On the cell processing side, we have doubled our cell processing capacity in our Raritan facility. Since 2023. We are making progress to your point, Terence, in our European cell processing facilities. We are already manufacturing the first batches of CARVYKTI for clinical use this month of January. And we also have contracted additional capacity, external capacity to scale up production and increase our ability moving forward that will start mid this year. On the other hand, we have also made significant progress in the internalization and scale-up of our lentivirus production. We have increased capacity in Switzerland, in our Switzerland side. And at the same time, we continue to progress with new U.S. capacity and additions site in the Netherlands to produce our lentivirus.
Late December, we received approval to expand our lentivirus capacity from 20-liter tanks to 50-liter tanks of lentivirus production in our U.S. facility. So overall, we feel good that we are progressing with CARVYKTI that we will continue to deliver quarter-over-quarter growth in 2024. And we are working towards building this $5 billion plus product and continue to transform the treatment paradigm in multiple myeloma, as we have discussed in the past, moving from treating to progression to treating to cure as we move CARVYKTI into earlier lines of therapy.
Operator: Thank you. Next question is coming from Larry Biegelsen from Wells Fargo. Your line is now live.
Lawrence Biegelsen: Good morning. Thanks for taking the question. Congrats to — a nice finish to the year here. Joe or Joaquin, I’d love to hear just a general update on your M&A appetite and expand on your recent comments about Abiomed being a gateway in cardiovascular devices, which you, Joaquin, commented on earlier this month? Thanks so much for taking the question.
Joseph Wolk: Yeah. So Larry, let me start, good morning, and then I can turn it over to Joaquin. So we are very well positioned to continue to entertain many types of deals. As you know, we have the parameters of making sure that they are a strategic fit so that we’ve got scientific expertise and insights, a familiarity with the space has proven to be our most successful platforms. We want to make sure that we’re earning a fair return to compensate shareholders for the risk that we’re bearing on their behalf. It was only 13 months ago, we were able to deploy $17 billion in capital for Abiomed. We’re very pleased with that acquisition. Not only has it beat our internal deal models, but it also is performing better than what the Street had called for that business prior to the announcement of the acquisition.
So it’s been a really nice fit. What I would say is, we also deployed or announced, as I said in my prepared remarks, over $3 billion in capital for more than 50 smaller licensing partnerships or deals. And while those may have not made headlines, they usually are headlines when they become products for patients. And so that when you think about our history of DARZALEX, IMBRUVICA, CARVYKTI for one, it’s been — that’s kind of our track record. Our appetite is still, I would say, interested in moving into spaces that complement our existing portfolio, whether that be for the near or long term.
Joaquin Duato: Thank you. And look, talking about that, Larry, let me say, we are agnostic to sector and agnostic to size. And as Joe commented, our preference is clearly to be in areas in which we have internal capabilities and know-how, and also to go into products that represent a significant progress from the point of view of improving the current standard of care and that are first-in-class and best-in-class. To illustrate that, the two deals that we completed this year, Laminar and Ambrx would be in that direction. So for example, Laminar is a deal in an area we know well, which is atrial fibrillation, and we believe could be first-in-class to be a device that can eliminate the left atrial appendage. When it comes to Ambrx, it’s a deal in an area that we have a strong legacy like prostate cancer with a number of products marketed already.
And this could be a first-in-class antibody drug conjugate in order to address a significant medical need in metastatic cut-resistant prostate cancer in patients that have failed under gene therapy. So very much so and in that context, we continue to see also opportunities when it comes to Innovative Medicine in neuroscience and in immunology. And when it comes to MedTech, to your point, in other cardiology areas based on the strength that we have now with Biosense Webster and Abiomed and not excluding also the potential for other areas like robotic surgery or segments of orthopedics that are growing faster and also areas of Vision. So overall, that’s our approach. We try to put this strategic, scientific and to Joe’s point, scientific lens in order to be able to deliver value for patients and also value for our shareholders.
Operator: Thank you. Next question is coming from Chris Schott from JPMorgan. Your line is now live.
Chris Schott: Great. Thanks so much. Just, Joe a question for you. How should we think about gross margins in 2024 and beyond? I know you talked about operating margins, but it did seem like adjusted gross margins came down in 4Q. And I’m just wondering, if that’s a one-off result or a longer-term trend when you think about — as we think about kind of the cadence of your P&L over the next few years? Thank you.
Joseph Wolk: Yeah. Good morning, Chris. Thanks for the question. I think as you look at that specifically for the fourth quarter, what you have in our operating margins is obviously the Laminar transaction that was part of that mix. So on our slide that details IBT, you likely saw a quarterly reduction in MedTech, specifically of about 9 points, about 2 points for the full year. I would say two-thirds of that is represented by the Laminar transaction. You also then have, I would say, in the fourth quarter specific some mix as orthopedics performed probably a little bit better than it had in previous quarters. And then you have the inflationary impact, obviously, with higher levels of inventory on our balance sheet that flow through the P&L, that is occurring throughout 2023.
