Welcome everyone, to Surmodics third quarter of fiscal year 2023 earnings call. Please note that this call is being webcast. The webcast is accessible through the investor relations section of the Surmodics website at www.surmodics.com, where an audio replay will be archived for future reference. An earnings press release disclosing Surmodics quarterly results was issued earlier today and is available on the company's website as well. Before we begin, I would like to remind everyone that remarks and responses to your questions on today's call may contain forward-looking statements. These forward-looking statements are covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, include statements regarding Surmodics' future financial and operating results, or other statements that are not historical facts. Please be advised that actual results could differ materially from those stated or implied by Surmodics's forward-looking statements, resulting from certain risks and uncertainties, including those described in the company's SEC filings. Surmodics disclaims any duty to update or revise these forward-looking statements as a result of new information, future events, developments, or otherwise. This call will also include references to non-GAAP measures because Surmodics believes they provide useful information for investors. Today's earnings release contains reconciliation tables to GAAP results. I would now like to turn the call over to Mr. Gary Maharaj, Surmodics President and Chief Executive Officer. Please go ahead, sir. Thank you, operator, and welcome everyone to our earnings call for the third quarter of fiscal year 2023. Let me begin with a quick overview of what we plan to cover on today's call. I'll begin my remarks with a brief overview of our quarterly revenue results and the key drivers of our performance, followed by a discussion of our recent operational progress and thoughts on our outlook for the remainder of the fiscal year. Tim will then discuss our third quarter financial performance in detail and review our fiscal 2023 guidance, which we updated in our earnings press release today. We'll then open the call for questions. With that, let's get started with a review of our revenue performance. In the third quarter of fiscal 2023, we reported total revenue of $52.5 million, representing growth of 111% on a year-over-year basis. Our total revenue performance was driven by exceptionally strong growth in our medical device segment, which increased 163% year-over-year, more than offsetting a 12% decrease in revenue from our In Vitro Diagnostics, or IVD segment. Our total revenue and medical device revenue growth benefited from the achievement of FDA pre-market approval for our SurVeil drug-coated balloon. As a result of this achievement, we received $27 million of a milestone payment during the quarter from our commercial partner, Abbott, of which $24.6 million was recognized as revenue. I'll discuss this important accomplishment in further detail later in my remarks. I'm pleased to report that we delivered strong performance during the quarter on an underlying basis as well. Excluding the PMA milestone, we achieved total revenue growth of 12% year-over-year, driven by the medical device segment, total revenue growth of 22% year-over-year. This impressive performance in our medical device segment was largely driven by product sales. The medical device segment product sales increased 38% year-over-year, fueled primarily by our sales of our Pounce and Sublime products, along with strength across our product portfolio, including sales of our performance coating reagents. In our IVD business, the year-over-year softness was driven primarily by decreased sales across our core product lines, as we saw several customers taking steps to manage elevated inventory levels during the quarter. All in all, we were pleased with our revenue performance in the third quarter. Shifting to an update on our recent operational highlights. During the third quarter, our team made important progress with respect to each of our three key strategic objectives for fiscal 2023, while continuing to advance our pipeline of vascular intervention products towards commercialization. I'll start by discussing our recent progress with respect to each of these objectives, which, as a reminder, are: 1, to achieve FDA pre-market approval of PMA for the SurVeil drug-coated balloon, then support our partner, Abbott, as they prepare to commercialize the product. 2, to advance the initial commercialization of our Sublime Radial and Pounce arterial thrombectomy platforms. 3, to drive revenue and cash flow growth from our medical device performance coating offerings and IVD businesses. Beginning with our first strategic objective, securing the PMA for our SurVeil DCB. We entered the third quarter of fiscal 2023 with strong momentum on the regulatory front, having secured formal feedback from the FDA's review team that provided the additional clarity in the process and content required to successfully amend our application for the PMA. As we shared via press release on March 28th, we believe the additional clarity we obtained would enable us to prepare an amended PMA application for submission in third quarter and secure the PMA in the fourth quarter of fiscal 2023. We submitted this PMA application to the FDA in May, consistent with our stated expectations. In the months leading up to and following submission, our team continued to engage with FDA's review team to discuss and clarify aspects of our submission and to facilitate their review process. On June 20th, we were proud to announce a receipt of the FDA premarket approval for our SurVeil drug-coated balloon. With this approval, our SurVeil DCB may now be marketed and sold in the U.S. to physicians for percutaneous transluminal angioplasty after appropriate vessel preparation of de novo or restenotic lesions less than or equal to 180 mm in length, in femoral and popliteal arteries, having reference vessel diameters of 4 - 7 mm. Securing the PMA for SurVeil represents one of the most significant achievements in our 44-year history as an organization. It will enable us to provide physicians and patients with a next-generation option for the treatment of peripheral artery disease, one that leverages a culmination of our decades of expertise as an organization in developing and applying drug-eluting coating technologies. The SurVeil DCB leverages our proprietary technologies and capabilities with a design that promotes more uniform drug distribution, more efficient drugs transfer to the target region, while reducing particulates and downstream emboli. This approval also represents further validation of the strong safety and efficacy profile of our SurVeil DCB and the results of our 446 patient TRANSCEND clinical trial. As the two-year results of this trial demonstrated, the SurVeil DCB achieves clinical and safety outcomes that are consistent with the market-leading device. These results are despite the competitive device having 75% more paclitaxel compared to the SurVeil DCB. Given the numerous challenges that had to be navigated in order to secure this approval, including the FDA's heightened concerns about the use of paclitaxel for the treatment of peripheral artery disease beginning in 2019, it also represents a herculean accomplishment by our product development, regulatory, and clinical teams, made possible through their years of hard work, dedication, and commitment to working in partnership with the agency to satisfy their questions. With the PMA now in hand, our team has been squarely focused on supporting our commercial partner, Abbott, as they prepare for U.S. commercialization. We've been actively engaged with Abbott's commercial and operations team to refine the plan for SurVeil's commercial launch. As a reminder, under the terms of our agreement, we are responsible for manufacturing and supplying Abbott with product as they commercialize the SurVeil DCB. While we are limited in terms of what we can say publicly at this time with respect to the commercialization, we expect to receive Abbott's initial stocking order during the fourth quarter of fiscal 2023, with commercialization anticipated in fiscal 2024. We look forward to sharing more details in a future earnings call. Since receiving the PMA, our team has been focused on all the pre-commercial activities to ensure our readiness to satisfy Abbott's initial stocking order, as well as subsequent orders. We've started up the manufacturing engine for the SurVeil DCB with successful initial test runs of our production and quality processes. With respect to raw materials, we are well positioned to support the commercial launch. From a people standpoint, throughout this year, we have continued to retain experienced manufacturing team members focused on SurVeil production, teams who have been responsible for building thousands of SurVeil units in recent years to satisfy the clinical and regulatory needs. We've also hired several additional team members to provide future support as we scale. In short, we are well positioned with the capacity, materials, and processes in place to meet the needs of our commercial partners. Given Abbott's commercial distribution infrastructure, their market presence, and expertise in vascular care, we're excited to be entering this pivotal stage of our partnership. We believe our next-generation drug-coated balloon will complement and enhance their existing product portfolio. We look forward to our continued collaboration with Abbott as we provide physicians and patients with a safe, effective, and innovative solution that leverages our best-in-class technology to address the challenges presented by peripheral artery disease. On a related note, we were excited to see the FDA publish a letter to healthcare providers on July 11th, that summarized the agency's latest views about the potential risks to paclitaxel-coated medical devices. As I mentioned earlier in my remarks, paclitaxel has been an area of increased focus and regulatory scrutiny for the past five years, since the FDA posted a letter to healthcare providers on January 17th, 2019, sharing their concerns. The FDA follow-up letter, published in July, is titled "Paclitaxel-Coated Devices to Treat Peripheral Artery Disease Unlikely to Increase the Risk of Mortality." It states that the agency has reached a conclusion that the totality of available data and analyses does not support an excess mortality risk for paclitaxel-coated devices. It goes on to summarize data and analyses that supported this conclusion and clarified that the decision applies to all paclitaxel-coated devices. We were also pleased to see the FDA state in the letter that they will work with device manufacturers to update product labeling based on the current available data. In terms of its implications, we believe this letter provides important closure with respect to the concerns that were initially raised by the agency in 2019. Like other devices in the market, the product labeling for the SurVeil DCB does currently include a standard warning related to paclitaxel. The FDA noted in a July letter that it will work with device manufacturers to update the product labeling based on the current data. We look forward to working with the agency to make the needed updates to our SurVeil DCB labeling, and expect this to be a fairly straightforward process. Moving to our second strategic objective, advancing the initial commercialization of Sublime Radial and our Pounce arterial thrombectomy platforms. As I mentioned earlier, sales of our Pounce and Sublime products were an important contributor to the 38% medical device business product sales growth that we achieved in the third quarter. From a commercial standpoint, we are pleased with the execution of our direct sales team as they worked with physicians at potential new accounts to navigate our products through value analysis committees. As a result of their efforts, we continue to make progress in expanding our base of customers, ending the third quarter with more than 215 customers for our Pounce and Sublime platforms, compared to over 170 at the end of the second quarter. We achieved our stated target for fiscal 2023 ahead of our expectations. Given that we entered fiscal 2022 with just over 100 customers, we're pleased with the strong progress made over the first nine months of this fiscal year, especially considering the workforce reduction that we implemented during the second quarter. Our sales team continued to make progress in expanding our pipeline of prospective customers, with a number of value analysis committees considering our products remaining in line with the March quarter, despite the growth in new customer conversions. We remain pleased with the reordering we're seeing from existing users as well. In terms of the size of our team, we're pleased to see continued stability during the third quarter, with 22 territory managers at quarter end, with an average tenure of 13 months, compared to 21 territory managers at the beginning of Q3. From a market education standpoint, we continue to make progress with respect to our PROWL registry study, which we initiated during the third quarter. We believe the study will further underscore the compelling therapeutic benefits of our Pounce arterial Thrombectomy System as used in real-world settings. We are enrolling patients at two sites at quarter end, and we continue to anticipate sharing interim data with current and prospective customers as part of our efforts to educate the market and raise awareness. Based on the progress made over the first nine months of our fiscal year, we believe we are squarely in the process of graduating from initial market entry to what we referred to previously as the early market development stage of our commercialization effort. As we look ahead to the remainder of fiscal 2023, we expect our customer base to grow to more than 250 accounts at year-end, and generate Pounce and Sublime sales growth in excess of 250% year-over-year, as we continue to focus on raising awareness of the capabilities and advantages of these platforms. Crossing the chasm, so to speak, by converting mainstream users as well as early adopters, and facilitating strong utilization across the entire user base. In addition to driving adoption and commercial traction with respect to our Pounce and Sublime portfolio, we are continuing to expand this portfolio with our new product pipeline. I will discuss this progress on this front in a moment. Let me give you a nugget here about Pounce and Sublime revenue. They have now contributed more than $1 million of revenue per quarter for two consecutive quarters now. This, while small on a relative scale, is fantastic news. It demonstrates the power of developing and commercializing devices that can change the standard of care, and we're doing this with a sales team that is still in the early innings and less than one-tenth the size of larger medical companies. As you have heard me say in the past, the future has already been created, it's just not evenly distributed yet. Herein lies the potential of Surmodics' vascular intervention strategy. Turning to our third strategic objective, driving revenue and cash flow growth from our medical device performance coating offerings and IVD businesses. We're pleased to see revenue from medical device performance coating offerings in our third quarter increase 11% on a year-over-year basis, driven primarily by strong sales of performance coating reagents. This is moderated partially by the 12% decrease in our IVD business that I discussed earlier. The decrease does not appear to be driven by market competition, but by multiple macroeconomic factors impacting the entire IVD industry, including the decrease in demand for COVID testing products and stabilization in supply chains, reducing the need for elevated safety stock. Viewed together, revenue from these categories increased 4% year over year in the third quarter, consistent with our long-term expectations of low to mid-single digit growth, generating cash flow to support our strategy. Lastly, in addition to our progress with these key objectives, we continue to advance our new product pipeline. With respect to Pounce Arterial Thrombectomy Platform, we're continuing to enhance the capabilities of this portfolio to expand the addressable market with new product introductions and clinical indications. Most notably, on June 14th, we announced a receipt of FDA 510(k) clearance for our Pounce LP Thrombectomy System, with a clinical indication for use in vessels ranging from 2 - 4 mm in diameter. The addition of Pounce LP will expand the range of our Pounce arterial system by providing systems to physicians with a product designed to facilitate efficient removal of organized clots in smaller vessels, such as those found in the peripheral arteries below the knee. Securing regulatory clearance for Pounce LP takes us one step closer to our commitment to providing patients and physicians with a comprehensive suite of mechanical thrombectomy solutions to address acute limb ischemia across the entire peripheral vasculature, helping to reduce amputations. We look forward to commencing this limited market evaluation of our Pounce LP Thrombectomy System by the end of the first quarter of fiscal 2024, and entering full commercialization following its completion. With respect to our Pounce venous thrombectomy system, we continue to make progress through our limited market evaluation, which we initiated during the second quarter, to collect physician feedback on the system's use across a variety of cases. Our progress was initially paced by limited product availability, but we were able to work through this constraint during the quarter and accelerate the pace of evaluations. We've been pleased to find physician users emphasizing their appreciation for the system's simplicity, ease of use during cases, and the feedback we've been obtained so far has been nicely informative as we prepare for commercialization. We'll continue to progress through this limited market evaluation during the 4th quarter, with the goal of entering commercialization in fiscal 2024. Lastly, at the end of April, we commenced a limited market evaluation of our.035" Sublime Radial Access Microcatheter. This is part of what will be the industry's first suite of torqueable, high-performance microcatheters designed for peripheral interventions and available in both radial and transfemoral lengths. We believe these Sublime microcatheters will enhance our existing Sublime Radial Access Platform by empowering physicians with tools specifically designed to cross difficult lesions, helping to facilitate the adoption of peripheral treatment via a radial approach. The feedback we've obtained on the.035 microcatheters to date has been positive, and we look forward to initiating limited market evaluations of our.018 and.014 microcatheters, the remaining products in this microcatheter portfolio. I'm incredibly proud of our operational and financial accomplishments this past quarter. Our team drove important progress on each of our strategic objectives that we prioritized for fiscal 2023. This progress enabled us to deliver impressive financial results, including $52.5 million of total revenue, $21.4 million of operating income, and $24.6 million of adjusted EBITDA. Excluding the $24.6 million of revenue related to the SurVeil PMA milestone, we delivered total revenue growth in the third quarter of 12% year-over-year, and we were essentially break even on an adjusted EBITDA basis. As I mentioned in our last earnings call, cash flow remains a priority for our organization. From a cash flow perspective, we generated $25.4 million of cash during the quarter to further strengthen our balance sheet, ending the quarter with $44.6 million of cash and equivalents, and approximately $61 million in incremental debt financing available under our existing credit facility. Excluding the $27 million milestone payment, we were also pleased to reduce our quarterly cash burn to $1.6 million of cash use, exceeding our stated objective of $3.5 million-$4.4 million of used cash for the quarter. As we continue to control our expenses and allocate capital thoughtfully following the implementation of our spending reduction plan implemented earlier this year. Lastly, as we continue to advance multiple key products in our pipeline, positioning Surmodics to drive future growth and value creation through innovation in the years to come. As Jim will discuss, we are raising our guidance today to reflect our impressive financial and operational performance in the third quarter, as well as our updated expectations for the balance of the fiscal year. We remain committed to perpetuating our recent momentum and bringing fiscal 2023 to a strong conclusion. I'd like to conclude my remarks today by congratulating the entire Surmodics team on the many achievements made during this past quarter, that would not have been possible without their hard work and dedication. With that, I'll now turn the call over to Tim Arens, our Chief Financial Officer, to discuss our third quarter of fiscal 2023 results and updated guidance. Tim? Thank you, Gary. Unless noted, all references to third quarter results are on a GAAP and year-over-year basis. Total revenue for the third quarter of fiscal 2023 increased $27.6 million, or 111% to $52.5 million. As Gary mentioned, our total revenue in the third quarter of this year included $24.6 million of revenue recognized from the $27 million milestone payment received for obtaining pre-market approval of our SurVeil drug-coated balloon. Excluding the impact of this milestone payment, third quarter total revenue grew 12%. Product revenue increased $1.7 million, or 13%, to $15.7 million in the third quarter of fiscal 2023. The increase was driven by broad-based product sales growth in our medical device business, which increased $2.6 million, or 38%, driven primarily by increased sales of our Pounce arterial thrombectomy and Sublime radial platforms, as well as our performance coating reagents. IVD product revenue decreased $810,000, or 11%, to $6.4 million. The decrease was driven primarily by several customers actively managing their inventory levels. The IVD industry is adapting to respond to multiple macroeconomic factors, including the decrease in demand for COVID testing products, as well as stabilization in supply chains, which are reducing the need for elevated safety stock. Royalty and license fee revenue increased $25.4 million, or 288% to $34.2 million. Excluding $24.6 million of license fee revenue recognized in the third quarter of fiscal 2023 from the SurVeil PMA milestone payment, royalty and license fee revenue increased 8%. Royalty revenue from our performance coatings increased $450,000 or 6%. R&D services revenue increased $520,000, or 24% to $2.7 million. The increase was primarily due to higher customer demand for our performance coating services in our medical device business, which was impacted in the prior year period by our customer supply chain challenges. Moving down the P&L. Product gross margin in the third quarter of fiscal 2023 was 55.8%, compared to 63.1% in the prior year period. The decline in product gross margin was driven by the adverse mix impact from increased device product sales, which have lower product gross margins due to low production volumes during the scale-up phase following initial commercialization. R&D expense, including costs related to clinical and regulatory activities, decreased $1.7 million, or 13%, to $11.2 million in the third quarter of fiscal 2023. The decrease in R&D expense reflects the benefits from the spending reduction plan we implemented during the second quarter of 2023. SG&A expense was $12.9 million and was unchanged compared to the prior year period. Contingent consideration gain of $830,000 resulted from a non-cash fair value adjustment to acquisition-related contingent consideration liabilities. Our medical device business reported operating income of $21.8 million, compared to an operating loss of $7.3 million in the prior year period. The year-over-year change reflects the $24.6 million in license fee revenue recognized on the SurVeil PMA milestone payment in the third quarter, along with disciplined expense management, broad-based revenue growth, and the aforementioned contingent consideration gain. Our IVD business reported operating income of $2.9 million, compared to $3.4 million in the prior year period. IVD operating income was 44% of IVD revenue, compared to 46% in the prior year period. Turning to income taxes. In the third quarter of fiscal 2023, we reported income tax expense of $13.3 million, compared to an income tax benefit of $1.5 million in the prior year period. Given the magnitude of income taxes this quarter, I'd like to take a moment to outline the key drivers, starting with the $24.6 million in revenue recognized on the PMA milestone payment. In the third quarter, as a result of the milestone payment, we shifted from a taxable loss to a taxable income position, resulting in significant tax expense. Contributing to our income tax expense was a recently effective IRS requirement to spread the deduction of U.S. R&D expense over a five-year period. As a reminder, we are no longer recording tax benefits for deferred de-deductions or net operating losses as a result of having established a full valuation allowance against U.S. deferred tax assets at the end of fiscal 2022. GAAP net income in the third quarter of fiscal 2023 was $7.3 million, or $0.52 per diluted share, compared to a net loss of $5.7 million, or a loss of $0.41 per diluted share in the prior year period. Non-GAAP net income in the third quarter of fiscal 2023 was $7.3 million, or $0.52 per diluted share, compared to non-GAAP net loss of $4.7 million, or a loss of $0.34 per diluted share in the prior year period. Non-GAAP adjusted EBITDA in the third quarter of fiscal 2023 was $24.6 million, compared to adjusted EBITDA loss of $3.1 million in the prior year period. Adjusted EBITDA includes adjustments for contingent consideration gain in the third quarter of fiscal 2023 and for stock-based compensation expense in both periods. Our earnings press release includes detailed reconciliations of GAAP to non-GAAP measures. Moving to the balance sheet. We began the third quarter of fiscal 2023 with $19.2 million in cash and $29.3 million in long-term debt. Cash provided by operations during the third quarter was $25.9 million, reflecting the $27 million PMA milestone payment from Abbott. Capital expenditures totaled $470,000. We ended the quarter with $44.6 million in cash and $29.4 million in long-term debt as of June 30th, 2023. Long-term debt includes $5 million in borrowings on our $25 million revolving credit facility and $25 million in borrowings on our $100 million term loan facility. As of June 30th, 2023, we had approximately $61 million in debt capital available, consisting of $50 million on our term loan availability and approximately $11 million of incremental availability on our revolving credit facility, which is subject to borrowing base requirements. Turning now to fiscal 2023 guidance. We updated our fiscal 2023 revenue guidance today to reflect our performance in the third quarter, as well as our revised expectations for the remainder of fiscal 2023. We now expect fiscal 2023 total revenue to range from $130 million-$132 million, representing an increase of 30%-32% over the prior year. Excluding the estimated revenue recognized on the PMA milestone payment, we expect total revenue to range from $105 million-$107 million. This compares to our prior range of $103 million-$106 million, or an increase of 3%-6% over the prior year. We now expect fiscal 2023 GAAP diluted loss per share to range from a loss of $0.55 to a loss of $0.40, compared to our prior range of a loss of $2.30 to a loss of $2.00. Non-GAAP diluted loss per share in fiscal 2023 is expected to range from a loss of $0.29 to a loss of $0.14, compared to our prior range of a loss of $1.98 to a loss of $1.68. I'll now share a few additional considerations for modeling purposes. Our updated total revenue guidance reflects the following assumptions for the full fiscal year. Revenue for our two businesses, medical device and IVD, is expected to be approximately 80% and 20% of revenue, respectively. Product revenue is expected to be approximately 46% of total revenue. Our guidance for product revenue does not include any sales of the SurVeil DCB product in our fourth quarter. Revenue associated with our legacy medical device performance coating offerings is expected to grow in the mid to high single digits. IVD revenue is expected to decline in the low single digits. Abbott's SurVeil license fee revenue is expected to range from $29.5 million-$30 million, which includes approximately $25 million in revenue recognized in fiscal 2023 on the $27 million PMA milestone payment. This assumes fourth quarter revenue associated with the PMA milestone of $400,000. In the prior year, total Abbott SurVeil license fee revenue was $5.7 million. Our updated diluted loss per share guidance reflects the following full year assumptions: Product gross margin in the high 50s, reflecting continuing mix impact from growth in device sales during the manufacturing scale-out phase. R&D expense in the range of $48.5 million-$49 million, and SG&A expense of $52.5 million-$53 million. Interest expense of approximately $3.4 million. Finally, our updated EPS guidance reflects full-year tax expense of $4 million-$5 million. This assumes a sizable tax benefit in the fourth quarter of approximately $8.5 million-$9.5 million. Lastly, with respect to cash utilization, we anticipate that we will finish the fiscal year with approximately $37.5 million-$38 million in cash, with cash use in the fourth quarter of approximately $6.5 million-$7 million, which includes approximately $3 million in estimated cash tax obligations as a result of the PMA milestone payment. This reflects our disciplined expense management, the spending reduction plan implemented in the second quarter, and our active management of working capital. With that, operator, we would like now to open the call to questions. Thank you. If you'd like to ask a question, please signal it by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We do ask that you limit yourself to one question and one follow-up. If you would like to ask additional questions, we invite you to add yourself to the queue again by pressing star one. One moment, please, while we poll for questions. Our first question is from Brooks O'Neil with Lake Street Capital Markets. Please go ahead. Good morning, guys. Since I have about 10 questions, I'm gonna have to queue up multiple times here, but I'll try to follow your, your guidance. The first question I have is: how do you think the FDA's declaration that there is no negative effect from paclitaxel to impact the ultimate success of SurVeil? You know, it's, it's quite positive, actually. If you look at the potential for growth of paclitaxel devices, it's, it's not quite penetrated, and it's been restrained because of this 2019 label warning that's now been removed. O ne of the restraints was, you know, the marketing and commercial programs to drive market adoption were basically stunted by the FDA's label warning. I believe all companies can get back into demonstrating what paclitaxel can do as an anti-restenotic drug on both stents and drug-coated balloons in the distal peripheral vasculature. I think it's gonna help drive the market. What it means to us, you know, I know Tim is closer to some of this market data, it's, it is about a billion-dollar potential for this, you know, and half a million procedures per year. For us, in particular, with Abbott as a commercial partner, we have the trifecta, I believe, and that momentum. The timing is great. We have a technically superior product, and we have a clinical trial, the only clinical trial, that pivotal worldwide trial that demonstrates that technical superiority. This unwinding of the label warning will allow for the market growth opportunity to get back into, into, into full, full bore. Then we have the commercial strength of Abbott Vascular. They're really well known for their ability to move the market in, in, in terms of drug-eluting devices. That trifecta, we believe, it's, it's, gonna give us a multiplicative impact as we grow. Now, we'll stay tuned, and we'll tell you more about that and what it means for fiscal 2024. The winds, the trade winds are blowing favorably because of it. Gary... Yeah. I would just add, for Brooks and others benefit, we have heard from several physicians that there are still hospitals and accounts that have restricted the use of paclitaxel devices. Obviously, with the FDA changing its position, those restrictions should be lifted and should have a greater opportunity in terms of addressing the need to treat patients who are suffering from peripheral vascular disease with a drug-coated balloon. We'll, we'll be looking closely to the data on this over the following or the next couple of quarters, stay tuned. Great. At the risk of being accused of, of cheating, I'm gonna combine questions two and three and just ask you: Can you tell us the key steps and timing that you need to take to prepare for Abbott's launch of the product? Can you help us begin to think about the impact of SurVeil on Surmodics' results in fiscal 2024? Thanks a lot. Sure. Sure, Tim is really connected to our operational, so I'll turn part of that over to him, activities with pre-commercial activities with Abbott. Really, the first thing was to secure materials, and we're in good shape. You know, it might have increased our inventory balances a little much, especially, paclitaxel is not an inexpensive drug to acquire. On the raw materials and supply chain side, we're secure, and we're prepared for whatever Abbott has in their plans. The second thing you've heard me talk about a cold start of a diesel engine in winter. We have started that up. We're able to retain most of the team members despite the reduction in force we had earlier this year. We've hired some more people so that we have the ability for future scale here as well. That's been going well. It takes a while to fulfill these orders, but I'll pass it on to Tim. Yeah. Thank you, Gary. Well said. You know, Brooks, I think the key takeaway for us is that we will be prepared. We have the people, materials, and equipment to support Abbott's commercial launch. Notably, our manufacturing team has built thousands and thousands of SurVeil units over the years to satisfy our clinical, regulatory, and development efforts. We've got a lot of experience. We have the experienced team here. They've been in place for years, and we've actually have restarted and have done test manufacturing runs just to ensure that we're ready. I think there is still work to be done more on the administrative front, we're waiting for the Abbott PO, and, and then we'll start manufacturing product. The second part was, what do we expect? I guess, you know. Yeah. We'll, we'll ask you to stay tuned. We have not yet received the final PO, but what we have discussed in the past, we had talked, I think, previously, that Abbott had shared perspective in terms of their forecast. They've done so again. We like what we're seeing. We'll have more to say on this topic, probably as early as Q4. Thank you, guys, and congratulations. I couldn't be more excited about the future. Thank you, Brooks. Thank you, Brooks. Thank you. Our next question comes from the line of Michael Matson with Needham & Company. Please go ahead. Yeah, thanks. Just a few more on SurVeil. I guess just starting with the DCB market, can you remind us where pricing is? I'm not asking where Abbott's gonna price their product, but I seem to remember that the DCBs, when they launched, were kind of in the $1,200 range, if I'm remembering correctly, but I think it's come down quite a bit. Do you have a feel for where, where just kind of the typical pricing is these days? It's a great question, Mike, What I can tell you is, looking at the IMS data, industry data, these are sales into hospital accounts. We still see list prices around $1,400-$1,500 per device. As you can imagine, every manufacturer is probably having some discounts relative to their products. I can't really speak to what the pricing, the ultimate pricing is, but the list price has remained constant over the last several years. Okay, thanks. Can you just remind us about what you've said about the economics of the Abbott deal? I know you haven't given specific numbers, but it's kind of convoluted, I guess, in the way that it works from what I remember. You know, would it be crazy to assume that Surmodics might be capturing roughly 50% of the kind of end market price in terms of value that you're, you're getting? I'll, I'll walk through. Great, great question. Appreciate the question. I know this is a topic on many people's minds. The economics, really, I think probably the best way to describe it is that Surmodics will receive two revenue streams. The first revenue stream will be for the product shipped to Abbott, and we call that a transfer price, and we'll recognize that revenue the moment the product is shipped out, out of our docks. Then the second piece is what we call profit sharing. The profit sharing, obviously, there's a formula, and it, it works somewhat like this. I think we've articulated this a bit in the past, but Abbott will back out the transfer price, and they'll have a gross margin. I think we can appreciate how to get to gross margin. They also can deduct a, what I would consider a typical, multinational strategic, sales and selling expense percentage from the revenue. Basically what remains is what we call the profit pool, and we've characterized this in the past that it's not quite 50/50, but it's close. I would say, in terms of thinking about what percentage of the revenue on the sale price of SurVeil, it the 50% might be high, but I think we've highlighted in the past that from a whole product solutions or a partnered product solutions perspective, Surmodics is approaching that 50% level. We'll, we'll talk more about this, I'm sure, as we kinda get past the initial commercialization, but it is very attractive. Okay, thanks. That was, that was helpful. Then, you know, I understand you're not including any kind of SurVeil revenue in your guidance now, but when you report your fourth quarter, is it safe to assume that you're gonna factor something into the, the 2024 guidance, some assumption around SurVeil revenue in, in your revenue guidance and earnings guidance, or for 2024? Yes, Mike, another great question. Yes, that is the expectation. Gary and I will have more color and context to provide on SurVeil, probably during our November earnings call. Okay, got it. All right. Then just unrelated to devices or SurVeil, on the IVD business, just the declines, a little concerning, I guess, is. I mean, how long do you think this is gonna last? Is this kind of a, gonna be like a four-quarter, you know, kind of a step down that lasts, you know, 12 months, and then you kinda lap it, and it starts to grow again or something like that? Yeah, you know, Tim and I were out at the ACC meeting with Joe, our president of that business, last week. If you look, Mike, at the, and I, I don't think you track the IVD industry, but the, it's been whipsawed around, and the, the idea was whipsawed around a lot because of, of COVID. Now, we are a smoothing function on that because we had quite a few reagents and stuff with, in, in COVID, and so we didn't get whipsawed around as much. 12% is not as much as a lot of the rest of the industry saw. What we've heard is that the industry hopes to lap that comparable. We don't have enough detailed analysis to know, specifically for our IVD business, how that lapping is going to work. We, we do understand that there were a lot of customers who had geared up for a lot of reagents with high expectations, and they just have to work through that inventory. Tim, I, I know you have some color as well. Yeah. Thank you, Gary. Mike, I think it's really important to recognize that our IVD business has gone through kind of a soft period here over the last several quarters. If you consider and contemplate the guidance that we've provided and the percentage of our revenue that's being generated by IVD, you'll, you'll come to the conclusion that IVD is gonna be returning to growth in our fourth quarter. We're starting to see some of the customers who have delayed or slowed their purchases. We're seeing some of those come back online. I think we feel pretty confident that this is not going to persist much longer. That's not to say that there couldn't still be some general softness on the business, but we like, we like where we sit today, and, we'll have more to, to say about these macro impacts here in, in a couple of months. Okay, got it. like, if you feel like you're kind of already several quarters into this slowdown? Yes. Yeah, again, the entire industry has, and these types of regions have gone through this, in a bigger fashion. Okay, got it. Thank you. Thank you. Our next question comes from the line of Michael Petusky with Barrington Research. Please go ahead. Hey, good morning, guys. Tim, I guess I wanted to ask on the initial stocking order, you will be able to recognize revenues in Q4 from that initial stocking order. It sounds like you just said that, correct? No, that is incorrect. Oh. The stocking order-- Mike, just to be clear, let's, let's, let's rewind a bit. We will not recognize revenue on the stocking order until the product leaves our dock. You can infer from my comment here that we do not anticipate that we'll be shipping product before the end of September. Just to be clear, the receipt of an Abbott PO to manufacture SurVeil is a distinct part of the process. Another distinct part of the process is when Abbott wants to receive the product shipment. Abbott gets to decide when they wanna receive the shipment, and as you can imagine, it probably has something to do with when they're thinking about the launch. I will also just let folks know there's 20-some SKUs. You know, it's yet to be determined, are we shipping all the SKUs simultaneously, or does Abbott wanna receive certain SKUs? You know, we'll, we'll have a lot more. It's exciting, but we're, we're in a position here of having received the PMA and working with Abbott on commercialization. We'll have a lot more information over the coming quarters and, and months. Remember, the initial stocking order, we have up to 120 days, and we might use all of that- That's right. ... to produce, you know, that product, available to be shipped. It, it takes us a couple of months, so up to four months, to actually cold start the engine and make sure we can deliver that product when they need. All right. Then, just shifting real quick, on, on, on the side of Sublime and Pounce. Gary, you sort of, you know, laid out that, hey, you know, the progress we've made, $1 million revenue, each of the past two quarters we've made with a, you know, a small sales team, you know, a fraction of the size of some competitors out there. Given that you now have some breathing room in terms of cash and, and, you know, likely over the next 12 months or so, cash generation, I mean, does it make sense to, you know, look towards expanding that team and, and sort of really, putting some muscle to that effort? Yeah, and I'm, I'm glad you picked up on that. The reason I said it is a lot of investors have said, We have no idea of the scale of this. You know, percentages don't mean a whole lot. So I wanted to at least let a little bit out that, you know, the, the, these products are generating over $1 million per quarter, and we expect that to grow. There are a couple things. One, we, we do have to remain disciplined in our allocation of capital. That being said, as these products get more traction with value analysis committees and up to and including group contracts, when you have, when you have those needs that are pent up from customers, we're gonna strategically increase the size of where our the territories, where we can have territory managers. Right now, we're constrained, but as we look into what we're doing in fiscal 2024, we'll strategically do it. I wanna stop short of saying we're going hog wild and just adding, dozens of territory managers. We have a very, very sharp, small team now, and what we're looking for are really A players who are hungry, who can really do justice to the quality and caliber of these products. You've heard me wax poetic, where I go to conferences and people say, these products have never been, have not been created yet. Not a single product in our vascular interventions portfolio exists outside of Surmodics, and that's a very important thing. To answer your question, we'll have a little more color in our Q4, but it's a strategic dosing and adding, caliber, high caliber salespeople. Not necessarily we're doubling the sales force in the next three months. There's a limit to how much we can reasonably staff support with the high quality of service that our current sales team does as well. We'll add a few, but can't get over the cash barrel too much. All right. Very good. Thank you. Thank you. Our next question comes from the line of James Sidoti with Sidoti & Company. Please go ahead. Good morning. Thanks for taking the questions. Gary, how many sales folks does Abbott have that will focus on SurVeil? It's a good question. I, I don't know the answer, but it's the Abbott Vascular sales force. Tim, I don't, I don't wanna guess. Yeah. It's gonna be in the hundreds. I remember, Jim, when we inked the agreement with Abbott, we had all that information and data. Honestly, I have not looked at that. Well, what's changed is the acquisition of CSI. That's true. ... who had several hundred, but those were coronary and peripheral. Yeah. It, it's large, and, and I would say it's probably, as you think through large med tech, competitors in this space, I would say Abbott's size of their sales force is probably well on the dartboard with everyone. Yeah, look, what, what I like about the setup. I would say, Brooke, the question is, clearly it matches any of the large strategics. With the acquisition of CSI, I expect that, you know what, what's nice about it is, at least in my opinion, I'm not speaking on behalf of Abbott here, but in my opinion, Abbott has an incredible stent in Supera. I mean, you, you need a trifecta for this vessel, right? You, you need a stent, you need atherectomy, and to, to prep the vessel, and you need a drug-coated balloon. What I'm excited about is, as the vascular division has all three in the arsenal now, and, and, and they're a formidable sales and marketing organization. Feel really good about that. How do you feel about your capacity? Do you think you need to add to, to ramp up to Abbott's demand, or do you think that you have enough, enough folks and, and equipment on hand to meet Abbott's demand? Tim and our operations team have been really carefully monitoring that. As I said, we, we put to bed the raw materials component, don't want any oopsies there. Tim, if you want to chat, we, we have multiple shifts we can go to and stuff. That's right. I've I think I've addressed this. We're ready, Jim. I think we're ready to support Abbott's commercialization and what their needs are, what we expect their needs to be over the next 12 plus months, not only from an equipment perspective, but also from a personnel perspective and raw materials perspective. We're looking forward to the possibility of a future where we're gonna be constrained, and we have to think differently about people and equipment and space. I think at least for the next 12 plus months, we should be in good shape. Keep in mind, one thing I may have said in the past, but we have proprietary manufacturing technology. I don't know if anybody else has, but I know we have it, which where we use robotic automation to coat the drugs on these devices. These are not trivial or low tech components. In all of this time, we, we had in mind to when we do have to manufacture, these are robotically controlled machines that actually, actually coat the drug on the product. Those manufacturing cells have a lot of scale potential. All right, and then, Tim, can you just talk a little bit about taxes? You know, why are you gonna get the refund in the fourth quarter? Is the $3 million payment, is that all you need to pay on the milestone payment? When do you think you'll be, you know, in a position where you'll be paying cash taxes? Do you think that'll happen in fiscal 2024 or fiscal 2025? I'll hold off on the second part of your question, James Sidoti. We, we still need to do the work to think through fiscal 2024 and create our plan, we'll have a lot more to say about guidance in November. Yes, you're right. The tax bill, the cash tax payment that will be sent to the IRS, I believe it's September 15th, will be approximately $3 million. It's really for the entire business, but obviously driven by the SurVeil milestone payment. It is a little wonky that we have a huge tax expense here in Q3, then we're gonna revert to a tax benefit in the fourth quarter. That's because we're back in an operating loss position. You know, you can do the guidance, and you'll recognize that we'll be in an operating loss position. We'll have a tax benefit. That's probably gonna put us in a position where it's gonna be weird, and you don't see it very often, but we're gonna be in a position where I expect that we'll even have favorable or positive EPS, GAAP EPS, and non-GAAP EPS. If you combine the two and the IRS, and from a tax perspective, you don't smooth this stuff, but if you combine Q3 and Q4, you actually have about a $4 million tax expense, and unfortunately, it just makes it really lumpy. That's probably the best way to describe it. We'll get through the lumpiness here, we'll have about a $3 million tax payment as I mentioned. Cash is really the thing we're paying attention to here. Got it. All right. Thank you. Yep, you're welcome. Thank you. Ladies and gentlemen, as there are no further questions, that concludes our conference for today. Thank you for your participation. You may now disconnect your lines.