LeMaitre Vascular Inc (LMAT) 2007 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to to the LeMaitre Vascular first quarter 2007 final results conference call. As a reminder, today's call is being recorded. At this time, I would like to turn the call over to Mr. Dave Roberts, Chief Financial Officer. Please go ahead, sir.

Thank you, Tony. Good afternoon, and thank you for joining us for our Q1 2007 quarterly conference call. Joining me on the call today is our Chairman, President and CEO, George LeMaitre, and our EVP of Finance, JJ Pellegrino. Before we begin, I'd like to read a Safe Harbor statement.

Certain statements contained in this conference call may be considered forward looking as defined by the Private Securities Litigation Reform Act of 1995, in particular, any statements we make about our expectations for future financial, clinical and operational performance.

Forward-looking statements may often be identified with words such as we expect, we anticipate, upcoming, or similar indications of future expectations. These statements involve various risks and uncertainties that could cause our actual results to differ from those expressed in such forward-looking statements. These risk sand uncertainties include risks related to product demand and market acceptance of our products, significant competition we face from other companies, technologies and alternative medical procedures, our ability to expand our product offerings through internal development or acquisition, our ability to recognize the anticipated benefits of our acquisition, disruption in our single manufacturing facility, our lack of experience and general uncertainty related to seeking regulatory approvals for our products, particularly in the United States, potential claims of third parties that our products infringe their intellectual property rights, and the risks and uncertainties included under the heading risk factors in our final prospectus filed with the SEC in connection with our initial public offerings and available on our investor relations website at www.lemaitre.com and on the SEC's website at www.sec.gov.

Investors are cautioned not to place undue reliance on such forward-looking statements as there is no assurance that the matters contained in such statements will be achieved. The forward-looking statements we make on today's call are based on our beliefs and expectations as of today, May 3, 2007, only. We do not undertake nay obligation to revise or update publicly any forward-looking statements expressed on today's conference call. I'll now turn the call over to George LeMaitre.

Thanks, Dave. I'd like to welcome all of you to our Q1 2007 conference call. I'll start by reviewing some of the quarter's financial, operational and strategic highlights. Dave will then follow with a more detailed review of the quarter, as well a description of a small endovascular acquisition we just completed.

Afterwards, Dave, JJ and I will be happy to take your questions. I'm pleased to report that in Q1 2007 we continued to execute on our business plan, delivering 15% top line growth and a healthy 74.6% gross margin. In Q1, we stayed true to our company's three-prong strategy, one, build our vascular sales force, two, acquire vascular product lines and, three, develop vascular devices. We showed steady advancements on all fronts.

During the quarter, we increased the number of bag-carrying sales reps to 49 and posted record quarterly sales. We completed a small tuck-in acquisition and we launched a next-generation carotid shunt. I will now highlight a few key points from the quarter.

Net sales for Q1 were $9.9 million, a quarterly record. This represents a year-over-year increase of 15% and a sequential increase of 13% versus Q4 2006. This new revenue level begins to validate the 2007 revenue guidance, which we gave you on our last call two months ago. Of note, our endovascular and dialysis access category grew 45% in the quarter due to the high underlying growth rates of these markets, our increased focus on this category and the startup of the distribution of the Powerlink stent graft in Europe.

Our transition from an open vascular to an endovascular company continues. The endovascular and dialysis access category now accounts for 34% of our sales, up from 27% in the year-earlier quarter.

With respect to our sales force, you may recall we hired 11 sales reps in Q4 2006, many in the last couple of weeks of the quarter. In Q1, we hired two additional sales reps, bringing us to 49 at the end of the quarter. We continue to target 50 to 55 bag-carrying sales reps by Q1 2008 and believe it takes six to nine months for a rep to gain traction.

Moving down the income statement, I am pleased to report that we increased our gross margin to 74.6% in Q1 2007 from 73.6% in Q1 2006. This gross margin improvement was driven by our five factory consolidations since 2004. The centralization of production encourages interplay between our R&D and manufacturing personnel, helping us to improve product quality and accelerate product launches.

In January 2007, we launched a next-generation carotid shunt called the Pruitt F3. The F3 is more flexible, color-coded and features increased flow. The F3 has performed better than our pre-launch expectations.

To increase our research and development bandwidth, we've recently hired several product engineers. Naturally, the lion's share of their efforts is focused on the endovascular and dialysis access category. On our last call, we answered a few questions about our UNITE abdominal stent graft trial in the U.S. I'd like to give you an updated status report.

As you may know, we have received conditional approval of this trial, but we continue to seek full approval. We submitted our original application one year ago. Since that time, the number of open FDA questions has decreased from 34 in June of '06 to 18 in September of '06 to four in January of this year. The remaining open questions generally involve the novel hydrogen peroxide sterilization method that we use on the majority of our stent grafts.

We expect to receive our next communiqu from the FDA this coming Wednesday, May 9th. During Q1 2007, we also signed final investigator agreements and completed the training for our first two centers, Emory University Hospital and Harvard and UCLA Medical Centers. This was done based on the conditional approval. These two centers are now waiting the appropriate patients to begin implantation.

Moving to the bottom line, we posted a net loss in Q1 of $629,000. Our solid top-line growth and strong gross margin have allowed us to accelerate our investment in the sales force since our IPO. Indeed, we have almost reached our 50 to 55-rep headcount objective, nearly a year ahead of plan. While these investments clearly advance the business plan, they also come with a cost. One way to think about this cost is to do the math on our incremental sales reps.

We currently employ 11 more sales reps than we did at the end of Q1 2006, most of whom earn a six-figure plus W2. This represents approximately $1.5 million to $2 million per year in incremental selling expenses. Of course, we look forward to future benefits from these investments.

In summary, we had a solid quarter, advancing on all three fronts of our business plan, and while I'm naturally disappointed with our $60 million entity value, I remain excited about the central hypothesis of our IPO, add growth capital to a top five vascular surgery brand.

With that, I'll turn the call over to Dave.

Thanks, George. I'm going to talk about the Q1 financial results first, make a few remarks about our balance sheet and talk about the acquisition that we recently completed and finish with our 2007 guidance. Q1 sales were $9.9 million, a 15% increase over Q1 2006. In terms of our three product categories, endovascular and dialysis access continued to grow the fastest, increasing 45%, while vascular grew 6% and general surgery declined by 4%. In Q1, our endovascular and dialysis access category accounted for 34% of sales, vascular accounted for 56% and general surgery accounted for 10%.

In addition to our mix shifting to endovascular, we became more global. International sales accounted for 40% of worldwide revenues in Q1 2007, up from 34% in Q1 2006. With respect to gross margin, we continued to extract cost from our manufacturing operation. Our gross margin increased from 73.6% in Q1 2006 to 74.6% in Q1 2007 and begins to validate the 75.3% gross margin which we posted in Q4 2006.

The catalyst for our continued gross margin improvement has been our factory consolidation program, which we completed in mid 2006. Our company-wide headcount of 220 at the end of Q1 2007 is down from 225 at the end of Q1 2006. Indeed, over the same time period, the number of direct labor employees of the company has decreased by 24%.

Another metric we track is annualized sales per employee, which was $180,000 in Q1 2007, up from $152,000 in Q1 2006.

Moving on to operating expenses, most of the increases for the quarter took place within sales and marketing. Q1 sales and marketing expenses were $4.8 million, an increase of 48% over $3.2 million in Q1 of 2006. This spending increase was driven primarily by the continued ramp of our sales force, as well as higher direct marketing activities.

We increased the number of bag-carrying reps from 38 at the end of Q1 2006 to 49 at the end of Q1 2007, a 29% increase. First quarter G&A expenses were $2.4 million, up 34% over Q1 2006. Much of this increase was the result of expenses associated with being a public company, such as increased audit fees, insurance costs and fees associated with compliance with Sarbanes-Oxley and FIN 48. We also recorded share-based compensation expense related to FAS 123R of $116,000 in the quarter.

Q1 R&D expenses were $1.2 million, an increase of 45% over Q1 2006. Increases were primarily driven by the hiring of additional R&D engineers, as well as additional product development activities. Other drivers included an increase in regulatory and trial-monitoring personnel and expenditures related to those efforts. R&D expenses were 11% of sales in the quarter. We posted an operating loss in Q1 of $977,000 compared to operating income of $462,000 in the same period 2006.

The net loss for Q1 was $629,000, compared to net income of $370,000 for Q1 2006. Excuse me. Our Q1 [2000] income tax expense was $28,000, compared to $91,000 in Q1 2006. Q1 2007 earnings per share was a loss of $0.04 versus earnings of $0.02 in Q1 2006.

Turning to the balance sheet, we had cash and cash equivalents of $28.6 million at March 31, 2007, compared to $30.8 million at December 31, 2006. This decrease was driven primarily by an investment in working capital, principally to fund the sales-driven growth, accounts receivable and inventory. There were also residual payments made during the quarter related to our Q4 2006 IPO.

Moving on to acquisitions, I'm pleased to report that we recently closed on a small tuck-in acquisition. Last Wednesday, LeMaitre Vascular acquired substantially all the assets of Cardiovascular Innovations LLC of Athens, Texas. CVI markets a hand-powered contrast injector used in endovascular procedures.

CVI's 2006 sales were approximately $240,000. We paid $400,000 plus potential royalties to acquire CVI, indicating a purchase price multiple of 1.7 times revenues. This is an accessory device which occupies a niche between electric contrast injection systems and handheld syringes.

Electronic injectors are the gold standard but cost approximately $30,000. They're cumbersome to set up and often require an additional technician to operate. The opposite end of the spectrum are handheld syringes, which are inexpensive, but unable to inject enough dye to be effective in high-pull vessels, like the aorta.

The void between these two modalities is filled by the device we acquired. This product is sold to our vascular surgeon customers. It is a complementary addition to our sales bag and another way for LeMaitre Vascular to participate in the endovascular arena. We expect product synergies between the CVI device, VascuTape and our EndoFit and UniFit stent grafts.

We remain committed to executing at least one substantial acquisition in 2007. Since the completion of our IPO last October, we've been actively repriming the acquisition pump. We considered the CVI acquisition to be too small to qualify as our real acquisition for 2007.

We remain focused on finding willing sellers of vascular and endovascular devices that can be purchased at reasonable valuations. As to our guidance, for 2007, the company reaffirms that it expects full-year net sales to be between $39.5 million and $41 million.

We also continue to expect a net loss for 2007, based on our continued on our selling, marketing and R&D. The company's goal remains to achieve profitability by the end of 2008. I will reiterate that our expectations for future financial performance do not include the impact of any future acquisitions. In addition, we did not change our 2007 revenue guidance as a result of the CVI acquisition due to its relatively small size.

With that, I'll turn it back over to Tony for Q&A.

(OPERATOR INSTRUCTIONS)

Your first question comes from the line of Robert Faulkner with Thomas Weisel Partners. Please proceed.

Good evening, gentlemen.

Hello, Rob.

Hello. A few minor things. Very nice quarter, very nice on the top line, and wonder if you could focus on general surgery, since that was the only -- there's a minor inflection in the trend. What's going on there, how should we think about that business? With increased focus on the other businesses, is that one seeing less focus? It's not certainly core to your strategy?

Yes, Rob, I think you're getting at we're just not spending a lot of time on it. it is small enough, though, that if you look back at the last five quarters, it does tend to bounce around a lot, and so I think with the two things of it being small and us actively telling our sales force, don't focus on it, I do think it's a natural that that one's going to just drift around.

And on the other line, on the really positive line, maybe you could about how adding Powerlink to your bag is helping in Europe drive those numbers.

I think we've seen our first quarter worth of activity over there ,and I think what we like out of it is that there's a real, true synergy. The theoretical synergy that I think we were selling to you when we first announced it is becoming real concrete synergy. You go into a hospital in Sweden, where we've been trying to get in for X years with our stent graft and it turns out they're already using the Powerlink stent graft. They like the response that we're doing with the Powerlink stent graft, and then they'll come onboard with the EndoFit stent graft. So the synergy is really strong. They're using those products, and they don' t compete too, too much.

I think the surgeons do understand when they should be using an abdominal uniiliac approach and when they should be using the bifurcated approach. So any potential sort of crossing of the wires here, I don't think this takes place. It really feels good. And the chemistry of the relationship between LeMaitre and Endologix, which is now five months old is very good, and I always feel like these distribution relationships are a lot about the chemistry at the top of the companies. And it feels real good with Paul McCormick and his gang.

Good, good. And finally, on the acquired product, Cardiovascular Innovations, maybe could you tell us a little bit about where those sales are and how you plan to leverage that through your organization?

Sure, Rob, this is Dave. It's primarily a U.S.-based company with U.S.-based sales, so I would expect our U.S. sales force to really benefit the most from this. This is obviously a small acquisition. It's a nice product, it's a nice endovascular accessory product that we felt would fit real nicely next to our tape product in our bag.

The company was never big enough to really sustain and have a sales force, and so one of the reasons the acquisitions made sense for the seller and ourselves is because we can couple our sales force in the U.S. with what we think is a very interesting technology and so that's what we plan to do.

We think with our sales and marketing firepower behind us we should be able to do good things with it and we feel like it's a prudent investment considering the price we were able to acquire it for.

And is there a role for it in your European operations?

Essentially, yes. We need to work through and get European approval for the device, which we don't think will be a long undertaking, although I will say when you launch a product in Europe, it could take a little while. So we don't want to get over our skis with expectations on that, but certainly if it works in the U.S. we see a place for it certainly outside the U.S. as well.

And do you have a guesstimate as to what the market size is for product like that? Obviously just scratching whatever surface there is.

Yes, it's funny. The niche that exists, Rob, is between these syringes and the electronic power injectors, and there's no other product like this, really, out there in the market. There's no product that fits in the middle, in the gulf between those two devices.

So it's how hard of a wedge can you drive between those two products, the syringe and the electronic injector. Potentially, you think about how many syringes get used, you think about how many syringes get used, if you think about how many aortic cases get used, it's a pretty good size, but I don't think we're putting an exact number on it right now.

Great, I'll hop back in the queue. Thanks.

Thanks, Rob.

With Goldman Sachs, your next question comes from Larry Keusch. Please proceed.

Yes, good afternoon, guys.

Hi, Larry.

So two questions for you. First, George, CMS earlier this week came out and reversed a decision to expand the carotid stenting reimbursement. Obviously at a 5,000 foot level, that's good for you guys, but could you talk a little bit about how you'd see that progressing going forward?

Right, and I know you probably have a better handle on all those details of what took place, since we were preparing for you guys all day. But I will say when you see something like that, it does to a certain extent corroborate the feelings we always have. Now, obviously at some point carotid stenting is coming, but there is a wax and wane that takes place between these new modalities and the open modalities, which does fit into our business plan, that we want to be both open and endovascular. So it makes sense to us.

What are they saying, it's now a $100 million market instead of a $1 billion market? Is that what some of the resourcers are saying, Larry?

They're basically saying that the proposal was to double the size of what's currently reimbursed and now they're going back to where they were, essentially a much thinner population.

You know, one last comment on this from my side, which is you sort of see the same thing with the FoxHollow device, with at first blush you'd say, oh, competition with our bypasses. But not really true in the instance of FoxHollow, as well as carotid stenting, because once the surgeons get into the vessels and they start stenting and ballooning and playing around, it does start sort of the swirl of treatment, if you will, for the patient. And in the long run a lot of these patients will drift into the bypass category in the leg and it's a carotid shunting category, the open-endarterectomy solution in the neck.

And it's a little bit about when these start, so when we see something slow down, it's not always a good or a bad thing. I guess we're a little neutral on what just happened and we really can't control stuff like that, but on the surface it looks good for us, right?

Yes, okay. The other two ones are -- and I'll just rattle them off and you can address them. First, as it relates to the acquisition, you indicated that the product is not CE Marked yet, but can you talk a little bit if there is any IP around it and what are your thoughts on transferring the manufacturing to Burlington and when might we see any cost or charge associated with that.

And then the other question is, do you have any insights into some of the insider selling activity since the lockup expired on the 19th of April.

This is Dave, I'll take both of those questions.

Great.

All right, so with respect to the acquisitions, you're right that it is not CE Marked. It does have two patents associated with it, so there is some nice intellectual property around the device and so we do get the benefit of that protection. Now, whether we would try to expand and file continuations on that, we will have to evaluate that, but there is some protectable intellectual property around the device, which is part of the appealing nature of the device for us.

With respect to moving the manufacturing to Burlington, 100% of the manufacturing of this device right now is currently outsourced. The company itself doesn't do any of its own manufacturing. So the relocation and all of that, as a starting strategy, we will just -- we've already started communicating directly with their OEM suppliers. We'll maintain that relationship.

And then frankly what will happen in the longer term, we'll have to think about that, but I don't expect there to be any material charges, if you will, from the relocation of the in-house investment manufacturing. That's frankly something for us to think about down the road.

Probably the easiest integration we could imagine. By the way, of the six that we did before this, Larry, this is easily going to be the quickest integration.

Sure.

And then with respect to the expiration of the lockup, so what I can tell you is we've only had nine of our pre-IPO investors initiate the process of having [legends] removed from their shares, which obviously is a step they have to go through to sell the shares in the public market. They represent about 82,000 shares, so, frankly, when we look at the increased trading volume, we feel like you can't really attribute it to the expiration of a lockup. It must be something else and it's sort of difficult to prognosticate exactly what that is.

Right, and Dave, the nine that you mentioned, that includes the -- I forget, how many surgeons that you guys had that were investors?

Yes, there might be a couple of surgeons in there, but I don't have the list in front of me, but it wasn't uniformly all surgeons or all not. It was a smattering. We had 230 shareholders, as you remember, prior to the IPO.

So this is nine.

This is nine.

Okay, great, thanks very much, guys.

Sure, thanks, Larry.

(OPERATOR INSTRUCTIONS)

Your next question comes from the line of Amit Hazan with CIBC World Markets. Please proceed.

Hi, Amit.

Hey, guys, can you hear me?

Yes, yes we can.

Great. Nice revenue quarter. Just a few questions from me. First of all, I actually would love to have a little bit of a better understanding of really what's driving the endovascular and dialysis access number in particular. It looks like it comes off of three relatively flat quarters. You had some very nice growth there, so is there any way you can give us a little bit more color on the breakdown, whether it's Powerlink or even if it's AnastoClip that you can give us a little more color on whatever it might be?

You know we really try not to break deep into these categories, Amit, but maybe a little bit of color is of course the Endologix distribution relationship started up January 1st, so you know that's got to be in there somewhere, right? I don't know what else to say without sort of leading us down the wrong path here in terms of trying to stay away from those categories.

And maybe if I ask it in a different way, is it fair to think of AnastoClip as really one of -- let's say, for example, is it 10% of your sales?

Again, I hate to be the tough guy on this, but that's getting at one of these product categories. And what we're trying to do is set it up so that we can all measure this thing going forward without having to get into tricking individual product lines. A little bit you're seeing that poke out in the general surgery question that Rob asked at the beginning of this phone call, which is general surgery is not too many product lines.

The Reddek Clolangiogram catheter is the bulk of that category, and we're trying not to have these things poke out by themselves.

Well, let me ask it in the even more general way. Outside of Powerlink, are there specific products, to remain nameless, that were growing faster and driving endovascular and dialysis access.

In this quarter, yes, but in the quarter before that it was an opposite order and the quarter before that it was an opposite order. So there's no dominant player there. They trade in and out.

Great, that's actually very helpful. And then if we can just get an update on the studies, in China, just remind us perhaps where we are in terms of the follow-up and to the extent you can comment, how long you think it might be before you can get approval there again. And in then in the U.S., remind us how many IRBs you're going to have set up.

Okay, great. I'll take that. So China, we're still giving guidance that we'll have approval by the end of 2007. Maybe in retrospect I regret having given the guidance of actual approval rather than when we were going to file, but everything's still on plan, Amit, as far as that goes. I think we started our 30th patient in November of '06, and we need to follow up according to the SFDA over there. We need to follow up for six months. So the filing you should see taking place let's call it Q2, Q3, and we're still on the hook to you guys for revenue in '07, the beginnings of revenue in '07 for this device.

And, as you know, we have almost no Chinese revenue right now, so this will poke out and be easy to see for us and we'll report back on that. So according to that, nothing's changed, it's going according to plan. Now, as far as the American UNITE trial for the abdominal device, you heard us sort of update that we do expect some kind of response from the FDA next Wednesday, May 9th. We're excited to hear what they have to say.

The reduction of the questions recently and some phone calls lead us to believe things are going in our direction, although we have found it folly round here to try to prognosticate exactly what the FDA is going to do.

As far as centers and IRBs, you know we've gotten through two IRBs with Emory, as well as Harvard-UCLA. That's new on this phone call. Unlike some of the other hospitals, they took the conditional approval that we've received -- as I mentioned, we still have not received final approval. We're still awaiting that.

So those two guys have taken it. And they're effectively in the mode of enrolling patients as they find the correct patients. So you could see a press release at any time about the first patient that gets implanted with this device. We're excited about that, as well, and then sort of to put brackets around this study, we're looking to get 14 centers, and we'll do 19 patients and then follow that up for one year.

Okay, great. And then my last question has to do with gross margins, really just to try to get a better understanding of the business since this is only the second quarter since the IPO. If I look at it versus the fourth quarter, which I know we probably shouldn't do, but the margins were a little bit higher. What would cause them to be a little bit lower with the rev up? Is it Powerlink, or is it anything else?

I think, again, I tried to caution when we showed up with that big 75.3% margin in Q4, I think I wanted to caution. It does bounce around a little bit. Clearly, there's some Powerlink in there, although Powerlink's just not a big piece of what we do around here, so there's other stuff in there, too.

But I would say it bounces around a little bit. I feel when we put up two numbers that are 1.3% away from each other, and I feel that's more or less, de facto, the same number. What I'm excited about is that when I came to you guys in Q4 with that 75.3% margin, I was a little tentative about have we achieved that number as a company? And in some of the comments here, I think you can hear Dave and I saying that we're starting to validate that 75%-ish gross margin, and we're feeling real good about that. So it's a nice -- we've got six months of it established now, and that feels pretty good.

Great, that's perfect. Thanks very much, guys. Have a nice afternoon.

Thank you, Amit.

Your next question comes from [Andrew Weinstein] with Cowen & Company.

Hi, thanks for taking the call. Most of my questions have been answered already, but just one other follow-up on the gross margin line. It isn't a nice improvement year-over-year, a slight little downtick from Q4, not material, but do you see kind of the high 74s being sustainable for the rest of the year?

We're not providing guidance on this gross margin number, although I think what I just said about the trailing six months feeling pretty good to me is giving you a hint that I'm feeling pretty good about where we are with the gross margin right now. So, as it relates to 74 or 75, or 73 to 76, I think that gets editorially towards it, but we don't want to give specific gross margins for just the reason that just happened, which is it does bounce around a little bit.

Okay, thanks a lot, guys.

Thank you, Andrew.

Your next question is a follow-up question from the line of Larry Keusch. Please proceed.

Hey, guys, just one question, and George, maybe I don't understand this, but if you have conditional approval, how can a hospital go ahead and do an implant?

On the hospital side, all they need to do is get it through their IRB, so we've gone through their review boards, and they've said fine. It's not that odd, and if you consider the issue that they're on right now, the sterilization, Larry. And a product, in my opinion, it's either sterile or it's not sterile and if they buy the sterilization method, I think they're okay to do it as long as they pass it through their IRB.

So, again, they've given us conditional approval to do it. Let me check a fact here. Dave, are the devices that are being used -- are they ethylene oxide right now? Okay, so that's what.

So, Larry, the devices being used in the patients that are at the approved places are going to be ethylene oxide, which is something the FDA doesn't have a problem with for us. It's hydrogen peroxide sterilization process that they do have issues with.

Right, and so if they go ahead and do one of these implants before the final approval is given for the IDE, can you count those patients in the study?

Yes.

So there's no penalty in any way for them doing this pre-approval, or final approval, if you will, of the IDE.

Correct.

Correct, and I think maybe the way you can think of it is the conditional approval is as long as you do it with the ethylene oxide sterilized devices, we're okay -- this is the FDA talking, I think, not to put words in their mouth. But, as long as you do it with the ethylene oxide device, that's fine. Once you pass over into H2O2, you're not able to pass go, George.

And [EGO] is obviously what everybody else uses.

Right, and you guys want to do hydrogen peroxide, obviously, because it allows you to sterilize faster and go down the whole custom route.

That's right. It's a piece of our business plan, although in terms of getting through the trial, it's really not necessary. It doesn't give us that much of an advantage.

Got it, okay, great. Thanks very much.

Thank you.

With [Miller Nexus], your next question comes from [David Gone]. Please proceed.

Hi, guys.

Hi, David.

With respect to the thoracic EndoFit product in Europe, in particular, a few questions. How do you see it evolving in the marketplace with respect to other competitors? What sort of feedback are you getting from docs and any clinical trial news there?

Let's see. Let me handle the second one, first. The clinical trial is -- we don't have any clinical trials going. We do have a marketing trial going right now, and that's to work on thoracic dissection, paper devices for thoracic dissection. That's going quite well. I actually don't have the details with me right now, and I apologize. Maybe I should have that.

But given that it's a marketing trial, I didn't feel like I needed to have them with me. That's going well. We're enrolling in multiple centers over there, but it's not on the way to any approval. As far as the first part of your question goes, the market is evolving nicely. We're seeing 25% unit growth on an annual basis and the players are Cook, Gore, Medtronic and recently entered Lombard and LeMaitre, I would say. And those are your five players, with those first three players being the big guys. Excuse me, I said Lombard. I meant to say Bolton.

Okay, thanks.

Thank you.

(OPERATOR INSTRUCTIONS)

All right, gentlemen, there are no questions in queue. I now turn the call back over to Mr. Dave Roberts.

Tony, thank you very much and thank you everybody for joining us. Please do note that George and I will be presenting at the Goldman Sachs 28th Annual Global Healthcare Conference on June 12 in Laguna Nogal. Thank you very much, have a good evening.

Thank you.

Ladies and gentlemen, thank you for your attending today's conference. This concludes your presentation. You may now disconnect. Good day.