CONMED (CNMD) 2024 Wells Fargo Healthcare Conference summary

Market and operational trends

• No slowdown observed in surgical procedure volumes for general surgery or orthopedics; recent softness in orthopedics attributed to internal supply chain constraints, not market demand.

• Supply chain challenges in orthopedics, especially sports medicine, have persisted longer than expected, but foot and ankle supply issues have been resolved.

• Guidance assumes supply constraints will be cleared by year-end 2024, with confidence in returning to normalcy in 2025.

• No spillover of supply chain issues into general surgery; inventory and product availability for AirSeal and Buffalo Filter remain strong.

• Lowered top-line guidance for the year is solely due to orthopedic supply chain issues.

Segment performance and growth outlook

• Growth dynamics in general surgery and orthopedics expected to mirror first-half trends in the second half of 2024.

• Upside to guidance depends on outperformance of recent acquisitions and market strength; downside risk tied to potential market softening.

• No material long-term market share loss expected from supply constraints; any share loss likely to be minor and temporary.

• No changes to commercial strategy or pricing anticipated due to supply issues, as contracts are stable and customer focus remains high.

AirSeal and product differentiation

• AirSeal usage trends remain consistent with pre-launch levels, with about one-third of robotic procedures using AirSeal.

• Surgeons are returning to AirSeal after initial commitments with new robotic systems, confirming product differentiation.

• No pause observed in capital or disposable purchases for AirSeal despite new market entrants; product remains well-established.

• AirSeal's clinical benefits, especially in longer, complex procedures, continue to drive surgeon preference.

• AirSeal and other insufflators can coexist in the operating room, with usage determined by surgeon and case type.