Smith & Nephew plc ($SN)

Good morning, everyone, and welcome to those joining on the webcast. I'm Emily Heaven, Head of Investor Relations, and it's a pleasure to have you with us for our expert surgeon Insights event. We have a strong lineup this morning, including presentations from 5 renowned surgeons. During the breaks, I'd encourage you to visit our product fair next door, and there'll be a light lunch for those able to stay after. And now let me hand over to our CEO, Deepak Nath.

Thank you, Emily. Let me add my warm welcome to you all. So it's great to have you with us in London as we mark our 17th year as a company to showcase our innovation that's driving better patient outcomes and ultimately supporting our growth. So you'll hear from leaders across our business, demonstrating the strength of our portfolio and importantly, from surgeons themselves, the people using our products every day about what truly differentiates our offerings in practice. As many of you know, our RISE strategy to accelerate growth and improve returns is focused on 4 priorities. First, Reach and that's about reaching more patients by driving adoption of our differentiated portfolio across indications, settings and geographies. Second, it's about Innovate, is advancing the standard of care through a strong cadence of new product launches and scaling our key platforms. The third is Scale, which is prioritizing our investment into our highest growth and highest return opportunities. And finally, Execute efficiently, and that's about driving productivity and asset efficiency across the group, particularly in orthopedics to expand our margins and improve returns. So together, these priorities underpin our ambition to deliver 6% to 7% organic revenue growth and 9% to 10% trading profit growth over the next 3 years. Now through continued strong cash generation, we expect to reach over $1 billion in free cash flow by 2028 and ROIC of 12% to 13%, which is comfortably above our cost of capital by 2028. So today's session focuses on Innovation, the second of our 4 pillars. And in that we showcase how we're stepping up R&D investment in sports and wound while maintaining a robust front-loaded pipeline across the group, including in orthopedics. Over the last 3 years, we've successfully launched 44 products, largely on time and within budget and we plan to increase launch cadence going forward with 14 new products in '24, 15 and '25 and expanded 16 in 2026. We're also building on our 2 major scalable technology platforms, MTEC, which is -- where we just launched our next-generation leaf monitor for pressure injury prevention and wound and we'll be launching TESSA and Lumos in Sports Medicine, and you'll hear more about that later today. We also have a rapidly evolving robotic platform to drive procedure innovation across all major joints in orthopedics. The second of our innovation platforms is in biologics and we'll build on our leadership with innovations like [indiscernible] , very creatively name, which is our next generation of regain. So with that, let's now look at some of our most exciting growth opportunities, starting with Cathy, Cathy Dalene, who'll talk to you about unlocking the value in management. So Cathy, would you come up?

Thank you, Deepak. So good morning, everyone. My name is Cathy Dalene, and I lead Global Strategic Marketing for the Wind division. At our Capital Markets Day last year, we spoke about 5 large market opportunities that we are focused on. I'm excited to share greater detail of 2 of these opportunities and our innovative solutions to address those that will unlock further value for our business. Both opportunities create new markets by preventing wounds from occurring by reducing the risk of pressure injury or reducing the risk of surgical site complications. Today, pressure injuries are one of the most burdensome conditions in wound care, and it's impacting around 2.5 million patients in the U.S. each year alone. These injuries prolong length of stay by 9 days, and they take over 40% of nurse time, which leads to $27 billion financial burden on the U.S. health care system. We have 2 products to help prevent pressure injuries. The first is LEAF a unique fast-growing patient monitoring system, which has been shown to reduce the risk of pressure injuries by 94%. And the second is ALLEVYN Complete Care. We have recently launched in the U.S., and we are launching this quarter in Europe. ALLEVYN Complete Care is addressing with 51% better exudate management than the market leader. It also has 4x more flexible and has a unique share defense mode of action because it is the only dressing of its kind that has nonbonded layers. This feature means it has 55% greater ability to absorb friction and share. We are excited about the opportunity to accelerate growth with ALLEVYN Complete Care. The global wound KOLs were part of the prelaunch and very early on, we had feedback from each of them highlighting key benefits of the new design. Dr. Kevin Woo recognized the impact of the High Flex design, making the dressing contour better to the patient's anatomies. Wound Ostomy and Continence nurse, Catherine Milne observed the impact of the change indicator leading to less dressing changes. And last but not least, Dr. Alicia Smith saw less friction and sheer translate to the skin of the patients that she was preventing pressure injuries. Moving now to another key opportunity in Wound Care, surgical site complications. This is an area where we are uniquely positioned to set a new standard of care that will truly help improve patient outcomes. Surgical site complications are a significant underserved problem. Complications can be devastating for patients and a huge financial burden on the health care systems. There are 2 known factors that increase the risk of surgical site complications. The first is patient factors like BMI or other comorbidities. The second is the procedure-related factors such as time in the for example, emergency procedures. Surgical site infections are the most common complication of surgery with an incidence rate of over 5%. One infection alone can cost over $20,000. We have 2 main solutions to help reduce surgical site complications. The first one is ALLEVYN AG+Surgical. [indiscernible] ALLEVYN Ag plus Surgical last year, featuring a faster and more sustained antimicrobial action than leading competitors. It has a superior reduction of the bioburden and it has superior year pad extensibility. Finally, the dressing can manage 2.5x more liquid than the market leader. With PICO, we are committed to transforming the standard of care for surgical site complications across key specialties like orthopedics, OB/GYN, cardiothoracic, general surgery and plastics. These high-volume procedures represent a significantly underpenetrated opportunity to reduce complications and truly improve outcomes. Today, single-use negative pressure only represents about 20% of the potential $1.7 billion addressable market opportunity. PICO is our first ever portable single-use negative pressure wound therapy device. PICO protects the incision site, simulates the biological healing process in the surrounding tissues and increases lymphatic drainage, reducing the incidence of infections and other complications. It was launched in 2011, and we have continued to evolve the product ever since. In 2014, we launched a soft port, and we continued our innovation cycle in the following years with PICO 7Y and PICO 14. In 2018, Professor Kisner at the University of Miami published a key study proving the efficacy of PICO in open wounds, extending the indication range. In 2020, we reached an impressive milestone of 1 million units of PICO sold since launch, making it one of the fastest-growing brands across all of Smith & Nephew. And we have consistently delivered double-digit growth over the last decade. I firmly believe we can maintain, if not accelerate with the right investment and focused execution. With PICO, we can reduce the incidence of surgical site complications by up to 63%, and we can reduce the average length of stay by 1.75 days. In short, the benefit to the patient outcomes and the financial savings to the system are significant. Through our consistent investment in PICO, we have secured over 200 patents on both the pump and the dressing design, which together deliver a unique mode of action to stimulate the biological healing process. We have over 310 studies, 60 of which are RCT Level 1 studies, the highest quality and the most reliable evidence that you can get. The ultimate proof is the meta-analysis published in the Lancet, one of the world's most respected medical journals, which confirms again the effectiveness of PICO. Last but not least, we have guidance from the National Institute of Clinical Excellence or NICE, here in the U.K., which recommends the use of PICO to reduce surgical site infections. NICE is a U.K. public body that validates both the clinical and the cost effectiveness of medical technologies, and it provides a strong endorsement for our product. In conclusion, the RISE strategy for PICO is set, and we will significantly expand the number of patients we can reach. We will accelerate innovation for PICO through our strong coming pipeline and we will build our leadership in single-use negative pressure wound therapy, and we will scale even further. At the same time, we're investing in top talent to strengthen our selling capabilities in the OR and to drive more effective execution. The unmet need and the market opportunity is clear, our strategy is set, and I am confident that we have the right product and the right team to accelerate and to deliver on our ambition. Now it is my pleasure to introduce our next speaker. Dr. Ravi Bashyal, Director of outpatient hip and knee replacement surgery at Endeavor Health in Chicago. He is the Medical Director and Chief hip and knee replacement consultant for the National Basketball retired Players Association. He holds an academic appointment as clinical assistant professor of Orthopedic Surgery at the University of Chicago Pritzker School of Medicine. In this practice, he specializes in robotic minimally invasive hip and knee replacement and is performing approximately 600 ultra-minimally invasive total hip and knee replacements every year. while still actively participating in clinical research and education. He has published extensively on reducing surgical site complications and infections. So please join me in welcoming Dr. Ravi Bashyal.

Thank you, Cathy, and good morning to all of you. Really a great pleasure to join all of you this morning. I'm here to talk to you about what I call Destination Zero. You heard in Cathy's talk that the chance of developing a surgical site infection across all surgeries is about 5% and within hips and knees, if we look at the OUS forward-facing patient website, it tells patients they have about a 1% to 2% chance of developing an infection after their hip or knee replacement. And I always say to myself, I got on a plane to get here from Chicago yesterday, if there was a 1% or 2% chance that something really bad is going to happen on that flight, I would be doing this virtually okay? And so Destination Zero is about really bringing that same mindset to orthopedic surgery and to surgery in general. Aviation has a spectacular track record of safety. And there's no reason that with a little bit of focus and thought we can't aim for better in orthopedics. Specifically, my practice is hip and knee replacement. And so many of the things that you will hear from me are in that context. But please understand that these are applicable across other specialties as well. So I do about 600 hips and knees every year, as Cathy mentioned, I use PICO on every single one. The question is how and why did I get there? It's not because I was going to have an opportunity to speak to all of you. I've been doing this for some time now. And it is because of this journey to try to get to 0. My #1 fear as a hip and knee replacement surgeon in my practice is infection It is devastating. And we'll talk about why and how, but it's horrible. My #2 fear, persistent infection. That's an infection that we try to treat, but it doesn't go away. And that happens more commonly than you might think. And then my #3 fear is an SSC that's not infected yet. So an SSC is a surgical site complication. These are simple things that may not seem like a big deal, a little bit of drainage in a wound, hematoma, a seroma, a collection of fluid, but left untreated, those can then follow a cascade and end up as that devastating complication, surgical site infection. So why? Why is this such a big deal? Why is this such a problem? It's because there's a huge patient impact when a hip or knee replacement patient develops an infection both for the patient, but also for the system. So there's a cost element. And I use that word intentionally. There's a financial cost but there's also a human cost. Here's some sobering data. As we've mentioned, about 10% of patients will develop some sort of SSC after surgery. And I always say that they sign a consent form. When somebody comes to see me, they say, "Yes, I can have a heart attack. I [indiscernible] a stroke. I can die. " But when they come to me for an outpatient total joint replacement, they're thinking about their friend who sent them to me who was playing golf in 3 weeks. They're not really signing up for that cascade, okay, even though the consent form says. And here's some sobering data. If you look at a survivorship curve, and this is what you usually see when people are talking about cancer, periprosthetic joint infection or [indiscernible] is on that list. You have a better chance of surviving some prostate melanoma and breast cancers then you do a periprosthetic joint infection. It is not an ear infection where you just take some antibiotics, you go home and you're okay, it's a big deal. And it's also a big deal from a cost standpoint. So what you can see here is that cascade that I was talking about. [indiscernible] of patients may develop some sort of SSC. If that's not treated, they go on to some further wound complication, perhaps surgical site dehiscence. And if that doesn't get treated, you can develop a surgical site infection. And this is, again, not just damaging to the patient, it's damaging to the system. We cannot afford to be paying $53,000 for every infected hip and $41,000 for every total knee. Now we need to do that in order to take care of the patient, but that's not sustainable. And I'll show you some numbers that demonstrate that. In 2024, we had 1.8 million total hip and knee replacements. The estimated cost to treat those infections in 2025, $3.3 billion. Assuming no inflation, no increase in cost, but just an increase in the volume of procedures, which we very clearly see is what's going on. That cost is going to be $5.6 billion in 2030. And if we look at health care across the world in the United States, I don't think that anybody is prepared to give us $2.3 billion to treat complications in 5 years. It's not there. And that's what's really interesting about this. We're going to talk about the clinical data and why this is better for patients. But we have this confluence where what's better for the patient is actually better for the system financially. And oftentimes, those 2 things are at odds. We want to do the right thing, but the right thing sometimes cost more, so we have to figure out how and when to implement it. This is a confluence we're doing the right thing and the best thing for the patient, decreasing their chances of having a detour on their journey is actually cost effective in cost savings, and we'll show some numbers around that. But why are these things so expensive? You might say, "Doc, my kid had a [indiscernible] infection. We went to the doctor, we took some piles better. How can that cost $5.6 billion? It's because surgical site infections and hip and knee replacement cannot be treated medically. You can't just take a pill. It requires an operation. If you have a deep infection by definition, you are having a second surgery at least, okay? When you do this, you have to change out the parts. And it's simplest form, you're just changing out one part, but the more complicated it becomes, the more persistent it becomes, the more parts you have to change. And the new parts are more expensive than the primary part. So this cost starts to go up. There's additional costs that we don't think about routinely if somebody has an infected hip or knee replacement, they go home with this called a PIC line, which is a permanent IV and 6 weeks of IV antibiotics that's administered by home health. That is also extremely costly, okay? So there's all these downstream costs that occur. And oftentimes, that -- I just gave you the best case scenario, 1 wash out, 1 quick change of components, 6 weeks of antibiotics. When you have an infection, your chance of getting a recurrent infection is dramatically higher than your primary infection rate. So now we're talking about surgeries that have might have a 10% or 20% failure rate, meaning that patient stays persistently affected. If we think about meetings like this, one or talks that my colleagues and I go to, we, in Arthroplasty hip and knee replacement love talking about technology, the newest implant, the newest robot because those things are really sexy to us. That's what we're about. We really want to put in the best of the best. And when we think about the wound, it's just remained secondary. And part of that is because we just haven't paid attention to it. We said, that's the cost of doing business. And it turns out that with some really simple interventions, it's not. And I can use the best Smith & Nephew implant with the best robot, which you're going to hear about and we have that Smith & Nephew has rather. But if that wound becomes infected, if that patient has that devastating complication, none of that matters. It all goes out the window, and we're in rescue mode. We're like, let's save this guy's leg. And that's really sobering. And so as I said, there's been the status quo of Hey, we're surgeons. We're going to get infections. If 1% to 2% is the quoted rate and I'm doing 0.5%, I'm doing pretty good. I don't need to worry about that. But if you're told that 1% to 2% is the baseline, and you're at 0.5%, you feel like you're doing pretty good. You don't need to target anything lower. And that's what Destination 0 is about. We need to target 0 because if we don't, we're not going to get any better from where we are. And if we look at the rest of Orthopedics and how that's evolved over the past 20 or 30 years, it's incredible. If we look at infection rates, they're essentially the same as they were 20 or 30 years ago. And that's just not acceptable, especially now that we know with the data that about 60% of SSCs are preventable when you use negative pressure and that we simply just cannot afford this burden from a financial standpoint any longer. So my own journey and evolution on this was that, hey, as I said, there's a quoted 1% to 2% infection rate at about 0.5%. I'm doing great. I'm a leader. I'm the best infection guy or low infection guy in my hospital. That mindset has to change. And that's sort of what my academic work has been focused on is the prophylactic prevention of these infections. A lot of attention gets paid on how to treat these infections once they occur, which is critically important. We do need to take care of those folks, but how about stopping it from happening in the first place? In my own practice, we've had this nice 4-year window now where I'm at 0 and my colleagues always say, don't say don't say it. you're going o get one when you get home. But I'm okay saying it because it's true. We've published it, and it's been a game changer. When you have a 0.5% infection rate and you're doing 600 cases a year, that's 3 people a year. When you have a 0% infection rate, it's 0 a year. And that change has been transformational for my practice and sort of my thought practice around it. We know we can do better than the status quo. We have to aim for 0 and we must do everything we can to manage outcomes and costs. We care about our patients primarily and most importantly, but we live in an environment where we have to be cost conscious. So if I'm going to invest in a technology, it has to have an output that's going to be responsible. And that's what this is about. So how does this work? So these are just some examples. PICO is a very simple dressing. It's not complicated. You don't have to go to a course to learn how to use it. You just put it on the wound and it does well. This is one of my outpatient knees who's in his 80s, and he's got a nice looking scar. But not only is the star really nice looking what's going on underneath is great. There's increased perfusion, decreased lymphedema, decrease inflammation. This patient is able to get back to his life more quickly, okay? In medicine, we are driven by research, right? So we say evidence-based medicine is how we make our best choices. I won't belabor the point. But if you believe in evidence-based medicine, you have to believe that using negative pressure on a closed incision decreases the risk of that incision having a complication. That's not under debate or refute anymore. There's a pyramid of evidence that has demonstrated in this. So we can certainly go into detail on that, but it's there. And most people have accepted this. The real question is implementation, where and how do I utilize this technology because there's a cost associated with. There's some arthroplasty data specific that shows its effect in hip and knee replacements. And then here's my data. This was looking at our run of patients. This is the one -- we have 1-year follow-up. This is at 2 years. We presented this at the hip society. And again, we're seeing a 0% infection rate, statistically significant. So as I said, we've had this 4-year window from December 1, 2021 to December 2025, and where we have had a 0% rate of infection. Now admittedly, that last group were still doing the 1-year follow-up, but they're doing fine. And that 0 having -- being able to say that and being able to publish that has really been enabled because of PICO. And that's why I use it on all of my patients. I don't think that every single surgical patient in the world requires negative pressure. But I think that every single practice, every doctor has some -- every surgeon has some patient in their practice that would benefit from negative pressure. And to Cathy's earlier point, that's what we're missing. It's underutilized. There are some people that don't know much about this, that aren't using it in their practice. And so the available amount of folks that we have that are undertreated is massive, and that's really what we're targeting. And if we look at this, we know that every surgical practice has some opportunity to increase their usage of this. And as the data is coming out, that is what's happening and evolving. So the bottom line here is that we know that surgical site complications are costly. And again, I use that word intentionally to patients, providers and systems. We know that some SSDs are preventable. So we have a problem. We have a piece of technology that we know fixes that problem. And we know that there is clear data to show us that this technology decreases the rate of the complication that we're most fearful of getting. I'm going to share a quick patient story with you and then we'll move on to the Q&A. This is the patient that changed my practice from, hey, I'll use it sometimes when I think somebody has high risk, I'll try to guess to see where I need to put this device on. Jazz was medically a 54-year-old active male with severe right e arthritis, no significant past medical history. I'm going to do my outpatient minimally invasive, total knee on. So from a medical standpoint, this guy is the lowest risk he doesn't need anything he's going to do great. odds are. He's going to do really, really well. I don't need to do anything special for him. But who is he really? So he was a former NBA basketball player that was sent to me by his former teammate that I did a successful knee on. He's now a business leader. He's a C-suite guy. He's running around traveling. He loves playing sports with his 3 kids. He's a coach. He's a golfer. And he's healthy enough for an outpatient total knee. He wants to have what his friend have. He signed that same consent for him, but he wants what his friends had. Get home the same day, play off in a few weeks back to his life. This was not a revision case. This patient is not more [indiscernible] obese. He doesn't have any major risk factors, but that doesn't mean the consequence of his failure is any lower than somebody that does have those risk factors, right, particularly within the hip and knee replacement world. So what he came for was this, right? This great little package that I can offer everybody. Here's what happened. He had early wound drainage and I said, "Oh, we got to look at this. He comes in to prove infection in the hip or knee, you got to take fluid out of it. So I ask Brad, it is me, -- sure enough. You had an infection. So we had to go to the operating room. This was early, so I just washed it out and changed out the plastic. So he gets to IV antibiotics, get this pick line. The cultures came back positive for MRSA, all right? So he gets pick line IV antibiotics. We watched it out. We're hoping for the best. It comes off the antibiotics, still has an infection. Now we have to go in and put in what's called a spacer and that's no fun to have. It's a temporary knee replacement you're supposed to live with for 2 or 3 months. We come back, still infected. Okay, which can happen with MRI say, he gets another spacer, and all the while on IV antibiotics. And he's not doing any of those things that I told you to find who he was. He's just trying to cope with his knee sitting at home with IV antibiotics with a space here need. We did finally eradicate this infection and about 1.5 years later, you got a revision knee replacement. As I said, that's not what he signed up for. legally, he said that he knows that those things could happen, but that's not what he wanted. I like the term high consequence. Instead of risk stratification, I consequence stratify my patients. And every single primary hip and knee replacement that we do is high consequence. We cannot afford for that patient to get an infection, financially or from an outcome standpoint. So again, is routine pathway, that's what we're aiming for, but that's what we got instead. And along with that, came increasing cost. And so the dressing that I use, PICO, was slightly more expensive than a standard dressing. But that wasn't the expensive part. Him having this complication was the expensive part. And there's more and more data showing us that's going to be forthcoming that demonstrates that this case is proven out on an economic standpoint as well. So this is his life for 1.5 years. None of you would want to get on that airplane. So as I said, it's not the dressing, that's the expensive part. The human and financial cost is what's expensive here. For me, all elective total joint replacements are high consequence. And to answer that question that I asked at the beginning, that's why I use it on every patient. He wasn't supposed to get an infection, but he still did. So if I just risk stratified my cost, all that stuff, I would have still paid that price for him. He would have still paid the price. And in this case, he did. But for 4 years, I haven't had to pay that price in neither of my patients. And to me, that's really been practice changing. Thanks for your time, and I think we're going to take some questions.

Perfect. Yes.

[indiscernible] Snatkin, Deutsche. Just you mentioned you're obviously using on every case. So clearly, you're a believer in sort of implying that others could do more. Just wondering what is the sort of #1 sort of factor preventing broader adoption? And then two, how do you sort of -- what do you think differentiates PICO from sort of other systems?

Yes. Great question, and I'll try to answer it briefly. There's a few things that are packed in there. What is preventing broader adoption I think some of it is a lack of awareness of how simple and easy this is to use. I think that surgeons in general are focused on the operation, the implant, the technology and this has fallen a little bit by the wayside. And so through medical education, we're attempting to improve and grow that. And as I said, I think that there is some sense of, hey, this is the cost of doing business. We can't do any better. And the data is showing us more and more than we can. And this is where the cost is actually going to drive. So if a surgeon says that, he has a 1% infection rate and he's doing fine. At some point, the system is going to say, we can no longer afford this, and we need to move it that way. So I really do believe that in the next couple of years, the finances are going to push that awareness and adoption, even though we're working on that medical education standpoint. In terms of why it's different than competitive products, and this is critically important. PICO is set at negative 80 millimeters of mercury as a pressure setting. All of the data that I kind of went through quickly, all the clinical benefits that we've seen, including increased perfusion, decreased edema, decreased inflammation, these are all studies that are done at minus 80%, more or less this is not necessarily going to have the same effect. So until other products can prove that they can do that, PICO is still the leader in this space. And I always encourage surgeons to look closely at the data just because it looks like a PICO or sounds like a PICO, doesn't mean it's a PICO.

Yes. Thank you. I think we had one, yes.

David Adlington, JPMorgan. I just wondered how the number of SSIs have trended over time as it so up down sideways. And what are your thoughts on the impact of robotic surgery on infection rates? Do you buy the thesis that the longer surgery times required robots increases infection risk?

Yes. So that's a fact that longer surgery time does increase infection risk. I think that within robotics, the platforms are evolving to become more time neutral. And I think you're going to hear some things about the [indiscernible] robot specifically on that track. So I don't think that that's driving up infection rates. I don't think robotics is driving up infection rates. To your first question, that's what keeps me up at night. SSI rates and hip and knee replacements have been the same for about 20 or 30 years. So they've remained baseline because we've just stopped focusing on that. We've said 1% to 2% is good enough.

And just follow do you absorb the cost of PICO or do you get your payers to pick up some of that cost?

So within our system, we have the bundles coming in the United States, it will be absorbed within that. But we have some data that we're looking at that would suggest that long-term routine use of that will actually still be a cost savings over time versus an extension of spend.

Any other questions? Okay. Thank you.

Thank you, Cathy, and Dr. Vishal. Hello, everyone. My name is Christie Van Geffen, and I lead Global Strategic Marketing for Sports Medicine. It is my pleasure to present to you on our Sports Medicine business. And today's focus is on what we call the big 4, all category-defining technologies, each at a different stage in unlocking their potential. REGENETEN, our bioinductive implant has been available now for over 10 years and is the established leader in biologic healing. [indiscernible] tendency from our recent acquisition of Integrity Orthopedics is at the start of a very exciting growth journey and can significantly improve repair strength when compared to a traditional rotator cuff repair. The CARTIHEAL Agili-C implant offers a new treatment option for patients with damage cartilage, including those with mild to moderate osteoarthritis, which is a large and underserved population. Lastly, TESSA, our tracking-enabled spatial surgery assistant is pioneering dynamic real-time arthroscopic video-based navigation. It is currently under review with the FDA pending commercial launch. These 4 platforms are sports medicine driven by our focus in innovation and commitment to market development. This is underpinned by sustained investment in clinical evidence, market access medical education and commercial execution. And together, we expect the Big 4 to drive a significant portion of our growth over the next 5 years. So let's dive into Rotator cuff repair. The rotator cuff consists of a group of muscles and tendons that come together to drive stability and move the arm around. Rotator cuff tears are extremely common with an estimated 1.2 million tears that are surgically treated per year globally. Most often, the tendons terrace, patients age unfortunately, about 25% of rotator cuff surgeries fail due to poor tissue quality and the tendons inability to heal back to the bone. Smith & Nephew is changing the standard of care in rotator cuff repair with not just 1 but 2 technologies that address both pillars of healing, the biologics and the biomechanics. So let's start with our REGENETEN bioinductive implant another way to address biological healing of tendons. It is a type 1 collagen scaffold placed over the tear, which aids postoperative healing and thickens the native tendon. It has been shown to reduce retail rates by 65% and at the 2-year follow-up mark in a randomized controlled trial. A key driver of its adoption is the simplicity of surgical technique. The implant is delivered via a well-designed insertion device which goes in unfolds and is then fixed to the tendon and bone. And within 6 months, the implant is replaced by tissue, which promotes tendon healing. REGENETEN has been used in over 250,000 patients globally to date, delivering fantastic patient outcomes. However, great technology is not enough. To unlock reimbursement and drive adoption, you must also prove its value through clinical evidence. We have been committed to a 10-year market development journey to do this. Our evidence is unmatched including 3 randomized controlled trials with over 30 studies from multiple sites published in high-tier journals, all showing consistent positive outcomes. This is now shaping clinical practice and we are very proud that last year, the American Academy of Orthopedic Surgeons issued a strong recommendation to use bioinductive implants in rotated of repair based solely on the evidence generated from REGENETEN. This will open doors with payers and will embed REGENETEN into everyday clinical practice. And we see significant opportunity to expand the use of REGENETEN in other tenders beyond the rotator cuff. It has already been used in hip tendons and in the foot and ankle like on Achilles task. Most recently, we received clearance to use REGENETEN for the repair of ligaments, which can be leveraged in the hip capsule closure which Dr. Ranova will talk about later. So turning back to biomechanics, traditional biomechanical repairs rely on multiple individually delivered anchors with sutures managed at discrete fixation points. These complex constructs remain vulnerable to [indiscernible] formation during rehabilitation and can lead to potential repair failure. Tendency reimagines this approach, drawing inspiration from textile engineering to create a continuous media them construct with connected but individually locked points of fixation. This unique system delivers a stronger, more stable repair that significantly minimizes gap formation and supports the repair through the healing period. With tendon teams disruptive technology then the initial repair construct and REGENETEN's proven ability to promote biological healing over time, we can present surgeons with a more complete repair strategy that addresses both the biomechanical and the biological drivers of successful cuff repair. Together, these can change the standard of care and set a new bar for patient outcomes. And we look forward to Dr. Clift sharing his experience with both of these later on this morning. Now let's turn to CARTIHEAL AGILI -C and it's used in cartilage repair. The knee is made up of 3 court issues, ligaments, meniscus and cartilage. Cartilage is a vascular so it doesn't heal well on its own and can cause significant pain. Damage can occur in various forms, cartilage alone, cartilage with bone known as osteochondral defects, or cartilage damaged in the presence of osteoarthritis. Current methods of repair have limitations. Microfracture isn't very durable beyond 2 years. Cell-based therapy requires 2 surgeries and donor tissue an osteochondral allograft transplants are limited by donor tissue availability in the U.S. and even more so globally. So enter, the AGILI-C implant. This is a new treatment option designed to help the body regrow healthy cartilage and heal damaged bone in the knee. It's highly effective with twice the pain reduction relative to the current standard of care microfracture. [indiscernible] versatile can be used across a variety of sizes. And uniquely, it is the only cartilage repair technology that can be used in the presence of mild to moderate osteoarthritis. It's also convenient because it can be implanted in 1 surgery without any donor tissue. And last year, a new Category 1 CPT code was created that we can leverage starting in 2027. We -- this code is essential for future revenue growth. It gives us the opportunity to work with U.S. payers to access broader reimbursement coverage while leveraging the clinical data and our surgeon advocates in parallel. CARTIHEAL AGILI -C Stands apart from other technologies with a Level 1 randomized controlled trial and 5-year follow-up published early this year in the peer-reviewed American Journal of Sports Medicine. Dr. Ranaut will get into greater detail later, but I'd like to highlight key findings, twice the reduction in pain when compared to microfracture or debridement, significant improvements in overall CUS scores which is a patient-reported outcome looking at knee health symptoms and functional abilities, consistent results regardless of osteoarthritis status and reduction in relative risk of patients progressing to knee replacement. This underlines that the CARTIHEAL implant is having a sustained positive impact on patients' lives a great new option for our surgeons and patients alike. Now let's talk about the last of the big 4, TESSA, anterior crucial ligament, or ACL reconstruction surgery is all about visualization and tunnel placement. And where you can't see well, it can be challenging to get good results. In fact, 34% of ACL failures are caused by technical error. The first ACL reconstructions were done as open procedures. Then in the early '70s, camera-based visualization was introduced, creating the field of arthroscopy, where a surgeon would insert a scope and watch on the monitor. Since then, arthroscopic surgery has barely changed until TESSA. This is the first of its kind arthroscopic video-based navigation system that provides guided visualization and advanced imaging. Everyone remembers using a physical map, but now we can all use Google Maps because it is digital, dynamic and has a real-time update. TESSA applies that to arthroscopic surgery. So if the surgeon is the journey and the surgeon is driving the car, TESSA the surgeon real-time assistance to stick to the surgical plan he or she is created at the beginning of the surgery, making sure that the surgery is completed as planned. TESSA takes surgeons away from basic analog imaging to digital dynamic augmented reality that is personalized to the patient. The first application is going to be femoral tunnel drilling, but this technology is a platform for further surgical arthroscopic applications. And from here, we'll move on to tibial drilling then to increase applications in the knee, shoulder, hip and beyond. I hope you've enjoyed learning more about Sports Big 4 and how we are committed to accelerating innovative technologies and capitalizing on our expertise in market development. But in summary, I want to underline that our purpose is to help people live a life and limited and that patients are truly at the center of everything we do. These are 2 patient stories where we helped Chris get back to walking his dog and running to work after being treated with CARTIHEAL and Nick, who is treated with REIT in his shoulder so that he could get back to doing what he loves, which is being a coach and a great dad to his kids. That's what gets me up every morning and excited and working here at Sports Medicine, my team and I get to impact millions of patients' lives every day globally. And with that, I'd like to introduce Dr. Anil Ranawat who is an orthopedic surgeon from HSS New York, focusing on hips and shoulder and me. He is constantly pushing state-of-the-art advancements in joint restoration, including both nonoperative and operative management of these conditions. He serves on numerous orthopedic boards, including AO SSM and EOA, and lastly, is the orthopedic surgeon for the New York Rangers ice hockey team. Dr. Ranawat will share with us his perspective on 3 of the big 4 technologies in terms of how they are used in his practice today and their potential in the future. Dr. Ranawat, it's a delight to welcome you here today, and I [indiscernible] invite you to the stage

Thank you, Christie. I want to thank Deepak and Scott. And it's really an honor to be here. We give a lot of talks. I don't usually even like look at slides anymore. I just kind of talk to the audience. But these are kind of more unique talks. I've -- in the last year or 2, I've given this one in New York at that capital markets. Also with TESSA, we presented with Brian to the FDA. That was a fascinating little kind of endeavor. So I'm really enjoying this journey as we're all calling it. And it's a team journey. And my father, my late father was a very famous [indiscernible] peak surgeon, heated arthoplasty kind of like our other colleagues here and he said a couple of things. First, work with the company to really help patients. That's really -- there's this new philosophy that working with companies are [indiscernible] and we treat conference of interest and all this stuff. It's actually the only way we can really drive technology when our incentives are aligned. And our symptoms is to help the patient wait Christie up in the morning when she sees her company can help people. And that's all I want to do for you guys to show us how our efforts and their efforts can help people. These are my disclosures are not relevant. Talk about my background, who I'm from my kind of experience with Smith & Nephew and then 3 of the Big 4 just my full disclosure is, I am a hip and knee surgeon. I do a little shoulder Clifton will talk more about the shoulder. I am any shoulder operation has a Frenchford, [indiscernible] or rent massage, I don't know because they don't speak French, so that's where I end to begin. I've been an attending surgeon at HSS for now almost 20 years. I'm the Chief of the hip knee sports department. HSS has 160 surgeons at HSS. We have 50 surgeons in the sports department. We have as many sports surgeons as most orthopedic departments have in the world. So it's a pretty big place. We actually call it the big house, and we have a lot of my colleagues here to talk about the big house. and I'm a media director of various different off-sites in the system. I am a Duke too, and I did a lot of fellowships. And one of the [indiscernible] so I did was actually, although we are American, I try not to be an aggregate American, I did 1 year in Pittsburgh, and then I learned this kind of organization called [indiscernible], an international organization. So then I went -- spent 6 months to Sholto's insert, and I spent 3 months here in the U.K. at Extera, Oxford, Cambridge and up the street at King's College. And I learned a lot of different ways of skin of cat. So that's one of the things that I love about Smith & Nephew, global company, global ideas, global change. So these are my affiliations. I do take care of a line of professional athletes. It's fun. I'm not really a football professional athlete and I'm talking more about hockey and baseball but I've -- I take care of a lot of athletes. But I also take care of a lot of average does, and you have to recognize what's the disease ahead of you? Is this a disease of an ate that has to get back really quickly or is the disease of an aging tendon that doesn't actually have an injury. It's just more deterioration. And it's a very different treatment algorithm based on what you see before even sometimes it can be both. And that's really what I do. I want to prevent degradation. I want to fight God, God usually wins. It's a hard battle. But what I don't want to do, I want to get you guys all running around on the TAMs and enjoying your life. I never wanted to be a general [indiscernible] surgeon. That was like blasphemy for my father because I don't want to talk about infections all day. That's not really boring. I want to talk about getting people back in the game, right? Having them rise. So that's really been my approach. Get people back on the field or the pitch. So let's just talk about what's the one-stop solution that Smith & Nephew are getting to. Let's first talk about cartilage. And as Christie said, cartilage actually Dr. Robert Hunter, very famous U.K. physician. We're surgeons. So we're from the barber line. We're misters. We're not -- and I can explain that to you over a couple of coffee later. But Dr. Hunter, who was a smart guy, I recognize if you open cartilage up and you cut it, it doesn't heal. That was quarter that in '17 '20, still true to this day. There's been a 1,000 different ways of heal college, none of them really work. And they're all really expensive. And it's a huge clinical problem. There's not one person in this room if I took an MRI underneath that doesn't have a [indiscernible] defect. It's ubiquitous. Now some people have verse, but it's a massive disease. The muscoskeletal burden in the United States is huge. So let's talk about how we fix early or these. We're not talking about [indiscernible] That's what our colleagues have talked about replacements. Earlier threats, which is an even bigger category and it's actually more important because, yes, it's important to get grandma out to walk around, but I want to get her son 40 more years until he gets in the replacement or maybe never give them a knee replacement. So what do we have out there? We have [indiscernible] you can take your own plug of your own body, put it into your thing, Well, that's kind of Robbie Peter to pay Paul only or extend would do something silly is that -- let me take one part. Well, if God didn't want it there, he wanted to put it there. so we get smarter. Let's take a dead person and put it into side you need Well, usually, when you take a debt persons, you need like this is not. So when you do a liver transplant, you have to be cross match. If you don't cross match miss with skeletal tissue. So there's a level of rejection. So autograft do grade for 5 years. And then there's a thing called microfracture, which is still the standard poke little holes, and we're going back to Dr. Hunter's principles. It doesn't work. cartilage doesn't heal by itself. And then there's fancy things were out of Scandinavia, they create cell base where we took your cartilage, grow it up in the lab and then put it back in your knee. Well, that's 2 surgeries a lot of money, and it still doesn't work. It's actually illegal in Europe. So if it was so good and the Navy and there's so much data about it, why can't you do it in Europe and only in the United States? That's like a little head scratchy because the data isn't there, and that's what we care about. We care about data. What about ACL? What's the clinical problem with ACL? The clinical problem of ACL is what we called tunnel positions. What was an ACL, you have a femur or tibia, you drill a tunnel in each. If you put the tone in the wrong spot, the graph to impinge the graft impinges, it cars or it's too loose. It's as simple as that. We're battling the tunnels in the right spot because right now, the human body is a 3D structure. When we look at a screen, it's a 2D structure. Whenever I take a resin, I can tell them 30 seconds, I always a trick my father said he is I take an unusual object. Put it before you close your eyes lifted up and spin it in the x axis, then the y-axis. You can do that maybe you can become a surgeon. Now spin the X-axis, 80% of people can't do that. And once you can do X axis, then your last name is around a lot. I'm just joking. My daughter is here, so I said that for her. No pressure, Vive. And then tendon healing. Tendon healing is fastening People think the average person thinks a tendon healing is just like bone healing. When you break a bone, it's very reproducible to heal a bone. It works. The nonunion rates of bone healing is under 1%. Actually, usually the only times bone don't heal when we put too many plates on it. We try to fix it too well. But by doing nothing, maybe putting a little screw little plate on it. It heals very particularly tend into bone doesn't hear predictively because it's not a traumatic event. It's 95% of the time, it's a degradated process now. You can go skiing in some beautiful places in France and [indiscernible] cup at 40, but that's a very rare event. More likely, you actually break your bone or greater tubrosity. What normally is in which I could see right now, when I see people like last time we gave a lecture like, okay, who can do this right now with the right arm, who played a little tennis yesterday and be like got my cuffs hurting a little bit. All right at for me. Again, if you really is, a lot of people like, yes, it does. You're developing cuff disease. Cuff disease is spectrum. If you use it, you will lose it, and you will go from partial to full thickness. So this process of degradation of tendon dying is really -- it's really hard. And even when we fix it, and we've got 85% success rate. But what does that success for? That means the patient say they're happy 85% of the times. If you look at the healing rates on ultrasound and MRI, it's like 50 or even lower. Look, I'm no shoulder surgeon, but I can tell you this, there's tenders all over the body. And those tenants are feeling whether it's a glut tendon, which I take care of. Whether an Achilles tenant, every Achilles tenant an the MDA now by a senior colleague line get to REGENETEN in the patch, every single one. become now standard of care for the most high-profile players. So if it's worth $100 million contract ankle, then maybe it's worth 55-year-old shoulder for me, maybe a lift to fix my cuff. So let's get into the details of cartilage. Cartilage -- CARTIHEAL has this massive group. And it's kind of like the group before us. I'll have some people, some of the younger analysts -- we'll have an isolated defect. Some in the middle age, we'll have 2 or 3 holes. And some of the older guys like me will have pretty extensive disease. So you have really what this implant showed that it wasn't just for isolated disease. It carried a long spectrum of indications. And from a selling purposes, that's a pretty simple thing. That means there are a lot of patients you can sell it to. So that's good. And it worked. So how do I use CARTIHEAL today? Well, when I see a cartilage or really a scale with a bone lesion, I use it every time. Because CARTIHEAL turns into bone. Allograft does not only turn into bone and even autograft doesn't heal OEs to bone. CARTIHEAL is very predictable to bone and then the cartage grows on top and I do it with either mild or moderate disease. If you truly have a date, a dance OA, anything one-on-one, I refer to my colleagues, Dr. Data asked. And as I said, the healing rates, the scientific cumulates are very profound. 75% in both the bone will heal, that's more like 95%. Coral is a really osteoinductive agent and conductive agent. And then the [indiscernible] Shield are at 75%. So you get bang for your book. And as we heard, you could do this with a lot of other complex procedures I use with an ACL or do it with an osteotomy, escalate it's we and sports have an armamentarium where Smith & Nephew helps us a lot to fill out this [indiscernible] And ultimately, it can either prevent or delay arthroplasty. And that's really what we want. We want the people to get back in the game and play as much as you can. So here's a little quick low video here's an isolated lesion, you do a minarthrotomy. You drill, when I do an oats plug or an allograft, it takes me 30 minutes to do. This takes me about 6. It's another powerful thing. It's so easy quick to do. And it's very reproducible. So a lot of times, we have things that are great biologically, but they're hard to put in some things are easy to put in and terrible biologically, this is a win-win. Great biologically, easy to put in. You line it up. Some of these things, I don't do as much because I have a little ADD, as you can tell. I don't wash it out 3 times probably only once. I do like to do this low step and makes it looks really -- I don't see they wash out again. I don't do that. Come on. I don't change my gloves. And then -- but it goes in -- but here's the thing you want to -- you actually recess to plug a millimeter or 2. So cartilage regrows on top. So it's not a flush in plant. It's not an osteochondral autograft or an autograft and you own a space now. What we have now is that we have now developed a kit. So it used to be in trains, you have to sterilize trains. The future of orthopedic surgery is we're hearing from the arthroplasty guys outpatient. It's all outpatient. So it's all surgery center business. So we don't want to do trade Cooking trades costs a lot of time and energy. I think Mike will talk a lot about this. This is all the single disposable kit. It's another big advantage of this system. And here's when we talk about the data. Our CT data in cartilage is obnoxious, how little there is -- and we do these operations all the time. I'm looking at like Data Hosts so true. Like we're such worse doctors than artists, but they can occur 1,000 patients in a week. That takes us years to do that. But with this RCT showed and then we have got FDA approved that compare the microfracture or debriement, their problem scores were way ahead of them and MRI data. Then they repeat at 5 years and showed consistently. But let's get delve a little deeper into that data. If you look here, the orange is cartel. They had a 58% reduction in any failure surgery or injection, a 76% reduction in injections. That's profound. Subsensory 20% and the risk of total joint replacement or style the ultimate failure of your procedure 80% at 5 years. There are a few things we can really say in orthopedics that are disease-modifying right? Totally is not disease modifying. One of my professors would used to call it its internal amputation of the knee. That's an orthopedic joke. I never appreciate that because the tone got me through college. So I was like a little harsh, not helped, but disease-modifying means that you can change to natural history, right? PICO can be disease modified. If it changes the attrition is size. This is disease modifying to change the natural history of the failing need. And that's what's exciting. That's why joint preservation is exciting to me. So the 5-year results of the RCT shows lower intensive treatment failure, lower risk of major surgery, equivalent outcomes actually depending on your [indiscernible] , which is really fascinating. You would think the single minor disease guys would do better than the more massive disease guys, no, all comers are pretty close. And the pain reduction was twice as better than standard of care. So this is just the case where we did one. This is what a plug looks like. I did one the other day. This is one, I did on the fireman where you can see much more extensive disease this what I did with an osteotome. And this is what I said to you before, it's really filling out the whole armitarium. So let's get to TESSA. As we heard a lot, traditional ACL surgery is hard, and we're living in the 2D world for a 3D concept, and we're using mechanical guides, it's amazing when I do an ACL and now I look to my friends and colleagues that look at Dr. As next to in the same surgery center, he's got a robot for grammar and have an ACL for his son -- that seems weird because he wants it my operation the last for 50 years. So we need to modernize sports medicine surgery because traditional marketing using mechanical guides, whether inside or outside are wrong. So video processing and on materiality guidance can really make 2D, 3D. And really what it is, you have your TV and then you have an image-based whether an MRI or CAT scan overlapped the image, and you're holding your hand and seeing my tunnels in real time. It is a game changer. It is -- it will blow you away as a surgeon because what those guys have, the robots are still pretty cool, but they're still looking at an image that's not real -- I'm looking at a real-time 2D image, and then I have the actual imaging on top of it. It's a really powerful thing, and it's what's going to give me the ability to get my tunnels in the right spot. So it's patient-specific because it's image-based, as we talked about, first, with the ACL, but now on the FEMA [indiscernible] it's all segmentation. It is literally -- it's funny that we're here. I guess there's a plaque. It's using all AI technology. It's fast. It's all based on QR codes. So the QR code has the big scanners that they use now. arthroscopic we're using a small QR code. It's fascinating. We did a paper showing that with 15 [indiscernible] it's 10x more accurate than the free hand. That's one thing I can tell you about all robotics navigation, all modern technology. When you compare that to the freehand Robots navigations, the robots are always better. It's a little depressing. It makes us feel like we're not so good. We still have to control the robot. We said the control of everything in navigation, we said the talent where to go. That's always a debate. But in terms of the sites, they will always beat us if you're just asking them to make a straight cut. So let me quickly go to 10 the healing. We heard about REGENETEN. We're going to hear a lot more. So I don't want to go too much about that. As I said, I am not a French shoulder doctor. I'm an American hip doctor, but I use this for the glut. I use this for patellar tendon. [indiscernible] , these are all tendons and athletes that fail because the tenant is actually degenerative. And that's the pre-existing condition. And the way I think of REGENETEN, it's food for your tendon, attending is slowly devascularizing. -- it's food for the tendon and it feeds the tendon and thickens it. And we've actually proven that in the paper. This is just an example of one doing the hip that where I do it for all my gut needs like this, and we have an MRI paper to show that the thickness of the tendon after the Regent in patch is 6 millimeters thicker. And this is consistent with RCT data in the rotator cuff. So now we're having multiple joints and then just amount of time until we show this in the Achilles that the tenant is thicker and healthier. This is just a standard way to fix anything. This could be a road haircut. This is actually a glut media or minimus, and you pass it and you'll see how we normally do our construct, right? So again, to go back to Christie's point, you first have to do biomechanics, Isaac Newton. Adesis funeral in Westminster, but it's kind of cool because -- he was kind of my hero growing up. We're all about mechanist as [indiscernible] risen. And then you add biology. It's the 12 combo. And this is the potential, all the other outcomes. And this is that paper I wrote where we talked about increased healing. And then we can use it for the capsule as well and a lot of other indications. And this is just an example of the patient that I did it on, and this is how we do it. So just because of the time, I want to just say, I really believe the Big 4 -- 3 of the Big 4 that are mine are really a -- it's a vision to the future how we think of improving biomechanics, biology and enabling surgical technology because we're not doing this for the sake of here's a new anchor, that's how other companies do it. Now here are clinical problems. Cartage doesn't heal, tenants don't are dying, and it's hard to do surgery sometimes. Go after clinical problems find a company that's merely ethically responsible to give you a clinical solution to that clinical problem and you help patients. Thank you very much.

Thank you very much Dr. [indiscernible] Very passionate presentation and very durable. A couple of questions for me. One, can you maybe talk when you clearly, you find these products work very well. But why do you think other surgeons don't use them? And maybe talk about how this changes the duration of the surgery, the cost of surgery? What are kind of the barriers that prevent folks from using REGENETEN in every single procedure.

I mean I think REGENETEN has created a lot of adopters. REGENETEN was the first guy out of the block, right? And -- with it's pretty close. You know that you did something well. Like when you come to a first great one with Artico something like that. So I've seen a lot of nonspecific users use it and then eventually they try other ones, but it's still the best because it has the most science. And that's really the thing. And then when you have the science, you then eventually can go to your payer and saying, "So I would want to put REGENETEN in my shoulder. And that's usually the best way you ask a surgeon if they believe in the product, would you take that product for yourself or put it into your own family members. That's what I would say. So I'd say there is a cost, obviously, it's added cost to an operation. But again, I'm saying, why did we pick grower off because it's failing tremendously. -- from really healing rates. So there's room -- I never wanted to be a hip replacement surgeon because it was the operation was 92%, 98%. -- what room you have to grow. So rotor cuff at 50% real to go. So that's a good reason to. Go for the money.

Great. It's Graham from UBS. Could I ask one, you talked about your experience learning abroad and spending time in Europe. In terms of sports medicine, we think of the market being so well to well progressed in the U.S. and maybe not as common as growth in Europe right now. What differences do you notice in terms of practice and the availability of some of these products?

Yes. I mean, obviously, it's every European country is vastly different. If you -- I had a cousin in the NHS, if you have -- there's no [indiscernible] repairs in NHS, because the time the kid gets to ACL surgery. It's 2 years waiting has been a shredded versus you go to Harley Street, they fix Monsey, like it's candy. So there's that 2-tiered system in certain countries. There are other countries like Italy, where they're very aggressive, and their NHS is a little bit more better -- I think better access. So it's very country specific. I will say this, they're all realizing now that sports medicine is a field. And it used to be -- traditionally, the European system was that you were in the search. You did everything soup to nuts in to me. And America had this false thing of joints and sports. And the reality, the answer is that the pros and cons are both. But I do see now the traditional knee German surgeon who used to just do us and he told me and then do a scope. There are now people who really just focuses on sports. And the way you know that is look at Esca and look at Esaase. Those are the 2 biggest growing organizations in the world. So I would say Europe is a huge market to grow for Sports Medicine.

There are 2 webcast questions, so I'll just go there. The first is how much cost and time do you think TESSA adds to [indiscernible]

For any robot as we heard before, it takes said, it takes time in the beginning. But if it takes time to lower your failure rate is worth it and then as you get better at it, that time goes away. That's just true for all of us. So yes, the first -- it's usually a learning curve in 10 cases. Now again, cost is always going to be the issue. But if cost lowers your -- the ACL failure rate in a 16-year-old young athlete is 30%. And if you tell that to the young athlete every time they show up to you, the parent should walk right out of your door. But you have to kind of tell them it's insane. So we have room to do better. We have to -- I mean, if you take a 6-year old and you do enough of these and they come back with a failure and you thought you did a really good job. That apes devastated. So I don't want that because I had 2 ACLs and my needs are not so good now. And that was 4 years ago. So we have to do better with this. There is a clinical need here.

And then the second question was just how does what you've talked about today translate into procedure volumes for the hip and knee replacements down the line?

As much as I would say, I want to eliminate hip replacement, hip patient is not going anywhere, okay? It's such a good operation. And it's -- but we're not talking about attacking hip and not replacements. We're talking about the middle, the injection middle where you just say, "Oh, don't know, my [indiscernible] one is going to work. my PRP is work -- it's no, no, this PT will work now. And it's really about going after that middle age population where we could say we could do better. Because when arthroplasty surgeons tried to address them 20 years ago, they realized that they did not have good results. That's the -- the irony if you take care of just Medicare patients over 65 United States, you will have much happier patients than if you -- once I go after the 54-year-old, that's more higher stakes.

We're now just going to a break, so everybody can go and get some tea in coffee and see the product fair, and we'll be back here at 10:05. So 20 minutes. Thank you. [Break]

Well, welcome back, everyone. I hope you enjoyed that quick break, and hopefully, you also got to see some of our innovative portfolio in the adjacent room. My name is Mayank Shandil, and I lead our global portfolios across orthopedics and robotics. Over the next 10 minutes, I will take you through how we are going to build our competitive advantage across knees and robotics. We have a strong track record of innovation across both robotics and enabling technology, along with implant design. With the acquisition of Blue Belt Technologies in 2026, we have pioneered the use of handheld robotics for total neothroplasty. In fact, Smith & Nephew remains the only company with FDA approved robotic indications for partial, total and revision knees. The digital tensioner launched in 2023 was yet another unique solution that helps make the procedure more precise and reproducible. I will speak more to this in subsequent sections. On the implant side, we were the first to bring to market the asymmetric joint line with Journey, which helps match the average patient anatomy more accurately. Across our Legion and Journey platforms, we offer surgeons distinct choices on both implant geometry and materials to help personalize the procedure for every patient. Finally, [indiscernible] in the OR, it is the implant that the patient goes back home with and its design must accommodate bearing needs in the future. So let's talk about those needs. The expectations from all of our stakeholders, starting with the patient, but across surgeons, our staff, administrators, even payers are evolving rapidly. Our key objectives will always remain the same, make patients happier and improve their satisfaction from knee replacement surgery. And what we are seeing is personalization of the implant position makes patients more satisfied with their outcome. So future implant designs must accommodate this. While implant geometry plays an important role, it's really the technology, the robot that helps position the implants accurately, precisely and reproducibly every single time. The purpose of this technology fundamentally has to be to make more complex surgery easy and to make less complex surgery more reproducible. And finally, the shift from hospitals to ambulatory surgery centers or ASCs they're known, is driving a distinct need for streamlined workflows and efficiency. I realize that ASC is a very U.S.-centric acronym. But think of these as smaller outpatient of day surgery centers, and we'll discuss these in greater detail in our subsequent sections. For now, I will concisely state that at these outpatient centers, cost of technology, its footprint and procedural breadth, even the number of instrumentries can all contribute to significant inefficiencies. So any solution we build for the future must address all these needs, always starting with the patient, making sure technology is doing what it's supposed to do. That's more complex surgery, easy, less complex surgery reproducible. And they're doing that while driving leaner and more efficient workflows. So now while we clearly understand these needs, at Smith & Nephew, we are also aware that our current knee portfolio is complex with as many as 4 knee brands. Any solution we create for the future must ensure that we are not only evolving our knee procedural offering, and that's across the implant design and surgical workflows, like I said, but also actively streamlining our portfolio. So we manage significantly fewer SKUs across the value chain. Since we announced this objective last year, I'm happy to report that we are well on our way with production stopped on 10% of primary in SKUs already. By making these strategic portfolio choices, we would reduce our overall SKU burden while at the same time, adding an innovative new knee system and I will share more on that soon. Before I do though, let's dive a little bit deeper into how we look at the future of knee surgery. We really have 3 key design priorities. First and foremost, it's the ability to personalize the position of the implant for each patient's anatomy. And like I said, the implant design must accommodate for this personalization. Second, the implant and the robotics solution needs to work together to unlock better outcomes for our patients. And lastly, going back to that really important point around efficiency, the solution must offer all these benefits without adding significant cost or complexity in the OR, especially in the ASC. So starting with personalization and without getting into too much technical detail, we know that satisfaction in a knee replacement procedure is driven significantly by the balance of the soft issue around it. These are typically the ligaments that support the knee, especially on the inner and outer sides till the invention of this device on your screens, most surgeons were using some subjective ways to assess tension and ligaments. We have learned that the subjectivity can create variation and assessment, not just across different surgeons but also for the same surgeon between their first and last cases on the same day. Our unique digital tensioner is the first step towards an objective assessment of each individual patient soft tissue that will eventually help us personalize software retention for every type of patient. The clinical impact is actually already showing up in level 1 evidence. Smith & Nephew handheld robotics significantly reduced soft issue releases while improving patient-reported outcomes and natural joint feeling at 1 year. Here is another great example of how our robotics and implant systems can help personalize the surgical process, even in complex surgical settings. In a revision situation where there is bone loss and limited reliance on anatomical landmarks, our unique CORI division workflow simplifies the procedure significantly through accurate implant placement and the ability to plan for bond defects. We can even use the digital tensioner typically used for more straightforward primary cases, to dial in the right soft tissue tension for each patient eventually improving function and outcomes even in these complex revision scenarios. With this simplified workflow multi-center data across 100 revision knee cases shows CORI, reduces mental and physical demand on OR staff by 54% versus conventional instrument without compromising on surgical performance. I'm going to now switch from personalization to performance. But before I do, this is LANDMARK . There are 3 things I want you to remember about our new knee system. One, LANDMARK will incorporate the differentiated kinematics of our journey platform while retaining the simplicity of use of our Legion platform. But that also means -- it is compatible with existing instruments and will allow us to retain our customers while being offensive with convergence across full cemented and cementless offerings. Second, LANDMARK will be our most robotically enabled in the ever period. PINK simplified workflows, advanced telethemoral planning and industry-leading soft [indiscernible] optimization and much more. And lastly, and perhaps most importantly, LANDMARK will have industry-leading leanest tray configurations, including for robotic cases without compromising on interop options for the surge [indiscernible] so the ability to dial in patient-specific alignment with prior planning, so without compromising on function or survivorship is one of the holy grails of need replacement today. Typically, plus or minus 3 degrees on alignment is considered safe, although some surgeons can go beyond that. But within those 3 degrees, the landmark design actually covers 90% of the patient population out there. So think of it as for 90% of patients that are out there, LANDMARK does not require additional cuts to accommodate for patient variation. This equates to easier workflows and less compromised in the position of the patellofemoral joint -- this is the LANDMARK advantage with alignment. Another area where LANDMARK has differentiation is the design of the telofemoral joint. LANDMARK is designed to allow for the Patella to find its natural position by changes made to the patella group along with the ability to prevent rotational compromise of the femoral component. I'd mentioned Landmark will be our most robotically enabled me ever. This is another area where you will see that come to life. I can't disclose too much here today, but please know that CORI's unique capabilities lend themselves really well to planning and executing the patellofemoral joint in a total knee. Besides improving function, this can also help reduce the incidence of anterior knee pain, which remains a common problem with knees even today. All of our new platforms across hips, these and shoulders will have best-in-class trade configurations that drive efficiency. For LANDMARK, we will be able to support a robotic totally replacement with up to 50% fewer trays than some of our competitors, while offering multiple implant options as well as cemented and somatostatin. This is significant. -- sense it not only reduces sterilization costs, but also the burden on our stuff. Remember, ASCs are typically leaner on staff compared to hospital ORs. The commercialization of LANDMARK will focus on our full procedural offering for knee arthroplasty pairing together a distinct implant design that replicates the normal position and movement of the knee with the amplifying power of handheld robotics. Whether surgeons use LANDMARK with manual instruments or with the CORI robotic system, LANDMARK will bring amplified efficiency, personalization and performance to every procedure. Finally, and most importantly, while we continue to innovate with the robotic platforms and implant systems, we continue to generate valuable data across the episode of care. Starting with our image agnostic codiograph prior planning, all the way into inter-open post-op data around outcomes and function, we have the ability to create this connected ecosystem that would eventually help build algorithms, algorithms that can 1 day drive clinical decision-making for patients with different anatomies, disease progression or even functional expectations. Our exclusive partnerships I'll speak more to this when I talk about ASCs, enable us not only to capture the clinical data across the episode of care, but also critical health economic data that can unlock value for hospitals and ASCs and even payers and policymakers in the future. I'm very confident about our direction on robotics and knee surgery, and I'm convinced that this will create competitive advantage for Smith & Nephew in the coming years. With that, it is now my pleasure to introduce Dr. Steve Haas from the Hospital for Special Surgery in New York. Dr. Haas, besides being an accomplished surgeon and a global thought leader is also the immediate past President of the American Knee Society and has been the Chief of Knee Service at HSS for the last 18 years. He will talk to us about the evolution of implant design and enabling technology from his unique vantage point. Dr. Haas, please.

Well, before I begin, I want to thank Mia and Deepak for inviting me to come I have a special warm spot in England. I studied here when I was in school and spent a year in London and another 4 months up at Oxford. And I love London and I love England, and it's a real pleasure and honor to be here. So I'm going to speak as you heard about LANDMARK and CORI. And I think I'm going to try to share with you why I think this is really the next evolution of knee replacement. I think something that probably that most people don't know is some of the great limitations that we've had in knee replacement up to this point. It's a great operation. I love it. I do it all the time, but we have had problems and sort of a bit of what Anil talked about before, it is true that hips are about 95% perfect. Knees are not 95% perfect. They're 80% perfect, maybe 85% perfect. So it gives us as an academic, you say, I have things I can do to make it better. And in partnership with you guys, I think that we may have done that. Okay. So with that, we have to look at what we -- the reality of the world today. Our patients today are not what they were 20 years ago. Our expectations of what our patients want to do. They're not all the 65-year olds or 80-year-olds who just want to walk down the street. They want a ski, they want a mountain climb. Some of the more professional at rates that I have that want to do that, which I wouldn't suggest the bungee jumping for most people. And somebody want to do, frankly, whatever this patient was doing, she wanted to do that. I don't even know what she's doing, but that patient the demand of the patient has restored them to the activities that they want to do. And many of the patients are, in fact, younger or if they're older even much more active than they used to do. So the demands on us is to make patients happy, we have to meet their expectations. I'd like to share a little history of knee orthoplasty to understand how we got to where we are and what the limitations have been up to this point in time. Knee replacement started in the 60s really as hinges. That's where determine if I could outlaw the term, knee replacement, I would, I can't. Knee replacement at terrible term. We don't do an internal amputation. It was, in fact, an internal amputation when you put a bit of [indiscernible] But in the '70s and '80s, the first successful were servicing replacements were developed. Actually at HSS by Neil's dad and my mentor, who is British, John Mense, who trained at Cambridge. And that was a revolution because knee replacement turned into like a dentist cabinet tooth, just capping the end of the bone in the shinbone the [indiscernible], the tibia and the cap with implants to we're about 1/3 of an inch thick, about 7 to 10 millimeters thick. And that was a great innovation. Now that worked amazingly well, but there were no lesion rights at that time, okay, if you again to understand how we got to where we are. There were no lifts and rights. There were 1 or 2 sizes. Those things worked and they last a long time, but they were rarely crude. You matched essentially the patient to the implant rather than the implant to the patient. But the concept of resurfacing was started. And in the '90s, that was improved upon you focus on refinement of this basic design and prove instrumentation so it could be put in. And that brings us to about 2006 to 2013. And you -- I don't think probably people think about this, but the knee replacements by the 3 major companies Veoneminth and Nephew, Stryker, Zimmer and DePue, all those systems were developed Literally, they were released in 2006 to 2013. So these are going in today, they were designed then and the philosophy and science of the time is what's used today, okay? Now what happened since that time? There were improvements. And in fact, the main improvements were, well, there were new polyethylene inserts that had some asymmetry in them were introduced and there was the introduction of 3D printed technology, which was applied to only the tibia and the patella. So those were improvements and I think really great improvements but limited, okay? But the big limitation is, well, if your designs, your femur in particular, was designed in 2006, it's stuck with that. It's symmetric. It's mostly symmetric They're left and right, but only a little bit left and right. And they're based on science of time of 2005 to 2013. It's really not what we think today. So those are limited by those concepts. And why do we care? Well, if you look in the arthoplasty, again, very happy, makes lots of patients have last a long time, but the reality is that lots of patients aren't satisfied with the result. A lot of them are, but a lot aren't. And so 10% to 20% of patients are not satisfied with their results. And especially if you look at the younger patients, I mean younger is that people in their 50s and 40s, okay, especially in their 50s, we do a lot of patients and about 15% of those patients aren't satisfied with the results. And this has happened to be a publication we did, but it's been reproduced software, and you had about 20 to 25, we're only moderately satisfied. So they're happy. They have the operation again, but they aren't thrilled and they don't always return to the activities they wanted to do. So with this, if you look at the world of orthopedic arthroplasty, okay, new concepts have been developed to improve these outcomes, which is what makes it fun, okay? We have these new concepts. It's a really exciting time in orthopedics because we have technology and science that have introduced these new concepts. What are these new concepts? Well, the first one is it seems so simple to me, but restore native anatomy. We want to restore the anatomy and that means restoring the anatomy of the femur, the thigh bone, the tibia, the shinbone and the overall alignment delay. Years ago, what we did is we thought everybody -- in part because the best we could do, we said everybody ought to have a straight light. They make a difference how you started. And we like all things in life, not everybody is the same, right? Now people aren't vastly different, but people are a few degrees one way or the other. And if you start off with the bow leg a little bit about, maybe that's the way we ought to put you back in the first place, not say you were straight and the person a little knocked you be straight and everybody got the same. So the restoration of that concept and that concept applies to both the thigh bone and the shinbone reproducing anatomy, a personalized alignment strategy. The next is restoring the natural motion pattern. The knee is not a hint. It doesn't just bend. It actually rotates, it bends, it slides. It has a multitude of motion activities and trying to reproduce that natural stability and motion is actually a goal of this new concept. The third one, I already talked a bit about is 3D printed technology. 3D printed technology has proven to be very successful in the tibia and in the patella and for reasons I'll talk about it a little bit later, but that's 1 of the third concept. And the last one is, what makes a lot of this possible as robotics because of the accuracy we get with the robotics and the reproducibility we get with the robotics we can do some of the other things that are the earlier concept, okay? So if you look at this, the fact LANDMARK is the first knee [indiscernible] to incorporate its design to incorporate all these concepts into the design. The other can't because they were designed long before these concepts were actually thought about. I'm going to try to explain that. And I actually -- this is actually a pretty simple concept. You'd say, why didn't the Les do this all along, but they didn't. And they didn't because they started at HSS and other places as symmetric designs and then just grew out of that, okay? This is looking at the knee, we were looking like at the knee as it was bent just again straight at the end of the 5 bone. This is the femur, okay? What you want to do is essentially match the back, which would be touching the tibia and shinbone and the front which is where the knee cap sits. So it's pretty simple. If I'm doing a resurfacing the operation, I want to match that any, right? Simple concept. Well, in fact, traditionally, these don't do that. They match -- if you match the back, the knee cap isn't in the wrong place. The grow for the knee cap is not in the right place because they weren't designed to match the front and back at the same time. They simply weren't designed anatomically. They weren't asymmetric. They were designed in a way that didn't match anatomy. And in fact, to show you this, this is actually a real case. This happened to be a Mako case, that's a Stryker knee, and that's a trap on need placed on -- and as you see, the back line is up in the back, but the groove is there, and that's where the group at the Patel is. So you can do -- you say, well, I'll match the front, but then you're not going to match the back. So at the end of the day, you're making a compromise. And with LANDMARK since it was designed anatomically, it's a simple concept. It's designed like the natural anatomy. We simply took what the average anatomy is and we put it back together and said, it's asymmetric, but that's what it looks like. That's the natural anatomy. So it matches the back and the front because the kneecap groove is in the correct place. It's a simple concept, but knee replacements because of their vintage did not do that because it wasn't thought of. Well, there's another aspect to it, too, because what this is a diagram of essentially looking at the alignment, it has the overall leg alignment, it's called CPAC and it's the overall alignment. It's a classification system. So you look at -- you have bowlegs on the on the left, knock me on the right and the individual categories of how the bow leg and not [indiscernible] made up either of the femur and tibia. And ideally, you want to match it all and the green dots are the distribution of normal patients. Okay. Simple. Those are distribution, those are their alignments, okay? Well, if you take the and you say, well, I'm going to put it in the way we know is a safely to put it in the way that we've gone to custom to and say this, we know is safe. We have lots of data saying 3 degrees plus/minus is okay to do it. Well, you can only match the anatomy with the conventional needs that are out there, those other designs in about 40% of patients. So you may want to, but you can't. And if you want to match them to a larger proportion, you have to make cuts of the bone that were not known to be safe. We don't know. I think probably some of them are okay, but some of them probably aren't, and some of them aren't okay in patients because historically, we know that if you deviate from those guidelines, that especially in heavier patients, which a lot of patients are, you get failure. So we don't know that deviating is safe and the only way to match anatomy with the [indiscernible] is to deviate from that conventional way we do it. If you look at LANDMARK, simply with doing it, the conventional way that we know is safe to do. It's just easy. It matches now. And again, if you take it and design like the average person to get to the bell shaped curve doesn't take very far. If you're designed like an outlier where people aren't symmetric, then it takes a big deviation to match all the anatomy. So I think the first goal matching anatomy, the second is respiration of that normal rotational motion. We think that, that will also make the knees feel more natural and function better. And in fact, we build on the proven technology of Journey II publications. This happens to be a publication by me, but there are publications literally 20 or more publications on Journey showing it has the most natural motion pattern of any need. What we did is combine that with the ease of use and the versatility of Legion and then built on that to make this a simple thing to restore that native rotational motion and natural motion pattern. Additionally, by doing that, we can optimize the Patella groove. By optimizing the Patella groove, we said, "Well, we want that groove to be good even if we modify those cuts a little bit. So that group is very forgiving. And not only is it in the right anatomic position to start with, it's forgiving for variations in alignment. So I think it has, by far, the most advanced Patella groove certainly in the industry. And if you look at this, what the other designs did basically because they were designed they wanted this rotational motion, they introduced the asymmetric plastic. So they didn't necessarily make that theme with the tibia. They took an existing fumer and said, "Well, let's make a plastic to make it. whereas Landmark was designed in conjunction. The whole system was designed together with mating those 2 together to optimize that stability and rotational motion that we need to get. 3D printed technology. I've already alluded to this, 3D-printed technology, it's actually interesting because there's a picture bone and there's a picture of the 3D-printed titanium and they look pretty much the same. And that's part of what induces the bone to grow into it. And it's really been shown that there are fewer failures of 3D print and technology and really all contemporary ibis and patellas that are porous-coated or noncemented R 3D printed. But because the fees were designed in 2000 to 2013, they weren't, and they didn't change that other than sort of smaller niche products, they did not change the main femoral components. So they still rely on using older porous technology. So LANDMARK again, is the only need that is incorporated into the whole system, 3D printed technology for the entire system. The femur, the tibia, the patella, the entire system, which I think will eliminate some of these outlier failures that you do get in noncemented the arthroplasty. So now we'll move on to robotics and talk a little bit about the history of robotics and how we got to where we are in robotics. Well, robotics first started in the 2000s really as navigation. It was just to guide you on how to do it. And then 2008, the Rio Robot, which ultimately became Mako was introduced. And it was a big advance. It was a first robotic platform that was really successful. It relied on the CT scanning, so you had to have a CT scan. It did have a Haptic saw/burr that you could use and though some of the limitations, it's still and to this day, still requires manual assessment of ligaments. In other words, you have a device that's accurate within a degree or so to make the bone cuts. But when I assess the ligaments the soft tissues, I literally tag on them. I say, I hold it and I pull on it one way or the other or stick a spoon. literally, a little spoon underneath to say is the ligament looser type, which is which we've shown and is, as you can imagine, in less than accurate because I might pull a little harder if I drank some more coffee or if I'm a big guy or what the days like how hard I'm going to tug on the leg. So that's a limitation of it. And I would argue the biggest limitation is and I can't argue because in 2008, that was probably not a bad idea. It's a big truck in the OR. And so the big truck on the OR is a more and more problem as we go into ambulatory surgery and efficiency of surgery, which I'll go into. 2012, 2020, well, you had NAVIO. And NAVIO was a great innovation because it was handheld robotics. You actually had a robot that you held in your hand that could execute the plan that you designed on the computer. So that was a great innovation. The other thing that it has had the ability to map the bone and do it image free. So now you didn't have to get a CAT scan ahead of time you could map the bone accurately and do it in a -- without the added ability or requirement of getting a CT scan. As you know, it was acquired by Smith & Nephew, and then CORI came along in 2020, and it has been improved on an CORI XT. And those improvements included, you've heard some of them the ability to add a tensioner now to robotically and accurately measure the soft tissues and personalize the soft tissues. Additionally, the additions of if you want CT guided, you can do CT preplanning, you can do and develop the image from a CT or an MRI. So the versatility of having an image diagnostic doesn't require you to have a CT. It could be image free is actually very useful and I suspect in Europe where you're much more cost constrained. And in the U.S., once you actually -- I have to like the preop planning with MRI or CT. But actually, once you do the image free, you say, well, gosh, it saves my office a bunch of time. So you find that you may even prefer that. And certainly having the versatility of all 3 CT, MRI and image free is the best of all. Well, on the robots came along, too. In fairness, we did have ROSA and you have [indiscernible] same truck, but didn't even do much of what -- it doesn't even have a cutting device. It does put a guide in front of the bone. So I would argue that that's a much more limited kind of platform. But in fact, they do share with Mako and having the large robot. And to give you this sort of visual, I thought this is a good way to describe the 2. The robot is in the orange of holding my hand. That's the CORI core robot. That is a robotic device that automatically will remove the bone. I'm going to show how it does that, okay? And it's doing the same thing as the Mako robot on the right has an arm with a saw on it or a burr on it. I have the burr in my hand, but it's robotically controlled, meaning turn on or off, go in out. I'll show you. The ROSA rollout, which is equally -- it's actually as big as the make, and it doesn't even have anything to remove bone. It just puts a cutting guide, which I have to then take a saw and manually cut it. So the idea of having this small mobile device creates huge efficiency ergonomics. It's just -- it seems like that's a difference between a big brick phone or having your iPhone in your hand today, okay? So how this works, essentially, what you have is you have this robot in my hand, and the bird will come in and out, on and off and it comes out to the depth it needs to come out to. So if I'm doing this, that's me ruling the bone looking at the screen. I'm just waving my hand in front of the bone. In fact, it will come out to the depth. And if I push it in further, it's going to pull back. It's going to move exactly the bone and it has a bounded control which is, I would argue, an improvement on haptics because it just shuts off. It doesn't stop me from doing it just turns off. It pulls the bird back. If I go off the field where bonus foster move, it just pulls back, it's gone. So I can't move bone from bone. I'm not supposed to move. It won't end to soft tissues because it's going to disappear and shut off. And so it allows me to remove exactly the amount of bone I'm going to move in a very expeditious fashion. So as I said, there are a multitude of things that I think are improvements, having the versatility of CT, MRI scans having the robotic tension. And as Mark said, there's an indication for primary total knee, [indiscernible] provision total knee, total hip replacement with CT guidance and total solar replacement and it's the only revision FDA approved in the U.S. This -- I think there's a good visual also about telling how the efficiency -- if I'm going to do a case, and I'm doing it either in the Ambular towards surgery or if I'm in a hospital, where I've got one room and I'm going into the other room, which is frequent. It's for efficiency, surgeons will get the one room prepped and ready when they finish the other room. They can go right into another room. And that's really the way that many efficient hospitals or most in the U.S. are going to do it. And I suspect a lot in Europe as well. And in fact, what has to happen if you're using a Mako robot is that robot has to get rolled into the room. It has to get that [indiscernible] -- all those arrays have to be put on and then it has to be registered. And that -- there's just no way about it. It takes time to do. And you talked about does it affect infection rates. Well, I'm not sure it does. We haven't shown robot has increased. Although I would more worry about when I have a truck revenue running in the room, from one room to the other and have to get it ready right away. When we are doing CORI, each CORI, the card is where the brains are but the robots and the handpiece each cart comes with multiple handpieces. So when I go to the room, that's my ENG, rolling the card into the room, from one to the other, -- that's a pretty simple thing to do, then that repeat it's not in the surgical field. And the robot is my circle is not exactly right, but my robots already there on the table, okay? So that's already sit there. So I just walked in the room and I use it, they plug it in. And that to me is, I mean, obviously, a much more efficient setup and doesn't require the drain prepping that is necessary with the larger robotic trucks. You already saw this much more efficient as far as with LANDMARK and CORI, you have many fewer trays. So you just don't need to -- and that is crucial for the ambulatory surgery. Mike is going to talk about that. But they can't cook 10 baskets over and over during the day. Fewer instruments create efficiency and not only efficiency, the cost to sterilize in this and frankly, the cost of being around this for a long period of time, the cost of manufacturing, all those instruments, as developer scientists, I would always be frustrated because what limits you in innovating in the design of an implant, is often you built all these instruments, you can't change anything because the instruments are already built and the instruments are so expensive. So the more extra instruments you need, the more limits you are in future progress. So there are lots of reasons why having fewer instruments is a far for the system, the company and for the surgeon. So in summary, LANDMARK as I hope I shared with you why I think it's the next evolution of knee orthos. It's the easiest need to restore natural anatomy, optimizes this for activities that our patients want to do. We've already shown we can reproduce natural motion patterns in the knee. It's the only new incorporated all the 3D printed technology. And I think that's really where the arthoplasty world is going. I think CORI obviously optimized for mobility, efficiency. He really -- it's shocking me that no one has using robotic tensioners -- there's one other that has come along, but none of the major companies have it. And I think that's see want to get all this accuracy in our bone cuts, but soft tissues are vitally important. So getting the accuracy and then with a robotic tension is so important. And as I mentioned, has the broad indications. So I think that's the next evolution.

We can do a couple of questions.

Thanks for that presentation, it was excellent. Could I just one on robots. If you think about over the last, say, like 15, 20 years, I get the sense ex the Mako, people would buy the robot from the company from which they were already buying most of their implants because you could use the robot for a portion, but not that many necessarily of your procedures. Do you think we've tip that over to the point where people will buy the best robot and adjust their implant behavior as a result? And do you think that makes a difference for because it is genuine?

I will say, actually, it's an interesting thing because I think for a bunch of years, people didn't like of trap on -- so they got the credit for doing it first. But I would be critical to them because they've sort of sat on their laurel for bit. They say, but they milked it. They milked that for a while, and they haven't improved. Like I would like why don't they have attention, don't tell them? I don't want them doing this. But it's crazy. They still -- literally, if you do a Mako case, your tug in on the need to assess the ligaments, it's crazy. If that is crazy when you have this sophisticated instrument to do the bone cuts and planning. That to me is nuts. The other thing is I think they relied on their laurels [indiscernible] was an okay knee, but it's from 2006. Now they did improve with the noncement. That was an improvement. But that beamer literally is from 2006, and it was okay back then. But it's old. It does not incorporate the new technology. And that picture I showed you is real. That is just reality. It does not match natural anatomy. So if our current thinking, which is the current trend that's been on for over 5 years now is that matching an anatomy is good, and it makes sense. We're doing a resurfacing operation. So we want to reserve them, we realize that 20% or 15% of our patients are not happy. Well, some of them are probably not happy because we didn't restore their [indiscernible] properly. So that requires us to alter things to compromise in all sorts of ways. And like I said, but if you were selling all these robots and you sold your mediocre need them, they got buy. So I think the answer is having a robotic platform that is more forward thinking, that has more modern I think will, in fact, get people to convert. And if you add that to a knee to the state-of-the-art, to me, that's a combo that really hasn't existed. So it's really, I think the synergy of the 2 is really what makes it. And that's why I think this is really exciting.

Dr. Haas, thank you so much. This is Veronika from Citi. Two questions for me. The first one is on Landmark. And obviously, the anatomical approach is unique. How receptive do you think your peers will be to that? And does it require a different surgical approach retraining? Is this something that folks are going to be super excited and want to use or they're going to say, "Oh, you know what, I've never done it this way. Maybe I'm just going to wait for a while. And then my second question, I think I asked you this in New York, I'm going to ask again burr versus blade and how you think about CORI, how important the blade attachment is going forward in terms of driving better adoption?

Yes. Great question. The first one was the basically, they don't have to -- first of all, you don't have to modify the technique at all. Actually, interestingly enough, in many ways, it's actually easier. If you did it just the way if you did your knee, the way you did it before you worried about anatomic alignment, you'd match the anatomy perfectly in 40% of people because, again, it's based off average anatomy. So if you did nothing, you didn't even know it existed and just said, I'm going to do the old mechanically neutral way. you'll match in that mean 40% of people, which is -- get to halfway there, right? And the way you actually -- if we incorporate this actually in CORI, you don't even know it exists. It's actually invisible. You just know that you're going to match -- we have the C packs on there. In other words, the alignment we have -- you have on the screen the alignment. And you'll see you match that line of 90% of the time, you don't know -- even have to know why you're doing it. You just say, "I want to match the anatomy and it dials it all in. So it's really seamless to do it. You don't even know what's happening. You just know -- and if you plugged in a symmetric me, like if you happen to put in, you went in and you said, "Well, I'm going to look at Legion, which is more traditional, right? You put a legion in UT weren't matching the name, right? So if you wanted to compare and someone to see it now if you ask it, there are screens that can tell you how you got there. But it's invisible. It's designed to be totally -- you don't know why it's happening, you just know you got there.

The burr [indiscernible]

Oh, the burr saw, yes. The burr,actually, that's another good question. I think the burr in fact, you are correct, I think this sign is the traditional way that people did it. I think burning for a limited amount of [indiscernible] so when you do a core, you have different options. The way I do it, CORI, because I like to saw the bone and when I do certain cuts. So I [indiscernible] right? That frankly, that the adoption of that would be pretty easy because that's really simple to do, and it's super fast. Then I use a cutting block to cut the rest of the cuts. Because those cuts are really easy through a cutting block. The Tibia, you have the option of cutting the burn. I have to like to cut. So we recognize that there are people who like to cut. So you actually have a cut option for the tibia. And essentially, you use CORI to essentially guide you in how you make the cut. So I think we've resolved that objection to it for those who like to cut. We built a cutting option into it. In fact, that's the way I do it. And actually, the beauty is if you are not perfect, actually, we checked the cuts. And if you don't have to, but I do and you check the cuts. And sometimes our manual cuts can be a degree of -- and for that matter, if you look at it -- well, obviously, you'd have that with ROSA because you're just coming through a slot. And in Mako, if you look at the accuracy, you could be a degree or 2 of -- so in fact, I checked the cut and if it's a degree or too, which sometimes it is, I can take the burr when you use the bur,and this is kind of a new thing I call it the eraser because if you're just rubbing the wand on the tibia, it literally takes 30 seconds. You rub the burr because it's going to come out and do it on its own. I just literally take it like an eraser and raise any little bit of bone away. It makes -- it literally is within a half degree accuracy. It's like incredibly accurate to do that. So I do that if I'm not -- if my cuts are not perfect, I sort of like that to be perfect. So I perfect as I can be. I'll take the bar and do that. And it's actually kind of need to watch it.

Okay. So I think there's more should be -- so I think we're running out of time. So maybe we'll have another opportunity to get Dr. Haas back on stage and ask the questions later. Thank you. Appreciate it. Great session. Great questions as well. Thank you very much. Let's switch gears a little bit here now. So we heard from Dr. Haas his perspective on the evolution of both implant design and technology knee surgery. I trust it is clear to you how Smith & Nephew is working to build its differentiated value proposition for the future of knee surgery. The other significant trend we talked about was the shift in care from hospitals to ASCs. We talked about some of this, but understanding and serving the unique needs of this segment are paramount to future success. This is also an area where we have competitive advantage. But before we get to that, let's review what makes the segment unique and so important. There are about over 4,000 ASCs in the U.S. performing some type of orthopedic or sports medicine procedures. Let's call them musculoskeletal procedures. These centers already have and will continue to see strong double-digit procedural growth as more surgeries move from multispecialty hospitals into dedicated outpatient settings. However, this ASC care setting is very different. The ORs are smaller with limited capacity for sterile reprocessing and storage. They usually operate with much leaner staffing models while opting for higher efficiency and throughput. Ongoing reimbursement changes, we know will continue to drive an even higher procedural uptake. With growing volumes and a focus on throughput, recent mandates also require these centers to maintain and report on their patient outcomes, a task that can be burdensome with these leaner operating models. So as you can see, whether you're a surgeon or an ASC stakeholder, there is a fine balance across throughput, efficiency and outcomes that needs to be maintained constantly. At Smith & Nephew, we understand the business pressures and the ASC stakeholders face and have enhanced our commercial model to fully align with our customers' priorities. Smith & Nephew is partnering with ASCs to deliver value across the episode of care becoming far more than just an implant provider. Through procedural solutions across the full Smith & Nephew enterprise, robotic technology that's optimized for ASCs expanded strategic partnerships and access to unique insights and analytics, Smith & Nephew is positioned to be the partner of choice to help ASCs deliver their priorities of clinical, economic and patient outcomes. We maintain a higher procedural penetration across both hips and knees versus market and ASCs anyway. But furthermore, in 2025, 40% of our cardio robotic units were deployed in ASCs in the U.S. This strong segment performance is really a function of our robotic form factor, which is aligned with ASC needs, our best-in-class tray configuration for efficiency and our unique ability to leverage in our sports medicine business, where we enjoy market-leading positions. Recently, we have revived our commercial model to serve our ASC customers even better and have forged some strategic partnerships that help ASCs unlock more value. I'll dive into each of these in a little more detail. Let's start with CORI. I said this earlier, and you heard this from Dr. Haas as well, CORI is the only robotic system handheld or otherwise that covers the knee procedural breadth all the way from partial total and revision knees. With the introduction of CORI shoulder earlier this year, and we'll hear from Dr. Clift about that. We expanded procedure coverage to include both REVERSE and anatomic shoulder arthroplasty. With CORI hip launching soon, CORI will become uniquely positioned to offer musculoskeletal-focused ASCs this flexibility to use the same robotic platform for multiple procedures. And also remember that CORI is small footprint, it can be wheeled between ORs like Dr. Haas showed, with quick setup and turnaround time, something that ASCs really value. CORI's overall cost of ownership is also significantly lower than larger ARM-based robotics. All these factors combined, it's really no surprise that we deploy 40% of our cores in ASCs in the U.S. Given the recent CMS mandate, CMS is the center for Medicare and Medicaid services in the U.S. They've had a recent mandate for ASCs to report on patient outcomes for every case, and we have fought some unique partnerships to help enable this. Not only do our strategic partners facilitate patient outcome reporting, but they also drive improved patient engagement and compliance across the episode of care. We also offer ASC's actionable analytics and optimize performance with real-time metrics and connectivity across multiple reporting systems. Lastly and most importantly, these partnerships have generated clinical and health economic data across the patient journey, which will ultimately help us personalize these pathways for patients and ASE stakeholders. Beyond the attractive form factor and procedural breadth of CORI, we -- I mentioned this earlier as well, we will have the best-in-class tray configuration for all our flagship brands across knees, hips and shoulders. So LANDMARK, Catalyst Tem and ATOS. This really matters in ASCs, but OR space sterile reprocessing space and staffing are all constrained and designed to maximize throughput and efficiency. Compared to the competition, our knee and hip platforms will offer up to a 50% reduction in OR trays, while our ATOS platform, and you'll hear more about this, will offer up to a 70% reduction. This is a result of deliberate design choices we have made to ensure we offer the leanest configurations without compromising on intra up surgical options. As I mentioned earlier, there are close to 4,000 ASCs in the U.S. that perform some sort of muscular skeletal procedures. Out of these 4,000, over 60% perform both sports medicine and orthopedic procedures. And this is where our combined portfolio really shines. Whether it's knee hip or shoulder arthroplasty or knee hip or shoulder soft tissue repair, we have unique and clinically differentiated offerings across both as you heard from Christine, Dr. Ranova on the sports side earlier. Our Sports Medicine business also carries capital with unique technologies like TESSA, which we will be able to offer to over 60% of these ASCs. All the portfolio technology and partnership capabilities are underpinned by one thing, and that is our commercial model that drives relentless focus towards our ASC stakeholders. Over the last few months, we have reshaped our model with new leadership and a dedicated ACT. We are continuing to build flexible deployment models and other partnerships that will help us deliver enhanced turnkey solutions for musculoskeletal-focused ASCs. In summary, Smith & Nephew is uniquely positioned to meet the needs of this ASC segment through its enterprise portfolio strength, differentiated technology, strategic partnerships and a dedicated ASC organizational structure. I'm also really excited about our future in this space. With that, I would now like to introduce Dr. Mike Ast, who is also from HSS. Besides being the chief of knee service at HSS, Dr. Ast is also the Director of ASC strategy at the Hospital for Special Surgery and their Chief Medical Innovation Officer. Dr. Ast will share with us his perspective on the ASC segment and how he sees it evolving in the future. Dr. Ast please.

[indiscernible] In what we do, right? So it's always hard to know exactly how interesting the rest of the world finds what we do, but it's nice to see at least a few of you than its as cool as we do. So as Mike said, my name is Mike Ast. I'm a hip and knee replacement surgeon from HSS. And I'm not going to talk to you at all about hip replacements. Instead, what we're going to talk about is sort of way that health care systems are changing across the world. And I know that ASCs are an extremely United States-focused concept, but I would argue that our existence and the world of ASCs in the United States translates a lot to the global health care economy. And there are actually a lot of synergies and parallels between more nationalized health care systems and what we have seen successful in the U.S. and why there's a lot of lessons learned in the ASC that will translate to the global market. I mean we're already seeing some of that as you move around. This is a picture of one of our ASCs, just that's the fun one because it's set sports medicine, and that's where all the famous athletes get their treatment. But I'm lucky enough that I work in actually 1 of our other ASCs and what makes me so lucky is that I get to partner with Dr. Renaat, which is why they're both -- they are so mad at us today because both of us are supposed to be there operating today, and instead we're here with you, great folks. So the world of outpatient arthroplasty the concept of having a hip or your replacement and going home on the same day has rapidly accelerated over the last couple of years. I started my personal journey on this in 2013. So I am one of the sort of people who've been in this the longest I've been doing same-day discharge from ambulatory surgery centers and hit an e replacement for about 13 years now. But in the United States, a variety of factors have caused us to move a lot of our hip and year replacements from the inpatient space to what we call the outpatient space. That's either a same-day discharge from a hospital or from an ambulatory surgery center, for new replacements, you can see based on this graph, that happened just around 2021 for hip replacements, that happened about a year later, but more than half of the hip and knee replacements done in the United States are done in an outpatient setting, meaning in a setting where patients are staying for shorter amounts of times and oftentimes not even going to a hospital. We saw a little bit of this, but this is the classic -- I don't need to explain a consultant McKinsey slide to a group of investors, but this is that understanding of how that market affects the health care system in the United States where ambulatory surgery centers are one of the fastest growing markets in health care with double-digit continued growth over the last couple of years and an over $12 billion market value. This is an interesting map because as we heard from Mayank, about 4,000 ASCs in the United States to do things like musculoskeletal care. This is a map of the ASCs doing hip and knee replacements, right? So this is just general muscular skeleton care. This is in sports medicine. This is specifically those doing multiple types of joint replacement procedures in there, and it goes directly to the question that was asked earlier, is there ever a point at which the technology becomes so differentiated. It helps make the sale. And the answer is absolutely because when you are doing both hips and knees and potentially shoulders, you don't want to buy 7 different robots to accomplish that, and it becomes a very different conversation. The really interesting part about this is, number one, it shows you the disparity of health care in the United States, where the middle of our country has a dramatically -- has dramatically less access than other parts of the country and an access issue expands beyond the United States to many global health care systems where access is more important than necessarily cost or outcomes, just trying to get more access with less resources. I can also tell you that if I showed you this map 5 years ago, there would be maybe 11 dots. And if I showed you 10 years ago, there'd be 3 dots, right? There'd be one in Chicago, there'd be mine in New Jersey and there would be another one in New York. That be it, it'd be 3 dots 10 years ago. There's now 574 as of last May, I just looked it up just to try to be as up-to-date as it can. There's 603 ambulatory surgery centers in the United States doing multiple types of joint replacement procedures as of earlier this year. This is the fastest-growing segment in the U.S. health care market and the lessons learned translate across the global markets because if you look in the global markets, we may not be using the term ambulatory surgery center or day surgery center, but we are still focusing on the same important topics. How do we do more with less, how do we become more efficient and how do we utilize our health care resources in a way to get more patients care sooner. We heard it from Dr. [ Rana ] this morning that the challenge of meniscal repairs in some of the health care systems around the country is that the patient doesn't get surgery for 2 years and 2 years is too late. We know that health care systems around the world are working to decrease wait times, increase capacity and yet not spend more money. So if you look at the penetration of ASCs, it remains low to moderate in most of the health care systems around the world, but if you look at outpatient growth, the concept of simply trying to utilize fewer resources for the same thing, we're actually seeing moderate to even high growth in a lot of markets around the world. And that's because what keeps global health care leaders up is no different than the things that drove us to ambulatory service centers in the United States. It's long waiting lists. It's workforce shortages, right? We need to do more with less -- it's bed shortages and it's an aging population utilizing more health care resources in a very different way than they did 20 or 30 years ago when we started doing joint replacements. And this is not, as I said, a uniquely American problem. This is right out of the NHS where reforming elective care for patients is an absolute priority of the U.K. system where their goal is to get 92% of patients to the operating room within 18 weeks, a goal that we are not yet achieving in the United Kingdom. The National Audit Office put out this came out earlier last year that their surgical transformation goals are to create surgical centers that are more efficient and more focused so that they can provide more efficient care, more efficient utilization of resources. What does that sound to you like? It sounds like an ambulatory surgery center, right? This sounds like the United States concept of an ambulator surgery center. So while we talk about ASCs as a uniquely American thing and some of the drivers of ASCs like the financial incentives we see surgeons partner with their ASCs to achieve the goals are a great lesson for the rest of the world and for the global market that Smith & Nephew addresses. And we know that the wins we see in the ASC market in the United States will translate to larger global wins in the future. because when you're the NHS and you've got a fixed amount of money to spend and you do a traditional joint replacement with 100 arthroplasty beds, you can do 1,000 cases a year. If you can take that length of stay and transition to outpatient arthroplasty those same beds, those same resources can now do almost 3,600 arthroplasties. So you can over triple your ability to care for patients and your access to care simply by modernizing the way we deliver care and learning the lessons of the ASCs. So again, those long wait lists can be addressed by more procedures per operating room, those capacity constraints because we have less dependence on inpatient beds workforce shortages are addressed with a significantly more efficient utilization of nursing resources and you get a scalable care delivery model that allows you to bring more care to patients as they age. And so this is why the ASC market may feel unique in the U.S., but it's actually a global consideration. But in the U.S., the ASC has a variety of challenges, right, of variety, both headwinds and tailwinds and the tailwinds we've heard, right? More surgeries are being paid in an outpatient way, so it's helping us shift more to the ASC There's this concept being discussed in Congress in the United States called site neutrality, where every single site is going to get paid exactly the same. Doesn't matter if you're in a hospital in ASC, therefore, a significantly more cost-efficient and cost-effective side of service like an ASC becomes a huge win. There was this introduction of something called the No Pain Act, which helped us pay for some of the resources we need to be able to get patients out a bit more quickly. And I think that was very helpful. And then a variety of other considerations you see here on the screen that help us understand why ASCs have become so popular. But they've got headwinds to prompts reporting, as Mayank alluded to earlier, is a challenge in a resource-constrained situation like an ASC. We don't have a lot of extra people to do a lot of this extra work. At HSS, we have entire departments of people just calling patients to get these patient-reported outcomes to achieve the mandatory reporting from the government, the ASC doesn't have any of that stuff, right? They don't have people to do that and so partnerships with our under partners really make that possible. Push to value-based care in the United States has been talked about for a long time, but the mandates are now humming, right? A full country mandated bundle for hip and knee replacements on its way called CJRX. It will be next year. This will be a huge push to the surgery centers to try to control costs, right? Issues we have with our insurance companies always are a problem for anybody. But the more we restrain resources, the harder it is for us. And then platform consolidation, like the large consolidation of major health care systems in the United States has driven some pros and cons in the world of ASCs. But I think the most important thing to understand whether you're talking about United States, ASC or the increased utilization of resources and trying to improve access to care around the world is to understand what makes that ASC different and nothing will ever explain the difference between an ASC in a hospital like this picture right here. You never think a picture is worth a thousand words. This picture is worth $10 million. So this is my first ASC where I worked. This is a real photo -- it's a real surgical photo, I'm going to explain a few things about it. Number one, this is a wall-to-wall picture. So the average operating room in a hospital that does joint in place is about 600 square feet. This room 358 square feet, just barely half of it. right? This is the entire room. Also, you're looking at the entire staff. The nurse is taking the picture. You see Ben in the back, his back is to us. He's our anesthesiologist on the right side, that's Dan, that's my PA on the left, that's at least my surgical tech. On the table, and the reason I'm allowed to show all of these, is that's my other PAs dad. So the patient is my other PAs father. So he's the one who lose to use this picture all around the world, and I use it all time. But let's look at a couple of unique things. Number one, as I said, really, really tiny. Number two, not a lot of extra people. But the most important part of the picture, I want you to look at the lights on the surgical field. If you look, there are -- like in every operating like attached to the ceiling that we move around, does anyone notice where those lights are pointed? The back corner of the room, right, they're not even on the surgical bed -- why is that? Well, because they were broken. And in a surgery center, we just did the math. It was cheaper to rent this portable light sticking over the side of Dan's head than it wants to fix the lights in the ceiling. In the hospital, if a single light bulb goes out between cases, I walk to the administrators and I tell them I'm canceling the rest of my day if that white bulk isn't changed by the time I next surgery starts. And by the way, it's still better not slow down my turnover. I don't want to wait for it. I just want to make sure it's done before I start. In my surgery center, I say, lights, who needs lights? It's fine. We'll rent another more, I think over the side. I won't be able to see. I don't really care. It's a completely different way you think about utilizing resources when you start to constrain the resources and have a good reason to do so in this surgery centers because I owned it. So fixing those lights came out of my pocket, as I still do today. In the NHS, it's because we're out of money. And so we need to spend less and do more and make decisions that way. And I think that's why you understand the unique patient population room size sterilization and cash flow, it is a different world when you transition to the world in ASCs. So what do ASCs need? They don't need a supplier, you can buy supplies from anywhere. What ASCs need, ASCs need an enabler. They need someone who can help us achieve what we need to achieve using the right amount of resources at the right time for the right patient, right, an enabler. That's the key. So we need to limit variability because we don't have enough staff and so that staff needs to be very good because they need to move very efficiently. And our goal at our hospital is let's try to get 2 or maybe 3 surgeries done in this room this day. In my surgery center, I want 10. I want 3x as much production from 1/3 as much staff. And guess what, we are very good at achieving it. We achieve it almost every time. And there are examples of -- surgery centers in the United States that are as efficient in a day as our hospitals are in a month using less resources and less time. We also need more unique things from our partners. As Mayank alluded to, we need help in getting these problems and being more efficient. These are just 2 examples of technology. Interestingly, these technologies aren't about patient reported outcomes. The one on the bottom left, this is a technology for operating room operational management. How are we managing our block time. How many cases are we doing? How is our turnover going? Tracking patients throughout the day because we don't have someone to sit with them the whole time. So we can tag them electronically, and we can use technology to focus on that episode of care. On the top right, the one you never talk about when you're a surgeon at a hospital, what you really talk about when you're a surgeon at a surgery center, that's the financial performance of my surgery center yesterday, right? On a day-to-day basis, on a beat by beat basis, understanding your financial operational metrics are critical when you're trying to drive super high levels of efficiency. And this is actually where Smith & Nephew leads, right? This is where Smith & Nephew has the absolute advantage. This is Corey as we've seen over and over again. But what is this? This is Cory in my operating room, so same operating room, this one's our bigger one. This owns 410 square feet. So this is our massive operating room still 2/3 the size of the one at the hospital. But I -- this is the same surgery. I took the entire robot, and I moved it around the surgical field for one side together, and you can see the back of my PA closing sort of the same position you saw them in the other case, right? And so I can move it within the room while the surgery is going on without breaking sterile technique without worrying about the constraints of the size of the room, absolutely ideal for the ASC because of size, but mostly because of procedural breadth. By the time that hip is launched, we will be able to use this exact same appropriately sized robot for partial needs, total knees, revision needs, total hips and total shoulders, all of which we do at my ASC, all of which we do not have the space or capital capacity to buy a different robot for each one. And so in significant decisions are guided by that procedural breadth. And then what's next, obviously, we've heard about Landmark implants and implant systems optimized for the fact that we just don't have as many sterilizers in the ASC as we do in the hospital. And as you start to specialize your care delivery centers, whether they're ASCs or specialized hospitals, you need to improve efficiency by improving consistency and minimizing waste and trays. And like I said, the future of Cory with the introduction of hip and shoulder, which you can see in the product call next or it's actually the first time I've seen them show the hip in a product theater. So congratulations. I think you are group #1 to see that outside of the lab, very, very exciting technology and something I can't wait to use next year. The right to win is very simple for Smith & Nephew actually, right? It's arguably the largest ASC footprint of any of the major orthopedic companies that are competing in this space because of their leading market position in sports. Because a meal is doing sports cases in the room right next door to where I'm doing joint cases, right? It's the same team, the same people, the best-in-class robotics for the ASC as we talked about the minimal trades associated with both Catalyst Stem and Landmark, all of the newest systems being tailored to higher efficiency with less resource utilization and then data management partnerships that can help me solve the problems I actually have, especially associated with new government mandates for our ASC. And that's why I say, put all those things together, you look at Smith & Nephew. When we look at Smith & Nephew certainly Dr. Rana and I, owners of our ASC who are making these decisions look to Smith & Nephew as our partner of choice. Thank you

Thank you of that. Maybe we can have again a shortened Q&A session. We'll have another opportunity to get Dr. Als, Dr. Hasback on the stage. So yes, please.

Maybe just on the shift from hospitals to ASCs. Ultimately, does it actually create any more in the hips or knees that need to be done? Because it just looks to me like unless there is some untapped supply and there's a massive backlog, are just moving one site to another, which is great for the system, but I'm just thinking in terms of total volumes because presumably over time with price, the ASCs are particularly chosen because Medicare pays a lower price. And I can imagine you over time, as they go up the patient curve in terms of severity, you might also, in turn, have additional costs and therefore, try and find a way to will lead those costs elsewhere. So I'm just trying to understand from a market perspective, does it actually untap a pool of patients that weren't already there?

Yes. I think it's really interesting. We always Think about it as a somewhat finite supply like eventually, you're just going to run out of patients. And when you think about sort of at the surface level, I agree with you, it's sort of we're just taking the patients that we would have done some are doing them somewhere else, maybe getting them in sooner, but eventually, you're going to run out. The one interesting thing we learned about the ASC market, which I don't know how all that translates outside of the United States, but there is a significant -- there are a significant number of patients, especially since COVID, who are actually very afraid of the hospital. And especially in some markets like some of our smaller markets, the local hospital is where mom and dad went to die. And so nobody wants to go there for elective care. And we saw an enormous influx of patients who said, I was never going to get a hip or knee replacement because I will never go to the hospital unless I'm having a heart attack. I'm not going to that place. That's a bad place, right? Sick model of care. And now you tell me I can come to this day center where I had my carpal tunnel done a few years ago, and it was like, no big deal, and I loved it. I can get a hip or knee replacement. And so I actually think there is -- now, I'm not saying this is a massive market, but there is an additional market opened up by moving out of the hospital that I think we didn't -- I certainly haven't planned it that way. I didn't recognize it early, but I have seen it pretty consistently over the last 10 years and much more consistently in the last 5 where these patients who simply did not want such a big surgery that it needed a hospital and are very, very comfortable now that it's not such a big surgery even though I'll tell you exactly the same thing.

More questions? Okay. If not, thank you very much, Dr. Als. Thank you.

All right. Good morning, everyone. Thank you for having me here in London. I'm Scott Gunn, Vice President of U.S. Commercial Marketing for Trauma, Extremities and shoulder at Smith & Nephew. Today, I'm going to spend some time about 10 minutes on one simple idea, shoulder arthroplasty is transforming fast, and Smith & Nephew is building a platform designed to lead in the next phase of this growth. Over the past decade, shoulder arthroplasty has undergone a profound transformation. Today, it's a $2 billion segment. and it's growing roughly 9% with strong momentum in the U.S. That growth is being driven by a few big forces: first, expanded clinical indications and aging populations. Second, the continued rise of reverse shoulder arthroplasty. Reverse has grown from roughly 29% to over 70% in cases in recent years. And third, technology innovation, 3D imaging preplanning software and robotics are shaping how shoulder procedures are performed. What's important to understand is it's not just that the market is growing, but how value is being created. We're seeing an ecosystem shift towards software integration, workflow inefficiencies, workflow efficiencies and outpatient care models that enhance overall treatment value. Let's anchor on that clinical landscape for a moment. Shoulder arthroplasty spans a broad range of pathology, so versatility matters. On the anatomic side, procedures commonly address [ glenohemorol ] arthritis, inflammatory arthritis, avascular necrosis and post-traumatic arthritis, where the rotator cuff is healthy. On the reverse side, we're reversing the ball and socket mechanism in the absence of a healthy rotator cuff and treating more complex cases. Rotator cuff arthropathy, massive irreparable tears, complex proximal [ hemofrecsures ] and severe bone loss. So the takeaway is straightforward. This is a market that demands increasingly demands precision options and the ability to perform across wide range of anatomies and indications. So here's how Smith & Nephew has approached this. Our shoulder journey has been deliberate, building step by step from acquisition of the Integra LifeSciences orthopedic business to implant designs to 3D planning to integrate enabling technology. You see that evolution from Titan supported by total shoulder, reverse shoulder and fracture to planning tools like Atlas Plan and then to Atos, including stemless and expanded sizing. And now that innovation at culminates in a modern platform centered on 2 key pillars: the [ ato ] shoulder system and Corey Shoulder. This is the foundation for how we compete, not only implants, but with integrated solutions that fit where the market is going. So what's changing in the OR and the site of care. We see 3 major trends. First, surgeons are increasingly focused on bone preservation, revision options and reducing risks like stress shielding, driving a shift towards short stem and stemless approaches. Second, there's rising demand for efficiency in the OR, higher throughput, less storage and sterilization and a continued shift to ambulatory surgery centers. And third, we're seeing rapid adoption of technology in advanced materials, more pre-op planning, more personalized execution through robotics and mixed reality. And the common thread across all 3 is this. The market is moving towards a more personalized surgical approach with more intra-op data and a clearer link between execution and functional outcomes. Let me bring that to life with Atos. Atos is designed around what we describe as elegant design and elevated experience. At the core is a design-driven bone engagement to load and preserve bone. The system uses a cruciform design intended to provide rotational stability advantages, particularly in osteoporotic bone, linking stability to engagement of higher-density bone. Now performance is essential. But in today's environment, system efficiency is also a competitive weapon. Atos is a single shoulder platform supporting medistem, stemless, anatomic total shoulder and reverse total shoulder with a design that supports workflow consistency and practical intraoperative flexibility. And the operational benefits are meaningful. Compared to other systems, Atos delivers a reported 67% reduction in implant inventory, 70% reduction in trays, along with a significant reduction -- and that matters because it directly impacts reprocessing, storage, staffing burden and the ability to scale in outpatient settings. Now the second pillar is Corey Shoulder, our handheld robotic approach to shoulder orthoplasty. The concept is simple, data-driven decision-making through preop planning and precise intraoperative execution. On the front end, we support CT-based 3D shoulder planning. And in the OR, Corey shoulders intended to enable execution for both anatomic and reverse across humoral and glenoid preparation. Importantly, this is not just about a single case. It's about building a learning system where surgeons can analyze insights and apply learnings from past cases to perform and refine over time. So the value proposition is simple. Precision, reproducibility and personalization at scale. Now when we talk about robotics, access and practicality are important. One point of differentiation here is form factor. Corey Shoulder is positioned as handheld and portable in contrast to large robotic systems, supporting an ASC fit profile and a simpler footprint. Another differentiator is procedural coverage. This is positioned to -- tumors plus the glenoid execution in both anatomic plus reverse shoulder workflows. And finally, adoption matters, a robotics approach that keeps the workflow close to manual instrumentation can support a more manageable learning curve. Let me close by stepping back to the full portfolio. What we're building is a simple and powerful shoulder portfolio. We're advanced biomechanics with tendency, proven biologics with [ REGENITIN ] and innovative technologies combined to improve outcomes. With arthroplasty and the launch of Atos in 2024, with anatomic and reverse and stemless option. This positions us for high-growth shoulder replacement segment, and Corey Shoulder extends our handhold robotics opportunity into shoulder replacement. So the headline is Smith & Nephew is pursuing growth by offering a broad clinically relevant shoulder portfolio, spanning repair and replacement supported by enabling technology that aligns with where the market is going. So to bring this to life through a clinical lens, it's my pleasure to introduce Dr. Christopher Klifto from Duke University. Dr. Klifto is an associate professor of Orthopedic Surgery at the University of Duke school of medicine and specialized in shoulder joint replacement surgeries, including reverse total shoulder, anatomic shoulder arthroplasty and hemishoulder autoplasty. Today, he'll speak about recent trends and advances in shoulder surgery, including the development of Smith & Nephew's Atos shoulder system and Corey Shoulder. His perspective will connect innovation to what matters most and how these advances support surgeons and improve outcomes for our patients. So please join me in welcoming Dr. Christopher Klifto.

All right. Awesome. Well, first of all, thank you for having me. This is actually the first time I've been in one really Mike and Scott were also first time we've been London. So we had a proper day together. We yesterday went to Buckham Palace, which was great. We did all the stuff that we thought we should do. We went to Chinatown, of course, why not. Mike apparently doesn't have a tie, so we had to go shopping for him. This is his first tie ever, which is great. And then we went to a pub, which was awesome. And then we wanted to have a really great local dinner, so we want to submit the wonky. So I think we crushed it. All right. Anyway, so I'm going to talk about Smith & Nephew shoulder landscape in changing innovation. And truthfully, this has totally changed my practice parting with Smith & Nephew because the investments that we've made, I feel like have really changed my patient's lives. I want to go over that. So quickly about me. I'm an orthopedic surgeon. I grow -- affiliate. I don't know any of you know what Philadelphia is like, but it's a blue colored gritty town, and this is actually our mascot gritty -- and this is how our fans get ready for games. And every single game, he essentially commits a felony. He beats up the opposing mass got and then frozen off the balcony. So it's fine. Then, I've been at Duke for the last 9 years, and we're a rabid fan base there, too, but we have a little bit different way to cycle out our opponents. This is a guy named Speedo guy, and this is how he tries to get players on the opposite team to miss fall shot. So a little bit of a different way to do it, but so -- talking about. And most importantly yes -- end of the presentation, I just stop there, right? So but most importantly, I'm a shoulder geek. And the reason why I love shoulders so much is, yes, I have the opportunity to care for a patient from their entire continuum of shoulder health. I see them from healthy shoulders, maybe throwing athletes all the way to rotary cuff repairs all the way to reversal -- plasties. -- it's extremely rewarding. But what keeps me up at night? I have a 5-year-old and I'm trying to figure out ways how to keep around the jail. She just walks around and shoots things all day. And she does it always in -- teather, which I can't figure out, but I got to keep route somehow. But also how to improve the outcomes of my patients with shore pathology. And there are 2 main problems, at least when I think about it as far as how we're going to solve the shoulder world. One is to I'mprove rotary -- and Chris, you talked about a lot, their outcomes are just not good. There's not another procedure that we do in orthopedics that we're okay with a 30% failure rate, like, okay, we're just going to keep going. And then also, patients hate extended mobilization. So we have to solve that problem. And then the other thing is how we're going to perfect shoulder arthroplasties because I'm going to have some data here. We're just not that good and very -- and low-volume surgeons do a lot of these, so we have to figure out ways to improve our outcomes. -- as Chris talked about, we have a 30% failure rate of retailers. This is after a large system at reviews. And we know that if their patients have a retair, they have worse patient reported outcomes, higher pain scores and reduced range of motion. So these are things that we have to figure out how to solve on the front end. And there are 2 main types of retailers that we're trying to prevent. And this is going to make sense kind of at the end when we go over the products, but there's this type 1, which is a tariff of footprint. And this is when essentially the -- of the bone that we repaired. And then there's the type 2 tear, which is more medium. So this is where the stutters kind of come through and it tears at the muscle tendon interface. And we have to have different solutions for both of these. So this is a typical patient. I just did this guide 4 weeks ago. So he's tennis player, he has pain -- the x-ray show minimal arthritis here. But you can see on the bottom right side for -- this who are nonclinical. And that is a massive rotary cuff there I think a lot of people will say it is 77, may we show a shoulder placement on this person. But he comes in and says, I don't want a shoulder replacement. I want to have my full-range motion for tennis, I want to have to deal with the complications of arthroplasties. So please try a rotator cuff repair. So probably why Dr. [ Radio ] has stopped doing shoulder very smart, by the way. That's -- but these used to be extremely hard repairs. We would do convergence cisions, which means we bring the kind of together more, we do 2 double row repairs, tie anterior posture, 8 sutures. You can see the sutures everywhere. It's extremely challenging. This would take over an hour to do. And this is why a lot of people stop doing shoulder and why a lot of failures occur because it's just so challenging. So that was the current state. You have these multiple anchors, suture passers. But as Chris talked about -- now we have tendency. And the beautiful thing about tendency is that this is a repair that is potentially 2x stronger. And why is that important if it's 2x stronger, then there's a chance that patients don't have to have sling use because the repair is stronger than the active contraction of the rotary cuff. And that is a paradigm-shifting technology if that's true and the less procedural steps. So this -- I did this case 4 weeks ago, I was look enough to get tendency on the earlier side. But -- this is, again, we do a small reduction with one anchor and you can see that brings us massive cuff over. And the beautiful thing about tendency is you have 1 portal so that apparatus comes in through a superior aspect of the cuff. And it's this link construct and it's amazingly fast and easy to use these multiple punches and instead of having suture everywhere. It's a very streamlined, easy procedure to do. And this procedure, which would normally take me over an hour to do, took me 20 minutes. And this is using REGENETEN. So the beautiful thing about tenancy and REGENETEN is that the tendency is able to hopefully prevent these type 1 tariffs. And then you could use REGENETEN, which is a biologic that could actually prevent these type 2 tariffs. So there's a theory that we have, all the things that we need in our toolbox now to prevent retailers as a continuum. So this is just my early experience of tendency. It's unbelievable. These are my first 11 cases. My average time to fix a rotary cuff has been 14 minutes, which is just so fast compared to a pretty fast surging like admittedly. My best time has been 7 minutes. That's essentially how long it takes to a carpal tunnel now. So like this is changing how we do rotary cuff repairs, which has been truly remarkable for my practice. And then we also have REGENETEN, which is a bioinductive implant which could actually improve the tendon quality after we fix these with tenasene. So you can see at 5 weeks, 3 months, 6 months, you have a ton tendon that's pathologic. And with the augment here, it becomes almost a normal tendency even thicker, which is awesome. There's been plenty stating that this decreases retail rates. And with these massive cuff tears like this patient, it essentially has a 96% healing rate, which is just remarkable for patients that have over a 30% failure rate with standard cuff repairs. But the next critical question is, some of these patients do develop arthritis, some of these patients do need arthroplasty. So how do we address this problem? And the things that I try and think about are scapulothoracic motion, so I'll talk about the second, surgical execution and how do we make this applicable to low-volume surgeons. I only 20 -- if people are doing less than 20 per year on average, we have to make this so they're able to be the person -- dose 400 per year. We have to have innovative techniques with improved efficiency and new approaches that I'll talk about in a second. And Mike beautifully talked about the ASC transition, so I won't talk about that as much, but having trade reductions in smaller footprints are going to be a big deal for us. And what I use for this is the ATO system with Corey and Coreograph and it's been a game changer for my practice. The Ato system is a nice streamline system. And then you have coreograph, which, in my opinion, is one of the best plants out there. And then Corey, like we talked about for hip this is a for shoulder, I'm going to show you why. So one of the issues that we have when we're counseling our patients is we don't know what to tell them what their post-operation -- motion is going to be. And the reason for this is most of the planners out there right now, only map [ glenohemrol ] motion, and that's only 2/3 of the motion of the shoulder. So patients who come in with a virtual arthroplasty, they want to know, can I do things like comb my hair? Can I put luggage up on a plane? And we don't know what the right answer is. But with this technology, which is unique to Smith & Nephew, is that we don't have the ability to map with scalp for motion it does. And this has been a game changer for me because now I'm able to see where the impingement points are, when not only the glenohemo joint moves, but when the scapula moves. So I could change intraoperatively my execution to give them what they care about most. And we know from looking at all arthroplasties that one of the most, if not the most common reason for revisions is now positioned of components. So if you look at this study right here -- position, humoral malposition is a huge reason why patients need revisions. So we had to come up with a solution that is not only good for reverses for anatomics, but had before the glenoid and the humorous. And this is unique to Smith & Nephew along the birth technology. So this is how it works if you haven't seen it. And you asked a great question, like is the bird good for hips and knees maybe I can speak on that, but I'll tell you what it is, what has to happen for shoulders. You can see the shoulder is a very small space. You have only a little area and you can't get a solid there for the glenoid and the humorous. So this is -- I used this technique that Mike taught me where essentially we do with the tibia. We burn we then use salt for intraoperative speed. And then we use the end the bird to kind of refine make it accurate. And then see how small that space is for the shoulder for the glen oil. Like if you had a big saw, you physically can't do it. And this is why it's such a great application for shoulders. And then we also have this post-opera assessment tool. So like Steve was talking about, there's a tension of the need, but now we have attention to the shoulder. So it's an awesome application that has totally changed my practice. This is my second patient I ever did. I can't make an x-ray look better than that. And manually, that is just as good as I'm going to show it a glamor shot, is what it is. But this is her at 6 weeks. I mean these are outcomes that I haven't been able to get manually and she's so happy. And this was due to the technology that smith & Nephew has given me. So we're truly changing our patients' lives with this technology. And I talked about anatomics, so for those of you who aren't familiar with the shoulder world, we're trending away from anatomics, because, frankly, we're just not very good at them. it has soft tissue balancing. If you overstuff the components and they fail quickly. So there's something called the perfect circle method. So if you draw a circle around the medial aspect of your implant it should hit the edge of humorous on the lateral metal side. And you can see that's spot on. This was just done with robotic application. So I think that we actually meet change the landscape with this technology back to anatomics, and maybe the tennis player who wants more range of motion who won't get at arthroplasty because he doesn't want to give that up and Thomas may be able to give him that. So he may get the arthroplasty quicker. And this is just another case. This is on the bottom left side, that's a glenoid that if I have my pin placement at all inaccurate, this is going to fail and the base plan won't be stable. But using robotics, as you get x-ray that looks like this, which again is awesome that I probably would have messed up if I didn't have a robotic application. So this is my learning curve, and this is data that we are assuming for publication. I had no Corey experience whatsoever. I'm not a core user. I'm not a hip and knee user. So I started this. Mike taught me what to do in the lab. We're working on it. It took me 12 cases to almost get to where I was with manual. I'm still downtrending. So for someone who doesn't use Corey at all, the application, the usability is just so easy. So one of the other cool things that we did this was the first in the world the other day, we're trying to move to more MIS type approaches. And this is -- and in the shoulder world, that's subcap sparing. So what that means is we go in between the super spatus and the subscapularus, and we work in a very small space. And it's extremely hard to do. But we have a robot that allows you to do this. We did the entire case working through that small interval just because CORI is made for shoulder arthroplasty. And you can see we're working through that small [indiscernible], and it's actually able to do the case with a robot subscap sparring sparing, which has been just unbelievable, and no sling need for these patients, which is great. And then the question is Mike talked about intraoperative execution accuracy, how that decreases turnover time, how that increases efficiency. This is my data showing that we've been 12% more accurate predicting every single part of the arthroplasty, the stem, the glenoid, the screws. So my team essentially lays the implants on the back table, and I use them the majority of time, which has been unbelievable. So how does this apply to the ASC? Well, if we're able to increase efficiency, we decrease cost. If we have, like Scott talked about, less trays and we have increased intraoperative efficiency, then we have more value to ASCs, which is why we're going to succeed there. But also our footprint is so small. Like Mike was showing, the CORI robot is, like I said, made for shoulders. You can move it around the shoulder, you could go from left to right, which is a little bit unique to shoulders and the footprint is so small, it's a small bur. And not only that, I run 2 rooms as well. We're able to move the robot back and forth, which other robots can't do, which has been awesome. So my residents call me coach. I don't know why because I guess Coach K. So this is Coach K, who's the old coach for Duke. And I do yellow them like he is here, so maybe that's where it comes from. But these are my first 50 cases with CORI robotics. Objectively, the X-rays almost match the plan every single time. Each case is getting faster. I've done 12 -- were 12 cases to get proficient and I had downtrending times. And most importantly, there's been no major complications for someone who didn't know how to use CORI before. So lastly, bringing this all together, this is a case I did a couple of weeks ago. CORI plus ATOS plus [indiscernible]. The theory is that if you potentially don't want to use a subscap sparing approach, but you don't want any sling use, you could use this accurate execution with CORI. You get ATOS which is efficient and a great implant, but then you get tendon, which has the ability to overcome a contraction of rotator cuff muscles. So potentially, you don't need any slings if you want to go that way. So we have the technology to go through the entire continuum of shoulders and treat patients well. So in conclusion, I truly believe with the technology that Smith & Nephew has, we're going to become the leader in the shoulder space from rotator cuff all the way to shoulder arthroplasty. And most importantly, I truly believe we're improving patients' lives and outcomes, which allows surgeons to sleep at night. I think we are solving shoulders. But most importantly, I'm still trying to keep my 5-year-old out of jail who is still [indiscernible]. So thank you.

Okay. Any questions for Dr. [indiscernible]?

I'd love to get your perspective, I guess, before CORI and getting robotics, just how much that's changed your practice in terms of speed? You talked about, obviously, the outcomes, but just in terms of speed and procedure time. And then there was a bunch of new shoulder systems on the market. So just curious if you could compare and contrast and why [indiscernible] is the one that you settled on? Is that more because of CORI or because of everything else?

Yes. I answer the second part is because of CORI. I just -- Dr. Has talked about this. If you have a technology that makes you better, I'm going to do that every time because I want my family to have that. I want me to have that if I was on the operating table. So we started this process 4 or 5 years ago, and that's when I got involved with the ATO system. But ATO system has been great. It's streamlined. It's fast. My surgical techs like it because there's 2 trades. It's very streamlined. So I think the market is going to go to robotics because I don't think it's that much slower, to be honest with you. I wouldn't have the patience, I think, to do a slower system, and I'm almost time neutral already with very little experience. So it's been great.

I've got one question at the moment on the webcast, which is, can you talk about the potential cannibalization of REGENETEN with Tendon Seam?

Yes. It's a really good question, and I'm still working through that for some different indications like partial thickness rotary cuff tears. And one of the things that I think Smith & Nephew does so well is they do clinical data to support it. So I think as we learn more about Tendon Seam, we're going to have a very good guidance on that. But like I said, they treat 2 different things, which is great. We have 2 ways to solve type 1s and type 2s. And I think they serve different purposes. So there is some overlap, but they're also divergent enough that I don't feel like there's going to be a ton of cannibalization.

Okay. Awesome. All right. Thank you, Dr. [indiscernible]. So lastly, I just want to welcome up our executive leadership team and the surgeons that are still here for some final questions.

Seb Jantet, Panmure Liberum. Question for Dr. Has. You made a very compelling case for the landmark kind of Ane. I guess a couple of questions from that. Why are the competitors not doing the same thing? And what are the resistance points from other kind of consultants who aren't convinced about the approach?

I think it's an easy answer to why they have because they have to design a new system to do it. So there's cost involved in doing it. And so as I sort of think talked about with Stryker, I think they just simply relied on the fact that they had growth from the robot, and that worked pretty well. And so they're doing it. They don't feel that they have to at this point. But at some point, when something new becomes better, then they're forced to do it. So I think that at the end of the day, they haven't wanted to make the cost of invested so much into what they have, and it's good enough that it gets by. And it gets a little bit more complicated because as a good example, Persona, which tried to be personalized, but they were personalized for 2013, right? And so then they said, well, I'm going to make a new titanium knee, but they made that for a niche product, but they added on to their portfolio already. So they really can't change it without a major investment. So I think that they just don't want to make the major investment to update it, so they'll live with the adequate, but not best technology.

The other consideration is we've actually seen this happen, right? This is triple taper stems all over. This is -- we saw this in the hip market 7 years ago with [indiscernible]. It just -- you have to have someone do it first. And then when it was really successful, obviously, then we saw the market follow. So I would not be surprised if we don't see some development in this direction 5 years from now, but it's just nice to know that we're probably just on the forefront of the right answer.

Yes. I think there's no doubt that if you follow this forward, following the anatomy is going to be the way we go. Now might there be other approaches to do it? The answer is, well, you could. There's a couple of different approaches to it. But you're not going to take the same symmetric implants that we did that are only minor modification from the '70s going forward. That will ultimately change. It just requires an impetus to make the change.

Just to build on this, just from a business perspective, right? There's -- the path that we took to get to landmark runs through a gap that we had to fill, right? So in contrast to our 3 competitors, we run our business on 2 different platforms in the U.S. It's more than that when you go outside the U.S. You've got [indiscernible] and everything else. But -- so that which our competitors do once, we have a choice to do, whether we repeat that innovation across 2 platforms. And actually, we've got 2 material systems. We've got [indiscernible] and [indiscernible] chrome. So it's actually a more complex portfolio thing for us. Right now, we're challenged because as the market has shifted towards cementless, we've got it on LEGION. We don't have it on JOURNEY. So our choice we faced was to just bring cementless on to JOURNEY. So literally take JOURNEY as it is today and bring a cementless analog on it. Rather than just take that approach, it took an opportunity to take a step back and say, what are the clinical problems that yet need to be addressed. And this is where we had an opportunity to bring forward the type of innovations that Dr. Haas, and Dr. Haas just alluded to. So it's -- it was fundamentally born out of necessity, but we're using this opportunity to actually try and, if not leap forward to at least make a significant dent into key unmet clinical needs.

And just one more question, if I can. This is for any of the surgeons. But just basically looking at the ASC model, I mean, you paint a picture of an environment where you have to be extremely efficient, right, in order to kind of make a decent economic return out of an ASC. Also at the same time, you've got a lot of volume going into the ASCs and you've got a lot of pressure on reimbursement and they're putting more kind of pressure on you in terms of outcome reporting. So I guess kind of trying to look at it perhaps from the other perspective, if I'm Smith & Nephew and I've got a strong position in that market, am I going to be seeing a lot of price pressure from you guys, a lot of pressure to get cheaper and cheaper because your margins are getting squeezed.

I think that the answer to that is, of course, but not just in the ASC. The markets are getting squeezed actually much harder in the hospitals. I think actually the ASCs, the implant pricing is critical to a certain level. But the beauty of ASCs, and I don't want to get overly technical in the way that we think about it. And I also don't want to try to take business to a bunch of really smart business people. But right, in ASCs, the biggest shift is the change from cost accounting to throughput accounting. So what that means is when we look at a hospital and you look at the finances of a hospital, every single question is, how do we make the care cheaper because we're looking simply at costs, right? We have a cost center, and this is our cost center, and we anticipate next year, the revenue will go down. So we need to decrease cost, which is why you see the continuous RFPs and downward price pressure on the simplest thing we can, right? When you go back to the first joint replacement bundle called CJR, CJR accomplished absolutely nothing clinically. And the only thing it did was make us send less people to post-acute care to rehab centers and nursing homes and made implants cheaper. That was it. The entire success of the program considered today the most successful bundled care program in the history of medicine, right? It did nothing but decrease cost. Surgery centers are much smarter than that and recognize spend money where it matters to do one more surgery. So I don't need a better margin on each surgery, I need more surgeries for a better margin overall. And when you transition to throughput accounting, you actually see a decrease in downward price pressure because what I'm actually going to go to the companies and ask is not can -- Deepak, can you sell me an implant cheaper, is can we work together to create a model where my entire episode of care is more efficient because I don't care about a cheaper implant, I want to do one more surgery because I have a very fixed overhead cost. I'm going to spend this much every day no matter what. That last margin is 100% profit. Hospitals don't have that because they've got very, very high overhead costs. They have very high fixed costs. And they always say, well, we're going to spend -- we're going to do one more case or we're going to spend a lot less money. They're not firing anybody. They're not saving anything, right? At the surgery center because the lights go off at 6, it actually really makes a difference. And that's why we -- the entire way we count the it looks so different, which I think actually improves the ability to resist downward price pressure on implants.

One more thing I would add, which we have not talked about is this concept of a single vendor ASC, which is really how the market is going. And all the big dogs are trying to now -- Arthrex, right, bought an arthroplasty company. Everyone is trying to be enable to be a single vendor. Well, there's no single vendor that has a tower, that has a robot, that has a sports platform, has an arthroplastic platform, has a trauma platform and now a pretty frict ridiculous shoulder platform. There's nobody else. And everyone is trying to get that, but nobody has a shaver platform and a camera platform. So that's really, I would say, the positional power of Smith & Nephew to really take over soup to nuts.

Maybe a question for the surgeons, particularly on the ortho side in terms of just the stickiness of surgeons with implants. So obviously, the launch of landmarks should be a driver of share gains. And I know Deepak would be good to get an update on what you were saying before around you stopped losing accounts and started winning accounts back. How willing are in your experience, your peers to switch if they are using a Triathlon, I think they're looking -- how easy is to get?

It's a great question. And I think historically, it was a bit different than it is today. I think historically, people were less likely to switch, okay? They got pretty fixed. But interesting enough, even though orthroplasty is relatively mature science in many ways, a lot of these new concepts are very hot. So people -- and we're recognizing, especially on the knee side, that there is a need to make it better. It's just -- there's a general recognition. And these new approaches that we talk about are sort of really hot topics. So I think there is much more interest in pursuing these new concepts. And that was, I think, started with the robot, but really with the alignment strategies really changed it because a lot of people were saying, well, I'm doing it the way I did it along, and I know that, that's an issue, so how do I change to make it better? And so I personally think this is going to make it easy for them to change because it's built to do exactly what we want to do as opposed to taking -- trying to overlay something that you wasn't designed that way. So I think this will make it easier, but I think that the ability to get people to change is easier now because of the new concepts that are really hot.

And I'll just add, I'll go right back to the hip market, right? If you're changing same for same, it's really hard. If you bring out another symmetric implant that looks like all the other implants, no one is going to change, right? But just like we saw with the triple taper stem, when it is differentiated, when it solves the clinical need and when it addresses a problem we actually know exists, then the change is actually pretty easy, and you saw that in the way that the entire hip market shifted with access.

On the -- specifically the sports med side in an ASC, do surgeons behave differently? So I spoke to a few ASCs who kind of -- they try and streamline things. They think about do we need to use those extra screws? Do we -- like are there things that we can do that maybe slightly reduce cost and speed of procedures? So is there a different behavior in your experience?

I mean 100%. I mean we -- if you do an ACL, sometimes you put a screw and you could do a backup fixation, maybe if you really don't think you need it, some people just say, I do it all the time. Why? Just because I do it all the time. No. Well, you should only do it when it's needed, right? So I think -- and also efficiency of how fast you can operate, how -- and so there are a lot of factors. And then ultimately, you get a report card of how expensive is your operation versus a cryo and I both a rotator cuff and like, well, you're consistently more expensive. So all these conversations happen in ASC. But you ultimately work together. And then the last thing that there's always a game of like, oh, I have a really expensive case. I'm doing on the main hospital. There's a lot of dairy laundry in ASCs. That's why we have Dr. Haas to make sure we're all clean.

It's Charles Weston from RBC. I was actually just following up really from Graham's point. And just, I guess, pushing back, you guys are key opinion leaders, implant designers, whereas a lot of surgeons in the U.S. and elsewhere would just be kind of more standard surgeons, if that's not insulting to them. And historically, there'd always be considered to be that kind of loyalty to an implant or loyalty to a relationship that you have with the salesperson. So I guess, distinguishing between some of the hip, knee, sports med devices because I suspect they're all quite different in terms of the attraction of innovation, are there any things in this kind of new and reinvigorated portfolio that you think would make somebody with that type relationship really reconsider what they're choosing?

It is an absolute truth that the surgeons develop a relationship with their reps. And so -- and that the sales force uniquely as opposed to pharma, which is not tied to reps. So we do rely on having great sales forces. And I actually -- having been around this industry for a long time, I think a vital role, which we have 2 of them I know that I'm involved with in August, is educating the sales force on what are the benefits. I mean, personally, if I'm going to talk to a surgeon, and I'm going to tell him why I think he ought to use Landmark, okay? It bit depends on what his interest. If he's interested in moving from a traditional alignment to a modern alignment strategy, well, that one is easy because it's just going to be easier to do that, right? But if he's just one just a regular surgeon, I would go after them and say, listen, do you have a lot of [indiscernible] pain? Is that a big problem in your issue? Because I think that the -- if I was looking at this, what I'm sort of excited in my life is to have -- I really believe we have, I won't say, solved the problem because I won't be that arrogant to think that we've solved a problem that was probably going on for centuries, even in non-total knees. But knee campaign going up and downstairs after knee replacement, it's the pain of our existence. If you're a knee replacement surgeon, the patients come back and they say, "I love my knee. I'm glad you had it, but boy, I go up and downstairs and it hurts. I get out of the seat, I go to the movie, it hurts." And I think we know why that has been happening. If you look at where we -- how we were -- it was a forgotten part of the joint. We like cared about all the other stuff, but we forgot about the patella. And we just gave some cursory attention to it where we really focus on that. And I think by all the metrics and all the testing, we have -- this is going to be better. And so that's how I would go after it. So you look at where the issue is with the surgeon, and that's how I think you can and get traction.

I'll try not to make this take too long. But actually, I think what we have learned is that relationship that has always been critical gets very different as you shift from surgery from hospitals to surgery centers. I think the ASC and the strength of the ASC portfolio and the ASC play is the thing. I'll tell the story of John and Walt. So John was one of my first partners. Walt was his rep from company A, we'll call it. John and Walt were best friends. Walt was the best man at his wedding and the godfather of his oldest son. So talk about the relationship between a surgeon and their rep. For 30 years, John used nothing, but company A with Walt. The hospital could have said we're switching to one wouldn't have made any difference. John used company A 100% his entire career. We opened our surgery center. And in 2013, started going out to all the companies and said, "Hey, this is the structure we need, B, we need less trades. We need all the things that I talked about today. And company B, C and D, no problem, in, great. Company A had a hard time getting there. Their structure couldn't do. They couldn't figure it out. The next day, John switched from company A to company B. The next day. When John owned the center, and it mattered which company he used, I love you, Walt. I'm going to company B, right? And 30 years of loyalty gone in 1 day of a bad contract. And so I think that as we see this site of service shift, this is a very uniquely American thing. But because of the financial state that surgeons have in surgery centers and the completely different way we look at the way accounting is done, those loyalties are great. They're not worth cash in my pocket. And so I think that is the biggest driver of the change we've seen in regards to brand loyalty at the implant level. Actually, Walt retired.

Gentleman in the fourth row, at the end, and then I'll get to you, Veronika.

It's Ken again, Deutsche. Dr. Haas, you mentioned, I think you used the term truck referring to Mako and I think ROSA. Just wondering, are there any thoughts on some of the sort of smaller handheld options in the market? We obviously had Mako with the small handheld. We've got TeMini, which obviously is quite small and agnostic implant agnostic. So yes, any thoughts on how those 2 might relate to CORI?

Yes, I'm. I'm flattered and I shouldn't be because at least they're driving a handheld market. I think that the TMini is a nice concept. I actually think Zimmer probably made some sense to do it because the TMini, first of all, the software is very rudimentary. I actually served as a -- for TMini in the eye because I was the only person new enough about TMini to be it sort of rep for one of the courses. I'm not a rep, but I had to be the surgeon to show it. And I think it's intriguing in some ways, but it's very limited. The software -- literally, the software is sort of sad in a way probably reflects their lack of resources, but their software, even though they gave the CAT scan, doesn't show the patella group. I mean it's sort of crazy. It wasn't done that way, but it didn't. That can be improved because they can update it, but they haven't at this point. But all that it does is it puts a pin and then you have to cut and it doesn't have -- it has rudimentary soft tissue balancing. So it's a very limited platform of what it is. But I think it frankly does everything ROSA does pretty much in a more compact. So if you were comparing to ROSA, I think it's a lot better, but it does what ROSA does. It just puts pins in to put a guide in. And I think that the Stryker hasn't been out to be used. And I think some of the limitations of that to the 2 biggest ones, first of all, are -- first of all, it doesn't tie into Mako. So the software, it doesn't tie into what is actually reasonably good software, right? So what is -- people like about Mako is in part the software, and it doesn't tie into Mako software. The second thing is that people -- surgeons are just -- while they like saws, nobody really is going to like to just freehand a saw, even if it's robotic. It's just an awkward -- I've used it. And it is awkward to put a saw and try to hold the saw and think you're going to get the planes right and get it right. So I think having some assistance with the saw is good. So our concept is that you robotically do place a guide with the saw because at least you have a platform to rest the saw. You're holding with your hand, but you have a platform to hold it on. So I'm flattered.

Just maybe one quick one for Deepak and John. Just out of all the sort of innovation platforms today, which would you say might surprise you the most maybe over a sort of 3- to 5-year view? Would you love them sort of equally?

Look, I think -- I'll go first, John, you can pick favorite one of your children. So I'd say, look, each part of our portfolio has a role to play in our success. Each business has a role to play. I think we've called that out in the Capital Market Day in terms of the role that Orthopedics does in terms of improving returns, the role that ortho sports plays in terms of driving and accelerating our growth and likewise with Wound, right? So each portfolio. Within that, the role of innovation, which over the last 4-some-odd years has played a vital role in driving growth. More than half of our growth has come from products we've introduced in the previous 5 years. And that won't stay like that forever, but we're in a phase where we've invested in a stepped-up way in R&D, right? We're continuing that within the [indiscernible] chapter. So it will account for a similar proportion of our growth. So within that framing, each one has a role to play. I talked about parts of our pipeline being front loaded, front-end loaded, and it's like that in orthopedics. Landmark is one vivid example that's come to light today. All the functionality in CORI, right, is another example of that. So we just recently released release shoulder capability on CORI. I mean Dr. Plitzer wasn't here, wasn't at the New York event, right, because we -- it was still too early, but we brought him here now because fast forward now 6 months, it is a reality. Fast forward 6 more months, it will have hip capability, maybe it's 7 months. Every time I talk to my team, I shave a month off and drives my team nuts. But 6, 7 months we'll have hip functionality on CORI. And so those things are front-end loaded. On the sports side, the Big 4 that the team talked about, Christy talked about, each has a role to play. REGENETEN is now quite a mature story, right? We're in early innings with CartiHeal with Agility AGILI-C, but January of '27 should be a pivotal point because we'll have CPT1 code, right? And then Tendon Seam literally early innings, but you heard Dr. [indiscernible] talk about how he's already started to talk about that in his practice. So -- and we haven't talked a whole lot about Wound, but we've made references to next-gen PCO. We talked about [indiscernible], but that itself is an innovation story from 2025, where we brought forward LEA 3.0 and all the connectivity that went with it. So what I'm trying to give you a sense for is there's quite a good balance in terms of level of innovation in terms of our R&D programs and how they kind of map out in terms of time line when they start to really drive top line and also risk. I mean there's some incremental things we're doing in our portfolio. There are some things that are really new to the world. I mean, TESSA, there is no other spatial surgery visualization platform on the market today. So I think hopefully, you get a sense now of the level of innovation that's in our portfolio and how each one plays a role. So in all of this, I don't think I've picked the favorite. I said has a role to play. Perhaps, John, maybe you'll take sides.

And I think you've covered the broad ground there across the portfolio, but for me, the personal favorite is TESSA actually because I think that the potential breadth of application of our navigational surgery Obviously, initially, we're looking at it from an ACL perspective, but what really excites me is this could become -- it could be a game changer in terms of the way that surgery gets conducted. And I think the opportunity -- obviously, it's a long game. This is a 5-, 10-year game, but I think it's a huge opportunity in TESSA. I don't know, Scott, whether you talk about it much more knowledgeably than me. But to me, that's the most exciting development in our portfolio.

And I'd love to get Dr. Rinat's perspective on it as well. But I mean, we do see it as it's an opportunity to change the way arthroscopic surgery is practiced. And the vision is to have TESSA be a platform 10 years from now that surgeons can't imagine doing cases without. It is going to be a journey. We're starting with a single application on the platform, and we'll build from there. But it's -- and we believe it's the right place to start. But we've got we've led and created categories across sports medicine, and we've led in the innovation of the arthroscopic tower, and this is an opportunity for us to do that again. But Dr. Ranawat, you've probably as much as any surgeon that we work with had exposure to TESSA and see the potential of it. How would you regard it?

Yes. I mean I would regard it as, 10 years ago, I was very much involved -- actually '15 with Mako when it was in Florida. And I remember going to India, going to other countries and talking about a robotic partial knee and people thought that was all crazy. And then you went 10 years later, 15 years I was in India and the number of robots in India now, there's about 100 of them in every company. And that's India. And then if you look at the fourth of HSS, there were 0 robots when I was a resident, 0 anterior hip when I was a resident, and now it's all anterior hip and all robots. And so the way that navigator robotic technology changed arthroplasty is going to be the way that we still do 2D arthroscopy. That's very, very rudimentary. It's going to change the way in 10 years how all arthroscopy is done because the world doesn't live in 2D. Your body is a 3D thing. And that's the best way to improve surgical accuracy.

This is probably an unfair question, but I'm going to ask it anyhow, and it's for all the docs in the room. Obviously, you speak very passionately about Smith & Nephew technology and all the innovations and you're clearly big product users. But if we look at the performance, especially of the Orthopedics business at Smith & Nephew, it's been fairly poor. We've seen a fair amount of share losses and particularly in the U.S. I guess I'm just curious about your perspective of kind of how to reconcile your bullishness and enthusiasm with the sort of financial results that we see because that's what we on this side of the room care about? And then maybe you can sort of talk through when you talk to your peers who maybe are not Smith & Nephew users, what are the frustrations that you hear from them?

That's a question which I think needs to be addressed. And to me, having, again, sort of seen the spectrum and seen this, the effect of -- there was, I think, holes that needed to get filled, okay? And there were decisions that were made long before the folks in this room were here. And those decisions left, I think, the holes that are being filled. So the problem dates farther dates 5 to 10 years back, okay? And the way it could have been addressed in a couple of ways. You could have just tried to patch a hole. The patching a hole is just continuing a problem that existed for a long time that you said, well, we're just going to add another part on to a complicated portfolio that had good parts, but some of them are dated and didn't modernize the technology, or you say, listen, we're going to take the innovation that we have, and we're going to look towards consolidating the portfolio into the newest technology that's forward thinking. And I think that what the issue was appropriately -- and I would argue probably hard decisions to make because they financially required big commitments that I said some of these other companies are going to face. I mean I think they are facing. I mean it's not just Smith & Nephew, there are other companies that I think didn't face those issues and will be -- have to do. So I think management came on and said, we have the problem, they recognize it and then made the investment. And I think we're almost there. I mean so I think time is going to tell, but I think the issues were recognized and addressed in a really forward-thinking way.

Not an unfair question at all. There's 3 here. And I'll get to you, David and...

[indiscernible], Berenberg. I had a couple. Firstly, on Landmark, how does it stack up relative to compete to call kinematic alignment? And then secondly, on ASCs. You've noticed an above-market penetration in ASCs in both hips and knees. How much further do you expect this to be able to penetrate this market? And kind of directionally, how do you think about this gap relative to the market changing going forward?

I mean you've gotten the clinical parts of that now during the course of the day. Just let me address the business part of it. So as I said, what Landmark seeks to do is address the gap that we currently have on our JOURNEY platform, which doesn't have a porous component. And over the last couple of years, we've seen an acceleration in the proportion of knees in the market that are porous. And a lot of that is time driven, and I'll have our surgeons comment on that. But from where I sit, a lot of the acceleration is being driven by that. And roughly half of our customer base in the U.S. is on JOURNEY, right? So we have a need to kind of address that because taking a JOURNEY surgeon today and having them go and adopt LEGION, which is not kinematic alignment, right, is not -- I mean, it may be a short-term proposition, but it's not a longer-term proposition. So as I said, the decision -- the business decision we face was either to plug a hole, as you just said, Dr. Haas, or take a step back and try to address some of the shortcomings. And what we've tried to do is blend the best of LEGION and JOURNEY. LEGION is a relatively easy knee to put in, maybe not the easiest knee and all surgeons can comment on it, but it is easier than JOURNEY to put in. JOURNEY, as you alluded to, has the alignment, the kinematic alignment and the natural feel, right, of a knee. And so what we tried to do is get the best of both walls. And we've tried to do this now with the imperatives of the market that we see today and where it's going to, which is all about the ASC, the efficiency to fit in a 300 square foot OR, right, where you can't have 10 trays, right? And so what we've sought to do as we did with ATOS and as we did with CatalystTem is to make the implant tray efficient, right? The third thing we did is design the system to be put in with CORI, right? And so that offers a level of personalization as Dr. Haas kind of went through in his presentation that we think addresses an unmet need. No one thing is kind of a slam dump to use an American expression, right? What we're betting on is that combination of the implant characteristics, the efficiency around capital. We obviously benefit when you put less capital in account, but surgeons and institutions benefit when you have trade efficiency built in, plus the robotic aspect of it. All of that as a proposition, we hope will carry the day, plus you've got our presence in sports that commercially, you've got to do things to make all of that count. So that's the bet that we're making around this.

Just briefly, you noticed that Dr. Haas didn't use the term kinematic alignment specifically because it has no definition. So like the idea of kinematic alignment is really best articulated saying, we used to say make the cuts straight. Kinematic alignment says make the cuts crooked, right? Because kinematic alignment's attempt was to take a symmetric implant and recreate an asymmetric anatomy, right? The joint of a knee is not flat. So to make a flat implant, not flat, you have to cut it croocked. The beauty of Landmark is biomechanically, cutting it flat is better. So having a flat cut, but a kinematic implant essentially takes kinematic alignment or that term and makes it way, way safer and way easier to do. You no longer have to figure out how crooked is crooked enough. Instead, you can simply cut straight and put it an appropriately designed implant. So it will eliminate the surgical kinematic alignment and simply create an anatomic alignment with the right implant.

Best way to say, it's designed for kinematic alignment. It's designed anatomically to match the -- that chart I showed with the 90-40. If you want to -- if you're a kinematic aligner, okay? And in CORI, by the way, as I said, this is Barry, you are recreating the kinematic alignment. That's what it will show the CPAC restores the kinematic alignment. And you will be able to be perfectly aligned kinematically in 90% of people without modifying the0 technique more than 3 degrees, which we all think is safe, which is really kind of pretty remarkable. You can be a kinematic surgeon without the compromise of saying I have to make a really cricken cut.

And this is where the role of robotics comes in, right? Because you've got CORI, because we've designed it in a way that makes it easy for a surgeon to do. And again, Dr. Haas brought it to life, right? You essentially go in and use it as an erasor, use it in that context. But having a plan that allows a surgeon to execute to what effectively is kinematic alignment in a -- without having to explicitly think about it, that's the design principle that we've used to make this come to life. Again, it's not any one thing that's necessarily going to carry the day. It's the package of all of these things that we expect to make a difference.

Just one further comment. We actually -- in addition to CORI, which I think is the best way to do it, obviously, we have manual instruments that are kinematic alignment instruments that are simple. They just cut thickness of the implant, which is the philosophy of the original kinematic before robotics. We have those instruments, which will be doing really quite simply just like any kinematic surgeon would do. We have manual kinematic instruments for Landmark as well.

To bring it home to is, look, share moves in orthopedics is they don't happen kind of overnight. We don't expect that you launch Landmark and tomorrow, the whole world starts to embrace. I hope that's the case. But there is a pace at which we need to introduce this into the market. The real cost in orthopedics for putting capital out there. So we are being much more thoughtful in how we place capital, right? In other words, we want surgeons who want to give us their primary business, right? Because that's what makes the economics work for us. And so the consequence of that is we're not going to put a whole bunch of capital out there for surgeons to go try this for a proportion -- for a small proportion of their cases, right? So those are things that pace the launch. So David, I think you were next, and then Julian will come to you. Sorry, Charles, I need to point because you don't know...

David Adlington, JPMorgan. Bigger picture question for the panel. I just wondered if you're seeing any impact from the usage of GLP-1s in terms of either the type or pace of patients coming in and how is it impacting surgery?

I think I've talked about this before, maybe even with this group. I think GLP-1s are a fascinating medication in the way that they impact us, but I also think everyone is misreading some of the data, right? So there's now there's data, oh, take get GLP-1, no one's ever getting a new replacement and oh, it's going to -- and like there's actually absolutely no data that supports that even the papers put out saying that that's not what they're saying. What we've seen from GLP-1s is patients come in lighter, great, right? So that means we got a -- we had that initial bump where we all of a sudden had a whole new crop of patients who qualified for surgery in places that had BMI cutoffs or something else. Then there's the anti-inflammatory effect. And I think right now, we're actually seeing across the board a little bit of that lull as patients are a little happier, getting a little more active. But what I anticipate is we're actually going to see a big rise, right, because we're sort of saturated. Basically, everyone takes a GLP-1. It's no less than 100% of my patients. And not -- and that doesn't mean they tell us they do, and that doesn't mean they get it from a doctor, right? But when push comes to shovel, we tell them, by the way, you might die from anesthesia, if you don't tell me you take it, all of a sudden, everyone right? So I think we've hit sort of a market saturation where we're going to see the weight loss people who lose enough weight and get enough anti-inflammatory effect that they're great and they're happy and they're going to avoid surgery in the short term. They'll get more active, they'll use it, but GLP-1s don't fix bone on bone arthritis. They may make a patient take a little longer to get to the level of symptoms in which they decide that surgery is the right answer. But as we heard from Aneel's talk like nothing grows fat cartilage and bone on bone arthritis hurts. And as the GLP-1 patients get more active, I actually think we're going to see it go in the other direction, and we're going to see them increase the number of joint replacements we do because patients are going to be happy they're so active. They're no longer willing to be obese and sedentary. They're no longer obese. They're no longer willing to be sedentary. And I think that will drive an increase in utilization in these surgeries, but not like this week. Like I think it's going to be a year or 2. We'll watch this kind of funny lull, and then I actually think we'll see a pretty big rise.

Okay. I think the last question from Julian unless David a follow-up.

it's Julien from Bank of America. I mean something that stood out to me is how much you use [indiscernible], not only for [indiscernible], but for a lot of different applications. I mean I know, Deepak, you spend time and money on, I mean, having some clinical studies. My understanding is that the penetration for [indiscernible] curve is still in the single digits right now. So my question is more, how do you see the penetration for [indiscernible] over time among all the applications? And do you think it's going to take many years again for all the applications to match like the rotor?

Yes. I mean the thing about -- and [indiscernible] can talk about it, too. Right now, the American Academy, which is really against anything that helps science, sorry, are saying that patch augmentation is indicated. That was a big, big deal when the academy said that. There's a lot of politics that went into that. So that's going to trickle down everywhere. And as I say, right now, every NBA athlete who cares Achilles gets REGENETEN. I can't tell you who the surgeon is, but it's -- and so if you're putting on our most elite athletes who probably have the best biology, God knows my when I care my Achilles. So it's impossible to say, but there's -- every day, there's another patch. Every -- it's just like how the robots came. It's going to go -- so -- and there's completely a patch war right now. If your patch better healing, your patch more bioreactive, is your patch a little stronger, it's all different, but we're first to market. It was kind of how ArthroCare was with the wan business. It was by far the best wan business. How Dyionics was with the Saver, it was the best Saver business. Now that's all standard of care and then everyone copied it. So I really think it will be.

Yes. So I mean, from what we see across the board, we see about roughly 10% is Dr. Ranawat, something like maybe a little under 10% of all shoulders have [indiscernible], right, in the market. For us, as Dr. Ranawat said, there's quite a bit of innovation, quite a bit of activity in the field, which is good. I mean, in the sense that all of that attention encourages trial, encourage use, encourages hopefully, over time, appropriate adoption. And it's that appropriate thing that we're indexing on. So REGENETEN is not just REGENETEN, and of course, it's a great product, but it's the clinical evidence that supports the use of it. The statistically significant reduction in retail rates. First, we demonstrated the 1-year time point, now the 2-year time point. That just didn't happen, right? We funded the trials to do that. And we're doing that for the Achilles, we're doing that in the hip. And that's a very significant part of how we bring therapies to market. The engineering of it, the product development of it are important. So for example, REGENETEN I think it's a code name, maybe it is a trade name actually. So the next version of REGENETEN, it's an improved delivery system. But actually, it's so much more than that because we're going to invest actively behind how to use it for all the different applications. So that's equally as important as coming up with the next next-generation patch, right?

And if I could just comment on the REGENETEN journey. I mean we've learned a lot along the way. But I would say that rotator cuff was the natural first place to go. We identified it years ago as one of the largest unmet needs in all of sports medicine that Dr. Ranawat and Dr. [indiscernible] talked about that. It was the largest procedural area as well. So that was the first place that we wanted to go. We wanted to focus on that, build the body of evidence around that, put all of the market development effort behind that in terms of medical education, having the right channel that was kind of scientifically well versed that could tell the story and launch that in the right way. We know that there are other applications for other tendons that are also in need of help when it comes to healing. Those are logical next places to go, Achilles, hip as well. And then Deepak talked a bit too about the importance of the delivery system. I'd say if you think about what differentiates REGENETEN today from the other entrants into that category that we've effectively created, it is about the evidence. It is about being the first in that space to create it. That's a huge advantage that REGENETEN will have, but it's also about the arthroscopic delivery of REGENETEN, which is really, really slick. It will get even better with the next generation of delivery systems that we'll introduce. But that makes a big difference, especially when you're talking to surgeons about the importance of efficiency in the operating room. So it's a good story, and it's also gives us some lessons in how do we begin to do it again with CartiHeal and other kind of category shaping types of technology. There's the innovation itself, the technology, but there are all the things that go on around that in order to shape the category and deliver on it commercially.

What I like about Smith & Nephew Sports, it isn't that we're just building another anchor always. There are a lot of other companies that want to build another anchor. And you have to still do that in sports. You have to another rot anchor, another [indiscernible] anchor. But all the things that we talked about today is truly looking at the next 5, 10, 15, 20 years. And [indiscernible] was the one we were like, yes, we called it 5 years ago, boom, done. Next 5 years will be cardio and 10 years will be TESSA. I mean that, to me, as a surgeon, that -- I'm not selling anything. I'm letting science tell itself and I'm saying, this is the future. This is an innovative concept. It's not looking at old schools. Same thing with Dr. Haas was saying. We're not looking at the old way of doing knee replacements. Let's look at the new way. That's what's intriguing, and that's what makes people become adopters.

Okay. I think we'll leave it at that. So as we close the session today, I hope what you've seen clearly is how the strength of our company, Smith & Nephew lies in the combination of a differentiated innovation program and real-world clinical validation. You've heard directly from our leading surgeons on how our technologies are improving outcomes in practice and why they choose to use our products every day. And that external perspective is critical, and we believe it's one of the most powerful indicators really of the value of our portfolio. So stepping back, a few points to take away. First, innovation is a core driver of our growth with a strong and a sustained cadence of launches across all of our business units, Orthopedics, sports and wound management. And I hope you also saw the portfolio depth and breadth clearly displayed with differentiated solutions across all of our business units, addressing really significant and meaningful unmet needs. And I think that combination gives us the multiple growth drivers that we've talked about in various forms. Surgeon advocacy is important. It reinforces our competitive positioning and supporting adoption and market share. Each of our surgeons here could work with any company. You could use any company's products. But you've hopefully chosen to work with us because you see the value of innovation, you see the value of the approach and the philosophy that we have here, and that's important to us. And all of this underpins our right strategy that gives us confidence in delivering our medium-term growth targets and returns ambitions. So ultimately, everything that we do comes back to the patient and improving patient outcomes. That's why those of us who are in the company show up to work every day. That's what drives our innovation and what drives our philosophy. And that's ultimately why we're confident on the opportunities ahead. So I'll take a moment now to thank our surgeon panelists and those who have to leave to catch their flights. It's not a small thing for you to take a day, 2 days out of your practice, and these are your busy operative days, and it means a lot to us that you've done that to speak about your experience, speak about why you've chosen to work with us and the products that you use. So thank you very much on behalf of all of our colleagues for being here today. And to my colleagues, it's not a small thing to put together something like this, to our IR team, to our business unit teams and to my colleagues around [indiscernible]. Really appreciate you bringing our innovation to life in the way that you have in creating this opportunity. So we look forward to continuing this dialogue with you. We've got some refreshments and light lunch outside and look forward to continuing this conversation there. So thank you very much.