ABIOMED Inc (ABMD) 2015 Q2 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the Abiomed, Inc. Second Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions). As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Ms. Ingrid Goldberg, Director of Investor Relations. Ms. Goldberg, you may begin.

Thank you. Good morning and welcome to Abiomed's Second Quarter of Fiscal 2015 Earnings Conference Call. This is Ingrid Goldberg, Director of Investor Relations for Abiomed, and I'm here with Mike Minogue, Abiomed's Chairman, President, and Chief Executive Officer, and Bob Bowen, Vice President and Chief Financial Officer.

The format for today's call will be as follows. First, Mike will discuss strategic highlights from the second quarter and then turn to our key operational and strategic objectives. Next, Bob will provide details on the financial results outlined in today's press release and we will then open up the call for your questions.

Before I turn the call over to Mike I would like to remind everyone on the call that this presentation includes forward-looking statements about the development of Abiomed's existing and new products, the Company's progress towards commercial growth and future financial performance as well as future opportunities and expected regulatory approvals.

These forward-looking statements contained in this presentation is subject to the risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Additional information regarding these factors appears under the header Forward-Looking Statements in the press release we issued this morning and in part 1, item 1A, Risk Factors, in our annual report on Form 10K in the year ended March 31, 2014 that is filed with the SEC and is available at www.SEC.gov and on our website at www.Abiomed.com as well as subsequent filings with the SEC.

The forward-looking statements in this presentation speak only to the original date of this presentation and we undertake no obligation to update or revise any of these statements.

I thank you for joining us and I'm now pleased to introduce Abiomed's Chairman, President, and Chief Executive Officer, Mike Minogue.

Thank you, Ingrid. Good morning, everyone. Abiomed achieved our best quarter in revenue with $51.9 million and growth of 17%. US patient utilization also set new highs with a robust 19% growth rate driven by record number of patients in all three categories of support, prophylactic, emergent, and other.

From a product perspective, Impella CP utilization was a key driver and increased 79% in patients supported. The CP is now in 56% of our customer sites. We are proud of our execution this quarter and have grown top line revenue double digits year over year for 20 straight quarters. This second quarter demonstrated the renewed interest by physicians to identify a new population of patients for the cath lab that can benefit from extensive revascularization and may require hemodynamic support for high-risk procedures.

Most of this patient population have likely been turned down or not considered for surgery by a heart team because of age or prior surgical risk factors. With the support hemodynamic assist devices such as Impella, this historically undertreated patient population may now be provided an alternative treatment with real benefit. This new physician-driven initiative around complex, high-risk, interventional procedures called CHIP was highlighted at TCT and is a call to arms by the interventional community to create education and training around the ability to identify and appropriately treat these high-risk patients.

For today's call we have some very positive news regarding the execution on our regulatory processes. In regard to our Impella 2.5 PMA submission, we are pleased to report today that Abiomed and the FDA have agreed on the indication and use for high-risk PCI for the Impella 2.5 pre-market approval and Abiomed no longer anticipates the requirement for an FDA panel before our projected PMA approval in February to March 2015. We believe this development is the result of our submission of the most comprehensive data set in the field of circulatory support and our positive interaction with the FDA during the 515 process.

As a reminder, our data set incorporates two FDA approved studies, PROTECT I and PROTECT II, totally 472 patients which includes randomized data, 637 new high-risk PCI patients from the US Impella registry, and clinical data from 215 publications for a total of 1,638 Impella patients. The submission also contained a medical device reporting analysis, MDRs, from approximately 14,000 patients and comes after six years of real world US Impella experience with over 24,000 patients treated post-510K clearance.

In summary, Impella is the most studied FDA percutaneous circulatory support device and is referenced in five clinical guidelines. Relative to next steps, Abiomed recently completed an FDA audit at our Danvers facility which allowed for a combined review of our operations and quality systems for both the Impella 2.5 and Impella RP submissions. We want to thank the FDA for their engagement in this process and recognize that their initial decision to grant the 510K clearance in 2008 provided Americans with access to this breakthrough technology for the last six years. As a reference, Impella has been approved in Europe since 2004 for a variety of indications.

To remind our investors, our stated plan has always been to submit for PMA approval for high-risk PCI for the Impella 2.5 and complete all the mandated FDA audits for clinical data, operations, and manufacturing. Following approval of the Impella 2.5, the Impella 5.0 and the Impella CP will be submitted as PMA supplements, including add-ons for other indications. Until the 515 process is completed, the Impella 5.0 and CP will remain on the market under the existing 510K clearances. In parallel to our 515 process this quarter, we completed our Impella RP HDE submission and announced RECOVER RIGHT results at TCT 2014.

The clinical trial results demonstrated an overall survival rate of 73% in this challenging patient population. We appreciate the FDA combining the recent operational audit for the Impella 2.5 with the Impella RP and reiterate our projected HDE approval by February to March 2015, an increase in one month earlier range.

Moving overseas to Japan, we hosted a Japanese advisory board at TCT and Physicians Society support remains very strong. We maintain our expected reimbursement approvals to occur six to nine months from the PMDA approval which leads to a commercial launch forecast as stated between June and December of 2015.

In the market, we feel Impella momentum has helped get reform drives physicians and hospitals to relentlessly explore and study better ways to achieve higher quality at lower cost. One such study that compares quality and cost was recently published in the Journal of the American College of Cardiology. The publication authored by Yale physicians entitled National Trends in the Utilization of Short-term Mechanical Circulatory Support concluded that the use of short-term mechanical circulatory support in the US had decreased in-hospital patient mortality while also decreasing hospital costs. Conversely, there was a 25% increase in the cost of hospital stay associated with the intra-aortic balloon pump use and the study also revealed that the use of balloon pumps in patients before short-term mechanical circulatory support was a predictor of mortality.

This analysis is consistent with our own US Impella registry results, a recent MEDPAR publication, the result of the SHOCK II balloon pump study and the recent decision to downgrade balloon pump use in cardiogenic shock patients to class three in the European Society of Cardiology guidelines. The overall study, in which Abiomed had no involvement, analyzed nearly 12,000 adult patients from 2004 to 2011 using all payer inpatient hospital stays from the Healthcare Research and Quality database.

In summary, our investment in clinical research, new products, and our patent portfolio, along with our disciplined approach in execution, continued to provide Abiomed with the opportunity to become the new standard of care and recognized leader in percutaneous circulatory support. We want to convey our excitement for the future to our stakeholders and thank all our employees for their hard work and dedication to our mission. We look forward to continued execution this year and meaningfully impacting the lives of our patients.

I will now turn the call over to Bob Bowen, our CFO.

Thank you, Mike. And good morning, everyone. As noted in this morning's earnings release, fiscal second quarter revenue increased 17% to a record $51.9 million. To summarize the most important parts of Q2 revenue, Impella patient use in the US was up 19%, Impella reorder revenue in the US was up 20%, Impella revenue outside the US was up 53%, and service revenue was up 27%.

Worldwide Impella product revenue of $46.9 million grew 17%, in line with total revenue growth of 17%. In the US, Impella revenue of $42 million grew 14%. The largest piece of US Impella revenue was from Impella pump reorders totaling $36.7 million, up 20%, driven by a 19% increase in patient use. Outside the US, Impella revenue grew 53% to $4.9 million. Hospital owned average Impella unit inventory levels of Impella 2.5 and Impella CP combined was 2.6 units, equal to the prior sequential quarter and up two-tenths from last year's average of 2.4 units.

With regard to the breakdown of patient utilization, 46% of patient use was in a prophylactic setting and this segment grew 10%. At 46% in Q2, the prophylactic setting returned to the highest segment of patient utilization. 42% was in an emergent setting and this setting grew 25% and has consistently been growing at about this rate. And 12% was all other, the largest piece of which is VT ablation. This segment grew 32%. As of the end of the quarter, 56% of US customers have the Impella CP and 38% of US customers have the Impella 5.0.

Gross margin for the quarter expanded to 81.5% compared to 79.6% a year ago largely due to fewer placement of AIC consoles which totaled 140 this year compared to 172 in the prior year. As of the end of the quarter, 88% of US Impella sites have the AIC console, so we are near the end game of this upgrade cycle. R&D and SG&A expense together totaled $38.1 million compared to $33.9 million in the prior year. R&D expense totaled $8.7 million and the increase of $1.1 million from the prior year was attributable to the ECP acquisition which closed in July.

SG&A expense totaled $29.5 million compared to $26.2 million in the prior year. The increase was attributable to continuing invest in our field personnel, training, and customer support and higher stock compensation expense partially offset by lower legal fees. During the quarter, the Company incurred $4 million in stock compensation expense, $0.6 million of legal fees related to the DOJ investigation, and $0.4 million in transaction costs related to the acquisition of ECP in July.

The amounts for the comparable prior year period were $2.8 million of stock compensation expense and $1.7 million of legal fees related to the DOJ investigation and shareholder litigation matters. GAAP net income for the quarter increased to $3.9 million or $0.09 per diluted share from $1.1 million or $0.03 per diluted share a year ago. Our balance sheet remains in excellent shape and we ended the quarter with cash and short and long-term marketable securities of $111.9 million after using $15.7 million to acquire ECP.

Turning to guidance, as noted in our press release, we have increased the lower end of full year revenue guidance by $4 million, and the new range is now $209 million to $212 million compared to the previous range of $205 million to $212 million. We expect third quarter revenue to be somewhat higher than the second quarter and fourth quarter revenue to be somewhat higher in the third quarter.

We are reiterating our GAAP operating margin guidance to be in the range of 1% to 4% of revenue as we continue to invest in the expansion of our field sales, clinical, and training organizations, prepare for a post-PMA marketing and clinical environment and accommodate legal expense related to the DOJ investigation.

We are very pleased with our strong results this quarter and it was a significant one for us on many fronts. In particular, the 515 announcement today represents a major milestone for Abiomed which positions us well and gives us increasing confidence in our ability to deliver continued growth and profitability.

Operator, would you please now open up the line for questions?

(Operator Instructions) Matt O'Brien, William Blair.

Good morning. Thanks for taking the questions. Mike or Bob, I was hoping we could start off with the prophylactic reacceleration that we saw in the quarter off of what by my model is a pretty difficult comparison. I know there was a lot of buzz at TCT about CHIP but given the timing of that conference I can't imagine that had much impact. That's probably something more for Q3, Q4. Can you just talk a little bit about some of the drivers of that reacceleration in prophylactic?

Sure, Matt. This is Mike. So, the growth of the prophylactic application did move back as you mentioned into the double digit range. It was at 10% growth and it was 46% of our patients. So, it returned to the most patient category. Emergency growth, as Bob said, was 42% of our patients and grew 25%, and the other category was 12% of our patients and grew 32%. We believe that this is because people are now more aware of the guidelines.

They're more aware of the PROTECT II publications. To date we have six publications now. The most recent one was on the octogenarian population that concluded that irrespective of age, the use of Impella 2.5 was an independent predictor of favorable outcomes. If you look at the model that's out there with the heart team approach with percutaneous valves, they're out looking and finding patients that are surgical turndowns. In the case of PROTECT II the average age was actually 67 but we have the ability to treat patients that are older than that.

I would also highlight that the formal initiative has started by the interventional cardiology community that's called CHIP. That is really designed to recruit more patients to the cath lab, patients that historically have been turned down from surgery because of complexity or age and now they have the benefit of a new therapy such as PCI and to remind folks that the PROTECT II study showed that the ejection fractions did go up 20% to 30% and more than half of the class 3 and class 4 patients improved by at least one class at 90 days as well. So, this is a new and growing population for the cath lab and our goal is really to become the standard of care for helping to increase and provide a hemodynamic support device for this high-risk population.

Just to follow up on that a little bit, Mike, with CHIP, I mean, it would seem to me that that patient population is pretty identified at this point. So, given that it's coming from the clinicians that are recruiting these patients, it would seem that that could be a fairly near-term catalyst in terms of getting more people to the cath lab and potentially having Impella implanted as well. Is that a fair assessment?

That is and it's partly because of things we've talked about in the past called the Appropriate Use Criteria that the bread and butter simple procedures are no longer in the most appropriate category and when we get into our patient population, class 3, class 4, triple vessel disease, they are seen in the area that's most appropriate with the exception of those that are turned down and don't get the option. That is what I believe has kind of rejuvenated the high-risk population.

Okay. And then just one last one for me for Bob. The gross margin strength in the quarter was pretty meaningful. Is this just a function of the generator conversion process kind of winding down? Is this something along the lines of what we should expect going forward?

Yes, Matt. It is partly the consoles. It's also the yield levels and the higher volumes in the manufacturing area all contribute. Pricing was essentially stable. We like to think of our gross margin rates at the 80% level and we're pretty happy with that and anything above that is kind of just extra icing on the cake for us.

Understood. Thank you.

Thanks, Matt.

Danielle Antalffy, Leerink Partners.

Yeah. Hi, guys. This is Puneet in for Danielle. I just wanted to know in terms of the high-risk PCI label and kind of what it means for the emergent patients, is it safe to assume these patients fall under a high-risk umbrella?

The question on the label, the label applies to high-risk PCI and the Impella 2.5 and to remind everyone, that is our plan. And the plan has also been to add the other products, the 5.0 and the CP as a supplement to that, including adding on other indications which could be in the shock category. So, relative to the high-risk PCI, what that means is it's been declared safe and effective and we'll now be able to market for indications in ways that we were not previously able to do. We do believe this will be a catalyst for growth for the high-risk patient population.

Okay. Thanks for that. And then just about the impact of TCT, do you think it actually, does it look better actually to look better than what it is and even the timing of TCT sort of from a volume perspective?

Puneet, could you explain that question so I understand?

Yeah, sure. So, in terms of at TCT in September you talked about versus October last year, in terms of given the timing of the TCT, in terms of volumes that you are seeing? And are you seeing, there were several docs at TCT that were talking about stuff, volumes that are not implanting? Are you seeing any trends along those lines?

I think the trends that we see are pretty favorable across the board.

Thanks for that. That's it for me. Thank you.

Thanks, Puneet.

Raj Denhoy, Jefferies.

Hi. Good morning.

Good morning, Raj.

I wonder if I can just ask about the FDA, the panel decision obviously is the big one? How long you've been pushing us to believe that your discussions with the FDA were positive and I guess this clearly shows that but did anything substantively change in what the FDA saw or viewed? Or was there one thing in particular that got them over to where they didn't think a panel was necessary any more?

The focus of the 515 to do a PMA transition requires the reasonable assurance of safety and effectiveness and this is the most comprehensive data ever submitted to the FDA for percutaneous circulatory support. That's undeniable. And so I just think that they have now set expectations that will not require a panel and we've come to an agreement with the FDA on the indication for use for high-risk PCI. So, there really doesn't appear to be a need for a panel.

When you think about the other indications, any other products as well, do you feel you have the same level of data to support the supplements there? Do you think there's going to be -- I guess what I'm trying to get at is the timing and when we can expect to see those additional supplements approved.

Raj, that's a good question because the hardest bar to cross relative to the risk benefit for the FDA's ratio is really around prophylactic use. That's because VADs are usually used on emergency patients. So, we have passed the bar for prophylactic use that is safe and effective and then now we're going to move into a patient that has a different risk benefit ratio because they're having emergency requirement for hemodynamic support.

And just to remind everyone that one is the practice of medicine and that's why you're seeing the current growth that we have, and two is that emergency use with Impella already carries a class 1 recommendation which means it has the strongest recommendation and it also then and is reimbursed by CMS for all indications. And to answer your question, I do believe we have that strong level of data for these other indications, for these other products. The 5.0 had an FDA study. That was the RECOVER one. We also have an extensive registry that we've been collecting that we're going to continue to use.

And there are multiple publications that we've talked about in the past, for example the Robert Wood Johnson that shows a greater than 70% survival in these types of patients. So, we are working with the FDA. The moment that we get the formal approval on the 2.5, the supplements for the 5.0 will go in as well as will the CP and again we'll work with them to be expeditious about getting the approval, but in the meantime, just to remind everyone, the Impella CP and 5.0 remain on the market with the current 510K clearance until we have the completion of the 515 process.

That's clear. And just one last one. Another thing you've been clear about with us is through this period where you're awaiting FDA approval you were going to be a little bit more conservative perhaps in your marketing and promotional activities around the products. Now that you almost have the FDA approval in hand, should we expect a more aggressive posturing from the Company and should we expect to see an acceleration in revenue growth over the next several quarters?

I think we already have a plan that has acceleration. You saw that in the past quarter. We do expect to have the approval by February and March and we work very closely with the FDA on compliance. So much so that if we;8 have certain things we want to work on, we do it collaboratively. We show them it in advance and that way we just have a good working relationship.

Okay. That's helpful. Congratulations.

Thanks, Raj.

Jayson Bedford, Raymond James.

Hi. This is Mike calling in for Jayson. Can you hear me okay?

Hi, Mike.

Thanks for taking the questions. First, congratulations on the 515 news. That's great. Not to nit pick but it sounds like the label's a little bit more specific than prior commentary which I think included high-risk PCI and hemodynamic instability. So, I don't think that's an issue really for the 2.5 but I guess my question is do you know what the label expansion will be for the CP and the 5.0? Does that include hemodynamic instability or is there another label expansion you're going for, for those supplement devices?

Yes. So, first of all, the label is what we had guided to and so there will be other things in the label that will allow us to really get into the benefits of Impella for high-risk PCI and allow us to really train and market and educate people on all the data from PROTECT I and PROTECT II. We're just telling that the label is around high-risk PCI and you'll get more details as we go on. It is prudent when you're in these discussions and you're closing out your program with the FDA to not discuss more than you need to. We felt that we had an obligation and we wanted to be transparent with our stakeholders so that's why we're telling you today that we've agreed to the indication for use for high-risk PCI.

Your second question, we will be submitting for other indications on the 5.0 and the CP and we'll be going after more of that shock status in that population and just to remind everyone that the 5.0 study that was done, the FDA approve 5.0 study, it was for patients that were in shock and struggling coming off the heart-lung machine. So, we already have data in-house for that as well as what we've collected in the Impella registry.

Okay. Great. Thanks. Shifting to the RP, did you enroll any patients in the CAP during the quarter? And as a follow up to that, do you have any idea what the roll out strategy is going to be for the RP in terms of target centers or number of centers you could add in the first 12 months? And do those centers need IRB approval since it's an HDE and not a PMA or a 510K?

We did enroll a couple of patients. We still have other sites getting their new IRB approved for the Cap, Continuous Access Protocol. What we expect to have is a very controlled launch similar to what we did on the CP and estimates will probably be in the first couple of quarters to make sure that we can really collect the data, publish the data, and share best practices. We anticipate probably around 10 sites per quarter. And your question on the RP is correct. The other product that's out there, the Levitronix for the right side already has an HDE for surgical use. So, all those sites also are required to have an IRB. We started a process of identifying the sites that are in our initial target and we'll be working with them in advance to work through the IRB process.

That's very helpful. Thanks and congrats.

Thanks, Mike.

Chris Cooley, Stephens.

Thank you. And congratulations again on the 515 win in what's been a hard fight but well worth it. Just a couple questions if I may, Mike. Would you mind reminding us what you've invested to date just in terms of your domestic sales and clinical support infrastructure and where you see that needing to go? Maybe kind of characterize how your activities will change now post what we'd assume to be a PMA approval here in the months ahead? And then just as a follow up to that, just want to make sure I'm clear on the follow up to the prior question. As you file for your supplements, do we treat this like any other traditional PMA supplement? Is there anything different we need to think about there either in terms of the way the data is collected or the timing? Or can we kind of finally revert back to the traditional approval timelines? Thanks.

Chris, we have been preparing for the PMA as we've talked about for the last four quarters and we've been adding heads in anticipation of this. We have felt confident that this was coming and we are currently around 155 to 160 people in the US sales team. Two-thirds of those are clinical and we also again have a call center that's open 24 by 7 that we've ramped up. So, that will continue in the near future. It's a pace of two to six depending on if we find the right qualifications and the right person we will do more of a six range, if we're moving along at a slower pace, then we're going to be selective about who we add within the territories. Relative to the supplement, this is going to likely transition now to the traditional timeframes. It is a 515 process but that is what our expectations will be as well.

Thank you.

David Lewis, Morgan Stanley.

Hey. Good morning. This is actually James in for David. I wanted to drill down maybe a little bit more on the potential growth implications for an indication in high-risk PCI. Obviously we saw that, that growth rate tick up a little bit in this quarter which is encouraging even without the label. As we move forward, with a label in hand and presumably some reinforced marketing around that label, what is the growth rate of that segment relative to the other two segments that you've called out, kind of shock and other? Can we get the high-risk elective growth rates up towards where those other two segments are? Or is that too much to hope for?

James, that a very good question and we have already a growth rate that's double digit so I'll give you general guidance, is that we believe that this will be a catalyst to ramp up the growth rate on our high-risk patient population for prophylactic use. We have been growing that population however what we haven't been able to do is have a program similar to the percutaneous valve model where the heart team is looking into the community, talking to the heart failure cardiologists, and looking for referrals for patients who are not surgical candidates or who prefer not to have surgery. We now can create training modules, clinical programs, that will allow us then to share the clinical data that we have from our studies and provide this alternative treatment to patients who can benefit from minimally invasive revascularization.

Got it. And then just one for Bob. Margins in the quarter are obviously very encouraging. We touched a little bit on the gross margin strength already but more of the upside really seemed to come from operating expenses and with the full year guidance obviously implies some modest comprehension in margins to the back half of the year. Can you walk through what might be driving that relative to the margins you saw in the second quarter and to what extent those dynamics might be transitory versus permanent?

James, we added the ECP acquisition, so in the R&D area that is incremental to certainly what we had last year. We also have some continuing expenses related to the remaining completion of the regulatory filings. And then we're continuing to build out our sales and marketing organization as we prepare for the post-PMA kind of marketing efforts that Mike talked about. And then we've left some room which to some extent is a bit of a place holder but we've left some room for potentially incremental expenses to hopefully bring the DOJ related matter to a close as quickly as possible.

Okay. Great. That's all from me.

(Operator Instructions) Jan Wald, Benchmark

Good morning, everyone. Congratulations on the quarter and especially the panel. I guess a lot of my questions have been answered but maybe go into a little bit more detail about what you're going to be doing after the approval? You mentioned education and training programs but I think ;8there's going to be an opportunity for a fairly large marketing effort and certainly a detailed one to position, so maybe you could talk a little bit more about what your plans are going forward and what the implications are for the SG&A spend rate?

Jan, we are planning to do the things that we haven't really done in the past relative to physician education. It will look a little bit like the perc valve model. I'd rather not get into all the details now until after the approval and again we will be giving our guidance on the impact of the SG&A. Overall, as we look at our picture, it's more than just that. So, the first piece is that we want to maintain, continue to have a strong CP roll out, getting great outcomes for patients. That's the focus.

The 2.5 PMA allows us to go out really and expand our high-risk PCI platform, not to mention that the RP approval is going to happen at a similar time will allow us to work on a biventricular basis and also cross over between the cath labs and the hybrid labs and the surgical suites. As you know, there's great demand for the RP. We do believe that getting a PMA on the 5.0 will also be a catalyst for that device which is currently in probably around 30% of our sites. So, the 5.0 with some of the enhancements we do think will also show growth and then again from a geography perspective, we're excited to bring Impella to Japan and China and the rest of Asia. So, the net is we believe we have years of growth ahead of us and we're very proud of the fact that over the last five years, over the past 20 quarters we've grown double digit year over year and we think we have several years ahead to continue with that growth.

Thanks. And just one more question. It looks as if TCT and if you look at the clinical literature, the literature, the complete revascularization is gaining a lot of attention in the physician community. I guess you're going to benefit from that. But the one question I have is it looks as if right now it's the people with great [aunts] that are able to do these complete revascularizations. How far do you think this goes into the physician community or do you see a hierarchical setting where people are -- patients are referred to these centers in order for these centers to do the more complete revascularizations?

I think it's going to be a combination of physicians that want to grow a practice around high-risk. I think it will be subject to those that have that interest. But certainly you require for some of these patients some type of hemodynamic support if you want to try to do extensive revascularization or long balloon inflations or atherectomy. To some extent, the clinical data that we have, the PROTECT II data shows the benefit at very skilled centers of giving them the ability to provide a better cardiac power output as they treat the patients.

The one statistic that wasn't the primary end point but really applies to the healthcare concerns of today is that when patients left the hospital in PROTECT II, the Impella arm had a 56% reduction in major adverse events to 90 days. Seeing a 56% reduction from discharge to 90 days is a pretty staggering statistic and it really matches what the healthcare reform is trying to do as they now measure hospitals, they measure them in quality, not so much from discharge but out to 90 days. And they're looking at things like repeat revascularization and readmissions.

So, we're excited. And to your question, I think it will be a combination because I think it's going to be a heart team approach and hospitals are looking to find better ways.

Thank you very much. Congratulations on the quarter again.

Thanks, Jan.

I am not showing any further questions at this time. Please proceed with any closing remarks, Mr. Minogue.

Thank you again to all of our stakeholders. We appreciate your support and as always if you have any questions, please feel free to reach out to us. Have a great day.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation and everyone have a wonderful day.