Abiomed, Inc.
Q3 2016 Earnings Call Transcript

Published: 4 Feb 2016

[Operator:]

Good day, ladies and gentlemen. Welcome to the Abiomed Inc. Third Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, there will be a question-and-answer session, and instructions will follow at that time. As a reminder, today's call is being recorded. I would now like to turn the conference over to Ingrid Goldberg, Director of Investor Relations. Ma'am, you may begin.

[Ingrid Goldberg:]

Good morning, and welcome to Abiomed's third quarter of fiscal 2016 earnings conference call. This is Ingrid Goldberg, Director of Investor Relations for Abiomed, and I'm here with Mike Minogue, Abiomed's Chairman, President, and Chief Executive Officer; and Mike Tomsicek, Vice President and Chief Financial Officer. The format for today's call will be as follows. First, Mike Minogue will discuss strategic highlights from the third fiscal quarter and then turn to our key operational and strategic objectives. Next, Mike Tomsicek will provide details on the financial results outlined in today's press release. We will then open the call for your questions. Before we begin, I would like to remind everyone that this presentation includes forward-looking statements about the company's progress relating to clinical, regulatory, and commercial matter as well as capital and other expenditures and financial performance. Each forward-looking statement contained in this presentation is subject to the risk and uncertainties that could actually cause – that could cause actual results to differ materially from those projected in such statements. Additional information regarding these risks and uncertainties appears in the heading Forward-Looking Statements in the press release we issued this morning, our Annual Report on Form 10-K for the year ended March 31, 2015, and in subsequent Form 10-Q. The forward-looking statements in this presentation speak only to the date of this presentation and we undertake no obligation to update or revise any of these statements. Thank you for joining us. I'm now pleased to introduce Abiomed's Chairman, President, and Chief Executive Officer, Mike Minogue.

[Michael R. Minogue:]

Thank you, Ingrid. Good morning, everyone. In Q3, Abiomed executed on our corporate goals and achieved another breakout quarter, as the Impella product adoption curve ramps up. Abiomed delivered our best ever quarterly results with $85.8 million in revenue which represents 38% in overall revenue growth. U.S. patient utilization set new highs with a robust 45% growth rate, driven by record numbers of patients in Protected PCI and emergent support. Our consistent performance validates Abiomed as one of the fastest-growing GAAP-profitable medical technology companies. Abiomed has no debt, nearly $200 million in cash, and has grown top line revenue double digits year-over-year for 25 straight quarters. This success has enabled Abiomed to significantly invest in our U.S. distribution, educational programs, and manufacturing capacity. As of today, Abiomed has the largest U.S. commercial team in circulatory support, with over 200 field representatives and growing. Additionally, our manufacturing infrastructure has redundancy and is positioned to produce over two times our current market demand. For today's call, I will highlight three topics

[Michael John Tomsicek:]

Thanks Mike. Good morning, everyone. I'm pleased to share some financial details with you today, outlining a very successful quarter where we maintained strong revenue growth and came in ahead of pace in profitability and cash generation. It's encouraging to see such positive results while Abiomed continues to invest in infrastructure for future growth. In our press release circulated in advance of the JPMorgan Conference, we estimated fiscal third quarter revenue increased 38% to a record $85.8 million. We are now confirming that revenue performance, and we are ready to share some further details. U.S. Impella revenue rose 45% to a record $75 million, driven by a 45% increase in patient utilization. Protected PCI was the foundation of our growth and success in the quarter. Outside the U.S., Impella revenue totaled $6 million and was up 26% on a constant currency basis. Worldwide revenue of $4 million was – worldwide service revenue of $4 million was up 14%. As of the end of the third fiscal quarter, the Impella 2.5 has been placed at 1,020 of approximately 1,400 targeted hospital sites, for a penetration rate of 73%. Impella CP has been placed at 788 hospitals, for a penetration rate of 56% of total hospitals. Impella 5.0 has been placed at 401 sites, for penetration of 29%. During the period, we added 17 RP sites, mostly early in the quarter, bringing the total number of such sites to 71, which is just 5% of total hospitals. We will continue to gate this RP product introduction, restricting the number of new sites we add, as we have now exceeded the target of 60 sites for this fiscal year due to strong demand for participation. Our focus in RP is to have rigorous training, publications and sharing of best practices to create training centers that support eventual full launch of this critical technology. Reorder performance was very strong for Q3, with U.S. reorders at $69.3 million and growing 49% versus prior year, and our reorder rate was again 100%. Average combined Impella 2.5 and Impella CP inventory at hospital sites was 2.88 units per site versus 2.82 units in the prior quarter and 2.66 units in the prior year. This maintenance of very modest inventory level illustrates how our customers stock pumps and rely on rapid replenishment direct from Abiomed. Gross margin for the quarter increased to 85.1%. As in recent quarters, margins were helped by favorable euro exchange rates, and product volumes and yields were strong during Q3. R&D expense for the third quarter totaled $13.7 million and was approximately 16% of revenue. We had mentioned in October that this expense was expected to increase, and it has increased by $2 million versus prior quarter. The bulk of the increase comes from program investments in new product technology and new manufacturing processes that we believe will provide great benefits in the future. As a result of delivering thousands of pumps, we have great opportunities to learn from repetition and these R&D investments capture this learning and allow us to design products that are easier to manufacture and easier for our customers to use. SG&A expense for the third fiscal quarter totaled $41.9 million, up 39% from the prior year. Most notable here is the expansion of our U.S. commercial team, where 14 heads were added this quarter to a total of 203 professionals. We intend to continue this investment pace in the near future, and we are very pleased with our ability to drive growth by adding to our team. When it comes to building commercial capacity, Abiomed prioritizes greater focus, building deeper relationships in existing accounts as well as modest new account penetration initiatives. Operating profit for the third fiscal quarter was a record $17.5 million or 20.4% of revenue compared to $13.7 million in the prior year. GAAP net income for the quarter was $10.6 million or $0.23 per diluted share compared to $12.7 million in the prior year or $0.30 per diluted share. Prior year net income was boosted, as Abiomed was building NOLs and not yet fully expensing U.S. tax at this point last year. On a related note, the company has approximately $63 million in deferred tax asset value remaining, primarily due to NOLs. The balance sheet remains in excellent shape, and we ended the quarter with cash and short-term marketable securities growing about $20 million to a balance of $196 million. Our top priority for use of cash is to support our organic growth. Along these lines, we announced this past quarter that we entered into a purchase and sale agreement to acquire Abiomed's existing corporate headquarters located in Danvers, Massachusetts and we're currently executing the diligence process. Turning to guidance. As noted in our earnings release, we have increased our full year revenue guidance and expect fiscal year 2016 revenue at or just over $326 million, representing growth of 41% for the year and translating to approximately $90 million in revenue in Q4. This is an upgrade from the previous guidance of $305 million to $315 million, which had represented 32% to 37% growth. With the limited number of weeks remaining in the fiscal year, which ends March 31, the range of outcomes for total revenue has narrowed considerably. The company is updating its fiscal year guidance of GAAP operating income to be at or just over 17%, upgrading the range of 15% to 17% given previously. In summary, Q3 was a terrific quarter, and we showed growth and progress across the board. We are very pleased with the increased adoption of Impella and our progress in building Abiomed's infrastructure to support rapid growth for years to come. Operator, would you please now open the lines for questions?

[Operator:]

Thank you. Our first question is from Anthony Petrone with Jefferies. You may begin.

[Anthony Charles Petrone:]

Thanks, and good morning. Congratulations on a great quarter. Maybe just to start, Mike, with just your comments on timing for the emerging PMA supplement, I just want to clarify. Is that specifically for CP and 5.0 because I believe you already do have that for 2.5? I just want to clarify that.

[Michael R. Minogue:]

Anthony, as we stated on the call, we believe that the timeline for approval could be pulled in before their August 2016. We currently have PMA approval for high-risk PCI on the Impella 2.5. So, all subsequent approvals will be supplements.

[Anthony Charles Petrone:]

Okay, okay. Great. And then, maybe as you look out into -just generally, not specifically 2017, I mean, the PMA supplement across all technologies with the emergent label, I mean, how do you think that changes the abilities of the sales force to go out and market and what that does to growth overall?

[Michael R. Minogue:]

Similar to the high-risk PCI approval, we will be able to go out for the very first time to educate physicians and patients on the technology relative to emergency support. We think this will be a catalyst for growth. However, it may not be as drastic as it has been for the high-risk PCI indication because it's already growing at a very strong rate, in the 40%-plus range. I would, though, highlight that these patients that are the emergency patients are already in the hospital and are already being treated to some extent with either inotropic therapy or intraaortic balloon pump or other measures to improve their hemodynamic stability. There was a recent publication out that demonstrated that the rate of cardiogenic shock from STEMI in Medicare patients has increased by 50% over the last five years. So, it's currently around 57,000 patients in 2014 for just cardiogenic shock from STEMI that are Medicare-aged patients. As a reminder, many of our emergency patients are younger than 65 that are experiencing some type of acute event. The paper also indicated that the rate of cardiogenic shock from STEMI in this population has also increased by approximately 50% over the last 10 years. So, we believe this will be a significant driver and, very similar to the Protected PCI population, this will be the first time we'll be able to really go out and educate and share our data with our users.

[Anthony Charles Petrone:]

Great. And then last one from me, Mike, and I'll hop back in, is just when you look at these two opportunities of sort of treating previously turned away patients now with Impella and sort of the emergent patients, Protected PCI versus emergent, the Protected PCI pushes, as you mentioned three quarters in the making, sort of, unveiled at Analyst Day in 2015, it seems to me that it's actually going faster than original expectations. And so, maybe just your high-level comments on when that push was launched, where does it sit in terms of the initial expectations? Is it going faster? It seems that more of those turn-away patients are coming in to the fold faster than expected. Thanks a lot.

[Michael R. Minogue:]

Anthony, I will try to address your question; hopefully, I address it correctly. Over – U.S. revenue is growing based on the U.S. patients and the driver for that growth is Protected PCI. Growth rates in its third quarter from PMA was in the 70%s and the 50 – 60%s and now, on 59% range. So, it's actually at a higher pace than our longer-term vision relative to U.S. growth. As a reminder, we are trying to penetrate from 5% of the total addressable market to 20% as the first phase. We do not expect our growth to be completely linear, and as each quarter exceeds that run rate, it lowers the remaining CAGR to get to our vision over five years. And as a reminder, our five-year vision which was calendar year 2021 – or 2020, is actually fiscal year 2021. As far as expectations, we believe that we are driving a level of ethical growth to ensure we maintain very good outcomes. We track our procedural success rate and we want to be about the same in levels of success as we were in our FDA trials or better. And we are always looking to find best practices and share processes that can help approve outcomes and ensure that Protected PCI is seen as a new therapy paradigm for a lot of patients that have no other options.

[Anthony Charles Petrone:]

Thanks again.

[Michael R. Minogue:]

Thanks, Anthony.

[Operator:]

Thank you. Our next question is from Danielle Antalffy with Leerink Partners. You may begin.

[Danielle J. Antalffy:]

Good morning, guys. Thank you so much for taking the question and congrats on a great quarter and the outlook raise. I just wanted to see if you could talk a little bit more in detail, Mike, about the potential impact we could see from Japan coming online later this year, this calendar year? How we think about how you're approaching Japan? What that could mean for numbers? How quickly adoption could ramp there? And maybe just frame the market for us.

[Michael R. Minogue:]

Danielle, the Japanese market today has a recovery-only mindset. There is cultural influence that they do not do a lot of open-chest sternotomies or heart transplants. They do have a smoking population, and if you do not survive and recover heart muscle, you have very limited and very costly care moving forward, until the patient dies. The current use of intraaortic balloon pump and ECMO pumps and potential patients for Impella, we estimate to be 50,000 patients per year. The Japanese market does some of the highest risk, most minimally-invasive procedures in the cath lab and EP lab, partly because there's more cath labs in Japan than there are in the United States and, as a result, they can do a lot of complex long procedures, because they have the ability and the resources and the labs available. The overall approach to the market will be a direct distribution by Abiomed to the top 150 to 200 sites, and we'll use these sites to set up a network and to establish training centers and collect data under our global cVAD Registry. Once we feel comfortable that we've established the rigor and the training and the relationships, we'll be partnering with a third-party to cover the rest of the country. But we'll ensure that the training and the processes are similar to what we're doing direct. The way the approval should roll out, if the PMDA approves – gives approval by June, we expect to have the reimbursement approval within the following four months. And so, that leads to a very controlled launch by our direct team at a selected number of top hospitals. So, we'll go in phases as we work our way to 200 sites, and the commercial rollout for the October 2016 is pretty much status quo.

[Danielle J. Antalffy:]

Okay. Great. That's very helpful. And then, Mike, maybe a question for you. Very strong positive operating leverage in the quarter. You guys laid out a long-term goal, call it, of 30% operating margins, I think it was by fiscal 2020 timeframe. Wondering how we should think about the progression on the operating margin side, because you guys continue to outperform there, and just wondering how sustainable that is?

[Michael John Tomsicek:]

Yeah. Thanks, Danielle. Yeah, that is our vision, shared previously, to achieve 30% operating margin within that five-year timeframe, and we do show good progress towards it. I think we tried to be clear on the call today, in more specifics ,all of the different ways that we're making investments to improve our manufacturing processes and to invest in our commercial capabilities. And so, those will come in this next couple of years, as we prepare ourself to become the $1 billion company that we've discussed. And then in the long run, we have discussed the opportunity for leverage in both R&D and the commercial activities manifesting themselves more towards the end of the five-year period that we discussed in the 2020 vision.

[Michael R. Minogue:]

Danielle, also a quick point on that. You said fiscal 2020, so our calendar year 2020 on vision is our fiscal year 2021.

[Danielle J. Antalffy:]

Right. Okay. Got it. Thanks for that clarification. Thank you, guys.

[Michael R. Minogue:]

Thanks, Danielle.

[Operator:]

Thank you. Our next question is from David Lewis with Morgan Stanley. You may begin. Scott Wang

[Scott S. Wang:]

Good morning, guys. This is actually Scott Wang in for David. Two quick questions from me. First off, Mike, your guidance for the rest of fiscal 2016 implies increasing penetration quarter-over-quarter at rates that are roughly similar to kind of what you achieved this quarter. Can you give us a sense for, what are the key gating factors that govern how fast you can drive Impella adoption? Is it sales reps, manufacturing capacity, or something else?

[Michael R. Minogue:]

Scott, you said Mike. So, this is Mike Minogue, and I'll let Mike T take a shot on the forecasting side of that question. The guiding factor for us has always been training and data. And now that we have the PMA approval, we can do more extensive training with symposiums and web videos and using our website. For the data, this is the first time we've really been able to go out there and interact and educate and talk about all the clinical information we have including all the cost effectiveness data that's available. To note, one of the reasons we feel very strong about this therapy is because it really aligns with where healthcare reform is driving, the quality metrics which again is at 90 days post discharge. And if you look at our clinical data and our FDA studies, you really see the benefit of doing a better job during the PCI or getting complete revascularization, as they say in the clinical community, shows that great reduction of out-of-hospital adverse events to 90 days and it reduces the repeat procedures, it cuts them in half as compared to control arm. So, we feel very confident that this is a function of training and data. On the Protected PCI, the goal is really to bring new patients to the cath lab, so that's a little different and it's also why we require the PMA. We also believe that the emergency PMA approval will also be a catalyst, because it will allow us to talk again about our clinical data for patients that again are already in the hospital and being treated. So, we think we're in a very good position as we use the education to increase the growth rate.

[Michael John Tomsicek:]

Yeah. Just to add to that, I think I'm struggling a little bit with the gating factor as opposed to talking about it as a series in (31

[Scott S. Wang:]

That's really helpful, guys. And then one more from me, can you comment on utilization trends this quarter in terms of the breakdown between utilization and existing centers versus new hospital adds, and how should we think about the pace of new center adds and the sustainability of that growth? Thank you.

[Michael R. Minogue:]

Scott, we have several levers for growth, as Mike mentioned. So, the start of which is we continue to try to add 20 to 25 new Impella 2.5 sites per quarter. We limit it to that, so we can focus on the other product launches, which ends up at about 100 per year. What you're also starting to see is a driving conversion of more of those sites in achieving the Impella CP, which – Impella CP is at 56% of those sites, total sites of the 1400. The 5.0 is currently at 29%, and we believe that that's going to have a great opportunity with the PMA approval, where we can market it more directly. And then, of course, the RP is only approximately 5% of the total site. So, we have lots of opportunities for selling in the new products at our existing sites as well as expanding these indications and moving forward, expanding the geography. But just one last point to the growth, as far as some of the regions. It's pretty much in all the regions. All the regions set new records and, as we stated, both Protected PCI and the emergency population also set all-time highs as well.

[Scott S. Wang:]

Thanks very much, guys.

[Michael R. Minogue:]

Thanks Scott.

[Operator:]

Thank you. Our next question is from Ben Andrew with William Blair. You may begin.

[Ben C. Andrew:]

Hi. Good morning, and thank you for taking the questions. First for me, Mike, when you talked about the field add and adding 14 people professionals to the field, where are those going? Is that a combination of reps in clinical? And what is your, kind of, approach to territory management as you look out over the next one year or two years?

[Michael R. Minogue:]

Ben, our approach is to, kind of, have a quarterback in the territory, that's the account manager. And then, as appropriate, we balance that quarterback with lots of clinical experts, people that have extensive experience in either the cath lab or the ICU. And it's a function of how many patients they are doing, what's the independent use. And as we grow it, we basically replicate that model again with another quarterback and other account manager surrounded by clinical people. However, all of our people are in scrubs and all of them are expected to do education and provide patient support. Over time, it's really going to be a function of the volume as well as the percent of independent use. We are not providing a model or building a model that would be similar to the orthopedics where it's a one-to-one interaction. We expect that most of our sites can be independent already today with Protected PCI. And in the emergency population, we just want to ensure that we get great patient outcome. So, if that means that we make a visit in – with the ICU and communicate work with the nurses as well as provide 24/7 support on our call center, we'll do that because, as the new therapy, we want to ensure we get the best outcomes.

[Ben C. Andrew:]

Okay. And then, given kind of the performance characteristics of CP, what's the whole bag – back to the gating factor question, what's the whole bag to that only being 56% of accounts? Is it clinical support? Is it training? And why wouldn't that go up very quickly?

[Michael R. Minogue:]

Ben, it has been going up quickly. But to us, it's a matter of ensuring we have rigorous training and a proper rollout. So, it's a function of sites that get CP. We want to ensure that they have comfort already with ICU experience, and we're just using it as a way to reeducate or retrain the sites that want Impella CP. There is a strong demand, and it's a similar approach to the RP. There's a strong demand for that product. What we found though is, by going slow and steady, we can ensure the outcomes, we can increase publications and we can share best practices to optimize the outcomes for the center and for the patient.

[Ben C. Andrew:]

Okay. And one more question from me maybe for Mike T. As we look at the cadence of catalysts over the course of fiscal 2017, they're a little bit more weighted to the middle or back part of the year into (37

[Michael John Tomsicek:]

Hey, Ben. I expect to stick to annual guidance. And as you anticipated, we'll provide that guidance in the Q4 earnings call, and we will take you through and make assessment of the contributions of each of the drivers ongoing (37

[Ben C. Andrew:]

Thank you.

[Operator:]

Thank you. Our next question is from Jayson Bedford with Raymond James. You may begin.

[Unknown Speaker:]

Good morning. This is Mike (38

[Michael R. Minogue:]

Good morning, Mike. (38

[Unknown Speaker:]

The first thing – good morning. First thing, which was new to us, you mentioned some new marketing and advertising initiatives. What sort of feedback are you getting on those, so far? And do you have any way to measure the impact? And then, just as a follow-up, once you have supplement approval for cardiogenic shock, should we expect these efforts to expand in 2017?

[Michael R. Minogue:]

Yes is the answer. As far as the experience, we just started doing it this past quarter. We do have things we're looking at, which are hits on our protectedpci.com website as well as we're trying to track as patients come to the website and request information. We'll be looking at those and measuring the effectiveness of this campaign, and we'll continue to pilot and try other approaches here.

[Unknown Speaker:]

Okay. Great. Thanks. As it relates to the RP rollout, you mentioned 71 sites to-date. You'll probably measure the growth in the fourth quarter. But can you give us an idea what the goal is maybe for number of centers next year? And then, just as a follow-up, I think the expectation for RP in the old guidance was in the $6 million to $8 million range. Is there an updated number assumed in the updated guidance?

[Michael John Tomsicek:]

There is not an explicit updated number for RP. Again, we said that it is going ahead of schedule, but we're going to attempt to gate it this period, and we did state the things that we're focusing on there, which is publications and qualifications of sites as training centers. So, I'm not going to suggest a material change in that guidance for the year at this point.

[Unknown Speaker:]

Okay. Any goals for next year, in terms of number of centers?

[Michael John Tomsicek:]

(40

[Michael R. Minogue:]

Mike, this is Mike Minogue. One of the reasons we're a little bit ahead of schedule on the number of sites is, there is such strong demand, so I'd encourage all the investors, as they do their surveys, to ask about this technology. It's shown to have a significant impact on the patients that we've been treating. As a reminder, if the right side of the heart fails, it does not pump enough blood to the left side, which is one of the reasons these patients have a very high mortality rate. What we've also found that, if you can support the right side for a period of time, it has a high likelihood of having full recovery. So, some of the physicians refer to the R and the RV as the recoverable ventricle. We, as a company, are really trying to balance, ensuring that we have a successful rollout. We do not want to come across to our customers – some of our best customers – as arrogant in any way. So, we're working with them for them to understand how important it is that the entire heart team is engaged, and one of the requirements that we have is that the heart team, the entire – heart surgeon, heart failure, interventional cardiologist and chief nurse – has to come to a training event for a day and a half at Abiomed headquarters, as well as do the onsite training. So, it's been very positive overall in integrating the Impella technology, or the mindset to the heart team, and we're very confident in being able to impact the outcomes for these patients.

[Unknown Speaker:]

Understood. If I can just ask one more, I was hoping you could break down the Impella sales by device.

[Michael John Tomsicek:]

Sure. So, going slowly, because I know that people note these down, for Impella 2.5, it's 31% of revenue. Impella CP is 60% of revenue. Impella 5.0 with 6% of revenue. And RP with 3% of revenue. And they're within a point or two points of the percent of utilization in each case.

[Unknown Speaker:]

Great. Thank you very much.

[Michael R. Minogue:]

Thanks, Mike. (42

[Operator:]

Thank you. Our next question is from Jan Wald with Benchmark Co. You may begin.

[Jan D. Wald:]

Good morning, everyone. And congratulations on the quarter.

[Michael R. Minogue:]

Thank you, Jan.

[Jan D. Wald:]

You're welcome. I guess I have a couple of questions left. In terms of – you're investing in the company right now. And I guess I just wanted to understand how that investment is going to happen over this year, and I know you're not giving guidance for next year yet, but just a sense of what's going to happen next year, in terms of R&D and SG&A related to that investment?

[Michael R. Minogue:]

Right. While we have made substantial investments in manufacturing, we said we'll continue to make investments in the commercial team. We'll build our commercial team investments in Japan next year. So, I still think there's going to be an active pace of investment during the course of 2017. You need to put that infrastructure in place because of our confidence in achieving our goals. And we have been, as I said in the script, successful in targeting areas to add resources and then seeing the growth that comes out of them. So, we continue to be a little bit front-end loaded on – from the expense standpoint, and see more leverage later on in our 2020 vision.

[Jan D. Wald:]

Okay. And I guess, my last question. You are getting into Japan. I guess, in the sense of never really being satisfied, what's your next international expansion? Are you thinking along those lines, and where would you be targeting?

[Michael R. Minogue:]

Jan, when we established our infrastructure in Japan. We're going to use that as the opportunity to build out the rest of Asia. We already have approval in China, and we had approval, so we'll have to re-register in India. And that is – that will be the development of the Asian continent.

[Jan D. Wald:]

Okay. Thank you very much.

[Operator:]

Thank you. Our next question comes from Chris Cooley with Stephens, Inc. You may begin.

[Chris Cooley:]

Good morning, and thanks so much for squeezing me in here. Just one last question from me at this point. Could you, Mike, remind us a little bit about the IP position the company has around the Impella technology? As we think about some of the patents starting to sunset in the out years, how the portfolio basically has been extended or protected? Just – maybe just give us a quick IP update. Thanks so much.

[Michael R. Minogue:]

Chris, at JPMorgan, we covered a little bit of this, but we have 215 patents and we have 215 patents pending. Of the patents we have, they're going to run all the way out till 2032. Some are going to start in the 2020 range, but we – this is a huge asset now and in the future for our company. What we announced on the last earnings call was that we did file a lawsuit against St. Jude in Germany, and it's for infringement on our IP. To be clear though, that this lawsuits impact only St. Jude's ability to commercially sell PHP, and none of these will impact our ability to sell Impella, so that's the only update that we currently have.

[Chris Cooley:]

Thank you.

[Operator:]

Thank you. I'm showing no further questions at this time. I'll turn the call back over to Michael Minogue for closing remarks.

[Michael R. Minogue:]

Thank you, Shannon. I want to thank everyone for their time today. And if you have any follow-up questions, please feel free to reach out to us. Have a great day.

[Operator:]

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