Richard Newitter

Richard Newitter asked for clarification on PYLARIFY's pricing and unit growth in Q4 2025, noting a 3% unit growth and a 500 basis points 340B-driven price headwind in Q3, which suggested a high single-digit unit growth in Q4. He also requested details on Lantheus's market assumptions for PYLARIFY in 2026, specifically regarding unit and price expectations.

Answer

Robert Marshall (CFO and Treasurer, Lantheus) confirmed Q4 2025 was a strong quarter for PYLARIFY, driven by both volume and a favorable gross-to-net price change, with approximately 4% volume growth. For 2026, he anticipates low single-digit volume growth, similar to 2025. Mr. Marshall noted potential competitive pricing pressure as another F-18 agent loses pass-through, leading to a forecast that assumes incremental price erosion (mid-teens to high-teens gross-to-net adjustment), while emphasizing Lantheus's disciplined pricing strategy. Mary Anne Heino (Executive Chairperson and Interim CEO, Lantheus) affirmed the analyst's interpretation of their prudent guidance and potential upside.

Richard Newitter sought clarification on PYLARIFY's pricing and unit growth performance in Q4 2025, specifically asking about the drivers behind a potential high single-digit unit growth rate and whether the market improved or share was regained. He also requested details on the market, unit, and price assumptions for PYLARIFY in 2026, including the impact of potential price erosion and the lack of contribution from the new PSMA PET formulation in the current guidance.

Answer

Robert Marshall (CFO and Treasurer) confirmed strong Q4 2025 PYLARIFY performance driven by volume and favorable gross-to-net price changes, noting approximately 4% volume growth. For 2026, Mr. Marshall anticipates low single-digit volume growth and assumes incremental price erosion due to competitive dynamics, particularly as a competitor loses pass-through status, leading to a sequentially neutral net revenue outcome for each quarter. Mary Anne Heino (Executive Chairperson and Interim CEO) affirmed Mr. Newitter's interpretation of the prudent guidance assumptions.

Richard Newitter inquired about any directional comments regarding 2026 guidance, specifically in relation to consensus earnings of $5.75 and Polarify sales hovering over $900 million, given the increased visibility.

Answer

Brian Markison, CEO, declined to provide 2026 guidance but emphasized the current market stabilization, continued year-over-year and sequential volume growth for Polarify, and ongoing preparations for the launch of the new F18 formulation.

Richard Newitter asked for directional comments on 2026 guidance, specifically regarding PYLARIFY's performance and potential earnings resets, in relation to current consensus estimates.

Answer

CEO Brian Markison declined to provide 2026 guidance but emphasized the current market stabilization for PYLARIFY, consistent year-over-year and sequential volume growth, and ongoing preparations for the new formulation launch.

Richard Newitter of Truist Securities inquired about the earliest possible commercial launch timeline for the new Polarify formulation and questioned why this next-generation product was not developed sooner.

Answer

CEO Brian Markison explained that R&D timelines are not fixed and the formulation is ready at the "right time." President Paul Blanchfield outlined a potential launch in the fall of 2026, following a March 2026 PDUFA date and subsequent processes to secure coding, coverage, and payment, including Transitional Pass-Through (TPT) status.

Richard Newitter sought clarification on the combined earnings impact of the LMI and Evergreen acquisitions for 2026 and asked if the company still anticipates double-digit revenue growth in 2026.

Answer

CEO Brian Markison confirmed that double-digit revenue growth for 2026 is 'definitely in the cards.' CFO Robert Marshall reaffirmed that the combined dilution from both acquisitions is still expected to be in the low single-digit percent range for 2026, relative to the prior guidance midpoint, once the LMI deal closes.

Richard Newitter asked for color on the cadence and pacing of PYLARIFY's guided low-to-mid single-digit growth, specifically questioning if growth is expected in all quarters of 2025.

Answer

CFO Robert Marshall explained that the guidance range captures different scenarios. The low end implies a flattish first half with modest growth in the second half as the company anniversaries its strategic partnership contracts. The high end of the range implies growth in the first half, accelerating to mid-to-high single digits in the back half of the year.

Richard Newitter asked for reconciliation on why management used the word 'sustain' rather than 'grow' for the PYLARIFY franchise in 2025, given the positive CMS pricing update. He also questioned the company's level of confidence in the pricing stability and their direct dialogue with CMS.

Answer

CEO Brian Markison clarified that the company does anticipate volume growth for PYLARIFY. President Paul Blanchfield added that the term 'sustain' reflects the transitory net price compression from strategic partnerships that will annualize in 2025. Regarding CMS, he expressed confidence in their position based on past engagement and the agency's openness to using ASP-based payments in the future.

Richard Newitter asked for details on Q4 system sales, including the average selling price (ASP), number of greenfield placements, operating leases, and trade-ins, and sought confirmation on the implied 2026 system placement number. He also questioned the health of underlying procedure demand, asking if recent issues were self-inflicted or if there were underlying demand-side or penetration curve challenges, seeking confidence in the company's visibility and execution.

Answer

President and CEO Larry Wood stated that the Q4 system ASP of $425,000 reflects customer mix and does not indicate softness, expecting 2026 ASPs to be flat to up. EVP and CFO Kevin Waters confirmed that roughly flat system sales with a slight ASP increase is a fair assumption for 2026. Regarding procedure demand, Mr. Wood highlighted almost 70% year-over-year procedure growth in Q4, indicating healthy demand. He clarified that the revenue shortfall was driven by customer ordering behavior influenced by discounts, not procedure demand. He emphasized that the recent changes are foundational for long-term health, improved ASP, and steady revenue mirroring procedures, aiming to accelerate procedure growth through improved commercial execution and a compelling value proposition for Aquablation.

Richard Newitter asked for details on Q4 system placements, including greenfields, operating leases, and trade-ins, and sought confirmation on the 2026 system placement number. He also questioned the health of underlying demand for procedures, distinguishing self-inflicted issues from demand-side problems, and how the company plans to build confidence in its visibility and execution.

Answer

Larry Wood, Chief Executive Officer, noted that Q4 system ASP of $425,000 did not reflect softness, and he expects 2026 system ASPs to be flat to up, with greenfield placements similar to this year. Kevin Waters, Chief Financial Officer, confirmed that roughly flat system sales with a slight ASP increase is a fair assumption for 2026. Mr. Wood emphasized strong Q4 procedure growth (almost 70% year-over-year) as evidence of healthy underlying demand, attributing revenue shortfalls to customer ordering behavior driven by past discounts. He asserted that these 'foundational, fundamental things' are now behind them, and the sales force reorganization will improve execution, with more details on Aquablation's value proposition to be shared at Investor Day.

Richard Newitter of Truist Securities inquired about the potential impact of the proposed physician fee schedule reduction on surgeon behavior and asked for the reasoning behind lowering the assumption for replacement system sales this year.

Answer

President & CEO Reza Zadno asserted that adoption is driven by clinical outcomes, not physician fees, and that the stable hospital facility reimbursement is the more critical economic factor. EVP & CFO Kevin Waters explained that the focus for 2025 is on the large greenfield market opportunity, and a more robust replacement cycle is now expected in 2026, aligning with the 5-7 year useful life of systems placed in 2021.

Richard Newitter asked about the 50/50 split of system sales between high-volume and low-to-mid-volume hospitals and whether this shift could make utilization growth more challenging. He also sought clarification on whether the potential 150 basis point tariff headwind posed a risk to the reiterated EBITDA guidance.

Answer

Executive Sham Shiblaq responded that placing systems in low or medium-volume hospitals is a key growth driver, as the technology often helps those accounts become high-volume centers. Executive Kevin Waters clarified that while tariffs could create a $5 million gross margin headwind, the company has already identified offsetting operational efficiencies, allowing them to reaffirm the full-year adjusted EBITDA guidance.

Richard Newitter of Truist Securities asked if sales force distraction from HYDROS training impacted Q4 or Q1 results and sought details on the $3 million in 2025 replacement revenue guidance, including the expected ASPs for these trade-ins.

Answer

CCO Sham Shiblaq confirmed that rep training for HYDROS was accelerated during the Q4 downtime and is no longer an issue. CFO Kevin Waters clarified that the $3 million in replacement revenue is separate from the 210 new system sales and that future trade-in ASPs for older systems will be significantly higher than the initial exchanges seen in late 2024. CCO Shiblaq reiterated that the primary focus remains on greenfield sales.

Richard Newitter asked for details on the HYDROS trade-in and exchange program, including the cutoff criteria and financial impact. He also probed for early commentary on 2025 expectations, particularly regarding system ASPs and potential flow-through from the strong Q4 jump-off point.

Answer

CFO Kevin Waters distinguished between a limited 'exchange' program for very recent AquaBeam purchasers, which had a nominal revenue impact, and a formal 'replacement' cycle planned for 2025. Executive Sham Shiblaq emphasized that the sales team is entirely focused on and incentivized for new greenfield accounts in 2024. Regarding 2025, management expressed confidence in the HYDROS launch and ASPs but declined to provide specific guidance until their next earnings call.

Richard Newitter questioned the rebound in enabling technology performance, asking what changed in the market environment and how the company's operating lease strategy for capital placements is contemplated in 2026 guidance.

Answer

Keith Pfeil, President and CEO, described 2025 as a 'lumpy year' for enabling tech, with Q4 seeing pipeline deals close after elongation. He confirmed a more aggressive operating lease and placement strategy for 2026 to drive implant pull-through. Kyle Kline, Chief Financial Officer, added that 2026 guidance reflects a higher mix of lease approaches.

Richard Newitter of Truist Securities congratulated Globus Medical on its performance, particularly the rebound in enabling technology sales. He sought clarification on what factors contributed to this improvement and how the company's operating lease or placement strategy for capital equipment is factored into its 2026 guidance.

Answer

Keith Pfeil, President and CEO, described 2025 as a 'lumpy' year for enabling tech, with pipeline deals that had elongated throughout the year finally closing in Q4. He noted a robust pipeline for 2026 and confirmed a more aggressive approach to operating leases and placements to drive implant pull-through. Kyle Kline, Chief Financial Officer, added that the 2026 guidance contemplates a mix of sales and fair market value leases/placements, with a higher mix of lease approaches expected compared to 2025.

Richard Newitter from Truist Securities asked for a breakdown of the components within the reaffirmed full-year guidance, questioning the pushes and pulls across segments like U.S. Spine, International, and Nevro since the initial outlook was provided.

Answer

SVP & CFO Kyle Kline reiterated the full-year guidance range for revenue and EPS, stating that after a light Q1 and a solid Q2, the company feels comfortable with the current range. Kline declined to provide specific breakdowns of the guidance components but confirmed confidence in U.S. Spine and Enabling Tech, acknowledging some international headwinds.

Richard Newitter from Truist Securities sought confirmation that the full Nevro contribution was in the reaffirmed guidance and asked about the implied organic growth. He also questioned the outlook for the capital equipment sales cycle.

Answer

COO and CFO Keith Pfeil confirmed Nevro is in the guidance and said the standalone organic guide is not 'materially different.' CEO Dan Scavilla addressed the capital outlook, stating that while he doesn't expect an immediate 'snap back' in sales cycles due to macro uncertainty, the company is focused on its long-term, 5-to-10-year strategy where minor quarterly shifts are manageable.

Richard Newitter of Truist Securities sought clarification on the expected "meaningful contribution" from ortho robotics in 2025 and asked where the company has more confidence in outperforming 2025 consensus estimates: top-line growth or margin improvement.

Answer

President & CEO Dan Scavilla clarified that while ortho robotics will not be the main growth driver in 2025, its revenue contribution will become more significant and set the stage for future growth. COO & CFO Keith Pfeil indicated that if there were to be accelerated outperformance, it would most likely come from COGS, as the company has the ability to take out more cost and turn in-sourced inventory quicker to drive profitability.

Richard Newitter requested an update on the next-generation MCT device, asking what steps are needed for FDA approval and commercial launch in H1 2027, including details on enhancements and features.

Answer

Quentin Blackford, President and CEO, confirmed the H1 2027 launch, noting that Zio AT's strong performance allows for strategic decisions. The primary change involves transitioning to a new mobile gateway to meet evolving FDA expectations and cybersecurity requirements, rather than updating the older gateway. The new device will feature a 21-day wear time and enhanced algorithms.

Richard Newitter asked for an update on the next-gen MCT device, including the specific steps needed for FDA approval, planned enhancements, and confidence in the first-half 2027 commercialization timeline.

Answer

President and CEO Quentin Blackford confirmed the first-half 2027 timeline, explaining that the delay allows for a strategic shift to a new mobile gateway to address evolving FDA expectations and cybersecurity concerns, rather than updating the old gateway. The new device will offer 21-day wear time, enhanced algorithms, and improved patient experience.

Richard Newitter of Truist Securities, Inc. asked about the primary drivers behind the significant growth acceleration, questioning whether it was due to underlying market expansion, a halo effect from PFA procedures, or market share gains.

Answer

President and CEO Quentin Blackford attributed the growth to a combination of all three factors. He confirmed a likely benefit from PFA procedure monitoring, noted that iRhythm's long-term monitoring market share has increased to nearly 72%, and emphasized that the overall market is expanding, driven by a concerted strategy to push prescribing into primary care settings, which is now a key practice in large IDNs.

Richard Newitter asked if the senior FDA leadership iRhythm engages with has remained consistent and also inquired about the long-term potential for the primary care channel.

Answer

CEO Quentin Blackford confirmed that the senior FDA leaders they work with have remained the same, which he views favorably. On primary care, he expressed high bullishness, stating the true market is the 27 million patients presenting in that channel. He cited early trial data showing high diagnostic yields (80-90%+) in at-risk populations, reinforcing his confidence in the strategy to expand the market through primary care.

Richard Newitter from Truist Securities questioned the confidence in the new Q3 2025 MCT submission timeline and the estimated remediation spending, given past challenges with timelines and costs.

Answer

CEO Quentin Blackford stated that current efforts go beyond the FDA's observations to rebuild the entire quality management system, validated by a new consulting firm. He explained the $15 million annual spend reflects this comprehensive approach but will be offset by other corporate actions, allowing for continued profit improvement. He expressed confidence in the Q3 '25 timeline as a conservative estimate for the proactive work being done.

Richard Newitter questioned the implied operating profit margin being lower than previously expected, specifically asking for details on the steep Q1 decline despite extra selling days and a breakdown of operating margin components (OpEx vs. gross margin). He also sought an update on customer discussions regarding the three discrete products causing headwinds, asking about current visibility and confidence in the 300-400 basis point impact.

Answer

Daron Smith, EVP and CFO, attributed the Q1 operating margin pressure to lower sales needing to absorb fixed costs, emphasizing the company's commitment to maintaining its structure for 2027 growth. He noted expected variable margin expansion from the Integer Production System, with mixed impacts on gross margin from fixed cost absorption. Payman Khales, President and CEO, confirmed that Q4 performance and ongoing customer discussions are in full alignment with their initial modeling and guidance for the 300-400 basis point impact, reflecting extensive homework and customer input.

Richard Newitter inquired about the overall contribution from new PMA products, their expected performance in 2026, and the progression of development-stage products to commercialization by 2027. He also asked for clarification on the steep Q1 operating margin decline despite extra selling days, and a breakdown of gross margin versus OpEx. Additionally, he sought an update on customer discussions regarding the three discrete products causing a 300-400 basis point impact, and Integer's visibility on their forecasting.

Answer

Payman Khales, President and Chief Executive Officer, explained that the 15%-20% growth model for PMA products over 3-5 years accounts for current dynamics, with good visibility on existing products and expected launches. Diron Smith, Executive Vice President and Chief Financial Officer, attributed the Q1 operating margin pressure to lower sales absorbing fixed costs, expecting improvement as sales grow sequentially. Mr. Khales confirmed Q4 results aligned with expectations and customer discussions support the 300-400 basis point headwind, noting it's an unusual event related to market adoption.

Richard Newitter questioned Integer's forecasting process, given the historical reliability despite lumpiness and the current aberration of multiple customer changes. He asked if any changes to the process were planned and how to interpret the conservatism of the 2026 guidance. He also sought clarification on whether the affected EP and neuromodulation products were already on the market in 2025 and if any were related to finished goods where Integer had a larger manufacturing percentage.

Answer

Payman Khales, President and CEO-elect, acknowledged the unusual nature of the situation but stated that Integer's forecasting algorithm has not changed. He explained that longer-term pipeline products are risk-adjusted, and shorter-term production plans are based on customer forecasts. Khales reiterated that the current situation of multiple, large-magnitude changes in a short period is highly unusual and not expected to be recurring. He confirmed that all three impacted products (EP and neuromodulation) were on the market in 2025 and are expected to remain so in 2026, with Integer remaining the supplier. The issue is solely the rate of market adoption. Khales also stated that Integer had a good portion of the bill of material for these products but could not be more specific.

Richard Newitter questioned if Integer plans to change its forecasting processes given the recent unexpected customer forecast revisions and the conservatism of the 2026 guidance. He also asked if the impacted EP and neuromodulation products were already on the market or awaiting approval, and if any were finished goods where Integer has a larger manufacturing percentage.

Answer

Payman Khales, President and CEO-elect, stated that Integer's forecasting algorithms haven't changed, but the simultaneous, large-magnitude forecast revisions from multiple customers are 'highly unusual' and not expected to recur. He confirmed all three impacted products were already on the market in 2025 and will remain so, with Integer as the sole supplier. He specified Integer supplies a 'good portion of a bill of material' but could not be more specific on finished goods.

Richard Newitter asked for clarity on the expected cadence for revenue and adjusted operating income (AOI) in Q3 versus Q4. He specifically questioned if the Q2 pull-forward would lead to a lower-than-normal Q3 growth rate, followed by a comp-adjusted Q4.

Answer

COO Peyman Khales stated that the second-half growth is projected at 8%, with roughly equal growth rates expected in both Q3 and Q4. EVP & CFO Diron Smith added that AOI growth in the second half should be similar to the first half's 14% rate, with AOI margin expected to improve sequentially in both Q3 and Q4. Smith reiterated that the year-over-year sales growth for Q3 and Q4 would be very similar, around 8% at the midpoint.

Richard Newitter of Truist Securities asked if OEM customers are changing their engagement with Integer due to the tariff environment and requested an update on the company's order backlog trend.

Answer

CEO Joseph Dziedzic responded that OEMs are not rushing to make significant changes to their global manufacturing footprints, preferring to wait for more clarity on tariffs. He noted the order book has grown from $728 million at year-end to nearly $800 million, providing strong visibility, but he expects this figure to decline toward year-end as order lead times normalize and the Portable Medical exit is completed.

Richard Newitter questioned the fourth-quarter gross margin performance, which was below expectations despite strong revenue. He also asked for clarity on the expected gross margin trend in 2025 and its contribution to the overall operating margin expansion target.

Answer

President and CEO Joseph Dziedzic attributed the Q4 gross margin pressure to the inefficiencies associated with significant new product ramps, including hiring and training new associates. For 2025, he stated that Integer expects operating margin expansion to come from a combination of both gross margin improvement and operating expense leverage, though the mix may vary. He noted SG&A would likely grow closer to the sales rate while RD&E would grow at a slower rate.

Richard Newitter asked about any lingering Q4 impact from Hurricane Helene, the specific divisions affected, and for more detail on the relative softness in the Cardiac Rhythm Management & Neuromodulation segment during Q3.

Answer

Joseph Dziedzic, President and CEO, clarified the hurricane primarily impacted the Cardio & Vascular segment from facilities in Florida and the Dominican Republic, with a minor lingering cost impact expected in Q4. He reiterated that the Q3 CRM softness was anticipated based on customer order patterns seen at the start of the year, which indicated a normalization in the second half, and was not necessarily a reflection of a broader market trend.

Richard Newitter inquired about the Type 2 mix (40% of new patient starts) potentially implying moderating Type 1 growth, asking if this is due to market share dynamics or maturity, and followed up on guidance assumptions.

Answer

Flavia Pease (CFO) confirmed strong Type 2 performance and record new customer starts overall. She noted that Type 1 grew nicely year-over-year, comparable to Q3, but Type 2 is accelerating due to its significantly lower penetration (5% vs. 40% for Type 1). Eric Benjamin (COO) reiterated a balanced growth contribution from U.S. Type 1, U.S. Type 2, and International Type 1. For the follow-up, Flavia Pease (CFO) stated that the provided guidance range represents the upper and lower bounds, with faster AID penetration potentially leading to the top end.

Richard Newitter asked about the implications of Type 2 new patient starts reaching 40% of the mix, suggesting a potential moderation in Type 1 growth, and sought clarification on the factors driving this trend and the assumptions behind the upper and lower ends of the guidance range.

Answer

Flavia Pease, CFO, confirmed strong Type 2 performance and overall record new customer starts. She noted that while Type 1 grew nicely, Type 2 is accelerating due to its significantly lower penetration (5% vs. 40% for Type 1 AID). She reiterated that 85% of new volume comes from MDI users. Eric Benjamin, COO, added that U.S. Type 1 remains a significant growth driver despite higher penetration. For the guidance range, Flavia Pease stated that faster AID penetration could lead to the top end of the outlook.

Felipe, on behalf of Richard Newitter, asked about the customer acquisition cost (CAC) for Type 2 patients compared to Type 1, and how Insulet's scale could provide a long-term advantage in converting this patient population given the early stages of adoption.

Answer

Eric Benjamin (COO) explained that Insulet leverages its 25-year presence with Type 1 prescribers, creating strong commercial synergy and efficient activation of existing call points with SECURE T2D data. While activating new prescribers for Type 2 initially incurs higher costs due to education, Insulet manages this effectively and efficiently, maintaining a close eye on overall CAC.

Richard Newitter asked how the Type 2 indication is helping Insulet compete more effectively for Type 2 patients and to what extent the current momentum is attributable to the indication itself versus other marketing initiatives.

Answer

Eric Benjamin, EVP, Chief Product & Customer Experience Officer, explained that the formal indication is crucial for building the market as a first mover. He emphasized that the strong clinical data from the SECURE-T2D study resonates powerfully with prescribers. This evidence, combined with Omnipod's inherent simplicity and unique pay-as-you-go access model, creates a strong competitive advantage.

Richard Newitter of Truist Securities asked how the specific Type 2 indication is helping Insulet compete for those patients and whether the current momentum is driven more by the indication itself or by marketing initiatives.

Answer

EVP, Chief Product & Customer Experience Officer Eric Benjamin explained that the indication solidifies their first-mover advantage. He noted that clinical data from the Secure T2D study strongly resonates with prescribers. He added that Omnipod's differentiated simplicity and unique 'pay-as-you-go' pharmacy access model are also key competitive strengths in this patient population.

Richard Newitter asked if iDose TR re-administration is factored into the sequential improvement color for U.S. glaucoma in 2026. He also requested more details on Glaukos's Epioxa market access programs, including specialty pharmacy access and efforts to navigate the denial process, and whether the denial process would diminish once the J-code is in place.

Answer

Joe Gilliam, President and COO, Glaukos, stated that iDose TR re-administration was not a material consideration for 2026 guidance, expecting it to be more impactful in 2027-2028 and beyond. He reiterated confidence in iDose TR growth through multiple pathways (existing MACs, new MACs, commercial/Medicare Advantage). For Epioxa, Mr. Gilliam detailed investments in 'best-in-class' hub and specialty pharmacy services, including a $0 co-pay program for commercially covered lives, and broader DTC/education efforts aimed at optimizing patient access and treatment turnaround time. He implied that while the J-code streamlines things, initial denials and appeals are part of the early launch process.

Richard Newitter asked if iDose TR re-administration is factored into the sequential improvement for US glaucoma in 2026. He also requested more details on Glaukos' co-pay assistance and market access programs for Epioxa, including specialty pharmacy access, the denial process, and whether the J-code will eliminate denials.

Answer

Joe Gilliam, President and COO, stated that re-administration was not a material factor in 2026 guidance but expects some contribution as early patients become eligible, with a more significant impact in 2027/2028+. For Epioxa, he detailed investments in 'best-in-class' hub and specialty pharmacy services, including a $0 co-pay program for commercially covered lives, to maximize access and reduce treatment turnaround times. These efforts, alongside DTC and education, aim to increase awareness and detection.

Richard Newitter of Truist Securities asked for a characterization of physician behavior and utilization trends in MAC regions with established iDose TR professional fees versus those without. He also sought to clarify the expected sequential Q2 to Q3 revenue trend for the U.S. Glaucoma business.

Answer

President & COO Joe Gilliam confirmed that regions with established pro-fees are outperforming, with faster physician training, higher utilization, and broader use in both standalone and combo settings. He also confirmed his earlier comment that while the non-iDose business will see a seasonal Q3 dip, strong iDose TR growth is expected to result in positive sequential growth for the total U.S. Glaucoma franchise.

Richard Newitter asked for the key assumptions behind the slightly higher iDose guidance, specifically regarding reimbursement progress, and questioned whether iDose can be implanted with other MIGS devices under the current LCDs.

Answer

President and COO Joseph Gilliam explained that the iDose guidance assumes the positive reimbursement trends seen in Noridian will continue to roll out across other MACs, supplemented by a methodical expansion into commercial and Medicare Advantage plans. He also clarified that iDose, as a procedural pharmaceutical, is not subject to the MIGS combo-procedure LCDs and can be used in combination with other devices at the physician's discretion.

Richard Newitter asked for details on the installed base of iDose-trained physicians and the progression of training efforts. He also referenced a recent physician survey showing high utilization and asked about the range of utilization rates Glaukos is seeing among new versus experienced users and across different reimbursement regions.

Answer

President and COO Joe Gilliam explained that while they don't provide granular numbers, physician training is not a primary gating item due to existing surgeon skills in angle-based surgery. He identified training office staff on reimbursement as a more significant factor. Regarding utilization, Gilliam confirmed a wide range, with new accounts typically starting slow and scaling up as they gain confidence in payment. He noted that a growing number of doctors are achieving high monthly procedure volumes, driven by strong clinical outcomes.

Richard Newitter (via Felipe) inquired about the progress of the Mint patch pump program, specifically seeking an update on its development checklist before submission, given the anticipated step-up in CapEx spend. He also asked how increasing competition from other durable pump companies entering the pharmacy channel might impact Beta Bionics' PBM contract conversations and its competitive position.

Answer

Sean Saint, CEO, declined to provide specific details on Mint's development status beyond what was in the prepared remarks, reiterating the unconstrained commercial launch by the end of 2027. Regarding pharmacy channel competition, Sean Saint viewed it positively, as it creates momentum for the entire industry to adopt pharmacy coverage, which Beta Bionics pioneered, and Stephen Feider, CFO, concurred.

Richard Newitter from Truist Securities inquired about Dexcom's revenue cadence for 2026, specifically asking if a 6% sequential decline from Q4 2025 to Q1 2026 is a reasonable expectation.

Answer

Jereme Sylvain, CFO of Dexcom, confirmed that a 6-7% sequential decline from Q4 to Q1 is a reasonable expectation. He explained that as more business shifts from DME to pharmacy, the stocking dynamic typically seen in Q4 (maximizing benefits) becomes less pronounced, leading to less seasonality and a slightly higher Q1 relative to Q4 compared to previous years.

Richard Newitter inquired about Dexcom's revenue cadence, specifically whether the Street's expectation of a 6% sequential decline in Q1 2026 versus Q4 2025 is reasonable, and if there are any other call-outs for the year's cadence.

Answer

Jereme Sylvain, Chief Financial Officer, indicated that Dexcom expects less seasonality due to the increasing proportion of business through the pharmacy channel, which reduces the Q4 stocking dynamic. He stated that a 6-7% sequential decline from Q4 2025 to Q1 2026 is a reasonable expectation, aligning with the higher end of the Street's range.

Richard Newitter asked about the competitive dynamics factored into Dexcom's preliminary 2026 base case, particularly regarding potential intensification with new competitor products like Abbott's dual analytic, and other puts and takes for the upcoming year.

Answer

Jereme Sylvain, CFO, stated that the 2026 base case is a prudent starting point, considering competitive products and known coverage decisions. He mentioned that specific details would be provided with official guidance after the board meeting in December, but the current context aims to give an idea of their base case thinking.

Richard Newitter asked about competitive dynamics, specifically with Abbott's dual analytic, and other 2026 puts and takes factored into the preliminary base case commentary.

Answer

Jereme Sylvain, CFO, stated that competitive product assumptions are always considered in their prudent base case for 2026, along with known coverage decisions. He reiterated that specific details will be provided with official guidance, but the base case aims to provide directional feedback, not aspirational targets.

Representing Richard Newitter of Truist Securities, an analyst asked about the implied back-half guidance, specifically the growth dynamics between the U.S. and OUS segments and the expected convergence of U.S. volume and revenue growth.

Answer

EVP & CFO Jereme Sylvain reiterated the expectation that OUS business will grow faster than the U.S. business, consistent with historical trends. In the U.S., he confirmed that the gap between volume and revenue growth should narrow as the company fully laps the impact of prior-year rebate changes.

Richard Newitter asked why Inspire Medical Systems is not pursuing a Category III CPT code as an interim solution, which could take effect by January 1, 2027, to potentially avoid modifier requirements and establish a more stable payment system before a Category I code becomes effective in 2028.

Answer

Tim Herbert (Chairman and CEO) explained that a Category III code would introduce an environment without defined reimbursement, leading to variability and a lack of clarity on facility reimbursement, which is critical for the company. He emphasized the strategic choice to pursue a Category I code long-term and focus on minimizing the -52 modifier reduction in the short term.

Richard Newitter questioned why Inspire is not pursuing a Category III CPT code as a dual track, which could take effect by January 1, 2027, to potentially pivot away from modifier requirements and achieve a more stable payment system during 2027, while also pursuing a Category I code for 2028.

Answer

Tim Herbert, Chairman and CEO, explained that while a Category III code could take effect by January 1, 2027, it would introduce an environment of undefined and variable reimbursement, lacking clarity on facility reimbursement, which is crucial for Inspire's payment model. He stated that Inspire chose to stay the course with a Category I code long-term, focusing on minimizing the short-term risk of the professional fee reduction with 64582 and the -52 modifier, which provides clarity on facility reimbursement.

Richard Newitter of Truist Securities asked for clarification on the drivers of the guidance cut, the reason for the increase in accounts receivable, and the cause of the 20% implant growth seen at early Inspire V adopter sites.

Answer

CEO Tim Herbert confirmed the Inspire V transition is the primary issue, compounded by a strategic pause in DTC spend and new center additions. CFO Rick Buchholz explained the accounts receivable increase was due to a temporary delay from a new billing system implementation and a strong month of June. Herbert attributed the 20% implant growth at early-adopter sites to increased surgeon capacity resulting from the elimination of the pressure-sensing lead, which simplifies and shortens the procedure.

Richard Newitter from Truist asked for context on the reiterated full-year revenue guidance. He questioned whether the initial guidance had assumed a transition period for Inspire V and what factors would now drive performance to the high or low end of the range given the Q2 dynamics.

Answer

CEO Tim Herbert stated that the annual plan always anticipated an Inspire V launch and inventory transition; the main new development was the increased patient awareness causing a shift in timing. CFO Richard Buchholz added that they had expected a more back-end weighted year from the outset and that the Q2 launch dynamics now point to a Q4 that will be stronger than historical levels.

Richard Newitter asked to reconcile comments about being comfortable with Q1 estimates against previous commentary about a back-half weighted year, and sought clarification on driving utilization at established centers.

Answer

Chief Financial Officer Rick Buchholz reiterated that the company expects normal seasonality in Q1 followed by sequential growth, and that the Inspire V launch is factored into annual guidance. He clarified that while they are no longer providing specific utilization metrics, they expect growth to come from both new centers and increased productivity at existing centers, in line with historical trends.

Richard Newitter of Truist Securities sought more specific details on the Inspire V coding strategy, including the potential use of the cranial neurostimulation code and confidence in maintaining neutral physician economics. He also asked if the company's endorsement of the 2025 consensus revenue assumes continued year-over-year growth in U.S. utilization.

Answer

CEO Tim Herbert deferred on specific coding details pending final discussions with payers but stressed that the shorter procedure time with Inspire V creates a net positive for physicians by allowing more procedures per day. He confirmed that their view of the 2025 consensus as 'not unreasonable' does incorporate the key assumption of continued growth in same-store sales and U.S. utilization.

Richard Newitter sought to reconcile Stryker's price comments, asking if MedSurg is expected to be positive (100-200 basis points) and Ortho negative (-1% to -2%), netting out to a similar overall price impact as last year. He also asked for quantification of the market percentage that Triathlon Gold potentially re-accesses and how to think about its impact.

Answer

CFO Preston Wells stated that while the specific ranges might be slightly high, MedSurg will be positive and Orthopedics slightly negative, netting to a similar overall price impact as 2025. Chair and CEO Kevin Lobo added that these figures exclude new product launches, which are introduced at higher prices. Preston Wells explained Triathlon Gold is a premium-priced product addressing roughly 5% of the market, specifically for metal-sensitive patients, and fills an important portfolio gap, with potential for market growth beyond 5% given its advanced bearing and cementless options.

Richard Newitter sought to reconcile Stryker's overall price comments, specifically asking if MedSurg pricing is expected to be positive (100-200 basis points) and Orthopaedics negative (-1% to -2%), netting to a similar overall price as the previous year. He also asked for quantification of the market percentage that Triathlon Gold potentially re-accesses for Stryker and if this is the correct way to view its opportunity.

Answer

Preston Wells, CFO, Stryker, declined to provide specific basis point ranges but confirmed that MedSurg will be positive and Orthopaedics slightly negative, netting to a similar overall price as 2025. Kevin Lobo, Chair and CEO, Stryker, added that these figures do not include new product launches at higher prices until their anniversary. Regarding Triathlon Gold, Mr. Wells stated it's a premium-priced product addressing roughly 5% of the market, primarily for metal-sensitive patients, and could potentially grow beyond that given its advanced bearing and cementless option, filling a significant portfolio gap.

Richard Newitter of Truist Securities asked for Stryker's view on fully autonomous robotics and the market appetite for it. He also requested commentary on the U.S. neurovascular end market, particularly in ischemic stroke.

Answer

Chair & CEO Kevin Lobo revealed that Stryker has the capability for an autonomous Mako but has chosen not to pursue it, believing there is currently no significant value-add for surgeons compared to adding new applications. Regarding neurovascular, he noted the ischemic market was a bit slower in the quarter but expressed optimism for a better second half, driven by three new product launches.

Ravi, on behalf of Richard Newitter, asked about early conversations regarding 2026 hospital capital budgets and inquired about R&D priorities for the newly acquired Inari business.

Answer

VP Jason Beach noted it's too early for 2026 budget discussions but highlighted that a significant portion of Stryker's capital sales are tied to procedural volumes, which remain strong. CEO Kevin Lobo stated that Inari's R&D is focused on improving its existing product lines and supporting the recent launch of its Artix arterial product, which is receiving favorable feedback.

Richard Newitter asked if Stryker is observing any changes in hospital capital budget behavior due to potential healthcare policy shifts. He also inquired about the due diligence process for the Inari acquisition, noting its quick turnaround.

Answer

VP Jason Beach stated that the capital environment remains very positive, and they see no signs of change. CEO Kevin Lobo explained the Inari diligence timeline was typical for a public company deal, as Stryker had done extensive homework on public information prior to gaining access.

Richard Newitter asked for quantification of the earnings dilution from recent M&A and inquired about the strategy to re-accelerate the ischemic stroke business.

Answer

CFO Glenn Boehnlein confirmed that any earnings dilution from recent deals is already contemplated in the current full-year guidance and will be absorbed. CEO Kevin Lobo addressed the ischemic stroke business, noting that a previous supply chain issue has been rectified and the company is exploring sales force changes, such as dedicated reps, to better compete in a crowded market.

Richard Newitter from Truist Securities sought clarification on the robotics portfolio strategy, asking what distinct role ROSA will play that Monogram won't usurp, given Monogram's advanced capabilities.

Answer

Chairman, President & CEO Ivan Tornos explained that ROSA remains critical as the #1 orthopedic robot outside the U.S., appealing to a large segment of surgeons who prefer an imageless, CT-free system where they retain full control. He stated there is no internal "race," as the strategy is to offer optionality and flexibility to win across different customer segments.

Richard Newitter asked for more details on the U.S. sales force reorganization, questioning what prompted the changes and if any disruption was factored into the reiterated guidance.

Answer

President and CEO Ivan Tornos clarified that the changes are an 'evolution' aimed at accelerating U.S. growth, which he deemed unsatisfactory. The optimization involves leadership changes, territory adjustments, and incentive plan modifications to better support high-growth areas like S.E.T., robotics, and the ASC channel. He confirmed these actions are fully contemplated within the existing financial guidance.

Richard Newitter from Truist Securities asked about the progress of the Tamini handheld robotics collaboration, particularly regarding its momentum in the ASC setting.

Answer

CEO Ivan Tornos described the Tamini partnership as a source of valuable optionality, catering to customers who prefer a smaller footprint or CT-based system, which is common in ASCs. He confirmed the collaboration has already driven customer conversions and that early data suggests it is a meaningful opportunity.

Ravi Misra, on behalf of Richard Newitter of Truist Securities, asked about remaining gaps in the trauma product portfolio and whether the stronger June and July deformity case trends were due to cases being delayed from earlier in Q2.

Answer

CEO Dave Bailey responded that the new 3P plating platform, which just had its first case, is a key initiative designed to fill gaps in both trauma and deformity with advanced, specialty plating technology. He reiterated that the Q2 deformity slowdown was a temporary 'ebb and flow' and did not believe cases were pushed from earlier in the quarter into the summer months.

Richard Newitter sought to confirm the overall financial outlook, summarizing it as a reiterated MACI forecast with a prudent reduction in the Epicel outlook, and questioned if the MACI Arthro conversion timeline might differ from historical patterns.

Answer

CFO Joe Mara confirmed the summary was accurate. CEO Dominick Colangelo addressed the conversion question, stating they have seen no difference in conversion rates for MACI Arthro and that the current dynamic of biopsy growth leading implant growth mirrors the original MACI launch in 2017, with implant growth expected to catch up over subsequent quarters.

Richard Newitter questioned whether Vericel's projection for MACI revenue to exceed $240 million is dependent on a significant inflection from MACI Arthro. He also asked for details on the drivers behind the substantial step-up in projected Q2 adjusted EBITDA margin, questioning if it was solely due to Epicel's recovery or other factors like expense timing.

Answer

CFO Joe Mara clarified that the higher MACI forecast assumes a contribution from MACI Arthro based on strong trends seen to-date, such as surgeon training and biopsy growth, rather than a dramatic future inflection. Regarding margins, he explained the significant Q2 improvement is primarily driven by the much higher revenue base expected in the quarter, as operating expenses are projected to remain relatively stable. The lower Q1 margin was an anomaly caused by seasonally low MACI revenue combined with unexpectedly low Epicel revenue.

Richard Newitter asked for confirmation that initial MACI Arthro cases are targeting the femoral condyle, an expansionary market segment. He also requested a P&L framework for 2025, similar to the revenue outlook provided.

Answer

CEO Nick Colangelo confirmed initial MACI Arthro cases are indeed for femoral condyle defects, the largest part of the addressable market. CFO Joe Mara advised that while P&L specifics for 2025 are pending, the magnitude of year-over-year margin expansion seen in 2024 should not be expected, partly due to depreciation from the new facility. He affirmed confidence in long-term margin targets and noted a significant inflection in cash generation is expected in 2025.

Richard Newitter of Truist Securities asked about the potential impact of the proposed CMS reimbursement changes on the urology business, specifically for UroLift's recovery. He also requested an update on the market opportunity for intra-aortic balloon pumps following a competitor's issues.

Answer

CEO Liam Kelly described the proposed CMS rule as a 'positive development,' highlighting a potential 10% reimbursement uplift for UroLift in the physician office setting, which should aid its recovery. Regarding balloon pumps, he clarified that while they performed well, the quarter's outperformance in the Interventional segment was actually driven by OnControl and complex catheters. He expects balloon pump growth to moderate in Q4 due to tougher year-over-year comparisons.

Richard Newitter from Truist Securities asked for the basis of confidence in China's recovery, whether any products might be on tariff exemption lists, and if the Biotronik tariff impact was included in the $55 million estimate.

Answer

CEO Liam Kelly explained that confidence in China's recovery stems from cycling past the largest impact of volume-based procurement destocking, making Q1 the low point. He expressed hope that medical devices would receive tariff exemptions and confirmed that the tariff impact from Biotronik is 'de minimis' and not a material factor in the total.

Richard Newitter asked for an update on the intra-aortic balloon pump business, the potential impact of tariffs on the 2025 outlook, and plans for NewCo's leadership.

Answer

CEO Liam Kelly confirmed the balloon pump outlook remains unchanged with robust quote activity. An executive noted that while enacted tariffs are included in guidance, proposed tariffs (e.g., for Mexico) are not, representing the largest potential exposure. Kelly also announced that an external search for a NewCo CEO and CFO is beginning immediately.

Richard Newitter from Truist Securities questioned the new sales force split initiative compared to prior expansions and asked if an anticipated slowdown in any specific division was driving the conservative guidance.

Answer

CEO Adam Elsesser clarified that the new sales reps are already hired and trained, with the heavy lifting complete, and he expects positive impact in the second half. He confirmed no new slowdown is anticipated, but pointed to the softer overall stroke market and the mature coronary business as existing factors, reiterating the guidance reflects conservatism.

Richard Newitter sought a benchmark for the U.S. stroke business growth rate and asked if upcoming new product launches, like Thunderbolt, could create a pricing tailwind in the second half of the year.

Answer

CEO Adam Elsesser declined to provide a specific growth number but reiterated that U.S. stroke grew "significantly above the market." He confirmed Thunderbolt will have a price benefit for Penumbra but emphasized the company is not pursuing broad price hikes like competitors, preferring to drive growth through volume and innovation, which builds long-term goodwill with hospitals.

Richard Newitter of Truist Securities asked about the expected number of new product launches in 2025, following nine in 2024. He also sought confirmation that Thunderbolt revenue is not in the 2025 guidance and inquired about the potential timing for the data release.

Answer

CEO Adam Elsesser declined to specify the number of 2025 launches but confirmed that revenue from Thunderbolt is not included in the current guidance due to the uncertainty of the regulatory timeline. He explained that if clearance occurs outside the window of major medical conferences in July or November, the company would likely launch the product and release data via press release rather than waiting.

Richard Newitter inquired about the growth drivers within U.S. thrombectomy, specifically questioning a potential deceleration in the neurothrombectomy segment. He also asked for an update on the recovery outlook for international markets, particularly China, and the expected contribution from new products in Europe.

Answer

CEO Adam Elsesser clarified that the U.S. stroke business saw "high double-digit growth" and was not decelerating, attributing the overall thrombectomy calculation difference to slower growth in the mature coronary business. Regarding international markets, he stated that the situation in China is playing out as previously discussed, with fewer headwinds expected in 2025, and noted high physician interest for the new Flash 2.0 and Lightning Bolt 7 launches in Europe.

An associate on behalf of Richard Newitter of Truist Securities asked about the impact of the ASC reimbursement step-up on Q1 results and how the SpeedPlate platform expands the addressable market and builds momentum.

Answer

John Treace, Chief Executive Officer, explained that while it's too early to quantify the impact of the reimbursement lift, it is a definite positive with some positive anecdotal feedback from the ASC setting. Regarding SpeedPlate, he stated it's now the majority of their fixation mix and continues to gain converts. He highlighted the new MicroQuad for small incisions and SpeedAkin for complementary procedures as important portfolio additions that expand options and drive volume, particularly with MIS osteotomies.

Richard Newitter of Truist Securities questioned the clinical value proposition of Treace's new osteotomy products, asking if they are expected to demonstrate better long-term recurrence rates than traditional methods. He also sought validation on Q1 2025 consensus estimates and the expected revenue weighting for Q4.

Answer

CEO John Treace explained that Treace's osteotomy solutions are differentiated by incorporating a 3-plane correction, including the rotational plane, which is based on the same philosophy as Lapiplasty and is believed to provide more enduring outcomes. CFO Mark Hair addressed guidance, stating the company expects low-single-digit growth in Q1 2025, followed by potential double-digit growth in subsequent quarters, and noted Q4's contribution to the full year might be slightly stronger than the analyst's model.

An associate for Richard Newitter asked about current trends in the broader foot and ankle market and whether Treace was observing a similar Q4 reacceleration that a competitor had mentioned.

Answer

CEO John Treace clarified that Treace's focus on the elective bunion surgery segment makes direct comparisons to diversified foot and ankle companies difficult. He confirmed that after some market softening earlier in the year, Q2 and Q3 performed as expected, and they anticipate the typical seasonal acceleration in bunion procedures through Q4.

Ravi Misra on for Richard Newitter of Truist Securities asked how SI-BONE balances sales force expansion with productivity growth and inquired about any internal targets for the percentage of physicians performing multiple procedures.

Answer

CFO Anshul Maheshwari stated the plan is to grow to 100 territories over 12-18 months to support new products and ensure rep bandwidth. He expects productivity to continue improving, albeit gradually, as new reps are added. Maheshwari noted the company is in the early stages of driving physician density and cross-selling, particularly with Granite 9.5, and did not provide a specific target, emphasizing the long runway for growth.

Richard Newitter from Truist Securities inquired about the provider economics and profit profile for Granite procedures, particularly with the migration to outpatient settings enabled by the TPT. He also asked for directional commentary on the 2025 P&L, including gross margin and sources of operating leverage.

Answer

CEO Laura Francis detailed how the new TPT payment, combined with the removal of a key CPT code from the inpatient-only list, creates a strong economic incentive for surgeons and hospitals to perform Granite procedures in outpatient settings. CFO Anshul Maheshwari added that long-term gross margins are expected to stabilize in the 76-77% range. He confirmed that operating leverage will come from sales, marketing, G&A, and R&D expenses all growing slower than revenue, driving full-year adjusted EBITDA profitability in 2025.

Richard Newitter sought clarification on the timing of the potential $120 million in ship hold disruptions factored into guidance and asked about the company's appetite for M&A in the near-to-intermediate term.

Answer

CFO Lea Knight clarified that the guidance includes an incremental $60M to $120M for potential future holds, on top of the ~$27M annual impact from known Q1 issues. CEO Mojdeh Poul stated that while M&A is a long-term strategy, the 2025 focus is on execution of the compliance plan, manufacturing improvements, and deleveraging.

Richard Newitter asked about the rate of market share recapture for products returning from supply holds and how this informs the 2025 growth outlook. He also followed up on whether 2025 growth would be back-half weighted and if all products have equal recapture potential.

Answer

CEO Jan De Witte stated that for short-term holds, they regain 'pretty much full share' quickly. CFO Lea Knight added that 2025 growth is not expected to be back-half weighted and that while recapture for some products may take longer, they anticipate resuming their market position during 2025.

Richard Newitter asked about the Spine business, seeking to understand the drivers of its above-market growth and its sustainability. He also followed up on the opportunity to gain share from competitive disruption.

Answer

Chairman and CEO Geoff Martha cited both market expansion and consolidation as factors. Brett Wall, EVP & President of the Neuroscience Portfolio, added that the market favors companies with scale and technology like Medtronic's 'able' ecosystem, which he believes makes the growth sustainable. He confirmed they have a strong pipeline of competitive sales reps joining the company.

Questioned the timeline for seeing a return on DTC investment, asking why it seems to take longer to see a positive impact than it did to see a negative one. Also asked for reassurance that cost cuts haven't gone too deep, beyond the DTC misstep, and for commentary on the Q4 expense level as a baseline for 2025.

Answer

The company explained the DTC ramp-up delay is due to the multi-month patient journey from initial awareness to procedure. They expressed confidence that other cost cuts were appropriate, focusing on nearer-term projects. They declined to provide 2025 guidance but reiterated they will continue to seek efficiencies and leverage technology like AdaptiveAI to improve the cost structure.

Asked about the company's confidence in sustaining mid-to-high teens growth in the core U.S. venous business into 2025. Also requested commentary on the Q2 contribution from volume, price, and mix.

Answer

While not providing 2025 guidance, management expressed high confidence in sustained VTE growth due to the large, underpenetrated market and their ongoing strategy of technology iteration, clinical data generation (including PEERLESS), and commercial execution. In Q2, procedure volumes were strong and pricing was stable, with some minor stocking revenue related to the VenaCore launch.

Asked about the company's confidence in reaching a 20%+ EBITDA margin in 2024 and the expected cadence of operating expense and leverage throughout the year.

Answer

The company declined to give specific 2024 guidance until early next year but reiterated the expected quarterly revenue cadence: Q1 is softest, Q2 is strong, Q3 is similar to Q2, and Q4 is strongest. They are confident in their ability to manage the business and do not expect to slip backward on profitability, but will provide a solid 2024 outlook after Q4 is complete.