Shagun Singh Chadha

Shagun Singh of RBC Capital Markets asked incoming CEO Jake Leach to share his vision for Dexcom, including his strategic priorities and plans for building global scale.

Answer

President & COO Jacob Leach outlined his vision focusing on three key pillars: 1) Expanding global access to Dexcom's technology, 2) Driving innovation that provides real value to both end-users and prescribers, and 3) Scaling the business with greater efficiency to fund future growth and innovation.

Shagun Singh Chadha asked for the key assumptions behind the 14% growth guidance for 2025, noting it appears conservative, and questioned what contribution is assumed from the 15-day sensor.

Answer

CFO Jereme Sylvain explained the guidance includes 1-2 points of growth from Stelo, with the core business growing 12-13%. He stated the guidance was set to be reasonable and achievable after a unique 2024. CEO Kevin Sayer added that while the 15-day sensor is a tailwind, its contribution in 2025 is moderated by the time required for payer coverage and channel rollout post-approval.

Shagun Singh Chadha asked about confidence in the commercial strategy amid a leadership transition, plans to accelerate the Stelo launch in 2025, and supply preparations for the 15-day G7 sensor.

Answer

CEO Kevin Sayer expressed confidence in his commercial leadership team during the transition. He stated that Stelo's acceleration will be driven by app enhancements and opening new distribution channels. For the 15-day G7, he confirmed it will be made on existing manufacturing lines and that capacity is not a concern, as they already produce the 15-day Stelo product.

Shagun Singh asked what factors could enable Johnson & Johnson to exceed its stated 5-7% sales growth targets, and why 5% is a reasonable number for 2026 given potentially easier comparisons, questioning if the company could achieve better growth and what would drive it.

Answer

CFO Joe Wolk acknowledged the 5-7% commitment and stated that Johnson & Johnson is striving for better. For 2026, he noted ongoing significant Stelara erosion and additional discounting in Innovative Medicine, alongside the orthopedics business still being part of the outlook. He expressed strong confidence in the company's ability to conclude 2025, the backdrop for 2026, and the 'new era of accelerated growth' for the balance of the decade, driven by both in-market portfolio and new pipeline products.

Shagun Singh congratulated Johnson & Johnson on its operational progress and asked what factors could enable the company to exceed its 5-7% long-term sales growth targets. She also questioned why 5% is a suitable growth number for 2026, given potentially easy comparisons, and what could drive better performance.

Answer

CFO Joe Wolk acknowledged the strong performance and stated that J&J is striving for better than the 5-7% target. He noted that 2026 will still face significant STELARA erosion and additional discounting in Innovative Medicine, along with the continued presence of the orthopedics business. However, he expressed confidence in exceeding current consensus models for 2026, driven by in-market portfolio strength and new product launches, signaling a 'new era of accelerated growth.'

Shagun Singh of RBC Capital Markets sought clarification on the submission timeline for the Ottava surgical robot and asked for physician feedback on the adoption of the Varipulse catheter in electrophysiology.

Answer

EVP Tim Schmid corrected the premise, confirming the Ottava de novo submission remains on track for Q1 2026. On electrophysiology, he stated J&J is confident in retaining market leadership, noting over 10,000 Varipulse cases have been performed globally with a low neurovascular event rate (<0.5%) and phenomenal physician feedback. He emphasized the strength of the entire EP portfolio, including the large installed base of CARTO mapping systems.

Shagun Singh Chadha from RBC Capital Markets requested elaboration on the MedTech dynamics in the Asia-Pacific region, particularly China, asking to quantify the headwinds, the expected timeline for normalization, and the impact of expanding volume-based pricing (VBP).

Answer

Tim Schmid, Executive VP of MedTech, explained that headwinds in APAC include strikes in Korea, macroeconomic pressure in Japan, and the impact of VBP and an anti-corruption campaign in China. He noted that J&J's leadership position in China leads to a disproportionate impact from VBP, which he expects to be a headwind through 2024 and into 2025. However, he stressed that China is less than 5% of total J&J sales and the global portfolio can offset these challenges.

Shagun Singh from RBC Capital Markets asked about the recent CEO transition, seeking commentary on leadership changes around acquisitions and the evolution of Executive Chairman David Paul's role. She also questioned the strategy to return the newly acquired Nevro business to growth.

Answer

Executive Chairman David Paul explained that the company has a deep leadership bench and the timing was right for Keith Pfeil to become CEO, emphasizing continuity and his own continued focus on R&D and strategy. President & CEO Keith Pfeil outlined the Nevro growth strategy, which includes providing stability, recasting the product development approach, and leveraging the certainty of Globus's backing to energize the sales force. David Paul added that Nevro's differentiated high-frequency technology with Level 1 clinical data is a key asset for future growth.

Shagun Singh Chadha from RBC Capital Markets relayed investor concerns about the Nevro acquisition's timing amid the ongoing NuVasive integration and potential execution risk. She also asked for an update on the FDA warning letter and future M&A plans.

Answer

CEO Dan Scavilla defended the Nevro deal as a separate, opportunistic buy with long-term strategic value and stated the integration teams do not overlap. He noted they are 'more than ready' for an FDA re-inspection. COO and CFO Keith Pfeil added that M&A would likely 'slow down a little bit' in the near term to focus on finalizing current integrations.

Shagun Singh Chadha from RBC Capital Markets asked for Globus's assessment of Nevro's recent market challenges and why Globus can succeed with the asset. She also questioned if more M&A would follow to target the interventionalist call point.

Answer

CFO Keith Pfeil suggested Nevro's growth was hampered but that Globus's scale, balance sheet, and integration into its larger spine business create new opportunities. CEO Dan Scavilla added that Globus's backing of the high-frequency technology could overcome market hesitation. Regarding future M&A, Scavilla stated it's possible but the immediate focus is on closing and integrating the Nevro deal, with no other significant deals on the radar.

Shagun Singh Chadha of RBC Capital Markets asked about the differentiating features of the upcoming recon robotic launch and the company's current appetite for M&A.

Answer

President & CEO Dan Scavilla highlighted the new robot's design, accuracy, and flexible workflows (CT-based or imageless) as key differentiators. COO & CFO Keith Pfeil stated that M&A will focus on filling out the musculoskeletal portfolio, such as in shoulders or joints, but the immediate priority remains completing the NuVasive integration before considering specific deal sizes.

Shagun Singh of RBC Capital Markets asked for more detail on the company's confidence in achieving a fully autonomous robot with Monogram and how the competitive landscape might evolve.

Answer

Chairman, President & CEO Ivan Tornos expressed very high confidence, citing the recent world-first fully autonomous surgery performed with the technology. He mentioned a robust clinical trial pathway and expert validation of their assumptions. He projected a semi-autonomous launch in early 2027 and a fully autonomous launch in late 2027 or early 2028.

Shagun Singh Chadha inquired about Zimmer Biomet's appetite for M&A following the Paragon 28 deal, particularly regarding further expansion in S.E.T. and new adjacencies to increase its weighted average market growth rate.

Answer

President and CEO Ivan Tornos affirmed that M&A remains the company's top capital allocation priority, supported by a strong balance sheet. He stated the focus is on financially disciplined deals in high-growth areas like S.E.T., ASC-focused technologies, and data solutions, with the strategic goal of reaching a 5% weighted average market growth environment by the end of 2027.

Shagun Singh Chadha from RBC Capital Markets asked a follow-up on M&A's role in driving growth beyond the mid-single-digit range and requested details on the sales and margin cadence for 2025.

Answer

CEO Ivan Tornos reiterated that while M&A is not needed to hit current targets, the company desires to do deals to increase its weighted average market growth rate (WAMGR). He declined to provide any specific guidance or cadence for 2025, stating that this information would be shared in early 2025.

Shagun Singh requested elaboration on the second-half guidance, which implies a growth deceleration from the first half, and asked for help quantifying the underlying Q2 growth after adjusting for stocking and rebate timing.

Answer

EVP & CFO Ana Maria Chadwick reiterated that the underlying business is very stable. She specified that after normalizing for stocking and rebate dynamics, the first-half U.S. growth rate was 24%. She emphasized that the full-year guidance was raised by three times the Q2 beat, reflecting strong confidence in sustained momentum.

Shagun Singh from RBC Capital Markets requested clarification on the assumptions behind the second-half guidance, which implies a growth slowdown, and asked for quantification of the Q2 U.S. stocking and rebate tailwinds.

Answer

EVP & CFO Ana Maria Chadwick reiterated that underlying business trends are stable and strong. She explained that after normalizing for stocking and rebate dynamics, the first-half U.S. growth rate was 24%. She emphasized that the full-year guidance was raised by three times the Q2 beat, reflecting confidence in sustained momentum rather than an expected slowdown.

Mo, on behalf of Shagun Singh from RBC Capital Markets, requested more specific details on the internal transformation of the commercial organization and asked for directional guidance on the cash burn outlook for 2026.

Answer

Chair and CEO Leslie Trigg detailed the commercial transformation, which included restructuring the team to infuse an enterprise sales skill set and implementing new data-driven sales tools and processes. CFO Renee Gaeta addressed cash burn, stating that while specific 2026 guidance is not yet available, cash use may elevate from the current low quarterly run-rate due to increased inventory purchasing and typical Q1 incentive payouts.

Shagun Singh Chadha questioned why the company did not raise its full-year guidance despite the strong Q1 beat and asked for clarity on the expected revenue cadence for the remainder of the year. She also asked if the recent recapitalization and reverse stock split have led to increased business momentum.

Answer

Leslie Trigg, Chair and CEO, explained that while the company is confident in its outlook, it is maintaining a conservative approach to guidance after only one strong quarter. Nabeel Ahmed, CFO, reiterated this conservative stance and confirmed that they expect revenue to build sequentially through the year. Leslie Trigg also affirmed that resolving the balance sheet and other issues has been helpful, removing potential customer questions and contributing to momentum. Nabeel Ahmed declined to provide specific console placement numbers but highlighted the 23% sequential growth in console revenue.

Shagun Singh Chadha from RBC Capital Markets asked for a breakdown of the expected cadence for gross margins and operating expenses in 2025. She also requested details on where OpEx cuts were made, particularly in R&D and SG&A, while still funding commercial investments.

Answer

CFO Nabeel Ahmed projected 2025 gross margins in the high 30% range and OpEx around $90 million, with both expected to be relatively linear throughout the year, though margins could fluctuate with product mix. He confirmed cuts were made across the board while protecting the commercial organization. Chair and CEO Leslie Trigg added that R&D cuts were achieved by prioritizing near-term projects aligned with core goals and deprioritizing longer-dated initiatives, while SG&A benefited from general operating leverage.

Avi Kohn, on behalf of Shagun Singh of RBC Capital Markets, inquired about the 2025 outlook, asking for visibility on returning to double-digit growth and any preliminary top-line expectations.

Answer

CFO Nabeel Ahmed stated that while 2025 guidance is not being issued yet, the company's growing recurring revenue base provides a strong foundation for total revenue growth even if console sales remain flat. CEO Leslie Trigg added that the healthy mix of new and expanding customers across acute, post-acute, and home settings in Q3 informs their conviction for a return to healthy full-year growth in 2025.

Shagun Singh of RBC Capital Markets asked for elaboration on the reduction in U.S. guidance, the progress of the commercial transformation, and expected trends for the second half of the year.

Answer

President & CEO John Sheridan attributed the updated U.S. outlook to the ongoing nature of business transformations and increased competitive intensity, including a new market entrant. EVP & CFO Leigh Vosseller guided for Q3 worldwide revenue of approximately $235 million, reflecting a slight sequential step-down before an expected strong Q4.

Shagun Singh Chadha requested more detail on the go-to-market strategy for the Type 2 diabetes opportunity and Tandem's competitive positioning against other options like patch pumps.

Answer

CEO John Sheridan explained that the Type 2 market is highly segmented, making Tandem's product portfolio approach a key advantage. He noted a pilot program is underway to refine messaging, training, and reimbursement access before a broader rollout, capitalizing on growing patient interest in the ease-of-use of AID systems.

Shagun Singh Chadha of RBC Capital Markets asked if Tandem could provide a potential range of outcomes for its 2025 guidance, given multiple upside opportunities like the Type 2 indication, Libre integration, and pharmacy channel progress.

Answer

CFO Leigh Vosseller and CEO John Sheridan explained their conservative guidance philosophy. Vosseller stated the guidance is built on predictable revenue streams like renewals, with only modest contributions factored in for new, multiyear initiatives like Type 2 and pharmacy. Sheridan added that they wait for clear evidence of impact before fully incorporating new launches into forecasts.

Shagun Singh Chadha followed up on the 2025 outlook, asking if 12% growth was a reasonable base case and which catalysts offered the most upside.

Answer

EVP and CFO Leigh Vosseller and CEO John Sheridan both declined to provide specific 2025 guidance. Vosseller reiterated that their initial guidance will be based on predictable revenue streams like supplies and renewals. Sheridan added that while they are excited about numerous catalysts, their guidance philosophy requires balancing that excitement with risk to provide a highly predictable outlook.

Shagun Singh from RBC Capital Markets questioned the confidence in the significant Q4 sequential growth implied by the guidance, asked for color on July volume trends, and inquired about any customer pushback on profitability.

Answer

CEO Tim Herbert expressed confidence in the Q4 ramp, attributing it to the company's typical strong seasonality driven by patient deductibles, which is layered on top of a more conservative Q3 outlook. He declined to comment on specific July trends but stated there has been no significant pushback from centers on profitability, especially given the positive proposed Medicare reimbursement rate increases for 2026.

Shagun Singh Chadha of RBC Capital Markets asked about the financial impact of patient pausing and inventory dynamics in Q1 and sought color on Q2 EPS expectations versus consensus. She also followed up on physician profitability, questioning if it could be a barrier to broader adoption.

Answer

CFO Richard Buchholz stated that Inspire expects to be profitable in Q2, though likely below consensus, with profitability improving sequentially. Executive Ezgi Yagci added that the Q1 impact was difficult to quantify as the trend emerged late in the quarter. CEO Tim Herbert addressed profitability, explaining that high-volume centers become very efficient and profitable by using Advanced Practice Providers (APPs) and streamlining their workflows.

Shagun Singh Chadha requested more details on the DOJ investigation's potential timeline and scope, and also asked about the company's guidance philosophy and potential upside drivers.

Answer

Chairman and CEO Tim Herbert reiterated that the DOJ investigation is in its very early stages, preventing him from sharing details on timeline or scope, but he expressed confidence in the company's compliance programs. Regarding guidance, he explained it's based on a detailed plan where growth is expected primarily from increased productivity at existing centers, supported by field team expansion, DTC marketing, and the Inspire V launch.

Shagun Singh Chadha of RBC Capital Markets pointed out that the implied Q4 sequential growth is below historical trends and asked what was contemplated for the hurricane/IV shortage impact. She also questioned why the 2025 consensus growth of ~20% is considered 'reasonable' given the higher 2024 growth rate and multiple tailwinds for next year.

Answer

CEO Tim Herbert explained that the Q4 guidance reflects the difficulty of making up for regional disruptions from hurricanes due to existing capacity constraints in a high-demand quarter. Regarding 2025, he stated that it is still early in their annual planning process, and while they acknowledge the positive drivers, they are maintaining that the consensus numbers are 'not unreasonable' for now and will provide a more concrete plan later.

Shagun Singh of RBC Capital Markets asked about the implied growth step-down in the second-half guidance and for high-level thoughts on 2026 drivers, including potential hospital budget tightening.

Answer

VP & CFO Preston Wells explained the second-half guidance reflects tougher sales comps and the company's standard practice of setting achievable targets to 'beat and raise.' He deferred comment on 2026. Chair & CEO Kevin Lobo added that Stryker's procedures are highly revenue-producing for hospitals, making them less likely to be cut in response to budget pressures.

Shagun Singh Chadha asked for elaboration on international markets as a future growth catalyst and inquired about long-term expectations for gross and operating margins.

Answer

CEO Kevin Lobo explained that with only 25% of sales coming from outside the U.S., there is a massive opportunity to launch its successful new products internationally, creating a significant future growth engine. VP Jason Beach reiterated the long-term goal of at least 30 basis points of annual operating margin expansion from 2026 onward, noting an update will be provided at the November Investor Day.

Shagun Singh Chadha asked if the CFO transition would lead to a shift in priorities. She also inquired about Stryker's long-range plan, specifically its weighted average market growth rate and margin expansion potential beyond 2025.

Answer

CEO Kevin Lobo stated that no change in priorities is expected with the CFO transition. He noted that the company's weighted average market growth has increased and that updated long-term financial algorithms for growth and margins will be provided at an Analyst Day later in the year.

Representing Shagun Singh from RBC Capital Markets, Movan Sur questioned the reasons for the revenue miss beyond the known TRICARE and sales force impacts, and asked for the rationale behind continuing to service TRICARE patients during the payment suspension.

Answer

CEO Thomas Sandgaard and COO Anna Lucsok clarified that a third factor in the revenue miss was a reduction in supplies shipments, resulting from a new utilization management program and a strategic shift toward payers with more favorable reimbursement. Regarding TRICARE, Sandgaard stated that the Defense Health Agency (DHA) specifically requested Zynex continue servicing patients, and the company is complying to maintain a cooperative relationship, despite the cost. He noted, however, that new TRICARE order volume has dropped significantly due to the sales force refocus.

Shagun Singh Chadha inquired about the specifics of the TRICARE payment suspension, including the reasons provided, the evidence Zynex presented, and the potential for a domino effect with other payers. She also asked for reasons behind the Q1 revenue miss relative to the prior month's update and questioned the lack of full-year 2025 guidance, particularly for the non-TRICARE business.

Answer

Anna Lucsok, COO, explained that TRICARE's claims were vague but Zynex presented strong evidence of compliance with existing policies. She clarified it is a temporary payment suspension, not a coverage denial, and confirmed no similar issues exist with other payers. CFO Daniel Moorhead attributed the Q1 revenue miss to the sensitivity of revenue recognition and normal fluctuations with various payers. He stated that full-year guidance is pending more clarity on the TRICARE situation, with hopes to provide it during the Q2 results announcement.

Shagun Singh of RBC Capital Markets sought clarification on the Q2 EPS beat, asking for the split between tariff benefits and business outperformance. She also asked about margin phasing in the second half of the year and for color on the performance of underlying business segments.

Answer

CEO Liam Kelly reiterated that the underlying revenue guidance for 2025 remains unchanged, with the only update being the addition of the BioTronic acquisition. CFO John Deren confirmed the EPS beat was driven by approximately $0.50 from lower tariffs and the remainder from operational performance. He noted tariff impacts would be similar in Q3 and Q4 but did not provide detailed margin phasing for the back half of the year.

Shagun Singh Chadha of RBC Capital Markets asked if the interest in NewCo was for the entire business or select assets and sought an update on the separation timeline. She also questioned the growth outlook for NewCo versus RemainCo.

Answer

CEO Liam Kelly clarified that the majority of interest is for the entire NewCo. He reiterated that the separation process is on track for a mid-2026 Form 10 filing. He also stated that Q1 performance was in line with expectations for both entities and that Q1 represents the low point for NewCo's growth due to OEM headwinds that will ease through the year.

Shagun Singh Chadha questioned the drivers behind the low 2025 guidance of 1-2% constant currency growth and asked for the basis of confidence in RemainCo's 6%+ durable growth target post-separation.

Answer

CEO Liam Kelly attributed the weak 2025 guidance to approximately $100 million in headwinds from UroLift challenges, OEM customer inventory destocking, and volume-based procurement in China. He expressed confidence in RemainCo's 6%+ growth, noting its underlying business already grows in the high-single digits ex-VBP and will be separated from the slower-growing UroLift and OEM businesses.

Shagun Singh Chadha requested updated thoughts on the intra-aortic balloon pump (IABP) opportunity for Q4 and 2025, and asked for the rationale behind not expecting a significant contribution from the European market.

Answer

Liam Kelly, Chairman, President and CEO, reiterated that the outlook for Q4 remains unchanged from the prior call, with an expected revenue uplift exceeding $10 million from IABP. He anticipates the opportunity will persist through the first half of 2025. Kelly stated that the company does not expect a meaningful share shift in Europe, believing the primary opportunity remains in the Americas and Asia Pacific.

Shagun Singh Chadha asked for follow-up details on the CAS business mix, the expected patient subset for RDN coverage, and the company's go-forward portfolio management strategy after the Diabetes separation.

Answer

Executive Sean Salmon noted that cryoablation's mix contribution will decline but stabilize, while RDN coverage is expected to align with clinical evidence. CEO Geoffrey Martha stated that portfolio management is a continuous process focused on high-growth, high-margin areas with core synergies, and he signaled an increased appetite for tuck-in M&A to support strong market positions.

Shagun Singh Chadha asked about the product mix of cryoablation within the CAS business, the expected patient coverage for RDN, and the evolution of the company's portfolio management strategy given the Diabetes separation.

Answer

EVP Sean Salmon noted that cryoablation's mix will decline but stabilize, while RDN coverage is expected to align with clinical evidence. CEO Geoff Martha reiterated that portfolio management is a continuous process focused on high-growth, high-margin markets where Medtronic has core strengths. CFO Thierry Pieton then clarified the unique share retirement benefits of the planned Diabetes separation structure.

Shagun Singh Chadha of RBC Capital Markets asked for more specific details on the 'stacking growth drivers' concept, requesting quantification of their contribution, timing for the $2B PFA target, a definition for Hugo's 'meaningful growth,' and near-term RDN appetite.

Answer

CEO Geoff Martha outlined the sequence of growth drivers without providing specific long-term financial targets. He categorized Diabetes, PFA, and Neuromodulation as drivers that are contributing now, with the $2B PFA target being 'near term.' He positioned Hugo as a meaningful driver for the Surgical business in FY26, with Renal Denervation also kicking in that year following expected coverage. He also highlighted Tibial Stimulation as a longer-term opportunity.

Shagun Singh Chadha asked about the potential impact of a new U.S. administration on the medtech landscape, specifically focusing on tariffs, supply chain strategies, and Medtronic's exposure to imports from China.

Answer

Chairman and CEO Geoff Martha stated that the underlying medtech market remains healthy and that it is too early to speculate on specific policy changes like tariffs. He reassured investors that the company is running various scenarios and emphasized that Medtronic's exposure to products imported from China is minimal, accounting for less than 1% of total revenue.

Shagun Singh of RBC Capital Markets asked about the durability of the 41% year-over-year growth in the U.S. VTE business and whether any incremental factors beyond commercial expansion were contributing to the accelerating acceptance of the technology.

Answer

CEO Adam Elsesser reiterated that growth is not linear but will remain strong due to a combination of market growth and share gains. He emphasized the primary driver is the superior performance of the CAVT technology, which removes clots faster and safer than alternatives. This product superiority, combined with market access initiatives, is expected to drive strong, multi-year growth as physician adoption continues.

Asked for more detail on the drivers behind the 15% decline in U.S. trials, specifically the impact of competition, commercial execution, and DTC advertising. Also requested an update on the U.S. sales force dynamics and restructuring progress.

Answer

The company explained that the sales force changes are part of a planned expansion, promoting experienced associate reps into new territories. Regarding the trial decline, they noted that growing IPG replacements don't require trials, which will increasingly decouple trial numbers from revenue. They confirmed the reduction in DTC spending had a larger impact than anticipated and are now reinvesting in it, already seeing early positive results.

Asked about key priorities for 2024, the timeline for returning to a market share-taking position, and any updates on further acquisitions.

Answer

The company's priority is getting its realigned and newly hired sales reps fully productive, which is expected to take until mid-2024. They are also focused on training the salesforce on the new Vyrsa products. Further M&A is not an immediate priority until they have made progress on the Vyrsa integration.

Asked about the company's thoughts on expanding into adjacent markets or call points, and its strategic position regarding potential acquisition interest from other players.

Answer

Regarding a potential sale, the company's stock is available for purchase every day, and the focus is on creating shareholder value through execution. On adjacencies, the company is focused squarely on the incontinence market, which they see as a massive, untapped opportunity. They are not planning to expand into other neurostimulation fields with different call points, as it would be a distraction from their core mission.