As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Mr.
Jake Elguis, Treasurer and Vice President of Investor Relations. Please go ahead.
Good morning, everyone, and welcome to the Teleflex Incorporated Third Quarter 2018 Earnings Conference Call. The press release and slides to accompany this call are available on our website at www.teleplex.com. As a reminder, this call will be available on our website and a replay will be available by dialing 855-859-2056 or for international calls, 404-537-3406, passcode 8,158,978. Participating on today's call are Liam Kelly, President and Chief Executive Officer and Thomas Powell, Executive Vice President and Chief Financial Officer. Liam and Tom will provide prepared remarks, and then we'll open up the call to Q and A.
Before we begin, I'd like to remind you that some of the matters discussed in the conference call will contain forward looking statements regarding future events as outlined in our slides. We wish to caution you that such statements are in fact forward looking in nature and are subject to risks and uncertainties and actual events or results may differ materially. The factors that could cause actual results or events to differ materially include, but are not limited to, factors referenced in our press release today as well as our filings with the SEC, including our Form 10 ks, which can be accessed on our website. With that, I'd like to now turn the call over to Liam.
Thank you, Jake, and good morning, everyone. It's a pleasure to speak with you again to discuss our Q3 financial results. Before we get into the details, I would like to say that we are very happy with our results this quarter and not simply because of the rebound in our organic constant currency revenue growth performance. In addition to good top line performance during the quarter, we also received 510 approval for Perkuvance. We achieved positive results from our Phase 1 safety trial associated with replas.
We acquired an innovative company in Essential Medical, which has a product focused on large foreclosure that could be the first to market in the U. S. And our 2 recently completed scale acquisitions, NeoTract and Vascular Solutions, continued to perform very well. The combination of each of these items give us further confidence in our ability to achieve our previously provided 2019 through 2021 financial targets that we outlined at our Analyst Day this past May. Turning now to our performance in the quarter.
Our 3rd quarter results were a solid start to the second half of the year. During quarter 3, revenue grew 14% on a reported basis and 15% on a constant currency basis. This growth was driven by a combination of continued excellent performance from our 2 recent scale acquisitions and a significant rebound in our organic constant currency revenue growth, which reached 5.6% for the quarter. Included in the 5.6% growth rate is approximately 1% from increased sales of vascular solutions products and a contribution of 4.6% from legacy Teleflex product line. I point this out to highlight that the core Teleflex product lines can deliver 4% revenue growth and can continue to perform at that level in the future.
I am further encouraged by the step up I saw in our North American is an excellent indicator of end customer demand and therefore reaffirms our belief that the core business is performing well. During our Q2 conference call, we outlined a few events that we believed to be transient. And I'm pleased to say that, as we anticipated and expected, this proved to be the case. We also outlined the key drivers that we expected would accelerate organic growth in the second half of the year. I am also very pleased to report that thanks to strong execution across nearly all our strategic business units and the anticipated shift of distributor orders from quarter 2 to quarter 3, we delivered upon our organic constant currency revenue growth expectations for the quarter.
I also want to point out that we achieved this 5.6 percent organic constant currency revenue growth against our most difficult comparison of the year. Investors familiar with the Teleflex story will recall that in the Q3 of last year, organic constant currency revenue growth was 5%. While we are obviously focused on continued execution in the Q4, our year to date performance gives us confidence in our ability to achieve our full year organic constant currency revenue growth guidance of 5% to 5.5%, albeit we will most likely be at the low end of that range. Turning to our recently completed scale acquisitions. UroLift continued its strong momentum, delivering $49,000,000 in revenue, which is an increase of approximately 45% versus the prior year period.
Perhaps more impressive is that the interventional urology team delivered this growth, while simultaneously overcoming a temporary supply issue that resulted from our proactive second quarter product recall that we noted on our last earnings call. I am pleased to report that as of the end of quarter 3, UroLift supply is now back to approximately 100%. I want to add my personal thanks to the entire interventional urology team who continue to execute at a very high level. In addition to delivering strong top line results and getting past the recall, UroLift was also the subject of 5 real world studies at an international urology conference during the quarter and the team continued to expand its leadership position as DBBH therapy with the largest body of clinical evidence supporting safety, efficacy and cost effectiveness. Turning to Vascular Solutions.
3rd quarter revenues reached $53,200,000 globally, which represented growth of over 21% compared to the prior year period. Vascular Solutions worldwide revenue growth was robust in both North America and EMEA, which continues to benefit from the distributor conversions we initiated in the second half of twenty seventeen. We remain confident in the continued performance of VSI in the 4th quarter, and we anticipate strong year over year revenue growth. Turning to some other key metrics. During the quarter, our adjusted gross and operating margins reached 57% 26%, respectively, And our various restructuring initiatives remain on track to achieve the synergy levels we previously expected.
Our performance this quarter translated into adjusted earnings per share of $2.52 which is an increase of 18.9% over Q3 2017. And despite foreign currency exchange rates being less favorable as compared to when we last provided guidance, we are raising our full year adjusted EPS guidance from a range of between $9.70 $9.90 per share to a range of between $9.80 $9.95 per share. With that as an overview, let's now look at quarter 3 revenue in more detail. 3rd quarter 2018 revenue totaled $609,700,000 which is an increase of 15% on a constant currency basis. Beginning with the components of organic revenue growth.
During Q3, we saw organic constant currency revenue growth of 5.6%. The Q3 of 2018 had the same number of shipping days as Q3 last year, so there was no shipping day impact to our organic growth rate. Our 5.6% organic growth consisted of 3.5% from legacy product volumes, excluding the impact of the surgical product line exit, 1.6% from new product introductions and positive pricing adding about 70 basis points. These positive contributors were partially offset by the surgical products exit, which negatively impacts Q3 growth by about 20 basis points. Contribution from acquisitions during the quarter was 9.4%, nearly all of which was NeoTracts.
And before I return to review to a review of our segment performance, let me provide additional color as to why we expect our organic constant currency revenue growth to accelerate further in the Q4. Using our year to date organic constant currency revenue growth of 3.7% as a starting point, we see the following drivers of acceleration in Q4. 1st, as many of you know, the 3rd quarter was the final quarter that NeoTract was reported in our M and A bucket, and it will begin to contribute to our organic constant currency revenue growth rate starting in the Q4 and from that point forward. We expect NeoTract to add approximately 3% to our 4th quarter organic constant currency revenue growth. We will also have the benefit of 1 additional shipping day in Q4, which will add approximately 1.3%.
In addition, we expect growth in our EMEA, Interventional Access and Asia businesses to accelerate in quarter 4, which we expect will add approximately 60 basis points. For the full year, this brings us to our expectation of organic constant currency revenue growth at the low end of our 5% to 5.5% range. As we look longer term, we remain confident in our ability to deliver 6% to 7% organic constant currency revenue growth from 2019 through 2021. This confidence is supported by increased investments behind NeoTract and Vascular Solutions to further support strong momentum in those businesses, deeper utilization of our legacy products and accelerated momentum in growth from new products. As a reference point, if you were to include the financial performance of both Vascular Solutions and NeoTract into our 2017 results, our pro form a growth rate through the 1st 9 months of 2018 was approximately 6.6% and for quarter 3, it was approximately 8.2%.
Turning next to our revenue performance by segment. Vascular North America 3rd quarter revenue increased 7.8% on a constant currency basis to $80,700,000 driven by the return of distributor orders and strong growth in both PIKs and ECIO. Moving to Interventional North America 3rd quarter revenue was $66,700,000 which is an increase of approximately 9.9% on a constant currency basis. The increase here is primarily the result of higher sales of vascular solutions products as well as growth in OnControl. Turning to Anesthesia North America.
3rd quarter revenue was $53,200,000 which is an increase of 4.8% on a constant currency basis. Growth in this segment was driven by our airways and pain management product categories. Shifting to our Surgical North America business. It reversed the negative trends in the past few quarters, increasing its revenue 4.6% on a constant currency basis to $42,500,000 Surgical revenues were driven by instrument sales and initial easing of supply constraints, partially offset by the exit of lower margin product lines in the Q3 of 2017. Despite the improvement in surgical revenue in Q3, we continue to expect that surgical revenue growth would be relatively flat in the second half of twenty eighteen as compared to the second half of twenty seventeen.
Moving to our overseas operations, 3rd quarter EMEA revenues were up 2.9% on a constant currency basis to $139,600,000 Growth in EMEA was largely driven by distributor conversions. Now to Asia. 3rd quarter revenue increased 6.7% on a constant currency basis to $76,500,000 Growth in this segment was led by China, whose revenues expanded approximately 14%. This was largely driven by an increase in volume following our decision to take the business direct last year. Next, I'd like to brief you on our OEM segment.
During the Q3, revenue was up approximately 13.1% on a constant currency basis and reached $54,900,000 The increase in OEM revenues were due to higher sales volumes of existing products and acceleration in timing of revenue recognition resulting from the adoption of new accounting guidance. And lastly, 3rd quarter revenues for the businesses within our all other primarily attributable to the acquisition of NeoTract and to a lesser extent, our Latin American business, which grew approximately 16%. Also, during the quarter, we signed a total of 21 GPO and IDN agreements, of which 2 were new agreements. That completes my comments on Q3 revenue performance. Turning to a brief update on UroLift.
During the quarter, UroLift was the subject of 5 studies that were presented at the World Congress of Urology 2018 Annual Meeting in Paris. Let me summarize some of the important takeaways. First, our real world experience study demonstrated once again that the clinical benefits and quality of life in the real world were consistent with the 5 year LIFT study. Another study on the impact of prostate size and clinical results showed that UroLift provided statistically significant improvement in symptoms and quality of life for men with prostate smaller than 30 grams and larger than 80 grams. As a reminder, UroLift is indicated for prostate up to 80 grams.
While perhaps most impressive was a study on the UroLift device, which was used on men in urinary retention. This study showed that 90% of men treated for acute urinary retention due to BPH became catheter free after treatment with UroLift. We continue to invest in building a large body of clinical evidence supporting UroLift as the only treatment that provides rapid relief with low catheterization rates and the only therapy with a zero rate of new onset sexual dysfunction. We believe high quality published clinical data combined with our Go Deep commercial strategy and broad reimbursement will support our previously provided 2019 through 2021 revenue growth rate expectations for UroLift. And for a final update on UroLift, we are very pleased to announce that just yesterday, we received shown in approval for the UroLift system to be marketed and distributed in Japan.
As a reminder, we estimate the market in Japan to include approximately 2,300,000 men over the age of 50 with moderate to severe BPH symptoms who have seen a physician for their condition. Our plan to build a market for UroLift in Japan will follow a methodical process similar to how we built the U. S. Market. First, we will focus on obtaining reimbursement, which is typically a 12 to 18 month process in Japan.
Once reimbursement is established, we will begin commercialization with academic centers to build strong initial clinical experience, followed by a full commercial launch. At the same time, we will begin enrolling a PMDA mandated post market clinical study using many of our initial implanting physicians. This study will provide us with another important tool that we believe will support more widespread rapid physical adoption in Japan over the long term. Turning now to an update on RePlas, our freeze dried plasma product. During quarter 3, we completed the Phase 1 safety trial of reclass called STP-one, the results of which were presented at AABB in mid October.
The trial was a randomized double blinded dose escalation study that measured certain biomarkers following infusion with re freeze dried plasma versus fresh frozen plasma in healthy subjects. We are pleased to report that the data readout for the trial was very positive. RePlas was shown to be well tolerated in normal healthy subjects with no serious adverse events or safety concerns. These results will support the final module of our BLA, which we expect to submit in early 2019. Turning now to our most recent acquisition.
With the acquisition of Essential Medical on October 4, we obtained the MANTA vascular closure device. MANTA is a unique system specifically designed for closure of large bore arthropamies, utilizing devices or sheets ranging from French to French. Large bore arthrottomies are typically associated with procedures such as TAVAR and EVAR. MANTA is currently approved in the EU and has seen rapid commercial adoption with over 8,100 procedures completed to date. In its CE Mark study, MANTA achieved 94% hemostasis with a 1 to 2 minute deployment time and time to hemostasis of approximately 20 seconds, absorbing in the body fully within 6 months.
We believe there is a large unmet need for a large bore closure system and that MANTA could be the first to the U. S. Market. Currently, many physicians improvise by stitching together multiple small bore closure systems. More importantly, complications associated with large bore closures are high.
According to a 2017 JAMA study, patients with bleeding patients in TAVR and EVAR procedures stayed in the hospital 3 times longer, were twice as likely to die during their hospital stay and cost an average of over $18,000 more as a result. MANTA has demonstrated in its CE Mark study a 2% major vascular complication rate compared to a composite 7.5% major vascular complication rate associated with suture mediated and surgical closure products as soon as found, pardon me, in published literature. Our initial target market for MANTA will be TAVR and EVAR. We estimate the global addressable market for our MANTA technology in these two procedures will be approximately $200,000,000 to $300,000,000 Following its anticipated FDA pre market approval in 2019, we plan to leverage our strong presence in interventional cardiology to accelerate adoption of this breakthrough technology worldwide. Before turning the call over to Tom, I wanted to take a step back and highlight how our portfolio is positioned to drive durable long term revenue growth, including both our currently marketed products as well as our pipeline.
First, both UroLift and UroLift 2 are expected to make significant growth contributions, and we continue to feel very confident about the momentum in that business. Moving to our intraopsies products, we are deploying more sales and marketing resources into EZIO and OnControl as we believe there remains an opportunity to drive increased utilization of these products. From a vascular access perspective, PIKs have been a growth contributor and we continue to expect to gain additional market share in the future by leveraging our unique antimicrobial and antithrombogenic coatings as well as our catheter navigation platform. In our anesthesia business, we expect our One significant driver of long term growth is our One significant driver of long term growth is our platform of interventional cardiology products within our Interventional Access segment. This includes Turnpike, Trapliner and our most recent addition, the Chaplet Balloon Catheter, which we acquired from QT Vascular.
Chaplet is designed for coronary angioplasty and has a unique design that allows for less trauma to the vessel walls during balloon expansion. We expect Chaplet to generate a moderate amount of revenue through our interventional sales force. Moving to our pipeline. I covered MANTA in-depth, and we continue to be excited about the long term potential of both RePlas and Perkivans. In fact, Perkivans recently received 510 approval from the FDA, and we continue to expect to do a full market release of that product during 2019.
We are also increasing investments in R and D to support our expected acceleration in growth from new products over the 2019 to 2021 time period. Some of our new products driving growth in Q3 include our midland catheters, BPS rhythm catheter navigation and gel block embolization. Looking forward, one example of an R and D funded new product we expect to drive growth upon its expected launch in 2019 is the Clean Sweep closed suction system, designed to mechanically sweep the inner lumen of the endotracheal or tracheostomy tube. Clean Sweep has been shown in studies to remove 2.5 times more secretions than the leading competitor's standard glow suction catheter. As you can see, given the portfolio of both organically and inorganically developed products, we are well positioned to drive sustainable constant currency revenue growth for the foreseeable future.
That takes me to the end of my prepared remarks. At this time, I would like to turn the call over to Tom. Tom?
Thanks, Liam, and good morning, everyone. Given the previous discussion of the company's revenue performance, I'll begin at the gross profit line. For the quarter, adjusted gross profit was $347,300,000 versus $298,000,000 in the prior year quarter for an increase of 16.6%. Adjusted gross margin increased 130 basis points versus the prior year to 57%. The expansion in adjusted gross margin reflects the planned impacts of the acquisition of NeoTract and Vascular Solutions, efficiencies related to footprint consolidation programs and favorable pricing.
However, the increase in gross margin was partially offset by unfavorable product mix and higher manufacturing costs. For the quarter, adjusted operating profit was $158,700,000 versus $140,800,000 in the prior year quarter or an increase of 12.7%. Adjusted operating margin was 26%, a decrease of 30 basis points from the prior year. The decrease was related to a tough prior year comparable, the shortfall in gross margin, increased levels of R and D investment. On a sequential basis, the 3rd quarter adjusted operating margin of 26% was flat to the 2nd quarter results of 26%.
Moving down the P and L, adjusted net interest expense increased to $26,900,000 from $20,900,000 in the prior year quarter. The increase reflects the impact of additional borrowings required to finance the acquisitions of Vascular Solutions and NeoTract. For the quarter, the adjusted tax rate was 10.7% versus 18.1% in the prior year period. The year over year decline reflects the impacts of the recently enacted Tax Cuts and Jobs Act and a larger tax windfall benefit this year versus last year. On the bottom line, adjusted earnings per share increased 18.9% to 2.5 $2 Turning now to select balance sheet and cash flow highlights.
Through the 1st 9 months of the year, cash flow from operations totaled $302,900,000 down approximately 5% over the prior year. The decrease was primarily due to unfavorable working capital changes, partially offset by favorable operating results. The change in working capital is largely attributable to the factoring battalion receivables in 2017, which did not reoccur in 2018 and increased 2018 tax payments. By in length during the quarter, we repaid $80,000,000 of debt and our leverage levels as defined in our credit facility stood at 3.18 times. Next, I'll briefly cover our recently completed cross currency swap transactions.
On October 4, we executed cross currency swaps to hedge the variability of exchange rate impacts between the U. S. Dollar and the euro. Due to swap, we notionally exchanged $500,000,000 at an interest rate of 4.625 percent for the euro equivalent of $433,900,000 at an interest rate of 1.942 percent. These swaps are designated as net investment hedges and expired October 4, 2023.
Given the differential in coupons and assuming a euro to dollar exchange rate of approximately $1.15 we estimate an interest benefit of approximately $3,000,000 in 20.18 $13,000,000 on an annual basis. We anticipate this benefit will help to mitigate the interest expense impact of a rising interest rate environment on our variable rate debt. And that completes my comments on the Q3. Now I'll move to an update on 2018 guidance. For revenue guidance, the only change we are making is to account for foreign exchange.
Specifically, we now expect a full year favorable impact of 150 basis points compared to an expectation for a 200 basis point impact in our prior year guidance. We are reaffirming our full year constant currency revenue growth guidance range of between 12% 13%. We continue to expect that our organic revenue growth will be between 5% 5.5%, although as Liam mentioned earlier, we expect to be at the low end of that range. We also expect constant currency revenue growth driven by M and A to be between 7% and 7.5%, but expect to be at the high end of that range. Because of a less favorable currency environment since we last provided guidance, most notably the euro and the Chinese yuan, we are adjusting our as reported revenue growth guidance from a range of between 14% 15% to a range of between 13.5% and 14.5%.
Moving to margins, to reflect year to date performance trends and our expectation for the Q4, we have lowered our previously provided adjusted gross margin guidance range of between 57.5% 58% to a revised range of between 57% 57.25%. The gross margin adjustment is attributed to unfavorable product mix, including better than expected performance from our OEM business, which carries a lower gross margin profile, modest solution from recently announced acquisitions, tariffs related to our business in China and higher expenses to address the NeoTract production and engineering issues. We expect to offset approximately 1 half of the gross margin impact to SG and A expense control and thereby partially mitigating the impact to operating margin. As a result, we are reducing our adjusted operating margin guidance to a range of between 25.8% 26.1% from the previous range of between 26.1% 26.5%. Turning now to interest expense.
We currently anticipate approximately $104,000,000 in interest expense during 2018. The reduction from our prior expectation of $109,000,000 is primarily the result of the recently completed cross currency swaps and an accelerated reduction of debt outstanding. Turning to taxes, we now expect our full year 2018 adjusted tax rate to be approximately 12.5% to 13%. This compares to our prior guidance, which call for an adjusted tax rate of approximately 14.5%. On the bottom line, we are raising our outlook for 2018 adjusted earnings per share from a range of between $9.70 $9.90 to a range of between $9.80 and $9.95 The $0.075 increase in the midpoint of our adjusted earnings per share range is primarily due to our over performance in the Q3 as compared to our prior expectations.
And so in closing, 3rd quarter delivered solid constant currency and organic revenue growth and we are very pleased with the outcome. We are also pleased with 3rd quarter adjusted EPS growth of 18.9%, year to date adjusted EPS growth of 19.8% and the actions put in place to allow us to again raise our full year adjusted EPS guidance. We are disappointed by the need to adjust down 2018 margin guidance. However, I would like to point out that the midpoint of our revised adjusted gross margin guidance still represents a year over year increase of 130 basis points. Additionally, many of the cited issues are transitory in nature and the key drivers of our multiyear margin expansion plan remain intact.
We continue to expect that NeoTract, Vascular Solutions and Vitacare will be major contributors to the margin expansion story because of their higher margin, higher growth profiles. We grow more confident in NeoTract as the business continues to exceed revenue and growth and profitability expectations. Additionally, with the recent acquisition of Essential Medical, we now add another business with high margin, high growth potential into the portfolio. The ongoing manufacturing footprint consolidation initiatives remain on track to deliver planned savings and we have stepped up efforts to identify additional productivity opportunities within our manufacturing sites. The multiyear financial plan outlined earlier this year at Analyst Day contemplated only modest contribution from new products such as RePlas and Perkuvance.
Recent clinical and regulatory developments provide encouragement that such products may contribute above previously projected levels. Additionally, our multi year guidance did not consider future acquisitions such as Essential Medical. In summary, we continue to focus our efforts and invest for Now I'd like to turn the call back over to the operator for Q and A.
Thank Our first question is from David Lewis with Morgan Stanley. Your line is open.
Good morning. Thanks for taking the questions. I thought you very solid quarter. I thought that we'd think about next year a little bit here. So two questions for Liam and Tom and then I had a quick follow-up.
So on growth, Liam, for you, organic revenue growth guidance for the Q4 implies 8% to 9% organic. You talked about your LRP this call being 6% to 7%. So is the right way to think about next year something between the midpoint of these ranges, 6.5% to 7.5%? And then for Tom, I wonder if you could help us with some of the more volatile components of next year on earnings, FX, tariffs, tax, the impact of the debt swap. How do these net out in your mind?
And how are you feeling about the profile for earnings next year relative to 2018?
And I
had one quick follow-up for Liam.
Hey, David. Thank you. So regarding 2019 guidance, obviously, we'll provide that in February, not on this call. But you're right in your expectation of our 4th quarter growth. And as we outlined in the call, if you look at through 3 quarters, our core organic growth was 3.7%.
UroLift rolls off M and A in the 4th quarter, that will add 3% and the additional day would add about 1.3%. So in my mind, that's simply math that gets us to that increased performance in the 4th quarter. And then, we've a general improvement in our underlying business based on what we saw within the 3rd quarter and that should add about 60 basis points. And again, we were able to reaffirm our full year constant currency guidance at 12% to 13%. And the only adjustment we made quite frankly is for currency, which is beyond our control.
And then I'll let Tom answer the second part of your question.
Okay. Well, with regard to some of the more volatile components, as we think about some of the issues you outlined, tariffs for next year, we estimate currently to be about a $3,000,000 full year impact. So certainly an impact, but nothing that's insurmountable. In terms of the tax rate, this year we are benefiting from a very improved tax rate versus prior year, largely due to two factors. The first is the Tax Cuts and Jobs Act and we expect for that benefit to continue into next year.
The other is due to stock based comp windfall benefit. And that, as you can imagine, is less predictable. It's somewhat dependent upon how people choose to exercise equity and how some of the restricted shares vest. So to be able to predict that right now would be difficult. We could have some better visibility as we get closer to the year.
On the tax front, there are a couple of things also that will cause the rate to perhaps have some upward pressure. The first is just the implementation of the swap and that will reduce our interest deduction and put some upward pressure. In addition, our mix has typically been skewing a little bit more North America based. And in fact, with the growth of vascular solutions and NeoTract, we expect that to continue. But overall, we expect our tax rate next year to be below where it was back in 2017.
I'm not sure if it's going to get to the level we're seeing this year. What other
Currency, Tom?
Well, currency is clearly a headwind right now. I think the average for the year is probably going to end up somewhere around $117,000,000 to $118,000,000 relative to that's on the euro, relative to where it's currently trading, which is more than 1.14 range. So that could be a slight headwind for us as we get into the year, but we'd have to see how the whole basket of other currencies are trending at year end. So certainly, there is some volatility as a result of FX movements this year. It seems to have stabilized a little bit right now in the kind of the 114 range.
Okay. And then Liam, just a follow-up here on the pipeline. A couple of interesting updates, obviously, this quarter, talking more about the MANTA device. Obviously, Perkuvance approval was nice in the reclass data. So first question is on Perkuvance.
The opportunity you described for that business several years ago, do you still see that as the most appropriate opportunity for the size of that market? And how do we think about the contribution of some of these products next year in terms of they're going to get the full commercial launch Percuvans, MANTA, obviously, REEPLAZ is probably not a major factor. But how should we think about the contribution for Perkuvance and Perkuvance next year? Thanks so much.
Yes, sure. So, we're at the early start with MANTA, David. So we are currently going through PMA approval for the key North American market. And that's really the goose that has the potential to lay the golden egg, if I can put it that way. It's the biggest market for large foreclosure.
We will I would be very hopeful that by the time we get to 2019 guidance that we would have very clear visibility on our PMA process and approval. If we do need a panel review, we could have approval in the first half of the year. If we don't need a panel review sorry, if we don't need a panel review, it will be in the first half of the year. If we do, it will be in the latter half of the year. And we'll know that for sure, I think, by February.
Regarding PerkyaVance, I still think the market potential for this is in that $300,000,000 range globally. The sales team are very excited to get the product back into their hands. We're doing a limited market release late in Q4 Now that we've gotten the approval and we will start to roll the product out during 2019. We want to assess the pent up demand that was there and the momentum that we had built up when we removed the product from the marketplace. And at that time then, we'll give a much clearer assessment as to what we expect in 2019, 2020 2021.
But clearly, it's a great starting point to get the 510. We're very excited about MANTA. We think that would address the $200,000,000 to $300,000,000 market opportunity, as I said in my prepared remarks, and that's looking at TAVR and EVAR closure procedures. And we firmly believe that we will be first to market with this product. This product is interesting because we've been talking to this company for 4 years.
And as an organization, we're interesting because we've been talking to this company for 4 years. And as an organization, we had a decision whether to make or buy this. We were working on an internal development ourselves, and we decided that it's very complex to get a large foreclosure device that works. In this it's very hard to get a large core device that works, get hemostasis. And one of the added complications when you're in the cath lab is that you won't bring in the next patient until you're sure your hemostasis is on the one that's on the table.
So we believe and we've got to prove this out with clinical data, but we believe we can make the cath labs more efficient. And some of the anecdotal evidence we've got from the Netherlands would tell us that they're getting an additional procedure through the cath lab as a result of using the mantle large bore closure device.
Great. Thanks so much, Liam. Nice quarter.
Thanks, Dave.
Thank you. Our next question is from Richard Newitter with Leerink Partners. Your line is open.
Hi. Thanks for taking the questions and nice job on accelerating organic
growth this quarter.
I wanted to ask a quick question on the OEM accounting changes. What was the contribution from that to organic growth? Was it contemplated in your original guidance plan? And could you talk about what kind of contribution that might have to 2019?
Yes. So it was contemplated within our guidance, Rich. And OEM had an excellent performance from a volume perspective as well as some benefit from the new rev rec rules. In any quarter, there are revenue puts and takes. And if I take them all into account, the puts and takes, including the OEM, we probably had a net positive of around 20 basis points, net net.
So the OEM gave us a positive. We didn't fully get through the disruption in the supply chain. And the total impact within the quarter of the OEM, to answer your question directly, is about 3,000,000
box rate.
Okay, got it. So you by my math, you still would have been above 5% backing that out, right?
Absolutely. And if you you know, Rich, there's always puts and takes, as I say. So if I take all the puts and all the takes, if I take the $3,000,000 positive from that, we didn't fully get through all of our supply disruptions. There's about $1,000,000 there. We got over $3,000,000 as I said on the Q2 from distributor orders.
Most of it's stuck, but it was about $2,200,000 of it's stuck. So you add it all up, it's about a 20 basis point impact.
Got it. And then just as we think of kind of the puts and the takes around gross margin as we head into next year, I appreciate you're not giving guidance, but it sounds like some of the items are beyond currency. I just could you give us a sense for how we should be thinking about gross margin directionally relative to 2018? There still should clearly be upward bias even when you net out all the puts and takes. Is that a fair assumption?
So as Tom said, and I'll throw it to Tom, but I'll just make an opening. As Tom said in his comments, most of these were transitory in nature. And our long term margin guidance, as we said, were ratable. So and I think that nothing has changed in our restructuring programs. Nothing has changed in the acceleration of mix coming from NeoTract and VSI.
As you can see, their performance is exceptional. But I'll get Tom to go into more of the details, I think.
Yes, and that's exactly it. So as we looked at the items that impacted 2018, the majority of them are transitory. I would say that the tariffs will be one that are sticky. We've quantified that it currently at $3,000,000 but again, that's not something that will throw us off our longer term track. As we look at that long term margin expansion, it's really predicated on a couple of key things.
1 are the restructuring programs that we put in place. And those programs are still right on track and delivering as expected. It's also a margin expansion story based on some of our key product offerings such as KneadTrak, vascular solutions, and even AvidaCare. And as we look at those businesses, we remain very, very confident in their performance and in fact pretty excited by some of the performance we've seen recently with NeoTract beating expectations and vascular solutions putting up double digit growth consecutive quarters in a row. So, we're excited by the margin drivers from both a revenue and a cost standpoint.
So you should expect to see continued expansion next year and to the coming years.
Got it. And maybe just one last one. I just want to be clear. So when this quarter and Q3, when you back out kind of all of the inorganic items, the actual kind of true organic growth even ex vascular solutions, which is organic, but even if you back out that contribution, the growth was somewhere in the 3 point 3% to 3.5% range.
Is that correct?
So our organic growth, Rich, was 5.6% and that includes about 1%
from BSI. So therefore, we're at 4.6% on a true organic basis for our core business within the quarter. And there's about, call it, 80 basis points of taking VASCO Solutions direct from a pricing standpoint that's included then in the
organic number.
Yes. Okay. That's really helpful. Thanks guys.
Thank you. Our next question is from Larry Keusch with Raymond James. Your line is
open. Yes. Hi, good morning. I wanted to come back and touch on the core business, Liam, really sort of understand how you guys are thinking about managing that business. There's obviously been a lot of focus on whether that business can grow 4%, maybe it's more like 3% to 4%, but I'm really curious as to just again, are you really trying to optimize the growth there?
Or is 3% or 4% good enough and really the resources are really focusing on the growth drivers?
Yes. Well, we have this philosophy, Larry, as you know, with Intelliflex that not all growth is equal. If you look at where we're trying to grow our business, we're trying to grow our business in NeoTract, within our interventional access, within Asia Pacific, within our vascular business and within our anesthesia businesses and now within Mantel. All of these businesses have one thing in common. They're all accretive to our gross margin and therefore they'll give us better leverage within our P and L.
Coming back to your specific question on our core business. If you look at the core business within the quarter, it grew by 4.6%. If you look at our guidance towards the end of the year, in the second half of the year, we should be very close to that 4% for our core business. And as I've always said, if our core business goes 4%, if it does a little bit less than 4%, we have enough levers within UroLift and within BSI to cover if it is slightly less than 4% to make it very comfortable in our 6% to 7% as an organic growth number over the multiyear period.
Okay, perfect. And then 2 other ones.
Just on UroLift,
what has to happen to push that really into sort of more of a frontline therapy position in the U. S?
Frontline, just repeat the last part Larry, I'm sorry.
Yes, in the U. S, again, what has
to happen or what could drive that device, that therapy into more of a first choice for a patient coming in with BPH system symptoms versus medical therapy first and then moving it to something like this?
So we think we're very close, Larry, to having this as the first line of care. All of the clinical data shows that the real life experience is very close to the LIS data, and that's very important, number 1. The clinical outcomes data is very, very compelling. The urinary retention that I mentioned is an important one because previously those men would wear a catheter for the remainder of their life. By using UroLift, now 90% of them don't wear a catheter.
We also need to get greater penetration within the urologists. I mean, we're still very early in the penetration rate of urologists, 12,000 urologists within the United States, and we have a long way to go to penetrate those urologists. Once we have all of those trained, it will become the standard of care. And the key number of urologists is those less than 6000 to treat 80% of BPH patients. But we're going to continue, Larry, to go deep urologists and wide to ensure this product is sticky and that it does become the standard of care for the treatment of BPH.
Okay, perfect. And then last one, just because you mentioned it, PIKS, maybe update us on the growth rate there. And remind me again, if you are in China or not, and again, what do you see the growth drivers for PIKs?
So our PIK growth was around 18% for the quarter, Larry, and we're really encouraged by that. We do not have our coated PIC yet registered within China. We're working on it. We have the clinical study underway to support our submission. And we're looking forward to having that product on the market in the next once we get clinical study done thereafter, the submission should take about 18 months.
So but we continue to take share within the key North American market. And it is because of our antimicrobial and antithrombogenic coding technology that reduces infections for the hospitals. And now that they have to report them, they're very keen to adopt our technology.
Great. Thanks very much and very nice quarter.
Thanks, Eric.
Thank you. Our next question is from Raj Denhoy with Jefferies. Your line is
open. Thank you, guys. This is Anthony in for Raj. Actually just a question, Liam, can you repeat for the Q4, the moving parts on days to organic growth? And then I'll have a few follow ups on the UroLift.
Thanks.
Yes. So in the Q4, we have one additional day, Anthony, and that should add about 1.3%. And as I said earlier, that's simply a max problem, having that additional day. And 2019 was at the same number of days as we had within 2018. And then obviously, UroLift rose into organic, that should add 3% within the quarter.
And a general business improvement continuing as we've seen in quarter 3 should be the last pillar to get us to our full year guidance range.
And then just on UroLift, can you remind us a little bit on new physicians versus existing physicians, where your penetration is today, more particularly on the ladder in existing physicians? And sort of where do you think that can go over the next 2 years?
Yes. So our existing I'll first start with how many we've trained. So we've trained over 1700 of the 12,000 urologists in North America. Regarding the utilization within physicians, our average physician that we've trained is doing an average of about 4 procedures a month. Our highest adopting physicians are up into the teens with their adoption rate with some of them even going beyond the teen numbers.
So we believe that's a nice move forward. So 97% of our revenues are coming from the existing physicians. And we continue and that's because of our strategy to continue to go deeper rather than go wide. And again, Anthony, it's about the utilization and we continue to see that utilization rate improve as we go deeper within these physician practices.
And then a follow-up there would just be the landscape is heightened a little bit, you have a Zoom out there, UroLift is out there. Those are the 2 newest solutions. I'm just wondering, is the market segmenting with these 2 solutions or are they going after sort of the same sort of patient sort of profiles? Thanks again. Good quarter.
Thank you, Anthony. So obviously both treatments are going after BPH patients. I think that our clinical data and in particular as it applies to sexual dysfunction, the reduction in catheter rates, it's critically important for men. And I'm speaking, Anthony, as a 52 year old man myself, I personally would not want to wear a catheter. I would not want to have any impact on sexual dysfunction.
And where we're targeting taking our share from is from drug dropout. That's where our core market, we believe, is not from the surgery market. I'm not really sure whether Rezum is targeting at the turf market and taking share in that smaller segment. It does to me appear to be more, at least from my perspective, to be more of an ablative therapy compared to the other ablative therapies, whereas ours, we believe, is just a better solution, non invasive, great clinical data, very fast recovery time, no catheter, no sexual dysfunction. So we still feel very confident that the clinical data will bear out in the long term.
Thanks again, guys.
Thank you.
Thank you. Our next question is from Mike Matson with Needham and Company. Your line is open.
Good morning. Thanks for taking my questions. I guess I wanted to start with the China business. Your growth was 14%, which is good, but it is down a little from I think the 22% you did last quarter. So can you just give us an update there?
And then can you remind us when you all start to lap kind of your move to the direct sales model there?
Yes. And you asked Mike, you absolutely nailed it there. That's exactly what we've done. We've lapped the Go Direct timeframe in quarter 3. So that is why you would see a slight deceleration in the China growth from that Go Direct.
But still, we're very, very happy with the performance. We believe that we have done excellent execution on the go direct of our vascular and cardiac business within China, and we continue to be encouraged by what we see within the growth within the key China market.
Okay. So it's largely a comp issue then and not any kind of slowdown in the economy or healthcare spending or anything like that?
No, no. I mean, even if there is a slight downturn in the general economy, I can't see it having that much impact on healthcare. I mean, the government is very focused on providing significant continued investment into health care. And quite frankly, the people are demanding better health care and to pay for service and they are demanding better health care within there. And of course, we all know it's hard to determine what exactly is a slowdown in that geography with the data that comes out.
But we haven't seen it in our business, Mike, to answer your question directly.
Okay. Thank you. And then just a couple financial questions. So the 4.6% kind of legacy organic growth, you did have the shift of orders from Q2 to Q3. So are you able to quantify how much of that 4.6% was due to that those orders that got moved from Q2 to Q3?
I am, because we have that data. So the uptick initially, we got a bolus of orders in excess of 3,000,000 dollars About $2,200,000 of it was sticky to the quarter. And that was anticipated in our guidance as well, Mike.
Okay. Thanks. And then, just the Tom mentioned that the you're raising your guidance despite the increased currency headwind. So can you quantify how much additional EPS headwind you're expecting at this point to the annual EPS versus what you were expecting, I guess, as of your last quarterly call?
Are you referencing related to the change in currency?
Yes, exactly. Yes. I mean, how much more I guess I should say, how much has it changed? I mean, because maybe at a tailwind and it's just less of a tailwind now or maybe it's a headwind
and it's more of a headwind now? Yes. Well, just for currency overall on the revenue impact, it's still a tailwind for the year. We now estimate that tailwind to be about 150 basis points. It used to be an expectation of 200 basis points.
So that's going to reduce our revenue obviously. And that has an impact to our 3rd and 4th quarter earnings. I would say that's kind of on the negative side. We also have some dilution from the recent acquisitions that's going to hit the Q4, the incremental tariffs. On the positive side of the equation, we've got reduced interest expense as a result of the swap and frankly strong third quarter earnings in part due to taxes and some other factors.
So a number of pluses and minuses that kind of all come together to offset what our expectations are in the Q4 as to the pluses and minuses from currency and other factors.
Okay, that's helpful. Thank you.
Thanks, Mike.
Thank you. Our next question is from Matt O'Brien with Piper Jaffray. Your line is open.
Thanks for taking the question guys. I wanted to push first a bit on the gross margin expansion. I know it was asked. Just two pieces. One, it sounds like the restructuring is on track.
Can we just dive a bit in on what steps you've taken thus far with that and any early benefits you're seeing? And second, as we think about the bridge getting the company closer to the long range plan, about 300 basis points by 2021. What's the ease between mix from acquisitions, restructuring or core expansionnew products is the most important to get you there or importantly to bring you above that range?
Okay. Well, let me just first touch on, I think you asked about restructuring. And so as we look at all the programs out there that we have in place, there are a number of programs underway, including, frankly the 2014, 2016 2018 footprint realignment programs, the integration of vascular solutions and OEM manufacturing project. If you combine all of these, the restructuring savings are in the range of $107,000,000 to $127,000,000 by the time they're fully completed. Now what we've talked about is through the end of 2017, we've realized $45,000,000 of those savings, leaving another $62,000,000 to $82,000,000 for this year and through the completion of these projects.
And the way to think about that is, we had talked about $25,000,000 to $35,000,000 being in the timeframe of 2019 to 2021. And then we've obviously realized we'll realize some this year and then at least the remainder for 2022 to 2025 timeframe. So the way to think about that remaining $62,000,000 to $82,000,000 of savings is probably a quarter of it this year, about 40% over the timeframe 2019 to 2021 and then the balance thereafter. And how that plays into our longer term gross margin objective is it's certainly a component. But as we look at the most important components of that 200 to 350 margin or if you say basis point margin expansion through 2021.
The biggest impact is really related to mix. So the favorable benefit from NeoTract, Vascular Solutions and other products such as our PICS and VidaCare, really are the largest component driving that margin expansion. The restructuring program is certainly a component of it. And if you think about the numbers that I cited of $25,000,000 to $35,000,000 that's about 100 basis points at the midpoint of that range. And again, I would say that mix will play a more important piece of the margin expansion story over that 2019 2021 timeframe.
Okay, thanks so much. That's very helpful. And then the second one is on UroLift. The clinical work there has been really strong the past few months, both on the results front and the cadence. So I wanted to ask your thoughts on the investment specifically as it relates to competition there.
So what is the latest on competition in the marketplace? And are more investments needed in the channel or on the clinical front? Or are you pegging these efforts as expansionary in the marketplace thus far?
So our view is that we will continue to do investment behind clinical data. I think I've spoken to the investment community about a study we just kicked out in France. That's going to assist our reimbursement within Europe. And we have never thought, Matt, that we would be alone in this large BPH market. But I think we have the most robust clinical data out there in the market.
And that was borne out in this conference in Paris, where we had 5 papers presented at the conference, which was more than any other technology in any area of men's health as far as I could see and also much more than any other more papers for UroLift than any other BPH technology that's out there. Now I can assure you there's probably 3 skunks works going on somewhere working on a treatment for BPH. I can also assure you in the last 20 years, the graveyard is full of technologies that were supposed to address BPH and that UroLift is the first one that has come up with a unique methodology to treat BPH with the symptoms that we have. So you can expect to see a continued cadence and investment on further clinical data to support the UroLift as making it a frontline care for BPH.
Okay. And you just don't you don't think it's incremental due to that competition? It's just the same cadence that you would have expected?
Yes, we have an internal plan for ongoing clinical data that was considered when we put out our 3 year plan. So I wouldn't see any change to that required to do what we need to do with UroLift to make it the standard of care, Matt.
Okay, perfect. Thank you so much.
Thank you. Our next question is from Brian Weinstein with William Blair. Your line is open.
Hey, guys. Thanks for taking the questions. Obviously, a much better quarter this quarter and everybody seems pleased with it, but it has been a more variable year here. And as I think back over the last couple of years, it seems like it's more variable than what we've seen over the last couple of years. And I'm just curious as to whether you guys have any strong feeling as to why there seems to be more variability in results?
And specifically, Liam, when you were in the COO role, things seemed to be fairly stable. I don't think that you have filled that role in the organization. Do you think that there's a need for a COO to come on in and help bring a little bit more stability so that we don't have the ups and downs that we've seen this year?
Well, Brian, I think that consistently, if you look at on a full year basis, Teleflex has consistently performed. And from 2014 to 2017, our average constant currency growth was 4%. And Brian, this is almost like when you get a little bit older and you look back and you think every summer was a great summer. In the reality, not every summer was a great summer. And even with IntelliFlex during that time, and thank you for complimenting me on my COO role.
But even during that time, Brian, there were ebbs and flows. We had nuances within the quarter. But as we saw in this quarter, I always try to remind people, with every yes, there is a flow. And we saw that rebound very strongly within this quarter as well. We have made management changes by appointing a head of North America to make sure that we have that consistency of performance.
And I think that we don't give quarterly guidance, Brian, and Teleflex should be judged on how we do on an annual basis. And consistently, we performed on an annual basis.
Okay, great. Thanks for that. And then just my follow-up would be, you talked a little bit about some areas where you may be winning some share, but can you talk just more broadly about categories where there are share wins and maybe some increased competition and some share losses? Thank you.
Yes, sure. So I think I'll start with the share wins for sure. I think that obviously PICCs is a nice area for share wins. Biotechare continues to perform very well and that's not really a share win that's converting the market. Our interventional business with the BSI portfolio continues to grow and take share.
And I'm really encouraged by what we're doing within Asia Pacific. I'm not sure I would categorize it as a share a lot, but we do see, tougher economic volatility, if I can put it that way, within EMEA, where there is more pricing pressure within the market. It's always kind of been there, but Europe continues to be a fairly price sensitive market for Teleflex and our portfolio there. And that's probably the area I'd point out where we see a little bit of additional competition.
Thank you.
Thank you. Our next question is from Dave Turkaly with JMP Securities. Your line is open.
Hey, great. Thanks. Just really quickly, you mentioned you just mentioned vascular solutions, obviously, 21% growth is a big number. I'm just curious, is there anything you'd point to driving that from a new product front or sales force or what would and how sustainable do you think that is?
So within the 21%, obviously, for BSI, there is a the Go Direct is counted within that. So that's a large portion. But outside of that, we do see Turnpike as a product continue to drive significant growth within that portfolio. I mean, that's still growing in the 40% range. We see the GuideLiner and Trapliner doing an excellent job for us, and we'll continue to take share within that segment.
And those would be 2 of the areas that we've also launched new products around guide wires that are building momentum within the marketplace. But we're incredibly pleased with BSI and the performance of BSI and indeed the performance of our overall interventional business unit, because along with BSI, we're seeing a nice uptick on legacy products because of the additional sales force. And we didn't build sales synergies into our models, but I'm seeing that we are getting them.
Great. And then on to this Central Medical, the MANTA, based on the description, the picture there in the collagen component, it sounds like it may be similar to the old angiocele, Kensi Nash Terumo device, but maybe for a larger access. Just curious if that's the case. And then would a good approximation of a domestic ASP be a couple of $100? Thanks so much.
So this is a different market segment. It is similar to that product that you mentioned, but it's a very different market segment. And therefore, we believe it would attract a significantly higher ASP. Remember, Dave, that when they're closing these large foreclosures, they're using 2 or 3 of these devices right now. So it's an expensive closure system for them.
They also have 7% on average complications, as I said in my prepared remarks. We can take those down to 2% in the clinical data that we demonstrated. And as I also said earlier, and we got to prove this, but what we have anecdotally seen in the Netherlands where we have significant penetration with this device is that they are actually able to make the cath lab more efficient. Now if you could get one more patient through that cath lab, all bets are off at the price because they won't even be talking about the price of the product because it just makes them more efficient. And of course, they will know that for vascular complications, that patient is going to cost the hospital $18,000 to get that patient treated.
So therefore, this will have a higher price point than the one you stated for sure.
That's great to hear. Thank you.
Thank you. Our next question is from Isaac Ro with Goldman Sachs. Your line is open.
Good morning, guys. Thank you. First question is on NeoTract. Just interested in some of the investments you're making in Japan, if you could maybe qualify and quantify what those mean for that part of the business?
Okay. And yet again, the investments in Japan were contemplated in our 3 year guidance, so to make that clear. We will begin by putting some clinical people on the ground to start to develop the market. The key here is to get our reimbursement. So we will work in the Q4 beginning and then in 2019 to bring the product to get some clinical exposure to it.
And then we will obviously begin immediately going through the 12 to 18 month process to get reimbursement for the product. We will then move to get those clinicians that we will have developed to do the clinical work for the post market study that is required as part of our approval. But I got to tell you, we couldn't be more excited about getting this product shown and approved. We believe that the using the same criteria inside the U. S.
Market at about $6,000,000,000 the Japanese market is about $2,000,000,000 And the interventional urology team have done an excellent job. I would like to remind people, we only submitted this shown in Q1. This is an incredibly fast timeline to get approval within the same calendar year. Internally, we were expecting it to take at least 12 months. So we couldn't be more pleased with the progress we're making there, and we will work to develop market during 2019 in anticipation of reimbursement sometime thereafter.
That's helpful. And then just a follow-up question on M and A. Obviously, if you listen to the earnings calls across the industry, most companies, if not all of them, are pretty active in looking for assets. So you guys are able to pull off a couple of pretty notable deals here that have already started to sort of change the growth profile of the company. Can you talk a little bit more about where you're looking at the margin defined assets at valuations that make sense and either whether that be tied to a therapeutic category, somatic category or just size and scope?
Just kind of curious how you're finding assets and kind of how we should think about pacing of deal flow over the next 12, 18 months?
Well, I think Matt is an interesting example, Isaac. We met with Greg and the entire team 4 years ago, and we have been building that relationship, watching their progress very closely. That's one example as to how we find assets. Obviously, another one is the banking world know that Teleflex is very acquisitive. They know what we're looking for in the assets that we want.
They know that we're very focused on interventional space, men's health, the vascular space and also anesthesia and surgical. So they will bring us assets as long as they know that it meets our growth criteria, our margin expansion criteria and our leverage criteria. As Tom outlined in his prepared remarks, we are now on a growth leverage down near to the low 3s. So that gives me encouragement that we also have the financial ability to do activity if we find the right asset. It's not Lawson as Intelliflex that we're a disciplined organization.
We will stick to our strategic criteria, and we'd only get credit for the good acquisitions, not credit for acquisitions, full stop. So we're very focused on finding the right assets and executing. And I think it's become a core confidence of this organization to find these assets, bring them into the Teleflex family and accelerate the growth thereafter by leveraging our global footprint.
Got it. Thank you, guys.
Cheers, Isaac. Thank you.
Thank you. Our next question is from Kristen Stewart with Barclays. Your line is open.
Hey, guys. Thanks for taking the question. Hey, Kristen.
Thank you very much.
It's good to be back. I just wanted to just kind of go over the EPS guidance both on a non GAAP and a GAAP basis. Am I kind of doing the math right that the change in the tax rate contributes about $0.20 to the full year?
That would be the right calculation, yes.
Okay. And then on the non GAAP guidance or the regular GAAP guidance, that was reduced by $0.60 I was wondering if you could just talk to why some of the restructuring and acquisition integration charges are going to be more significant now relative to what you guys were expecting a quarter ago?
Okay. Well, there's a couple
of things that play into that. One was a change in some of the contingent consideration payments as we continue to see the performance of some of the acquisitions, we adjust the amount of contingent consideration to reflect that. We also had an impairment during the quarter related to our Hotspur technology, which would roll into that. And then we had a restructuring program earlier this year that obviously had some impacts.
Okay, perfect. And then a last question just on acquisitions and accretion dilution. NeoTract had always been thought of as $0.35 to $0.40 accretion for next year. How is that looking and how should we just think about Essential Medical? Is that more dilutive next year from an earnings perspective or neutral?
So I'll start with Essential. Obviously, Essential is dilutive in the 4th quarter, which to our earnings, which is partially reflected in Tom's comments around our full year guidance. Now we will give guidance for Essentials in February. And the only reason I'm saying that, Kristen, is because it's very dependent on whether we need a panel review or not, as I said a little earlier. And we will have greater line of sight on that when we come to give AirLink guidance.
Our expectation is that Essential will be dilutive in 2019 and then accretive thereafter. And then your other question was around NeoTract. Yes, and we're well on track to have NeoTract to deliver in line with our expectation of $0.35 to $0.40 in 2019.
Okay. Thanks very much, guys.
Thank you. Thank you very much.
Thank you. And that does conclude our Q and A session for today. I'd like to turn the call back over to Mr. Jake Elguis for any further remarks.
Thanks, operator, and thanks
to everyone for joining us on the call today. This concludes the TalpPlex Incorporated Q3 2018 earnings conference call. Have a nice day.
Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program and you may all disconnect. Everyone have a great day.