Integra LifeSciences Holdings Corporation (IART) Earnings Call Transcript & Summary

Good morning, attendees. Please welcome to the stage, your Senior Director of Investor Relations, Chris Ward.

Good morning, and thank you for joining us, and thank you for coming to Integra's 2023 Investor Day I'm Chris Ward, Senior Director of Investor Relations for Integra LifeSciences. It's been about 2 years since we've had our last Investor Day. So really excited to have everyone here today and everyone online. And thanks to you who joined us here in New York today and everyone who's joining us virtually on our webcast. We truly appreciate your interest in Integra. For your convenience, the slides for today's presentation are posted on our website at integralife.com in the Investor Relations section under Events & Presentations. As a reminder, some of the comments we will make today are forward-looking statements. Our actual results may differ materially from those projected in the forward-looking statements and some of the numbers in the presentation will contain non-GAAP financial measures. Please refer to the current report on Form 8-K filed with the SEC on February 22, 2023, in connection with our annual report on Form 10-K where we provide definitions of these non-GAAP financial measures and provide information regarding why we believe these non-GAAP financial measures provide useful information for investors and a specific manner in which management uses these measures to evaluate performance. In addition, we will discuss products in our pipeline that have not yet received regulatory approval. Throughout today's presentation, we will reference market size and market share information that reflects our internal estimates. Looking at our agenda for the day, Jan De Witte, President and CEO, will begin the formal presentation with an overview and strategic update for the company. Following Jan, are commercial leaders for Codman Specialty Surgical and Tissue Technologies divisions will provide a detailed review of their respective businesses, followed by our leaders in digital strategy, international and global operations. We will conclude our formal presentations with our long-term financial outlook and closing remarks. We will have 2 Q&A sessions this morning, one following our digital strategy presentation and the second following our long-term financial outlook and closing remarks. We ask that you keep your questions limited to the subjects that have been presented up to that point. And for those in the room, please wait for a mic so everyone can hear your question. For those on the webcast, there's a dialogue box on your screen that will allow you to submit questions throughout this morning's presentations. We will include questions from the webcast during our Q&A sessions. At about noon, we'll end our formal webcast. And for those in New York, we will break to an informal lunch where members of the Integra leadership team will be present and available for additional questions. So with that, it is my pleasure to turn the program over to Jan De Witte, President and Chief Executive Officer.

Good morning, and welcome to all who are joining us here in New York today. And also welcome to people on the webcast. It's great to be in person again, and I'm happy to see many familiar faces and also some new faces here in the room. Some members of the Integra Board are here with us today as well as several of our executive leaders and senior Integra leaders. And as Chris said, some of you -- some of them will be presented here. Others, you will be able to meet over lunch. This morning, we're going to be spending time talking about who we are, where we play, what makes us unique, where we aim to take Integra LifeSciences and how we will get there. This is not my first Investor Day, but it is my first at Integra since taking over the helm 1.5 years ago. Before coming to Integra, I served as the CEO of Barco, a Euronext listed specialist in advanced visualization technology for corporate, entertainment and health care solutions. Whereafter resetting some of our culture and operating excellence practices, we focused on creating shareholder value through commercial acceleration, international growth, new product development, digital innovation and operating efficiencies, and we ended up more than tripling our enterprise value over a 4-year period. Prior to Barco, I spent 17 years in multiple senior leadership roles at GE Healthcare, including COO of the health care IT business. And before that, worked 5 years in strategic consulting at McKinsey and in operations at Procter & Gamble. I'm happy to be fully back in a great health care technology business and an ecosystem where technology makes a difference and where the changes in the ecosystem create opportunities for growth. As we go through the presentations this morning, you will realize why I'm so excited about being at Integra and our technology. The last 1.5 years has passed rather quickly as we navigated through the residual effects of the COVID pandemic. But this turbulent period has allowed me to learn the business fast. Its operations, our broad and deep technologies, our talents and our culture. And it has enabled me to start putting my fingerprints quickly on a number of strategic and operational areas. Now what continues to strike me since I joined Integra and got to know our organization and our rich history is the keen sense of purpose in the organization. You can feel it every quarter when we hold our global town hall meeting, where we invite patients and surgeons to talk about our products and how they have made a difference in their lives. Last year, we had Dr. Claire Dillingham from Moses Cone Memorial speak to us on how she used MicroMatrix and Cytal products in a traumatic wound case for a patient in a terrible tractor accident. We also had the pleasure of listening to an inspiring and brave young lady, Isabella McCune, who benefited from our Integra Skin after severe burn accident and where our technology enabled her to recover and at the age of 12 climb Mount Kilimanjaro. These powerful stories inspired us to revisit our purpose, mission and vision. So we can reflect the meaningful impact we make on health care providers and patients around the world. And what you see on this slide is where we landed. Our purpose is to restore patients' lives through technologies that transform surgical neurologic and regenerative care. We will realize this by innovating, innovating treatment pathways and enabling new standards of care. The work that we do at Integra matters to our colleagues, to our health care customers and to our communities and our aspiration is to be the first choice of clinicians and health care systems. This strong purpose at Integra is the glue that binds us together and it still is a tremendous source of pride and energy in the organization. It is this energy that we're channeling towards realizing the many opportunities we have at Integra. And here are the opportunities we see after having spent significant time in the field last year with our sales force and our customers across the world. It's clear to me that this strong presence in large, attractive markets is a tremendous asset to capitalize on. And having met many of our sales teams and visited our manufacturing facilities, it's also clear that we have further opportunity to strengthen our operational and commercial excellence to drive further market and margin expansion. Last year, when we did our strategic reviews, it further reconfirmed our strong position, but also the many opportunities to broaden and deepen our reach along care pathways through NPIs, digital and international expansion. Before I joined, I had already known Integra to be an acquisitive company. Now that I'm on the inside, it is clear we have the strong balance sheet and the leadership experience to act on strategic M&A opportunities in adjacencies and in high-growth segments. And finally, over the past year, we spent significant time with the leadership team laying our plans to execute our integrated strategy and to pursue priorities to achieve profitable growth acceleration. Pulling on these key levers, we will fuel our growth and value creation now and into the foreseeable future. Now before going a bit deeper into strategy, let me first ground you in our business. We spent the last several years building and refining our business into 2 key business segments and organizational divisions. The first segment is focused on neurosurgery and specialty surgical instrumentation under our Codman business, led by Mike who will be speaking right after me. The second one is regenerative wound and surgical reconstruction under the Tissue Technologies business, led by Bob who also will be on stage this morning. Both segments have product franchises that leverage and market our key collagen regenerative technologies. We were founded in 1989 based on this collagen technology, and Integra has proven its staying power through many economic cycles. Today, our company has more than $1.5 billion in global revenue with market-leading brands sold in about 120 countries. We're a player with critical scale, which allows us to innovate while staying focused on key differentiating capabilities and building commercial relationships that translate to recurring revenues. The markets we compete in and our position in those markets formed a strong foundation for us to accelerate profitable growth in the coming years. These markets have significant populations with chronic diseases with health care providers who demand and value technological advancements and who reward players like Integra for innovation and value differentiation. We're uniquely positioned to take advantage of these market conditions. As you see on the right side of this slide, Integra offers a unique breadth and depth of products and technologies, a best-in-class and trusted sales force, a track record of execution and profitability enabled by a strong balance sheet and fiscal discipline. And the Integra business enjoys the presence of established M&A capabilities and practices to continue expanding and optimizing our portfolio and capabilities. Since the last Investor Day in May 2021, we have executed key growth catalysts while navigating the business through the COVID turbulence. There's a lot on this slide, but let me call out a few of the highlights on the left side of the page. Mike and Bob later on will be speaking to points on the right-hand side later. Last year, I led 2 divisions. and our international team through a strategic refresh, defining and activating a more focused and integrated growth strategy to maximize the value Integra can deliver to clinicians and health care systems. This work has also served as the basis for our future M&A activities, our M&A game board, as we call it. We sharpened our capabilities and execution excellence, specifically in commercial operations, supply chain and quality systems. I'm proud of what the team has done here, though there is more work to be done. We also formalized our ESG road map, a pragmatic, yet powerful framework for our sustainability efforts moving forward and a way to make ESG and sustainability a natural part of how we do business. We published our first ever ESG report, which you can find on our website. We also hired key executives to lead our quality, regulatory digital, IT, medical and international teams. Each of these leaders bring the thought leadership and execution experience needed to drive our strategy and further attract top talents. And despite the still rough 2022, we delivered solid financial results and demonstrated the resilience of our business and our teams. We've navigated our P&L well through the pandemic while continuing to invest in foundational aspects of our business. We grew 4% organically and exercised strong fiscal discipline. We drove efficiencies to offset unprecedented margin pressures, which subsequently contributed to margin expansion, though not to the level of progress that we had projected. And through 2022, we worked on redefining our integrated growth strategy and to identify gaps in areas we needed to catch up. And the next slide shows the results of that work. We've redefined our strategy into 2 key dimensions. The first is growth drivers, levers that directly impact the growth ambitions of the company. We will activate investments and business priorities that will drive innovation and customer outcomes, including building digital capabilities. We'll focus on how we will further expand our markets outside the United States and how and where we can invest to broaden our position and impact in the care pathways. The second, I mention is key strategic enablers, foundational pillars that support these drivers, such as operational and customer excellence and cultivating a high-performance culture. There has been great progress on these drivers, and I'm excited to have our executive leaders later this morning, share more details on the plans behind our integrated strategy. Now Mike, Bob and Mark, when they are up here, will illustrate the common denominator that runs through each of our divisional strategies. The opportunity to broaden our presence and impact on the care pathways by following and catering to the needs of clinicians and patients along the patient journey in order to maximize outcomes for them. The graphic on this page is rather simple, but it captures tremendous opportunities for growth for Integra. Today, Integra has a strong product portfolio and is very much present in the acute care areas of the hospital. This gives us a great starting position to add further value to the care system and across the patient journey along 3 dimensions: first, further strengthening our surgical offerings in the acute area, building out and innovating our product offerings. Second, moving upstream, upstreaming the patient journey into surgery planning and workflow support; and third, moving downstream from the acute area into other sites of care or into extended patient monitoring. So the way we are visualizing this patient journey is guiding us in our evaluation of commercial and technological opportunities that will deliver growth. It is also guiding us in how we prioritize our investments, how we think about geographic expansion and where we aim to leverage digital innovation. It's also helping us to define the filters for our M&A game board as we screen for acquisition or partnership opportunities. This focus on the care pathways has also guided our priorities to further build out or drive stronger end-to-end innovation and commercialization. Over 2022, we have started to strengthen our strategic marketing proficiencies. We've stepped up clinical evidence generation and clinical operations and how they connect with our selling efforts and clinical education globally. We're also growing our R&D and innovation capacity and piloting digital capabilities. You've heard me a couple of times refer to the importance of new capability building and talents and being able to attract, develop and retain those talents will be a key business differentiator. Integra values have been core to our workplace culture and 2022 was another year of great milestones resulting from the efforts around building an environment of accountability, talent development, creating a diverse and inclusive workplace and progressing on our ESG imperatives. Our people are our greatest asset, and we want to nurture a culture of accountability around continuous process improvement, simplification and ongoing focus on quality. We're committed to talent development, whether it's through formal programs or on-the-job learning and achievement. These are essential to employee engagement and job satisfaction. Diverse and inclusion has been the cornerstone of our people strategy, and we will continue to build on the momentum through our diversity programs, employee research groups or partnerships with external organizations focused on driving inclusion in the workplace. And finally, we will execute the ESG road map we established last year and provide deeper and broader disclosure of our progress against our targets. I'm very proud of our executive team, leading Integra. It's a team that we continue to build. Since the last Investor Day, around 2 years ago, half of the leadership team are new in their roles, but highly experienced in health care and their function. Together, members of the ELT bring deep knowledge and capabilities that are critical to executing our strategic priorities. Today, you will hear from and get to know Mike McBreen and Bob Davis a lot better as they take you through our divisional strategies and plans. Mark Jesser, who joined us less than a year ago, has an extensive career in digital innovation and will explain our thinking around digital and where it can bring value to Integra. Harvinder Singh, who joined us 6 months ago, built his career in healthcare technology and commercialization outside the U.S. And he will update us on international strategy accelerators. And then Steve Leonard will highlight our operational progress and priorities. Some of our other recent hires in the ELT include Susan Krause, Jessica Smith, Dr. Stuart Hart and Gurpreet Kaur respectively, in our quality, regulatory medical affairs and clinical apps and CIO roles. Each of them are bringing new skills and leadership in line with our market expansion, innovation and business efficiency objectives. This terrific leadership team is highly accomplished in running complex operations and nurturing diverse and inclusive organizations, which translates to creating the high-performance culture we strive to build. Our CFO search continues and we have a very strong slate. And together with our Board selection committee, we should be very close to identifying a great leader with operational and strategic talents and the right fit to the company. We're also extremely fortunate to have the support of a strong Board that has broad global experience and expertise in health care, executive management, finance, governance, sales and marketing. Our most recent addition to the Board, Renee Lo is currently the CTO Partner and Regional Director for APAC at Google. She joined us last year and has deep knowledge of digital innovation to the Board as well as a keen understanding of the Asian markets. Three of our board members are here with us today. So let me extend a special welcome to our Chairman, Stuart Essig who is joining us remotely. And then Keith Bradley and Shaundra Clay sitting here in front joining us here in the room. So let me close this business overview and remarks with a slide that highlights the targets we shared 2 years ago at our last Investor Day. So let me recap our long-term targets. Bringing organic growth into the 5% to 7% range, further grow our gross margin into the 70% to 72% range, drive EBITDA margins between 28% and 30% and achieve double-digit EPS growth. And over the past year, many of you, okay, if not all of you have asked me if I stand by these long-term financial targets. And my answer is yes. My first month on the job was spent assessing our markets and our business strategies and despite the headwinds from the COVID pandemic, which has derailed our time lines. These are the right long-term performance targets for Integra. So today, we are reconfirming these targets. And for the rest of this morning, we're going to be taking a deeper dive into the growth catalyst and margin accelerators to achieve these targets. And the path and time lines towards these objectives. So this closes my opening remarks. Let me turn the floor now over to Mike McBreen, our President of our Codman Specialty Surgical Division. With that, Mike, the floor is yours.

So thanks, Jan. Good morning. Before I dive in, let me touch a bit on my background. I joined Integra in 2017. It's part of the Codman acquisition from J&J. I was there for 21 years and helped lead the Neurovascular business as well as the Neurosurgery business. In the last 5-plus years at Integra, I was the President of our International business, and I've been in my current role since June of 2020. I'm really excited to be here today and give you an update on our business here at [ CSS ]. This morning, I'll get into all the key areas for the business and make sure I give you a flavor for our people and the passion we have for this business. We've made great progress on commercial execution, in our innovation pathway. I'll do a deeper dive into the markets we serve and walk through 3 case studies that show how we're executing on innovation, addressing meaningful customer needs and ultimately improving outcomes for patients. It should be a great session, and I'm looking forward to your questions later in the day. Okay. Let me give you an overview of the key messages you're going to hear from me today. First, we enjoy a global market-leading position and have a lot in the pipeline to drive growth across NPI execution, international expansion and focused channels in both neurosurgery and the instrument spaces. Our global commercial teams are fantastic. You'll hear me talk about this a lot today. We have a best-in-class sales force, which helps us maintain steady performance in all regions of the globe. We are unique due to our heavy focus on neurosurgery, and this dedicated focus plays a big role in our success, attracting tenured sales reps who have built their careers in neuro making it very tough to compete with our deep neuro focused sales team. We love this pipeline focus and the ability to attract talent. It's really a core part of who we are. As a well-established global business, nearly 40% of Codman revenues generated from outside the U.S. As you will hear from Harvinder shortly, we have strong performance, particularly in Japan and China. My second key message is focused on our continued investment in innovation to drive long-term profitable growth, address unmet needs to grow our base business and provide a gateway to new market segments that will change the standard of care through state-of-the-art surgical approaches and instrumentation. Later in the presentation, I'll take you deeper into 3 innovation platforms that will drive growth and market expansion for us over the next few years. My third message is focused on the strategic shift to broaden our care pathway. This expanded view is heavily built on the patient and our market-leading position compels us to find new ways to expand how we meet their needs, preoperatively within the operating room or in other sites of care such as the ICU. Our 2 main markets are good places to be in and really complement each other. In each of these spaces, the market rewards dedicated focus in both innovation and sales channels. Neurosurgery is highly specialized with steady growth from demographic factors and advancements in diagnostics and imaging, driving treatment growth. Neurologists and neurosurgeons are developing new protocols to identify and treat advanced diseases, which support a consistent 3% to 5% market growth rate. A great example of this is our MIS technology. Our Aurora Surgiscope becomes even more valuable when improved new imaging technology provides details on the bleeder tumor. I see some unique trends in our markets. Neurosurgeons are among the lead of surgical disciplines and have a strong influence in purchasing decisions within the hospital systems. This enables doctors to more quickly adopt new technologies and drive advancements in their field. This is an important driver for us. It can speed up conversion and adoption time lines. On the instrument side, these solutions span a wide variety of surgical specialties, including ENT, neuro, laparoscopic and general surgery. This is a relatively stable market with consistent demand. We believe sterile processing departments are really underserved. This is the engine for our hospital fuels its operating room. Our reps are locked in on this and how can they support this area. The formula to win an instrument starts with a strong dedicated sales force, and we have one. A broad portfolio also enables us to expand our reach and generate growth through bigger alternative channels, including larger distribution partners. Customers have different buying preferences, so providing diversity of purchasing options creates flexibility and scale. This is really a scale business and dedicated focus with efficiency across both the portfolio and the channels gives us a unique competitive advantage. We have established leadership in our served markets. and are well positioned to exceed market growth. We play in a $5 billion total aggregate market with growth between 3% and 5%. The Codman business alone is a $1 billion segment for Integra. You can see the specific product categories at the bottom of the page. In my opening, I mentioned our people. We're privileged to serve in areas of extraordinarily high patient impact. And it's a source of pride for this team. It's really exciting to see how they engage. This is a big part of the culture and drive. So let me just spend a minute diving into this a bit more. We enable surgeons to safely access the brain through open craniotomies and allow for minimally invasive surgical approaches to address brain tumors, bleeds or other issues. We have technology to address and monitor traumatic brain injury, which includes advanced catheters and fragmented with antimicrobial agents and advanced monitoring systems to measure intracranial pressure and brain oxygen levels. Hydrocephalus is a lifelong condition for which there is no cure. The industry-leading Codman valve portfolio provides patients with the solutions needed to live an active lifestyle such as the Certas Plus Programmable Valve, which is designed to minimize unintended setting changes for magnetic interference, which can lead to adverse effects. Our employees rally around the role we play in these complex surgeries. We look at our neuro business through the lens of both disease state and product categories. We have 4 main product platforms. composed of many market-leading brands. I'll go into some of our technology at a deeper level in a few slides. But the takeaway here is in all 4 of these neurosurgery areas, we have products that are dependable, so the surgical team can get their jobs done. As you can see, we have particularly strong performance in our advanced energy and hydrocephalus portfolios. In Neuromonitoring, we would historically see mid-single-digit growth prior to the CereLink recall, which we reflected on this slide. We spoke about a return to market plan for CereLink during last week's earnings call, and we're more than happy to answer further questions later today. Looking at our Instruments segment, the market is growing between 2% and 3%, and we provide a broad portfolio of high-quality specialty and general instrument offerings. This includes Codman's Jarit brand, which is a staple instrument catalog found in the most sterile processing departments. The MicroFrance specialty line for ENT in a portfolio of surgical lighting systems, including our dual headlight. We continue to advance our instrument business and now have revenues of more than $200 million globally. So how does this all lead to winning? We are a trusted global leader with the most comprehensive neurosurgery portfolio in the business with industry-leading capabilities and technologies. We command the #1 or #2 share position in most of the markets we serve. We have leveraged organic and inorganic innovation to build a robust pipeline to address unmet clinical needs. As I mentioned, one of our greatest assets are our global sales team and our infrastructure. Over the last 5 years, we focused on driving commercial excellence within our instruments team. As a result, we've seen strong performance in our instrument revenue line, and we're growing faster than the markets we play in. It's been driven by a few areas of focus: analytics that lead to strong targeting and deal tracking, leveraging partnerships across our neuro and enterprise contract group and created programs to align incentive compensation to the most attractive products. As Jan commented earlier, this slide spot sites our organization's ability to impact the patient's journey on the care pathway. This is accomplished through surgery planning and workflow support strengthening surgical offerings and site of care expansion and patient monitoring. Today, we are focused on broadening our care pathway in 3 ways. We are focused on bringing more patients into the presurgical pathway. This is achieved by driving 2 areas: number one, continuing something we actually do very well today. Disease state awareness and continuing education go hand-in-hand with the technology and so. We partner with patient support groups such as the Hydrocephalus Association to help raise awareness and bolster support for those living with these conditions. For example, in 2022, we participated in 30 walks across the United States as part of the association's Walk To End Hydrocephalus Campaign. If you want to understand the impact of this disease and the potential for new and better treatment options, spend a day with the patients, families and physicians who live this every day. Hydrocephalus in adults is often can be confused with other neuro diseases. We're at the front line with clinicians to publish and update guidelines that treat this condition. In addition, we are using our MIS surgery platform to bring more patients to surgery and reshape the care pathway. At an industry level, clinical trials are providing more insight as to how certain diseases should be treated such as brain bleeds and hematomas. This matters to patients because availability to MIS techniques positively includes the decision to take a patient to surgery. Patients now have the potential for better outcomes due to MIS surgical approaches. And number two, continue to play in our strength in the operating room. We can play deeper, broader as well into new spaces within the neuro category. These include internal efforts and business development opportunities. We have an opportunity to expand our current offerings into new disease states. Our CUSA ablation system is a great example of this, and I'll address that in a few slides. We also see several M&A areas where we have the opportunity to broaden our portfolio, but leverage our strong sales channel. The third is centered on postoperative care. So let's focus just for a minute on the ICU. This is a space where we see opportunity to drive digital advancement of our portfolio. We have a wide and strong product offering in this site of care. And our portfolio depth in the ICU is quite unique. We see several opportunities to grow in this space. Our Neuromonitoring platform is broad, and we have innovation that will change the level of information available to the ICU team. This aligns perfectly to our focus on digital technology. We kicked off projects to expand our current product portfolio, become better data sources. So this information can be captured and shared with the ICU team which will help them make better decisions and see better patient outcomes. I'll cover this again a bit later in the presentation, and Mark Jesser will also touch on some of these innovation opportunities. So for the next 3 slides, I'm going to dive deeper into how Codman is executing on our innovation platform, addressing meaningful customer needs and ultimately improving outcomes for patients. To kick off, I'd like to focus on the growth and innovation around our CUSA Clarity system, which has been one of our strongest near-term growth drivers. CUSA's longevity has given us a strong installed-base for disposable and capital revenue. It's been a consistent area of growth and innovation for us. We have executed well and are building on that foundation with new products and programs. Our NPI cadence for CUSA is very consistent with a new product being launched each of the last 2 years. CUSA stands for Cavitron Ultrasonic Surgical Aspirator. It uses a very specific ultrasonic profile to safely debulk fibrous tissue in delicate areas such as the brain and liver while minimizing the impact to surrounding vessels. The ultrasonic cavitation emulsifies the tissue, while the irrigator and aspirator provides precise and localized fluid to manage heat and tissue removal. While we have a primary focus on the brain, we have indications in specific tip offerings for other organs, such as the liver, which has a dense and complex blood supply and delicate bone removal, particularly in facial structure. The tissue select feature is a key differentiator for us. The sensor and feedback loop helps modulate the speed of the device when it encounters high-density tissue, such as collagen that surrounds blood vessels. The best way to think about this is it's a lane assist when you're driving a car. When you get close to a line, CUSA's going to tell you and give you a signal. We see CUSA as a key technology platform for us, which offers multiple areas of expanded growth. In the last 2 years, we have delivered multiple tip product introductions to assist surgeons. We're excited to see the impact these products have had in several areas, including laparoscopic in neurosurgery. So let's talk for a minute about how we translate all of this into fuel and growth for this platform. First, it's already a growth platform for us. This new pipeline will result in a cadence of new products, new indications in new markets over the next few years. This will be heavily focused on delivering innovation on several new tip designs to provide the surgeon better access and performance. New disease state indications that we'll continue to use CUSA as the technology platform in new international markets where we have not launched CUSA to date. We're also focused on the role of CUSA in robotic surgery and are well into a pipeline project that combines our technology and tip offerings with robotic surgery. Catheters are used to manage the flow of cerebrospinal fluid, or CSF, and several applications including external ventricular drains, also known as EVDs, for treatment of traumatic brain injuries and for shunt catheters and hydrocephalus and where excess CSF is rooted from the brain to be reabsorbed in the body cavity. These catheters can stay in a patient's body for several days, weeks or even years. And unfortunately, can be susceptible to potential complications related to infection or blockage of fluid flow. So the good news is that Integra has market-leading and advanced catheter technologies in the market today, designed to reduce the risk of each of these issues. The BACTISEAL antimicrobial catheter, which are impregnated with 2 different antibiotics, underpin our portfolio offerings, both EVD and hydrocephalus categories. Codman's catheters with the Endexo additive, which was acquired in 2019, reduce thrombus buildup or clotting on the surface of the catheter. Currently, both technologies don't exist within the same device, causing surgeons to have to choose between focusing on possible infection or blockage. So our focus is making sure the market gets the best of both worlds, combining our BACTISEAL and Endexo material technology so that surgeons will no longer have to make this trade-off decision. The complexity of a project like this is heavily focused on successfully adding the -- combining the additive to the catheter. We have that behind us. And as a result, we're very confident we'll deliver this into the market in the second half of 2024. This new combo catheter will change the game in EVD and shunting. There will be a significant benefit for both patients and health care providers. It addresses 2 of the major unmet needs in this category. As a result, we'll see a share expansion across our long-range plan time frame. Another example of Codman's commitment to innovation is the Aurora Surgiscope which came to us through an acquisition in 2019. We've been executing very well on the commercial side today and are selling in commercial accounts in the U.S. and are also supporting clinical programs in both the United States and Australia. We've launched several new products to the portfolio and will continue to do so in the second half of 2023. '23 and '24 are key years for this technology, as we fully launch and kick off our clinical programs. As some of you may have heard, there were some recently some positive clinical news in the area of MIS surgical treatment for hemorrhagic stroke. This news combined with a large number of clinical cases under our belt and a growing product portfolio really positions us well to lead in this rapidly growing and developing space. So as a refresher, let me talk for just a minute on why this product is transformational. So the wow factor of Aurora is really the ability to offer a minimally invasive approach to neurosurgery that's complete. It reduces OR setup time due to everything being included mostly a disposal [ device ]. There's very limited capital needed for this product. Due to its small cannula, it also minimizes collateral damage to brain tissue as you create the surgical path. An easy way to think about the benefits are speed and safety without sacrificing surgical access or efficacy. A cannula is used to provide a clear and protected access pathway to the brain lesion. The imaging and lighting systems amounted on board to give the surgeon a direct, up close and illuminated view of the pathology. It's currently available in 2 versions: a smaller 8-millimeter diameter surgiscope which is used primarily for blood evacuation or taking a biopsy. There's also a larger 15-millimeter diameter version which can be used to accommodate multiple instruments. And you can see that on the left-hand side of the picture. So let's talk a little bit more about what's next for this platform. We have additional development work in progress for better imaging technology and user features to improve the user experience for Aurora. Our system enables early intervention with easier and safer access. So a refresher on the disease state, intracerebral hemorrhage is a disease with a global incidence of over 3 million and Aurora help clinicians treat these patients faster with less traumatic access to the brain. To date, the standard care of these patients has been medical management. We believe our platform and clinical programs will support the early studies released showing that intervention is, in fact, a better solution. Integra has a long history of growth through strategic mergers and acquisitions, and our healthy balance sheet enables us to place additional bets to broaden impact on care pathways. We have additional further focus to areas where we can bring stronger digital focus into our portfolio. We continue to evaluate partnerships or acquisitions to grow our digital footprint, whether it's surgical planning, patient triage or workflow support. We will pursue tuck-ins to expand the breadth and scale of our offerings. This includes expanding into adjacent markets. So let me give you a bit more flavor on this. We see several areas of opportunity, including broadening our approach in the MIS area of neurosurgery. On the instrument side, we're focused on increasing our scale and efficacy with surgical instrumentation. We see a great opportunity to add scale and deeper focus on the targeted specialty surgical areas we cover. This could be targeted through distribution deals or acquisitions. And lastly, we're building partnerships to digitally enable our market-leading solutions. We have a robust capability in sensing in the ICU with our ICP and oxygen monitoring platform. We have the opportunity to digitally enhance a number of our core platforms to improve how patients are monitored and subsequently treated. So shifting to international, CSS has a great track record with nearly 40% of our business existing outside the U.S. and more than 30% of future organic growth coming from China, Japan and other growth markets. But we've got plenty of opportunity to grow. Harvinder will speak about our international business in more depth later today. We continue to observe above market growth, particularly in China and Japan, and we feel really good about our pipeline in Asia, many of which we've spoken about today. Okay. So let me try to summarize the story I've told today. We feel great about where we're sitting, a strong portfolio, combined with a lot of opportunities to strengthen our industry-leading global share in neurosurgery through advanced products, international growth and focused channels and commercial capabilities. We anticipate new products driving at least $100 million in revenue by 2027, and we'll continue to invest in key clinical programs that grow our markets and support international expansion. We also look to expand the care pathway, accessing higher-growth segments to bolster growth in our more established markets. So I'll end this where I started, I really am excited about where this business is heading and the progress we've made. We progressed our innovation agenda, and we have several impactful innovation programs coming to market in the next year. I covered several of these in detail today. In addition to CUSA, we have 3 new growth platforms, Aurora, the combo catheter and the relaunch of CereLink to accelerate our growth. These technologies, combined with our broad portfolio, commercial capabilities and M&A track record prepare us well for the next few years. Thanks for your time this morning. It's my pleasure to hand it over to Bob Davis.

So thanks, Mike, and good morning, everyone. It's great to be with all of you again. I've been at Integra for 12 years and leading the Tissue Technologies Global Product Division for the last 7. Since our last Investor Day, we have set a clear vision and strategy. We've also fully integrated ACell, expanded our commercial sales teams and are also executing on a path to be a global leader in breast reconstruction with the acquisition of Surgical Innovation Associates. For the next 20 minutes, I will be talking about how Tissue Technologies can build on our strengths with our versatile portfolio, differentiated technology platforms and investments in faster-growing markets. Tissue Technologies has the broadest set of proprietary technology platforms in the industry. These platforms give us a competitive edge to compete in attractive high-growth markets. Our largest global market is complex wound reconstruction, which includes products such as Integra Dermal Matrices and MicroMatrix. Today, we have a strong leadership position and scale in the acute care hospital setting. In order to shift our underlying market growth to the faster end of the larger wound reconstruction market, we are actively seeking opportunities to extend our reach beyond acute care into the non-acute segment. Second, one of Integra's most attractive strategic growth opportunities is the breast reconstruction market. We now have 2 distinct product offerings with SurgiMend PRS, a xenograft, and DuraSorb, a resorbable synthetic mesh, expanding our plans to access the U.S. market with devices specifically approved by the FDA for use in implant-based breast reconstruction. To date, no other manufacturer has submitted a premarket approval or PMA. As we work to obtain specific indications in subpectoral and pre-pectoral implant-based breast reconstruction, Integra is poised for a first-mover advantage. This allows us to bolster our investments with additional evidence generation, innovation and surgeon education to set a new global standard of care. Third, we plan to capitalize on our technology platforms across these high-growth markets to introduce new products and generate evidence to accelerate U.S. organic growth and expand internationally. The 2 main rapidly growing markets we serve are complex wound reconstruction and surgical reconstruction. Our third market, private label is the business-to-business arm of Integra, which I'll talk about shortly. Both the complex wound and surgical reconstruction markets are growing high single digits and above the commonly cited 5% med device industry growth rate. There are many factors driving these above-market rates. Starting on the left, in complex wound reconstruction, the aging population and comorbidities, such as diabetes and obesity, result in more prevalent wounds that are more complex to treat and are candidates for earlier reconstruction with skin substitutes. Integra's Dermal Matrices and MicroMatrix provide more solutions to health care professionals that didn't previously exist. And due to the complexity and challenges of treating these patients, surgeons have a significant influence over the choice of treatment and which product to use. The trend to treat patients in lower-acuity, less costly care settings, combined with the availability of these technologies, continues to expand into the non-acute care settings. Moving over to the middle, in surgical reconstruction, especially in the area of implant-based breast reconstruction, there is significant opportunity for our surgical matrix business. Some of the factors driving this opportunity are the high rate of implant-based breast reconstruction driven by the Women's Health Act of 1989, which mandated insurance coverage for reconstructing following mastectomy, earlier detection and diagnosis and the trend towards bilateral and prophylactic mastectomies. Accessibility is also made possible by more outpatient procedures, emerging techniques of the pre-pectoral or above-the-muscle implant placement technique and products like SurgiMend PRS and DuraSorb, which lead to more predictable, positive outcomes. The U.S. market has been undergoing significant shifts, making it right for disruption as the need for cost efficiency intensifies. And in addition to the high cost, the current regulatory landscape and limitations of human tissue, including the lack of larger sizes, consistent quality of the tissue and availability of source material are driving clinicians to seek alternate solutions. These factors are spurring a shift in mesh preferences that we intend to capitalize on as this market is poised to favor clinical and cost-effective technologies like SurgiMend and DuraSorb. And lastly, our private label business is one of our key growth opportunities with a different set of drivers, which makes it attractive. Partnering with other blue-chip medical device companies allows us to capitalize on our technology platforms, our manufacturing capacity and R&D capabilities to serve other high-growth market segments. Our partnership with Pfizer is a great example of us combining our engineered collagen technology platform for drug delivery. The takeaway from this slide is that we are focused on rapidly growing markets with significant upside. Tissue Technologies has global revenue of over $500 million. And as I spoke about earlier, we have the broadest set of proprietary technology platforms in the industry. Some of our leading brands include our Integra Dermal Matrices, PriMatrix, AmnioExcel, SurgiMend, DuraSorb and Gentrix, to name a few. The complex wound and surgical reconstruction markets represent a global opportunity of over $2.5 billion, with healthy high single-digit growth rates. And within these markets, there are various segments that have different growth rates. We are poised for above-market growth in complex wound and surgical reconstruction, with investments in new products and indications, expansion of our geographies and private label agreements. And as a recognized market leader in soft tissue regeneration and reconstruction, Integra has established itself as an innovator in addressing unmet needs in growing therapeutic categories with multiple proprietary technology platforms. Our technology platforms include highly engineered collagen, fetal bovine dermal matrix, human amniotic tissue, porcine urinary bladder matrix, or UBM, and resorbable synthetic mesh. We have built meaningful scale from these platforms with our R&D expertise and manufacturing capabilities. We have also developed scale with our commercial sales teams, professional education and operations. Most companies in this space have a single platform. Integra has a versatile portfolio of differentiated products to address a broader range of these clinical needs. Similar to what you've already heard from Jan and Mike, Tissue Technologies has the opportunity to broaden our impact on care pathways to improve patient outcomes by expanding beyond our current product and acute care focus. In complex wound reconstruction, patient flow can be bidirectional, meaning that can either start with an inpatient procedure and then move to a non-acute settings or, as is the case for many patients, start by receiving treatment in lower acuity care settings. And as the severity and complexity of their wound accelerates, they move into the acute setting. By intervening earlier in the patient's journey, we can broaden the use of our products to improve outcomes. To better understand these clinical pathway strategies, let's walk through a few examples. The first example I want to share is in complex wound reconstruction. The need for a reconstructive procedure can arise from different etiologies or causes and can have very different goals. Regardless of etiology, treatment is often accomplished through a progression of treatments or procedures. Based on this site of care, age, comorbidities and condition of the patient, treatment goals can change. So conserving healthy tissue and speed of closure are 2 key factors surgeons take into consideration. So contrast the needs of surgeons treating patients with large third-degree burns versus a relatively small but deep diabetic foot ulcer known as the DFU. The first needs a product to regenerate dermis and provide immediate physiological closure essentially to buy time to let the patient recover and for donor sites to heal. The latter needs a product that can rapidly build tissue. Integra has the broadest range of skin substitutes that could be tailored to the specific clinical and economic needs of the patient. For example, it's increasingly common for MicroMatrix to be used in advance of or in combination with PriMatrix or AmnioExcel, and with this versatile portfolio, we'll be increasing our emphasis on new product introductions and generating clinical and economic evidence to extend product utilization. This will help sustain our leadership position in complex wound reconstruction and grow faster than the segment in a $1.6 billion market growing at 5% to 12%. The second example is in the area of post-mastectomy breast reconstruction. And as we've discussed, the U.S. market faces potential for disruption through shifting surgical techniques, value-based care trends and regulatory actions. Today, there are no FDA-approved surgical matrices for implant-based breast reconstruction. And we are well positioned to capitalize on this disruption with SurgiMend PRS and DuraSorb. By offering these 2 distinct product solutions to plastic and reconstructive surgeons, we can address various clinical, contracting and economic needs across different sites of care to help improve patient outcomes. With SurgiMend PRS, Integra is the first and, to date, the only manufacturer to submit a premarket approval, again, PMA application for surgical matrix for use as soft tissue support in implant-based breast reconstruction, and we anticipate label expansion in 2024. We expect DuraSorb to be a fast follower, with expanded label market entry for both pre-pectoral and subpectoral reconstruction in the 2025 and '26 time frame. DuraSorb is the only active enrolling prospective multicenter investigational device exemption or IDE study in the U.S. Integra's strong capabilities in soft tissue reconstruction and the addition of DuraSorb create a portfolio of solutions to set a new standard of care in this large, fast-growing $600 million market with a 12% CAGR. Our long-term goal is to achieve approximately $200 million of combined revenue by 2030. We believe we have significant organic growth opportunities. We see additional opportunities with inorganic accelerators to broaden impact on care pathways to further support the patient journey. Starting on the left, we have deep expertise in reconstructive procedures with our current products, which provides a platform to expand into adjacent areas. Examples of this are debridement, which is a critical aspect of the wound healing process, with the application of our skin substitute products. And related to this, our opportunities to expand into diagnostics that could provide customer insights and clinical capabilities to help influence their decision-making process and choice of skin substitutes. Mark Jesser will talk more about this later during his digital strategy update. And moving on to the middle section. Another opportunity is to accelerate our international and market position through acquisitions, especially for market-appropriate products in select regions and segments. And we also continue to invest in and push the frontier forward, utilizing our regenerative technology platform in areas that are not strategic to our core pathways. We're engaging with potential new private label partners to present our technology portfolio for use as medical devices and as a platform for drug delivery. And finally, on the right, we are actively exploring opportunities to extend our reach into the non-acute settings through an acquisition or partnership. Today, Tissue Technologies' market for complex wound and surgical reconstruction is predominantly in the U.S. However, we have a strong global presence at Integra and footprint compared to competitors in this space. The key to success will be registrations and market access, which will require clinical studies and health economics and outcomes research. We are in the early stages of market development and growth opportunities in Europe and China with our Integra Dermal Matrices and SurgiMend PRS and new product introductions specific to Europe. We also believe the versatility of our technology platforms can lead to globalization and acceleration opportunities, specifically with new configurations of SurgiMend PRS, the MicroMatrix launch in Europe and our urinary bladder matrix and UBM portfolio. Harvinder Singh will talk more about accelerating international growth with sustained market development efforts during his presentation. To summarize, we have a clear vision and strategy in Tissue Technologies to build on our strength with our versatile portfolio, differentiated technology platforms and investments in faster-growing markets. The key growth opportunities for our business are, one, sustaining and expanding our leadership position in complex wound reconstruction by focusing on new product introductions and evidence generation in support of our global value propositions. Two is to capitalize on our first mover advantages to set a new standard of care in the implant-based breast reconstruction global segment with the pursuit of our SurgiMend and DuraSorb PMAs. And three, we plan to capitalize on our technology platforms across our high-growth markets to introduce new products and generate evidence to accelerate U.S. organic growth and expand internationally. We are confident that we will achieve success in these 3 key areas. We are targeting greater than 7% growth in 2023 and, in subsequent years, to move to the midpoint as we gain more scale and critical mass in the higher-growth market segments. So thank you. And with that, I'd now like to turn it over to Mark Jesser.

Hi. I'm Mark Jesser, Integra's Chief Digital Officer. I joined Integra about 9 months ago, and I'll be sharing some of the progress we've been making on our customer-facing digital strategy. Before I get started, I want to tell you a little bit about me. Prior to Integra, I held innovation and digital strategy roles at Abbott Labs and Becton Dickinson. At Abbott, I spent 10 years in diabetes care and led innovation work for several medical devices, including FreeStyle Libre. My team created the cloud reporting platform and apps for the device. We launched into 60 countries to support about 2 million patients. At BD, I led a team that designed an AI imaging and clinician task tracking system for medication management and vascular care in hospitals. And now with Integra, I'm getting a chance to leverage this experience to help expand the role of digital to support the CSS and Tissue Tech portfolios. Okay, 3 messages that I'd like for you to take away today. First is that we're committed to digital. A big reason I joined Integra was Jan's background in this area, and it's been great working with him to start building a team and new capabilities. Next is that our approach to digital is grounded in supporting our nondigital device portfolios. We're focused on opportunities that expand market share and drive value pricing for our products. In the future, we may pursue stand-alone digital propositions, but right now, our priority is bringing digital to our core products. And finally, we know it will take new capabilities to succeed in digital. So we plan to leverage Integra's strength and M&A to partner or make small complementary acquisitions of companies that have the skills we will need to accomplish our goals. As we move toward digital, we're taking 2 related approaches. First, we're exploring ways to add data-generating and cloud connectivity features to our devices. Adding new sensors through our ICP monitor so we can track a broader range of physiological conditions would be one example, storing CUSA or CereLink usage data then sharing it with real-time remote clinicians would be another way through reports. Second, we can create companion apps. These combine data from our devices with data entered into the app itself and share it in value-adding ways with providers, patients and caregivers. The goal is to create new value that drives preference for our products. We're exploring several ideas in this area, and I'll provide a few examples of those later. And for any of our digital products, we need to ensure that they integrate with the broader digital health ecosystem. We're not trying to create our own broad digital ecosystem that goes well beyond our products. Our focus is on making sure that whatever digital solutions we create, they integrate effectively with other digital platforms that are part of clinician or patient workflows. We ask 3 questions when we think about prioritizing digital plays. First, we aim to understand how the digital opportunity will support our device portfolio. This is important because we're not a software-only company. We will always have the challenge of managing both digital and nondigital products, but we can turn this into an advantage if our digital companion apps drive more revenue for our devices. That synergy creates another way of capturing value that isn't available to software-only companies. We've seen this in the diabetes space, where mobile apps and web-based reports have made it easier for patients to measure their glucose and share the data, which has increased the adoption and utilization of glucose sensors like Libre. Second, we consider the balance between how much value this play will bring to Integra and how much new costs we're adding to our operations. Digital products bring new types of ongoing development and support costs. So we want to create solutions that customers are excited about but aren't bigger than they need to be to drive value for Integra. And finally, we're focused on lower-investment, faster-to-market solutions. We ask ourselves what's the smallest big thing we can do for our customers. When we talk about bringing digital into the patient journey, we are early. A recent McKinsey study ranked the top 23 industry sectors and how much they've adopted digital. IT and media, we're #1 and 2, which makes sense, but health care was #20 on that list. So the good news, of course, is that we beat construction, agriculture and hunting. So we have that going for us. But otherwise, another good thing is that this does create opportunities for digital to help drive the growth and margin targets that Mike and Bob shared with you a little earlier. On the bottom of this slide, you can see some of the digital opportunities we're researching. I'm going to highlight a few of them. But before I do, I want to respond to the question that I know is coming when I start showing future digital products. This sounds great, but how does it fit into your current financial plan? So this is a 2-part answer. On the cost side, we've included organic digital investment. We put about $2 million into our 2023 plan. And over the next couple of years, as we increase our overall R&D spend, digital is part of that. These are investments in sensors and data sharing features as well as companion apps to support the CSS and Tissue Tech portfolios. For inorganic, we have digital plays in our M&A game board. But like any acquisition, we think carefully about ROIC and don't want a long-term dilutive acquisition in this area. Okay. On part 2, on the revenue side, we haven't included digital products. We see them as potential upside. Both Jan and I have been around the block a few times on digital, and it takes time to build up digital revenue. So once you're there, you often have a solid ongoing revenue stream. But for right now, we're focused on price and share capture and, later, separate digital revenue. All right. This slide is my favorite because it shows how digital can help people, both our customers and patients. There's 3 examples here. I can't share everything we're working on for obvious competitive reasons, but these should give you a sense of what we're exploring. The first pilot is an app to support tissue technology. This market segment has a lot of products, and it's changing quickly. Over $2 billion was raised by industry players in the past few years for regenerative technologies, and there are about 160 new tissue products in clinical trials globally. With so much innovation, surgeons want guidance to select the right product for different kinds of wounds and advice about the best way to apply them. Providers want more tracking of procedures to ensure consistent standards of care. So digital can help on something like this. We're researching app that captures images of patient wounds over time with decision support for surgeons. The goal is to educate clinicians to make it easier for them to start using our products and ultimately to improve patient outcomes. For CSS, we're looking at an app to support increased diagnosis of iNPH. This is a kind of hydrocephalus that affects the elderly. In the U.S., there is an estimated 700,000 cases, but only 20% are properly diagnosed because the symptoms such as dementia and incontinence are similar to other age-related diseases. So a lot of iNPH goes undiagnosed or, worse, gets diagnosed as dementia. People with iNPH often have a shuffling gait when they walk. So we're working with a clinical team in Japan to build an app that a caregiver can use to take a video of an elderly person walking. We then apply AI to the video to flag for potential iNPH. We're aiming to get more patients into their doctor's office for this treatable form of dementia and, at the same time, expand the market for hydrocephalus valves. And finally, we're looking at opportunities in China to combine our ICP data from CereLink with other parameters such as oxygen level and blood pressure. Giving clinicians a way to see these measures on one screen with real-time calculations can help care decisions and differentiate our device portfolio. In summary, we're committed to a digital strategy and making steady progress. We're building out the team to work with strategic marketing groups within our segments. We're exploring digital pilots globally with clinicians and patients, and we're scanning the market for strategic partners and complementary acquisitions that we can leverage to build and scale our digital offerings. We're off to a great start with digital in Integra. We're building new capabilities that will help us deliver on our vision of being the first choice of clinicians and improving the lives of patients around the world. Thank you. And at this point, I will turn it over to Chris, who is going to facilitate some Q&A.

Thanks, Mark. So just a quick note on housekeeping for Q&A. We have mic runners in the room, so we'll wait for the microphone before asking a question. And then for those online, on the webcast, please feel free to enter questions in, and we'll intersperse those into our Q&A through the web interface. And I'd like to have the presenters from the first session, come up on stage, Jan, Mike and Bob to join me on stage, and then we'll begin the Q&A. And then for your folks in the room, please introduce yourself before asking the question so we make sure everyone knows who's asking questions. Start here.

Ryan Zimmerman, BTIG. Two questions, one for Mike and one for Mark. So Mike, if I go back to the last Analyst Day, the CSS WAMGR was 4% to 6%. You now have the CSS WAMGR at 3% to 5%. Take us through what changed and why that is. And then for Mark, the digital guy, why do you expect you can get more price in this market when you add digital solutions, just given kind of the challenges we've seen in this market in terms of growth? And I guess, curious what's underpinning that.

Okay. Thanks for the question. So there's been a lot of different factors, as you can imagine. So as we think about the growth rates around the world, we've had some impact from COVID, et cetera. But I think as you think about that range, there's a couple of the products that you saw today that we're still kind of sorting out. There hasn't -- it hasn't been any big breakthrough changes for us. I think it's more timing. I think we feel fundamentally very strong about the business. We'll continue to update. But hasn't been any really fundamental drivers other than the fact that we're -- some of our items are a bit slower in timing for obvious reasons of COVID and some supply chain challenges. But no fundamental differences, so we'll continue to update.

Okay. There's a lot of ways to get value out of digital. It doesn't necessarily have to be a list price goes up as a result of it. But some of the things that I mentioned when you have this iNPH app, the market expands for something like our hydrocephalus valves if you can diagnose more cases. So it's the same pricing potentially, but you're selling more valves. The other way that it shows up is often maintaining price. So if you're looking at new tenders or you're starting to bring products out to bid, for instance, digital is often a way where you can add that into the overall bundle of what you're providing and gather additional value in that way. So usually, it's not, hey, we've got this new digital thing, we want to charge you more money for it. There's more strategic opportunities that you see as you start adding it in and bundling it with your devices.

Vik Chopra, Wells Fargo. So 2 questions for me. Jan, M&A has sort of been in Integra's DNA, and I'm just curious as to how you see M&A playing a role over the LRP and whether you're open to adding an additional platform to the company. And then I had a follow-up.

Okay. So a lot of questions there. One -- and you heard me talk over the past year about our M&A game board. Yes, we have last year when we did the strategic work, translated that to the targets that we want to go after. I mean SIA was clearly one of those examples. We are entering, over the next few years, a phase where -- and later on, I'm going to show that. In terms of capital allocation, we're going to go back to allocating more of our capital to M&A given that we see very synergistic opportunities either to deepen, okay, where we are today or to broaden on the care pathway. So that's on the M&A approach and the types of M&As we're going to go after. I think there was a second part to that question.

Yes. So second part of that question was whether you're open to adding a new platform to Integra.

Not -- our LRP, okay, does not account or assume a third platform. It goes back to the 2 platforms that we have -- have so much opportunities -- synergistic opportunities that we, first, need to build those pillars into real strong pillars before jumping into a third one. There's no lack of ideas of what a third pillar could be, but my worry would be that we have 3 halfway pillars while we have opportunity to really build the 2 pillars that we have with the plans that we're showing today.

Got it. Helpful. And then just my follow-up. I think you've been successful in taking price over the last year. I'm just wondering what you have baked in for price over the LRP.

So in terms of price, we assume our normal [ 1 ] point or a bit higher price assumption. We definitely, last year and this year, are getting more than that, but I assume that at one point, we go back to a normal steady rate.

I think we have one here, Craig.

Craig Bijou, Bank of America. One for Bob and then one for Mark. Bob, you guys have invested a lot in the breast recon opportunity. You made an acquisition. You've been doing a lot of work internally. So just wanted to kind of get a sense for your confidence that, that is going to materialize as a significant opportunity as you think it will.

Yes. Look, so any time you're talking about PMAs, you have a bit of a not guarded confidence but just understanding as you work with the government on that. I would say we are confident -- very confident in both PMAs. We will be submitting in full our submission for the SurgiMend PRS, the final submission for that clinical later this year. And at that point, we're on time to look at a 2024 indication for SurgiMend. So things are going quite well there. We're continuing to build up the robustness of the clinical data that we're submitting. And then as far as DuraSorb goes, the final patient in that program will happen at the end of this quarter. So that puts us in line for submission in late '24 and online with our 2025, '26. indication, and that will be for both pre-pectoral and post-pectoral. So yes, we are confident. And again, PMA, so that's the part of the work that you want to be, I'd say, commercially and from a facility perspective, making great inroads to be ready for that as well. But we are excited about it, for sure.

Okay. And then on the digital side, I think some of the digital technology makes sense in the monitoring space. And there's a little bit more -- it's easier to see that and probably the demand from the end user. Probably a little bit more difficult to understand the clinician demand for -- on the wound care side. So maybe if you could just speak -- I know you said you're going to have to convince clinicians to want the technology, but maybe you could just speak a little bit more about what you need to do to drive that demand.

Well, again, it goes back to that idea of a lot is focused on driving preference for our nondigital products. So when we look at the tissue side of the business, as I mentioned, there's a lot of different products. There's a lot of interest in getting support on the best way to apply them and kind of driving preference. We have a really advanced portfolio of products on the tissue side and doing surgeries like a flat surgery or something like that. Surgeons in our research have said that they would really like additional support and guidance when they're doing those kinds of surgeries. So to me, it feels a little similar to in the robotics space where that whole support, remote support, peer support that's provided to surgeons as they learn to use robotics for certain techniques is the same thing that I think could apply over in wound care. That would be interesting. So again, it's an area where it's software-driven. It's going to be remote support and things like that. But those kinds of opportunities definitely exist on an unmet need. The trick is to figure out how to wrap that into an offering that clearly drives value for our tissue products.

Let me maybe add to that because a year ago, when I was still fresh in the company and was allowed to ask whatever questions when I met KOLs. So I asked many of them say, "What's the next innovation we should go after? What type of collagen, synthetic, whatever?" And many KOLs said, "Look, there's so many different products in the market." And because of a lacking standard of care, I mean there's a lot of surgeons that frankly don't really know what product to use and what specific case, right, or how to diagnose whether the wound bed is really as clean as it should be. So many came back and said, "If you could find some decision support tool to bring that knowledge to the surgeons so they can make a better choice and a better preparation of the wound." And it kind of confirmed a hypothesis we had in this type of care area where there's no clear standard of care, decision support to bring better quality and also productivity has real value. And so that's why we're exploring that as one option of our digital, what we call companion apps.

I think we have a question in the corner.

Steve Lichtman, Oppenheimer. Mike, a couple of questions for you. First, you mentioned CUSA opportunity in robotics. Can you give a little more color on what you see as that opportunity milestones and timing? And then on Aurora, you mentioned the $50 million in '27. How should we think about the ramp of that? Could we see some more material numbers in 2024 as you go full there?

Okay. So obviously, I'll take them in the order you asked. So CUSA in robotics, this is -- I kind of stressed that CUSA is kind of a workhorse in neuro today and, in the United States and other markets, also in the liver. So -- but robotics and neuro was very early. There's not a lot of activity going on. So we've got an early-stage program. It's still early. We're through feasibility, and now we're moving to the development phase. And it's really taking our CUSA technology and adapting how it would be delivered through a robotic arm. That's kind of the summary of it. So as I said, milestone-wise, we just kind of passed it from early stage into development. So it's really nothing that we're going to be able to give you any kind of detail. So Aurora, just a reminder, right, this is a rapidly developing market. There was just clinical data released at the big neuro meeting in L.A. a couple of weeks ago that was the first positive trial on ICH. Good results, but somehow -- on one side of the study, if you will. So that market is going to be slow to develop. The numbers we gave you around how big we'd be in 27, how big we think the market would be is really that's our guess -- our estimate for today. But as far as '24, I think we're still going to be ramping. There's going to be more clinical study needed in this space. So I think for now, you should think about that as probably slow ramp through '24.

We got a question in the middle.

This is Rohin Patel on for JPMorgan. I guess this question is mainly directed at Jan, but I'm just trying to get a better sense for the organic growth guidance and specifically some of the puts and takes. How are you thinking about kind of the bridge between 2024, 2025 and 2026 through 2027? And specifically, kind of does that guide imply reaching the low end 5% in 2024? Or do you see it kind of progressing beyond that? And then also just a follow-up on emerging markets and specifically how that factors into your guidance.

So I'm going to hold that question for the second Q&A because in the deck, you will see one page there that, I think, pretty much gives you all the numbers, answers and the data answers you asked for. And then we've talked international -- after the break, we'll have Harvinder on to talk more about, and he'll be at the Q&A -- in the second Q&A.

Okay. Is it -- would you be able to, I guess, more specifically than product focused, just comment on kind of the drivers within Tissue Tech and CSS that are underpinning the guidance then, just like the key areas that we should focus on moving forward?

So what -- I'll show later on, right? There's one -- there's a significant part which gets us next year above that 5%. Yes, it's about executing to the market, both the Tissue Tech, CSS market. And then you get the acceleration of international, the NPIs and so on, on top of that. So we'll -- again, we'll break that out in the second half of the presentation.

We have one in the middle.

Sam Brodovsky from the Truist Securities team. I'll just ask first on the margins. When we think about new product contributions, how much of them is factored into the margin guidance? If time lines get pushed out, whether it be Aurora or on SurgiMend, can you still hit the margin targets? And then I'll just ask the second question now. You were pretty, pretty open about being interested in partnerships on the Tissue Tech side. Should we -- what's missing there? Is that more of a distribution item? Or do you think you need new products? And when you're looking for a partner, is that more the interest when you're thinking about M&A and/or distribution there?

Again, on the numbers and the margins, yes, we'll talk in the second Q&A, and you'll see some in the presentation come there. I'm going to -- the second question to, yes, partnerships in Tissue Tech, you talk and that you [indiscernible].

Were you specifically talking about partnerships related to private label?

You mentioned you wanted to be...

Sam, could you use the mic, please?

Post-acute or...

Okay. We can clarify the question.

For Tissue Tech getting out of the acute care setting and more, does that need to be just a distribution partnership? Or do you feel like you need new products to be?

No. Look, I would say, as I stated, we have a very strong leadership position in the acute side of that. And as we look for opportunities that are in that higher single-digit growth, that's where the non-acute segment and setting come into place. So we most definitely have the right products. And again, there's a lot of disruption, as you all know, relative to reimbursement and pending changes. So as that model goes from a, what I call, financial model to more of a value-based reimbursement platform where providers are rewarded for wound closure and timing, we most definitely have products today that allow us for an organic opportunity into that and channel straight to expand that. And there's obviously also inorganic opportunities as well.

Drew Ranieri at Morgan Stanley. Just a question on CSS for Mike. But you talked about 40% of the business is U.S. today. Japan and China is going to account for about 30% of your organic growth over the LRP. So maybe just walk us through some of that plan. Is that going to just be taking existing products and registering that? Or is it really going to be some of the new products that are coming along? And just second to that, maybe I'll have to wait until the next session. But how are you kind of thinking about the international margin profile as you're further developing that as an opportunity for the company?

I suggest you take it from a product perspective. And then later on, I think when Harvinder will be up, can go more into how do we develop the market.

Okay. I'm sorry, one question, could you repeat the part that...

That was just essentially with Japan and China driving 30% of your organic growth. What are kind of the drivers for that? Is that new products, registering existing products?

So obviously, Harvinder will cover a lot more in this section, but I can take this for kind of 2 reasons: one, global CSS question. Second, I ran the international business for a bunch of years. So I can cover that as well. So when you think about international for us, we talk a lot about Japan and China because of their size and scale and their growth. But it really is a mix of all the things you would expect it would be, right? It's innovation that's born through my global business. It's also business development deals done in local markets around the world. So you get innovation mix from those, too. Obviously, there's a price impact. There's a share impact. Harvinder will get into a lot of detail on work he's doing, particularly in China around Tier 2 and Tier 3 markets. And it's just real strong commercial execution. So there's a wide mix of -- it's kind of all of the above is what fuels that. Harvinder will get into those countries -- those 2 countries, but specifically, it's because of their size and scale and growth rates that fuel that. So a wide range answer, but it really is a mix of lot of things that drive that growth, including we have a large group of products that we have not launched in the international markets that we have queued up for registration. One that would fit that bill very much is CereLink, which is out in 2025. This is the mark, and so there's an opportunity there, but I'm sure Harvinder will give you a walk-through on that.

And just 2 product questions. But on CereLink, you didn't discuss it much today so far. But how are you thinking about the opportunity? Can you give us a lit bit more?

Yes. No, happy to. I think -- so we have covered this pretty extensively in earnings. But as I said in my script, was welcoming questions today. So how we're thinking about it is -- so just let me reiterate what we talked about in earnings just so we do this for clarity. We feel really good about the solution. We have root cause identified. We feel very good about the solution. We made -- during the final validation, we saw some data that led us to, we think, a solution that is -- we're very excited about. And that was the decision we made. It also is -- it doesn't require a change to the box or the monitor, which is very attractive to us for several reasons. It also makes our regulatory pathway, particularly outside the U.S., less complex. So for all those reasons, we made that call. Timing-wise, I think you'll start to see revenue commercialization late 3Q outside the U.S. in select countries. The U.S. is really dependent on FDA regulatory pathway. We're actively in discussions with the FDA. We've met with them, shared a preliminary data. And if we get -- if the FDA is aligned with a special 510(k), you'll see it late 3Q. If it's converted to a traditional 510(k), it moves into 4Q. So we continue to be incredibly excited about CereLink. I think if you look at the recall, the vast majority customers had really good experiences. So we feel really strongly that this is a product that the market needs and the market wants and our customers have stayed with us. So very strong outlook.

Matt O'Brien, Piper Sandler. A question for Bob. Can you talk a little bit about SurgiMend and the expectations for that product because you'll be the only 1 with an actual indication for breast recon, fingers crossed with FDA, but how are you going to take that product, dislodge so many entrenched competitors? How quickly can you do that? And then how are you going to price the product, given again that you're going to be the only 1 with the PMA clearance for it? Are you going to price at a premium, you got to price at parity. How do we think about that?

Yes. No, it sounds like an operating review. So no, listen, I would say -- listen, first off, figures definitely not across here, right? We're working weekly and frequently with the FDA on both these PMAs. So just to make sure that I'm very clear about that. And the other thing I just need to reinforce in the U.S. no company, no vendor has an indication for safety and efficacy for implant-based breast reconstruction, including us. So we focus very much around not the indication, but the product itself as we promote our products. Now we are enjoying very nice double-digit growth above market in both products, but I just have to make sure that I say that correctly. So as we set ourselves up and do a lot of the work, right now, the market itself in the U.S. is predominantly with a strong dominant leader in the human allograft aspect of that. And what we're looking to do is around the disruption with both xenograft SurgiMend and a resorbable synthetic DuraSorb they have made great strides over the last couple of years, which really drove us to make that acquisition of [ CA ] really as you think about it in 5 years, it's a portfolio that talks about xenografts, bovine, ADM and an absorbable synthetic for a global presence there. So as we get closer to that, what that first mover allows us to do, of which we think will have anywhere from a 2- to 5-year lead here based on what we can tell today. It allows us to get in there and meet with surgeons and actually promote the product. It actually allows us to teach them procedures for subpack and also with DuraSorb per sub and prepack. So it really allows you to get in there and develop those relationships with the surgeons at the procedure level and at the account level, where we can help them build up in the OR promoting breast reconstruction. From a cost perspective, I would say today, if you had human allograft here, xenograft our price position appropriately and then with the resorbable synthetic less than that. That's how we're looking to position it and that portfolio play that we'll be promoting contractually once we get the approvals.

Got it. That makes a lot of sense. A question for Jan. You talked a little bit about M&A, but it's been throughout this entire presentation on the M&A side of things. Can you just maybe level set us as far as what you're looking for revenue size, size of deals? Are you looking for smaller tuck-ins? What kind of return timing are you looking for, things like that just so we have a better sense from an acquisition perspective?

So yes, we're looking for tuck-ins. Yes, we're looking for larger, more strategic deals. If I look at the tuck-ins that we typically are $50 million or less type volume deals. We are looking at other larger deals, which come at $200 million, $300 million revenue points. So both are important, both in Tissue Tech and CSS, right? If you look at our M&A game board, you will find that mix, and I will never show the game board, of course, but you can find that mix of deals there. I show later on, yes, some of our filters, return on invested capital, 10% or more within 5 years or less, that remains an important financial filter. We are careful with deals that are too long dilutive to EPS. So that's -- I mean, Mark touched some of those. So that's kind of the financial filters we apply on top of our game board.

Those are the questions we have now. We'll pause now. We have a break scheduled for right now before we start our next session with Harvinder on International. We'll resume at 10:20. We'll have a few minutes, and then we'll get everybody back together at 10:20 to kick back off. [Break]

Once again, good morning, attendees. Please go ahead and take your seats. Our program will resume in about 2 minutes. Once again, please welcome Chris Ward.

Thank you. If everyone could join. I'm going to get a seat. We're going to get started with the second half of our program. We have a couple more presentations from our leaders from international operations. And Jan will conclude with a wrap-up of our financial overview and long-term outlook. So I would like to introduce for our next session, Harvinder Singh, our Corporate Vice President and President of our International business. So Harvinder, the floor is yours.

Good morning, and thank you for joining us after the break. My name is Harvinder Singh, and I guess you heard the name probably 17 times since morning, and I'm the Executive Vice President and President for Integra's international business. I'm based out at Singapore, and I have responsibility for the business outside of the U.S. I joined Integra about 6 months back in October of 2022. But I've been around the block. I've been in the health care and Medtech space for over 3 decades. I have lived and worked in the U.S., in China, in Japan, in India, Hong Kong, Singapore. And before joining Integra, I was part of Abbott Labs for more than 20 years, where I held several leadership roles in the vascular business. Before joining Abbott, I was part of Guidant Corporation and Eli Lilly in sales, marketing, strategy and general management roles. During my career, I've been involved in successful launches of new products, market development for new therapies, integrating newly acquired companies and business turnarounds. To quote some examples, I led the launch of a new drug-eluting stent in Japan and attained market leadership position in that market. As a result, that business grew over 3x. And I've been involved in turning ground businesses in China, in India and the United States. Today, I will share with you why I'm so excited about Integra's international business and talk about the tremendous opportunities that are ahead of us. I'll provide you with an overview of where we are in the international business, where we are headed and the strategy to get there. Six months in, I see a great opportunity to transform this business by building on a solid foundation that already exists. To begin with, let me share with you the key messages that you're going to hear today. In this role, I look at my role as -- I look at my goal as -- to work with our international teams and transform this business into a key growth vector for Integra. Today, international business contributes about 28% to Integra's global revenues. The plans you're going to hear today will help us advance that contribution to well north of 30%. And we will do this while improving our margin profile. As you heard from Jan, Mike and Bob earlier, Integra is a recognized leader in multiple proprietary technology platforms. I see many fold opportunities to leverage this differentiated portfolio beyond what we've done so far and drive the penetration of these technologies and bring these products to more patients and more markets around the globe. With the help of our international leadership team, we've carefully crafted a clear set of priorities that we are now working on to drive accelerated growth and capture market share across international, but with a specific focus on key emerging markets such as China. I will talk more about these priorities in a little bit. But before I do that, let me start by sharing with you our position in the international markets. Integra has a global footprint with direct presence in multiple markets across Europe, Asia Pacific and in Canada. This map on the right indicates Integra's presence in countries shaded in green. Countries shaded in blue are served by over 200 Integra distributor partners. Together with our distributors, we cover over 120 countries and generate more than $400 million in revenue. While we've done well in international markets, we just get 28% of our revenue from these markets. Thus, we are significantly under-indexed in these markets. If you compare that with the Medtech industry in general, you will see that international markets can contribute as high as 50% to global revenues. We do not see any reason why Integra cannot achieve that with a much higher contribution - cannot achieve a much higher contribution with an empowered team, a strong strategy and the strength, the depth and the breadth of our portfolio. We are targeting greater than 30% contribution from our international business by 2027 and aspiring for 35% to 40% in longer term. Now let's take a look at the markets where we play. Currently, the total accessible market in international is about $1.5 billion. Europe represents about half of it. Asia Pacific and China are the other significant contributors. The critical difference that you see between these markets is the growth rate. China and Asia Pacific are growing faster. And as you can see, Integra is growing faster in these markets and is taking share. The critical question that we've asked ourselves is how do we continue to win in these markets in the post-COVID world as the case numbers as the procedure numbers come back to normal. The answers lie in finding more ways to accelerate this growth that we've experienced even further. In previous presentations, you've seen that we win in markets where we play. Our game plan to win in international is built around 3 key themes: First, prioritize the fundamentals. It is all about enhancing capabilities and building internal expertise that helps us capitalize on key growth opportunities associated with new product launches geographic expansion and leveraging the portfolio. These capabilities include local knowledge, better understanding of the markets, talent and the customers to enable us compete successfully. Next, we see opportunities in driving commercial execution to expand our footprint and grow above market to capture category leadership. As they say, all ideas and strategies are a commodity until you execute them successfully. Therefore, execution is going to be our singular focus. Finally, the third one is about leveraging our comprehensive portfolio to accelerate organic growth. We plan on bringing our market-leading products to more customers and more markets around the globe. Let me walk you through these key themes in more detail now. As I mentioned, Integra wins in markets where we have the local leadership, talent and expertise. Markets such as Japan, Italy and Canada are some great examples in that direction. We are looking at replicating those capabilities across different markets and develop deeper local regulatory reimbursement and market access capabilities. These capabilities will elevate our ability to anticipate market -- anticipate emerging market, competitive and policy trends. Earlier, you heard Mike and Bob talk about how surgeons play a vital role in purchase decisions in our business. We believe that winning in international business also starts with a strong customer focus. This means engaging with our customers and understanding and fulfilling their needs better than anyone else does. In Europe, Integra is a market leader in partnering with customers through industry standard professional education programs. We are building those capabilities in other markets to enable us to work with our customers in advancing therapy adoption for highly underpenetrated disease states, such as INPH. The next team is in driving commercial execution to register double-digit growth in key emerging markets. When we compare ourselves to the market, we see many growth opportunities by expanding our geographic footprint, particularly in markets such as India, Southeast Asia, Middle East and in Latin America. In addition, in China, we are over-indexed to Tier 1 cities. That's expansion into Tier 2, 3 and 4 cities represents a unique opportunity for Integra to redefine our presence in China. This picture on the right is from March this year when we opened our new office in Shanghai. This celebrates our continuous success in that market. We are highly optimistic about our growth prospects in China and other emerging markets. From a cultural standpoint, we will infuse sense of agility, accountability and a growth mindset in our international teams. This is to ensure that all our teams are pulling in the same direction and driving towards our growth aspirations. We will do this while supporting our team's development and delivering on our employer value proposition. We are proud to share that Integra China has been awarded the great place to work in 2022. Globally, just 15 markets offer a compelling opportunity as they contribute to greater than 80% of the international markets. Therefore, We will focus on these markets with a renewed sense of urgency and priority. You heard earlier today that Integra is a global leader with highly differentiated product portfolio. We have a #1 or #2 position in many neurosurgery and tissue reconstruction markets. Building on this comprehensive portfolio is a unique opportunity to accelerate international revenue growth. In the EU, our focus is on delivering on the MDR approach for continuous market access. In Japan, our goal is to build on our already strong position and continue growing above market and drive category leadership. In China, our growth -- our goal is expanding coverage and bringing our highly differentiated portfolio to more patients and more physicians across the country and ensure continued access through changing policy environment in the country. Another way to drive international growth is to leverage innovation and introduce our new products and technologies over the next 5 years. to as many international markets as possible. In this slide, you see a strong cadence of new product introductions that equipped us and our commercial teams to seize that opportunity. Finally, we are utilizing the M&A game boards that Jan talked about to identify inorganic opportunities for international markets and drive business development in both the neurosurgical as well as the Tissue Tech areas. Talking about China. China is one of our key strategic priorities is shared across the organization. And that is because you would agree with me that China is the largest Medtech opportunity outside the U.S. and continues to grow double digit. Integra has done well in China and has grown double digit. Our history in China highlights that once you have a product that performs clinically, revenue growth in China can be rapid. This chart on the right demonstrates exactly that. We established a direct presence in China in 2014 and drove performance through DuraGen and CUSA and more than doubled our business in the next 3, 4 years. And post the Codman acquisition, we continued footprint and portfolio expansion in China and continued our double-digit growth trends. Our team in China has shown the ambidexterity required to win in that market. In the next few years, we are bringing multiple new technologies such as DuraGen Plus, Certas Plus, CereLink to the market, and that augurs well for our aspirations in the China market. Having said that, despite all this success, Integra is still under-indexed in the Chinese market. Less than 5% of our total revenue comes from China. And if you compare that with the industry, if you compare that with Medtech in general, you will see that China revenue contribution can be as high as 10% or more. And to help us move in that direction, in 2023, we will add 200 more new accounts in lower-tier cities in China. And when I look at the next 5 years, there are 1,000 more accounts in China in Tier 2, 3 and 4 cities that we can add by 2027. In addition, we have the opportunity to drive portfolio penetration in accounts where we already have Integra presence, but with only 1 or 2 products. We are looking at launching CereLink monitor in China by 2025. This is an attractive opportunity to build on the position that we already have in that market with ICP EXPRESS and gain further market share. While China is an exciting opportunity, there is environment of policy change under the Made in China initiative. More and more hospitals are moving towards buying locally manufactured products. We are cognizant of this change and are preparing ourselves by building a local manufacturing capability for some of our key products. This will enable us better alignment with the local policy and help us with accelerated approvals for these locally manufactured products and with continued market access. And finally, to summarize, this is my favorite slide as it embodies my personal optimism and enthusiasm about our international business. It sums up the magnitude of all the opportunities that are ahead of us in the international business and clearly states our priorities and actions to realize those opportunities. Today, we are poised to accelerate the expansion of our international business. And I can share with you that all my colleagues at Integra are deeply engaged and fully committed to our priorities. Let me reiterate, in international business, we will grow revenue contribution to be above 30% in the next 5 years. And we will do this by addressing the fundamentals and the foundational priorities such as building local execution capabilities and leveraging our portfolio. We will also strengthen our presence in China and establish a culture of high performance. I'm sure all of this will yield in positive results and will help us move our international business forward. Thank you very much. And with that, I'm pleased to introduce Steve Leonard.

Thanks, Harvinder, and good morning. It's great to be here with all of you today. I've been leading our global operations and supply chain since 2020. Before joining Integra, I spent 10 years in the pharma services sector in similar roles with 2 different companies. Both were large, global, complex supply chains with an acquisitive track record where I led operational transformations, improving customer service and creating a culture of continuous improvement and productivity. Before that, I spent just over 20 years at GE. Most of it in their health care segment, in multiple operational leadership roles. When I started with Integra, we dedicated extensive resources to reinforce our core operational competencies of global scale and deep technical expertise and strengthened our foundation by adding structure, processes and focused investments. In my relatively short tenure here, we've experienced multiple industry headwinds stemming from the COVID pandemic. And while working through the various challenges, we've taken this opportunity to learn, adapt and position ourselves for success. We accelerated our continuous improvement actions and operationalized broad countermeasures in our factories and upstream in our supply base. We invested in strengthening our foundation of safety, quality and compliance. Emerging from the pandemic, our supply chain is more resilient and better prepared to deliver to clinicians, health care systems and patients in this rapidly changing environment. Under my leadership, we now have a clear game plan to deliver the growth and margin expansion. Our primary objectives across the supply chain are clear and simple. Reliably supply safe and effective products to clinicians and patients with a cost position that allows for continued margin expansion. We are here to support the growth. You heard Bob, Mike and Harvinder talk about. And today, I will provide an overview of Integra's global operations strategy includes 3 key points. one, adapting our global network and capacity to support our broad technology portfolio; two, create a scalable, resilient supply chain to deliver on our strategic growth objectives; and three, focus on productivity and cost management to support margin expansion. I'll spend the next several minutes walking you through these priorities in further detail and articulating why we are confident that we can deliver on our growth plans. This slide provides a snapshot of our global operations footprint. Our network supports our broad technology portfolio throughout the patient journey to reach health care systems and patients with our products when and where they need them. After multiple consolidations and divestitures over the past several years, we now have a network configuration that is better focused and supports the breadth of our technology. We streamlined our manufacturing sites to focus on our market-leading products and best serve the business. Most recently, we divested our traditional wound care products and manufacturing facilities. And Biot, France site has been closed, discontinuing products that no longer meet customer demand and transferring the production of profitable products to other sites. We've established centers of excellence in various locations globally and building on Harvinder commentary, we're adding manufacturing capability in China to improve local market access and our cost position. Our key manufacturing sites each focus on 1 or more of our core technologies. These range from converting bovine tendon into pure collagen in Plainsboro, New Jersey, precision machining of titanium in Cincinnati, Ohio, electromechanical assembly in Tullamore Island to fine Swiss watch like assembly of our hydrocephalus in Le locle Switzerland. And beyond commercial production, we're excited about our new regenerative research and development lab located in Plainsboro, New Jersey. Next to our collagen manufacturing center and just down the street from our corporate headquarters. The lab boasts 14,000 square feet of space dedicated to new product development and evidence generation activities. Combined, these sites offer the deep technical expertise to manufacture products, addressing the unique needs of clinicians and provide the platform and know-how to launch new products. Our repair and return centers have been centralized with a single point in Europe and another in the U.S. to offer faster service at a lower cost. And through our partnership with a world-class third-party logistics providers, we can provide high service levels with next-day delivery to our key markets and have the scalability to integrate future acquisitions easily and quickly. In summary, we now have a network configuration that is better focused, more efficient, has deep domain expertise supports the breadth of our technologies, enables customer service and provide scalability. Now I'll lay out the framework for supporting the company's objectives. First, we will build upon and further invest in our competitive advantages. We are a global leader with unparalleled advanced technologies. We have the manufacturing expertise geographic footprint and specialized workforce to support it. Our robust sourcing and risk management resources, sophisticated technology centers of excellence and scalable distribution network positions us to provide excellent customer service. And our global scale and efficient network differentiates us and primes us for growth acceleration. Our actions as we continue to enable growth are aligned to these critical priorities. Number one, invest in long-term supply resilience. Number two, elevate the speed and quality of execution; and three, expand margins. And our global scale, industry-leading manufacturing technology platforms all sitting at top common scalable platforms give us the ability to strengthen customer service and to generate productivity. I'm excited to share with you the ongoing actions to improve the resilience of our supply chain as it's such an essential element of our growth story. As demographics, comorbidities, advancements in diagnostic imaging and our focus on accelerating international growth increases the need for our products, we are making significant investments in infrastructure for both reliability and capacity. We will ensure our capabilities to supply meets these increased levels of demand. As I mentioned earlier, it's been a challenging time in our industry. And COVID has exposed where we had some gaps in resiliency. We are facing these challenges head on and have taken accountability to address them. Supply interruptions, whether from our suppliers are driven by internal matters, have increased our sense of urgency and level of commitment to implement lasting, corrective and preventive actions. The different level of leadership acting with increased intensity and velocity has been required. We have redefined what good looks like and put the foundation of people, process and systems in place to get there. We are standardizing our key processes, further driving the scalability of our network. We are investing in our infrastructure to enable reliable supply and address the ongoing challenges as the world emerges from the pandemic. By the end of this year, the final site in our network will be migrated to our single global ERP, rapid access to information, speeds decision-making and action. We have adopted a single common global quality management system and digitize many of its components. The ease of tracking and trending key metrics at our sites in our post-market surveillance, all fuels our continuous improvement processes. We are also improving the robustness of our quality and regulatory systems assuring compliance. Our processes around regulatory, internal quality auditing and supplier quality have been similarly strengthened with centralized common processes, streamlined information flows and accountability to assure compliance drive improvement. Last year and this year, we made significant investments in quality across all of our manufacturing sites with a focus on accelerating our quality project in Boston, involving testing, infrastructure and physical layout changes. And we are on a path to reach world-class quality assurance across all manufacturing sites by the summer. This further enables reliable supply and availability of our PMA products. And lastly, we are optimizing key tools and systems to simplify the complex. Our investments in supply reliability go beyond digitizing data and improving decision support information. We have a structured process to continuously evaluate our key manufacturing assets and strengthen their resilience through either replacement or enhanced preventive and predictive maintenance processes. As shown here, roughly 40% of capital is allocated to improving reliability and resilience. And the balance is allocated for increasing capacity and creating new capabilities to support the long-range growth plans of the business. To highlight a few impactful projects, a new clean room in the Le locle, Switzerland will double our BactiSeal capacity by year-end. And the relocation of our Boston facility to a new PMA-ready site in nearby Braintree will more than double our capacity for SurgiMend and PriMatrix in 2025. The final validation of our collagen expansion in Plainsboro, New Jersey, will increase DuraGen capacity by 75% by mid next year. This structure will allow us to continue to meet long-term demand forecast and build adequate safety stock assuring supply reliability. In addition, they provide a strong backbone supporting organic and inorganic growth. Investing in the systems and equipment gives us the hardware we need to be successful. But the software that makes all this come together is our people. One of our key priorities is to elevate our talent and capabilities to improve resilience in this uncertain macro environment. In a competitive labor market, the opportunities to learn, grow, develop and contribute at Integra are compelling. And I'm excited about our efforts to continue to build the leaders of today and tomorrow and be an employer of choice in the Medtech sector. We are elevating leadership and skill sets, emphasizing Lean, continuous improvement, customer excellence and reliability to manage our complex and challenging environment. We've updated our organizational design and redefine what good looks like as we invest in capability and building and bringing the best talent to Integra. In our manufacturing sites, we are investing in key talent with a focus on leadership that drives and accelerates change. And these expanded capabilities support local execution, growth and retention. We are simplifying metrics with a robust operating cadence that drives rapid escalations. We have multiple operating mechanisms to drive improvements in all aspects of safety, quality, delivery and cost. And this goes beyond the shop floor and applies to our transactional processes in the supply chain, procurement, quality and regulatory. All of this focused on driving accountability and rigor extending deep into the DNA of our culture. We're tackling key issues with agile problem-solving techniques, collaboration across our network, both speeds improvement and creates opportunities for our colleagues to broaden their responsibility and impact on the company. To share a couple of examples, the engineers at our sites with machining capabilities collaborate on equipment maintenance and programming techniques. And we frequently have a safety leader from 1 site to take a role as an auditor on another site. As a result, best practices not only get shared, but they get quickly adopted and put into action. Additionally, we have been pleased to be recognized as a top employer and best place to work in New Jersey, and we aspire to be that everywhere that we operate. With a focus on speed, simplicity, Lean principles and empowering our people, I'm confident in our ability to win and grow as the external environment evolves. Most businesses have seen input cost increases over the past 2 years. Inflation in raw materials, energy costs, transportation, outside services and labor have persisted over the past several quarters. And a key priority in operations is to find creative ways to mitigate these trends and find offsets that allow us to continue to drive margin expansion. Our investments in Lean, Six Sigma and process improvements are beginning to pay real dividends and operational improvements customer excellence and conversion cost productivity as key margin drivers. We have created a culture of continuous improvement that's led by me personally from the top and supported by a newly rebuilt central continuous improvement team. We've established effective cost management practices, including materials management, debottlenecking, yield improvement, waste elimination, supplier risk management, just to name a few. In our procurement organization, we are aggressively developing additional sources for key materials, negotiating contracts and selectively taking advantage of the spot market. Our raw material stocking strategies are continually refreshed while we build more agility and planning into our scheduling process. In our factories, we are focused on minimizing any unplanned downtime, cross training our workforce and accelerating our ability to implement countermeasures in real time. As you can see here, our Tissue Technologies operations have created capacity and reduced costs through an intensive focus on yield improvements. Improvements of between 10 and 15 points across multiple of our key franchises, allow us to meet growing demand and deliver productivity through better labor and equipment utilization. We are focusing on excellence in quality and compliance as a key element of our competitive advantage. As mentioned earlier, achieving world-class quality assurance in all manufacturing sites further enables reliable supply and the availability of our PMA products. And finally, continued investments in our foundation of quality go beyond just assuring compliance, being auto ready every day and using the feedback from external and internal audits as an input to our continuous improvement process, delivers real productivity and allows our key talent to focus on improving how we deliver safe and effective products to our customers on time every time. I'm excited about these improvements and optimistic about how much more we can accomplish. Every manufacturing site and production line has a productivity target to deliver. And I'm confident that we can meet these goals. The key takeaway from this slide is that we are creating a culture and a mindset of continuous improvement across the company. To wrap up, I'll go back to where I started. Our primary objectives across the supply chain are clear and simple: reliably supply, safe and effective products to clinicians and patients with a cost position that allows for continued margin expansion. We are positioned to meet the long-term growing demand for our products that you heard Mike, Bob and Harvinder talk about. We're very optimistic about strengthening our competitive advantage through the strategy and target investments that we continue to make. We have key metrics and operational rigor around everything we do, to highlight a few key milestones that we plan to achieve here. So one, we will increase capacity by 30% over the next 3 years through targeted investments through new plant, equipment and talent. We're aligning our capacity creation investments to the long-range plans of the business, and it's a continuous process. With a focus on resilience in our factories and upstream throughout our supply chain, we are committed to achieving and sustaining 98% service levels for the clinicians and patients that depend on our products. A broad average across the medical device industry benchmarks on-time delivery at around 90%. And surpassing this mark will create a real competitive advantage for us. By improving process yields, focusing on speed, simplification and waste reduction, we will deliver 5% productivity annually across our manufacturing network. Strengthening the culture of continuous improvement and accelerating change enables us to deliver on this objective. The foundation of standardized, simple systems and metrics, combined with greater financial and operational accountability and a real sense of purpose will continue to fuel our progress. So roughly 2,000 colleagues working in operations and quality across Integra are excited about our future and prepared to support the growth and profitability objectives of the business. Thanks for your time today. I'll now pass it back to Jan to cover our long-term financial outlook and closing remarks.

Thank you, Steve. So during this final part of our prepared remarks, I'm going to sum up the messages and information we provided to you today and share our excitement and plans over the long-term prospects of Integra. I'll provide you with an overall P&L picture that shows you how executing on market growth drivers, delivering on the catalysts translate to a growth rhythm of this 5% to 7% organically. I also show you how volume growth mix and working a broad set of efficiency levers translate to significant adjusted gross margin improvement. And how our strong balance sheet and further growth in free cash flow enables us to enhance our organic growth profile with further profitability and growth acceleration through M&A. I shared this slide in the opening, briefly looking back over the past years where we effectively navigated our P&L during the pandemic while investing in our strategic drivers with organic growth of around 4% and responsible management of our costs to offset margin pressures, we delivered sound profitable growth, though not to the level of progress that we had projected in 2021. During the COVID pandemic, as procedures slowed down and got canceled, we did not see the full potential of our business. And in some cases, supply challenges kept us from fully capturing the market growth that was there. And while we managed OpEx responsibly over this period, it became too much of a lever to drive EBITDA accretion as we did not have sufficient operational efficiency and pricing dynamics to offset inflation and drive further margin accretion. As I indicated before, despite the time lines being off, the long-range targets we communicated during our May '21 Investor Day still are the right targets. Just let's go deeper into how and when we will get there. And let's start by looking at our revenue and organic growth performance in the next coming years and walk to where we see growth in 2027. In 2022, we ended up with growth at approximately 4.2% in a market that was not an entitlement yet and with still opportunity to improve our own execution to achieve full market potential. Looking forward, we do see our markets back at entitlement growth as Mike, Bob and Harvinder described earlier. A strong position in our markets reinforced by stepped-up focus on supply chain execution and further building out commercial coverage and effectiveness will allow us to take that market growth and potentially more with share gains. The dynamic of growth with our current portfolio in itself translate into around 100 basis points as a midpoint of growth acceleration over the LRP horizon. This gets us above the 5% growth threshold, which is in line with the weighted average growth of the markets where our segments are playing. To this acceleration, then we will add new products that will launch and grow over LRP. Mike and Bob talked about some of these main catalysts. We also add in the international growth potential, which may be offset by some additional portfolio rationalization resulting from EU MDR. These will bring us into the 5% to 6% range as of next year and into the 6% to 7% organic growth range in the out years of our LRP. Looking now at our gross margin. Over the past year, driven by our focus on execution, excellence and the need for productivity to counter higher inflation, we have initiated improvement initiatives on a broad set of margin levers. The main one being in our manufacturing operations with a focus on conversion cost productivity, yields and structural optimizations. This will be a key driver over the next few years to increasing our gross margins. The second important driver of gross margin accretion will come from favorable product mix through NPIs and our higher-margin tissue technology business growing faster than our Codman business. We also expect to further achieve margin leverage through volume and continued focus on net price capture. We do expect some pressure from margin dilution related to accelerated international growth where we operate at somewhat lower gross margins. These factors will walk our gross margin towards the 70% level by 2025 and further into the 70% to 72% range by 2027. Looking now at cash flow. Currently, our strong profitability is not fully translated yet into free cash flow with a conversion below 80%. This is driven mainly by investments in EU MDR remediation and catching up on manufacturing infrastructure investments and footprint optimizations. As we move past these important investments and changes in external regulations, we will see the revenue growth and margin accretion translate to stronger cash generation. And we're committed to achieving free cash flow conversion at or above 90% during our LRP horizon. The solid and further improving free cash flow performance adds to the strong balance sheet that we enjoy today. But currently, total liquidity above $1.6 billion and leverage at 2.5x, the low end of our target leverage ratio and no debt maturities until 2025. We have significant capacity to reinvest in our organic growth opportunities, but even more in M&A. We have historically run a tight and rigorous shift in how we manage our financing and how we allocate capital. But where we allocated capital has shifted over time in function of the economic environment and business climate. If you look at the 2 bars on the page, you'll see the clear difference between the couple of years before COVID hit with significant strategic M&A activity and during the COVID period with lower M&A activity and a relatively more conservative posture with debt reduction and share repurchases. Going forward, we project to be back in a more active period with stepped up focus on M&A as we explore strategic acquisition and tuck-ins in alignment with our strategic and M&A gameboard. Mike and Bob gave you an idea of the areas we are exploring for our M&A gameboard. In general, we aim for targets that broaden and deepen our position along the care pathway. And, of course, preferably in higher growth and higher margin segments. Within these targets, we will pursue opportunities that are both more growth-oriented as well as opportunities with strong accretive profit profiles and cash generation. We're also looking at targets to build out our international portfolio and channels to accelerate our international ambitions. We believe there are targets that are accretive to growth and/or earnings and meet our minimum hurdle rate of 10% ROIC by year 5 or sooner. And that is what our M&A gameboard is made up with and targeting. The recent examples of 2 acquisitions, I believe are representative of the type of deals we are aiming for and the strategic approach we are taking. Though in terms of size, we also have larger targets on the gameboard. We acquired ACell, a company specialized in enforcing collagen technology in early 2021 and then later, SIA, which sells and manufacturers DuraSorb resorbable mesh in December '22. Both of these acquisitions met our criteria and are currently on the path to delivering to our targets. ACell has deepened our portfolio and opened up new procedure and international opportunities. And while ACell went through a tougher transition than planned in its commercial organization, it is now well on the path to steadily catch up to its deal plan. The SIA acquisition, which sells resorbable synthetic mesh is a good example of a deal that resulted from our M&A gameboard in the first half of last year. It got on the gameboard as a result of our strategic work and ambition in the breast reconstruction segment. DuraSorb strengthens our future value proposition in the high-growth breast reconstruction segment, brings a new technology platform to Integra and its integration is off to a great start. This page summarizes on the right-hand side, the key strategic vectors around organic growth, profitability and cash flow and inorganic growth and reaffirms our long-term targets on the left side of the page. Entering the low end of the 5-plus percent organic growth range with double-digit EPS growth in 2024. And further working our operational efficiency and EU MDR remediation to achieve gross margins of 70% with cash conversion at 90% by 2025. So in closing, when I gave my opening remarks this morning, I mentioned that what struck me the most during my first months at Integra as I got to know our people, values and culture, was the sense of purpose across the organization. As I got to know the business and our markets better and as we work to define and refine the strategic direction for Integra, the second Aha moment for me was opportunity, which is what attracted me to Integra in the first place. Integra has tremendous opportunity, opportunity to leverage our strong position in soft-tissue regeneration in neuro. Opportunity to broaden and deepen this position even further within and beyond the care pathways and care areas where we play. An opportunity to fulfill our purpose of restoring people's lives. We will realize these opportunities and achieve value creation for our shareholders and stakeholders by capitalizing on our strong commercial presence in large attractive markets with stable growth through the pursuit of operational and commercial excellence to support stronger market capture and margin expansion. We will broaden and deepen our reach and care pathways through transformative NPIs, digital and international expansion. And in parallel, leverages our strong balance sheet for strategic M&A and care pathway adjacencies and higher growth segments. All of these will be guided by focused strategy to achieve profitable growth acceleration. These are opportunities that are driven by a clear purpose of restoring patients' life, okay? We believe this is work that matters to our colleagues, our customers and our communities and will deliver compelling shareholder value. So with that, I want to thank you for your time. And we're now going to open up for our second Q&A. I'm going to hand it back to Chris to organize us for that.

Thank you, Jan. So for our final Q&A, again, please wait for microphones in the room. We'll also have to take call or take questions from our webcast and for this round of Q&A, I'd also like to introduce Mathieu Aussermeier, our Vice President of Finance, Corporate FP&A, Treasurer and Investor Relations. So he'll be joining us on stage in addition to our previous presenters. And I would like to invite our other presenters on stage as well for this round of Q&A.

O'Brien, Piper Sandler, it's a full lineup up there. So thanks for all the time today. Yes, just real quick, just a clarification. That 5% to 7% is not including any acquisitions just what you have today, right?

Yes, that is not including any acquisitions.

Okay. And then as I look at the '26 and '27 out-year growth numbers, to get there, I think you need Tissue Tech, which will still be about 1/3 of revenue to be growing low double digits at that point. And Codman is probably more like mid-single digits. Can you just give us a sense specifically of the products that get you to that level of growth investments that you need to get to that level of growth within Tissue Tech? And then I do have one more follow-up.

So let's maybe hand that back to Bob and Mike, right? In terms of their portfolio, translating these growth drivers. I mean we touched some of these products, but I think you'll get the right details from that. Let's maybe start with you, Mike.