Started here. I'm Robbie Marcus, the MedTech analyst at J.P. Morgan. Really happy to introduce the CEO of Integra, Jan De Witte. Jan, do so a presentation, then we'll do some Q&A after.
Perfect. Thank you, thank you, Robbie. I'm Jan De Witte, the CEO of Integra LifeSciences. With me here is Lea Knight, our CFO. Together, we'll cover, yeah, with Robbie, the Q&A. First things first, our safe harbor disclosure, as a reminder that some comments during this presentation are gonna be forward-looking. So let's get started. I know many of you, when I look through the room, have been following Integra for many years. Also see quite a number of new faces, and hope that we have more on the webcast that don't know us that well, and I hope that you will come away as excited as we are as a management team about Integra's future, our opportunities.
I'm gonna take a bit of time taking us through the potential of the company, markets, portfolio, but also the path that we're executing on to strengthen our capabilities and make sure we capture all of these opportunities. So let's start with high-level Integra. Okay, we're a world-leading company committed to restoring patients' lives through unique technologies in neuro and regenerative care. We operate with two big business segments. First one is Codman Specialty Surgical. It's about two-thirds of our revenue. Okay, Codman is a leading player in neuro access, neurosurgery, neuromonitoring devices, and disposables, and also a leading provider of specialty surgical instruments, and soon to be a leading provider in ENT, with the anticipated completion of our Acclarent acquisition, acquisition that we announced last month, and that we expect to close in the second quarter of this year.
And then the second big segment is Tissue Technologies, and one-third of the company, with a broad portfolio in complex wound reconstruction, and leading and a leading innovator in surgical and breast reconstruction. What ties these two segments together is our deep domain knowledge in regenerative technologies, okay? Technologies that we leverage across both businesses, but also through our private label activities. Integra is a business that operates in attractive end markets, yeah, with close to $1.6 billion in revenue, of which more than 90% is recurring, driven by procedure volume. We leverage two distinctive competitive strengths, okay. First of all, our leading brands. We bring clinically differentiated technologies to surgeons and to their patients, and we do this across the board with a scaled, experienced, and trusted global commercial footprint.
So let me go a bit deeper, yeah, into our markets and then these two segments and divisions. What I believe makes Integra distinctive is that while we are a mid-sized player in med tech, we're a big and leading player in the attractive markets where we are present, through our focus and through our breadth. We play in markets with growing patient populations, driven by chronic diseases and emerging market dynamics, and both in our Codman business and our Tissue Technology business, yeah, our markets, yeah, we bring differentiated technologies and innovation to markets where that matters. Like with our technology for selective tissue ablation with our CUSA capital equipment, or the introduction of minimal invasive surgery in neurosurgery, or the PMA products that we're driving, either, yeah, in skin substitutes or in breast surgery.
With these technologies and innovation, we access high-growth niche opportunities where surgeons are uniquely influential in the buying decision and where customer relationships make a lot of difference. Our total accessible market is set up to about $9 billion TAM, growing at a solid 5%. Two-thirds of that, again, is neurosurgery, growing at 4%, and one-third is complex wound reconstruction and surgical reconstruction, growing 8%. The fact that we are a big and leading player in those markets where we're present allows us to provide deep focus on these markets with critical scale, breadth in our portfolio, and depth in clinical education. With a tenured and trusted sales force that have deep reach in those markets, and in addition, our global commercial footprint enables us to leverage our technology and innovation investments outside of the U.S.
And we can leverage a strong balance sheet and strong financial rigor to complement our organic dynamic, yeah, with systemic and targeted M&A for accretive growth. If I go a bit into our two divisions, and starting with Codman. Playing into the $6 billion specialty surgical market, our Codman business represent a bit more than $1 billion in revenue for Integra, concentrated in neurosurgery and specialty instruments, and soon to include, yeah, ENT, as I mentioned. And we enjoy, with our Codman business, a long legacy and a strong position with a market-leading portfolio and direct sales force.
Our global scale allows us to offer solutions across multiple disease states, yeah, such as brain lesion surgery, including minimal invasive, traumatic brain injury and neuromonitoring, hydrocephalus care, and then with our specialty instruments segment, we capture a top three position in neuro, ENT, and general surgical procedures. And then as we will close our Acclarent ENT acquisition, we're gonna be adding about $1 billion in U.S.-based accessible market with accretive growth and with strong adjacencies with our legacy CSS business, which will also strengthen our R&D capabilities and fuel innovation opportunities between ENT and CSS. Our aim with our Codman business is to grow above the market, above that 4%, and we do this by investing in higher growth segments like advanced energy, minimal invasive surgery, and ENT.
Expanding into higher growth geographies, like we're doing in Asia, and investing in unique technologies to grow share in markets, like what we're doing with our Endexo Bactiseal combo catheters. Jumping to our tissue technologies business, $500 million in revenue. Yeah, a leader in a $2.5 billion accessible market, and a business that represent the broadest set of regenerative technology platforms in the industry. Okay, we're talking here about highly engineered collagen, bovine dermis, porcine, and amniotic tissue, and since a year now, we also have a resorbable synthetic mesh platform, a technology acquired, as part of the SIA acquisition, about a year ago.
And so all these technologies support multiple leading brands across complex wounds and surgical reconstruction, while the private label market enables us to leverage our technology and our manufacturing capacity in markets where we don't have a commercial footprint. Like with the Codman business, we aim to grow above the market through new products, new clinical indications, supported by clinical evidence, as well as expanding geographies and private label opportunities, while we focus our organic and inorganic investments on the higher growth segments. And, yeah, our investments in implant-based breast reconstruction, yeah, is a great example of, yeah, going after a accretive growth segment. For those of you who followed our investor day earlier this year and, you know, also last year, yeah, we drive our strategy focused on five key pillars, with the goal of accelerating growth and profitability and creating value for our shareholders.
These priorities remain the priorities for 2024. Based on accomplishments in last year and lessons learned, we're updating our focus, specifically further driving operations and customer excellence, and a performance culture to accelerate that innovation and growth capability. So I'm gonna cover some of these five pillars, and let me start with operations. So over 2023, we've continued to strengthen focus on operations and customer excellence as a key strategic driver, a key strategic enabler. And while Boston recall and the factory shutdown shifted some of our focus and resources towards quality system remediation, we did make significant progress in strengthening several of our operational foundations. By building out manufacturing capabilities, like in our factory in Le Locie in Switzerland, and building our first in China for China manufacturing capabilities.
We've upgraded talent and leadership to drive performance, yeah, in a world which is more complex and more unpredictable from a supply perspective. We've established new capabilities from a lifecycle management perspective and procurement to ensure quality and availability throughout the lifecycle of our products, and we've introduced a stronger and more detailed performance management. And in 2024, our priorities are pretty clear. Okay, first priority is to bring our Boston products back into the market, sustaining the upgrades that we've made in our quality management system, and not just in Boston, but yeah, we've done that across the enterprise. And we're further advancing supply resilience and strengthening efficiency methods as a way to step up our ability to drive productivity and make that a core capability for Integra. Maybe brief on Boston. A brief update there.
As we outlined, I think it was in the third quarter earnings call, we have 5 key milestones to progress towards bringing Boston back in the market mid-second quarter to end second quarter, mid-May to end June. We remain on track to that timeline. We restarted the factory mid-November, a little bit before Thanksgiving, ahead of the end of the year, and that allowed us to start producing batches of products, to start validating products, validating processes, refining processes, and further preparing the sites and the teams there for the key audit milestones that are coming up here in the first quarter. So while the Boston recall and remediation has posed significant challenges to the business in 2023, it has provided us a clear North Star for our operations and quality system.
And in parallel to the Boston remediation work, we have also worked last year in implementing these lessons learned across all of Integra, and that's what you see in the right-hand side of the page, what type of topics we've driven across the enterprise. With regard to margins, although Boston remediation, again, has delayed some of our gross margin improvement trajectory, we're confident in the levers that we have as a business, and we have further insight in how and where we can drive margin accretion. This covers volume, mix, price, operational efficiency across our supply chain, procurement and supplier management actions, process, yield improvement, and improvements in our footprint, and SKU rationalization where that would be needed.
Now, in order to further accelerate this momentum, we are kicking off a project, an initiative in 2024, with the help of a third party, okay? A consultancy that will work with our operations leadership over the first half to identify and activate the next phases of projects that we can initiate after we get Boston back into the market. Opportunities, projects that drive the next levels of margin improvement across our main factories. And with that, establish a path and the capabilities for sustainable margin improvement for the business. As we work to develop capabilities, people and leadership make the difference, and over 2024, we are further activating a holistic project to step up focus on creating and performing a high-performing organization.
Not gonna go through this page, but, yeah, we're touching the key drivers that you see on the right-hand side of this page. So with that, all of this is to enable our innovation and our growth. Let's talk about innovation. For more than 30 years, Integra has been a technology innovator, okay? Targeting clinical and economic outcomes and elevating the standard of care. We do this in three ways, okay: developing new indications for our technology, supported by clinical evidence. Again, yeah, I mentioned breast reconstruction is one area where, yeah, we're very much doing that. Second, developing new surgical approaches, yeah, like we do with Aurora, our Surgiscope, where we introduce minimal invasive neurosurgery and minimal invasive intracranial hemorrhage surgery.
And finally, we bring new technology to our care areas to improve quality and productivity, like what we're doing with our combo catheter. When I look back at 2023, okay, a lot of accomplishment. We brought CereLink back into the market, the international markets. We're gonna do the same in the US again over the first quarter. We're well on track there. We continue to make progress on our breast PMA strategy with both SurgiMend as well as with DuraSorb. And we continue to innovate organically, okay? Broadening our CUSA Tip portfolio and improving our Aurora portfolio. And we continue to also invest in foundational R&D, specifically in regenerative technologies.
In 2024, we'll further step up, continue on that momentum, strengthening customer insights and clinical capabilities, making our portfolio more digital with projects that expand analytics and companion app capability. And we're gonna continue to execute on clinical programs and PMA studies. Over the next couple of years, we've seen new product innovations, new product launches, as a significant accelerator of our organic growth. And this is a page where, yeah, we summarize or give an overview of some major areas for organic new product introductions, okay? Starting again with Aurora Surgiscope platform. Okay, this is a new technology that provides advanced visualization and neuro minimal invasive surgery capability. It's a market that we eventually see as a $1 billion accessible market, and a market that will yield significant revenues for Integra, you know, over the LRP period and beyond.
Second is combo catheter, okay, where we combine the best of both worlds, combining two technologies. One technology that minimizes infection. Other technology minimizes occlusion risk. We bring that together in one single catheter. Catheter is a big market, $800 million-plus accessible market. With this innovation, we're gonna further strengthen our leadership in that segment, take share, take price. And then our complex wound reconstruction segment, we're driving investments in product innovation and evidence generation for new indications, which will further allow us to continue driving growth above that 7% market growth rate. And then finally, SurgiMend and DuraSorb. Here, we have the clear ambition to deliver to the market the first two distinct solutions with PMAs for implant-based breast reconstruction.
Okay, aiming to address various clinical, contracting, and economic needs across multiple sites of care in this fast-growing breast reconstruction segment. Okay, this is one segment where, yeah, by 2030, we see this as, yeah, more than $200 million revenue opportunity for Integra. International. Today, almost 30% of our revenues are from outside the US, so we have a solid global presence, though we believe that this 30% number should be more 40% or above. And we believe we can leverage that footprint to get there. If you look back at 2023, we demonstrated that we can accelerate growth in our international markets, launch new products or existing products in the international markets. And we've built out capability to really have a sustained double-digit growth rhythm in the years to come.
So over 2024, we're gonna continue pretty much on the path that we've been, yeah, with international, strengthening local commercial market access, regulatory capabilities across Europe, Middle East, Africa, APAC, Canada, and Latin America. We're broadening our commercial footprint and capturing hospital expansion opportunities in emerging markets and growth markets, and we're gonna further advance our China, in China, for China, manufacturing capability to strengthen our position, in that large Chinese market. As we think about where we're headed with our portfolio, okay, in our logic, yeah, we both, in our CSS, our Codman business, as well as our tissue tech business, we focus on solutions and how they fit, yeah, in the broader care pathway. In the journey that patients take, from diagnosis, to treatment planning, to surgery, to post-operative care.
Today, Integra is very strong in acute care, in the hospital, and we plan to leverage this to first, and grow, further, deeply in acute, as well as broaden our impact by moving upstream, pre-operative care, and downstream in additional sites of care. If I look back at 2023, again, we successfully integrated our SIA acquisition, an acquisition that broadened not just our portfolio, but also our access to sites of care for breast reconstruction. With the Acclarent ENT acquisition, we're adding a strategic and an anatomical adjacency to our neural business, broaden again, our presence in care pathways. We advanced our digital strategy over 2023 by finalizing market research and design for our digital innovation pilots. For this year, 2024, we're gonna continue on that track, building solutions that drive value for care systems, introducing more digital connectivity and analytics in our NPI programs.
And we also continue to execute on our M&A game board that complements our organic focus. So as I near the end of this presentation, I hope you've gotten a feel for our commitment to delivering long-term, durable value for our shareholders. I've taken you through our markets, our unique position to build out market-leading presence with our differentiated portfolio and commercial strength, as well as through future investments in and innovation in growth, accretive segments and products, and expanding our capability to commercialize outside the US, while we upgrade our operations capabilities to ensure quality and reliability, and laying out a path for for durable margin expansion. During 2024, we look forward to providing updates on key milestones as we progress, yeah, with the business.
On February 28th, we're gonna update on the fourth quarter, full year 2023, 2024 guidance, and updates on key milestones, like progress with the Boston relaunch. And then, in addition, near the end of the year, we plan to provide an update to the trajectory towards our LRP plan, okay? And that's gonna be following the Boston relaunch, where we intend to set up a virtual LRP update somewhere in the fourth quarter of the year. So in conclusion, I hope that you've gotten a good view on Integra's tremendous opportunities and what we're doing to capture these. We are a global leader with a great legacy in neurosurgery and regenerative technologies. Our portfolio is unique and with a great commercial position in attractive markets, and strong opportunities to further build it out in depth and in breadth.
We're further enabling commercial success by strengthening our operations capabilities and building supplier resilience, and stepping up our ability to drive margin accretion. We're not only capturing opportunities in the high-growth segments with organic moves like transformative NPIs, geographic expansion, and digital value add. Yeah, we're also leveraging our strong balance sheet and financial rigor to complement that with strategic M&As. And so with that summary of, yeah, our key value drivers, wanna hand it back to Q&A with you, Robbie.
Thanks. Maybe, to start it off, you know, we're gonna get the full update on fourth quarter and guidance for next year. Any just, high-level thoughts on how the quarter played out you're willing to share?
Yeah. So, I think a couple things. So we are not sharing, you know, our fourth quarter results at this point. I think, you know, Robbie, you and I have talked. I've been on a listening tour since I've taken the role, six months ago, and I think what I've heard very clearly from our investors, as well as our analysts, is that there is a desire for more disciplined communication, when it comes to our earnings, along with improved kind of clarity, consistency, and reliability of results. And so we're taking this opportunity to make a few changes.
Mm-hmm.
And so we're gonna be doing things like, and I know this will make you happy. We will no longer exclude discontinued products-
Very.
From our definition of organic growth, effective 2024 results and guidance. But we also are taking a more comprehensive view in terms of how we communicate our earnings, because we understand our value proposition to our investors goes well beyond revenue growth to include profitability, cash flow. And so for that reason, our communication of earnings will coincide generally with our planned quarterly releases. And then I think the other final thing I'll note in terms of changes we're making is, we did this with Boston. We felt it worked well, and we will continue to do it. When it comes to large, strategic multi-period initiatives, we're gonna keep providing those time-based milestones so that it's a mechanism to measure our progress and see how we're winning.
... Maybe we could, we could start with that since you brought it up.
Yeah.
Boston, you had a slide, you detailed where you were, what you committed to. Maybe just speak to your confidence in hitting those timelines and your level of visibility to being able to restart selling in the second quarter of this year.
Yeah. Let me cover that one, Robbie. Communicate before, right? We, over the summer, made a holistic plan. Okay, it was the first, yeah, step for making sure, yeah, there's no surprises on things that we missed along the way. And we understood our critical path, yeah, very early on. That's what we're managing very closely, which today is by validation of products. And that's why relaunching the factory before Thanksgiving, yeah, was important, because it gives us the time to validate process and products, to also test run, fine-tune processes, and prep our teams in that site. Prep our organization for, yeah, the couple of audits that, yeah, we will be having in the first quarter of this year.
Okay, we'll have a dress rehearsal later in January, and then near the end of Q1, yeah, we'll have a third-party auditor coming in to audit, yeah, the entity. A report, yeah, when positive, we'll send to the FDA, and that's gives us the open door to start commercializing.
I believe the comment is that you're looking to recapture 100% of lost sales within 12 months. So 2 parts to the question here. This market is a fairly competitive market.
Mm-hmm.
So, one, what have you seen in your market share during this time? And, second part of the question is, 100% is a high number. What gives you the confidence to be able to recapture all of that within a year?
Yeah.
Yeah. But there's two sides to the question. Let me talk a bit about the commercial dynamics, and then, Lea-
Yeah
... can go into the numbers. But yeah, we've ensured that during this recall, our sales force yeah has and remains in close contact with our customers, okay? Which is not that difficult because we have a broad portfolio of products, okay? And so maybe PriMatrix is not there anymore, but we have Integra Skin, yeah, other products that yeah we sell to customers. And some of these products also take the place of PriMatrix. So yeah, when we relaunch back in the market, we have customer relationships that are as warm as they were before. Okay, and then second, and we've learned that yeah during the recall is that our products you know whether it's SurgiMend or PriMatrix yeah are great products, are differentiated products, which customers love and want back.
And so yeah, we've also learned, yeah, on why customers love it, and, yeah, we're using that to reposition to get back in the market. So that drives the confidence of our sales force, that they've got a relationship, they've got products that can win. And when we put it back in their hands, yeah, they'll drive, yeah, us back to the volumes where we started from.
Yeah. And then to the second part of your question, because I do think it's important to clarify kind of what we're talking about here. So when we say 100% recapture, it's recapturing our sales run rate-
Mm-hmm
... right? And within 12 months after relaunch. So when you consider we exited in 2023, and we're talking specifically on our commercial business-
Mm-hmm
... so PriMatrix and SurgiMend. We exited in 2023, around the middle of the year. We anticipate coming back mid- to late Q2 next year. So by mid- to late Q2 2025, is when we'll be back at the same sales run rate that we were when we exited the market in 2023. And so there, I think there's more there than maybe is appreciated when you think about just 100% recapture. I think it's also important to note that in the two years, effectively, that we're talking about, the market has continued to grow at mid- to high single-digit rates. And so we're not saying we're gonna recoup all that growth, right? We're getting just back to where we were effectively two years prior.
But being off the market for as long as you have, doctors have had to look elsewhere-
Mm-hmm
... and potentially try other products, sign contracts with other companies. So how do you, you know, get back in there and recapture the sales you've had when, you know, physicians just naturally would have to look somewhere else to fill the gap?
So again, yeah, yes, customers, yeah, where we could not substitute, yeah, have had to use other products and multiple other products. And that's where the presence of our sales force is important because they hear every day why the surgeon, yeah, does not like where they had to go through and why they would wanna come back, right? So those arguments and those, let's say, pre-selling, is happening. There is gonna be a bit of a timeline in some cases, yeah, getting back on the shelf. It's gonna have to go through some VAC, yeah, approval, some administration to get back on. That's why, yeah, there is gonna be a ramp, yeah, over those, yeah-
Mm
... 12 months to-
Mm-hmm
... yeah, get us back, yeah, on all the shelves that we vacated over there.
If we could shift gears and move-
Yeah
... to the Acclarent acquisition-
Yep
... that you just did. It's an interesting adjacency, right? You talked anatomical adjacency. You know, let's talk both the strategic rationale on the top line, and then also the financials on the bottom line. If we start with the top line, you know, anatomical adjacency, it makes sense from the body, but how similar are the call points, and how much leverage is there between your existing business and the new acquired Acclarent business today?
So the call points today between ENT and neurosurgery are different.
Mm-hmm.
Okay? That's why it was important, yeah, Acclarent as a target is an at-scale target with an at-scale sales force that has, yeah, critical mass to, yeah, address those sales points. It can be a platform not just for organic growth, but yeah, for tuck-ins there. Over time, yeah, as you see some of the ENT practice and neurosurgery practice get closer together, okay? Take the example of skull base surgeries. Yeah. You have more and more multi-skilled teams that are, yeah, working together. Okay, so the call points will be getting closer, and we will be looking at innovation opportunities in that space, yeah, to address, yeah, those emerging anatomical adjacency. Overall, I think, yeah, one of the attractive, yeah, dimensions of Acclarent is that it is growth accretive, yeah, to our neural business.
Yeah, both the ENT segment as well as, yeah, the Acclarent dynamic that they have in the business. So that together with the scale, yeah, gives us, yeah, a really attractive strategic opportunity. Size, scale, great portfolio, great brands, and opportunities to drive, yeah, innovation, yeah, and collaboration between our neural and ENT business.
On the acquisition call you hosted a couple weeks ago-
Yeah.
You talked about the potential for sales synergies, and this was included in the deal model. One, you know, what specific sales synergies are you looking at? And when we think about the timeline, is this something that happens day one, or is this more year three, year five, and beyond?
Yeah. Yeah, so yeah, absolutely. So I did mention that. I think to put it in perspective, that's a—it's a relatively nominal part, right, of the business case and why we moved forward. The overlap is in with our MicroFrance business, and so it is relatively small. We could take that out, and we'd still be hitting all the major financial metrics that we talked about in terms of our generating ROIC greater than 10% by year five. So it doesn't—it isn't really a factor when it comes to that, but we would expect to be able to see it kind of initially upon integration, just because of the connection with MicroFrance.
As we think down the P&L, what's your plans for the sales force? Is there gonna be some rationalization, and how sensitive is the sale in the ENT to the rep?
Yeah. So I think from a... This, this is gonna be a sales force we can keep intact, right? Because, to the points that Jan made in terms of the call-on universe differences, we're gonna need to retain that sales force. Additionally, we recognize the R&D and innovation that this business will bring is also something that we need to continue to protect and invest behind. So that we would imagine that to stay in place. I think in general, as you think about cost synergies, there won't be any significant cost synergies. We'll look for ways to kind of drive some efficiencies from a G&A perspective, but beyond that, don't anticipate significant synergies.
In order to hit the ROIC targets, is this primarily a sales synergy-driven model?
Not sales synergy, no, in terms of with our existing business. It's the R&D technology innovation pipeline-
Mm-hmm
... in addition to, obviously, the existing commercial business that comes with it. Yes.
Great. Maybe jumping around a bit, you know, Integra has a lot of products, and they're more brand families, and there are fewer individual product launches that we can look to. SurgiMend is one of them, an exciting opportunity. You have planned, I believe, for the first half of 2025. Originally, the panel voted against approval. So now, what gives you confidence that you'll be able to eventually get approval, and how do we think about the size of the opportunity for SurgiMend?
So over the past one year plus, when we had the first panel, the panel asked for additional information, which that we provided in part last summer, and then in the fall. I mean, that dossier is complete. I think we've provided all the answers that were needed. And so to get to the PMA, it's at this point in time getting the manufacturing side of the PMA, which is then linked with the Boston relaunch. So that market opportunity is significant. It's today a $600 million+ market, growing 12%+.
Pretty much dominated by one big player, with great opportunities for us to bring in our SurgiMend, but also our DuraSorb, two products that have occupied different segments in the markets. Have clear, whether it's strength, size, and price, and conformability benefits versus the incumbent. So, this is a market capture play. As I communicated in the presentation, by 2030, we think this could be more than $200 million in revenues-
Mm-hmm.
Yeah, growing double-digit there, where today, yeah, if we add it up, we're about $50-$60 million, yeah, starting point.
Jumping around, CUSA Clarity. How do we think about where you are in the relaunch, and just give us an update on your view for the product?
Cerelink.
Cerelink.
Yeah.
I'm sorry.
Yeah.
Sorry.
Yeah, CereLink is back in the international-
They both start with C.
But the C, there's a lot of Cs in there. So, selling back in the market, international market, since beginning, end of September, and over the fourth quarter, we brought pretty much all international markets back on, and I feel comfortable, yeah, we're gonna get the 510(k) for the US over Q1, get back in the market. There, if we learn from the international markets that yeah, relaunch is going well. Okay? It's going well because yeah, we never really lost our customers there. Okay? We had the insights at the very beginning that yeah, our surgeons wanted to continue working with that micro sensor.
By bringing in the predecessor product, yeah, ICP Express, we essentially solved, yeah, the problem for our surgeons, and they, yeah, were waiting now to get CereLink back, which is, yeah, a big step up versus ICP Express. But, yeah, we've never forced them a reason to leave us. Okay? And also, let's say, non-customers, yeah, because there's not a lot of other great products in the market. What we see now in international is that they've waited for us to upgrade, yeah, to a CereLink-type of product. So, yeah, I feel good about how we handled that and helped our surgeons solve their problem, which is now paying off in terms of a relatively easy getting back in the market.
Maybe one last question before we run out of time. You've talked about gross margin expansion in 2024. The acquisition is an accretive to gross margin. You know, so I imagine you still feel confident in gross margin expansion in 2024. Just maybe talk about how you're feeling on that line and, you know, any high-level view on expenses, realizing we'll get full guidance in 2024.
Yeah, so just to clarify, the gross margin is in line. The acquisition-
That's so
... Acclarent is in line-
Okay
... with the gross margins. And I think, you know, as we talked about the drivers of gross margin from a volume, mix, price perspective, I think we remain on track in realizing that because the key to unlocking that is driven by our revenue and NPI growth. I think as we move into 2024, we're still gonna have to overcome the headwind that is Boston, that will have an impact on gross margins. And then the effort that you saw, that Jan talked about in terms of bringing that external consultant in, to help us unlock even more value as it relates to gross margins from a operational efficiency, footprint optimization, that work will be underway during the course of 2024.
We don't anticipate that it will have meaningful or significant impact on 2024, more kinda in the 2025 and beyond timeframe. But that's kind of, kinda how we're thinking about 2024.
Great. We're out of time. Thank you.
Yeah.
Thanks, everyone, for joining.
All right.
Thank you.
Thank you.