Just pasting, Q&A from last CC Raymond Myers – The Benchmark Company
Steve, I had some questions, but you just intrigued me with what you just said; that the SynerGraft Aortic Valve would be "a big deal". Can you compare the opportunity for a SynerGraft Aortic Valve with the SynerGraft Pulmonary Valve, which you already have cleared?
Well, that addresses a much bigger market for adult aortic disease, because the pulmonary valve is really focused primarily on pediatric and children, neonates to maybe 20 years old. So the aortic valve opens up the whole adult reconstruction market for us. I don’t have any published data at the moment regarding that. But I do know in the collection of the data for the HDE that we have some outstanding results from SynerGraft valves that are been implanted for 10 years or better.
And it’s definitely a better valve than SynerGraft-processed valve in general are better valves and are more durable and long life than a standard-processed cryo preserved valve and the rival, the performance characteristics of any other valve out there. The data will probably be published in sometime here in the next year, year-and-a-half, but it is included in what we are submitting to the FDA regarding that application for the aortic valve.
So, for instance, I was just told this week by one of the physicians that has a series of aortic valves that go out over a 10 years that there are no signs of deterioration, that they have normal hemodynamics and they are functioning perfectly. And so those things are really big considerations and of course you don't have to use anticoagulants with them. And I’m looking forward to that product being approved by the FDA.
I’m very positive about the fact that the HDE will be granted for that. But, as I said earlier today, that submission, all of the data and everything won’t be submitted until sometime early next year.
This valve may be great for mankind. However, it resides on the "tissue" side of CRY's product line. The margins there are low. Right now 51% of revenues come from tissue related sales. After the allocation of all fixed and variable costs the entire tissue business only generates less that $2 million in free cash flow. The remaining $15 million comes from BioGlue and HemoStase. Those are my WAG calculations anyway.
I will believe its a big deal when it is FDA approved and more importantly when CRY shows me the free cash flow.