Alex Shvartsburg: I’ll take the ACS question first. As far as the — we guided the ACS savings and the impact on EPS to about approximately $0.10 at the beginning of the year. We still feel good about that. Now with your follow-up question, I’ll turn it over to Matt.
Matthew Dodds: Sure. So I think for bipolar, we said last June we had 150 patients enrolled and we said roughly 25 patients a quarter and we’ve said that’s on track. For that one, the unipolar data could have an influence on it, but this is a very different patient group. And if you look at some of the historical data that we’ve shown generally BNS does better with the bipolar patients. So there is still a path for bipolar regardless of where unipolar ends up in our opinion.
Alex Shvartsburg: And Anthony, just a follow-up on your question regarding capacity. We’re continuing the program to expand our capacity in Mirandola. And that’s as I said it’s going really well. We incorporated that capacity expansion into our original guidance. And so we’re kind of maintaining that assumption. We’re going to see some favorable benefits, some tailwinds in the second quarter as we were able to achieve some success there earlier than anticipated. But the expectation is that there’s going to be some growth in the back half of the year as a result of our ability to expand the capacity.
Operator: The next question comes from the line of Mike Matson of Needham & Company. Your line is now open. Please go ahead.
Mike Matson: Yeah. Thanks. Just so on the Essenz launch I mean obviously it’s driving really strong growth. But I was wondering you are getting a pretty big price premium with Essenz. So how much of it is pricing? And how much of it is volume? I know you’re not going to give us the volume number, but I guess I’m getting at is has volume picked up as the availability of Essenz driven more upgrades? Or has it really just been pricing so far at least.
Alex Shvartsburg: Yeah. Look, we’re seeing a strong funnel with regard to units and the placements have been tracking according to plan. So yeah, obviously the price mix benefit, right? We have a substantial price premium in effect here but we’re also seeing customers sort of taking advantage of the newer technology and the feature and benefits that are offered with Essenz that didn’t exist with F5. So, we are getting some of that benefit. But as I said our funnel for unit placements looks strong for the balance of the year and we’re going to continue to see an acceleration of our placements.
Mike Matson: Okay, got it. And then with the earlier sort of end of enrollment in OSPREY is there any cost savings associated with that. I think on the last call you said you expected to spend a little more than the $27 million that you spent in 2023 on that program. So, would that spending be down as a result of that? Or is it kind of not impacting it?
Alex Shvartsburg: It’s roughly the same Mike because the majority of the cost is associated with managing the patients throughout the trial, throughout the study. So, while there’s some savings and perhaps the recruitment costs the majority of the costs reside in sort of the active management of patients throughout the trial process.
Mike Matson: Okay, got it. Thank you.
Operator: Thank you. The next question comes from David Rescott of Baird. Your line is now open, please go ahead.
David Rescott: Great. Thanks for taking the questions. But I wanted to follow up on one of the comments I heard you make in the prepared remarks around evaluating RECOVER OSPREY trials alongside what you called a holistic view around some of the areas for innovation. And I’m wondering if you could expand a little bit on what some of the factors are maybe around that holistic approach? And then specifically for RECOVER I heard some of the comments earlier to a prior question, but does the holistic view around RECOVER get accounted for or thought about maybe when we start to hear about some of the top line results? Or is that maybe more of a hey let’s wait to issue the publication and think about the fit in the portfolio longer term?
Vladimir Makatsaria: Yes. So, thank you, David. I think short-term investment choices well — and I’ll start maybe before the RECOVER and OSPREY comment. But if you look at some of the really good decisions that the leadership you made over the last couple of years, one was to focus the portfolio. So, with the wind down of the ACS and then the heart CLA business that gave us opportunity to reinvest in the core and partly you see the kind of the outcome of the decisions and improve execution and improved results in the core business. So, short-term — potential kind of for short-term growth will be to reinvest more in the core both on the innovation front execution front expansion of capacity and so forth. So, that’s one opportunity we’re looking at.
Longer term, in terms of strategic directions, we’re going to have to wait until we see what clinical results OSPREY and RECOVER bring because obviously that will that will be a forecast if you like on the strategic direction of the company. So, that’s a little bit how we’re thinking about it. Short-term more reinvest in the core; long-term, see what the what direction would take on DTD and OSA.
David Rescott: Okay, great. Maybe a question for Alex. If I look at the kind of updated EPS guide for the year in the bridge relative to what you laid out after Q4. Operational growth and leverage is where things kind of have moved higher tax cost inflation infrastructure investments the HF ACS exits all remained relatively the same as it relates to the contribution for the bridge to growth in EPS this year. My guess is that implies that there’s no real update on the latter kind of thesis to the guide. If we think about maybe some levers for upside in the remainder of the year, is there any shift in potential for those three latter pieces or would or if there’s more upside to be had on the EPS line? it’s more going to be operational growth and leverage relative to those four other — three of those kind of buckets? Thank you.
Alex Shvartsburg: Yes, I mean as we looked at the components of EPS, we feel really good about the savings from the heart failure and the ATS wind down. Tax rate, we knew going into this year was a headwind, but we’re managing through it. So the majority of the upside here is really about operating leverage. And our team being super disciplined and focused about driving growth and ensuring that there’s an appropriate level of drop-through on the bottom line.
David Rescott: Okay. Thank you.
Operator: The next question comes from the line of Matt Miksic of Barclays. Your line is now open. Please go ahead.
Matt Miksic: Thanks so much. Can you hear me okay?
Vladimir Makatsaria: Yes.
Matt Miksic: Great. Thanks for taking the question. Maybe just if I could follow-up on the sort of scenarios and your decision process between OSPREY and RECOVE,R, that would be super helpful and which rolls programs you’re likely to move forward with? Thanks.
Matthew Dodds: Hey, Matt, it’s Matt. So, for both, I mean the data is obviously critical. As we said, with RECOVER for Unipolar, we get that data by the end of the quarter. And then for the OSPRYE OSA program around year-end, I’d say in terms of product development, there’s a little bit of a difference with OSA that’s a component as well to look at. But generally, those are the core time lines when we get the clinical data to show basically where we would play in each one and what the value would be to the patients and physicians.
Vladimir Makatsaria: Yeah. And Matt, maybe just I mean, obviously, we don’t have the outcome of the decision. But I think what’s important is the principle on how we make it. and we were going to look at three dimensions. The first one is what is the clinical benefit to patients, and that’s number one. That’s the most important one. The second one is how competitive is our technology in this space versus other available technologies on the marketplace. And then the third one is looking at the end-to-end kind of business model, if you like, and how we can create value, not just for patients but also for the shareholders. So those will be the three kind of parameters that we’re going to use to decide how to prioritize between those two.
Matt Miksic: That’s helpful. If I could just one follow-up on the epilepsy market. If you could maybe talk about the biggest sort of factors driving or maybe enabling or restraining your execution there and ability to operate is competition? Is it some of the changes in your sort of go-to-market strategy? Is it just general sort of end of life cycles in your current and previous kind of implanted patients. Maybe just what are the most significant factors that we can look at to measure that performance this year? Thanks so much.
Stephanie Bolton: Hi, Matt, it’s Stephanie here, sure. Let me tell you where our focus is for the remaining part of this year for the US, it’s going to be the continuation of that disciplined commercial execution, building very much on the foundations that we made last year in 2023. You touched on our sales force structure, but we’ll be maintaining our sales force structure and our territory design. We’re also building a high talent bench for those large influencing territories as well. But as I mentioned on the last call, our strategy is a little broader than that than just our sales force structure. And in combination with that, it’s also making sure that we expand our efforts in regards to partnership with our physician base.
We had a really successful recent scientific advisory board, full of great insights. And also as we look towards 2024 in our end of service, so that’s based on our latest data that the comparisons do get a little more tricky throughout the rest of the year. But we still are encouraged by our end of service performance and partner with our physicians to identify patients in accordance to that all-important continuity of care. So those are the sort of main aspects really. Partnership with our physician base ensuring that we can expedite care, continuation of our territory structure and as I say, a key partnership with our advisory board.
Operator: The next question is a follow-up from Anthony Petrone of Mizuho Group. Your line is now open. Please go ahead.
Anthony Petrone: Thanks. Just a quick follow-up on RECOVER and the messaging there. Is the go or not go forward decision, will that be on the headline readout in June, July time frame? Or will you wait for the final data set at the end of the year to make that decision? Thanks.
Vladimir Makatsaria: Anthony thank you for this follow-up. Just the if the clinical data is negative, then it’s a clear no-go decision. If the clinical data has elements of positive, whether holistically or in certain clinical areas, then we will continue working with CMS to define a go and no-go decision. So I and that is, for me, the best scenario where we can continue to work with them to evaluate that.
Anthony Petrone: Okay.
Operator: As there are no additional questions waiting at this time. I’d like to hand the conference back over to Vladimir Makatsaria for closing remarks.
Vladimir Makatsaria: Thank you, Candace, and thank you, everyone, for joining the call for your feedback and very thoughtful questions. And on behalf of the entire leadership team at LivaNova, we really appreciate your support and your interest in the company. And we’ll talk to you soon. Have a good day.
Operator: Ladies and gentlemen, this concludes today’s call. Thank you for joining. You may now disconnect your lines.
