This slide provides an overview of our current product portfolio which extends across tissue processing, medical devices and surgical sealants and hemostats. We have market leading products, deep clinical and R&D expertise and strong operational experience in each of these areas. We have strategically build our business around these complimentary product lines with the goal of driving growth in the lower two circles and also building out our product offering in these categories through business development.We also are working to expand the market opportunity for existing products and services, such as those offered by Cardiogenesis and PerClot by investing in clinical trials to gain incremental geographic or indication approval. Over the past 18 months, we have been on an aggressive campaign to identify and buy undervalued or underfinanced products or companies that are focused on cardiac and vascular reconstruction. We are particularly interested in products that address complex cardiac and vascular repair. We are interested in products or companies that have high gross margins and expensive market opportunities. We are also very interested in leveraging our worldwide distribution network that is focused on cardiovascular and vascular reconstructions specialist. A criteria for this includes innovative products and technologies that will accelerate our top line growth with a focus on cardiac and vascular surgery, products or technologies that we can integrate into our global sales force and achieve leverage with our commercial and clinical infrastructure and above all transactions that have a clear path to shareholder value. Internally, we are also focused on growth primarily through investments and R&D, expanding the market opportunities for our existing products and continuing to position CryoLife as a leader in each of these product areas. This slide outlines the company’s business development activity over the past 18 months. Each of these milestones has advanced our growth strategy and has given us access to market leading or potential market leading products in some expensive markets. The Starch Medical transaction gives us worldwide rights to a second generation hemostatic agent PerClot, that we believe has tremendous potential and will carry gross margins north of 80%.
The launch of BioGlue in Japan expands the products market potential and sales there have exceeded our prelaunch expectations. PerClot and BioGlue give us the opportunity to sell these two broad products together in European markets and we are doing so successfully. Cardiogenesis was a significant transaction with great potential for incremental revenue growth through leveraging our global sales channels. Cardiogenesis fits perfectly into the company’s strategy to focus on products that are involved with complex cardiac reconstruction.The ValveXchange transaction gives us an equity stake and right to acquire a novel potential life time heart valve replacement platform that is highly complementary to our cardiac and tissue processing business. We estimate the prosthetic heart valve market to be 800 million worldwide. CryoLife’s existing market opportunity which includes BioGlue in the U.S., Europe and Japan; Cardiogenesis in the U.S. and Europe; BioFoam and PerClot in Europe; and our domestic allograft tissue business is currently about $1.1 billion. Over the next four years, these existing opportunities are expected to expand to $1.5 billion and we are well positioned to gain market share in several of these areas as our growth initiatives come to fruition. One of CryoLife’s advantages in the market is our sales force, we currently have 50 sales reps in the United States that are focused on cardiac and vascular surgery markets, including the addition of 8 reps from the Cardiogenesis acquisition. We have relationships with more than a 1000 cardiac and vascular surgeons providing excellent coverage and the opportunity to cross-train our reps across product lines to further maximize their productivity. Read the rest of this transcript for free on seekingalpha.com