Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Matt Dolan with Roth Capital Partners.
Matt Dolan - Roth Capital Partners
My first question is on the inventory issues that we talked about on the last call. Can you give us an update on how far through working through some of those inventories you are at the end user level? Are hospitals still in reduction mode or do you think that’s stabilized for the most part here in Q2?
Steve Anderson
I think it’s stabilized, but I think that some of the hospitals are in the process of working down their standard process cardiac tissue inventory, as witnessed by the significant increase that we’ve had in the SynerGraft process pulmonary valves. My recollection is that the SynerGraft process pulmonary valves now constitute slightly more than 20% of our total cardiac valve revenues. It is my feeling that that is what is going on there.
Matt Dolan - Roth Capital Partners
Okay and what are you getting on pricing on SynerGraft? Have you been able to maintain kind of a 20% premium or where is that falling?
Steve Anderson
We are charging approximately $14,000.00 for a pulmonary SynerGraft heart valve and our typical price for a standard processed valve is about $11,000.00.
Matt Dolan - Roth Capital Partners
Okay. Can you talk about the split of the sales force and how that may or may not have impacted revenue in the quarter? Did you see the cardiac group have to play catch up and hit some of the territories or maybe the hospitals that maybe weren’t working in the past? Is there any impact there, how smooth was that transition?
Steve Anderson
I think the transition was very smooth. We chose the top ten representatives from our sales force to be cardiac specialists. They had to try out for the position. They went through an intensive interview process with Dr. Northrup on our staff and marketing management. There are two cardiac specialists assigned to each region. We have five regions in the United States. I think that has and is in the process of becoming a very effective marketing tool.
We didn’t flush out the 10 cardiac specialists until towards the end of the year, so there are two to four of them that just began getting started in that new position in January of ’09. I think that you will see their effectiveness pick up as we hit mid-year and towards the end of the year.
- To read the full transcript on Seeking Alpha, click here »
