Question-and-Answer Session
Operator
The question and answer session will be conducted electronically and will last for 30 minutes. (Operator Instructions) Our first question comes from Jason Bedford with Raymond James.
Jayson Bedford - Raymond James & Associates
First, just so that I'm clear, when you receive approval for any of the three products, would you expect the products to be immediately accretive to the bottomline, meaning if there’s a forward spend necessary in that quarter and subsequent quarters, the marketing spend will not exceed the revenue you will get from those products?
Rob Cascella
There will be some incremental investment that will be necessary in order to roll out any of these products, and it will be by way of marketing program and any of the other promotional aspects of it. If it is in fact dilutive upon its initial release, we believe that it would be within that quarter or the near quarter following that it would be accretive. We don’t believe that the dilution would be long term, but we also believe that we will experience up to a quarter of dilution from the release of the new product.
Jayson Bedford - Raymond James & Associates
Surgery, if I heard you correctly, will have 17% to 18% growth next year. What gives you confidence in that acceleration?
Tony Kingsley
I think there are really three reasons. The first is that we observed that the endometrial ablation market is large and continues to be underserved. I think what we’ve gained a lot of confidence in in the last 6 to 12 months is the clinical argument that NovaSure should be a procedure that’s used earlier and more frequently for women with menorrhagia relative to medical management. We think we’re winning that battle with physicians. The second is we’re continuing to invest in patient outreach, with both things we are doing at the physician office level to provide outreach and education but also separate targeted and significant investments on the internet to convert people who are searching for solutions, and I think the third is the clinical data continues to be encouraging. Recently there was a paper presented done by the Mayo, so that’s from a reputable institution done independently that among other things specifically identified the use of RF energy, which as you know from the NovaSure procedure, it is a positive predictor of amenorrhea, so we just think you will see a bunch of different fronts things that are very encouraging.
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