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Medtronic, Inc. (NYSE:MDT)

Cowen and Company 34th Annual Healthcare Conference Call

March 05, 2014 11:20 AM ET

Executives

Mike Coyle - EVP of Cardiac and Vascular Group

Analysts

Josh Jennings - Cowen & Company

Josh Jennings - Cowen & Company

Okay. So we’re going to get started here. Thanks everyone for joining and participating in the third day of the Cowen Health Care Conference. My name is Josh Jennings; I am a Medical Device Analyst here. And we’re honored to have Mike Coyle, Executive Vice President of Cardiac and Vascular Group at Medtronic. Mike thanks so much for joining and participating today.

We’re going to have a Q&A session. And I just wanted to start, always it’s a good opportunity just to get a refresher on the CBG strategy, I know we’ve talked about it in the past, you talked about it publicly in the past now with the addition of Cardiocom, your hospital solutions initiative how that all reps together. There has been -- you’ve highlighted historically how successful the Resolute drug eluting stent launch has been and maybe how that translates potentially to other products or other products within the cardiovascular group?

Question-and-Answer Session

Mike Coyle

Sure. Well, first thanks for the invitation, it’s good to be here. So just as a reminder, the Cardiac and Vascular Group for Medtronic has basically four business units associated with it; Cardiac Rhythm, Endovascular & Peripheral, the Structural Heart business and then the Coronary and Renal Denervation business.

And what each one of those business unit leaders is really asked to do is to basically to do three things; to have a breadth of product line, to focus on intervention physician group, have a breadth of product line that makes them not only important, but really indispensable to what that physician does every day, have a regular flow of new products and services that are being offered to that physician to advance their clinical practice and then probably most importantly looking out in that kind of five plus year timeframe and identifying what the next big growth drivers are for that physician practice.

And so we really started this process 3.5, 4 years ago. And we now have put in place I think some very interesting growth drivers within each of the businesses. When you look at the CRDM business, they obviously have growth factors in atrial fibrillation with our ablation technologies, in predictive diagnostics with the release of our new Link loop recorder and then in the area of deep [utilization] of technologies like our MICRO Leadless Pacemaker.

In the Structural Heart business obviously a franchise in surgical valves and the cardio pulmonary products were the real growth driver in TAVI product lines that we obviously have just gotten the U.S. approval for the extreme risk patient population.

Within the Endovascular business, obviously mature business and leadership position in AAA and thoracic aortic aneurysms products, but then also a big growth driver in peripherals specifically in the drug coated balloon space.

And then in the Coronary business, obviously a core franchise in PCI, but also next generation stent technologies and obviously also investments in Renal Denervation that we are working to decide how best to drive those investments.

But when we go to market, we go to market as Medtronic CBG. And the reason for doing that is over the last three to four years, we’ve seen some fundamental changes in the way that our customers make decisions about purchasing, a much bigger emphasis arising within the administrative purchase decision making process.

And what we’ve seen is that the hospital systems that are actually differentially growing taking procedure share in their areas are ones that have basically empowered a cardiovascular line administrator to look strategically over their cardiovascular practices, their Cath Lab, the Interventional Cardiology [Suite] and are making decisions across that area.

And that’s where we see very different decision dynamics taking place than would have occurred five plus years ago when they were looking at, how do I drive patients to my fixed plant, how do I drive quality measures to drive my reimbursement, how do I take unnecessary cost out of my facility, how I get better utilization of my labor?

And these are things that we can help independent and individual physicians and products that we have, so putting together programs like meeting out pacer clinics to take them from two week to one week to make them more efficient. Things like disease management program scenarios like syncope where patients would typically coming into the ER two or three times before they get properly diagnosed.

We think in blood conservation where we use pathways and protocols to minimize blood utilization in surgical procedures not just to drive the cost down and blood usage, but also to minimize complication rates. And then things like minimizing infection rates and minimizing 30 day re-hospitalizations for heart failure where there are big penalties in place for reimbursement.

So these are the areas where we can put together programs that spread across our businesses and then either work with the administration for direct billing on those programs or to use the credits that aren't from the implementation of those programs to drive share in some of our larger product segment by placing DES and CRM.

So that pretty much is the way the strategy has been playing out and how we have implemented it over the course of the last three years. And I think your point kind of the proof point that is working is the performance of the products like Resolute Integrity where if you think historically stents works, you would typically introduce your new product and you get a pop in share over the course of the first two quarters and then it would stabilize. We're now 7 or 8 quarters into the launch of Resolute Integrity here in U.S. and we continue to share capture, because we're using it in broader product bundles with these kinds of programs, not to mention that that is just a great product. So that’s the strategy.

Josh Jennings - Cowen & Company

Thanks for that. And if you look at the CBG Group over the last two years or so, you’ve had some -- just individually you’ve outperformed your cardio peers from a growth perspective. You mentioned some key pipeline products within CBG in your last answer, but just maybe just map up for us what you think of the top pipeline products that you have that are going to sustain that outperformance and the level of growth that you're approaching consistently in the mid single-digit range. I don't think Medtronic gets enough credit for the deep pipeline that you have sort of like to giving chance to highlight it here?

Mike Coyle

Sure. I'm very excited about the next six quarters or so, I think we're going to be bringing in some very fundamental new therapy innovations which has been the cornerstone of Omar’s overall strategy for business, therapy innovation, economic value creation, globalization. And I think this next period is going to be one of the most productive periods Medtronic has had in its cardiovascular businesses.

So just to point a few, obviously we’ve just released the CoreValve extreme risk product in the U.S. and are ramping that program. Just within the next few weeks, we’ll be at the ACC meeting presenting our high risk data associated with that CoreValve which obviously be the first randomized data to surgery that we’ll be showing at that product line. So we’re very excited about it.

We just released the Link product which is basically a loop recorder that is highly miniaturized; I’ll just hold it up here so you can see it. This is basically a device that has all the functionality of a pacemaker from a diagnostic perspective to be able to look at continuous read out in electrocardiograms that actually doesn’t [pins] measurement for tissue pulling status has the 3D accelerometer for [posture].

This is device that will replace what is essentially a pacemaker size loop recorder and can be inserted under the skin by a physician who basically is capable of doing a biopsy. So this is not going to require the kind of interventional skill sets for that pacemaker implants require. But it has the capability then with three plus year battery life of (inaudible) information every night to the patient’s bed side without the patient having to interact with it, to be able to look at things like syncope unexplained painting competitions that haven’t been explained things like atrial fibrillation management one patient should be on the medications.

And probably most impressively cryptogenic stroke which we released a just week ago, about 10 days ago a clinical study at the International Stroke Meeting that looked at the study of the use of loop recorders in the cryptogenic stroke patients, patients who had an embolic stroke that is unexplained and 40% of patients who have embolic stroke will depart the hospital not knowing whether it was AF induced or whether it was a vascular issue.

In our study we basically randomized 450 patients through that standard of care which is holter monitoring or patient self reporting AF on the symptoms versus using a loop recorder to look at those patients. And what we found is in the traditional group at one year only about 2% of those patients actually reported having AF, if they had one of the loop recorders in, 12.5% of those patient were confirmed without AF. And a three years, 30% of the patient wound up being confirmed as having onset of atrial fibrillation with whereas in the controlled group it was only about 4%.

Why that’s important obviously is patients who had a stroke or an elevated risk for a second stroke and being able to confirm that it’s an AF induced problem that can be treated with the Coumadin or other blood taming agents. It’s a real opportunity then to intervene in that second stroke actually occurring. So this kind of technology we think is going to be very exciting and has just been released in the U.S. and CE Mark.

In addition week after the ACC meeting, we will be at Charing Cross releasing the pivotal clinical data on our drug quoted balloon, which is a treatment for peripheral vascular disease in the FFA indication. This is an area that is poorly treated by existing technologies, has very high recurrence rates, 10% of those patients have a least stenosis so they just kept PTA or a drug eluting stent and 25% of those patients will have a primary patency issue at a year. So these are patients who were looking for a solution, we’ll be obviously providing our clinical data, pivotal clinical data at the Charing Cross meeting.

In addition we’ve just started the clinical trials both for CE and for U.S. FDA on our MICRO product which is a pacemaker that basically uses the same [deeper utilization] technology I just talked about for Link. This is that pacemaker. And it goes directly into the heart, no need for lead, no need for creation of a pocket. So this is a program that we expect to result in a CE Mark by the end of our next fiscal year. And we are still working with FDA on timing for U.S. approval, but have started clinical trials in those products.

In addition we have a product called TYRX, which we have just launched into the market which is basically a technology that is used in device implants especially in replacement implants to minimize the frequency of infection. If you look at high risk device implants, any replacement or using a patient with diabetes for example or dialysis, you’ll look at roughly at 2% to 4% infection rate associated with the device implant.

We've been able to show that with this TYRX technology a reduction of anywhere from 70% to 95% in the incidence of that infection which is a very big deal from a healthcare economics perspective because typically when those patients come back, the devices can (inaudible) implanted it’s basically a 75 to $125,000 intervention to go correct that issue and so the ability to actually lower that infection rate using these kind of technologies is the significant one. So those are some of the more impactful programs we have.

Josh Jennings - Cowen & Company

Great. And maybe just to focus on CoreValve hot issue in the investment community, as well as the clinical community, we have extremely stated here. First question would be high risk data depending later this month. First question would be how is Medtronic thinking about the market, how it’s been developed to-date and what does CoreValve entrance do to the overall market size?

Mike Coyle

Well I think, we think we've always kind of broken down the penetration starting with the extreme less patients, these are the patients with basically 50% mortality at one year for their aortic stenosis. They were going to be the first candidate to be tested; those were the data that we presented at TCT here which showed some very impressive low stroke rates, low rates of paravalvular leak and most importantly improving hemodynamics over the one year follow-up period for the patients, which hadn’t been seen in other type of the clinical studies.

So very exciting improvement from the standpoint that the headline was 50% reduction in mortality associated with the use of that technology and that extreme risk group. The next layer of clinical studies is around the high risk data, so these are patients who are less sick, but still not until they have high surgical risk and have for outcomes. These are the data that we will be presenting at the America oncology cardiology here in about three weeks and in that particular patient population of that study, we are actually randomizing to surgery. So this will be the first time, we have presented core valve data randomized to surgical outcomes. So we are hoping to see the very strong trend that we saw with the extreme risk be repeated into the high risk group. And then that third category is really the moderate risk patient group. This is one that we are studying in our TAVI study. And that is a program that has essentially two year follow-up associated with this. And it will be sometime yet before we complete enrollment and present those data, but depending on how the data come out for these other studies, we may look at if there are ways to actually shorten that timeline.

Josh Jennings - Cowen & Company

Great. And you touched on some of the metrics that you secured in extreme risk data set. Can you talk about what you think is differentiated with the most important metrics where you feel like you separated, core valve separate itself from these drug data sets in extreme risk indication?

Mike Coyle

Well, I think certainly when you look at the data and especially I would point to this issue of improving hemodynamics overtime. It does certainly lend itself to an argument that using a self extending stent that is actually providing radio pressure when it’s being deployed; actually may have both short and longer term benefits when compared to a balloon expandable stent platform. Obviously as more of these data come out we will get more opportunity to validate that conclusion, but we are certainly convinced that the design choices we have made around using a self expanding design were the right ones for this patient population.

That is something that I think as we now start to get less sick and less sick patient populations moving on and keep an eye and see if that keeps getting replicated and keep getting reinforced.

Josh Jennings - Cowen & Company

There has been some data about the pacemaker rate, an extreme risk data set. Can you just talk about -- we had a neuro intercardiology panel yesterday and have three, but three high profile intellectuals in Boston. We aren't too concerned about the incremental costs; I think one of them said it’s just the cost of doing business. Just wanted to hear your thoughts on is that a risk to adoption and do you think that could potentially limit the penetration and be a competitive risk for you?

Mike Coyle

Sure. I'd kind of like to think about it as even though Maslow’s Pyramid of Needs in these patients with severe aortic stenosis. And the things that are really important to get right are low stroke rates, low rates of paravalvular leak and then hemodynamics that if not improving or at least not getting worse. And the reason those are important is because those are the things that co-relate to mortalities in these patient groups.

The next level down and it's things like pacemaker rates. We were -- our three risk data showed kind of a low 20% kind of rate of pacemaker implantation. But importantly, when we correlated the presence of the pacemaker to any bad outcomes for the patients there weren't. So basically you didn’t see correlations to core hemodynamics, you didn’t see correlations to mortality. And that's important because then it becomes a function of the patients or feeling that are because they are being paced a bunch of putting a permanent pacemaker into the patient.

So now that we've got to confirm that part of the equation, what we will continue to do as we iterate on the technology is try to maintain or improve the hemodynamic performance of the device in a low stroke rate, but then try to lower that pacemaker rate. And there is a bit of a tradeoff there in terms of maybe the things that are making that hemodynamic improvement, the external pressure provided by the nitinol stent are aggravating the issue in the conduction system into the higher pacemaker rate.

So, we're turning our engineers loosen optimization and how do you maintain the performance and try to minimize the pacemaker rate. And I think you'll see some of the fruits of that effort in our Evolut R product line which is now in CE mark trials and will be coming to the U.S.

Unidentified Analyst

[Question Inaudible]

Mike Coyle

Well, range is important; first on the surgical valve side, we actually do have a full portfolio of both mechanical and tissue valves with the number 3 player globally in surgical valves so we have that full product line that you’re talking about in the surgical valve suite.

Unidentified Analyst

[Question Inaudible]

Mike Coyle

It’s in the 20s maybe [side] where we’re a smaller player than maybe we’re number 3 player. Though the important thing about range is range within TAVI and what valve sizes do you have to be able to support the cases and what kind of delivery access methods do you provide to the physicians both transfemoral as well as direct aortic as well as the subclavian implant routes. So we are the only ones who have that breadth in the U.S. currently and so breadth we think is going to be important in this space because we really don’t see long-term accounts putting up in 3, 4, 5 valves on their shelf. So I think they’re going to be standardizing on a primary supplier and then perhaps the secondary supplier, so having breadth within TAVI is the most important thing than in heart valves in general, the second most important thing. So we actually very much like where we sit competitively in terms of breadth within TAVI not to mention within cardiovascular.

Josh Jennings - Cowen & Company

Just one last question on TAVR. If you look at the success of the extreme risk trial assuming a similar success in high risk, how does that data set help in Europe there are some competitive launches over there and how can you give us an idea on how you expect the market in Europe to be sustained through?

Mike Coyle

Well, I think what we just talked about here in sort of a U.S. focus of the importance of breadth is going to be equally important in Europe. We don’t see centers again having large numbers of suppliers with the level technique dependence on this is you want to learn a technique and then you want to stick with it. So you probably looking at primary and secondary supplier. So we believe there will be trialing of follow on products, but right now there are only full line suppliers in the market. And we expect that those who are coming behind will get trialing. But unless they can offer something fundamentally different in terms of improved outcomes, we think it’s going to be hard for them to get a foothold, especially since really none of them have complete product lines. Whether we are talking about size ranges of valves or whether we are talking access reps. So from our perspective it’s going to be a big hill to climb for those who are coming in to displace players. The only way to do that is going to be with a better proven product and right now I am not seeing what that sort of feature set is, it’s going to be so differentiated to make up for the head start and the breadth that we have.

Unidentified Analyst

[Question Inaudible]

Mike Coyle

We are the market leader in the minimally invasive off pump support technology, so the Octopus product line.

Unidentified Analyst

[Question Inaudible]

Mike Coyle

Well in that case we would do mini thoracotomy. But to us the more important thing in the TAVI space is the alternate access routes that a surgeon would use. So transapical which we do in Europe with our Engager product line and then the core valve product line for direct aortic and for the subclavian access routes. And we are only ones with approval for those access routes in U.S.

Unidentified Analyst

[Question Inaudible]

Mike Coyle

Well, I think our approach to expansion of the market is to say transcatheter valve technologies can get down to levels of performance that actually would rival surgery, that's the operating theory. Obviously we’ll show the high risk data and see how to randomized data come out, does it support that theory and then we’ll do it with even less sick patients with the TAVI study. So we think that we’re very bullish on the opportunity that just transcatheter valve technologies provide for getting into less sick patients.

Josh Jennings - Cowen & Company

So Mike you want to shift over to cardiac rhythm management and just see if you are willing to give us your outlook on the market in 2014, exiting 2013 with some modest improvement that we saw in the marketplace. And maybe just outline whether or not Medtronic can maintain share or gain share?

Mike Coyle

Sure. Let me talk about just pipeline a little bit here first and then we’ll talk about the market. We are heading into I think both on the low power and the high power side of our business, a nicely productive period here of new product and clinical evidence generation. So on a high power side; we have a feature called adaptive CRT which we just published on, which basically a method of providing only less active is pacing in a BiV patient population. Those of you who ever followed this field over the years will recall that the active right ventricular pacing was shown to aggregate outcomes in patients with heart failure a few years ago. And the thought was that BiV pacing mitigated that problem. What we have founded have now published on is the fact that when you do BiV pacing in a patient who has impact conduction on the right side, you actually have worse outcomes than if you do only left pacing, so just left side of pacing, not BiV pacing and let the natural conduction of the patient from atriums and ventricle control the right ventricular pacing.

And we’ve just published evidence showing that we get meaningful improvements in response, 12% improvement in CRT response, lower incidences of AF and importantly, lower incidence of heart failure hospitalization. So that is available in our current approved Viva XT product lines and we are beginning to sit down with physicians on this topic. They know the dangers of RV -- direct RV pacing in standard fibrillators. And I think this message is going to sell very effectively given the strength of the clinical evidence that we generated.

Secondly, we have in Europe and in Japan just recently the approval of our quadripolar lead, our next generation and second generation quadripolar lead which basically offers, we think some medicated advantages over competitive product in terms of how this pacing is done, so what’s your target [site of latest] activation instead of just allowing the electrodes to go where you want them to go wherever they go, and then also the fact that each of our electrodes are steroid eluting, we think this is going to give us better thresholds and showing the better outcomes.

So that product we just completed the U.S. clinical study on and are submitting, and we should have that into the U.S. market at the latest at the end of our next fiscal year. In addition, the TYRX product that I talked about really gives us an opportunity I think to the drive share and replacements and to drive pricing replacements because of the availability to basically roll out rates of infection.

And one of our sister divisions is in the surgical technologies area offers a product called PEAK PlasmaBlade which is a product for be able to do surgical incisions, but also has a wonderful benefit that it can’t damage a lead. And there is about a 1% incidence of lead damage that occurs in replacement procedures that we are now putting that whole story together of TYRX infection reduction, lead avoidance with -- lead damage avoidance with our ST product. And then importantly, our Lead Integrity Alert within our high power systems, which basically is a proven method of identifying when a lead is beginning to have electrical conduction issues with a number of leads that are out there, whether it’s the [Dallas], whether it’s the Riata lead or the Durata lead, leads that are either under active or class one recalls or are being investigated for performance issues, we think this product line can really provide an early warning system for lead damage and as the clinically damaged [grade] and is labeled as such.

So, that’s how we’re going to focus on the high power side of the business. On the low power side of the business, we’ve just gotten full MRI safe full body scan labeling. We’re only company now in the U.S. with that product line. In addition to this, LINQ product, I like to refer to as a zero chamber pacemaker, meaning when you look at our revenues and you look at our lower power line, it includes our tripe chamber, dual chamber, single chamber and zero chamber pacing products. And this we think as a fundamental new growth driver within the pacing market line and will help us drive share in that particular segment.

And in addition, we just released data on our -- from our MINERVA study that basically showed the unique pacing features that exist within our Advisa MRI high end pacemaker. So, MVP managed ventricular pacing and our reactive ATP ant-tacky pacing actually drive a slowing of in atrial fibrillation patient, a slowing of progression to permanent atrial fibrillation by 61%.

So, all of these are features that now we can begin to focus on for differentiating our product line and to drive differential sales.

Josh Jennings - Cowen & Company

And so just with outlining your product portfolio, which you have coming, I mean in 2014 or just address your expectation for the market and then talk (inaudible).

Mike Coyle

So, obviously the last few years have been rather challenging ones in the implantable segment. We saw frank reductions in procedure volumes during that period when there was assessment of appropriate use of ICDs as well as the questions around just general economy for slowing procedure rates. We were very pleased to see as we ended the last calendar year some stabilization of unit implant rates on both pacemaker and ICD side. And in fact if you get a little more granular as we head into the fourth quarter, there seems to be a little acceleration of unit implants.

Of course we have unique aspect of our reporting is that our third quarter included November, December and January, clearly there had been an acceleration of procedure volumes into November and December. We think that probably has something to do with deductibles and people who getting treated earlier. So there was some January effect as we’ve seen it. Some of that clearly was weather but I think a lot of that is just the pull forward of those procedure volumes. But we are cautiously optimistic that that stabilization that we saw is what we’re going to see during the year. So, we’ll see relatively stable, maybe even slightly growing procedure volumes.

Last year, pricing was more stable than it had been in the 2 prior years, a lot of that was tied to the complete refreshing of our product lines, the Advisa MRI, the Evera, the Viva/Brava, I am looking forward there to be a little more pricing pressure this year than we had last year. But I think we’re still talking about flat sort of overall markets roughly for next year.

For us, the real opportunity is if they’re flat and we’re able to hold and take some market share with all of the things I’ve just talked about, then some of the new growth drivers like the LINQ, like the TYRX will be able to show up in the numbers and will be able to basically show some growth there. But again our big story TAVI getting into drug coated balloons, the LINQ product line; we think those are the things that are really going to let us show differential growth, not to mention emerging markets.

Josh Jennings - Cowen & Company

Just one more question on cardiac rhythm management, just your CRT-D franchise, quadripole technology now in Europe recently approved in Japan, can you just talk about the European experience without -- when you didn’t have a quadripole, (inaudible) share losers and have you recaptured some of that share or how does that all shape up from Medtronic CRT-D franchise?

Mike Coyle

I mean it’s as usual a story of the product cycle trend. So if you look at our MRI pacing for example in Japan, we took 13 points of initial market share when we brought out the product in Japan. When competitors came in with product, 6 of that went back to them but at the same time we had lost market share because of the use of quadripole in Japan, now that we brought that product and we are taking market share in that segment. So for us, all of these things are puts and takes that take place across the product line. I think you heard what we are excited about in terms of individual differentiating features in high power and low power. Those are things that we are going to be pushing and we would expect to be able to certainly hold and hopefully take market share.

Josh Jennings - Cowen & Company

Great. Open up for any question in the audience.

Unidentified Analyst

[Question Inaudible]

Mike Coyle

So, we talked about some of these value-added programs, great one that gets a lot of traction for us is the use of LINQ segment resources to lean out, patient follow up clinics. Such an intervention at a site takes time, takes effort and we basically can assign a value to that depending on the scope of number of hospitals that are involved in the system, could be several hundred thousand dollars to the intervention. We could take a check for that, right, or what we can say to them is our pacemaker share in your clinic is 45% or 48%. If we were to go to 60%, we can provide differential credits associated with that growth that could be applied to what you [wrote] about us had you just paid for the program. And that helps you in a number of ways, drives your share, drives more volume in the account to utilize the people that you have there and obviously if done over two year period can also be used to stabilize your pricing.

So from our perspective that's the model. And the more things you have that our customers value and administrators value the more opportunity there is to do that. And one of the things that is very interesting about the whole paddy space is there are 1,200 centers around the United States that actually do open surgical procedures for heart valve replacement.

If you look at the way CMS and FDA have sort of structured the approvals for which sites will be qualified to TAVI, you can tell that the answer is not going to be 1,200, maybe 350 or 400 or whatever is going to be. Now if you were an administrator of a hospital seeing they with a active surgical valve program that should be a cause of concern to you, because if you are not one of the sites that winds up having a kind of volume that let you run an aortic stenosis clinic that is full service, you are at risk that your referral base will say I don’t want to send my patient there because they can’t give you the complete set of services that I need.

And so you would start to see a risk of compression of your surgical business.

And so by the same token, as they try to start up each program and volume going, these can be expensive programs to start up. So there will be period where they are not as efficient as they could be and they’ve not yet gotten their referral volume into the standard surgery and so these programs require investment.

If you’re a hospital, you have a difficult choice to make, but if you’re working with Medtronic, we can basically say look if you are going to have a transient economic problem in building this program, I’ve got little share physicians or not as high share physicians as I’d like in the -- pacemakers or ICVs or CRTD which worked together to go figure out if there is a way that you can get an offset by driving volumes in those businesses as we build your practice in a true aortic stenosis clinic. So that would be another sort of an example of how we’re [thinking].

Unidentified Analyst

[Question Inaudible]

Mike Coyle

Well, let me take a shot first of your insertion, it’s a superior product. The clinical outcome has shown during the extreme risk data we showed, (inaudible) now a superior product. And I think that is how we are going to position that product in the marketplace. But your broader question, does this tactic of using breadth of work when you are clinically behind, no, you can’t. If you have a technology gap where the clinicians believe that somebody has a technology that is clinically superior to yours, you’re not going that pull that inferior product with a broader sort of product bundle.

Where it works though is when you have a level of clinical equivalence where basically people say single table pacemaker I see what the future differentiation is, but I don’t need it for this particular patient, so I can use anyone of three vendors, four vendors product and I would be pretty happy with the outcome. That’s where you can get some more attraction with a broader sort of discussion.

Josh Jennings - Cowen & Company

I think we’ll have to just actually apologize (inaudible) to breakout room the next door. So I just want to thank Mike for participating today, really appreciate it.

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