Mike Matson: That’s helpful. Thanks. And then I understand that you don’t want to really comment on the specifics of the CSL agreement, but we do have to update our models for ’24 and ’25. And I think for the most part, based on what you said at the Analyst Day, we took our CSL out of our – we’re assuming no CSL revenue beyond ’23. So I mean, is that kind of the message here just to be conservative and not put anything in there for now until you guys give your guidance, I guess, for ’24? Or…
James D’Arecca: So Mike, it’s a challenge, and we appreciate what you’re trying to do on that. We just need to balance disclosure requirements on one hand versus – and our desire for transparency with the need to protect customer confidentiality across the board. This is now effectively a three year agreement. So we think differently about the duration. Sitting here where we are at this point with less than two months remaining in the fiscal year, yes, we can confirm there will be revenue from CSL in FY ’24. The process that we’re about to go through with all of our customers is to get very clear about what the demands are. We are facing unprecedented demand. It’s great. We’ve expanded our manufacturing capacity. Our supply chain resilience, et cetera, to respond, and the response has been nothing short of extraordinary in the eyes of our customer.
So we feel great about that and our ability to continue to deliver over the next two months, we’ll sit down and go through this in detail with each of our customers, and the additional volumes will be included when we guide in May for FY ’24.
Mike Matson: Okay, got it. Thank you.
Operator: Thank you. Our next question comes from Joanne Wuensch with Citi. Your line is open.
Joanne Wuensch: Hi, good morning. And thank you for taking the question. I actually have two. If you previously gave us $88 million for CSL contribution this fiscal year and then you raised the guidance for the fiscal year for plasma. Is that raise all attributed to the new extended agreements? Or is there something else in there?
Chris Simon: Hey, Joanne, what we’d say is the guidance that we’ve put forward for the year reflects strong volume momentum, favorable mix and improved price across all of our customers, right? But as I said, we increased production and improve both the agility and resilience of our supply chain to provide uninterrupted supply. We and our customers are benefiting from that and as are the patients that they care for.
Joanne Wuensch: Okay. My second question has to do with China. Could you just peel apart for us what is happening in that market for you? And then how do we think about it falling off over the next couple of quarters and becoming less of a headwind? Thank you.
Chris Simon: Yes. So we – two of our businesses are well represented there, both our Blood Center business and our Hospital business. I’ll get us started and if there’s any further follow-on questions, I’ll defer to Roy for the Blood Center piece. Blood collections in plasma are different. They are overseen by the central government. And fortunately, for us, because of the government’s approach there, we’ve had good volume and demand throughout. We’re the share leader there, and we’ve benefited by that. So blood is largely unaffected. That’s probably not fair to the folks on the ground who are working feverishly to actually be able to deliver. But from a results perspective, it’s largely unaffected. Where we’re getting challenges is in the hospital base in terms of procedure volumes.
And with the various waves and the change in policy towards COVID, both our cell salvage and our TEG businesses have had meaningful challenge kind of delivering. We thought going into this, that we’d see abatement in the second half of the year. We don’t expect meaningful abatement certainly over the next two months, and we’ll get our heads around this and what that means for next year’s guidance. That’s the primary driver of why we now see hospital coming in closer to 19% for the year.
Joanne Wuensch: Thank you.
Operator: Thank you And our next question comes from Anthony Petrone with Mizuho. Your line is open.
Anthony Petrone: Thanks. Congrats on a good quarter here. A couple on plasma and a follow-up on hospital. Maybe Chris, the language in the queue on CSL as it mentioned PCS2. Just wondering if there is a potential that they take a look at Nexus Persona just considering the real-world experience out there with yields and how that plays into the extension? And then the follow-up on plasma will just be again, how do we think about the additional volume flowing through to margins? Obviously, excess volume plays at the margin. So what is the potential movement in margins, both gross and operating from the additional volumes? And I’ll have one follow-up on hospital? Thanks.
Chris Simon: Thanks, Anthony. The CSL agreement is essentially an extension off of the existing agreement, which is non-exclusive for PCS2 devices and the disposables through those devices. So that hasn’t changed. As it pertains to how we think about plasma and volumes and margin, maybe I’ll invite Roy to comment.
Roy Galvin: Thanks, Anthony. The plasma business overall is growing very well in the U.S. We’re seeing a growth overall sitting around 46%. So it’s gone very well overall. We’re pleased with how things are going. As far as the business is concerned long term, we’re really going to have to watch how the economy impacts that and how the growth of the sort of business continues as we see changes in the macroeconomics around the U.S., which are really helping drive some of the growth in the plasma business. As far as margin is concerned, obviously, that will be driven as we move forward with any kind of conversions around product, and that’s something we’ll see in the future possibly. But at this point, we’re just really focused on grabbing the volumes, continuing to drive our production upwards and making sure we’re successful as we can be supplying our customers and staying ahead of their demand.
Anthony Petrone: Great. Maybe the follow-up on hospital just on VASCADE, maybe just a recap on the penetration in the 600 target EP sites in the U.S., sort of where that sits. And how we should think about how the European launch of VASCADE MVP should play out over the next few quarters? Thanks.
Chris Simon: Yes. Thanks for the question, Anthony. In terms of VASCADE continues to exceed even our own high expectations for that product mix. What we’re seeing in the U.S., clearly, there’s some seasonality and some challenges. We’re not immune from those in terms of electrophysiology procedures. What’s really impressive for that team is as we saw some slowdown in procedure volumes, they leaned even harder into new account opening So we’re well through the first half of the top 600 in the U.S. We’re pushing hard into that second half, and they did even more of that as the quarter progressed. So you saw the momentum coming through, particularly in fourth quarter and now carrying – excuse me, in December are now carrying over into our fourth quarter.
So that’s a team that is a resourceful as they are focused and they’ve been able to get there on new account openings this quarter rather than utilization. Obviously, we need the utilization, and I think that will continue going forward. So we feel very good about it. In terms of the CE mark in Europe, that presents a real opportunity. We’re fully a year or more now ahead of schedule in that process. The team has been very thoughtful about how to use some of the benefits that we’re seeing across our business to get the additional investment. We’re talking about a $1.3 billion international TAM for that product family. And the European launch is the first opportunity to go against that. We’re trying to take a page out of the playbook from the U.S. team.
So it is very targeted, very focused by country and by key account within the country. We expect to have our first set of cases supported later this quarter in Italy and very quickly thereafter, we’ll move to Germany and the other European markets. So the outperformance we’re seeing across hospital and the other businesses is providing the opportunity to fund additional investment in making that European launch that much more robust. And I think we’ve got a really good playbook. We’ll leverage our existing back-office infrastructure, but we’re putting dedicated teams on the ground in the major markets to make sure that there’s no negative effect on our other hospital-based businesses.
