Operator: Your next question comes from the line of George Sellers with Stephens Inc. Your line is open.
George Sellers: Hey, good morning, and thanks for taking the question. For the Palette acquisition and specifically Barrigel, could you just give us some details on what that selling process looks like? And I think you mentioned that a majority of the users of Barrigel would be the urologist, but what’s the breakout more specifically from radiation oncologists versus urologists?
Liam Kelly: Thanks, George, and good morning. So, we’re not ignoring the radiation oncologists, let me assure you of that. We have actually a dedicated team that are exclusively dedicated to the training of the rad onc as we go through this process. It’s around 70 plus percent of the procedures are done by the urologist as compared to the rad oncs, but we’re addressing both sides of service. I think, what’s important about Barrage is the uniqueness of the product, George. It’s sculptable, which means that you can actually then mold the product around the area you’re trying to protect and the most – for prostate you’re trying to protect the anus, so you’re able to mold it around the prostate to make sure that you’re getting protectability.
There is no injectable time constraints. It’s highly visible. It’s a one-step assembly. It’s – you don’t have to do any hydrodissection. If you go into the wrong area, unfortunately, it happens from time to time with some of the products on the market, it’s reversible, which is unique to this particular product. And I think all of that makes it compelling. You’re right, and as I said earlier, it’s only 20% of our current UroLift customers that use Barrigel. So, for us, it’s really about expanding the market and growing the market rather than taking share. I think, this is a unique opportunity for Teleflex given our footprint in that area. The sales process, once a urologist or a rad onc comes forward, there’s a little bit of anatomy training, and then they’re proctored and helped over four or five cases.
And after that point, then they would be deemed to be fully trained and qualified to place the product.
George Sellers: Okay, great. That was a really helpful color. I appreciate it. And then maybe switching gears a little bit, maybe one on QuikClot. What inning would you say you’re in on penetrating that market opportunity? And have you seen any impact to demand from some of the conflicts going on internationally?
Liam Kelly: So, it’s a $600 million market for internal and external split about half of each. We just got a new cardiac indication that expanded the market by about $50 million, George. So that takes us up to around $650 million market. MilTac in general is a key customer of ours. Because of some of the budgetary constraints, it has kind of been under our expectations through the first three quarters of the year. I would expect that that might rectify itself now though unfortunately, because of what’s going on in different parts of the world. So, we would imagine that that will get back to our original plan in the fourth quarter, and that’s anticipated within our guidance that we just outlined.
George Sellers: Thank you for the time.
Liam Kelly: All right, George.
Operator: Your next question comes from the line of Anthony Petrone with Mizuho Group. Your line is open.
Anthony Petrone: Thanks for getting us in here. Maybe, I’ll stick with Barrigel and actually ask also about pipeline as well. I know, you mentioned at the time of the transaction, $0.15 in 2023 and $0.35. I guess when we stack it up from a growth and margin perspective, is there anything you can share just on how Barrigel is growing? I know they have two other products in there as well, Deflux and Solesta in pediatric indications. What is the overall growth profile of the portfolio? And is it margin accretive to the overall corporate average? And then I’ll have a couple of follow-ups.
Liam Kelly: Yes. Thanks, Anthony. So, what we expect in the full year from Palette is $56 million in 2023. The growth profile of it is high-teens and low-20s and that’s what we would expect in 2024. Regarding your question on the different components of the growth, I think you should focus very heavily on Barrigel. That’s where the majority of the growth is coming from. That’s where we bring a lot of the value and that’s where the growth has been – historically has been in the Barrigel product since it came on to the market just because of all the things I just went through a moment ago. Regarding the gross margins of the product, as we said previously, it’s accretive to Teleflex. Not alone is it accretive to Teleflex, but it’s accretive to the high-growth portfolio.
And not alone is it accretive to the high-growth portfolio, it’s accretive to the UroLift margins within the high-growth portfolio. And as most investors would be familiar with, the gross margins of UroLift were in the high-70s or are in the high-70s, I should say. So, from a gross margin perspective, it’s a really nice transaction. And that’s candidly why it warranted a really nice price, because high growth, high margins is the formula for a higher multiple on an asset. And then we still expect $0.35 of dilution from an EPS perspective for 2024, to the other part of your question.
Anthony Petrone: Okay. And then the follow-up would be, maybe I’ll go back to Titan and GLP-1. Of course, out of the gate here, a lot of folks are talking about headwinds to bariatrics in the near term, but there is chatter from folks in the space that when you think of the contraindicated patients at the very upper end of the BMI scale, some of those may be able to come into the fold as they take Ozempic or Mounjaro, et cetera, GLP-1. So, do you think as this cycle plays out that you could potentially see a tailwind, although, of course, it will take some time? What are your views on the potential for GLP-1 to actually expand the market in bariatrics? Thanks.
Liam Kelly: So, my focus, honestly, Anthony, is not on the GLP-1s expanding the market, I find that hard to see in all honesty. I see GLP-1s being used as a conduit to a gastric sleeve and a lot of surgeons are looking at it in that way. And I’m also looking at it as it impacts on Titan as to how long-lasting it will be as an impact, because you have to take the pharma forever, and you have to be able to afford to take the pharma forever. Everything I’m reading is telling me that in – if the prices stay as where they are for these GLP-1s, that the likelihood of coverage is unlikely. And I’ve spoken to a number of bariatric surgeons, and I’ve spoken to the team, and I’ve spoken to our clinical group, and the perspective is that it is going to have a short-term impact on bariatric surgeries.
