US and is currently being launched, with positive early feedback on its trackability. On shoulders, he acknowledged some pricing pressure in the ASC setting but stated it has not slowed the division's strong double-digit growth, which is driven by a superior implant portfolio and will be further boosted by the full launch of Mako shoulder next year.

Mike Matson questioned the disparity in U.S. versus international sales growth, particularly the weaker U.S. performance, and asked if the strong international growth was sustainable. He also inquired about the potential for further portfolio divestitures after the GI exit.

Answer

Patrick Beyer, President and Chief Executive Officer, explained that U.S. general surgery was impacted by the exit of minor product lines and a focus away from OEM smoke evacuation. He noted strong international performance but cautioned about potential Q1 implications. Regarding divestitures, he stated that while portfolio management is ongoing, no major exits are currently planned beyond the GI business.

Mike Matson asked about the drivers behind the stronger international performance versus weaker U.S. sales, particularly whether international strength was due to one-off stocking orders or true demand. He also inquired if any further portfolio exits or divestitures were anticipated after the GI review.

Answer

Patrick Beyer, President and CEO, attributed weaker U.S. general surgery to portfolio management, including exiting minor product lines and focusing on direct smoke, which impacted the U.S. OEM business. He confirmed international strength was true demand, not stocking, but noted the strong Q4 might influence Q1 internationally. He stated that while portfolio management is continuous, no major exits beyond GI are currently planned, expressing strong conviction in current growth platforms.

On behalf of Mike Matson, Joseph from Needham & Company inquired about the competitive landscape for Buffalo Filter amid new state legislation and asked about the interplay between supply chain constraints, production capacity, and Salesforce expansion.

Answer

Patrick Beyer, President & CEO, stated that the competitive landscape for Buffalo Filter remains unchanged despite growing legislative support. He also confirmed that ConMed is making progress on resolving supply chain issues and expects a significantly better position by year-end, while noting that sales professionals are added dynamically throughout the year as opportunities arise.

Mike Matson asked for more details on the drivers of growth within the healthcare business, including geographic performance, customer types (hospitals vs. ASCs), and specific product lines. He also requested an update on AST capacity, current constraints, and the speed of addressing these through expansion.

Answer

Dan Carestio, President and CEO, reported good strength across all geographies in healthcare, with particular robustness in the U.S. and recovery in other regions, without calling out specific areas of exceptional strength. For AST capacity, Mr. Carestio explained that expansion is a 2-3 year process, noting that STERIS has been steadily adding new capacity for the past eight years, with current expansions completed, in process, and planned, ensuring a good position in most global geographies.

Mike Matson asked for more granular details on the healthcare business growth, specifically regarding geographies, customer types (hospitals vs. ASCs), and product lines. He also inquired about AST's current capacity constraints and the speed at which new capacity can be brought online.

Answer

President and CEO Dan Carestio noted broad strength across geographies, particularly in the U.S., with recovery elsewhere, but did not call out specific customer types or product lines. Regarding AST, he explained that capacity expansion is a long process (2-3 years per plant) but confirmed that STERIS has been steadily adding capacity for eight years and is in a good position across most geographies.

Mike Matson of Needham & Company inquired about the net impact of various U.S. policy and spending trends on the Life Sciences business and sought confirmation on the drivers behind the increased free cash flow guidance.

Answer

Daniel Carestio, President & CEO, explained that while the landscape is complex, factors like manufacturing reshoring and growth in biologics should support the Life Sciences business, with the vaccine-related slowdown already absorbed. Michael Tokich, Senior VP & CFO, confirmed the higher free cash flow outlook is due to better-than-expected working capital performance, particularly in inventory and receivables.

Mike Matson from Needham & Company inquired about the rationale from MolDX for holding a CAC meeting, sought confirmation that the meeting would not affect the existing payment rate, and asked if the company would reduce its cash burn in response to a potentially longer LCD timeline.

Answer

Chairman & CEO Lishan Aklog explained that the CAC meeting is a formal process to supplement the clinical data with on-the-record expert opinion, which helps build consensus among the participating MACs for a coverage determination. He confirmed the $1,938 payment rate is separate and not part of this process. Both Dr. Aklog and CFO Dennis McGrath stated the company will not reduce its cash burn or test volume, citing a sufficient cash runway into 2026, the ability to retroactively bill Medicare, and the strategic need to maintain momentum for upcoming coverage decisions.

Mike Matson of Needham & Co. inquired about the rationale from MolDX for holding a CAC meeting, sought confirmation that the meeting would not affect the established payment rate, and asked if the company would reduce its cash burn in light of a potentially longer timeline to a final LCD.

Answer

Chairman and CEO Lishan Aklog explained the CAC meeting allows MolDX to supplement the clinical evidence with on-the-record expert opinion to build consensus among the MACs. He confirmed the meeting is strictly about coverage and does not impact the payment rate. Aklog stated they will not slow down operations. President & CFO Dennis McGrath affirmed this, citing a strong cash position of $31.1M, a manageable burn rate, capital market optionality, and a significant backlog of claims being pursued for collection.

Mike Matson of Needham & Company asked about the pricing and gross margin profile of the VOXIe 5 product compared to portable oxygen concentrators (POCs). He also sought clarification on the purpose of the Cemiox clinical trials and inquired about plans for enhancing connectivity features across Inogen's product portfolio.

Answer

EVP & CFO Michael Bourque declined to provide product-specific margin details but noted that pricing varies by sales channel. CEO Kevin Smith added that VOXIe 5 is crucial to the company's profitability strategy by improving rental channel economics and enabling bundled sales. Smith clarified that the Cemiox trials are designed to support reimbursement by generating health economic data and to develop marketing claims. He also affirmed that creating a unified, connected digital ecosystem for all products is a strategic priority to enhance customer value and brand loyalty.

Mike Matson of Needham & Company sought clarification on the net P&L impact from tariffs, expectations for total company sequential revenue growth, and the potential market impact from a competitor's temporary pump sales suspension.

Answer

CFO Brian Bunnell confirmed the net tariff headwind would be roughly $10 million. CEO Vivek Jain highlighted expectations for record sequential growth in the core Consumables and IV Systems segments but was less specific on total company growth due to Vital Care variability. Regarding competitive dynamics, Jain emphasized focusing on ICU's long-term technology value, assuming all competitors will ultimately be active in the market.

Joseph, on behalf of Mike Matson, asked for details on the marketing strategy for Plum Solo and Duo, which features resonate most with customers, whether customers are expected to adopt a mix of both pumps, and the potential timeline from submission to clearance for the CAD and Medfusion pumps.

Answer

Executive Vivek Jain explained that the marketing highlights the core Plum value proposition of safety and air-in-line management, now enhanced with modern features like a multi-tasking display. He confirmed that customers may opt for a mix of devices to suit different care settings. Regarding regulatory timelines for CAD and Medfusion, Jain cautioned against extrapolating from the Plum clearances (which took about a year), as those were developed in-house, unlike the acquired CAD and Medfusion products, which could lead to a different process.

Mike Matson from Needham & Company questioned the sustainability of Motiva's premium pricing in the U.S. and asked about the competitive response from larger incumbents.

Answer

CEO Peter Caldini affirmed that the company is successfully maintaining its premium pricing without significant pushback, attributing it to the product's superior benefits. He characterized the competitive response as localized and fragmented, stating there has been no major, coordinated reaction from competitors to date.

Mike Matson sought clarification on whether increased competition in Interventional Technologies was concentrated in small-bore products or seen across the entire Vascade portfolio. He also asked about the company's appetite for M&A, particularly whether they would focus on fixing the Interventional business before pursuing further acquisitions.

Answer

CEO Christopher Simon confirmed that competition is being felt 'across the board' for the Vascade portfolio, though it is more pronounced in interventional cardiology. He detailed a comprehensive response plan, including new leadership, sales force reorganization, and building a strategic accounts team. Regarding M&A, Simon stated that it is 'off the table' in the near-to-intermediate term, with the company focused on execution and fixing the Interventional business. The only potential deal mentioned was exercising an existing option for the PerQseal Elite product.

Mike Matson of Needham & Company asked about the U.S. market opportunity for Prosigna and whether the company would consider share repurchases given its large cash balance and valuation.

Answer

CCO John Leite described the Prosigna market as mature but with clear opportunities, citing an annual incidence of over 200,000 patients and upcoming OPTIMA trial data. Regarding capital allocation, CEO Marc Stapley stated the primary focus is on investing in business growth. CFO Rebecca Chambers added that while the M&A landscape is attractive, the company maintains a high bar for potential deals.

Joseph Conway, for Mike Matson of Needham & Company, asked about the drivers of Decipher's market share gains and requested metrics on Afirma GRID adoption compared to Decipher GRID.

Answer

CEO Marc Stapley explained that share gains are driven by the sales team actively using the company's robust clinical evidence, which in turn leads to influential recognitions like NCCN guideline inclusion. Management confirmed that Afirma GRID adoption is 'roughly around the same' as Decipher GRID, which has been taken up by about half of prescribing physicians.

Mike Matson from Needham & Company asked if the Tempus sales force could be incentivized to focus on specific cancer types once reimbursement is secured and questioned the data status and milestones for achieving colorectal cancer (CRC) reimbursement.

Answer

CEO Christopher Hall explained that while the Tempus team already focuses on key indications like lung and breast cancer, it is difficult to ask physicians to limit their use of the test to only reimbursed indications. He noted they have some ability to direct focus but not complete control. Regarding CRC, Hall described the preliminary VICTORY study data as 'phenomenal' but stated that the prospective study is ongoing. Reimbursement submission will follow the study's completion and publication, with the timing still to be determined.

Joseph Stringer, on behalf of Mike Matson of Needham & Company, asked about the international product expansion strategy, when international growth might outpace U.S. growth, and for clarification on the EOS product launch pipeline following Vertiglyde.

Answer

CEO Dave Bailey stated that international markets like Europe and the Middle East are growing rapidly and could outpace U.S. growth due to lower market share. He confirmed EU MDR approvals will facilitate a quarter-by-quarter product launch cadence. For the EOS portfolio, he said Vertiglyde's first cases are expected in August, and the next major product launch will be 'Ellie', which they hope to submit to the FDA early next year.

Speaking for Mike Matson, Joseph Conway asked about the market size for the DF2 system's expanded indication and the product launch pipeline for the OPSB division. He also inquired about the company's manufacturing capacity to support the numerous upcoming product launches.

Answer

CEO David Bailey stated the OPSB launch pipeline is strong, with a high likelihood of at least four launches this year, including a new bracing sensor and products for developmental hip dysplasia. CFO Fred Hite explained that while there's no specific market data for the DF2 indication, it's creating a new market by replacing the difficult Spica cast and is rapidly becoming a new standard of care. Regarding capacity, Hite noted they are currently running two shifts with a third available and have been planning for increased demand since early 2024.

Mike Matson of Needham & Company asked about the salesforce integration plan for the BioTronic acquisition, including potential overlap and disruption risk. He also inquired about recent trends in bariatric surgery volumes and the performance of the Titan SGS stapler.

Answer

CEO Liam Kelly detailed BioTronic's geographic revenue mix (50% EMEA), which complements Teleflex's strength in the Americas, creating an opportunity for a larger, combined salesforce with revenue synergies. Regarding Titan, he stated that while overall bariatric surgery volumes are declining due to GLP-1s, Teleflex still expects double-digit growth for the product as it continues to gain market share.

Mike Matson of Needham & Company asked about plans for reimbursement for Rhapsody in the Office-Based Lab (OBL) setting. He also inquired how the acquired BioLife hemostatic products would be sold and how they synergize with Merit's existing product portfolio.

Answer

CFO Raul Parra clarified that the company's primary focus is on the broader hospital outpatient (HOPD) setting, which represents the largest market opportunity. CEO Fred Lampropoulos added that BioLife's products are highly versatile and will be sold across both peripheral and cardiac divisions. He highlighted that they are often used in conjunction with existing Merit devices, like radial compression bands, to achieve faster hemostasis.

Mike Matson asked if the next-gen clinical trials would cannibalize existing revenue or be purely additive, and if a competitor's approval for in-flight device use alters the competitive landscape.

Answer

CEO Waleed Hassanein asserted the trials are additive, targeting new indications like DVD hearts. He dismissed the competitive development, stating the competitor's device is impractical and cost-prohibitive to fly due to its size, weight, and battery limitations, reinforcing its intended "back-to-base" model.

Mike Matson of Needham & Company sought clarification on the U.S. tariff impact, including the rate and the timing of its effect on gross margin, and asked about the initial labeling and marketing plan for the new urology system.

Answer

CFO Yair Malca explained the tariff rate was reduced to 10% and the guided 2-3% gross margin impact is an annualized figure, with the 2025 impact being lower. CEO Moshe Mizrahy reiterated the urology platform is launching with indications for blood circulation and pain relief while the company pursues a future indication for erectile dysfunction, with the upcoming user meeting focused on urologists.

Mike Matson from Needham & Company sought clarification on the long-range plan, asking if the company was backing off its 12-13% growth target. He also questioned the viability of the non-clinical business and whether an exit was possible.

Answer

CEO Tony Zook clarified he is not backing off the long-range plan but is reframing it with a 10%+ growth anchor from the core business, supplemented by new products and business development. He stated the company is committed to the non-clinical pharma business due to its strategic value in biomarker validation and technology access. CFO Jeff Sherman added that operational efficiencies are expected to improve the segment's viability.

Mike Matson from Needham & Company asked for clarity on the long-range growth plan, questioning if the company was lowering its target, and also inquired about the strategic rationale and profitability of the struggling non-clinical business.

Answer

CEO Tony Zook explained the long-range plan is anchored by 10%+ growth from the core business, with future products and M&A providing upside, and stressed a focus on near-term execution. Zook and CFO Jeff Sherman defended keeping the non-clinical business for its strategic value in R&D and new product launches, despite its current weakness and historically lower margin profile.

Joseph Conway, on for Mike Matson, asked why more of the strong gross margin improvement didn't translate to EBITDA margin, and inquired about the Manafuse launch opportunity and any potential device reclassification risk.

Answer

CFO Phillip Berry explained that the gross margin gains were strategically reinvested in operating expenses like medical education and product launches to fuel sustainable growth. CEO Matthew Trerotola positioned Manafuse as a market-expanding product for the large fracture market. He also stated there is no meaningful discussion of reclassification and believes such a change could potentially accelerate growth.

Inquired about revenue generation from the trial GraftAssure kits before FDA clearance, the specifics of Bio-Rad's support for the clinical trial, and the potential competitive response from existing lab-based competitors upon market entry.

Answer

The company does not project material revenue from the RUO product this year, as the main opportunity is the regulated product post-approval. Bio-Rad's support will be in the form of instruments and consumables, which will offset a significant portion of trial expenses, but a specific dollar amount was not disclosed. They anticipate competitors will leverage their market tenure and sample volume, but are confident their own data quality will be compelling and encourage head-to-head comparisons.

Followed up with questions about the Sublime product line's growth contribution and the apparent disconnect between strong Q1 profitability and the more conservative full-year guidance.

Answer

Executives clarified that Sublime is on track and met its Q1 plan, but its growth contribution was smaller than Pounce and SurVeil due to lower average selling prices. The strong Q1 profitability was attributed to the timing of expenses, as the company focused heavily on the SurVeil launch. They expect operating expenses to increase in the second half of the year to support upcoming product launches (Pounce LP, Pounce venous, microcatheters).