CRY - Earnings call transcript Q2 2019

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Operator

Greetings, and welcome to the CryoLife’s Second Quarter 2019 Financial Results Conference Call. [Operator Instructions] Please note this conference is being recorded. At this time, I’ll turn the conference over to Greg Chodaczek from the Gilmartin Group. Thank you, you may now begin.

Greg Chodaczek

Thank you, operator. afternoon. Good Chodaczek Group. Greg the from is Gilmartin This Thanks the call today. for joining

today Joining Ashley team are Lee, CryoLife’s Pat management me from MacKin, CFO. CEO; and

XXXX. Securities statements of call safe uncertainties expectations statements of include These Before made comply Act Private risks forward-looking Litigation these of of begin, I’d and to Act made and to and to the forward statements Reform Reform The the management’s that we estimates statements statements. within uncertainties, subject future. assumptions on in Comments as results forward-looking this differ involve like Securities or Litigation forward-looking with look a may company’s the requirements materially harbor intentions, the following risks, actual the number Private forward-looking are XXXX. of that from to or meaning the statements hopes, the are of make beliefs, to predictions time cause

statements impact certain Additional filings risks concerning forward-looking that company’s the the time and information from was that in SEC today. press and may time earlier in release to these is issued uncertainties contained

Now turn I’d to over CEO, MacKin. like Pat? it Pat CryoLife’s to

Pat MacKin

you Thanks, afternoon, good everyone, and joining Greg, us. thank and for

unexpected despite results We portfolio that can Our even challenges. delivered inline drive while again, our second quarter results impacted quarter. consistent once the headwinds demonstrated, differentiated facing short-term

delivery our pleased our on on still of development know half Those growth three further company continued progress to made XXXX the other I’m objectives. second objectives next-generation organic opportunities. who we towards JOTEC following of and launch is and quarter, products progress of of the revenue produced number our on XXXX, simultaneously report in strategy In execution with expected key solid we have that pipeline to track. a along the you been

second to second currency on and a reflecting as is JOTEC product performance; primarily compared On-X growth and quarter to strong This $XX.X GAAP the Turning of second a basis on XXXX. lines. non-GAAP quarter for consistent total X% constant the was delivered revenue quarter BioGlue, basis our million, by X%

a to grew international increased relative basis on penetration second X% of JOTEC driven non-GAAP quarter currency by in our markets. XXXX, constant the

During the of to of second failure sterilization experienced one us its partner caused primary lose a lines that our quarter, sterilization product.

of from XX% situation, rate loss stemming the currency this approximately constant JOTEC would basis. growth Excluding a revenues, our been non-GAAP on have

the the growth products expect we into next-generation to platform’s for the products new of this three by forward, JOTEC end European by key Looking as continue the our introduction trends differentiation year. as driven of well markets

revenue compared second the a we superior growing as On-X; FDA constant a Turning America our take quarter design currency basis quarter, On-X revenues from constant and solid North growth competitors, expect given X%. we X% to increased to currency second remain in revenue as softer-than-expected to market growth of Despite non-GAAP with on share to continue XXXX, the non-GAAP in On-X’ label.

demonstrate the businesses team our our BioGlue these and adhesive on Asia-Pacific to in continue constant and of strength, and X% BioGlue advantages increased effectiveness as distributors Europe results. to surgical BioGlue solid currency basis – both non-GAAP direct deliver tissue markets. a sales and economic continue in

tissue the non-GAAP a led quarter on basis was by During tissue quarter, currency our in another up our second constant business cardiac strong business. X% valve

discuss Before long-term near-term performance, some financial who catalysts. turning as would and highlights second Ashley, I the call quarter well over our review growth as will to business to like

third typical thoracoabdominal XXXX, mark. these first device to the receiving quarter we into three for on of for mark XXXX. Based on with off-the-shelf JOTEC; we In time the of European next-generation products CE products Starting our first would XXXX. we thoracic CE stent markets ever and our submitted remain in graft in introduce frames, anticipate the track JOTEC branched quarter

thoracoabdominal for named branched be patient-specific eliminating the next-generation E-nside, of available custom our the E-vita time device will Open graft waiting of will for branched by built. is shelf, to which first days stent a will expect Neo, receive off As be a graft year. approval a device, regulatory the submit Frozen and mark to called be Trunk, reminder, Further, CE we our Elephant the next-generation next end month,

approved the trial. As with the to PROACT IND valve, On-X growth in And the third FDA long-term receive driver currently quarter. next we our best-in-class the of for hope working of XXA we’re finalize FDA mechanical design to our the an from

to valve our about unique of design trial this allow monitor we the Coumadin to doctor eliminates mechanical the to that to the post-procedure be Eliquis and to excited versus monitor continue very their go patients going and – We to using aortic manage levels. doctor will On-X demonstrate technology having and and as to expect use it INR to

substantial such and business. know, in you indication could As we growth patients to benefit an our On-X be would a accelerate believe

earlier was FDA Chinese year. for approval regulatory BioGlue submitted Moving to to for BioGlue; the our this application the

Regarding U.S. in the our PMA our PerClot complete, we FDA is submit on enrollment and remain product, XXXX. a to trial PerClot in early to track

data May tissue study, Paul Ross in our experience AATS Toronto. results is which performance pulmonary mentioned, from Adding demand recent which valves, to as were at presented Stelzer’s strong previously our tissue meeting early which for in data. we from the believe long-term – Turning business; we Dr. to to these presented stems continue positive

XX underwent demonstrated In and and of failure XX%, respectively. XX years Ross from XX this XX%, demonstrated was XXX procedure at XX as years, a data review retrospective respectively, XX% survival of for – XX-year freedom well the XX% Ross and the over at period, that and patients, as the reoperation who

Ross to with patient’s the pulmonary the the procedure has is are to used those been replace For it’s where allograft not pulmonary which procedure, the a familiar valve, position. who native aortic double-valve moved

penetration our opportunities. sales in to well impacted of progress capitalizing America. good these Pacific our in leaders make as areas, have recent our operations strengths cross-selling Finally, The the competitive in Latin of we Asia commercial as and on continue expansion sales already additions two portfolio’s

several toward selective in to next shift on from helped and remain track territories. and we Latin in direct as teams Europe The commercial partners quarters, America experience in sales our the Pacific process we Asia direct has Asia implement direct us to expand our gain we distribution a Pacific. sales through Latin America smoother Over in migrate

I will second now turn the call of results financial our our Ashley quarter outlook. over to a review detailed and for

Ashley?

Ashley Lee

and and Pat, the We of compared a everyone. currency million saw Thanks, second X% good our revenue revenue a to across on four product major quarter constant X% of $XX.X company increases basis year-over-year afternoon, increased has all Total to non-GAAP grew XXXX. lines.

we that production comp. Recall X%. in second approximately $XXX,XXX the would constant currency X% revenue year-over-year a in generated quarter, quarter and which has XXXX, in quarterly lost the posted of revenue, approximately Pat reported JOTEC growth growth revenue would As growth have run toughest mentioned, strong non-GAAP during we revenue large additional which resulted created of very approximately that of have our

flat X% X% constant in This non-GAAP product reported year-over-year the impact JOTEC euro basis, the to Considering at approximately a and been currency is versus rates the Looking lines; to run, approximately currency U.S. constant would both have dollar. individual been versus second primarily production growth of revenue loss the non-GAAP weakness growth have would quarter the quarter the compared JOTEC and in currency growth due XX%. revenues difference large second constant increased XXXX. the reported on were for of

X% a of second X% quarter and increased second X% basis, a and revenues basis the to currency quarter on GAAP the the non-GAAP currency quarter both On-X a increased both to XXXX. quarter the basis BioGlue revenues constant for constant on X% on basis, in GAAP compared compared on of second XXXX. second a

Revenues every the revenues were been The a expansion OUS our XX% geography direct saw during in we quarter. strategy. particularly growth increase constant year-over-year has in where on basis. by international currency experienced growth We strong augmented markets the a of in

compared for XXXX. Total increased second tissue revenues X% processing the quarter to quarter of the second by

During processing a procedure. cardiac decreased revenues performance recently long-term tissue increased favorably and tissue and affected XX% data processing vascular of X% by tissue valves revenues published renaissance tissue revenues the Ross in the Cardiac quarter, were our processing year-over-year. second

to resulting decreased competitive segment grafts decrease shortage primarily a processing of temporary Vascular tissue meet to a from demand revenues and pressure. in prices due sale our existing vein long average

mentioned during quarter to we we favorably near-term in going affected during increase supply place, second to are that the forward. initiatives the conference and we implemented last as However, call, be expect our vascular revenues

of were gross versus second QX Our XX% margins quarter. were and QX, margins balance year. about will for Gross that this higher points improve margins the the XX over expect in continue to we basis

was with compensation. stock income excess benefits favorably in affected associated tax by quarter expense tax second the Our

Excluding range. effective those benefits, XX% been low tax in the rate our

net fully including million per refer of results, income diluted a we to GAAP GAAP net On or of press results. reported million additional of $X.XX XXXX. $X.X quarter about our Non-GAAP information the the line, results share. or release in non-GAAP second our these our per share approximately bottom for was Please to reconciliation $X.XX $X.X income

As cash had cash, net million current credit and X.X approximately our times under outstanding our approximately million And securities. XX, and based of in times. loan XXXX, documents, was leverage approximately term $XXX equivalents we gross on X.X approximately our $XX July We at had restricted our leverage B. stood

times expect the of be net by our We adjusted around EBITDA X leverage to end year. the

current have can aggregate was no the quarter. debt needs end our of on support X.XX% comfortably our the loan at business model. interest We rate our term and second to financing Our service

We and our financial million. and between full are $XX.X we million maintaining year third guidance, revenues expect XXXX $XX.X quarter

business. supply guidance the revenue on our impact issues with line of quarter product JOTEC temporary currency third and reflects Our the

distributor for markets JOTEC to line. line supply of in trials and new quantities our testing supporting approvals Latin Regarding consignment transitioning the have in next-generation temporary to units and created stocking initial the product issues our networks to JOTEC enhanced made the direct supply, product quantities with support support introductions in support it and worldwide America, various Asia-Pacific

products beginning and of We fourth quarters. third expect JOTEC supply in to the increase

guidance a of previous expected is X%, our high comments single-digit be X% third and constant of between currency Despite these year on constant full the growth. with reflects X.X% for between growth basis quarter currency consistent delivering our is growth X% still to and which and factors, our

my concludes and turn Pat. it comments, I’ll to over That back

Pat MacKin

Thanks, Ashley.

heard great you’ve making progress we’re objectives. our today, as on So advancing key

products quarters. We filed regulatory our We our of next JOTEC two the application next-generation BioGlue to China. in approval expect over three for launch

and confidence, in to still to drive in we start to level. say take trial to XXXX. PerClot have our consistent I the submitting FDA the We XXA days are quarter, third That obligation company why best expect with the growth PROACT anticipate we next can We the and believe in ahead. the our place early the pieces is

employees to the quarter second all also I success. helped who’ve make our Well, like of thank a

around but only company many and not people the the benefits work important Your world. families the

the call? with the With will open line will Operator, we you proceed now questions. that, to please

Operator

We’ll Yes, be you. session. you. Instructions] a question-and-answer thank Thank now conducting [Operator

from proceed question Jason line with First of Genuity. Mills Canaccord comes the Please question. your with

David Rescott

hear Pat, is on right? actually, David this Hey, Can Rescott me Jason. you all for

Pat MacKin

can We you fine, hear David. Yes.

David Rescott

two So wanted may firstly, on to on I questions, JOTEC. start be

So of thinking are should of of you how part to will where Kind product how you Europe that commercialization looking rollout? some of about sense color see any to commercialization acceleration up guys we’re kind get for one, really, of second you just on forward, And kind of coming the rollout? the from about could about And or you think look how rollouts as think in a ahead do the those? U.S. JOTEC you forward? either better setting the going process trying provide we or European think thinking type the kind of where

Pat MacKin

still feel and approved approval, thoracoabdominal graft, are the I of a talked QX. earlier Obviously, the contemplated, of that we’ve the devices branched track. little bit to on get of on those but Number that QX, things. always that two so that, kind we with both the E-nside, CE early we’ve QX about one, we extra and in year Yes, beginning said the submissions; we mean, we feel of like time, like from a applications we’re E-nya, mark we couple days added expected thoracic we’re a stent that’s in in the – the first and graft, and going

we the which is get which and The quarter. the Open week, is E-vita to device, that in expect third the we will fourth Frozen approval be device, our Elephant Neo, that submitting Trunk in next

we reasons to those be add the kind approved, obviously second mean, – in and – one – the So line. get of we of as products products acceleration will those that’s top because we’ll half will the an you see I think meaningfully

I’m was rate I – think product around of we X% had currency, is, in most the but with the challenges probably all in growth JOTEC extremely message extremely on coming frankly, supply we launches that it the we’re I but constant important a line, we’ve out. three problem talked – bullish, around had near-term, softer some mean, particularly these a kind we the and sterilization bullish quarter, got and

our like think percent it’s portfolio XX-plus I is upgraded. of getting

we to improved performance expect in see So second half. the

of expect is nice certainly up products And loosens XXXX, all becomes to XXXX JOTEC very year of growth going for rates see prevalent, and better be a supply those kind the as think we we to more in Europe. but exiting

David Rescott

in changes, of thanks. OUS be Then you Okay, sales in of the detail some you as I what places about kind into provide could what’s talking it the next looking last second color mix, If this margins, transition? on have launches kind the time as that, or maybe year. for half the boost that guess, guess, some you be year would great. one, maybe and Whether structural go force would I could second product the initiatives direct levers into margins? far of product

Ashley Lee

Yes. in are David, that that are several result improvement we’ve we to the margin a years. things the gross touched but over these of going within next on several think in on company are there previous couple going calls,

that First had. discipline not in, the our just a small now. we’ve and the that some people we down cost the enhancement that to with ops a team of foremost, brought that, it’s had previously focus organization, a is things we of the of one just management as on It new organization initiatives. focus this was and And year of started

is So year going drive higher down help we cost next that this to think margins over three to the just years. to and five

weren’t are things both help enhance In to we that and going markets around on those going Europe. have and we’ve in after where talked addition The where in long-term. just to that in acquisition, margins, JOTEC are previously, currently of world direct taking markets some company’s are some direct the that, we lines we there certain both going about initiatives the product near-term direct

product quarter On-X in year. just CryoLife initiative former Brazil. really the the that and And kicked of taking lines are direct this off We of in BioGlue has second

as Latin is our distributor optimizing Another and that’s by both well. working thing that, enhancing us margin we’re that distributor on networks, capture our we’re in And networks America. doing allowing Asia-Pacific to

the company grow look we are in longer On-X then line continues term, the expanding that we last future JOTEC margin thing, the opportunities the getting bit future. with And the little U.S., product as both be to think for as and more in into the those going to

David Rescott

Thanks All right. Great. taking my question. for

Operator

is of with & proceed question. Matson Company. question Mike Next Please with from Needham the line your

Mike Matson

with Thanks questions. just taking Hi. On-X. wanted my to start for I

with JOTEC. heard what happened going I I growth regions of, there, And just commentary. was the slower curious On-X? kind but lot what’s that I understand So did hear there. but be May a a on of missed it, down little the going lot I’ve on, for a

Pat MacKin

growing Yes. of our as kind of over of pretty last nothing field do the And On-X we out I checks, ordinary. mean, significantly there’s kind we’ve several obviously years. the kind of been

– trend there a our But I that think of than the some bit of a that was into kind the device, field companies a out meaningful their TAVR it checks. really jumped only younger is little think patient thing tissue of not didn’t we strategy. population heard other which pushing future we’ve for smart of is other kind in anything a valves

Mike Matson

Thanks. Okay.

tissue younger in clarify, say the you you patients? or to Just mean SAVR valves, when pushing TAVR

Pat MacKin

is again TAVR, which

Mike Matson

TAVR.

Pat MacKin

very this looks is think again XX which ask people recent valves? – an out, part of that your influence of with under us, And is If reach. the that is something III that’s don’t X% on the came – it’s me mechanical the just than I I a data and this PARTNER think Yes, yes, TAVR far less having years one at trial, old. were patients to

and patients, to XX- that this a XX- trial XX. was So was average was year-old the

we I supported community. then is, TAVR some heard patient SAVR saying, thought later. valve a have old him XX – clinical in give cardiologist valve putting saying, is a tissue in, TAVR in well think particularly that’s well, So put years under a a and the the That what people that’s not of we’ll

I inferior not There’s data, again, would the And that valve about well with mortality. that have were valves reoperation. extensive performance They an documented. informed in of accept. patients that’s patients increase to in they deterioration if think literature something leading There’s structural tissue It’s XX. under more

think this tissue the younger in been proven I patients So again, out. is – already

meeting failure kind time XX-year and in eye-opening surgeon that kind heard was mean bioprosthetic registry In XX I the to most that quarter fact, the valve the the to a was, this years, of valve eight of was from data olds. in and a

what’s So you to you tissue can putting happen there. younger imagine patients start valves in if going

So strongly population the I out think a hopefully, get better bringing we with in in very – we’re approved INR the in a which, XXA the as at is lower great under feel again, commented even trial, is the I the and we PROACT solution it will, script, that third On-X XX in quarter. looking patient

So this a we solution feel patient we like for great have population.

for old. the was I at XX PARTNER years By the it that was great think data. one-year data way, patients

a I patient sense. again, think population certain it makes So for

bicuspid the XX. think of the to those thing valves and other who in got I of patients remember the age people under that’s are there now trials is, are majority

turf. tissue kind them So that’s into strategy bright more is not I data. given a why bring lot and of trying of our the not coming there’s kind a It’s TAVR in, of a think kind of reasons to

Mike Matson

couple just super Okay. That BioGlue. was helpful. then And a on

And timing? currency. strong Chinese was the I then think, on al et visibility any U.S., X%, or also, constant outside updates any really growth curious there So

going on speed cross-selling just on that more what’s that? Or with is or The So Street?

Pat MacKin

no. – Yes

gotten kind should bit PMA-like to and it’s to it’s little feedback I in a China, from the two hearing our we’ve So initial of we’re with probably going we the and at to the lines to I feedback, in you. kind China, time and on a one to panel. China, go what we’re black BioGlue on QX be the of other be mean approval back we honest partners if when going get, mean, products box, of From in ground years. of looked questions

status at kind as So from we’ll more we really future certainly point. this have call a new don’t the that anything share get color but feedback, what we of on is,

the of international our far Europe, outside growth, all and sales heavy majority of BioGlue As through as our which distributors. it’s of are kind direct U.S. markets,

So quarter – stock big into patterns mean, softer quarter. may not this the a It you unwind. kind doesn’t is XX-day to up buying one of then necessarily tie of kind your where where I uncommon see the and quarter or a distributor have lumpy little next, reporting

be So with But the BioGlue we lumpy somewhat obviously a can again, had throughout quarter good that year. internationally.

Mike Matson

That’s all Great. Okay. have. you. I Thank

Pat MacKin

Thanks, Mike.

Operator

proceed line from Jeffrey question. question next The is your Ladenburg of with Cohen the with Thalmann. Please

Jeffrey Cohen

Pat, Hi, you? are Ashley. How

Pat MacKin

Hey, Jeff.

Ashley Lee

afternoon. Good Hey,

Jeffrey Cohen

questions, may. if I two So

it that getting Was firstly callouts your front? more have that just, a as efficient Looks the with like did Europe quarter. they feels efficient for like or some are specific is any were more more So activities of the or reps less? result of in on

Pat MacKin

excited our think channel the significantly strengthened Yes. I mentioned thing I we’re I I mean over in the about, Europe. we last earlier. have mean years, few one this very

roughly reps now. XX right sitting we’re Europe at think in I

JOTEC you get which all We these to this is in of kind approval, think portfolio, to are I know got of of, total field, and of we launches mean, who heels get things. you the provide many you on going growth, the revamping particularly the your meaningful in XXXX. are a as basically,

your consignment customers. out You train inventory reps and your ought your get and train to

premarket close particularly takes this but without which So lot excited, a in regulation, new this and bit the in medical it on device up medical the the approvals clinical is little of we’re to going, regulatory the – door environment getting to people going from to device data. Europe directive to where a basically very transition

channel kick So to a kind off with world-class we of XXXX. end feel year to have aorta this we’re really and a to going strong like thoracic portfolio

channel prepared I very that, well So accelerate is growth. think that to

Jeffrey Cohen

And get Okay. then better $X.X about trying more talk understanding to it. million? you Got just a could bit a I’m and production this of... this run

Pat MacKin

of Yes. on product partner there’s sterilized of It – mistake. was we companies, first like yes, million are we right? about sterilization. that two They is, on, worth the a things many going JOTEC that The a mean, have twice. basically a just I frankly, does have $X.X lot – one have front, just a

they So about That $X.X it which commented tune million means cooked of product. the the twice, us to of his ruined as hurt in Ashley you’ve remarks. kind

a a The on of primarily that European second going thing that’s – Europe. it to German-based focus European distributors – company JOTEC was was is sold outside

And new in distributors. commercial Pacific strong And comments, in heard as on and bringing bringing we’ve put leaders in Latin new you some very we’re – we’re Asia America. the on

direct to max And kind launch JOTEC cases, we’re hiring just at bring to distributors, people. now. launch of cover We’re products, capacity right in the inventories at

to So people wave you and just you as going get out not it’s as something want. It trained all of and you a more just sudden some many just and up to spit time units the running. takes them wand get it’s a can –

slowing a get we XXXX manufacturing-constrained of these in little into coming we’re that bit, this. will kind bit but a launches right quarter as is It kind stride. down of hit And our biggest will we third full I going QX. in to rectify we’re I get the our think said, better So And now. as up,

Jeffrey Cohen

there? two there? of think previously And that how What’s with about XX% capacity that some XX% And the in construct there, what XX% kind or of? availability the the Kind or then to another story is was facility I runs footprint structure. know I

Pat MacKin

we’ve – is taken just to We’ve main it’s couple ago. bring line year, that XX% – of I a which another grew, just well had mean, we’re a good of doing. know, actually lot of I Yes, weeks actually floor we’re literally a as question. doing – it’s was I there mean, got product expansion building, as and we’re no, some last needed. trailers growing we’ve temporary works. of much over our in you that We’d

So got kind It’s the we’re can just fast capacity space. how – everything up. the you in we’ve ramp of

So problem good about had And resolved. there. We very line strong operations but issues we’ve full to to wish today, I’m product get our in to again, opportunities a – a excited got for the rate the team. get extremely we grow JOTEC have. as a significant supply It’s we’ll product supply we these continue

Jeffrey Cohen

now serialization And as sole Okay. that your on far as source the front?

Pat MacKin

I mean, we use lots of different products. sterilizers around the world for different

– So but I JOTEC, – we’re for won’t specifically we’ve say for to the check addressed I’d issue. have

Jeffrey Cohen

Thanks for it. taking Got for questions. Perfect. the all

Operator

The question Instructions] questions. proceed line next [Operator the Securities. Kalia, Please with Northland is with your from of Suraj

Suraj Kalia

hear Good you afternoon, me afternoon, Can Pat. Good right? Ashley.

Pat MacKin

kind It’s connection. a you. hear can Yes. We scratchy of

Suraj Kalia

the my background the questions I’m so Hopefully, you noise. through. hear Pat, at might come airport

to for there be slight a Pat, So PROACT delay. seems XXA,

a the Your color great. trial originally of that something is some What design in in commentary contention? be the would the has shed is additional Any – – terms discussions the FDA? there color of point with

Pat MacKin

Yes. I the heard No, Sure. question. No.

iron So been CDER. all in out of the been purposely the agency. drug And to think this CDRA, internal That’s inherent a – new of them had been working to to complexity I months. have We is device work They look, the XX with. with the number And them. arm, of meetings issues. probably good the some there with very have there’s very I helpful. the obviously, They arm, area discussions a with FDA is for mean, kind for complexity we’ve

going I approved. to regulators to predict long So stuff always say again, I can how it’s get take

you submitting mostly IND we good this agree that. would with very had I our say final week. think I and conversations would we’re with them,

wait of it’s but a we’ve I and what’s we’ll So response responses, see questions I all XX-day time. think mean our got answered, and

we get should like in for an approval trial. we So third feel quarter the the

Suraj Kalia

XX just III Got I now P is III, look about My it’s in – prospect, age patient – age creep? average per said it. If mean, there’s By how get talked anticipation se. saying but curious on would the by TAVR? prevent as I’m think the as approval Am low-risk I far is PARTNER getting you years. was And that? as you imminent. I Pat, into offline I mentioned tremendous remember you XX-year-old Edward there a out, in approval. low correctly, you was I clearly curious, how obviously, you question, this. Pat, prevent no do risk, you understand, I once how would you you would that know age that limit wrong

Pat MacKin

Yes.

You’re patients wrong. This X% big do of mean PARTNER were age. I actually dead was than XX. a I does of a the to risk is it Low mean this, mean less of way confusion. kind but young a in tricky III not under age the

patient this TAVR. So age of patients the XX% right? age in XX, under of a XX XX is were – predominantly with was to the trial average XX, PARTNER of is at III trial The this right? There zero study durability

I won’t there I think but the out say that data it not does support. that happen, not to mean I’m So again,

to, In TAVR fact, under XX. in feel the surgeon KOLs basically patients is I like not talked indicated

XX-year- no under – olds in prosthetic old reasons in long-term work couple because how for it. performance work of valve a There’s under long. XX-year don’t a know one, there’s valves does tissue we that data Number very with

the majority patients is XX III. a bicuspid studied under valves of and second have were The bicuspid the in valve, not PARTNER

issue to XX talk valves, under which into of old patients with. – begin can for under right? XX, you doesn’t the get kind tissue you didn’t study last of majority then about in but creep, tissue whole years So they the the age is bicuspid And

inside. a with put to tissue going you’re Now TAVR

the XX-year was registry, for XX the eight I valves think registry, valve this that the I and data to bioprosthetic in time of olds. to valve that valve out valve failure commented mean on earlier, years and in

at to think look, what’s they’re be reason valves under people patients again end like Coumadin. XX? So I patients going do, day, to the to they rate but are So mechanical going the the the do what taking don’t of going failure – like because don’t

trail competitors a way a the And And or It’s which And down get a is do. that XX. changer with what for the full start the still and this game to of hope patients half piece to can get life today, want for our want valves. that’s take Coumadin rolling valve, one do amount better is mechanical to XXA. do life you valves second PROACT total of valve you On-X We question, under year. going the than you

Suraj Kalia

you. Thank

Operator

First question next the coming Joe from with line of is with proceed Munda your question. Please Our Analysis.

Joe Munda

Good afternoon me okay? guys. hear you Can

Pat MacKin

Yes. David. fine, can We you hear

Joe Munda

all guidance. have the cylinders on actually, issues, on around quarter? it question JOTEC of you say, how the things impact just on had both sterilization with Pat, equal, hitting quarter I’m revolves supply all curious, third let’s first third think do much the being would an you’re and

Pat MacKin

I mean, to know of that million. It’s and from say. we can’t I have we of how the in it’s probably, $X.X third range orders I we kind the mean, in mean, $X that quarter. hard fill million our to

Joe Munda

of business then in helpful. drive business, digit? you data overcome issues how those don’t the always that little Okay. this numbers III, from PARTNER the back some and but regarding overcoming spoke of in I you the a side, guess, That’s that just growth On-X double And On-X in softness for I quarter. front to growth to have me, do about on had potentially, in double-digit the confidence been

Pat MacKin

Yes.

I things. for issue I there’s think I no question. has big this currency been mean, mean, of a couple there’s one, year, a us

in on field. growth kind heard that I key noise accounts. the market – we kind was in for game some in total as PROACT is accounts some noise range. only to the overseas X% checks mean, think trial So move well say the around I a the changer of to this was We tissue did setup our the constant being XXA as TAVR. the the the That said, of of kind I U.S. On-X currency

kind the it’s still. So of not like think about patients again, valve one We that we’re about XX. we’re standing – a – talking not age we’re talking talking of – we’re for under

For sense doesn’t population, that the operations lifetime make idea a or over getting a payer. the patient multiple for the of of lot valve patient

in position in the XX. like valves really we So think if under a aortic the anticoagulant, have patients benign more you it landscape of can change Eliquis, On-X would the

So the and very this deal to we’re III, got it’s of clinical kind not have sitting of quarter. just to with kind we’ve unique and like trial PARTNER a still going coming

Joe Munda

supply helpful. – That’s talked curious competitive issues? on pressure – vascular tissue of decline well on as we I either last supply is to guess competitive question, as I’m And constraints. much my or then about weighted how the the the short just business, Okay. the of

Pat MacKin

then each the think the last price. of And So they vascular – and as expect mean case significant issue that real kind drops other, competitor in product. we I a stronger in second made improvements a tissue call kind we be we half Well, been don’t to is saphenous and But because area, we’ve our together. tied cover commented this and are much the two trigger they right? vein it’s have can’t quarter. the of we long competitor I

our of So into we’ve let him kind accounts.

by eliminating we problem, so the supply And competitive the eliminate problem.

years. saphenous XX doing the eliminate We’ve been of CryoLife field, So we’re is brand we’ll – I this extremely for this get think issue. If our vein, full supply we strong. the

Joe Munda

you. Thank Okay.

Operator

turn floor no this Mr. MacKin, the for management I’ll over to there time. closing comments. back questions further are at

Pat MacKin

number Well, thanks, call. And beat again, think even I and in I our line set the actually the and the QX bottom challenges. joining of out points we currency for the the face top would – the line of for one

for proud team So on that. delivering of our I’m

QX. we’ve in The we to second the PROACT lot coming thing got about expect talked half. in the back XXA approved – is a get We’ve trial

our thoracic E-vita get approved We’ve should our graft, Neo, QX. that next-generation approval Trunk, our Open thoracoabdominal got get graft Elephant stent to expect our next-generation in QX. Frozen We in next-generation stent

in Our and improving our be both should second vascular the JOTEC half. supply supply tissue

QX as feel JOTEC we then this China kind in got So QX in issue and work through like supply we’ll we’ve we be because of heading that, kind BioGlue U.S. the strong really hitting. and into of will a PerClot again, strong, XXXX be

momentum deal So We we – had forward to stronger had with a a – then going but nice them to some was and I move XXXX. with going and a we’re it think solid QX I into think a headwinds, quarter.

for again thanks joining So

Operator

today conference. for your concludes you This participation. Thank

may lines You time. this at now your disconnect

Artivion (AORT) 30 Jul 192019 Q2 Earnings call transcript