Medtronic's CEO Hosts Annual Shareholder Meeting (Transcript)

Nov. 1.13 | About: Medtronic plc (MDT)

Medtronic Inc. (NYSE:MDT)

Annual Shareholder Analyst Call

Oct 29, 2012 07:00 AM ET

Executives

Jeff Warren - VP, IR

John Liddicoat - SVP

Mike Coyle - President, Cardiac and Vascular Group

Rhonda Robb - VP, Catheter Based Therapies

Jeff Popma

Analysts

Joanne Wuensch - BMO Capital Markets

David Roman - Goldman Sachs

Brooks West - Piper Jaffray

Bob Hopkins - Bank of America

Matt Dodd - Citigroup

Kristen Stewart - Deutsche Bank

Jeff Warren

Welcome to the 2013 Medtronic TCT Investor Briefing, I am Jeff Warren, Vice President of Investor Relations at Medtronic. Before I turn the -- I am about to turn it over to John Liddicoat but I just wanted to cover a couple of housekeeping items first before we begin.

This slide you’ve all seen it before, so I will let you just take a second to look at it, I will walk through it but it look pretty familiar. But what I would add to this is that we are in our Q2 quiet period, because we ended the quarter last week and so we're not going to be -- today's going to be focused about the data, we're not going to be talking about anything related to the quarter, any type of revenue numbers or the such, so as you can understand.

The other thing I would tell you for those on the webcast the slides are available at medtronic.com under the investor relations portion of the website, so you can access the slides there.

A couple of other housekeeping items, in addition to this investor briefing similar to what we do at other conferences, there is going to be other opportunities for you to engage members of the management team at the booth. Tony Semedo from our Peripheral Endovascular business will be available tomorrow at 2 o' Clock; Sean Salmon from the Coronary and RDN Business will be available tomorrow at 3.30; and then for those of you that don't get to ask Rhonda all the questions you can think of today, we'll have her available again on Thursday.

And with that I am going to turn the call over to -- or turn the microphone over to John Liddicoat, who will give you some opening comments and walk you through the outline for the meeting.

John Liddicoat

I do notice that Jeff did not give me any more time with you over the course of the day, I am sure that was by omission not by intention. But I am also around tomorrow in the booth as well. Just to begin, it's been a great day for us; it's a day that we have looked forward to for a long time. I think the data are really exciting, they're really compelling, they are compelling to our customers, so it can be even more compelling to the patients. And one thing that a lot of us have had and shared together since we brought CoreValve in 2009, we have been on this journey and looking at Transcatheter Valves, watching the market develop in Western Europe, watching it develop here in the United States. And for us today really is the pinnacle of that as we really start to see the benefits of the CoreValve therapy here and demonstrated in this -- what I would consider to be just a fantastic clinical trial.

I want to thank Jeff Popma who is here and David Adams, both of them gave great presentations today, really demonstrating the data but really on behalf of 40 great clinical partners that we have had in terms of executing these trials.

So big day, lot of excitement, the course of this session is really going to be focused on the clinical data for CoreValve, that's Mike, just take the advantage of the fact that Mike is with us here at TCT to refresh some of the messages in terms of our cardiac and vascular group strategy for Medtronic, and so we take advantage of his presence here, I guess he can talk for about 10 minutes or so. Then Rhonda is going to walk through the current state of our catheter based therapies organization really focusing in on Transcatheter Valves you can highlight a number of things including the importance of the no-panel and what that means to our commercial efforts there.

And then we're not going to do anymore data presentations, I think Rhonda you may a slide or two but I don't think so. I think we did a good job today of laying out most of the data I think I have seen most of you at those sessions, but we're going to spend about 30 minutes then in Q&A, so last 30 minutes will be in Q&A. Obviously Jeff and David are both here to really drill down on some of the subtleties around the clinical data.

So with that Rhonda Robb -- Mike Coyle. [Multiple Speakers]

Mike Coyle

I actually just have a couple of slides up front, I wanted to put in context a bit of the overall strategy that we have both in Medtronic and CVG and how CoreValve fits into it, just to remind you since it's been a while since we did our cardiovascular analyst meeting. So Omar has done a good job I think of outlining that we're seeing very significant changes in the overall dynamics of our market. And I think I have been in this business for over 25 years and I think that last three to five years have seen more change than I have seen in the entire period before that.

And it's fundamental changes in the decision dynamics around how dirty decisions have been made -- made in terms of moving from specific physician only decisions to now group decision making which include administrative influence as well as the physician influence. A lot of focus on not just the clinical effectiveness of our technologies and the cost effectiveness of those technologies and the days of minor iterations on products and price increases going with those are by the board. That is resulting in some real changes in overall strategy. And I think Omar has done a nice job within Medtronic of taking the overall changing dynamics and fluidity of the marketplace and really focusing us all down on the universal need that makes sense no matter where you are in the world with healthcare, improving clinical outcomes, optimizing cost and efficiencies and expanding access to care.

And we well those down at Medtronic and within CVG the three basic strategies, using innovations to drive these therapies, taking those therapies and focusing not just on clinical differentiation but also on economic value creation, so how they are effecting the hospital system, how they are effecting care in project selection, and then focusing on globalization. The idea of taking those two things of innovation and cost effectiveness economic value and customizing those to the individual dynamics taking place in our markets around the world.

The result of that really has been a refocusing of the entire organization; those strategies are going to work for all parts of Medtronic, but I think they are particularly valuable to us and the CVG group because of the fundamental breadth and scope of the businesses that we are in. And as I introduced a 1.5 years ago at the analyst meeting, we have fundamentally reorganized our businesses within CVG from approaching the market as individual separated businesses to now where we have physicians focused organizations in each of our business units -- cardiac business, the structural heart business, the coronary [indiscernible] business the endovascular peripheral business. And basically have had those businesses due three things. One is the breadth of product line and makes them not only important but really indispensable to the individual physician group they serve to have regular iterations of product features as well as services that address unmet significant needs both from a clinical and economic perspective and then most importantly to be looking out five plus years for their individual physician group and identifying what the next innovation is going to be for those patients being served by that physician group and making sure that they are seeing as being the ones bring that innovation to our physician groups and our administrative customers.

Then at the commercial level, we approach the market as a single CVG organization and that really is a difference from where Medtronic had been in the past. Now, if you look at the first two things I talked about, you can see that our product lines have seen regular innovation across each of the businesses and especially with the Resolute Integrity launch last year, we now have state of art technology in each of businesses, but we also have a full line of products that allow us to serve whatever the price point is as well as the clinical need is within that individual physician group and that really is something that's very different from not only the market historically but also our competitors currently.

But the other thing is that we have now advanced significantly those innovations in each of the businesses and I want to spend a little time talking about that here just a second, but that other piece the newest piece of this, the wrapping around is of solution and servicing could actually take our product and put them into the context of overall delivered services that input clinical outcomes but also economic outcomes is something we talked about a year and half ago with the idea of generating appropriate identification of patients with things like Know Your AHF and the AAA answers program with the endovascular with the idea of helping with the hospital efficiency by meeting our pacer clinics, meeting at the floor with patients with cath labs, it's also the identification of program that actually allow more efficient treatment of patients like our syncope program or our aortic stenosis program.

So those are more now significant wrap around services that we have been providing. And you saw in last two quarters, a significant upgrade in the focus in that area with two major moves strategically; one, in Europe, the hospital solutions activities where we're actually managing cath labs for certain hospital systems in Europe and then also the acquisition of Cardiocom, which allows us to now move downstream with patients and actually have different services to manage patients after they have been discharged from the hospital. So these are important strategic directions that we are taking as an organization that you can see the progress on. There will be other times our next Analyst Meeting certainly next year to drill in to know items and more specificity.

The only thing I wanted to touch on today is that when we were talking a year and half ago about innovations within each business, we were talking about timing of events that were in the middle to the out year of our five year final, that was a year and half ago. Now, as we look at innovations across each of our individual businesses, they are much more near term and specifically over the next let's call it six or seven quarters. Each of the business is going to be delivering major innovations into their marketplaces whether we're talking about the Symplicity spiral, which we expect the full seasonal with market release here in the fourth quarter of this year or our next-generation loop recorder would be a link, which will be coming to the market in the fourth quarter within Ron and John's business, the CoreValve data obviously the announcement today of the bifurcation of the extreme risk from the high risk and then the ability to bypass panel moves up the timelines on both of those.

So we are looking at the extreme risk release by the end of this fiscal year and then by the next year the release is to high risk of patient population. And then by the end next fiscal year, we will be talking about CE Mark for release of the MICRO Leadless Pacemaker as well as the Symplicity Flex product, the U.S. renal denervation product. And as we then look at our endovascular business, we expect by spring of next year we will be releasing data on the FDA application for the drug-eluting balloon, the Admiral drug-eluting balloon, which should result for an early part FY 16 release of that. So as you can see much going on across all of the business, strategically than this size and scale and breadth that we then bring to the marketplace.

The combination of the full product lines we currently have plus the innovated technology that I just talked about in this near term window and the wrap around services set us up to truly differentiate the overall Medtronic CVG program and everyone at these new innovation releases gives us an opportunity to refresh that messaging across all of our product line. One thing I also wanted to point out is that the ability to take the existing sales to the clinical support organization that currently have out in the field growth and we purpose them onto growth areas is a real advantage from my perspective.

We saw with the Resolute Integrity launch in the U.S. how we use our reference scale for drive share there, we expect and able to repurpose people with every one of these launches to basically not only drive growth but also allow us to deal with the overall SG&G in burden in a market that obviously sees price declines in some of larger segments. So the key to all of this is being able to have each one of these new innovation get delivered with world-class clinical both from clinical outcome and economical outcome perspective and a well sort out plan for how now we put in our existing sales and service infrastructure, which you going to see today from Ronda is how that's being applied to CoreValve, but you can view it as a model to be apply to all of the innovation we're bringing more.

So with that, let me turn it over to specifically talk about CoreValve.

Rhonda Robb

All right, thank you. Good afternoon everybody. I am really excited to be here, given the day events to talk you about some of the specifics of what's happening in the market as well as with the CoreValve's launch and we've announced some significant new developments to accelerate U.S. commercialization today and I'll detail some of the specific plans and try to anticipate some of the questions that you may have. We still see this is a fabulous market representing $2 billion to $2.5 billion global market opportunity by 20:20.

I will talk to you a little bit about how we're making those estimates and where we are going with them. We are investing significantly in next-generation technologies and have made announcements and some things happening today that I'll insight into as well and then obviously the day has all been about data and certainly there is clear patient benefit shown with CoreValve and the extreme risk and continued to access data more than 1200 patients that we reported on today.

Okay just a little bit on extreme risk, Mike already said and you read the announcements that we do have a separate review path to a very significant development, this is something you all have been asking about us for quite some time and this is really just new information and conformation that we received from the FDA last week along with the fact that they waived the panel requirement for the extreme risk data, so really exciting and it's been a huge question and certainly now we have conformation and what that mean is that we will have an expected FDA approval by the end of FY14 and we have aggressive launch preparations underway as we speak.

I think what's also important for context you all have had some questions about what do we expect to have available at the time of launch and at this point in time we are pursuing our full valve-size metrics for approval that will include the Evolut smaller device all the way up to our 31 millimeter device so that will serve a patient annular range between 18 and 29 millimeters so very important in terms of overall patient access. We will also have alternate access that will be an important part and you saw David's presentation this afternoon about how do we take these benefits significantly it's a very meaningful part our overall trial almost 20% of the patients that were enrolled overall in this trial.

And then in addition the delivery system Accutrak was the delivery system we set again this trial as well at anti-calcification treatment so as we look forward to launch those other things that we're looking to forward to in terms of having available by the end of FY14. And then just quickly on high risk this is following quickly thereafter we just completed our one year patient follow up this past week. We're targeting ACC which is in March for the approval of that data -- for the release of that data. We are still anticipating an FDA panel for this portion of our trial so this is baked into the time lines that we're showing which we then put us into an expected approval time frame by mid FY15.

So just talk a little bit about launch and some of the expectations that we have for Varian this is just a view of the world of the centers and potentially some of the timing you are all well aware that we have 45 US IDE sites that were part of 40 that enrolled in the pivotal and additional five that were part of the Continued Access trial. We have started SURTAVI, the global trial. We have also added 15 new experienced TAVI sites into the SURTAVI trial for a total of 60 sites that will be experienced with the CoreValve program. As we look to the total market, we see approximately 350 to 400 total sites that potentially meet the NCD criteria. Based on market information another 190 of those are already existing trained TAVI sites that is where we will start our focus for launch, so we think it's most efficient to go after TAVI trained sites first and that will be our top priority. From now there are somewhere between 100 and 150 future sites.

We haven't started TAVI yet but we'll be starting in the future as they meet the NCD criteria, so just a little bit on the ramp. It's a little conceptual obviously. It will take us some time to reach all of these sites given the training process the proctoring et cetera but this is just a high level view of what we're anticipating in our goal and certainly our plans are lining up to have a dedicated and fully trained team at the time of launch. So we will have a dedicated organization. We think it's very important for the therapy to do so and they will be in place at the time of launch.

Significant market opportunity, our market estimates really have not changed for the last several years but we see a 20-20 market size between $2 billion-$2.5 billion really represented in the following areas. This gives a little bit more insight in terms of how we get there. We have our existing patient populations and the right blue at the bottom is the U.S. and Western Europe is our developed markets we see over this time frame growing in 6% to 10% range but then as we add on new geographies particularly Japan this grows much-much more significantly in the 35% to 40% range as well as new patient group intermediate risk valves and valves bicuspid, potentially aortic insufficiency. So it's important to look at what the drivers of some of the growth are and just helpfully this is helpful for you all but meaningfully the access to new geographies, the access to new patients, contribute significantly to the proportion of total revenue as we look to the out years.

I've been asked a lot about Japan, and so we wanted to provide a greater level of specificity today in terms of what we expect. And we will submit our [Shonen] in Q4 FY14 and we are leveraging data from the U.S. pivotal trial. So the agreement going in was extreme and high risk but be used for the [Shonen] submission so timing to Q4 FY14 the process for this takes approximately one year so we expect approval in the Q4 to Q1 time frame we'll provide a range and now titrate that down as we have more specificity. And then of course reimbursement typically lags from there. So we'll look to the following Q1 FY16 or Q2 FY16 for Japan approval and ultimately reimbursement approval to be able to commercialize there.

Let's move a little bit to some of our new product developments and innovation. And certainly there is a lot to talk about. And again as we talk today CoreValve is a spectacular platform. We couldn't be more excited to commercialize in the United States. The dates today are consistent with what you've seen previously. CoreValve Evolut as you know is part of our US IDE and CAS and already mentioned that we intent to seek approval along with the extreme risk group.

Engager has been a great development outside the United States this is a transapical device soon to be direct aortic device. We are in the midst of launching this throughout Western Europe with focus on Germany first as it's the largest transapical market in the world. And we are pursuing a direct aortic delivery system as well that we anticipate will be CE marks by the end of FY14.

Importantly CoreValve Evolut are as really kind of the next step for the CoreValve platform. We expect CE mark for this in FY15-16 time frame that's broad we are in the midst of conducting our clinical trial right now as we complete enrollment on that and get through that clinical trial we'll be able to provide more specificity in terms of the timing but we wanted to be aware of that.

We did have some important new developments in the programs just for those of you that don't have familiarity with CoreValve Evolut R and we have made some modifications to device, device is certainly part of the CoreValve platform you can see that by looking at it. But we've learned a lot about patient anatomical characteristics through all of the work and CTs that we've collected and have made some modifications to the frame and putting a reduction in the height by about 10 millimeters.

We've really titrated the inflow of the device to provide a better fit and interference for ceiling and PDL reduction, pacemaker reduction, et cetera. And then again anticipate to have a full size range and I note there are 18 to 29 plus. We still have a number of patients who are larger than the 29 size annulus that fall out because they just don't meet the existing guidelines. And so we are pursuing an even larger valve as part of this platform as well to be able to serve all the patients who could benefit.

One of the exciting new things is the EnVeo R delivery system. This is really what allows recapture and the goal here is to really deliver the valve precisely. First, we don't want to have to recapture, so that the system has really been developed to that very, very well. We've also developed a new InLine Sheath and one of the things that certainly you're here at the meetings and you hear as the dialog even today is the need to further reduce that's sort of complications and overall bleeding and we think movement to '14 French dedicated InLine Sheath will have a meaningful reduction in overall that sort of complications and ease of placement and for those of you that may have seen that two live cases the back-to-back Evolut R cases this morning from Bonn there was some commentary on that and we see it performing spectacularly well.

So, we just think it's going to be a huge difference to the delivery. We did our first in man at Monash Medical Centers couple weeks ago, we three implants in Melbourne, Australia with Dr. Ian Meredith so all of the implant so far have gone just extremely well and we couldn't be more pleased and we're working with the FDA to define the path to the U.S. They don't have more specifics today to provide on that but suffice to say we are very anxious to move this forward into the U.S. as well and are working on a clear path to do that.

The last development I want to touch on is the Medtronic mitral replacement project and I think you guys have seen this picture before we communicated on this device at EuroPCR. Nicolo Piazza gave an important update yesterday afternoon on the status of this device but as you can see it, it looks a little bit like core valve, its looks little bit like an engager importantly with those arms. This is a self-expanding nitinol frame. We are very committed to this platform and think it's extremely important for the mitral valve space. Fixation to the need of mitral apparatus will occur with those arms. Those arms really enable the device to fix it into place and then subsequently preserve it the need of mitral apparatus.

The cylindrical tri-leaflet pericardial valve that has a flexible inflow with minimal extension into the LV and importantly Nicolo Piazza mentioned yesterday in his presentation that we are targeting recaptureable system for this as well to provide that as needed. Acute animal studies complete chronic studies ongoing no update day on first in man.

So, let us get through some additional work and then we'll provide an update on down the road as we closer but we couldn't be more excited about this. And the big finale is really be extreme risk data and so I just want to close on this and turn it over for Q&A but again we couldn't be more please and I just personally want to thank Drs. Popma and Adams for their leadership in the trial it has been incredible and just the results are shown here. Achievement to the primary endpoint of all-cause mortality, major stroke via clear shot low rates of major stroke at 30 days and one year, low rates of moderate severe aortic regurgitation and important new insight that has not been presented transcatheter valves before in terms of seen it actually improve over time for moderate, I'm sure there may be some question on that. No association of mild and moderate on late-term motility and then further improved outcomes in more than 800 patients reported on in the continued access study.

So with that I think we will move, Jeff, to Q&A.

Question-and-Answer Session

Joanne Wuensch - BMO Capital Markets

Joanne Wuensch from BMO. Can you just talk about the background of skipping the panel? I thought that was quite remarkable. And then the second question is why are we then assuming a panel for the next leg of the data which will be presented at ACC?

Unidentified Company Representative

I'm glad to answer that. Rhonda and I have not been purposely evading the question about whether or not we had approval to separate extreme and high risk, I know what we have and ask that question for several months. It has been an ongoing iterative discussion with the FDA and we've collaborate them on a weekly phone call.

Based on the strength of the data as we saw the data come forward, we started the conversation with them, I mean it's more to it and just the clinical data has to be all of your preclinical testing, the entirety of you're the works as you've done. But just [indiscernible] clinical side it's also been on the preclinical testing side as well.

So, we did a modular submission, we work with them on the pieces of that and at the end of the day -- and the letter states it expressively they found our argument to be compiling to forgo the panel. So at the end of the day it is their decision as Rhonda said, we just received confirmation last week, they eluted to it few weeks ago and some communications as they are working through the process that were leaning towards that but it wasn't until last week that they confirmed that.

Joanne Wuensch - BMO Capital Markets

So why plan for a panel?

Unidentified Company Representative

For the high risk arm, the high risk -- first of all we haven't seen the data I think the preclinical packages and modules are leveraging all of that information they are very similar or the same certainly the clinical module will be different because also a lot of nested registries within the high risk data which I think will perhaps to be or there some discussion but we have not started even that conversation with the FDA because we have not seen the clinical data. So, our assumption is the typical path for a second to market in that patient category would be, would include the panel.

Unidentified Analyst

Two questions, maybe John you could expand on the logistics of the rollout and how do we think about, obviously you want to maintain this high quality results, what kind of training, what kind of procedures [indiscernible].

Unidentified Company Representative

To give you high level answer, I'll ask Rhonda to talk to you the tactics of it. We are not going to change our philosophy on education and training that has served us very well in market throughout the world. So, we will continue to go long on proctoring support, team trainings, specific education assessment of -- you saw today in the data, assessment of the patient before they actually receive their procedures so we will continue to go long in that way, it service very well in all of the markets globally as such as is there more investment up front clinical results at the end of the day worthwhile I certainly think so on that and committed to that since we took on this technology. In terms of the U.S. so let's Rhonda comment on that.

Unidentified Company Representative

I think John eluted to we already use the same process that we use for example to train our 45 types and types that we're adding for [indiscernible] it really just Michael Reardon presented a slide today that I thought captured well as the five stage training process online modules, there's didactic training we do extensive simulation, we go into the lab with the full time and really kind of talk through all the different aspects of the entirety of the procedure as well as post procedural care, we start the proctoring process and then we advanced training as we see sites that may need help in different areas and so that process takes time, that process takes maybe weeks to get a site from the very beginning to the very end of where they're actually being proctored and so as we start we're going to have to work with sites we're going to queue them up, we're going to be collecting information certainly ensuring that they meet the qualifications as specified by the National Coverage Decision and then we'll begin to train sites and tranches as we move forward over time.

Unidentified analyst

And just a quick follow up for Dr. Popma, Jeff you talked about you actually pressured the earlier panel about intermediate risk, does this open finally the door to intermediate risk, however defined, any color….

Jeff Popma

So there're two aspects to intermediate risk, one is safety of the device and the procedure today I thought we had a big step forward for safety particularly with the reduction of stroke rate down to 1.8% so that in our continued access it's the best number one, and number two is confidence in the technology for how it works hemodynamically, Dave Adams might be able to comment but this is a, I think that we're now inching down, why you see good results that surgeons would be willing to randomize patients who they previously would have thought, we don't know about long term durability, we don't know about strokes, we don't know about all the other things that are there, so they don't want to randomize their intermediate risk patients but now I think there's increased confidence that this technology in the most extreme risk patients is actually getting down now to reasonable ranges which should even be lower in the intermediate risk patients, so I do think the safety is a very-very important component of that but also confidence the technology is going to be an important piece, Dave what do you think about this.

Dave Adams

I think you say that well, I think surgeons actually want to enroll more patients in these intermediate risk groups and I think the issue has been the STS profile and I think that's an ongoing discussion in collaboration with the FDA and I predict you're going to see that number go down, that's not up to us but I think that there are a lot of people, I think actually the opposite's happening, we're trying to enroll I think a lot of surgeons want to enroll more patients and there's still been some limitations, I think exactly what you said is true Jeff, as we get this accumulating experience and recognition by the way that the valve performance is better than the surgical valves, that you're going to want to see in the short term I am saying not the durability issue but from a functional standpoint they're better than surgical valves and there are a lot of small people that are going to really benefit from this technology once we just figure how we can enough patients in here to prove it.

Unidentified Analyst

Couple of questions and maybe I'll address this to Mike, they tried the stuff a lot over the last couple of years since Omar took over about economic value added and this is a procedure that's very expensive for hospitals, I actually believe they lose more money than they actually realize on these procedures right now. You have an opportunity to come into this market and say okay, this is what your economics look like today with valve at $30,500, we have a chance to improve upon that for you, how much does that play into the launch dialogue, the ability to come in and say, not only do we have a product that we think is as good or better than the product you've been using today but we can come in and make this more economically viable procedure for the company, and then fully separate topic, you mentioned getting a leadless pacemaker onto the European market by the end of [indiscernible] by '15, are you in humans yet to give you confidence that, that's a reasonable objective.

Mike Coyle

So the second one [indiscernible] shorter answer, by the end of the calendar year we will be, and so yes we think that's going to support that timing. On your first question you know I think it's important to recognize the characteristics of the patients that we presented these data on, the mortality benefit is so compelling in this patient group that that is value and that is worth an increase in price associated with what's being delivered to these patients who really don't have good alternatives, so economic value doesn't mean making everything cheaper, it means creating value for the healthcare system and for the patients who actually get them and this is about as compelling as the set of clinical evidence as we have, now as we start again the less sick and less safe patient populations I think you're question is going to become more significant, but from my perspective if we start to talk about much higher volumes of production I think we have an opportunity to bring down the cost but at the moment with this technology roll out of this product line, we think that the price points are appropriate for the value that's been delivered to the patients who get it.

Unidentified Analyst

Vast majority of hospitals are losing money on TAVI procedures right now…

Unidentified Company Representative

Maybe I may comment a little bit and I think your point's spot on and I think all of us that are having these discussions, even in our clinical trials we've seen, we've had those discussion, we developed a not to completely repudiate the premise, but if you look at the TAVI procedure itself I think you're right. If you look at the totality of managing patients with aortic stenosis as they come into your institution, I'm not sure that I agree with you and in fact we've developed an economic value tool which we actually take in, we'd sit down with the line administrators, we have the conversation, we talk about the benefit of the heart team we talk about the benefit of the heart valve clinic, when you look at the totality of the revenue that comes in to the hospital and the management of those patient, some go to surgery, some get no therapy some get a transcatheter, at the end of the day there is value to the hospitals and that's the way we've been able to have the conversation through the clinical trial, commercialization that the conversation will continue in that way, but you're right, on the commercialization side there will be ongoing pressure.

Unidentified Company Representative

Kind of there are lots of economies of scale we just got mad it isn't us, we make money in TAVR and I think that you're going to see just what we heard this afternoon with less general anesthesia and better defined protocols and a better understanding of the outcomes the costs are going to go down, they're not going to go down from the valve side, but they're going to go down in terms of length of stay and days in the ICU and things like that.

Unidentified Company Representative

And towards the minimalization of the procedure so just you said I mean to the point that we become comfortable doing with deep conscious sedation and not intubating and moving things from an easier sort of anesthesia environment to less and the other pieces might come in, but the hospitals give the data that they want to give. So if you really drill down to the exact costs of the entire procedure and what the reimbursement rates are, it's not always negative but the contribution margins are usually on the positive side by some dollars. It's how they manage the communications by putting an indirect cost that we may or be part of the system.

So the contribution margin is actually usually positive, but it's the indirect cost allocation which I don't think anybody understands. I know that David has much higher indirect cost rates as a surgeon and I do as a cardiologist, so thank god for that.

Unidentified Company Representative

They show me the sheet of paper at the end and say cardiac surgery is losing money and I always look at and say you guys want to stop doing surgery. Of course it's just the way to keep the books, obviously we make a lot of money and I think Jeff is spot on.

David Roman - Goldman Sachs

David Roman from Goldman Sachs, one for Dr. Popma and Dr. Adams, you did allude to in your prepared remarks Ron a little bit about the client and [indiscernible] over time I know they came little bit at the session today at 1 o' Clock today. But maybe you could just dive into that and a little bit more detail about what you think is going on there maybe specifically with the valve and about the treatment paradigm that you might be using 10 points that.

And then a follow up maybe for Rhonda, maybe just talk a little bit about the filing time lines around the high risk, it looks like you are sort assuming a similar time line from filing to approval as you are in extreme risk arm although you are contemplating a panel in that case, maybe you can just help us those out.

Unidentified Company Representative

So I will start with, but I will try to be focused in. We knew PBL was going to be a problem at the first patient that we treated, because we have seen the partner data, we understood that when you start to have significant [indiscernible] there is an impact to mortality. And so at the time that we did our first case at December 2010 at David's hospital we were thinking UCT in geography for sizing to give us a much more accurate sizing and the interference was more appropriate with the CTs than what you get it, interference is a technical word but over sizing is another term to it. So you want to appropriately size the valve, select the valve for the size of the -- so we did that from the very start.

The second piece we should mention deep dive today is that we have proctors that got it, so our proctors who came to all of us, almost simultaneously and said you got to do three things, you got to look for the echo, you got to look for hemo and you got to look for the autography and you can figure which one you believe the most but they are all going to match in the right place and if not you got to do something. So we had two things going into. One is that we had the sizing was correct, secondly we were working hard to make sure the patient didn't leave the lab with lot of mitral registration as a third thing, that we didn't even start thinking about until recently and that is that a balloon expandable valve -- feels forever. So expandable valve you get your full expansion with the balloon inflation and then you deflate the balloon and there is differences between stainless steel and cobalt chromium. But if you have an appropriately size self explaining [indiscernible] every single day and night all that valves trying to do is expand.

So there are differences in the technology. So we kind have got to the right interference and we have got to the right sizing and high implants, use the whole diameter of the device. And I didn't expect it to get better. Obviously there was nothing that I was nothing that I was six months ago. So I just want to go slow and not get worse.

So I was surprised by this whole thing in a good way. So we saw the data and went through the whole echo thing, there is no issue with echo lab. [Indiscernible] he showed you examples, he got more examples that showed us examples of patients have moderate for one month and got better over time, and you are seeing example after example.

So we need to do 10,000 patients to test this hypothesis but where we stand with our 471 patients right now? It makes sense from the procedure, planning getting the right valve in place, that makes plans from a management standpoint and there is reasons why the valves are different, and let's just see how this rolls out the next 3,000 patients. But it doesn't get worse, it's low and it doesn't gets worse and 80% when we do the paired analysis, one month and one year 80% of those patients showed improvement of CoreValve relief.

So this was an eye opener for us, but I think it's going to make sense if can replicate this in the next 4,000 patients we treat and kudos to the technology.

Unidentified Company Representative

To get the other point that -- made was the in growth we don't know that because that hasn't been said and we're fortunate we haven't had to take enough of these, have taken these valves out but that's another possibility and play between the technologies t there maybe something unique about this frame or about this that it's facilitating in growth.

Unidentified Company Representative

So we don't have a definite answer to this but I think there is lots of real reasons for that and it looks very good.

Unidentified Company Representative

And to answer your second question on the high risk time lines. I mean we're quite excited and motivated by what we have seen today to move forward very aggressively with high risk I mention that we completed our last patients follow up, suffice to say we're going to plug the numbers in pretty quickly and get that submitted to FDA and we'll tell you right now as mid FY15 is our target so more information more specifics to come as we kind of meet those specific milestones.

Unidentified Analyst

From Credit Suisse, Jeff everyone -- no one care about the pacemaker apparently, and there may be a reason for that and could you just talk about the kind of duty cycle, how often were these people in fact paced and it becomes more relevant as you address younger pacers to live longer and expose to it longer. And the second part of the question pertains to the commentary yesterday to speak to the chairman's situation in junction, what's your perception of what -- you could imagine the judge would say okay we want to make a stand on intellectual property on the other hand we don't want to hurt patients and withdraw inventory and so there is hearing. So if comments on that would go, it will be great.

Unidentified Company Representative

I will go quickly with the pacemaker piece. So look, it's like radiation safety in the cath lab. Right, it's as low as we reasonable achievable for pacemaker, so we're not going to get the pacemaker down to zero. We are not going to get on 5%. We are not going to get at 10%. It's going to be a number and so we went into trial saying, what can we do to minimize and get as low as possible with that pacemaker rate is and what we do, we made certain and we use other sized balloons for the valve replacement and probably this is high as we could without having pop out, we applied high 4 mm to keep the out of conduction system. And we were very careful about monitoring the patient and make sure they work in appropriate pacemaker to come down, so I look up to 20% number as a success.

Because up until now that the number have been much higher, you know, maybe with this next-generation technology and some better delivery pieces we're going to change that number but for right now, this was close we could get and is acceptable and the point that I think important about it is that we did do with any harm, so if I couldn't pacemaker it's wasn't any higher. And the pacemaker dependency rate is a critical issue and Peter Zimetbaum at Harvard Clinical Research Institute is looking at those. It maybe something like the people on the pacemaker needs to go away, so if we could predict who goes away we may be able to do so other invading picks.

But let's put this on a context, we have a device that by definition some time tickles the number just how it would have plan, but we also have a device with the stroke rate and continue to access that currently is 1.8% and we have a device that with Echo Core Lab, for whatever in forms of more patients has 4% moderate regurgitation rate of 1 year 4%, with low impact of mortality. So this is all going to be series of trade-offs and you can pick a blemish and say that's only about company you have, but that - you look at the totality you may not even know. I drove one person to have an unnecessary pacemaker that doesn't have to have, that is absolutely clear.

We did everything within this place to keep as low as we can - we going to find out more information, but how long we're going to need that but at the end of the day they were trade-off, so I think the balance everything is very-very good.

Jeff Warren

I guess, I will jump on the second one for you. Yesterday was a busy day for me traveling, generally looks into Mike's comment, so I don't' really know specifically what you're alluding to. On Spencer, we have some fundamental disagreements here. If you look with Edwards, we also disagree with the decision of the court. We don't believe we infringed respectively. We also believe that the patent is ultimately, we found the invalid. You're going to read tomorrow at the EPO announce that they also feel that the patent should be found invalid.

But there is a long way to go. There is press release that's getting release here this evening from us and you will see there. We will talk about that. I still wouldn't consider that to be a major material finding because that still needs to undergo oral arguments in the spring. There is still going to be the change for them to present their side and a chance for us to present our side.

So to me that is even though they're citing with us, who knows at the end of the day who is going to play out. But we have fundamental disagreements with Edwards in terms definition, inventory and ownership, and we continue to have those compassionate use and we will continue have to those discussion. And so, we are not here to kind of specifically go back and forth with Mike on those, but we do have fundamental disagreement. We are very compassionate. In fact, she waits 60 minutes up here.

Brooks West - Piper Jaffray

For Rhonda and Jeff, current thoughts on the addressable patient population with this indication, the presented share or absolute number and then I've got a follow-up? Rhonda.

Rhonda Robb

I want to talk about my numbers and then I can ask Jeff maybe gave his experience, I mean, we think if you look at the extreme high risk in the United States, our models shows extreme being the vast majority of patients probably in the range of 70% to 85% patients today that could be served and this is you guys think about the world of these patients the addition of CoreValve into U.S. market, I think has some meaningful implication for patients that can be served and you know one just having a lower profile device and this will access.

That changes number of patient that can be served, the valve size metrics that we provided, I don't know if you guys caught the valve size metric that Steven Yakubov presented in his deep dive presentation, but you saw almost 80% patients being served with values on upper end of our sign metric and 38% being served with annual range above 27%. So, we think those will make meaningful contribution to the patients that will be served not just those deemed for extreme, but those who previously haven't had option even if they were at extreme risk to the existing technology. So that will further expand the patient population.

Unidentified Company Representative

And that was continued to access?

Rhonda Robb

It was yes.

Brooks West - Piper Jaffray

And then just follow up on the pacer discussion and I am curious to get the business side and physician side, maybe start with physician side, if you're looking at this from the totality of cost basis or any other view and you're looking at one out five, basically the patients are going to get a pacer with this valve, how do you approach there from a cost standpoint? I mean do you include that in your thinking about the cost of care, do you look for a callback from the company and then from a business standpoint, how do you react? Thank you.

Unidentified Company Representative

I think, if the patient needs a pacemaker, I never think about the cost implication for that, it becomes an epidemiologic study about how many studies on the last year and with the cost for those four events some with front end business side, so from a business side we only put pacemaker in when they're indicated and when they're indicated we put one in and I think we don't think about the individual cost for particular patient for that because which we haven't done in the analysis yet but we will that simply the reduction in complications like stroke for re-hospitalizations for heart failure from moderate to severe paravalvular regurgitation those are going to have upsides on the cost side. So we haven't really gotten into it but I don't know if you guys have thought from a business model by giving just a discount or something, is that going to happen?

Unidentified Company Representative

Yes, and I don't -- we've had no discussions. I think also on the clinician side in which David comments I thought it was very telling on the panel today when they talked about bleeding and it's just the way that we're measuring bleeding in these trials in which you're really seeing clinical practice being somewhat different as well. Do you think its smaller French size that we're bringing to market is going to have a positive impact on that as well [indiscernible].

Unidentified Company Representative

Yes, I just think again guys keep look at the real world use where you can use both devices where there is no -- what is going on there are more CoreValve going in than they are sapients going in certainly it's 50-50, why because there are lot of benefits. And I think the pacemaker thing is not them worry even worry on the panel they said why that's acceptable we're not going to spend any time talking about that. I think one of the reasons it's acceptable because of the positive side. There are at same regular force and position that may give you an increased risk of a pacemaker decreases your pair or arboreal rate of regurgitation which translates into a better outcome. And you have smaller access in other [indiscernible].

And we haven't talked about some of the other things that may go on in terms of durability in the term because of the device that a lot of surgeons actually are quite interested in and say when you take all of it it's just said you take some good and some bad but when you look in the real world that balance is certainly a lot of the market favors CoreValve on the balance.

Bob Hopkins - Bank of America

Thanks. Bob Hopkins, Bank of America. Just wonder if you could go back to the patent comment. What exactly is going on [indiscernible] maybe I'll just see if the press release has been issued yet [or not].

Unidentified Company Representative

Yes, it's actuated it is public information on the EPO website.

Bob Hopkins - Bank of America

If the patents been deemed in valve?

Unidentified Company Representative

No, just ECO gave their opinion that it should be sound to be in valve that's why said they're still a long way to go in [indiscernible] so it's not a final [indiscernible]. My opening comment was that there hasn't really been anything material in terms of the dispute that's ongoing. The EPO opinion that came out today I would still put in the immaterial to it because there still is a lot of discussion left on that issue.

Bob Hopkins - Bank of America

And then on the paravalvular leak data today, I'm just wondering if you think that that represents a potential structural advantage of this valve versus adverse valve. Is that something from the clinical perspective you think that Medtronic will be able to be successfully market two clinicians that if you look at this rate that had something that represents an advantage relative to adverse data?

Rhonda Robb

Go ahead give your answer and then I'll get my.

Unidentified Company Representative

So we're in -- there are so many things that we're going to sort out with this over the next several months, core lab differences, rate differences, all that. The only thing that I can say about this data that we have right now is that when we do period analysis so we take out the whole question of maybe the patients with moderate or dying and so they're not available for the long term but we take out that in this data set there is an improvements both numerically and by case examples from Dr. [O] in terms of PVL are getting and the clinicians do like that because that means I can work as hard as I can work to get rid the moderate AR in the lab if I need to but it's little bit reassuring that I've done everything I can do safety that the patient has a pretty chance of recovering. That might be different we'll have to see as we discuss this with the full expandable valve or once you've done your expansion that's about as much as you're going to get.

So to the extent that David said that it gets better because you filling the interstices wherever there maybe differences between these two at least from my perspective as we star to put all the data [] it sounds like it's something that I can understand so I think it is something that they can make a story around but less confirms just another 1,000 patients.

Unidentified Company Representative

Maybe give David a chance to response from a surgeons' perspective we're doing.

David Adams

Well I was just going to say again I think one of the other things is that this idea of the radio forced the valve been super annular in this conformation been a little bit more forgiving. So those things are all inherent in the design that may again and again I go back to what's happening in the real world. In the real world there are a lot of CoreValve going in where you didn't have the trial aspect and I think that's a significant reason.

Rhonda Robb

I think from my perspective just physically your question now I mean this has given us an opportunity to educate and we've learned a lot through the process in terms of the importance of using advanced imaging modalities to site the valve. We've learned a lot about procedural best practices and the results are what they are in a very-very well conducted trial. So for me I think the biggest way we can contribute is to educate physicians because there are being just so many questions in terms of what the national registries mean and the data being all over the place in terms of really being once we own I feel like we finally have some information that we can be truly confident in and so that is what we're going to do is educate on that one.

Unidentified Company Representative

And I think we should really talk I mean at least mentioned this pacemaker rate in the non-iliofemoral similar group which was 15% and it was consistent at 15% and continued access. And again it maybe that distance and the ability to even further refine your implantation dip and this new valve design and better release systems may all mean that's where it's going as we get even more control of this valve at the annular level.

Matt Dodd - Citigroup

Matt Dodd at Citigroup. Rhonda for you first you've highlighted Accutrak in the valve side as part of the approval and it's nothing later that Evolut you're seeking approval. So how strong you think your view is on the potential for Evolut to get approved with this first extreme group?

Unidentified Company Representative

23 just specific…

Rhonda Robb

Yes, to Evolut and yes so we're pretty confident so we're going to work with the FDA as part of our submission so it's part of the way we're planning moving forward.

Matt Dodd - Citigroup

And then quick one for you Jeff for the paravalves leak the moderates you didn't show increased mortality it was very small has been other David's been mixed I mean do you feel that moderate maybe overall isn't going to cost increase level motility we use to think or you think particularly maybe as it gets better, as it improve with this trail that might even have the reason why you didn't see much of increase.

Unidentified Company Representative

I mean whenever you do 400 patient trial you kind of wish that you had 10 times a number of patients so you have the confidence to say there is no relationship. So, it's not a strong relationship, I can't say never, I can't say that will not grow 4000 patients so they're going to be pre-value between mild, moderate, severe that's very clinically insignificant but because if there are so many patients to show difference.

But what to me I saw on those curves was that these curves are pretty much super imposable I mean there maybe [indiscernible] but they are pretty much [indiscernible]. Why would this be different and advanced for example then showed a relationship with moderate here. And we did things different, I keep going back to this. Rhonda has the answer to the query, and hear it when you have -- you have the best answer and that is we know how to tech. So, at the end of the day we know how to teach sizing based on CT and we know how to teach what has to happen on the cap in the OR to maximize the results. That's the right answer, and if we could reproduce these as we go forward then I think that the answer is going to be that you've got the right interference to the valve, you put in the right place, whatever you leave continues to remodel and expand over time and maybe things are going to get better. I think that maybe the right answer, but the [indiscernible] we know how to teach them.

Unidentified Analyst

Rhonda, could you talk a little bit more about the potential simulative effects. Medtronic entering the US market might have? For example, Edwards has started piloting DTC ads. Would you guys consider something like that and I had one for Dr. Adams after that.

Unidentified Company Representative

There is lot of work to do here to build this market and clearly a lot of opportunities as you saw in the graph that I showed here. I think where we want to start though is to work with train sites, work with that can do TAVI and really focus there. I think longer term will look at certainly market development efforts were conducting SURTAVI trail in the United States right now and that's proving to be bit more of difficult trail to enroll for many different reason and so I think that there are some market development awareness opportunities available there as well. But more to comment I think initial focus this is obviously moving up to launch considerably and we want to be prepared.

Unidentified Analyst

Dr. Adams I wanted to -- given that you're one of the world's leading experts mitral valves. I wanted to hear from you where you think the mitral - trans capital mitral field is today and what the outlook is your view.

David Adams

Well, I think it's still in its [indiscernible] today, I think that one of the challenges is always sort of matching the type of region you have and type of prepare you are going to do which is then I think one of the problems with the now commercially available device all along methodologically. Valve replacement is different because valve replacement is valve replacement so that matches the technique and the other thing what we always talk about one lesion, one technique. The difference in aortic and mitral disease, aortic, you have one lesion, aortic statuses. You have one treatment or valve replacement how you get there. So, [indiscernible] mitral disease you have 10 different lesions, not just [indiscernible]. But replacement to one technique that could treat all of them.

So, I think it's an extremely important avenue and I think the high risk population and now early population is going to get much more interest in that technology and the difference or mortality between mitral replace that happens in surgery predominantly from the technical aspect is surgery may not exist with the transcatheter therapy. So, it's important area and I do think there is a significant population of patients that could benefit in both spaces theoretically repair product that did the same operation or surgeon did like angioplasty and valve replace and I think maybe even easier to do for a host of lesions.

Unidentified Company Representative

So I want to be sensitive to time we have hit the top of the hour, we've got time for just three more questions and then we'll ramp it up.

Unidentified Analyst

The data that you presented today obviously positions CoreValve extremely competitive product in today market and can we talk about pace maker rate not being a big issue in today market. We think data coming now in the next generation devices were some of these devices with limited data getting [indiscernible] moderate severe close to zero pacemaker rate [indiscernible] evaluate are there. Could you talk about what you're expectation on paravalvular leak pacemaker rate for that product.

Unidentified Company Representative

You described our data preview, right I mean very low moderate and severe AR, I mean I think that's the strength of the data today.

Unidentified Company Representative

Our strategy has been dual platform strategy when we purchase core valve and engage opportunities to certain patients and we see physicians moving in the direction of looking at different patient characteristics and making a valve choice based on that and so I think in chemical consideration, patient consideration we're going continue to be important and we certainly looking at that in terms of future portfolio development in terms of ultimate performance of the valves. Obviously, we want to abolish all complications, right. So, that's ultimate goal and I think we're moving a lot through CoreValve I mean this information is telling us a lot about future platforms and so this will become a platform from which we can continue to innovate and build. I certainly think with the excitement of Evolut R and some of the early results that we're seeing from the site I think it will make a meaningful furthering reduction and overall PVR reduction as well as pacemaker but we have more work to do on that.

Unidentified Analyst

[indiscernible].

Unidentified Company Representative

I don't think with the [indiscernible] pretty transparent. I think with the self-expanding right now we will [indiscernible] 10% would be really some heavy listing. If you look at the design target for Evolut R, our design target is to improve it down and to the mid-teens to low double digits. So that we'll be very pleased with that having said that I think you saw two great live cases today that demonstrate the value of the InLine Sheath. I think I recall from the first case that being a 5 millimeter vessel down different [indiscernible]. So you starting to really get down and to some meaningful changes on the new frame and a new delivery system.

Glenn Novarro - RBC Capital Markets

Glenn Novarro with RBC a few questions for Rhonda but may be the doctors could also add. First in terms of the launch when you do launch are you going to require any stocking something like what Edwards did or do you go right to consignment? And then second, as you start training more hospitals you are going to start overlapping with now sapient hospital so one I am curious as you start talking to these sapient hospitals what has been the feedback are they welcoming Medtronic at another device end? And then are there any switching cost because we spoke to a few docs to say that said today there may be some swishing cost or training cost that would prevent sapient hospital from wealth giving in Medtronic? Thanks.

Rhonda Robb

I am not going to answer your first question yes.

John Liddicoat

We just haven’t landed on the strategy.

Rhonda Robb

Yes exactly so give us more time with that and we will answer the question down the road. Certainly the sites that I talk to are welcoming a new valve and I think as I mentioned earlier there are a significant number of patients that can’t be treated with today’s existing technology both in terms of valve side metrics in what’s commercial and as well as in that will add to our sales I think again going back to some of the anatomical considerations I mean physicians are looking at the annulus [indiscernible] I mean might make a choice with one valve versus another but having options for different patient anatomical characteristics is important.

So the feedback I am getting is I think it will be a welcomed addition not just for the patients who can’t be served by today’s existing technology but really to look even more broadly and to making very patient specific decisions on clinical considerations in terms of what’s most important versus what might be just obvious on the label.

In terms of switching cost I mean again I think we are going to better understand those as we get into this but I think physicians are very much looking forward to maybe Jeff we should ask you kind of what you think in that regard.

Jeff Warren

I don’t know about the switching cost I am not sure what the cost is I mean you were talking about why are here or there I don’t think there is going to be big switching cost. Unless there is something about I mean there are some sheaths that you have to buy with CoreValve because it doesn’t come with sheath but this is nickel and dime stuff it’s not really a major hospital [indiscernible].

Everybody is excited right I think this is excited as the sites that we have trained into the partner sites have been excited about a new technology they listened I mean you don’t they are new skills that you will learn it’s kind of exciting time. I mean running these new techniques and people are into it.

John Liddicoat

Yes at this point because if we are falling down size to be a complete TEVAR hospital, you have to you have to have both so I think you are going to see really no push back from I mean you are welcoming this is going to be the right word now that once you have commercialization in putting both products on your shelf. Okay one last question.

Kristen Stewart - Deutsche Bank

Kristen Stewart from Deutsche Bank I guess just consolidating up on that you had mentioned that you think you should have both how if you think about just percentage of valves that you would do in your respective institutions in terms of Edwards where that would set relative to CoreValve just thinking about sizing or just more holistically just about the program and may be some of the problems there…

John Liddicoat

You can see a 100% and again if you have any…

Unidentified Company Representative

I mean I don’t know I am not quite sure how to answer that and that’s why I went back to the beginning and said if I were to ask off the cuff what’s going to happen in the United States and say look like that I mean in Europe right now where you’re actually leased to [indiscernible] and maybe there more core vVales going in than the safety and valves. So I think that we’re likely to follow that half and I think what you’ve seen so far is for example fellow market agents we’ll put both and we’ve put sapients in because we haven’t had access for certain patients due to trial imitations and thing like that that we won’t anymore. So I think that it’s going to be hard [Liz] Jeff I don’t know how you want to follow up on that but I am not sure how… I think that we will keep both valves on the shelf I think we will use a lot more core valves than we were in sapients.

And I am not sure how much of that is bias versus just some of the technological things that we’ve seen today.

Geoff Martha

Yes, I mean I think the 10,000 [indiscernible] when I made is we’ve got three different drug [indiscernible] since in the lab and it doesn’t matter which one we pull out so it could be any. But it’s going to -- there will be a lot more thought about which valves going to be used for a particular patient. So I don’t think these are close to a commodity I think that they are going to very specific and they’re using [indiscernible] but they’re going to be different it’s not always pulling drug we’ve sent out so it doesn’t much matter everything that’s going to be very, very positively shows them.

Kristen Stewart - Deutsche Bank

And then just one last one for Mike

Michael Coyle

[Liz] its integrity resolute…

Kristen Stewart - Deutsche Bank

One last one for Mike you put up a number of new products that are being coming to market over the next couple of years. Just how do you think about putting the CoreValve opportunity into context with all the others what are you most excited about and I guess what level of share would you be disappointed in with Rhonda?

Michael Coyle

I’ll let John comment on that [Liz]…

John Liddicoat

Each of the opportunities we put up there are we think large opportunities and so we really view each of the businesses as needing to have growth drivers that match up to getting their individual contribution to look like Omar’s goal for the overall organization obviously through the end that’s a tougher challenge is because of the size of their business. And so you look at their AF opportunities we look at their opportunities and predict the diagnostic and I think they’re pretty exciting are to mention just their base innovations in the pacing side which are put up and things working on the ICD side.

But each of the other businesses I believe has opportunities that put them well within what Omar is looking at where drug [indiscernible] balloons for and over we talked about the trends got to valves for special hardware we show that party and for the pulmonary business I think they are each positioning themselves very well to be able to grow into those objectives that we have for the overall corporation.

Omar Ishrak

First of all it’s a great question it’s hard for Mike to admit that this is his favorite.

Michael Coyle

But you know where I am

Omar Ishrak

Yes I’ve been … and secondly I would say given this data I think there is a meaningful opportunity for Rhonda to over perform.

Unidentified Company Representative

Okay, thanks we’ll end the meeting there and the webcast. Thanks for coming.

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