Good day, ladies and gentlemen, and welcome to the LivaNova's Second Quarter 2016 Earnings Conference Call. My name is Sharla and I’ll be your operator for today. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call maybe recorded. I would now like to introduce your host for today’s conference Karen King. Please go ahead.

Thank you and welcome to our conference call and webcast discussing LivaNova's financial results for the second quarter of 2016. My name is Karen King and I'm the Vice President of Investor Relations and Communications for LivaNova. Joining me today are Andre-Michel Ballester, our Chief Executive Officer; and Vivid Sehgal, our Chief Financial Officer. This morning's press release and conference call include forward-looking statements. Forward-looking statements may be identified by the use of forward-looking terminology including, but not limited to, may, believe, will expect, anticipate, estimate, plan, intend and forecast or other similar words. Statements are based on information presently available to us and assumptions that we believe to be reasonable. Investors are cautioned that all such statements involve risks and uncertainties. Our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements which are not guarantees of future performance and involve known and unknown risks and uncertainties and other factors that are, in some cases, beyond the Company's control. For detailed discussions of the factors that may cause our actual results to differ, please refer to our most recent filing with the SEC, including our 10-K dated March 4 and other regulatory filings. Included in the press release today are selected non-GAAP operating results. In this press release, the management has disclosed financial measurements that present financial information not necessarily in accordance with Generally Accepted Accounting Principles or GAAP. Company management uses these measurements as aides in monitoring the Company's ongoing financial performance from quarter-to-quarter and year-to-year on a regular basis and for benchmarking against other medical technology companies. Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. These non-GAAP financial measures should be considered along with, but not as alternatives to the operating performance measured as described per GAAP. Enhance the call; we have posted a presentation to our website that summarizes the points of today's call. This presentation is complementary to the other call materials and should be used as an enhanced communications to all. You can find the presentation in the Investor Relations section of our website under the Events and Presentations tab at www.livanova.com. With that, I will now turn the call over to Andre-Michel.

Welcome to our second quarter 2016 conference call. I will begin the call by providing highlights of our key initiatives during the quarter and then discuss our sales results by business unit. After my comments, Vivid will give you some more color on the financials and I will then wrap up with closing comments before moving on to Q&A. Over the past couple of months, we announced several key initiatives that are positioning LivaNova for future success. Starting with CRM, in May, we announced favorable results from our RESPOND-CRT trial, which was designed to investigate the safety and clinical efficacy of our SonR device in patients with advanced heart failure. SonR is a superior device for patients with CRT or cardiac resynchronization therapy because it provides automatic and continues benefits which means the device continues to optimize long after patients leave the hospital for physician’s office. The trial showed a 35% reduction in hospitalization at three years and even 50% is some subgroups of patients with atrial fibrillation or renal dysfunction compared to echo. Echo is currently considered the goal standard in terms of reducing a number of non-responders to CRT. At the beginning of July, we announced a new organizational structure, the introduction of new talent into the executive leadership team and the appointment of a Chief Operating Officer. Damien McDonald has now accepted the role as COO of LivaNova starting October 3rd. Damien has a strong background which copes 30 years in executive leadership roles with healthcare companies Danaher, Zimmer and J&J. Damien were transitioning the organization to regional focus with regional leaders in the U.S., Europe and the rest of world. Supporting the regions will be our three business franchises Neuromodulation, Cardiac Surgery and CMR. The leaders running these franchises will be responsible for product R&D and…

Thank you, Andre-Michel. I would like to start my remarks by discussing merger related facility. We stated that our goal this year was $19 million. We’ve already been able to capture more than half of that and we are well on our way to our annual commitment. Now moving to other financial measures, adjusted gross margin as a percentage of net sales in the quarter was approximately 65%, up 200 basis points from the second quarter of 2015 and a material improvement sequentially. This margin improvement is driven by number of factors. First, we saw positive mix impact from sales of high margin products and countries. Second, manufacturing synergies are on track. And third, we benefit from the suspension of the U.S. medical device tax. For full year, we still expect gross margin to be in the 64% to 65%. Adjusted R&D expense in the second quarter was $30 million. R&D as a percentage of net sales was 9% compared to a 11% for the second quarter of 2015. This reflects a combination of lower absolute level of spending which are associated with the reprioritization of projects on track progress with our merger synergies, as well as the impact of restructuring efforts which we announced in the first quarter. For the full year, we still expect adjusted R&D to be in the 11% to 12% range. Adjusted SG&A expense for the second quarter was $116 million. SG&A as a percentage of net sales was 36% in line with the second quarter of 2015 and an improvement in the first quarter of 2016. The incremental spend in SG&A largely reflects the investments in our product launches, market access capabilities and in immerging markets. For the full year, we still expect adjusted SG&A to be in the mid-30% range. Adjusted operating income…

Thanks, Vivid. The organization is highly focused on executing against our strategic goal and we make great progress on many fronts during the quarter. Our new products are performing well and we’ll continue to gain momentum as we progress through the rest of the year. First and foremost AspireSR, we’ll continue to drive strong growth in new patients. Second, we see continued growth in oxygenators with our newest inspired device. Third, we continue to gain market share to KORA 250 in Japan and expect to see continued momentum in the coming quarters. Fourth, Platinum, our high-voltage device has performed consistently quarter-to-quarter with strong double-digit growth in Europe. And finally, the initial rollout of Perceval in the U.S. has been extremely successful. Being the only sutureless valve in the market, we’ve had very positive feedback from physicians and patients. As a new generation in aortic valve replacement, the Perceval sutureless valve helps reduce the complexity of the valve replacement procedure while optimizing the speed and efficiency of the operation and enable the minimally invasive approach. Many patients who have had an implant with Perceval are impressed with the valves benefits including shorter procedure time, hospital stays and recovery time. And this is why we are confident in our ability to execute and deliver on our plans to Perceval. We’re also making progress against our operating goals. We are on track with our synergies and managing our operating expenses. We are investing in our highest growth areas and restructuring parts of our business which is resulting in increased efficiency and profitability, all of which is driving sustainable long term growth. In addition, we’ll remain confident in our investment including percutaneous mitral valve replacement. And we have recently made some exciting announcements which are positioning the company for future success and long term sustainability. We are pleased to welcome Damien McDonald to LivaNova as our Chief Operating Officer. Damien will be instrumental in driving product innovation across the company, strengthening our position in the U.S. and expanding in target geographies of billboard. We are also realigning the organization to bring greater focus to our regions with support from our three business franchises, cardiac surgery, CRM and neuromodulation. We are excited about the organization changes we’re implementing. I believe we now have the right structure and leadership to take LivaNova to the next level. With that, operator, we’re ready for questions.

Hi, can you hear me?

Yes, we can Brooks.

Okay, great, thank you and good morning.

Good morning.

Vivid, can I start with just your FX assumption for the second half, are you - looks like you had a little bit more of a tailwinds in Q2, can you talk about the expectation for the second half of the year?

So I think Brooks, obviously we are with some volatility in the market today. But like any global company, we are subject to FX volatility and we do give our guidance to constant currency right now. So we do expect further currency fluctuations at this point but just to make the point that we do have a very selective hedging program which will allow us to mitigate certain risks on the bottom line. So we are monitoring it carefully but obviously FX will move in line without the global companies at this stage.

Sure, but based on - I mean just based on where rates are right now, where about do you see the impact in the second half?

So right now we see potentially some small pressure in the FX for the second half of this year, but within the range that we have for the full year guidance.

Okay, prefect. And then I really appreciate your comments on your confidence in the second half guidance. Let me ask a question just on the AspireSR launch, you are going to facing some increasing tough comps there, is - how should we think about the growth rate attributable to that business, is that something you can maintain in the range has been in the first half of the year or should we think about the growth rate they are slowing a bit in the second half?

Well thanks for the question Brooks. I mean the - you know as we are getting closer to the launch we are actually best that it was in June of last year. The - when the product like this is launched that there are multiple things that happened which are generally not this year, like initial hospital orders, they typically take two units when they are only implant one. For the first implant, they have light back, and then there is the small stocking level when they are starting implanting. So this means that the comparison that we have the back half of the year becomes obviously more difficult. So when you look at the full year projection we have for new modulation which is to be between 9% and 11% growth range that means the second half growth mathematically is going to be lower than the first half. What we believe is really important as well is to look at the new patient growth and we are really pleased that we’ve seen again in the second quarter a double digit patient growth particularly in the U.S. This is really for us the most important metric for long term growth of the business. We have seen a very high level of adoption of AspireSR around 80% again in the U.S. So basically we are confident that although mathematically the growth that would be lower in the second half, we’re confident that AspireSR is giving us very, very good prospects from mid to long term perspective.

Okay, perfect. And I guess one more from me if I could. Just it sounds like the Perceval continues to be a product success for you, can you give us some sense of the scale of that devise versus your surgical tissue and mechanical valves? And your thoughts around Edward’s plan entry into the U.S. market which I believe they said would be in the second half of this year? Thanks so much.

So to be honest, the plans of our competitors, I think we don’t have much comment to make. The only comment I would make if you look at the - what I would call the new technology valves, the only two sutureless valve that is commercial available in the market today in Europe, in many countries and in the U.S. is actually Perceval. So having more new technology valves in the market can help in actually moving from the what I would call the older technology valve, so the traditional valves to the new technology valve are which we believe Perceval is the best product. In terms of what Perceval does, it’s early days in the U.S. but we are really, really pleased with the feedback we are getting from physicians and also we’re pleased with the strategy that we are developing in the U.S. which is more of a focus strategy really very disciplined launch with the wave one with a limited number of hospitals in which we provide the right support and proper share to get them started and we see that these hospitals are starting to use Perceval as the valve of choice for all the aortic patients. And that’s exactly what we are looking forward to doing on a wider scale of moving forward in the U.S. And you have expect that basically the - we now have 32 centers that are trained and effective in the U.S. at the end of the second quarter. We are going to have much more - many more of these centers moving forward. But again, we are going to focus on going deep rather than going wide with Perceval. And the last thing I want to say is that again early days in the U.S. but we have a long term for Perceval which is to achieve $80 million to $100 million in sales for Perceval on a goal basis and we said that the significant portion of that will come from the U.S. And based on the last few months and again early stage for launch of the product, we’ve remained confident we can achieve that goal.

Great, thank you for the comments.

Thank you. Our next question comes from the line of Jason Mills from Canaccord Genuity. Your line is now open.

Thank you, Andre-Michel. Can you hear me okay?

Yeah, Jason, we can hear you. Fine, thank you.

Thank you. Congratulations on a fantastic quarter. I wanted to follow-up on Brooks’ question with the respect to the aortic valve market globally, can you give us any color, your perspective if you will on the dynamics in I guess both of the European as well as the U.S. markets as it relates to TAVI and what you’ve seen in terms of surgical area at valve volumes in the Europe and how that might be a precursor for what we’ll see here in the United States, there are some that believe that TAVI will result in a cannibalization of surgical aortic valve volumes, we don’t tend to share that view. But with love your perspective on that and just anything with respect to pricing and any pressures on pricing that you’ve seen or expect to see going forward or maybe you have some pricing power, just generally about the aortic valve market globally? Thanks.

Alright, Jason. The - probably the best way to answer I mean I can give you two levels, one is the number answer. We believe that the aortic surgical market will continue to grow at low single digit in the foreseeable future. And that’s based on their analysis of the market, the analysis of the what happened in Europe which I believe you are right might be users have precaution for what might happen in the U.S. but the problem with Europe is you know is that there is not one Europe and I am not referring to breaks it but there are many countries in Europe with very different behavior. But if I think the - from a surgical perspective, let’s say the worst case scenario which is Germany and Germany has publically available data on cardiac surgery which are published by the German Society of Cardiothoracic Surgery. And if you look at this date, and you look at the surgical market compared to the TAVI market, you see that the surgical market has been basically flat since the introduction of TAVI. But the number of producers are of - aortic procedure has doubled. So probably what happened in Germany is the TAVI have taken all the growth from the surgical procedures but they’ve not push the surgical procedures down. So as just one date point but based on what we see today and also based on new technology valves like Perceval that are reducing significantly complications, length of hospital stays and therefore that become a pretty significant economic benefit for the hospital. We believe that there is still an opportunity for us particularly in the U.S. to penetrate aggressively with Perceval, the surgical aortic market and drive growth from our perspective by gaining share against the older technology valves that we see in the market. Lastly on the price - sorry Jason.

No, sorry, go ahead.

Okay, on the pricing, we’ve been very discipline with our pricing strategy on Perceval. We believe that this develop that has that brings significant financial benefits and economic benefits to the hospital. Therefore the premium we’re asking for Perceval is a premium that we basically on which we have a very discipline approach and we will continue to maintain a significant premium from a Perceval over traditional surgical valve. And so I must state, has not slowed us down again it’s early days but it has not slowed us down in our ability to penetrate the U.S. market.

It’s very helpful. Thank you, Andre-Michel. On to the next question, just generally about the Cardiac Rhythm Management business, could you help us understand your medium and long term philosophy on that business and how you are managing that to sort of as a mature business or managing that for growth, do you see, could you talk about what the dynamics will be in your business relative to the competition in a market that’s flat to down, how you see this business starting out fairly in the next couple of quarters but over the next couple of years with some of the products that you are seeing some success with especially the one you mentioned this morning Japan, could you talk about how you are managing that business and modeling that business over the next couple of years?

Okay, the short answer is, we see just like you see the market is being very, very challenging, you know just looking at the result that were reported by some of our competitors recently, it’s a tough market out there. And there is absolutely no doubt that this market will remain tough for the foreseeable future. Our expectation in this market is to be able to grow low single digit, 1% to 2% is our current indication for the mid-term growth of this business. Why are we confident, we can do that, well because we have strong holds in this business in Europe and in Japan and we’ve demonstrated in the recent past for incidence the launch of Platinium in Europe that we’re able to grow double digit in a market that basically is flat or sometimes even slightly declining. So we believe still that there is an opportunity for us to grow low single digit in this business moving forward. Again focusing our strength which are Europe and Japan. In the U.S. we have reduced our presence significantly. We might have an opportunity moving forward to look at it again particularly with the new organization we have now with the regions. But we believe that this is a business that we are not managing for growth but we are managing for profits. And what you’ve seen in the last two months when we announced the restructuring of this business because really just an indication of how committed we are driving profit out of this business. And we believe that the times when CRM could be considered as a growth market or not around anymore, maybe will come back but we don’t plan for this, but we are really focusing on improving profitability of the business.

Thank you. One final one and I’ll get back in queue. On the P&L, maybe Vivid talked about the guidance for your tax rate, very clear guidance for the second half of the year, but how that might flow through over the next couple of years, wondering if you could give us an update on what you are seeing on that front now? I’ll jump back in queue. Thanks.

Thanks for the question. So from a tax perspective, we are exactly where we wanted to be at this stage, so in terms of expectations, certainly no surprises. We certainly taken our time to ensure that all the changes that have occurred on a macroeconomic front have been considered and taken into our views. I think we reiterated guidance of 24% to 26%, we will take our time but at this stage, we certainly see some further opportunity on the tax line beyond what we are guiding at this stage. But I think a lot of it will depend on the macroeconomic factors that will play out. But at the moment we do have a long term strategy which we believe are sustainable and nothing has changed we discussed last time.

Okay, thanks.

Thank you. Our next question comes from the line of Scott Bardo from Berenberg. Your line is now open.

Yeah, thanks very much for taking my questions. So first question please, just related to changes in organization, I just wonder if you could talk a little bit more about why you decided to implement those changes, what were the key driving aspects and why the group thought, do you still feel important to have a COO structure with Damien joining, so perhaps a little bit more information as to that process and when that process stated actually will be helpful? Second question related to the share buyback rate, pleased to see you announced a share buyback yesterday, just to really a question surrounding timing of that share buyback obviously announced yesterday but I think the group is yet to announce a capital structure that you are comfortable with. So including that share buyback, where do you think that’s going to take you in terms of leverage next year and how much headroom you think you can comfortably have? Third question from me please, relates to again the heater/cooler business, I appreciate the important restrictions at the moment, I understand we had next year panel discussing this topic which appear to us to relatively good, but I am wonder if you could comment a little bit as to progress on what you need to do to, how those important restrictions believed and the warning letter be tracked? So three and I have a follow-up after that. Thank you.

Thanks Scott. Let me start with the changes in the organization. So first of all we are excited to welcome Damien to the team and he has a great background in great companies so he is going to be a great addition to the executive leadership team overall. As you probably know, we have regional leaders now, they are going to run our regions in the U.S., Europe and rest of the world and the regions will be supported by the franchises in charge of our research and development a and global marketing. We believe that the regional focus will be for us away to be more efficient in sharing resources and in also sharing knowledge around the countries. We believe the lines of decision will be faster because they will be more focused the reality of the day to day life in each of the regions. We also believe that we will be able to leverage better our market access capabilities, we have very strong market access capabilities in some countries that we will well leverage by sharing them across the various franchises rather than just having them focused by franchise basis. And last but not least, we are seeing a changing environment in the market where we have more stakeholders now to deal with than we historically had. So it’s not only although we are specialty device company not only enough to deal with the physicians or with the clinicians, it’s also important to deal with the customer as a whole with the customer as a hospital, as an economic entity. It’s also important that we deal with the reimbursement authorities in the various countries and regions. So this organization makes a lot of sense. In terms of splitting the responsibilities, I mean obviously Damien will be in charge of the day to day operations of the company, driving the innovation throughout the company and global expansion. And you know I’ll focus more on let’s say the overall strategy and also spending more time outside of the company talking to specific clients, the partners, to customers and also taking a lot more to investors and also focusing my time on growth opportunities and some of them we just mentioned during the call, we’re very, very excited about. So we are strengthening our management team. We are bringing new talents and some of them are coming from within the company and are going up through the company. Some others are coming from outside of the company like we just recently announced the Chief Accounting Officer who joined us here in Huston. So we really are pleased with both the organization we have in place now and the talent pool that we have to drive this organization forward. I’ll let Vivid talk on the share buyback and I’ll come back on the heater/cooler.

Thanks Scott, I appreciate your comments on the share buyback program. So just on the share buyback program, we believe very much in the future opportunity that this company and our future performance. Genuinely we believe that stock was currently undervalued and it made a good sense and the use of our strong balance sheet in buying back share at this stage. I think in terms of when we stop, we are currently planning to stop the share buyback in late Q3 and that will the ditto which we’ll follow that that our current stock plan. Because of the capital structure, I think it’s been certainly a structured approach from us in relation to making sure that all our plans, all our synergies are restructuring, our operating margins are heading in the right place and our cash generation meets our confidence, we were on track and we are. So I think what’s important is that I will be announcing the capital structure in the near future and I think we will come out with more details of what that looks like. So but I will say that we are closed about and it won’t take too long for us to provide further detail.

And Scott, I’ll get back to the heater/cooler. So we - there was indeed a panel organized by the FDA to talk about the issues of heater/cooler. What transferred from this meeting which was very well organized and very positive leading to our views is that it’s clearly an industry issue, but it’s clearly not the LivaNova issue that it’s definitely an issue that need to be embraced by the entire industry. And it appeared as well that we LivaNova had a very scientific based approach to this particular issue, find as simple issue but it’s one that requires a very scientific based approach. So we are regularly communicating with the FDA. We are working closely with the FDA to make sure that we provide the best possible product to physicians and clinicians in U.S. and around the world as soon as possible, so there are some technical solution that has to be validated and then reviewed by the FDA. And we are also working in the - with the FDA on the resolution of the warning letter. We said before and we’ll say it again that we believe that the warning letter will not have a material long term impact on the business unit but is definitely on top of our priority list here today and we continue to work very diligently to address the concerns that we are set forth in the warning letter and we are in close contact with the FDA on those issues. But again the two things is, one is it’s an industry and issue and I think that was well established during the panel that we closed to. And second only a science based approach will basically help resolve this difficult issue for the benefits of patients that I think the U.S. and around the world.

Great. Thank you for your comments. And perhaps just one follow-up please. Anything quite a bit of clinical data that’s been presented by the group over the last few months I think and somewhat noticed and I just would be pleased to get some feedback or some views on now that we have the RESPOND trial out, now that we’ve had some of data what that means in your mind in terms of FDA approval and commercial strategy for those two areas. And should we expect any further clinical data particularly from some of the venture programs perhaps mitral this year and if you could help highlight any additional data that one might expect to the reminder of the year? Thank you.

We are pleased with the clinical data that we’ve been able to publish directly, so that’s the respond clinical trial. I am not going to repeat myself but the result are really spectacular when you think about the reduction particularly in hospitalization as two years on sub-groups of patients with atrial fibrillation or renal dysfunction, 50% reduction is really huge. So we are leveraging this obviously to get the FDA approval of the product and but that’s also - these are great data to leverage the continues efforts we’re making in Europe and across the world to penetrate the high-voltage segment with Platinium and SonR is one very important element of our high-voltage strategy. So we believe these results are extremely encouraging and very positive. And we also demonstrate something that we wanted to demonstrate is that LivaNova is able to come back to a large clinical trial which is a landmark trial published in the best scientific newspapers and with our journals with great kind of leaders support. So that was important to us. On the Respicardia, they were published by the company. We’ve seen the results, they are very encouraging. They show a significant reduction in the symptoms of central sleep apnea. As you know the challenge for this device now is that there has been a negative trial by a competing technology that has reported an increased level of mortality for patients in the treatment group, so that means the bar for us to pass is going to higher meaning LivaNova and Respicardia but we are really looking forward also to some of the subgroup analysis that Respicardia should publish in the coming months and we expect that to happen. So it’s very encouraging to earlier, to driven conclusion but every encouraging. Lastly on the mitral valve, you know we have three investments in mitral valve, two in replacement and one is repair. Basically highlights on case on that are developing the treatment the replacement solutions are really encouraging, very interesting technologies, high live is more of transformable and it’s a single access transformable delivery. They have started clinical work as we previously said and 2016 will be a pivotal year for these two investments, very encouraged by the progress. We will basically follow the communication of these companies when they are ready to communicate. We are again very excited about this space. We believe the mitral valve replacement space particularly is going to be an exciting space. We believe that based on what we see we are amongst the pioneers and we have some very, very differentiated technologies there. So excited by the field early days but we believe as we said before, before the end of 2016 we’ll be able to probably, these companies will be able to share early clinical result and we’ll then be able to continue to monitor their progress and make decisions on future investments.

Thank you. Our next question comes from the line of Michele Baldelli from Exane. Your line is now open.

Good morning to everybody. I have two questions. First of all, can you elaborate about your ForEx heading strategy in terms in particular of the Japanese yen, if you can give us any detail about the level that was hedge therefore this year and what has been for next year is there has been already any hedges? Second point is about the gross margins improvement, if you can elaborate a little bit and give more color about what is the contribution of ForEx mix of sales or anyway which kind of division improved more the gross margin? And lastly for the time being if you can also give us a sort of little feeling of how much could be from the inventory statement for the full year which is impacting the gross margin? Thank you.

Good morning. I’ll let Vivid answer these questions. Vivid?

Yes, thanks Michele. Let me start if I can with the question on the FX and the hedging. We have overall - I haven’t get guidance or details on the individual aspects of our hedging strategy but what I have said because it’s an ongoing process that we continue to look at on a monthly basis. But right now we have a very selective hedging program. We actively hedge certain currencies based on our own and partner’s forecast, but we also have very natural hedges that stick with us due to our sales and where our costs head. So right now what we have set is for this year that we expect some FX volatility and that may come from various currencies and we’ll continue to monitor that. So on a bottom line basis, we do believe right now that we have adequate confident to mitigate a lot of the risks that are potentially out there in the macroeconomic environment. In relation to the gross margin, really there are three element to this one, obviously the largest element in that is the mix element. We also have some benefit of equal amounts from both the medical device tax and the synergies and cost improvements. But from an FX perspective, there is very little of any FX upside that is being driven on the gross margin at this stage much of our cost of goods are value that dollars and where dollar denominated currency. So really right now there is very little of any FX that is driving that number. In terms of the inventory statement again, in terms of our gross margin, we are in a position where we gave the adjusted gross margin. For the year if you look at the press releases in the GAAP numbers, we have included for the first half of this year, we called out a $35 million inventory step up. We believe the most of that now has actually sort of been taken by the P&L in relation to the step up and we don’t expect much more if any step up to be hitting the P&L in the second half of this year.

Okay, thank you very much. And just a final point of the business of the new modulation, if you can give us some details about the inflation of the AspireSR in the last quarter of how much of the volumes were already substituted by these new product? And then about what was the volume growth in neuromodulation?

So the - Michele, in terms of the AspireSR, about 80% of our sales in the U.S. are made of AspireSR, so which is you know probably the fastest conversion we have ever seen in this business and that’s these volumes about the kind of value that the patients and physician see about this device. So in terms of let’s say volume growth, we need to think there are two kind of let’s say two moving parts here, one which is the new patient growth and the other part is the replacement business. In terms of the new patient growth, again the second quarter was double digit and we see this as the strong trend for the business, it’s very difficult to predict moving forward, but we believe it is a result of the AspireSR additional benefits to patient that we see more and more patients that are drug resistant that come and have AspireSR implanted. And the second part which is the replacement market, so patients are - at the end of battery life, we see this is as obviously slower growth element but we see trends that are back to our historical trends of replacement growth in particular in the U.S. So again we are confident in our ability to hit the mind to a 11% sales growth this year with really the most important for us factor being the new patient growth that is really the one driving mid to long term growth for this business.

Okay, thank you very much.

Thanks Michele.

Thank you. Our last question comes from the line of Maja Pataki from Kepler Cheuvreux. Your line is now open.

Thank you very much. Actually most of my questions have been answered, maybe just some questions, some answer that could help me understand growth going forward. In the past, you used to give us a breakdown of a different kind of product categories like the tissue valves and the mechanical valves. Now I understand it’s getting more complex to do so, but since we’re seeing relatively negative growth in some of the product categories, could you help us understand how much first of all represents aortic tissue valve or of the overall heart valves business? And then second of all, if we look at Japan and the progress you are seeing that you are making with KORA 250, could you help us understand how much of the market share that you use to have in Japan and then you started to lose, how much of the market share has been actually already recovered and how long do you think it’s going to take you to full recovery if it hasn’t been recovered yet? Thanks.

Thanks Maja. On the - because we are larger company now than both companies were before, we are not maybe splitting some of the subcategories into the details that we used to have separated companies. But what’s in point to see that we believe the trends that we see in mechanical valves are long term trends and we don’t see the facility of turning point for mechanical valves, the market we’ve said before is declining and it’s a global phenomenon. So we don’t expect to turn around point for mechanical valves anytime soon. And second we see that the traditional surgical valve but also when we look at some of our competitors recently announced results. We see that this is a challenging market, because the future is probably for new technology valves particularly for sutureless valve like Perceval. So it’s probably too early to say that when Perceval will become basically the only valve that we’ll sell but it’s really not likely scenario in the long run to see that all aortic valves surgeries will be done with Perceval light valve and we expect that this will continue as the valve itself will see improvements. In the years to come, we believe that this will become the valve of choice for physicians and basically will represent the vast majority of the valve sales that we have in the company.

Just a quick follow-on, what do you think there to assume that Perceval is still representing less than 50% of your tissue valves business?

We don’t get these numbers out Maja, but if you look at our long term goal which is 80 million to 100 million by 2018 and you do the math and if I remember correctly we sold $37 million of valves this quarter. Your math is probably right still, but it is the fastest growing, by far the fastest growing product we have in the valve business. And again if you look at our long term guidance relating 100 million, I think that gives you a good idea where Perceval will sit in the next two years.

Okay, thanks.

In Japan KORA 250 - look, what we said very, very directionally, we said that we had around 20% market share prior to starting to lose share because of the MRI compatibility or the lack of MRI comparable product for us in Japan. And we believe we’ve lost about half of the share that we used to have. So again indicatively you can think about low point having 10%. KORA 100 has helped us get a few percentage points back and we believe that KORA 250 will help us get the rest back. Let’s say indicatively today we have the way through but we believe that in the next 12 to 18 months, we’ve been able to get back to our historical position in Japan with the support of our local partner there and the quality of KORA 250 which is the smallest and only MRI mode product in the market.

Okay, thank you, that’s very helpful.

Thank you.

And I just want to thank everybody for being on the call today. And I appreciate - I know we ran over a little bit, so we appreciate you being with us and have a great day.

Ladies and gentlemen, thank you for participating in today’s conference. This does concludes or program and you may all disconnect. Everyone have a great day.