Executive Highlights
- A US launch of FreeStyle Libre consumer is now expected in the “second half of 2017,” back 2-3 quarters from the previously ambitious 1Q17 expectation (shared last July). In Q&A, Mr. White added that Abbott has filed BOTH an adjunctive and a replacement claim for the device with the FDA – a smart hedge to get to market faster.
- There are now “more than 250,000 patients” using FreeStyle Libre in Europe – up ~25% from the estimate of 200,000+ shared one quarter ago in 3Q16, and double the number shared just six months ago. EU Libre sales back out to ~$90 million if all patients are using two sensors per month (~120 euros per month) – we estimate sales are probably closer to $75-$90 million in light of samples, not all using two per month, discounts, etc.
- Abbott’s Global Diabetes Care sales totaled $310 million in 4Q16, rising 4% as reported and a strong 6% operationally year-over-year (YOY). The international business drove the performance, with revenue of $223 million up an impressive 16% operationally on the strength of FreeStyle Libre. US sales, as expected, plummeted 14% YOY to $87 million. Full year 2016 revenue totaled $1.1 billion, growing 4% operationally YOY thanks to international Libre sales strength. Management projects an acceleration to double-digit growth for both 1Q17 and 2017, a very strong vote of confidence in the business.
Early this morning, Abbott CEO Mr. Miles White led the company’s 4Q16 financial update, sharing very positive news for the diabetes business. Below, we bring you our top financial and pipeline highlights from the call followed by Q&A.
Pipeline Highlights
1. A US launch of FreeStyle Libre consumer version is now expected in the “second half of 2017,” back 2-3 quarters from the previously ambitious 1Q17 launch timing. In new news, Abbott is pursuing both an adjunctive claim and a replacement claim from FDA in parallel – this is very smart in our view to hedge regulatory uncertainty and hopefully speeding time to market. Libre consumer was submitted (both claims) to FDA in 3Q16.
2. There are now “over 250,000” patients using FreeStyle Libre in Europe, an ~25% increase from the 200,000+ EU patients using the system as of 3Q16, and twice the number indicated just two quarters ago. This is serious momentum, and the combination of factory calibration, a lower price point, easy online ordering (no prescription), and a better on-body factor is very strong in the EU. Will it translate to the US? How will Abbott come to market stateside?
3. FreeStyle Libre Pro (launched in US in 3Q16) was only briefly mentioned on the call, but was positioned as a “revolutionary professional continuous glucose monitoring system” on the infographic. We were hoping for an update on how the launch of the retrospective (blinded), 14-day wear, factory calibrated sensor and HCP-owned reader device has gone – How many readers and sensors sold? In how many practices? Have any issues arisen? We assume this launch will go much slower than a consumer launch, since it is HCP-driven and will require sales force-HCP education.
4. There are a number of FreeStyle Libre studies on ClinicalTrials.gov, including a 1,000-patient observational quality of life study in Belgium (investigator-initiated), a 100-patient quality of life study in type 2s (investigator-initiated), a completed Abbott-sponsored trial in 83 pregnant women, and a 76-patient Abbott-sponsored pediatric glycemic control (time-in-range) study. In addition, we look forward to an Abbott-sponsored symposium at ATTD 2017 (agenda), which promises real-world data and experiences from respected clinicians.
Financial Highlights
5. Abbott’s Global Diabetes Care business had a strong quarter on international Libre momentum, with revenue of $310 million growing 4% as reported and 6% operationally year-over-year (YOY). This missed 4Q16 guidance for double-digit growth, clearly driven by US weakness (see below). For 2016, global Diabetes Care sales totaled $1.1 billion, growing 2% as reported and 4% operationally YOY. Management projects an acceleration to double-digit growth for both 1Q17 and 2017, a strong vote of confidence.
6. International Diabetes Care revenue totaled $223 million in 4Q16, growing an impressive 14% as reported and 16% operationally YOY. As expected, FreeStyle Libre drove the quarter’s success, touted by Mr. White for its convenience, ease of use, and affordability. For 2016, International Diabetes Care rose 13% as reported and 16% operationally to reach $817 million. The reported international revenue marks the highest annual total in five years, no doubt attributable to the remarkable growth of the Libre user base and strong retention. EU Libre sales back out to ~$90 million if all patients are using two sensors per month (~120 euros per month) – presumably it is less due to samples, etc., but that’s still in the ballpark of 1/3 of international sales already.
7. US Diabetes Care sales declined 14% YOY for 4Q16, totaling $87 million in 4Q16. This came on a very easy comparison to 4Q15 (when sales fell 7% YOY) and now marks 15 of the past 16 quarters with US sales declines. For the full year, US Diabetes Care sales fell 18% YOY to reach just $325 million. Perhaps Abbott is pulling back on the US BGM sales side of the business as it plans to release Libre consumer, but perhaps the market is also just this challenging. We’re not sure how the Libre Pro launch is going in the US, but it’s clear the investment in Libre will continue to pay off.
Pooled J&J and Abbott Financial Highlights
8. Pooled global revenue for 2016 for J&J and Abbott reached ~$772 million, falling 1% YOY relative to 4Q15 on an easy comparison (-6% one year ago). US weakness drove the pooled declines in 4Q16, with combined sales of ~$278 million down 8%, whereas pooled international sales of ~$494 million grew 4% YOY (solely from Abbott).
- Executive Highlights
- Pipeline Highlights
- Financial Highlights
- 5. Global Diabetes Revenue Up 4% YOY; Double Digit Growth Projected for 1Q17 and FY17
- Figure 1: Global, US, and International Quarterly Sales (1Q12-4Q16)
- 6. Another Strong International Quarter: Libre Drives 14% Growth
- 7. Us Diabetes Care Struggles, Declining 14% YOY against Easy Comparison; 2016 US Sales Fall 18% YOY
- Pooled Abbott and J&J Financial Highlights
- Questions and Answers
Pipeline Highlights
1. FreeStyle Libre US Launch Pushed to 2H17; filed with FDA for both adjunctive and replacement claims
A US launch of FreeStyle Libre consumer version is now expected in the “second half of 2017,” back from the previously ambitious 1Q17. In new news, Abbott is pursuing BOTH an adjunctive claim and a replacement claim from FDA in parallel – this has been a major question mark and having both under consideration should get it to the US market faster. We felt the 1Q17 approval timing shared in 2Q16’s call was highly ambitious, given that the product had not been submitted at that time, the Pro version took >14 months, and the consumer version adds real-time data. Mr. White is always enthusiastic about Libre, but it was clear back then – and now – that the 1Q17 timing was overly ambitious. Still, we think the decision to submit with both an adjunctive and non-adjunctive claim is very smart, since there is a lot of regulatory uncertainty here (see below) – having both in the hopper hedges against any snags. Of course, Abbott also had FDA challenges getting non-adjunctive labeling approved for Navigator, making the joint submission even more important.
- Can Libre obtain a replacement claim? There are good arguments on both sides. Relative to Dexcom, Abbott’s FreeStyle Libre has the major added advantage of factory calibration (no accuracy noise from fingersticks), not to mention two large RCTs in IMPACT and REPLACE (showing patients stop taking fingersticks on Libre) and 250,000+ users-worth of real-world data in Europe alone. On the other hand, (i) FreeStyle Libre has lower point accuracy than G5, particularly in hypoglycemia; (ii) FreeStyle Libre does not have hypoglycemia alarms (which Dexcom used as a safety argument at July’s FDA Advisory Committee meeting); and (iii) it took Dexcom ~2 years to get this approved with the best FDA relationship in the field. As a reminder, Dexcom G5 became the first CGM to receive a non-adjunctive FDA label claim in December, and “therapeutic CGMs” (approved for insulin dosing) received a benefit category from Medicare less than a month later.
- Ultimately, a dosing claim is nice for marketing and essential for Medicare coverage, but patients will dose insulin off of the factory-calibrated Libre sensor anyways. After ~2 years of discussion with FDA, Dexcom has already started marketing the dosing claim, and it does make for a compelling CGM sales pitch (something Abbott showed very clearly with Libre when it launched in Europe). However, we firmly believe Abbott’s pricing and go-to-market approach may be even more critical than the labeling – will Libre consumer be super low hassle to purchase in the US? Will it be cheaper than CGM covered by insurance? We believe Libre consumer will require a prescription, meaning it won’t be quiet as easy to get as it is in Europe (online order with just a credit card). Still if the pricing remains the same or lower, and patients won’t have to deal with insurance, the value proposition grows.
- Mr. White remains very enthusiastic about bringing Libre stateside: “I think the potential for the U.S. is extraordinary, and I think not only is the product itself an extraordinary product, but I think its value proposition is unparalleled.”
- When asked about the label specifics, Mr. White replied: “I have to say to be honest that the FDA shifted sand on us a couple times here, and so consequently, we're seeking both claims…At this point, I clearly can't predict what the FDA's timelines and so forth are going to be here. But we're upbeat about the potential for it.” This is probably a challenging case for the FDA device division to review – would it approve an adjunctive claim for a factory-calibrated product, knowing full well patients won’t confirm their doses with a fingerstick? The claim will rest on the data Abbott has submitted, its relationship with the FDA, and whether Libre meets the bar for a non-adjunctive sensor. We wonder if the Agency initially gave Abbott one evaluation of the Libre’s chances and then changed course, perhaps related to Dexcom’s approval.
2. Over 250,000 Libre Users in EU, Up From 200,000 in 3Q16
There are “over 250,000” patients using FreeStyle Libre in Europe now, a remarkable ~25% increase from the 200,000+ EU patients using the system as of 3Q16, and twice the number indicated just two quarters ago. Wow! This impressive adoption has been achieved in just over two years on the EU market and with a patient-driven cash-pay business model – and Europeans are not used to paying out of pocket for diabetes supplies. For a rough comparison, this EU-alone user base is ~25% larger than Dexcom’s global installed base, which totaled roughly ~200,000 patients as of JPM 2017. We estimate that Dexcom added 80,000-90,000 new patients in 2016, while Abbott added 125,000 in Europe in the second half of the year alone (assuming Mr. White’s comments were accurate). Of course, it is hard to compare these numbers, as counting a “user” is actually quite nuanced. Each product has tremendous runway for expansion, given the number of type 1s and type 2s not at goal.
- CEO Mr. Miles White reiterated his cost-effectiveness argument for Libre in Q&A: “I think that the performance of the product thus far ex-U.S., Europe and other countries, has been frankly excellent…I think the reason we've been able to get reimbursement in Europe and drive uptake as much as we have owes to the fact that governments there recognize the value proposition and the product has not only impact for patients but impact on the costs in the health care system.”
- Will Libre’s EU adoption continue to ramp at this impressive trajectory? There are a few interesting competitive forces swirling in Europe: a positive CGM reimbursement decision in Germany (FreeStyle Libre is not included, though it does have regional reimbursement in Germany, as far as we know); Medtronic’s upcoming standalone Guardian Connect mobile CGM (its first CGM offering for MDIs, launching in May-October); and Dexcom opening its EU headquarters in Edinburgh in November. The market is more than large enough for three companies (and beyond) to excel in Europe and beyond, though it is certainly getting more competitive.
3. No Updates on FreeStyle Libre Pro in US Following September Launch
FreeStyle Libre Pro (launched in US in 3Q16) was only briefly mentioned on the call, but was positioned as a “revolutionary professional continuous glucose monitoring system” on the infographic. We were hoping for an update on how the launch of the retrospective (blinded), 14-day wear, factory calibrated sensor and HCP-owned reader device has gone – How many readers and sensors sold? In how many practices? Have any issues arisen? As a reminder, the fully disposable sensors cost only $60 each, and each reader device, which is compatible with multiple sensors such that a practice only needs one, costs just $65. Providers can order directly online, and current CPT codes for professional CGM more than cover the cost for HCPs (see pictures below). See our September report for a deeper dive into the product and view Abbott’s updated website here.
4. FreeStyle Libre Trials on Clinicaltrials.gov
There are a number of FreeStyle Libre studies on ClinicalTrials.gov, including a 1,000-patient observational quality of life study in Belgium (investigator-initiated), a 100-patient quality of life study in type 2s (investigator-initiated), a completed Abbott-sponsored trial in 83 pregnant women, and a 76-patient Abbott-sponsored pediatric glycemic control (time-in-range) study. See the table below for an overview, which only includes studies in ClinicalTrials.gov when searching “FreeStyle Libre.” In addition, we look forward to an Abbott-sponsored symposium at ATTD 2017 (agenda), which promises real-world data and experiences from respected clinicians.
Trial |
Trial Population |
Primary Outcome(s) |
Status |
Flash Glucose Monitoring Study for Diabetes (FUTURE) |
1000 patients (ages 18+) using FGM after entering in the new diabetes reimbursement program in Belgium |
Quality of life |
Recruiting participants |
Effect on QOL in Type 2 Diabetes Patients (Clinicaltrials.gov Identifier: NCT02809365)
|
100 type 2 diabetes patients (ages 30-80) treated with MDI (≥2 injections/day); A1c between 7.5% and 10% |
Treatment satisfaction as measured by DTSQ (Diabetes Treatment Satisfaction Questionnaire) |
Not yet open for recruitment |
Accuracy study investigating FreeStyle Libre in pregnant women with type 1, type 2, or gestational diabetes (ClinicalTrials.gov Identifier: NCT02665455). |
83 pregnant women (age 18+) with type 1, type 2, or gestational diabetes |
Point accuracy judged using the Clarke Error Grid |
Complete; no results posted yet |
SELFY is comparing the efficacy of FreeStyle Libre vs. SMBG in self-management of diabetes |
76 type 1 patients ages 4-17 |
Time in range |
Ongoing; completion slated for February 2017. |
An evaluation of the FreeStyle FGM system (Clinicaltrials.gov Identifier: NCT02824549) |
50 children (ages 4-18) with type 1 diabetes |
Usability of the system |
Not yet open for recruitment |
An accuracy study of FreeStyle Libre in type 1 patients in the UK (Clinicaltrials.gov Identifier: NCT02734745) |
24 adults with type 1 diabetes |
Accuracy – MARD vs. YSI during CRC visit and vs. glucometer during home setting
|
Recruiting participants |
Financial Highlights
5. Global Diabetes Revenue Up 4% YOY; Double Digit Growth Projected for 1Q17 and FY17
Abbott’s Global Diabetes Care business had a strong quarter, with revenue of $310 million growing 4% as reported and 6% operationally year-over-year (YOY). The performance came against an easy comparison to a 5% sales decline YOY in 4Q15, but surprisingly underperformed relative to guidance calling for double-digit growth this quarter (entirely US driven). Worldwide sales grew 1% sequentially from 3Q16. The US and international businesses continue to head in opposite directions, with a challenging BGM environment in the US and strong FreeStyle Libre sales in Europe.
- Despite falling short of 4Q16 guidance, management projects an acceleration to double digit growth for both 1Q17 and full-year 2017. Can European Libre sales overcome the struggling US BGM business? Will US Libre uptake be as significant as EU uptake once launched? In 3Q16, Mr. White forecasted “pretty heavy double-digit growth out of Libre for the foreseeable future.”
- For the full year, global Diabetes Care sales totaled $1.1 billion, growing 2% as reported and 4% operationally YOY. The performance came against a neutral comparison as sales grew 3% for the full year 2015. For perspective, the business peaked in 2011 when sales reached $1.4 billion on the strength of international sales.
- In response to a question on J&J’s Diabetes Care announcement yesterday (exploring sale or partnering), Mr. White said that Abbott is in a unique position relative to competitors: “I think that [Libre] puts us in a unique position to see a transformation of that market and benefit from it, if not lead it. And others don't have that, and I think that the competition in what I'll call the traditional part of the market and the commodity nature of it, the economics of it have clearly changed negatively in the past couple of years. Ironically, J&J kind of led that and in our case, we've got a different position with Libre that I think that gives us a unique platform to benefit as one of the disruptors.” We agree, and even see the J&J news as potential positive for Abbott, reiterating that sensors are increasingly moving to standard of care.
Figure 1: Global, US, and International Quarterly Sales (1Q12-4Q16)
FIGURE 2: GLOBAL, US, INTERNATIONAL ANNUAL SALES (2003 – 2016)
6. Another Strong International Quarter: Libre Drives 14% Growth
International Diabetes Care revenue totaled $223 million, growing 14% as reported and 16% operationally YOY. As expected, FreeStyle Libre drove the quarter’s success, touted by Mr. White for its convenience, ease of use, and affordability. Notably, the growth came on a difficult comparison to 4Q15 (when sales grew 8% operationally), and the international sales were the highest ever recorded in our model (which goes back over a decade). This also marks the seventh consecutive quarter of operational improvement, a clear alignment with the initial EU launch of Libre nine quarters ago. Sales also grew 6% sequentially from a strong 3Q16 ($210 million). We wonder how much growth is now driven by new users vs. existing users – the base is so large that in any quarter, current users drive most revenue. This year will also see more difficult comparisons to 2016, so we’ll be interested to see if that continues.
- EU Libre sales ballpark to ~$90 million if all 250,000+ patients are using two sensors per month (~60 euros per 14-day sensor). This is up from the estimated ~$72 million generated from the 200,000+ using Libre in 3Q16, and the ~$45 million generated from the 125,000+ users in 2Q16. Revenue would obviously be lower if many use Libre intermittently, or the 250,000+ users includes those who tried it and stopped using it. In a more conservative case of one 14-day sensor per month, revenue would be ~$45 million. If the larger number is true, this is a striking ~40% of international sales already (up from ~20% and ~33% in 2Q16 and 3Q16, respectively, not including the readers or sales in other countries outside of Europe). Abbott did not report specific sales for FreeStyle Libre, so this is our estimate.
- For the full year, International Diabetes Care rose 13% as reported and 16% operationally to reach $817 million. This came against a difficult comparison, as sales grew 6% operationally in the full year of 2015. The reported revenue marks the highest annual total in five years, no doubt attributable to the remarkable growth of the Libre user base.
7. Us Diabetes Care Struggles, Declining 14% YOY against Easy Comparison; 2016 US Sales Fall 18% YOY
US Diabetes Care sales declined 14% YOY, totaling $87 million in 4Q16. This came on a very easy comparison to 4Q15 (when sales fell 7% YOY) and now marks 15 of the past 16 quarters with US sales declines (1Q15 was the lone exception, and it was against a very easy comparison). Six of the past seven quarters have seen US sales under $100 million, and the quarter saw a 9% sequential decline from 3Q16 – the first sequential decline following two quarters of growth. Perhaps Abbott is pulling back on the US BGM sales side of the business as it plans to release Libre consumer, and/or this simply reflects the challenges in the US market. Mr. White said in Q&A: “We see a growing business that, as we replace the traditional fingerstick business, not only ours but others, I think there's a real growth opportunity and a very valuable one.” We love that Abbott is willing to cannibalize its own traditional BGM business – this is something very innovative companies do, but is not easy for a company of Abbott’s size.
- For the full year, US Diabetes Care sales fell a whopping 18% YOY to reach just $325 million. The business has seen negative growth each of the past three years (including staggering sales decline of 22% in 2014), and clearly pricing pressures continue unabated. This marks, by far, the lowest full year total in the past decade, and is just over half that of the revenue amassed in 2008 at the segment’s peak ($559 million).
Pooled Abbott and J&J Financial Highlights
8. Pooled J&J and Abbott Revenue Falls 1% YOY to $772M – US Drives Weakness, with AbbotT Carrying Int’l Sales to 4% YOY Growth
Pooled global revenue for J&J and Abbott reached ~$772 million, falling 1% YOY relative to pooled revenue in 4Q15. This came against an easy comparison as combined revenue declined 6% YOY a year ago. As with last quarter, it was a tale of two companies: J&J saw a 4% reported YOY drop vs. Abbott’s 4% reported YOY growth.
- US weakness drove the pooled declines in 4Q16, with combined sales of ~$278 million down 8% YOY against an easy comparison to pooled sales in 4Q15 (when sales also fell 4%). It was a tough quarter for both companies, but, Abbott’s quarter was responsible for a larger share of the decline: sales dropped 14% YOY relative to Abbott’s 5% decline. Pooled sales fell 3% sequentially from $287 million in 3Q16.
- Pooled international sales of ~$494 million grew 4% YOY in 4Q16 against an easy comparison to pooled revenue in 4Q15 (down 8% YOY). Abbott drove the gains with 16% operational growth vs. J&J’s 1% YOY decline. Abbott is uniquely positioned to excel with FreeStyle Libre, and we’ll be interested to see what innovation J&J and Roche bring to the challenging BGM and pump markets. J&J has a number of pipeline products launching this year (OneTouch Via, WellDoc/Verio) or coming soon (Animas G5, automated insulin delivery), but it’s hard to know where the business will go, given the sale/partnership considerations announced yesterday. Roche has a next-gen BGM launching in the US this year (Guide), and has presumably begun a controlled launch of its Accu-Chek Insight CGM in Europe (based on previous guidance). CGM is a good bet, but can Roche compete with Dexcom, Abbott’s FreeStyle Libre, and Medtronic?
- As a reminder, direct BGM comparisons between Abbott and J&J are impossible because each company’s Diabetes Care business includes a fraction of non-BGM revenue that is not reported. J&J has Animas insulin delivery and Abbott has continuous sensors (Navigator II, Libre) outside of the US. If Mr. White’s hopes of Libre “overtaking” the BGM business come to fruition (we assume they will eventually), then it will no longer even be appropriate to consider Abbott as one of the “Big Three” BGM companies! [Please let us know how you would like to see this market modeled going forward –would you like estimated total CGM market sales to include FreeStyle Libre?]
Questions and Answers
Q: Libre is off to a clearly brilliant start in Europe, and you said I think second half 2017 filing in the US. How do we think about growth from here, and what kind of label you're hoping for to drive US adoption of the technology?
Miles: Well, it's already filed, but it's, you know, I have to say to be honest that the FDA shifted sand on us a couple times here, and so consequently, we're seeking both claims, replacement claim and adjunctive claim. We're going parallel path on this. And I think that the performance of the product thus far ex-U.S., Europe and other countries, has been frankly excellent and does have replacement plan and so forth.
I think the potential for the US is extraordinary, and I think not only is the product itself an extraordinary product, but I think its value proposition is unparalleled. I think the reason we've been able to get reimbursement in Europe and drive uptake as much as we have owes to the fact that governments there recognize the value proposition and the product has not only impact for patients, but impact on the costs in the health care system.
So I'd say at this point, I clearly can't predict what the FDA's timelines and so forth are going to be here. But we're upbeat about the potential for it.
Q: I think given what happened earlier this week it's pretty interesting, the two best consumer oriented device companies are probably yourselves and J&J and they're buying one of your consumer base franchises, but they announced they want to get out of their other consumer diabetes franchise. Can you just talk about how you see the diabetes franchise going forward, and why you think that's the right consumer franchise for Abbott to stay in versus Ophthalmology where you made a different decision.
Miles: I would say we are in a unique position relative to a lot of the traditional competitors in this space in diabetic glucose monitoring. In the past, there were four major competitors there, and there's always a lot of other smaller ones. It's been a finger prick and a little chip business, and we have a unique position here with Libre, that is a completely different product that eliminates the need for that fingerstick, and gives a continuous glucose read that's frankly impactful for the patient, both type 2 and type 1 in a very different way. And I think that puts us in a unique position to see a transformation of that market and benefit from it, if not lead it. And others don't have that, and I think that the competition in what I'll call the traditional part of the market and the commodity nature of it, the economics of it have clearly changed negatively in the past couple of years. Ironically, J&J kind of led that, and in our case, we've got a different position with Libre that I think gives us a unique platform to benefit as one of the disruptors and going forward, I believe that platform has possible utility for us in other testing segments. So in our case, we see a growing business that, as we replace the traditional fingerstick business, not only ours but others, I think there's an opportunity there that's a real growth opportunity and a very valuable one.
Q: Obviously we are witnessing what could be dramatic political policy changes in Washington. If I was convinced, it seems like a lot could have potentially positive impacts on Abbott, but some worrisome things as well. Hospital capital, spending uncertainty, post ACA changes – especially with some of the trade agreement changes. It's hard again to resist asking you how are you thinking about some of these issues. Are you concerned that this is all going to be a net plus or negative? How are you adopting, etc., especially given your significant international exposure?
Miles: Yes, it's hard to speculate. I'd say in general I'm optimistic, and I say that for a number of reasons. Some of the things that have been talked about won't necessarily directly affect us. They may affect a number of multinationals obviously. Our new administration is pro-business but there's a lot of moving parts in that as you know. The things I look for that may affect us – I think early on we are all waiting to see if there's a tax reform package that would allow us the ability to access overseas cash and repatriate cash, etc. I think that would make a big difference for a lot of multinationals.
I don't really expect to see any changes in the Affordable Care Act directly affect us as much as I think they will affect other segments of the healthcare industry or business. And I think a lot of the effort will be pointed out other segments more than the spaces we are in. At least as far as that is impacted, we're primarily a diagnostic device company in the United States so I think to some degree some of that impact could be favorable for us.
The other things I watch going forward is policies that affect strong dollar, weak dollar, strength of currencies and so on because we are so geographically diverse internationally. I think one of the benefits, it's not the primary benefit, but one of the benefits of the St. Jude acquisition is it does spread and balance us into developed market currencies a little better more than we have been. And in general I'd like to see stability in the currency market for us relative to the dollar which has been a headwind for us for at least four years now. I think that will affect all multinationals.
-- by Brian Levine, Adam Brown, and Kelly Close