you alluded to. And we fully expect to see a strong acceleration for our surgical business in the back half of the year.

And then just last for me, Rob, if I can sneak one more in. Appreciate all the context there. I know you won't specifically comment on the strategic alternatives process, but maybe could you just help us contextualize it just a little bit as far as where we are? Is this fresh? Is this brand new? Or is this something we've been working on in the background before announcing it publicly here over the course of the quarter?

Yeah, thanks for that question, Chase. You know, as mentioned, we made the announcement today, given the unsolicited acquisition proposal that we received, along with multiple expressions of interest. And, you know, beyond that, we can't provide a lot of detail beyond what we've already shared. But, you know, I will say we continue to be really excited about our significant progress and about the enormous potential ahead. And we have a lot of confidence that the committee that I mentioned is committed to evaluating the full range of options to maximize shareholder value. So we'll leave it at that for now, and we'll keep you updated on anything that we can as time goes on.

Thank you, Rob.

Thank you.

And again, to ask a question, press star 1 on your telephone keypad. Our next question will come from the line of Larry Solo with CJS Securities. Please go ahead.

Great. Thanks, and good morning, everybody. I guess give us a little more color, Rob, on PRP and PNS. I know it doesn't sound like you're ready to give us any numbers, but it sounds like that 2% of 12 million number, it sounds like you're headed in the right direction there. But maybe just a little color, just on customer reception, just early on, anecdotally, you know, how things are going. And I guess particularly on PRP, I guess it sounds like you're building some capital placements, which will drive more sales, too, in the back half of the year.

Yeah, thanks, Larry. Great question. So, I'll start off with PRP, and we're really encouraged by what we saw in Q2, including velocity of new customers, accelerated capital placements, which you mentioned there, both an acceleration and an increase in the size of our reorders, all of which further validated the market opportunity in front of us with our differentiated technology. And I'll also point out that we're really starting to leverage our established HA commercial team from PRP in a very synergistic way. And that not only makes this a good profitability driver for Bioventus, but I think it's also important to highlight that HA is helping us win PRP, and PRP is now helping us win new HA business. So it's very exciting, and we're looking forward to turning this business into a strong growth driver for Bioventus. in the back half of this year and beyond. I'll touch on P&S briefly, too, since you mentioned it. We're really excited about what we saw in P&S in Q2 as well. It included an expansion of our P&S team, an acceleration of new customers and new trials, and a great conversion rate to new implants. And we're receiving really positive feedback from the market. And, you know, when it comes to P&S, look, it's roughly a $200 million market today. could reach $500 million over the next handful of years, and we're confident that our highly differentiated technology and our go-to-market strategy positions us very well to scale this business to over $100 million. As to the other part of your question, yeah, as expected, still tracking towards the 200 basis points for this year. So, again, really looking forward to the back half for both PRP and P&S and the years beyond.

And if I could just follow up a question from Mark. Sales growth, 5%. You mentioned 5% in the first half, and EBITDA actually grew 12%, which showed some margin expansion. Curious, I know when we started the year with the investments, enhanced investments into the business, we thought EBITDA would be roughly flat-ish on the margin basis. Is that still your assumption? Because I think sales growth you mentioned was a little bit less than expected, but you still had some nice margin expansion there. Any thoughts on that we look into the back half. Thanks.

Yeah, thanks for the question. I feel really good about the control we have with our P&L and the pure leading gross margins that we have. Overall, our expectations, as we mentioned in our prepared remarks, are pretty consistent with what we've communicated for the full year around the 20%. 2Q EBITDA margin was 23%, so it's just a reflection of the powerful P&L that we have and the ability to control it. But, you know, with those really strong performance numbers, we are continuing to invest in our growth drivers. As we mentioned in the beginning of the year, you know, we had highlighted $13 million of investment. It's actually going to be a little bit more than that as we go into the back half of the year. You know, P&S will get the majority of those drivers because of, you know, how Rob just articulated the confidence that we have in that product and our ability to be successful there. So, we'll continue to invest in the second half. There'll be more investments into the second half than there was in the first half, and I'm very confident about, you know, the team's ability to provide a return on investment for those.

Great. I appreciate it.

Our next question will come from the line of Caitlin Roberts with Canaccord Genuity. Please go ahead.

Hi. Thanks so much for taking the question. I think just starting with Exogen, maybe a little bit more color on the change in customer mix and, you know, any more color that you guys have on the CMS pricing reversal and how that shifts into your expectations.

Sure, Caitlin. This is Rob. I'll provide you with some insights on that. First, you know, we saw a volume grow in the quarter. We saw a shift for the quarter in the customer-payer mix with fewer Medicare orders. And so a little bit lighter quarter, but teams on top of it doing a nice job of growing volume and still see Exogen growing low to mid-single digits in the back half of the year while, as you know, driving great profit and cash flow for the company. On the CMS part of your question, you know, while it was – when it was initially announced, We communicated that it was not a material change. So we're pleased to see the reversal, and we don't see that as a material change either.

Great. And then just on the P&S portfolio and potential data generation, are you thinking about data generation going forward and have, you know, surgeons in the early days been focusing on that as a point for you guys to work on?

Yeah, thanks. And just to clarify, I think what you're referring to is the evidence generation. And, yeah, it's been a part of our plan, and we continue to pursue that just to further augment our differentiation in the space. What we're seeing initially in the market is a very strong reception to our technology, given its differentiation. But it's natural for us to continue to develop evidence just to further augment that differentiation.

Wonderful. Thanks so much.

Thank you, Caitlin.

And once again, for any questions, press star 1 on your telephone keypad, and our next question will come from the line of Michael Patuski with Barrington Research. Please go ahead.

Hey, good morning. And I apologize in advance because I've missed part of this call, having three calls. EGS, did you guys walk away from some business in the quarter? And if so, did you quantify it?

Yeah, thanks. I'll touch on it, Mike. We mentioned it a little bit earlier, but for BGS, constantly managing our business with operating discipline to drive that profitable growth. And, you know, to your question, that's why we highlighted that we took some proactive actions in the channel during the second quarter that had a temporary impact on our business. And I also pointed out earlier that while that was the case, we also saw a very positive attraction with BGS with new account acquisitions and early penetration with accounts that we recently won. And so those give us a clear line of sight to acceleration in the back half. So sorry for the others. A little bit of repeat there, but that's what took place in BGS in the second quarter, Michael.

So, Rob, can I just try to press on that a little bit? You did quantify the impact of the shift in ultrasonics. I mean, would you be willing to quantify how much business maybe you decided to jettison there in BGF?

Yeah, I don't think we'll get into the details on it, Mike. But it was, you know, significant enough for us to call it out as, you know, again, positive traction with our leading indicators. but that's why we made a point of mentioning that we took those actions in the quarter consciously and proactively. But I want to really emphasize that the focus there was just the driving of profitable growth, the same operating discipline that you've seen us take in other businesses, like HA, where we mentioned that end of last year and this year as well, transparent about our efforts to constantly play the long game and make sure that we have that operating discipline to drive really healthy, profitable growth. So that's why we highlighted it for the quarter.

Okay. And again, apologize in advance if you cover this in the first five, seven minutes of the call. But I'm just curious, on the strategic review, to the extent you can, And I'm just curious, has the PNS asset and what you guys have sort of been able to do there in terms of the regulatory approvals in the very early days, has that been a significant factor, do you believe, in the current strategic review?

Yeah, thanks for the question. So we touched on it briefly before you were able to join, and so I won't go over those details again. I think to your specific question, look, we have a really strong business overall. We've made a ton of progress, and we have enormous potential ahead. You know, I'd say we, you know, overall we have strength, we have momentum, and we have potential. And it's natural that that gets attention from others. P&S is a really exciting part of the portfolio, and, of course, there's high valuation of the P&S space overall in the market, but we're also getting a lot of positive feedback from the market about our overall business. When you look at year-to-date, you know, what Mark mentioned earlier, 5% growth overall just for this year, 12% EBITDA, 24% in EPS growth, debt pay down at $46 million, now lower than 2x leverage with line-of-sight to 1.5%. And so, again, just tremendous strength, momentum, and potential. And, of course, what we're building in P&S is a really exciting part of the overall company.

All right. Thanks, guys. Appreciate it.

Thank you.

And that concludes the question and answer session. I'll hand the call back over to Rob Claypool for any closing comments.

Thanks, everyone, for your interest in BioVentus. Once again, we delivered solid results in the second quarter and are confident in our ability to deliver above-market revenue growth, increase earnings, and accelerate cash flow to create significant shareholder value.

This concludes today's call. Thank you all for joining. You may now disconnect.