Q3 2024 Earnings Summary
- EluPro orders are averaging about 20% larger than CanGaroo orders, indicating stronger product demand and potential for higher revenues as the new product gains further traction.
- EluPro is being adopted across all major CIED brands without bias toward any one supplier, demonstrating its broad clinical utility and market acceptance.
- Early entry into the neurostim device market—a space with postoperative infection rates between 20% and 40%—presents a sizable opportunity for growth, tapping into a high-risk segment with significant unmet needs.
- Transitional Revenue and Margin Uncertainty: Management acknowledged potential short-term noise as orders transition from CanGaroo to EluPro, which may lead to margin variability and unpredictable Q4 performance.
- Early-Stage Adoption Risks: The early commercialization results for EluPro are based on a limited number of implants (with no clear bias across device brands), indicating that broader market adoption and consistency remain unproven.
- Geographic and Operational Gaps: While the company feels confident in its current team, executives noted gaps in coverage—particularly in the West—that could require further hiring, potentially increasing costs and diluting operational efficiency.
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Transition Impact
Q: Will Q4 numbers be affected by the transition?
A: Management noted that while they won’t provide forward guidance, the transition from CanGaroo to EluPro may cause some margin noise in Q4. However, early orders for EluPro are on average 20% larger than those for CanGaroo, suggesting the impact should be manageable. -
Neurostim Use
Q: Is neurostim use a focus for EluPro?
A: Management explained that although they were not initially marketing into neurostimulation, early demand has emerged for neurostim applications, driven by high postoperative infection risks (ranging 20–40%) and presenting a promising growth opportunity. -
CanGaroo Accounts
Q: How many CanGaroo accounts are active?
A: The team has about 400 accounts for CanGaroo, with roughly 10% activated (approximately 37 accounts), reflecting encouraging market traction in the early stages. -
Implant Mix
Q: What is the EluPro implant brand mix?
A: Management mentioned that early usage shows no bias among the major CIED brands—Abbott, Boston Scientific, and Medtronic—all are being covered, depending on the individual center’s primary pacemaker choices. -
SimpliDerm Initiative
Q: What are the key 2025 plans for SimpliDerm?
A: The focus for SimpliDerm is on expanding its proprietary distribution in reconstructive biosurgery, especially in breast reconstruction, with initiatives including the launch of the SimpliDerm RM product to capture market opportunities. -
Staffing Levels
Q: Is the team fully staffed now?
A: Management expressed confidence in the current team while using a hybrid strategy to supplement direct hiring with independent distributors in key territories, suggesting a cautious but effective staffing approach.
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