All right. I think we're going to get started here with our next fireside. I'm Rich Newhouser, medical device analyst here at Truist Securities. Our next fireside's with Artivion. We have Artivion CEO and President and Chairman, Patrick Mackin, and then COO and CFO, Lance Berry. Welcome. Good to be here. This is two years in a row. This is, I think, almost to the day. This will be really good to get an update here. For those who are maybe a little less familiar with the story, Patrick, do you want to just give a quick overview? Just how you've evolved the product offering. You're kind of a wholly owned aortic arch portfolio now. Just how you got here, where your biggest opportunities are. If you could just maybe size some of the opportunities for each of the key products, that would be great. Yeah. I would say that when I started with the company, it was really an aorta company, although I don't think they were focused on the aorta. Two main products, BioGlue, and the pulmonary homograft for the Ross. Really strong relationships with cardiac surgeons, a really good brand, a good sales force. They were also very profitable. I basically levered up the company to make four acquisitions over the last seven or eight years. The first acquisition was On-X, which got us into mechanical aortic and mitral valves. Second was Jotec, a German Stent Graft company, that also gave us access to kind of the arch frozen elephant trunks. Third was Ascyrus Medical, which was the AMDS. Fourth is most recently in the last month or so, was Endospan, which brought us NEXUS. Now we have a comprehensive, probably the leading portfolio to treat the aortic arch. I'll let Lance hit the TAMs. I think if you look specifically at maybe the go-forward opportunities, which is the more recent ones, which would be AMDS, which we're early on in the launch of NEXUS, which we just purchased and will launch in January 2027. Arcevo, which is a frozen elephant trunk, which is in clinical trials. That's the aortic arch that we're talking about there for acute dissections, chronic dissections, and aneurysms. All that together is probably in the neighborhood of a $400 million U.S. market, of which we're just getting started in AMDS. We haven't even launched NEXUS, Arcevo's on the way. There is a little bit of overlap between the three of them. I'd say the bigger pieces are AMDS and NEXUS. Arcevo is a little bit smaller. The main thing is we're going to have all three. We have two of the three now. It's a big opportunity, high gross margin, high growth, opportunity for us for the next really three to five years. When you layer in On-X and the rest of the portfolio, what does that aggregate up to? 2 billion, right? Is that right? The opportunity. that was just the $400 million, was just the U.S. opportunity. Okay. you have the OUS opportunity as well. If you take our whole stent graft portfolio alone on a global basis, assuming everything was approved everywhere, that would be close to $2 billion. you could put with On-X and BioGlue and Preservation Services, you could probably put another $500 million on top of that, I think. It wasn't long ago that we talked about the mechanical valve market being a $250 million global market. With the data that's come out in the past 18 months, I think there's a really good opportunity for market expansion for that to move to closer to a $400 million global opportunity. that's helpful context. Maybe let's go one by one with some of the newer areas. AMDS, why don't we start there? This product specifically, just maybe what's the TAM, and then what are some of the considerations for that product you launched basically last year in January? Yeah. Maybe talk to us about what's gone on since the launch, where you are today, how big is the market opportunity, and what are some of the key milestones we should be looking for? I'll start with the TAM. It's pretty simple. There's 6,000 procedures. We sell the device for $25,000, that's a $150 million U.S. market. The HDE, which we got the approval, we launched back Q1 of last year, we figured that was about 40% of the market, was what's called malperfusion. What's interesting is we're waiting on the PMA as we speak. We said mid-point of this year, in the next couple of weeks. We think that's going to cover both clinical and radiographic, which is like 60% of the market. The remaining 40% of that market, there's a term called DANE, which is kind of a leak in a standard procedure, a leak in the graft. In our clinical trials to date, in probably over 500 patients, we've seen no leak in the device, which is pretty substantial. We really think this entire market is available. We'll obviously market to malperfusion, but I do think people see benefits in the reduction in DANE. There's about 800 centers in the U.S. that do acute Type A dissections. If you do the back of the envelope math on last year, assuming that many of the implants we did or sales we did were starter sets to get into new accounts, we're probably in 120 accounts of the 800. We're very early days in the launch, if you will. You had set out for about 150 target accounts initially when you set out last year. I think we made comments on the Q2 call last year about we had 150. When you bring it up to today, you bring in H1 of 2026. We're not giving exact numbers, but that's roughly where we're at- Yep -to give people a picture. The bigger opportunity was what, 600 you said? Or what is it? There's 800 total. 800. Probably the majority, I'd say 80% of the volume's in 400 centers. We're probably a third of the way into those 400 centers. Got it. I think this might be a good place to get into some of the things that led to the updated guide on the Q1 call. You mentioned humanitarian device exemption. That's largely what you had been selling under- Yeah. -the PMA is upcoming, it's clearly a hand-off consideration there as hospitals are doing their analysis. Maybe just talk about what the differences are between commercializing under the HDE versus a full PMA and maybe also talk about the starter set considerations. I'll take the HDE, and Lance can do the starter set. HDEs, first of all, it was great that we got the HDE. This is a unique pathway from the FDA to get a technology out sooner than later than waiting on the PMA. There are some nuances. Number one, you have to get an IRB. Lots of hospitals, when you show up and tell them you have an HDE, they don't really understand why you need an IRB. They think it's a clinical trial. There are some restrictions about marketing, so we haven't been able to aggressively market some of the data of that. Two, we've had centers that have had restrictions on. They want to get an informed consent from a patient at 2:00 A.M. when they're comatose, which is not going to happen. Yep. I think that the lifting of the HDE when you bring the PMA in, the IRB goes away. We think that surgeons will be more aggressive in how they treat patients. I think this will be a meaningful shift in the adoption as we move forward. Can I just ask on that? Yeah. I remember this time last year, we were talking about this. You were describing, "Here's what it's like under an HDE." You had actually, I went back to the transcript. You had mentioned that the IRB can lead to different adoption curves of a different hospital. Every hospital's different on how they do it, and the IRB can be a friction point. We're working through it. We're learning. What did you underestimate as you moved from that to getting closer to the PMA? Well, I'll give you a great example. One of our top enrollers in the trial, big center. They all interpret the IRB differently or under this HDE. They want an informed consent for every patient. These patients typically come in on medevacs at 2:00 A.M., shows up, can't find the paperwork. There's no nursing staff around to help him with this. He's like, "I guess I'll just do it the way I usually do it because I can't." That was something we didn't fully understand when we launched this. Another example. We had a hospital that's trying to bring on AMDS, and the administration wants the surgeon to take a three-hour online IRB class. Not going to happen, right? There is these little nuances, and I think the point you brought up is a good one, right? Every hospital treated this differently. Again, we've learned along the way. I also think our ability to market, that we have amazing clinical data on our side, but there are some restrictions on how aggressive you can be with the marketing under an HDE, which I also think will be meaningful. Once the PMA comes. Correct. Yeah. I think the other thing that is a little bit of a surprise in Q1 is all these things are true. They've been true the whole time. We'd kind of figured out a way to navigate through these IRBs. What's interesting, though, is as we approach closer to the time where we've been telling the whole world we think we're going to get approval now, these are hoops that surgeons have to jump through to get the device. When it's an unspecified amount of time away from the PMA, they jump through the hoops. I think now we saw for the first time people saying, "You know what? Why don't you call me back in a couple of months when this is approved, and then we can figure this out." It's understandable and really hadn't run into that until the Q1. Yep. That's fair. That makes sense. I think the other thing on that, you asked about the starter sets. We're basically requiring. There's four sizes. It's an emergency procedure, so we're requiring hospitals to buy the four sizes upfront. That's fairly unique in med tech. People either consign or it's per procedure. The fact that you have to go through an IRB, a VAC committee, which we've done a lot of, and then we're waiting on the PO. Because it's $100,000, it's this weird kind of amount that's floating around the hospital with the financial people trying to figure out, like, "Well, who is this person who's going to approve this thing?" Because it's not normal, I guess I would say. I guess the sets, though. How do you work through that? What alleviates that view of the burden, the financial upfront cost burden? Then you mentioned implant reorder rates exceeded your expectations in the Q1. Yep. I would think that that's the more important go forward number. Maybe just help me reconcile those two things and what steps can you take to help with that? Yeah. Maybe I'll talk about the sets. I think the important thing is the facts are on our side. The reality is if it's an account that has any reasonable amount of volume, they're going to make their money back on that $100,000 because they get higher reimbursement if they use AMDS than if they don't. The thing is just getting in front of the right person who is holding this up. What facts do they have? Do they understand this? What's their concern? There's things we can do depending on what exactly their objection is. But the first thing is to understand, do you understand you're harming yourself here by not having this on the shelf and using this? Let's not even get into the patient benefits. You have one patient stay two less days, and you made your money back. Forget those, just the hard economics. I think that's one thing now that we understand better. We can prepare our reps better, package it well for them, and have them try and get in front of the correct person. I think that's activities we weren't really focused on before Q1 that we're focused on now. I think that'll help that we can make progress there and, like I said, the facts are on our side. This is something they should want on their shelf, and the economics would support it being on their shelf. Got it. What's assumed in your updated outlook for post PMA and any kind of change in the ability- Yeah -to sell the stent? What we've kind of articulated is, look, we expect to be able to make improvement. We expect to be able to make improvement because now we understand a barrier, and we can go attack it, and because we do expect to get PMA approval, and we expect that to be some amount of tailwind. We are expecting improvement in the second half as compared to the first. We are expecting less improvement than we previously expected. I think that's just acknowledging there are some challenges here that we didn't realize when we originally set our guidance, and trying to be transparent on that. We're attacking those things, and we think we have some good opportunities to move the needle forward. Got it. Maybe we turn to Endospan, NEXUS. Congrats on closing that, what, a few weeks ago? Mid-May. Mid-May. Now that you've triggered the option, anything that we should be thinking about as you kind of switch from distributor to manufacturer and your inventory build strategy, your go-to-market strategy? What has to happen between now and early January? Yeah. This was a startup Israeli company that was an incentive to build inventory for the U.S. launch. That's what we're doing right now, right? We've got three things to do over the next six months. One, we've got to build inventory so I can actually launch the product. Two, we're going to hire a handful of reps. We've already got a few. We're going to hire another handful. Three is we're going to train some surgeons. There's a tremendous amount of excitement about this product. We had the big vascular meeting here in Boston last week. I met with a bunch of customers. They all want the product. We've got to go through a value analysis committee. We're actually going to start that process now. Obviously, hopefully bring up a bunch of accounts that will all come online by January 1. I think those four things kind of coming together, good inventory position, having the reps, training the surgeons, and getting through VAC by January 1 will set us up really well for a Q1 2027 start. Got it. Just in the initial kind of experience with the VACs now that it's in your hands and whatnot, how's that gone? Any surprises there? Well, we haven't really started yet. We haven't started. It's been a couple of weeks. Yeah. That's fair. I will say that this is a very different launch than AMDS in that there's a product that's already on their shelf from one of our competitors. The pricing, and that's already gone through the VAC. You don't have to buy any inventory. We cover cases. It's a PMA with no HDE. There's a lot of things that are going to make this easier, and I would say the other thing is today with AMDS, there's a standard of care, HemiArch, so they have something they can do. With this technology, there is no standard of care. Our competitor has been out in the market but with not a great system. I've never seen it where customers are so hungry to get you in the account. The other thing is they can actually do cases on a one-off basis before they get back, which is not something we'd heard of before. Well, this is more of a market development. AMDS is different. You have to actually develop the market. What I'm hearing you say is that you actually think the pull is going to be- The pull's pretty strong, and probably because there's a bunch of patients. Their alternative right now, when you have a chronic dissection, it's typically a post in acute Type A, 7 to 10 years later. The option is to do a frozen elephant trunk, which is where Arcevo trial is going on right now. It's a great technology, but for older, sicker patients, the comorbidities of those patients can end up in real significant complications if you aren't careful. Doing a catheter delivery, it's a 20 French catheter, fixing the aorta from the inside out is really a game-changing technology. We just had one of our first cases. Patient was in the hospital two days. If they'd had full open heart surgery, heart-lung machine, it would've been 8- 10 days. This is your traditional you've been doing something open, now do it minimally invasive. Yeah. That's worked time and time again. Is that basically- Yeah, I would say that is exactly it. There are some nuances of why the open's going to be around for a while, which is why we've invested in that segment. A good chunk of those patients are going to need their valve replaced or something else done. You're going to have to open them up anyway. Yeah. There's probably half the patient population that can go to the catheter, and it's a great analogy. Can you remind us, or remind me, of the TAM there? There's about 3,000 cases in the U.S. The device is at 50,000. It's very similar to the market for AMDS. It's $150 million in the U.S. Got it. How do we think about the post Early or January 2027 launch cadence. This is something that you'll have the sales reps that you want fully up and ready to go running into next year. You'll have some progress made on the VAC. Is there any reason why this wouldn't, right out of the gate, be just full steam ahead? I think it could adopt pretty quickly. The other great thing is there's probably only 100 centers that do this. It's a very concentrated, whereas AMDS is in 800 centers, this is probably 100 centers. In many ways, they're like the polar opposites. With a small commercial team, you can do the back of the envelope math on this. If you have a half a dozen reps and they each do a case a week, do the math. Right? It can add up pretty quickly. We're going to have to watch and see how quickly we follow the launch and if we have to add inventory or reps, which we'll be watching very closely. What do you think the biggest risk would be if you had to assess and rank order, force rank all the risks? Is it going to be the manufacturing and getting the right inventory and what it takes to get there? That's not really a risk, that's just time. Well, I guess, is it the time between now and January? Does that seem like a hurdle? Yeah, I think I wouldn't say it's a risk. I'd say it's a potential missed opportunity is the two things, the two levers are how many reps do you have and how much inventory do you have. If this thing starts to take off, it takes you time to get reps up and training and get inventory built up. I think those are the two things that would be more of a missed opportunity than a risk. Got it. One thing nice is a very high ASP, relatively low volume- Right procedure. One, you don't have to hire 20 reps, you might need to hire two. Yeah, I think the other piece of this that we still are getting our own arms around, right, is we have been distributing this product in Europe for five years, so we know the technology extremely well. With the acquisition, we obviously pick up the U.S. with this PMA approval. We're also going to use that to get into Japan. We have a very strong partner in Japan. Those talks are now going on. We also have big channels in Latin America and in Asia Pacific that are also interested in the device. To some degree, we've got to get our arms around that as well, and where we can take that U.S. approval and that takes time. This will be a building platform over several years. Got it. I just want to go back to kind of the, because there were AMDS, some of the things that took you by surprise or just that were unexpected. Those were, I think two of the three or one of the three actually, items that led to the guidance change. The other were kind of a little bit more macro in nature, and then there was a supply issue. Yeah. Everything here sounds transient. We discussed the AMDS. That sounds like you should be able to work through that over the next 9- 12 months. What about the other two macro factors? What's your visibility there? Have those self-corrected already on some level? Well, the two things we called out was some impact from the war in the Middle East and then a supplier issue. The Middle East thing, no, that's not resolved itself. Okay. Yeah. I understand there's positive news. Let's wait till tomorrow and maybe we'll see if it's still positive. I think at that point, it's not a huge number, but I think easy thing is let's just not assume that there's going to be a recovery in that this year. Right? This level that we dropped down to, we need to assume that this is our level until we get free and clear of this thing, which we have no control over. We try to de-risk that by taking it out of the number. The supplier thing, that's more in our control. We do feel like we've gotten our arms around that. The capacity issue at a supplier was not pervasive across the Stent Graft portfolio. It was related to a specific product. We feel like we got our arms around that now and have the capacity expanded. It's just going to take some time to get healthy. I think we're going to try and get healthy as soon as we can. We try to put a conservative timeline on that. I think just clean and say we're not going to make any improvement this year was easy. If we can, that can help around the edges, but just for context, it was like a $3 million-ish. If we get done twice as fast, it's $1.5 million. I think we should have de-risked those things as it relates to the current year. Okay. That's helpful. Just how would you describe the longer-term financial framework you've provided for operating profit growth and how quickly you can scale and drive EBITDA improvements? I think this company is really interesting in it has unusually durable revenue growth, just to the nature of these differentiated PMA products that kind of insulate yourself from additional competition. They're also kind of life-saving devices that are fairly low volume for the hospitals, so they're not attracting a lot of attention. This business model that's really above average from an EBITDA margin expansion standpoint. We have a good G&A leverage opportunity like any sub $1 billion company probably has. The two things we have that a lot of med tech companies do not is for the most part, our reps don't cover cases. So our sales force is very leverageable. Which is not usually, most of med tech, you're standing in the OR every case and you have to grow your sales force linearly with your sales volume. We don't have to do that. The other thing is really the growth drivers going forward for the next several years are all about these products getting approved in the U.S., which always has the highest gross margins. These products we've been talking about, AMDS, NEXUS, or Arcivo, the next one after that, the next one after that all have gross margins significantly accretive to our current corporate gross margins. We really have three levers to help us get that EBITDA margin expansion, which is why we feel comfortable with feels like fairly lofty goals, but we just have more opportunities than most people have. What about just the synergy across now that in 2027, you're going to have a full portfolio. Well, actually Arcevo maybe not yet, but once you have everything. Even with just NEXUS and AMDS and On-X, describe the pull-through opportunity and how significant is that, and are you already starting to see some of the fruits of that? The synergies are, was part of the reason for the strategy, right? We're a cardiac and vascular surgery-focused company on the aorta. If you go to any big institution, they all use On-X, they all use our pulmonary homograft for the Ross, they all use BioGlue, t hey'll all use AMDS, they'll all use NEXUS, they'll all use Arcevo. It's the same customers. We interact and a lot of these guys are doing the AMDS trial, the NEXUS trial. They're all on all our trials. We know these customers extremely well. The ability to kind of surround the cardiac and vascular surgeon customer with our portfolio, it just builds every day. We train them all on these technologies, it gives us more opportunity to spend time with them. I think it's a very effective way to get great access to your customers. Maybe just on Arcevo, can you walk through just the way you did with NEXUS and AMDS? They all kind of fit together, right? Arcevo is basically what they call a frozen elephant trunk. You can replace the entire aortic arch surgically. It's a hybrid though. It's part surgical graft, part stent graft. On an acute Type A, you can use 80% of the market as a HemiArch, 20% as a frozen elephant trunk. We've got obviously a solution for using AMDS with a HemiArch, and then the frozen elephant trunk will be that 20% that's not that. As you go to chronic dissections, like I said, those patients, 7- 10 years down the road are going to need, 40% will need a reoperation. They can either get a NEXUS or they can get a frozen elephant trunk, an Arcevo. We've started that trial. We've already enrolled the first 30 patients. We expect to enroll that trial probably by Q1 of next year. Okay. You do your follow-up, that would put us in the market in early 2029, with another PMA $35,000 90% gross margin item. One competitor, and we have the first technology that has a branched left subclavian, which they don't. It is faster, easier. I think it will do quite well. Arcevo's 2029 possibly? Yeah. Got it. Just remind me the pipeline for NEXUS. Just, can you remind me? One of the interesting things about, again, if you contrast NEXUS to AMDS, when we acquired the company called Ascyrus Medical, which we got AMDS as one product. The Endospan acquisition is actually NEXUS 1, the first product in the U.S. is a single branch. We have already got R&D ongoing for a two and three-branch device, which we are working on now and have a trial coming soon. There are two more platforms, two more PMAs inside of that. One is a thoracic Stent Graft with a left subclavian branch, and the other one is to treat the ascending arch right above the aortic valve. Again, very sophisticated aortic technologies. Same delivery system. They all are different parts of the original NEXUS system, it's like four PMAs. Yeah. If you look at our pipeline, we've got like seven PMAs in our pipeline, we don't have to do any more deals. Yep. So- Actually, could you lay that out? Yeah. Maybe let's just think through 2027 for right now. 2026 to 2027. What are the key geographic expansion and potential indication or product approval expansion milestones we should be on the- Well, the big one obviously is AMDS- PMA The full PMA, which we should get very shortly, and then the NEXUS PMA, which we just got. Two PMAs, basically. We will be working on the AMDS and NEXUS in Japan. Now again, that typically takes you a year past PMA, and then you've got to wait six more months for reimbursement. That's like an 18-month post PMA. That might be 2028. Yeah. Yeah. Yeah. It's more of a 2028. I think those are the other two big ones. I don't know if there's- Obviously we'll be tracking Arcevo enrollment. Yeah. Arcevo. Arcevo enrollment. Yeah. Right. Sorry, to get to 2029, you're fully enrolled by the end of next year? No. I think by the middle of a year from now, if we're enrolled. Okay. Yeah. Call it mid- We could get to- 2027-ish. Mid 2027. Yeah. Okay. That's great. I think we're actually right at time here, but this was great. Thank you both for being here. Yeah. Great to see you. Really appreciate it. Yeah. Glad to be here. Thanks.