SRDX
#Morning.
Good morning, <UNK>.
Yes, IVD as we talked about in the past is, you know, we view that as a mid single digit growth business and obviously they have much tougher comps they are coming up with this next year.
We still think that's a mid single digit growth business for us.
And so with that growth we think we'll continue on that rate and then we continue to believe that there will be underlying growth in Serene, as well as growth in the reagent sales.
But really what the driver here is for fiscal 2016 is going to be the TL-3 the third generation and how much of that is actually going to be in the channel at the time of that expiration of the patent and the reporting on that and that will be largely reflected in starting the second quarter and we'll see more of that in the third quarter.
Sure.
So the second part of the pipeline just for the intent is to balance our portfolio.
We have a fee PMA type things going on.
Certainly we wouldn't be doing the pivotal, but in terms of getting 510(NYSE:K) clearances, we see an opportunity with some of our new chemistries that we have that actually as we have done our own data package testing of the currently marketed products, our new chemistries on these products actually enhance performance dramatically.
Now when you think of SurModics our customers wanting to technically and clinically but also regulatory de-risk things, we believe we can put those on some of advanced cases of these designs and actually get a product that has improved device design by itself and then you put our technology and events like the a non-linear battery effect that we can see.
So we can ---+ if we can get those design ---+ of designs frozen and then file for the 510(K) then we can offer our products what we believe are going to be new benchmarks in some of these products.
In terms of, I think you're think your question is heading towards, do we have the R&D capability for the device design part of that, the short answer is we have the initial component of that, but as we look and contemplate acquisitions, that is going to be a critical competency gap still for us and we see it actually to be able to innovate under device itself.
So big role in that.
Exactly, just a note <UNK> you're seeing extruding capabilities, I am not, but certainly with the base type stuff you'll have to have capabilities like that.
Clearly there are partners who can do this.
But also remember our focus of M&A is to bring that in house and also have the ability to manufacture it because part of our strategy depends on having a margin that can actually be attractive to both us and a strategic as we try to supply that product and license it to them.
So the M&A continues to be a real big pivot pole of this strategy, if we are not able to execute this M&A in the way we think, then certainly things could take a little bit longer if we are having to do it just from an OEM partner view point.
No, no, just to be clear.
I think the timing I should clear up.
We're doing the product development of those products in fiscal 2016, so that we can file and seek for approval in fiscal 2017.
Start to finish on our 510(k) type product, I think are good benchmark, a rapid benchmark is about 18 months start to finish on that.
So clearly we have nothing in front of the agency right now from a 510(k) view point.
But the aim is to have that developed frozen and hopefully some of that even filed in fiscal 2016, so we can get approvals in fiscal 2017.
I'll give you broad overview and keep - remember its sort of a like a real options analysis because if we don't get a good preclinical data from olimus then we're going to stop.
So when we think about olimus program I would think about $1 million this year would be an investment in general.
Now again its, you scale, you go from data to data and if the data doesn't look good and doesn't look we can get in olimus, we're going to spend up to that amount, but if the data does look good, we will accelerate into the next phase.
So $1 million is not a bad ballpark to consider for that.
Yes.
Certainly with our excipient program we have the ability ---+ I've described the platform is anything that requires a short term contact with tissue to be able to deliver a drug, that's on a broad category how we consider these excipient's that we are doing research on.
As far as various anatomical targets, we have nothing seriously ongoing in non-vascular systems at this point, that's not to say couldn't change, but we have our hands full with the vascular anatomies in front of us and the investment required to do those adequately.
So the platform and the IP we have filed we are confident and that will be there for our tissue anatomies, but for now we're sticking to vascular.
Yes.
couple of good questions there.
<UNK>, and the tax rate we expect to be similar and within that range of $0.70 to $0.80 a share whether encapsulate any R&D tax credits if they are enacted, and that's embedded in the rate right now.
And if you look at margins, you look at them being similar to where they were this year, we ended up the year at about 60 basis points, up from last year at 65.4% gross margins and you should expect us to generally be in the 64% and 66%, and a lot of it has do with mix, related to as we commented in the quarter, antigens which is a product we distribute has a lower margin and that would have some impact on the mix for the year, but all things being constant, be in the 64% to 66% range would be reasonable estimate.
Thank you.
Good morning, Beth.
Sure.
Beth, I call that three legs too, and typically a three legs to usually have two legs and you are adding one.
SurModics has one very strong leg and we want to add two.
So we have really incredible technology content, not just drug delivery but new chemistry that go on surfaces that could make our devices even perform better.
So we have that strong leg.
The second leg we want to add is really to have our own independent device design capability.
So from balloons to catheters, certainly we would like to have that so that we can improve not just the technology content, but the device itself.
And so that's a big part of our M&A strategy.
The third leg on the stool which is also part of our M&A strategy is our future business model is going to require manufacturing capabilities that have - what I call two components, one is very high quality systems standard of manufacturing, but also the ability to make these products at substantially low cost.
So we can't stop at the innovation and say we're better, there has to be enough margin to go around for SurModics and for the strategic we intend to provide these customers for.
So our M&A strategies looking for those two legs, device design and manufacturing and even better if it comes in one company that's even sweeter spot for us.
We have looked at over 100 companies in the last two years and we don't discuss anything that's eminent we certainly have been very, very active in that and we feel very confident in that space.
So we want to provide whole product solution to our customers, I'll take to it to the extreme just to make an example, is any reasons SurModics can't provide a product that's regulatory cleared or approved, and finish sterilized label than packaged and all customers we just ship it to them to be able to do that and do at a proper margin requires us to have a good manufacturing competency the board applied the technology content into manufacture device, yes.
Thanks, Beth.
Thanks.
Thank you.
Well, thanks to all of your questions.
We are pleased with our fiscal 2015 performance and a solid fiscal 2016 with a right move that can accelerate our transformation towards delivering whole product solutions.
This ensures that SurModics is relevant to our valued customers well into the future.
I believe it's the best way to build long-term shareholder value.
Thank you everyone.
