Merit Medical Systems (MMSI) Wells Fargo 2024 Healthcare Conference summary

Leadership and organizational priorities

• New president is focused on executing the long-range plan, talent development, commercial excellence, and gross margin improvement over the next 6–12 months.

• Succession planning is underway, with the board considering both internal and external CEO candidates and aiming for continuity.

• Current CEO will focus more on M&A, legal, and patent issues, enabling the next generation of leaders to take on more responsibility.

Rhapsody product and market outlook

• Six-month pivotal trial data for Rhapsody will be presented soon, with high expectations based on prior results; one-year data is also approaching.

• Reimbursement strategies are being developed, with multiple pathways under consideration and external advisors engaged.

• Rhapsody is expected to be accretive to gross and operating margins upon approval and launch.

• The product features a unique non-permeable layer to prevent restenosis, differentiating it from competitors.

• Commercial rollout leverages existing customer relationships and a dedicated sales force, with experience in launching similar products.

Financial performance and guidance

• Organic growth was 6% in the first half, with some expected seasonal slowing in the second half; guidance remains realistic and achievable.

• China performed better than expected in Q2, but volume-based purchasing and anti-corruption measures will continue to impact results into 2025.

• OEM segment is rebounding, with anticipated 20% growth in the second half due to inventory normalization and new deals.

• Gross margin reached 51.5% in Q2, with expectations to deliver at the high end of guidance for the year.

• SKU rationalization of $15 million in Europe is complete, with no major further actions planned.