Good day, ladies and gentlemen, and welcome to LivaNova PCL Second Quarter 2020 Earnings Conference Call. At this time, all participants are listen- only mode. After the speaker's presentation, there will be a question- and- answer session. As a reminder, this conference is being recorded. I would like to introduce your host today's conference, Mr. Matthew Dodds, LivaNova Senior Vice President of Corporate Development. Please go ahead, sir. Thank you, Crystal, and welcome to our conference call and webcast discussing LivaNova's financial results for the second quarter of 2021. Joining me on today's call are Damien McDonald, our Chief Executive Officer, Alex Shvartsburg, our interim Chief Financial Officer, who will be appointed as our Chief Financial Officer effective August 1, and Lindsay Little, our Senior Director of Investor Relations. Before we begin, I would like to remind you that the discussions during this call will include forward-looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent filings and documents furnished to the SEC, including today's press release that is available on our website. We do not undertake to update any forward-looking statement. Also, the discussions will include certain non-GAAP financial measures with respect to our performance, including but not limited to sales results, which will all be stated on a constant currency basis. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release, which is available on our website. We have also posted a presentation to our website that summarizes the points of today's call. This presentation is complementary to the other call materials and should be used as an enhanced communication tool. You can find the presentation and press release in the investor section of our website under News, Events and Presentations at investor.livanova.com. With that, I will now turn the call over to Damien. Thank you, Matt, and thank you to everyone joining us today. Welcome to our conference call for the second quarter of 2021. First, I'd like to officially welcome Alex Shvartsburg as our newly appointed CFO. Alex has served as our interim CFO since October 2020 and brings more than 25 years of industry experience to our team. Alex, congratulations on the appointment. Thank you. I'll start off by discussing some recent updates, move to sales results, and then review our strategic portfolio initiatives. After my comments, Alex will provide you with additional details on our results and increases to our 2021 full year guidance. Then I'll wrap up with closing remarks before moving on to Q&A. The neuromodulation and cardiovascular businesses continue to recover from the depressed levels of activity that began early in 2020 related to COVID-19. After a slow start in 2021, trends improved in March and showed good momentum in the second quarter, especially in the U.S. While some regions continue to be impacted, we saw sequential progress in case volumes and less apprehension by patients seeking treatment. Although we anticipate continued impact from COVID-19, we expect procedure volumes in the second half to show further improvement in the U.S. and globally. Moving to recent events. On June 1, we completed the initial closing of our heart valve divestiture, including both manufacturing sites. Further closings related to the sale infrastructure in various geographies around the world will follow in the second half of the year. Financial results for the heart valve business are deconsolidated effective June 1. Also, during June, we received investigational device exemption, FDA approval to proceed with our confirmatory clinical trial in Obstructive Sleep Apnea or OSA. The OSPREY trial will seek to demonstrate the safety and effectiveness of the aura6000 System, our implantable hypoglossal neurostimulator intended to treat adult patients with moderate to severe OSA. After receiving approval, we immediately launched the start-up phase of the OSPREY study and anticipate enrolling our first patient later this year. OSPREY is a randomized controlled trial and will include approximately 20 sites across the United States and enroll a maximum of 150 adult patients who do not achieve results from traditional CPAP therapy or have declined its use. Now I'll discuss our core growth drivers, epilepsy and ACS. Epilepsy sales increased 102% globally versus the second quarter of 2020, with growth across all three regions. This increase from the nadir that was experienced in April of 2020 reflects improved market dynamics resulting from increased hospital access and patient willingness to return to clinics. U.S. epilepsy sales increased 108% versus the second quarter of 2020. Total implants improved versus the prior year, driven by replacements which have benefited from a catch-up in the procedure deferred in 2020. Importantly, new implants grew 40% year-over-year and 13% sequentially. Our progress in U.S. epilepsy is being bolstered by our go-to-market initiative, which currently encompasses 12 dedicated teams, three of which were formed during the second quarter. The nine established teams accounted for approximately 16% of U.S. sales, up from approximately 10% in Q1. These teams are delivering sales and implant growth that is trending above the baseline business compared to the second quarter of 2020, as well as in comparison to the second quarter of 2019 levels. Epilepsy sales in Europe grew 105% versus prior year, led by the U.K., Italy, and Germany. Meanwhile, we achieved growth of 65% in the rest of world region, led by Asia Pacific, as non-emergent procedures continue to recover. Based on performance in the first half of the year, we now expect global epilepsy sales to grow 25%-30%, up from our prior guidance of 15%-20%. Our forecast includes sequential growth in new implants as patients and their caregivers return to in-person physician visits. In addition, we anticipate a continued tailwind in replacement implants related to the backlog created in 2020. ACS sales were $13 million in the quarter, an increase of 120% from the second quarter of 2020. Growth was driven by the continued adoption of LifeSPARC and an increase in procedure volumes. Given our performance in the first half of the year, we now forecast ACS to grow at least 25% in 2021, up from our prior guidance of at least 20%. Turning now to DTD, sales in the second quarter were $3 million. In 2021, we continue to anticipate DTD sales of approximately $10 million-$15 million from a combination of the RECOVER study and replacement implants for CMS-eligible patients. During our investor event held last month, we provided initial key metrics for the RECOVER study around site activation, patient consent, and patient implants. We've continued to make progress since this update. Based on the sequential acceleration of patients consenting into the study, we continue to expect to implant 250 unipolar patients and/or 150 bipolar patients in their respective RECOVER arms by year end. In heart failure, the ANTHEM-HFrEF U.S. pivotal trial continues to advance after reaching a key milestone of 300 patients enrolled in April. As previously discussed, we expect to start analyzing the functional endpoint data in the first half of 2022. For the cardiopulmonary business, sales were $118 million in the quarter, an increase of 12% versus the second quarter of 2020. Oxygenator sales increased in the high teens globally, with the U.S. and Europe leading the growth. Heart-lung machine sales decreased in the mid-to-high single digits. This unfavorable variance was primarily impacted by the timing of hospital capital equipment purchases, largely in the Middle East and LATAM. These impacts were partially offset by better than expected sales in the U.S. Moving to heart valves, sales for the quarter were $15 million, which was a decline of 22% compared to the sales for the second quarter of 2020. It should be noted that this comparison only includes heart valve sales through June 1 in the second quarter of 2021, versus a full quarter of heart valve sales in the second quarter of 2020. I'll now turn the call over to Alex for an overview of the financial results. Alex? Thank you, Damien. I'll discuss our second quarter results in greater detail and then provide an update to our revised 2021 guidance. Sales in the quarter were $265 million, an increase of 41% versus the second quarter of 2020. Sales in the quarter, excluding the heart valve business, were $250 million, an increase of 48% as compared to the same quarter of the previous year. Cardiovascular sales were $146 million, up 13% from the second quarter of 2020. Neuromodulation sales were $118 million, an increase of 102% compared to the second quarter of 2020. Adjusted gross margin as a% of net sales in the quarter was 70%, up from 61% in the second quarter of 2020. The margin increase was primarily driven by product and geographic mix. Adjusted R&D expense in the second quarter was $44 million, compared to $35 million in the second quarter of 2020. R&D as a percentage of net sales was 16.5%, down from 19.3% in the second quarter of 2020. Overall, R&D on an absolute dollar basis is increasing behind continued progress in the ANTHEM-HFrEF pivotal trial and the RECOVER study. Adjusted SG&A expense for the second quarter was $102 million, compared to $80 million in the second quarter of 2020. SG&A as a percentage of net sales was 38.4%, down from 43.7% in the second quarter of 2020. The dollar increase in SG&A is primarily due to commercial-related variable and discretionary spending last year as a result of COVID-19. Adjusted operating income from continuing operations was $39 million, compared to an adjusted operating loss from continuing operations of $4 million in the second quarter of last year. Adjusted operating income margin from continuing operations was 15%, compared to a loss of 2% in the second quarter of 2020. The adjusted effective tax rate in the second quarter was 14.7%, compared to 2.8% in the second quarter of 2020. The higher tax rate is primarily attributable to geographic income mix. Adjusted diluted earnings per share from continuing operations in the quarter was $0.52, compared to an adjusted diluted loss per share from continuing operations of $0.15 in the second quarter of 2020. The cash balance at June 30th, 2021 was $329 million, up $77 million from the cash balance of $253 million at year-end 2020. Net debt at quarter end was $426 million versus $505 million at year-end 2020. The decrease in net debt is driven by our increased cash balance. Our adjusted free cash flow for the second quarter of 2021 was $20 million. Capital spending for the first half of 2021 was $15 million, which is $3 million lower than the first half of 2020. Now, turning to our revised 2021 guidance. As Damien mentioned, based on our performance during the first half of 2021, we are increasing our previously announced full-year sales, EPS, and adjusted free cash flow guidance. Overall, we anticipate the momentum of the neuromodulation business to continue, and we're now forecasting 2021 sales growth between 5% and 10% on a constant currency basis, which assumes 1% tailwind from exchange rates. This is up from our prior guidance of 0% to 5% growth. We are projecting adjusted diluted earnings per share from continuing operations in the range of $1.60 to $1.90, up from our prior guidance of $1.31 to $1.81. We assume our share count to be approximately 50 million. Adjusted cash flow from operations is expected to be between $35 million-$55 million, up from our previous guidance of $30 million-$50 million. With that, I'll turn the call back to Damien for some final comments. Thanks, Alex. In summary, we've built good momentum during the first half of the year, and we are optimistic regarding the growth outlook for the remainder of the year. Taking this into consideration, we increased the midpoint within all our guidance ranges. While we acknowledge that we continue to live with changing market dynamics resulting from the pandemic, we remain focused on execution to deliver our pipeline commitments and our updated full-year guidance. With that, Crystal, I'll open the line up for questions. Thank you. If you have question at this time, please press star then the number one key on your telephone touch-tone. If your question has been answered or wish to remove yourself from the queue, please press the pound key. As you enter the Q&A session, please limit yourself to one question and one follow-up question, and then return to the queue if you have additional follow-ups. Your first question comes from the line of Mr. Rick Wise from Stifel. Sir, your line is open. Good morning, everybody. Nice to see the solid quarter. Thanks for that. Maybe, Damien, let's start off with Neuromod, with epilepsy. It's great to hear that all three regions showing improved performance. Maybe you could talk in a little more detail just about what you're seeing and what we can expect, both on the new implant side and the replacement side. I mean, tremendous momentum on new implants. To what extent is that the new sales team approach versus new accounts? Just help us better understand what's happening there. Yeah, great question. Good to hear from you, and good morning, Rick. We're very pleased with how the team is executing and getting us back to what I think looked more like 2019 levels of performance. Total U.S. implants rose 70% year-on-year, which is very strong performance for the team. The epilepsy implants in the quarter also grew slightly from 2019. I think, again, that's a really important signal for that business bouncing back to 2019 levels. In the past few quarters, end of services recovered faster than NPI. We've been talking about that tailwind from the backlog of procedures from 2020. They grew about 85% year-on-year and nearly 20% sequentially, which I think is a big sign, too. NPIs grew about 40% and low- teens sequentially. Again, end of service really leading the way there. I think a lot has to do with the new go-to-market strategy. As I pointed out in the script, they've gone from around 10% of the U.S. sales to 16% of the U.S. sales. That is important for us because we believe that's how we're going to continue to make changes in our awareness and impact on new patient implants over time. I don't know, Matt, if you wanted to add anything on that. No, I would say that, Rick, the U.S. is the majority of the business. We're also seeing a lot of good trends in areas in Europe and some of the other international markets as well. In the quarter, we just know most of the focus is on the U.S. We gave a few more nuggets there. Yeah. Great. Maybe two more. You've made encouraging comments about the DTD trial. I think your words, Damien, were, "We've made good progress in the quarter toward that 250, 150 by year-end." Can you give us any sense of, as things are reopening, recovering, hopefully returning to normal, was enrollment in line? Did it accelerate? It sounds like you're more confident in reaching your year-end targets, but any more detail there you can share? Yeah. I think since the education event we hosted, we've seen the progress in line with our forecast. We noted in May that over three-quarters of our sites were activated, over half of our target number of patients have consented. Just so everyone's aware, the consent is like a technical precursor to the implant stage. Then over 1/3 of the target number of patients have implanted and that's continued to progress and we've seen that basically running on our model since then. Okay. Alex, congratulations to you. I give you full credit for the excellent print already. Thank you. Maybe you could help us think through the second half in a little more detail. How do we think about the third quarter, fourth quarter sales cadence? I sort of think about the third quarters normally in life and medtech life as being sequentially softer because of seasonality and vacations, or no, that's not, it could be more flat to up this year because of the business trends you're seeing and new sales initiatives and recovery. How do we think about splitting up and thinking about the second half? Thank you. You're right, Rick. First of all, thanks for the congratulatory remarks. I would say, look, the seasonal trends we expect to be similar as we've seen historically, Q3 sort of being a slower quarter relative to Q4. One thing I will remind you is that heart valves are out of our sales trajectory for the second half of the year, so that's going to have an impact really in terms of comps. We feel good about the sales trajectory, and as Damien said, we are expecting sequential growth in the second half. Now that we've reached the midpoint of the year, we're more comfortable updating our guidance, and putting all of our EPS upside generated into our new guidance range. Just, if I could interrupt. As we think about the third quarter ex- heart valves, does it match the first quarter revenue levels? Is that the right way to think about it as we get ready for the fourth? Yeah. Yeah. At least. Yeah. Okay. Yeah, look, I think we feel pretty good about the second half of the year. We continue to see unpredictable impact of COVID, especially in pockets of APAC, Middle East, and Latin America. The U.S. trends have obviously improved, but not yet quite back to normal on epilepsy, particularly on NPIs or new patient implants. As we look for the back half of the year, we're assuming it's delivering the same level of EPS as we delivered in the first half. Got you. Thanks for all that color. Thanks, Rick. Your next question comes from the line of Mike Matson from Needham & Company. Sir, your line is open. Hi. Good morning. Thanks for taking my questions. I guess I want to start with neuromodulation. Obviously, good performance there. But, I wanted to ask about the strength of replacements. You did mention there's a bit of a backlog there. Is there a risk that that slows down the replacement part of the business and maybe we see an air pocket before the new implants sort of continue to pick up? I guess, in other words, how much confidence do you have or visibility do you have into the backlog that that part of the business can be sustained, the replacement portion? Hey, Mike, it's Matt. On the replacements, like we said before, that in 2020, we thought there were about 1,200 replacements that based on our modeling should have occurred that did not. We've eaten into that a little bit, but we still think there's at least 1,000 of those replacements that are still out there and available. We did burn a little bit in the first and second quarter. Just thinking about that math, that should carry into 2022. I don't think it's anything you need to worry about through this year. In terms of the new implants, as Damien said, we did actually show nice growth sequentially. Our expectation is that we'll show growth sequentially again in the third quarter. Not quite back to what we call baseline, but getting there. Okay, thanks. That's helpful. I just had a couple on the OSPREY trial. Is this in fact a pivotal trial? In other words, will it support FDA approval for aura6000 outlook? Co nfused because the slides called it a confirmatory trial, so I wasn't really sure what that meant. And I wanted to get a better understanding of the timing. What's the follow-up period to the endpoint in the trial, and when could we see results? Yeah. Yeah, so, great questions, Matt. The things for us that are important here is that we finished the THN3 trial and weren't happy with how that was executed as we took that over. We're calling it a confirmatory trial. But, yes, it does support as a pivotal the FDA approval cycle for a PMA. That is correct. It is a PMA pivotal approval trial. As far as follow-up, it's a six-month follow-up. The timing, Mike, we're assuming approval in 2024 right now. Okay, got it. Thanks. I'll let some others get on. Thanks, Mike. Your next question comes from the line of Adam Maeder from Piper Sandler. Sir, your line is open. Hey, guys. Thanks for taking the questions. Congrats on the results and to you, Alex, on the appointment to permanent CFO. Maybe just one kind of short-term question to start. I guess I was just hoping to get a little bit more color on Q2 and how the business progressed over the course of the quarter or by month, and just trying to get a better sense for the recent trajectory there and exit momentum that you have, and then if you're seeing any kind of early impact from the Delta variant recently, because I had a couple of follow-ups. Thanks. Hey, Adam. Thanks for your question. Yeah, look, as Damien mentioned in his remarks, we started to see strength in our trajectory in March, and it continued throughout the quarter. We came out at the end of Q2 with really good trends. Really happy with the type of trends that we saw in epilepsy, U.S. in particular across the board, across all franchises, we saw some really strong trends. That made us feel pretty good about the balance of the year, second half. Also in terms of beyond the sales trend, we saw some good progress in terms of gross margin, and we're seeing leverage across the rest of the P&L. All positive. In terms of Delta, like I'm sure everyone is doing, we watch this carefully. Some time ago, we started internal monitoring through Matt's SIVA team, and we've been tracking that by geography extremely closely. Then on our Focus Friday calls, we talk about this with the teams every week to look at where we see pockets and hotspots. LATAM is an issue, Middle East, Africa still being an issue. And in the U.S., we're tracking pretty carefully this whole Florida, Georgia, Louisiana spike. That's important too for us. The East is an important geography for us in all the franchises. We're watching it, again, I'm sure like everyone else, but we're confident at the moment that we're going to be able to execute to the goal we just laid out. That's really helpful. Thanks, guys, for that color. Then for my next question, just on CP, I think you said that's expected to grow low to mid-single digits this year. You talked a little bit about, you now, capital being soft. But maybe was hoping to get a little bit more color or put some takes there. Then I know you're not giving, obviously, guidance for 2022 at this time, just conceptually, I wanted to ask about the CP business when the new heart-lung machine is launched. What's the right way to think about the growth trajectory of that business? What type of impact did Polaris have and just how do we think about kind of the stage rollout timing? Then I had one quick follow-up. All right, Adam, on your question around CP. In oxygenators, we continue to see progress in the quarter. We had approximately 12% sequential growth which was positive. In terms of the capital cycle, the HLM sales tend to be kind of lumpy. We're not seeing anything that we hadn't predicted in our forecast earlier this year. In terms of 2022, we've said this is a low single-digit market. With Polaris coming online, I would say at least for now, maybe think mid-single digits until we get more visibility on the exact timing. Got it. Okay. Thanks, guys. To sneak in one more, if I may, just to ask about obstructive sleep apnea. Just want to learn a little bit more about the technology itself. This next-gen device kind of relative to the previous generation, aura6000. What changes have been made to the design and the feature set? How do you kind of view the value proposition versus the other available technologies? Thanks so much, guys. In terms of the technology, not a lot of changes to the device overall in terms of what it does, the number of electrodes on the lead. Really just, I think refining and enhancing the components for reliability. I'd say two of the big differences versus the current therapy out there, Inspire. We don't have the second lead right now. It's just a single lead, and we have more electrodes. We have six electrodes. They sit further back on the nerve than Inspire, you can theoretically recruit additional muscle fibers, and you can sort of adjust the shape of the tongue a bit better versus just stick it out. That's kind of a core component. We think that that'll actually help a little bit more with complete concentric collapse, which is about 1/3 of patients. There is some differentiation, I think, in the way it works. But in terms of the device, I wouldn't call this an enhanced device from a therapy effect. Got it. Crystal clear. Thanks, Matt. Your next question comes from the line of Anthony Petrone from Jefferies. Sir, your line is open. Hey, Anthony. Maybe we're having trouble getting you on. Crystal, do you want to come to the next one, and then we'll come back to Anthony if he can get back in? Sure. Your next question comes from the line of Mr. Michael Polark from Baird. Sir, your line is open. Hi. Good morning. Can you hear me? Yeah. Hey, Mike. How are you? Hey, very well. Question for probably Alex on just gross margin into the second half. Obviously, we pull heart valves out, which just should be an accretive exercise to the gross margin. I previously did some math last year when you first announced it, probably 200 basis points of lift just from stripping heart valves out of the model on gross margin. Is that in and around the ballpark? That's right, Mike. We expect gross margins to increase in this year relative to 2020 by about 300 basis points. The outlook is trying to get to 70 and beyond. All of that positive trend is really driven by the product mix as we sell more neuromodulation. Also, the increased volumes on cardiopulmonary, that will definitely drive some upside there. On R&D, always trying to model the or frame the shape of this curve. I know you're investing in a lot of important initiatives. Are we at a quarterly run rate or a quarterly number here of $44 million? Is this going higher, kind of flat here for the next few quarters? How do you see this playing out rest of this year into next? We see a little bit of a step-up in the second half, especially as we enroll the OSPREY trial, a bit of a step-up, but we're sort of in the ballpark there with our first half trends on the other trial. Okay. Sort of the base. Yeah. On OSPREY, this is my last one. On the math, the CCC comment, is the protocol for this study design such that all these patients go through the drug-induced sleep endoscopy, and you pull the Triple C patients out and then run a trial kind of consistent with the current FDA indication for hypoglossal nerve stimulation? Are you expecting that this study is going to have a Triple C and a non-Triple C subgroups? You got me on the endoscopy. I'm going to have to get back to you on that one. The CCC, it's going to include the CCC patients. I don't think they're going to be separated from the other patients in the trial. If that's wrong, I'll let you know. Well. But they are definitely going to be in the trial. Yeah, you run the DISE to identify the nature of the airway. I presume that's part of the protocol then. I'll check on that. Okay. Thank you. Thanks, Mike. Thanks, Mike. Your next question comes from the line of Mr. Anthony Petrone from Jefferies. Sir, your line is open. Hi. Good morning. Apologies. We're hopping between calls. Apologies if some of these got asked. My first question would be on VNS backlog. You mentioned last quarter there were still about 1,000 patients really that were backlogged, and I believe those were replacement patients. Just wondering if there's an update there, and how long of a tailwind does that represent? I think last quarter you mentioned into 2022. On the margin side, just trying to quantify, there was certainly an outperformance both at the gross and operating level versus our estimate. Certainly, the outsized revenue beat helps there. Just sort of trying to work through that. How much of that was the revenue beat versus just cost savings? If you can, Alex, maybe just some high-level thoughts on where you see the adjusted operating margin profile trending perhaps over the next several years. Thank you very much. Congratulations on a good quarter. Thanks, Anthony. It's Matt. For VNS, it's still over 1,000 patients. The way that works is we probably reduced the 2020 number by about 150-200, but we're still not back to normal, I would say, in U.S. epilepsy in terms of market trends. There were some additional ones added. The net is still, I would say, north of 1,000. Anthony, in terms of the margin profile, so gross margin, yes, it was It was sort of outperformed on basis of sales volumes. It's a kind of a mixed phenomenon, right? As we sell more neuromodulation, which carries a higher gross margin than the rest of the fleet. That really helps. We're trending at somewhere in the 70% range, and we expect to maintain that or improve that in the back half of the year, and into 2022. In terms of the operating margin, we feel pretty good about where we landed in Q2. I would say it's going to be pretty similar in the second half. Our goal, I think we've stated all along that we're striving to get to 20%. Not sure we can get there in 2022, but we're certainly going to give it a try. That's very helpful. Thank you. Congrats again. Thank you. Your next question comes from the line of Mr. Matt Taylor from UBS. Sir, your line is open. Hey, Matt. How are you? Hey, Damien. Good, Damien. How are you doing? Thanks for taking the question. I wanted to ask more about the epilepsy dynamics. Just as a follow-up on replacement versus de novo. Could you talk about how that mix looks today in different geographies and how you expect it to change over time? When might you be able to recapture those 1,000 that are still out there? Any more color on the trends would be really helpful. Hey, Matt. It's Matt. For U.S., we're currently getting closer to 70% now. A year and a half ago, we were closer to the 60% range, so no surprise. It's slowly gone up. We do expect it to eventually start to go down next year. Internationally, in Europe, our split's about 52% NPI, 48% EOS, so not quite as high as the U.S., but almost 50/50. In the other markets, international markets, it's like 85% NPI. Again, all of them over time. We do expect the End of Service to move up. Mm-hmm. Mm-hmm. Okay, great. What have you seen in the recapture and, I guess, versus your modeling? How are those coming along, and what's the pace that you could recapture those 1,000 that are out there? Again, it's not perfect, Matt, but we think 150-200 were captured in the second quarter. There were some captured in the first quarter. We'd expect it to continue to go up in the back half of the year. What we don't know is how long the tail lasts, because with the therapy and the settings, it really depends by patient. Even when you get the alert that your battery's below 17%, you could potentially go a year. We don't have a perfect window on when a patient's going to come in by month, but within a year period, we have very high confidence. What we think right now is more in the third and fourth quarter, some will spill over into 2022, and then by 2023, we're largely back to normal. Got it. Okay. I just wanted to ask a hypothetical question on RECOVER. Assuming that you do hit your enrollment goals for the cohorts by the end of the year, and based on what you have seen in the registry data previously, could you just clarify some goalposts about when you might be able to see separation of the curves enough to make a signal that you have a high success chance for a positive result? How long, I guess, could that take in a reasonably good scenario? Matt, right now we're assuming it's sometime in the back half of 2022. Again, it's phasing. We get to look a lot. For each arm, we get to look every 25 patients. We don't have long intervals of waiting. Based on the statistics it was designed on, it's somewhere in the back half. Again, we've committed to late 2022, early 2023 from a ship to registry. That just gives some time for CMS to decide and then also where in the back half we think the odds are the highest. That's how we're currently looking at it. Okay. Just on the softer side of things. What can you do ahead of time, I guess, to start to raise awareness and seed the market? What are you doing now and what can you do next year to start to get the psychiatry community excited about this? I think our real focus is just on RECOVER. We've also done, I think, a very good job in working with a publications subgroup of the investigators to map out a publication strategy. We are actively publishing in the area and engaging more with interventional psychiatrists. We're also working to make sure we've got capacity to implant, so whether that's a neurosurgeon, ENT, or general surgeon, so that we can make sure that the flow works from interventional psychiatrist to the implanter back to the interventional psychiatrist. They're two of the steps we're taking among the many aspects of what the team is doing. Using DRG data, where the centers are and how we would think about a commercial expansion strategy, once we get to certain milestones with CMS. Got it. Okay. Thank you very much, Matt. Cheers, Matt. We have our last question from the queue. We have Mr. Scott Bardo from Burbridge company. Your line is open. Hey, Scott, how are you? Thanks. Yeah, you'll be pleased to know I'm from Berenberg, not Burbridge. Right. Thought maybe you changed jobs recently, sir. Thanks, guys, and congratulations, Alex, for the permanent tenure. The first question, please, just relates to operating margin this quarter, which I think came in pretty reasonable at 14.9%. Of course, that margin is somewhat benefiting from the revenues that you book for heart valves for a couple of quarters. I wonder if you can give us a sense, Alex, as best you can, what you think the underlying margin for your cardiopulmonary, Advanced Circulatory Support and Neuromod business was this quarter, if you were to completely net out sales and costs from heart valves. That would be helpful. I guess follow on question, SG&A trending up to about $105 million now that you've exited heart valves. There's an awful lot of folks there within that business. Loop basis all remains flat, goes up. Some sense there would be helpful. Second question, just relates to cardiopulmonary, please. I think, correct me if I'm wrong, but your guidance or the outlook for that has been somewhat moderated, and you're referring to weak capital trends on top of what was already a weak capital year the year before. Are you confident that you're not losing market share here? We note that Getinge have now entered the market with a heart-lung machine and claiming strong momentum. I wonder if you can comment there, and furthermore then, some sense of the timings for both Polaris and your new VNS device, please. Thanks. Great. So, let's take this one at a time. Our operating margin, excluding heart valves, largely the same, Scott, because as you know, the heart valve business carried a lower gross margin relative to the rest of the fleet. You know, so, taking that out of the mix, the operating margin isn't drastically affected. Recall when we announced the divestiture, we said we were going to be dealing with some stranded costs in the back half of the year. That's absorbed in our guidance, in our margin for the balance of the year. We're working on costs, to get those out as soon as possible. We're supporting the transitional services agreement with CORCYM, which requires us to continue to spend from an SG&A perspective. Now, just look, I believe your second question was on cardiopulmonary and, in particular, the HLM cycle. In the quarter, we saw some really good trends in the U.S., you know, rest of world, I would say it was pretty lumpy. We had forecasted during the year, that the HLM business, the capital business would be down versus 2020 because remember, we're coming up on the end of the S3 to S5 conversion cycle. The HLM business, we are not losing share. We believe that the business is running in line with our forecast. A couple more things, Scott. It's Matt. Last year we thought the HLM business would do worse than it did. Capital didn't fall as much as we thought. It was down about 15% last year for the full year. In terms of the Getinge HLM, we certainly know it's out there. We know they launched it. We check with the CP team all the time. They have just not said much about that product having an impact yet. In terms of the timing of Polaris, no change. We've still said first half in Europe, around mid-year in the U.S., in some of the other markets in the back half of the year. That's helpful, guys. Maybe just one clarification please, Alex, just to fully understand what you were saying on selling and marketing costs. This $105 million that you book in the quarter, do you expect that to remain stable, if you like, into the second half of the year until you work down some of these stranded costs? I'm just trying to understand what sort of costs come out of the business now you've exited heart valve. That's correct, Scott. Remember, we're still investing behind our go-to-market initiatives in neuromodulations and ACS. Understood. Maybe last one from me. Very much appreciate all of these investor education sessions you've done on the various different divisions. They're helpful. I think what would be most helpful is a mid-term framework for margin and growth, to get some sense of your operating costs, your expected delivery of your platform, so forth. You've talked a little bit about CMD. Have we now got a definitive date in the diary for fiscal 2021? We're still looking at the fourth quarter. We were hoping to be live. In fact, our plans had been to be live. Of course, the issues with border crossings and who's been vaccinated and who hasn't is just complicating our planning. Our current plan is mid fourth quarter. Got it. Thanks so much, guys. Cheers on you, Scott. We have a follow-up question from Mr. Rick Wise from Stifel. Sir, your line is open. Hi. Sorry for the follow-up. I just wanted to hear you comment publicly, if you would, a little bit on TandemLife and LifeSPARC part of it. Obviously, terrific year-over-year numbers. Buti If I'm looking and understanding the numbers correctly, sort of flattish in terms of dollars sequentially. Just what's going on? Where are we in the rollout? What's next? How do we think about the second half, et cetera? Thanks a lot. Yeah, Rick, look, we still expect ACS to accelerate its growth in the second half of the year. You know, we like the trajectory. The comps versus last year, if you recall, in the quarter, basically, as LifeSPARC was anticipated in Q3, there was a sort of a slowdown in placement. I would say, we're looking at the business sequentially. We like the sequential progress we're making in terms of procedure volumes as well as the capital placement. And Rick, it's accelerated growth on an absolute basis, not a percent basis. Right. But just in case. Yeah, you are right. And we've talked about previously, what are we doing? It's about account acquisition. Those plans are right on track with the team through the midpoint, which is terrific. We also committed to putting on up to 20 heads this year. We're about halfway through, and we're about halfway through the recruiting. We like what we're seeing in terms of talent attraction, too. We've been able to, I think, really up the talent that we're bringing in to the team. I think that'll ultimately read through into faster uptime of those people in the field. We're really pleased with how this is progressing. Just put words in your opinion, but we should anticipate further sequential dollar acceleration or third, fourth quarter into next year. It's going the direction you want. Thank you. Correct. That's correct, Rick. Yes. Again, ladies and gentlemen, if you want to ask questions, please press star one. There are no questions over the phone, sir. Please continue. Okay. Thank you, Crystal. Thank you everyone for your time and the whole series of questions and your interest. On behalf of the entire team, I appreciate your support for LivaNova, and we look forward to speaking to you next quarter. Thanks, everyone. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.