Michael Petusky: Hey Fred, so let me just ask a last one to you. You brought a lot of — the last several decades, brought a lot of products from development into commercialization. Based on your experience, based on your sense of Wrapsody, I mean, do — and Raul’s comments, I think, were important, 180 days for FDA is sort of like watching the last four minutes of a football game. It’s not really four minutes. I’m just curious, do you think there’s going to be a lot of stops and starts sort of Q&A back and forth on a product like this? Do you have any sort of expectation around that based on your experience? Thanks.
Fred Lampropoulos: Yes. Listen, only from the standpoint that we’re focused on what we need to do, we’ll respond appropriately, and this is important to the company. So, we can’t control the FDA. We can control us, and we can direct our resources to answer the questions as they come. So, it’s really just we’ll do our part, Mike.
Michael Petusky: Okay, fair enough. Thanks guys. Appreciate it.
Operator: Next question comes from Jim Sidoti with Sidoti & Company. Your line is open.
Jim Sidoti: Hi, good afternoon. Thanks for taking the questions. I know you’re probably sick of questions on China, but it’s difficult for all of us to get our arms around it. When you had such a strong quarter, up 20% this quarter, why you expect a 4% decline? And I know in past years, you’ve been concerned about the volume price discounts. And then as the year ended up, it wasn’t quite as significant as you thought. I mean how confident are you this year that those are going to kick in, in the second half of the year?
Joe Wright: Hi Jim, this is Joe. I can take that one. As you know, there’s a lot of quarter-to-quarter variability with VBP in China. So, you’re right in a sense that it’s been difficult to project really when that impact will come. We are continually updating our models and trying to determine when that impact will come, but we feel pretty good about the full year guidance. And keep in mind, APAC incorporates more than just China, there’s Japan, which is a significant revenue driver for us and Southeast Asia, Korea. So, yes, all I can say is we’re confident with the number we projected for the year, fully realizing that there will be some variability along the way.
Jim Sidoti: So, potentially you could see more of an impact maybe in the last quarter, maybe into the first quarter of 2025?
Raul Parra: Yes, I don’t think we’ll get to that point there, Jim. But look, we’re trying to be as transparent as possible on this. We’ve detailed kind of the headwinds out in advance in our guidance. I know it can be frustrating to investors. It’s quite frankly, it’s frustrating to us too. But there is variability. I think we’ve managed it accordingly. We haven’t given you any surprises negatively, I should say, when it comes to China. And we are seeing the impacts. And I know that’s hard to see because of the results that we’re delivering. But — we — Joe and I looked at a report the other day, and that we are seeing price — pressure on some of our products. And so this isn’t something that’s made up that we’re just kind of making up. It’s real and it’s impacting the business. But I think we’ve tried to manage it appropriately.
Fred Lampropoulos: Jim, this is Fred. Look, we remain confident in our long-term plan in China. And I think that’s critical. Merit is in for the long run, and we’re confident about the future for Japan and all of APAC. We think it’s a big opportunity for the company.
Raul Parra: Yes. And just as a reminder, I think the whole goal was to kind of derisk the China component from our guidance, right? I think we were pretty clear on our call that a portion of it was actual tangible things that we knew are happening in the business, that’s in our guidance and a portion was things that we think could be coming on in the third and fourth quarter that our group thinks we’re going to have an impact. Now, whether those come to fruition or not, we’ll wait and see. But we’ll have better visibility as we exit kind of the second quarter and then hopefully, we can provide you guys an update then.
Jim Sidoti: Okay. All right. And then the last one for me. It looks like you paid down about $24 million of debt in the quarter. I assume that was on the line. Can you just remind me what’s the interest rate on that debt that you paid out?
Raul Parra: It’s about — well, yes, I mean, I think — so when you’re looking at the, I guess, — there’s a couple of components, and I’ll try and break it down. Sorry. So, we have a term loan that we have. That debt is at about 1.6% or something like that. We’re paying that down, and we’ll have that paid off this year. Then there’s obviously the convert that has a rate of around 3%. And so there’s a little bit of variability there. But for the most part, that’s what we’re paying down is the term loan right now, Jim.
Jim Sidoti: Okay. All right. Thank you.
Operator: The next question comes from Mike Matson with Needham & Company. Your line is open.
Mike Matson: Yes, thanks. So, just wanted to start with one on Wrapsody. So, is there — do you have any plans to apply for new technology add-on payment and/or transitional pass-through to get some additional reimbursement given that it’s a breakthrough device?
Fred Lampropoulos: Yes, I think, Mike, the — as we pointed out, as we get through this first six months, then that’s really — we’re planning on a lot of different things, the right time for release of data, the right time for release to the public. All of these things are all things are all being worked on. And at the appropriate time, we’ve been involved in this strategy for a long time. So, I will just tell you simply to capitalize at all, we’re prepared. We’ve been working on it. None of these are new to us. And at the right time, we will do all these things that were most beneficial to our shareholders and the company.
Mike Matson: Okay. Thanks. And then there were some news earlier this week that Hologic’s buying Endomagnetics. I believe they — that product competes with your Scout product. So, I assume you’ve already been competing with them in the marketplace, but Hologic’s kind of a well-known brand in the breast area. So, is there any reason to be concerned about this? And can you maybe just remind us what — how big the TAM is here? I assume there’s probably enough room for multiple players, but–?
Joe Wright: Yes. Hi Mike, this is Joe. I think I can take that one. You’re right. We have been competing against the Endomag product for many years now in the market. As you probably know, we remain the market leader in this space. We’re very excited about the prospects for growth here. We continue to invest in market-leading innovations. We mentioned the Scout MD, which recently was approved. So, our goal is simply to continue to focus on maintaining that market lead and delivering innovation to the market. I won’t get into the total addressable market. But I think our expectation is and what our belief is that the market will, over time, go completely wire-free and that’s what we’re working to achieve. Again, we’ve competed against magnetic technologies in the past, including Endomag and we’re confident in our ability to compete favorably against all the technologies out there.
Fred Lampropoulos: Especially from a technology point of view, we won’t get into that. But I think our technology is not just like we’re the market leader, Mike, but we’re the technology leader.
Mike Matson: Yes, got it. Thank you.
Operator: The next question comes from John Young with Canaccord. Your line is open.
John Young: Good evening. Thanks for taking the questions and congrats on the quarter. I just want to — it sounds like you won’t give this, but on Wrapsody, is there any estimate of when we could see the data and where any medical meetings that you’re looking at to release to the scientific community front?
Fred Lampropoulos: Yes. So, the general answer is no. No, I should maybe a little more specific [Indiscernible] filed. There are a lot of factors here, John, that talk about the value that’s being created issues like when the right timing is, what — there’s a lot of factors that go into this. We just want to do it correctly to maximize the opportunity. So, we could get in a hurry, we could get pushed. But if we do, and first of all, we won’t, but it doesn’t help the value to our shareholders. So, I think that’s important for you to understand that we’re doing things in a disciplined manner that we believe and have been counseled that in looking at these things, this is what maximizes value for shareholders and equally important to the physician community.
And that’s what we have to remember. This is a serious stuff we’re talking about. These are important issues. And at the appropriate time, we will release all of this information for the assessment of the public and physicians at the appropriate time.
John Young: Okay. Thanks. And then just moving to FIR. You guys had a very large showing there Q. How much of the new Bluegrass Angio products helped grab attention from the interventional radiology call point? And how large is that sales force now? I remember you previously say is up six to eight reps for the renal care call point. Are you continuing to scale that as those revenues grow? Thanks again.
Fred Lampropoulos: Look, we think, first of all, as you know, because you’ve heard Merit had a very good showing not only there, but here at our facility with over 150 physicians. It’s part of our Renal Therapy group. I think that strategy is sound. We’re seeing it execute the way we had anticipated and we are scaling. We don’t give out specific numbers, but it is a successful program and we continue to believe it will be. Joe, do you want to comment on it though? It’s your program.
Joe Wright: Yes, we decided we have enough scale in that product portfolio to break out a dedicated sales group. So, to your point, that’s what we’ve done. And we’re fully confident in our ability to scale that over time and be fully prepared for the launch of Wrapsody whenever that may come.
John Young: Okay, great. And then just a quick follow-up. What scale do you think you need to support Wrapsody at launch?
Fred Lampropoulos: We don’t talk about those things because we don’t want to give that information to our competitors, and it’s not generally what we talk about. We will, at the appropriate time, release data and information on TAM and all the numbers, all these things, you’ll have all of these answered in due time.
Raul Parra: Yes, John, I mean, obviously, we continue to be excited about the product. But we’ll talk about the U.S. commercial strategy, reimbursement strategy, all those things, as Fred mentioned, when appropriate.
Fred Lampropoulos: And let me just say one other thing. We are extraordinarily excited about this project coming down the road. Yes, very excited. So, just for the record.
John Young: Got it. Thanks again.
Operator: I’m showing no further questions. At this time, I would like to turn the call back to Fred for closing remarks.
Fred Lampropoulos: Ladies and gentlemen, it’s the top of the hour. We’ve got everything done in one hour. We appreciate we know there are a lot of other calls going on. Raul and I and Joe will be available to discuss with you one-on-ones. And we thank you very much for your consideration — your time. We wish you all the very best. Signing off from Salt Lake City. Good evening.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.
