James Sidoti: Good afternoon, and thanks for taking the questions. The first one, a lot of talks in the last few weeks about Ozempic and the other GLP-1 drugs, and its impact on some other names. Are you seeing any impact on your business?
George LeMaitre: Hey, Jim, thanks for the question. It’s George. No, clearly not at this time.
James Sidoti: Okay. And do you expect any impact over the next 2 to 3 years?
George LeMaitre: I mean, it’s a long thing, and there’s still a lot more to learn about that. My sense is, our answers won’t really add to this, but I’m happy to run through some stuff. We knew there’d be questions on GLPs, so if you want, I can give you a little blurb on sort of where we came at. Would you like that?
James Sidoti: Sure.
George LeMaitre: Okay. So, I guess the recent 20% major adverse cardiovascular event reductions from GLPs, these headlines really got some attention on Wall Street, the elephant in the room in most of these medical device conference calls. I don’t really know how much J.J., George, and Dave are going to add to your folks understanding of this, but we’ll take a swing at it. And to start with before we get into this, of course, everyone here is rooting for ways to reduce cardiovascular disease. I’ll call it CAD and PAD just for brevity here, but our take is that any GLP impact on CAD or PAD revenues seems very uncertain and very far away. This 20% headline, which is I think what most people are taking away from this whole thing, it quickly turns into a 6% a year headline because those events, the 20% events, right?
The major adverse cardiovascular events, we’ll call them MACE if you will. They took place over 3.3 years, so if it’s a 20% reduction, that’s pretty quickly turned into it. If you’re looking at the revenues of a company, you probably want to mark that down to 6%. And then you get that down to 4%, because one-third of those events are death by heart attack. And, of course, I hate to get technically or a little bit grim, but if we can manage to prevent death, it’s a great outcome for both the patients and then also a little oddly here. For the companies itself, devices for those patients who live longer. So roughly speaking, you can pretty quickly get the headline down to 4% per year. That’s assuming that the 42% – and that would be on the whole company if all 42% of adult obese Americans were on the drugs, were on the GLPs, and that’s 108 million people.
So we keep coming back to its really unlikely that that many people are going to be on these drugs. But never say never, you don’t know, none of us on this call know in 10 years if this is going to be another statin or what it’s going to be. I think Abbott has come out on a couple of calls, saying, they think it’s about 12 million. Americans will be on these GLPs, and this sort of aligns with that. We’ve all heard this $80 billion in revenue for the analyst estimate, this peak revenue for the GLPs out there, and I don’t know, X years, no one’s putting a number on it, and so that would be 12 million being on it. Just for some comparisons, we can discuss this. Lipitor launched in 1997, so maybe the GLPs are another statin, right? Who knows?
40 million Americans are on statins, and I would say maybe the most important topic that you could think about is that even though the statins have been out there, and lots of us 59-year-old men are on statins, the need for CAD and PAD devices. This has only increased over this quarter of a century. So I think maybe this could be like that, but again, I don’t know, I don’t think any of us knows. The Jefferies analysts who are covering us have written some really nice pieces on this. They might be on this call. I don’t know if they are. They’ve published three – and I’ll close up here, I know this is a bit of a long ramble, Jim, and you probably didn’t ask for all this, but I’ll close up quickly here. They published three lengthy GLP reports in the month of October, and they go all around and they make good proofs everywhere.
They come back to this mantra that they repeat over and over. GLPs are indeed – so I’m definitely stealing this from their report, GLPs are indeed a big drop in the bucket, but the bucket’s much bigger and the bucket wins. And I think what they’re trying to say is, cardiovascular disease is the number one cause of death in the world. It’s a very big bucket. It’s unlikely that it goes away because of this. In all of this, we didn’t talk about the fact that 40% of LeMaitre is O-U.S., and I think we all know that maybe this comes to the U.S. and Germany, but I don’t think it’s off in Japan and Thailand for a very, very long time. So I hope that’s a good swing at it, Jim. I’m happy to go in any direction you want with it on that, but that’s sort of what we got to.
James Sidoti: Okay. No, that was exactly what I was asking for, but thank you. You said you ended the quarter with 136 sales reps. You think you’re at the right number now, or do you think you’ll continue to add in the fourth quarter?
George LeMaitre: Right. So we feel like we’re going to end the year between 135 and 140, so maybe pick our way down the field and grab one or two more, but we’re good for now. I do think that the growth of the sales force is a continuing objective, and I’m not going to give what are we going to do next year, but I definitely feel like it’s a growth vehicle for us. We’re really, I don’t know, feeling our oats is the wrong word, but we’re feeling really good about the growth of these offices and the growth of these reps around the world everywhere, I mean, we’re growing everywhere with reps.
James Sidoti: And then the last one for me, you indicated the theme for 2022 was to build up the staff, get capacity going for 2023 was to get operating margins improved. Do you want to tell us what would you think the theme for 2024 will be?
George LeMaitre: Right. You want an advanced copy of our planks. We are deep in discussion at lots of bureaucratic long meetings trying to figure out. We publish this thing called the planks, Jim. We have nine objectives every year, and it’s on our walls, if you visited our facility, I know it’s been COVID and everything, but if it came up here, you’d see they’re all over our walls. We’ll have that posted. I think the last meeting is actually, is it this Friday or next Friday? I think it’s next Friday is the last meeting, so we’ll have that all sorted out by next Friday, but it’s a little early to share.
James Sidoti: All right. All right. All right. I’ll give it a shot. Thank you.
George LeMaitre: Thanks, Jim.
Operator: Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Suraj Kalia with Oppenheimer. Your line is open. Please go ahead.
Suraj Kalia: Good afternoon, everyone. Can you hear me, all right?
George LeMaitre: Yes.
Suraj Kalia: Yeah, perfect. So one of the key things, and forgive me I joined a little late, what was the contribution of price in the quarter?
George LeMaitre: 11%, and 5% units, Suraj.
Suraj Kalia: Got it. Fair enough. And George, following up in commentary on GLP-1’s, on a relative basis, just given the categories and how you’ll compete in the different product segments, am I wrong in thinking that you should be, or the LeMaitre should be relatively more insulated than other cardiovascular companies. I understand you’re pushed back on the 4% and so on and so forth, but just on a relative basis either way, shouldn’t we also look at it that LeMaitre is relatively insulated and ends the impact if at all should be de minimis?
George LeMaitre: I mean, the thing about LeMaitre that you have to keep knowing is that we’re really diversified by product categories, by disease state, and by geography. And again, 40% of our revenue is O-U.S. Is that right? Yes, 61% USA. So, it’s a very – even though, we seem like a small company, because I think our guidance here is $193.6 million in revenues. We seem like a small company, because it’s only $193 million in revenues, but I think we act and feel like a very diversified larger mid-cap, because we’re everywhere with a lot of different devices. So, I think, you’re right, but again, I’m not sure anyone knows, right? This is all we’re going to work down the field here and figure this out. The thing about these studies is not much information has come out yet, right? We really don’t know much.
