Joanne Wuensch: M&A, particularly given pullback on valuations? Thank you.
Robert Ford: Yes. Well, listen, we’ve completed three transactions over the last six months. We acquired CSI and in the process of integrating that business. I think it’s going to be a nice addition to our vascular business and start to reposition that business to kind of more higher growth markets. This quarter, we announced the acquisition of [Big Foot] (ph) and this is just going to be able to allow us to broaden our offerings with Libre and provide a nice opportunity from a global perspective, and then also an announcement on the EPD side to expand access to biosimilars. So we’ve been active, and we continue to be active. Yes, I think valuations have come down. The same way they came down, let’s say, post pandemic in that 2022 time frame.
It’s a good opportunity. Like I’ve said, I think sometimes companies need to understand if it’s a short term or if there’s something more fundamental in that valuation, but we’re in a great strategic position to be able to execute on our M&A strategy, which is really focused on can we add value to the asset and does it fall into our strategic framework of areas that we want to invest in and growth in. The ones that I highlighted here are strategic, and we believe that we can add a lot of value to them. So we’ve got plenty of capacity to engage. And if there’s the right opportunity that comes along in this period, we’ll be ready.
Joanne Wuensch: Thank you very much.
Operator: Thank you. Our next question will come from Vijay Kumar from Evercore ISI. Your line is open.
Vijay Kumar: Hi, Robert. Thanks for taking my question and congrats on the good print here. I had two questions. My first one is, could you just elaborate on this China VBP for Diagnostics. How big is Core Lab in China for you guys at this point in time? And I think I heard 20% would be impacted next year? Is the assumption that rest of core would be impacted in fiscal 2025, but how do these contracts flow up? Because my understanding is, you will see volume gains or those volumes [indiscernible] price headwinds?
Robert Ford: Yes. So the way this is kind of working out, right, this was announced recently, I think proposals are due within the provinces that are going to be bidding, Vijay, I’d say, in the next 30 days, right? And then there’s like another 30 days, 30 days to 60 days to evaluate all the proposals. So I think that this is going to probably start, I’d say, late Q1 and into Q2. Right now, the list of assays that are on VBP equate to about 20% of the market. So our annual sales are in China are about $1 billion. So — and then if you look at the specific assays, it’s infectious disease, there’s some fertility assays there, et cetera. So that’s where the — that’s where the VBP is kind of focused on. I haven’t heard and team hasn’t heard about expanding that to other areas of — other areas of testing, such as oncology or hormones or other areas like that.
So right now, I’d say, this is going to be our focus in 2024. If there’s volume upside to be gained, yes, there could be volume upside to be gained. I mean we do have good market share in some of these segments and others, we have lower market share, so it presents us an opportunity. So I think in areas where you’ve got higher market share, you’ll feel more price. And then if you can offset that price by gaining volume in segments that you’ve got lower share. So I don’t think that’s rocket science there, and we will just have to see how that all plays out. But we’ve had experience going VBP in China. We’ve gone through with [indiscernible], we’ve gone through it with VBP certain parts of our pharma business, certain parts in CRM also. So the team knows how to do this.
