AngioDynamics, Inc.

Good morning and welcome to the NGO Dynamics fiscal year 2022 first quarter earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the call, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. The news release detailing the fiscal 2022 first quarter results crossed the wire earlier this morning and is available on the company's website. This conference call is also being broadcast live over the internet at the investor section of the company's website at www.angiodynamics.com. And the webcast replay of the call will be available at the same site approximately one hour after the end of today's call. Before we begin, I'd like to caution listeners that during the course of this conference call, the company will make projections or forward-looking statements regarding future events, including statements about expected revenue, adjusted earnings, and gross margins for fiscal year 2022, as well as trends that may continue. Management encourages you to review the company's past and future filings with the SEC, including without limitation the company's Forms 10-Q and 10-K, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. The company will also discuss certain non-GAAP financial measures during this call. Management uses these measures to establish operational goals and review operational performance and believes that these measures may assist investors in analyzing the underlying trends in the company's business over time. Investors should consider these non-GAAP measures in addition to, not as a substitute for or as superior to, financial reporting measures prepared in accordance with GAAP. A slide package offering insight into the company's financial results is also available on the Investors section of the company's website under Events and Presentations. This presentation should be read in conjunction with a press release discussing the company's operational results and financial performance. during this morning's conference call. I'd now like to turn the conference call over to Jim Clemmer, Angio Dynamics President and Chief Executive Officer. Mr. Clemmer?

Thank you, Melissa. Good morning, everyone, and thank you for joining us for Angio Dynamics Fiscal 2022 First Quarter Earnings Call. Joining me on today's call is Steve Trowbridge, Angio Dynamics Executive Vice President and Chief Financial Officer. Steve will provide a detailed analysis of our first quarter financial performance and our updated FY22 guidance. We delivered a strong first quarter performance, and I am pleased with the commitment and dedication our team has shown as we continue to execute against the strategic plan that we laid out at our Investor and Technology Day in July. Angio Dynamics is in the midst of a transformation into a high-growth, MedTech company. And in our first quarter, we delivered strong revenue growth and we remained focused on investments, which we believe are critical to driving this transformation. Our first quarter was impacted by the ongoing COVID-19 pandemic and the recent surge caused by the Delta variant. Other medical device companies have discussed softening case volumes during the quarter, and we saw similar impacts. We are encouraged, however, to see improving trends in September, and we are particularly pleased with our performance, giving this challenging environment, and we are confident in our future. We ended the quarter with revenue of $77 million, representing growth of 9.6% year-over-year. Net sales from our MedTech business, which, as a reminder, includes Orion, NanoKnife, and our thrombus management platform were $17.6 million, a 68% increase from the previous year. We remain excited by the continued growth and innovation that we have shown in this part of the business. Our med device business, which includes the remainder of our portfolio, was roughly flat year over year. This year over year comparison includes the one time $5.2 million NHS order that we received last year for PICs and midlines. We believe these results reflect our momentum entering FY22 and to demonstrate that we are well positioned to drive further adoption of our unique platforms as procedural volumes normalize. Our Ariane business continued its positive trend in our first quarter. as strong procedural volumes and new customers drove revenue of $5.9 million, up sequentially from $4.6 million in the fourth quarter of FY21. The market reaction to our Aurion technology has demonstrated that we offer a differentiated technology with a wide array of treatment options driving positive patient outcomes. To date, Overall, Ariane procedures have been roughly split between above-the-knee and below-the-knee interventions, proving the versatility of our technology. For FY22, we expect Ariane to continue to grow meaningfully, and based off the strong first quarter performance, we now expect Ariane to generate revenue in the range of $24 to $26 million, compared to our prior expectations of $18 to $22 million. We continue to see year-over-year growth from AngioVac during the quarter, which grew 12% over the first quarter of FY21. While this growth was impacted by the challenging environment, we are pleased with the improved trends we are seeing in September. We are very excited about our mechanical thrombectomy platform, and we are particularly pleased to announce that last week we commenced the limited market release of our AlphaVac mechanical thrombectomy system. The initial response from physicians has been extremely positive. We have a disciplined, rigorous LMR process that we have refined over our previous product launches, including AngioVac Gen3, NanoLife 3.0, and Aurion. We expect the LMR process to extend for six to eight weeks. with full market launch planned after that. As a reminder, AlphaVac expands the breadth of our AngioVac platform and provides us access to a much larger segment of the DVT venous thromboembolism market. As we discussed during our Investor in Technology Day, we estimate that the DVT segment of the venous thromboembolism market is roughly $1.5 billion. Our current AngioVac platform addresses the more limited right atrium focused market, which we estimate to be approximately $75 million. The launch of our first AlphaVac product, the 22 French cannula, increases our addressable market, but still only unlocks a portion of this market. We plan to unlock full access to the full DVT VTE market with our upcoming 18 French and then smaller size AlphaVac devices that set forth in our Investor and Technology Day presentations. In addition, we are progressing towards IDE studies for the pulmonary embolism market that will ultimately unlock an additional $1.5 billion market. We anticipate that our mechanical thrombectomy platform comprising AngioVac and AlphaVac will grow approximately 30% year-over-year in FY22. NanoKnife probe sales for the first quarter grew 34% year-over-year worldwide and 63% in the US. The continued positive momentum in the US was supported by our expanded capital base But the primary driver was meaningful growth in procedural volumes driven by increased awareness, which we believe was fostered by our direct study. NanoKnife capital sales were strong year over year, off a low comp, as we made several capital sales and placements during the quarter. We remain focused on investing in the NanoKnife platform as we progress with our clinical studies aimed at expansion into potential new indications and an improving OUS environment in the future. On the internal R&D investment front, we continued to strategically invest in growth initiatives during the first quarter as we supported our MedTech platforms already in the market as well as products in our development pipeline in order to expand into larger, faster-growing addressable markets. This investment spans both R&D, which includes clinical, and selling and marketing as we introduce these products into the marketplace. While we remain focused on balancing growth and profitability in the face of COVID-related challenges, we did make a tuck-in acquisition related to the Ariane platform during the fiscal first quarter. This acquisition is a support catheter that we expect to launch in early calendar year 2022. While we don't expect it to be a meaningful contributor to revenue in FY22, it is an investment that gives us another tool in our bag in support of our continued build-up and growth of our Ariane platform. Strategic and tuck-in M&A remains a piece of our long-term growth strategy, and we regularly monitor the landscape for these opportunities. In the near term, we anticipate maintaining our disciplined approach to capital allocation and expense management. Turning to our clinical programs, we continue to make good progress initiating our 100-patient nanoknife prostate IDE study, Preserve. We believe this study will help illustrate that nanoknife's unique mechanism of action can provide a focal ablation option for improved patient outcomes including enhanced quality of life that is not available today. As a reminder, we are partnering with the Society of Urologic Oncology for this important study. Our co-principal investigators are Drs. Jonathan Coleman at Memorial Sloan Kettering Cancer Center and Dr. Arvind George at the University of Michigan. We're excited that these and other leading institutions are interested in partnering with us for this study. In terms of study progress, we have obtained central IRB approval and plan to work with up to 20 sites with respect to contracting and local IRB approvals. We look forward to updating you on our progress as we pursue this expanded indication. Consistent with where we were at the end of our last fiscal quarter, we currently have 26 active sites in our direct study and are encouraged by the overall execution of the study in the current environment. And finally, we expect to file an application for an IDE study for the use of AlphaVac to treat pulmonary embolism during our second fiscal quarter. With that, I'd like to turn the call over to Steve Trowbridge, our Executive Vice President and Chief Financial Officer, to review the quarter in more detail. Steve?

Thank you, Jim. Good morning, everyone. Before I begin, I'd like to point you to the presentation on our investor relations website summarizing the key items associated with our quarterly results. During the quarter, we continued to face COVID-related headwinds that impacted both our revenue and our margins, and we expect these headwinds to persist in the near and medium term due to the uptick in cases associated with the Delta variant. The good news is that we are not currently seeing across the board impacts, but are instead seeing localized geography specific slowdowns in elective procedures. At this point in the pandemic, hospitals have more refined protocols in place, and we are not seeing full across the board shutdowns. As certain hospital systems see increasing numbers of Delta cases, they are pulling back on elective procedures temporarily, which is a very different dynamic than what we saw 18 months ago. We plan to continue to maintain the same disciplined approach to driving growth and expense management that we employed in the first quarter and throughout FY21 in the face of the current environment. As Jim noted, our revenue for the first quarter of FY22 increased 9.6% year-over-year to $77 million. Our growth was driven by continued strength in our med-tech businesses, including Arion, NanoKnife, and AngioVac. as well as solid performance from our med device businesses. Med tech revenue was $17.6 million, a 68% year-over-year increase, while med device revenue was $59.4 million, roughly flat compared to the first quarter of FY21, which included that $5.2 million NHS order. Revenue in our endovascular therapies business, formally named our VIT business, increased 27.5% year-over-year, to $38.1 million. This business benefited from continued strong growth of our Ariane platform and a greater impact of COVID-19 on the prior year period. Ariane contributed $5.9 million in revenue during the first quarter, building upon the momentum of the product's official commercial launch and strong performance in FY21. As we discussed at our Investor in Technology Day in July, Arion remains a key growth driver as we continue to invest in the platform, build out our commercial infrastructure, and generate clinical evidence. We were pleased with the pace of new lasers placed during the quarter, and as of today, our installed base is 205 lasers. As Jim mentioned, based on the strong first quarter performance, we now expect Arion to generate revenue in the range of $24 to $26 million for the year. AngioVac revenue grew 12% over the first quarter of FY21. This first quarter revenue growth was somewhat lighter than previous quarters as we felt the impacts from the challenging procedural environment that other medical device companies have publicly described. As Jim noted, we are encouraged by the performance we have seen so far in September with AngioVac. Vascular access revenue declined 11.2% versus the prior year period, excluding that NHS order vascular access revenue increased 9%. This performance was driven by strength in sales of PICs, midlines, and particularly ports during the quarter. Revenue from our oncology business increased 13.9% during the quarter compared to prior year, driven by strong growth in both nanonife capital and disposable sales, as well as strong sales of our biosensory tract sealant system. This was offset by lower sales of our microwave product, which is a more mature technology, and has proven to be more susceptible to COVID disruption. The first quarter saw strong nanonife growth across procedures, probes, and installations. We reported 34% growth in probe sales, which we believe is driven by two primary factors, increased awareness from direct and the increasing installed base, which drives higher utilization. The new capital installations during the quarter drove some startup probe orders, but more importantly, we saw greater than 30% procedure growth in the U.S., Moving down the income statement, our gross margin for the first quarter of FY22 was 52.1%, an increase of 120 basis points compared to a year ago. Gross margin in the quarter was positively impacted by product mix as sales in our med tech business became a larger contributor to overall revenue. In addition, the first quarter of last year included costs related to our COVID-related operating plan that did not recur in the first quarter of FY22. Now, on the other hand, as anticipated, during the first quarter, we experienced accelerating increases in labor and manufacturing costs as a result of the tight labor market. We also continued to see elevated raw material inflationary pressures and a stronger headwind in the first quarter from higher freight costs. To quantify these, we experienced about 40 basis points of headwind related to the tight labor market, 10 basis points of headwind related to raw material pricing, and 60 basis points of headwind related to higher freight costs, both in and out of our facilities. As we've said previously, we anticipate that these pressures will continue to impact our business throughout this fiscal year, but we still expect that over the long term, our gross margin will expand as our MedTech platforms comprise an increasing percentage of our overall revenue. Our operations team remains focused on labor and service efficiency, material pricing opportunities, and make versus buy analysis. With all that in mind, we continue to expect FY22 gross margin of approximately 55%, but we will be monitoring this dynamic environment closely. Our research and development expense during the first quarter of FY22 was 7.4 million or 9.6% of sales compared to 9 million or 12.8% of sales a year ago. We continue our disciplined investment in R&D focused on driving our key technology platforms. For FY22, we continue to anticipate R&D spend to target 10% to 13% of sales, as the pace for clinical spending, including for AlphaVac PE and nanoknife prostate, accelerates throughout the fiscal year. SG&A expense for the first quarter of FY22 was $33.4 million, representing 43.4% of sales, compared to $26.3 million, representing 37.4% of sales a year ago. we are beginning to see the results of our heightened investment in sales and marketing across the revenue line as evidenced by our growth this quarter. We remain pleased with our ability to control general and administrative spending amid COVID-related disruptions and remain focused on disciplined expense management and managing our cash while investing in our key technology platforms. Accordingly, we anticipate FY22 SG&A spending to approximate 40% to 45% of revenue. Our investments in our MedTech platforms reach across both R&D and SG&A with the clinical spending included in our R&D line. We will continue to make these investments as we remain focused on driving sustainable growth from our MedTech platforms. Our adjusted net loss for the first quarter of FY22 was $0.9 million or a loss of $0.02 per share compared to adjusted net income of $0.6 million or earnings per share of $0.02 in the first quarter of last year. Adjusted EBITDA for the first quarter of FY22 was $3.6 million compared to $4.5 million in the first quarter of FY21. In the first quarter of FY22, we used $8.9 million in operating cash, had capital expenditures of $1 million, and additions to ARION placements and evaluation units of $4.5 million. Typically, the first quarter sees heavier cash utilization for us given annual year-end incentive comp and other annual expenses such as D&O insurance. As of August 31st, 2021, we had $35.5 million in cash and cash equivalents compared to $48.2 million in cash and cash equivalents on May 31st, 2021. We had debt outstanding of $25 million on August 31st compared to $20 million on May 31st with the $5 million draw on our credit facility linked to the acquisition that Jim mentioned. Turning now to guidance. We anticipate that FY22 net sales will be in the range of $310 to $315 million, an increase from our prior range of $305 to $310 million. We continue to expect that full-year adjusted earnings per share will be in the range of zero to five cents as we invest in R&D and sales and marketing to drive sustainable growth in our key MedTech platforms. With that, I'll turn it back to Jim.

Thanks, Steve. As we discussed during our Investor and Technology Day, AngioDynamics is a company in transformation. Our transformation revolves around two important parts. First is the transformation of our portfolio to focus on innovative technologies that help us drive growth in faster-growing, larger markets, where growth is proven by outcomes in patient wellness. Our transformation in our portfolio is very important, and you saw a demonstration of that transformation in this quarter's report. And the second part of our transformation is our investment in people. You look at our people to help drive the growth and expand our portfolio over time. One example of an addition of a person this quarter was a new head of international we have. We hired Laura Piccinini, a very seasoned and successful executive with a strong career in medical technology business. Laura joined us to head up our international business. We look forward to her contributions and leadership. So I want to thank the angiodynamics team for their incredible support of our customers during this challenging period. And thank you for listening to our call today. With that, I'll turn back to the operator. Melissa?

Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Jason Bedford with Raymond James. Please proceed with your question.

Hi. Good morning. Can you hear me okay? Hi, Jason. Good morning. Sure. Hi, Jim. So just a few questions. Just trying to summarize the COVID commentary here. It sounds like Delta was a negative factor in your fiscal first quarter. You're still seeing some impact, but broadly trends are improving in September. Does that kind of capture your thoughts there on COVID?

It is Jason. We don't want to focus a lot on that, but that's exactly right. So, you know, we monitor our landscape very carefully and discuss every day with our customer facing people. Watching the shift so we have seen during the month of September a little bit of improvement And you know we've seen some health care systems just recently start to do elective procedures again that were challenged During the last you know kind of part of the summer, so we're seeing you know slow tick back.

It's not normal yet We're monitoring it closely Okay, and then I'm just going to bounce around a little bit on some product categories and On Orion, the installed base of 205 lasers was a pretty big jump from fiscal fourth quarter. Was there something specific that drove this jump?

So a couple things. One is our supply chain is really strong and secure, so we're really confident in our ability to produce lasers now. But two, it's really customer demand, Jason. You know, we've had a lot of customer demand, some of which has pent up demand. We had demand coming into this first quarter. And then new demand. So we're finding more and more adoption about not just the laser itself, but then comfort once they get the laser. They see how easy it is to use. They see the versatility of how they can now treat above and below the knee, hard and soft calcification, or maybe other products don't have that versatility. So not just seeing increased lasers in the field, but increased usage with our current customers But, Jason, I do want to make a final comment. I don't think we'll expect to see this amount of lasers being placed going forward sequentially. Sure. So we'll still grow our install base. We have a lot of demand. But I wouldn't want to mirror this out for you sequentially.

No, no, understood. And just as a thing to your answer there, utilization among existing users pretty steady. Is that fair?

It is. So, again, both parts of the new users and utilization coming in. You know, now that we have, you know, about a year under our belt, we technically launched the product last September. So we've really got a year under our belt, a good user base. And we've learned, too, Jason, it takes three to four months for the customer, once they have the laser on hand, to get comfortable and confident with using it. Then when they see the outcomes it generates, we're watching even utilization creep up during that cycle. When that customer has the laser for three to four months, utilization looks like it's creeping up. So we're still measuring that and monitoring it. We see it as a strong sign.

Okay. AlphaVac, and I apologize if I missed this, but what's the timing on the 18 French device?

So, as we mentioned, you know, we did our launch, the limited market release on our 22 French, and the 18 French will be in the first half of calendar year 22.

Okay, and that's the launch, correct?

Right, the launch of the 18 French device, exactly.

Okay. Okay. And then just lastly for me, the 30% growth expectation on thrombectomy, that's for the entire thrombectomy bucket. It's not just mechanical thrombectomy. Is that fair?

It is, Jason. I mean, we're focusing that 30% growth target with respect to our mechanical thrombectomy products, which is the lion's share of what we have in thrombectomy. So the angiovac platform as well as the alphavac platform is We do have Unifuse in there when you think about our overall thrombectomy portfolio, but that 30% growth that we're targeting really comprises growth from AlphaVac and AngioVac.

Okay. All right. Thanks for the clarification. I'll get back in queue.

Thank you, Jason.

Thank you. Our next question comes from the line of Stephen Lichtman with Oppenheimer & Company. Please proceed with your question.

Good morning. Thank you. Hey, guys, I just want to ask a couple on Orion. First, are you seeing a consistency in terms of the OBL hospital mix in terms of where procedures are getting done? And any update you can provide us on the sales force, how many reps you have detailing Orion and where you think you might be exiting the fiscal year?

Sure. Thanks, Stephen. So in respect to your question of the OBL hospital mix, You know, I think we told you we launched this last year during COVID. So, you know, out of the gate, our OBL mix was probably higher than we had expected it would have been due to the hospital challenges that COVID put on. And over the course of the last couple, you know, months, we've seen this shift go a little bit back, more hospital engagement and probably hospital becoming a larger mix of our portfolio than it had been in the first three quarters of our launch. That's a good sign for us. Because I think you're also seeing doctors who've used it in the OBL gaining that confidence now going back to the hospital saying, hey, we want to get this unique device in the hospital to treat patients here. So over time, Stephen, we'll work with you and share with you that mix because we want the mix to be a little stronger in the hospital than it started with due to the challenges of COVID. And Steve, do you have a comment on that?

Yeah, so Steve, on the size of the sales force, roughly 60 field-based employees that we have currently that are in the Arianne business. And that comprises 37 territory managers and regional managers combined with about two sales VPs. And then we have, you know, roughly 23 clinical specialists, which include employees as well as per diem clinical specialists that are out there to support those cases. So roughly 60 field-based employees.

Great. Thanks. 50 to 99, too. great to see the impact that Direct is having on the current business. How are you seeing that play out in the field? Are you seeing pockets of growth in areas where the trials are being run specifically? And so what's the runway you see on that in terms of that pull-through of Direct onto the nanonite business?

So, Steve, it's interesting. I think the fact that, you know, Direct has been out for a little bit. People are understanding now the mechanism of action, how it works. We're seeing physicians, you know, involvement with thinking about utilizing this technology for other aspects of treatment, other organs. So, you know, the Direct study we're committed to, we're going to make sure that we can do the best we can to treat those patients with stage 3 pancreatic cancer because of the need that exists there for treatment. We think our device, we believe, gives them a choice. But beyond this, we've always talked about expanding into other care opportunities. And the prostate opportunity, again, we're following the FDA guidance. We're a little over a year ago. They came out with new guidance for focal therapy treatment options. So we aligned with that guidance they gave and talked to the FDA, and that's how we're able to get the preserved study initiated. We're seeing a real lot of interest now because I think people know there's still limitations with any type of prostate treatment. And I think with our product, Steve, what we want to prove is that the quality of life aspect that we can offer, treating it vocally and utilizing the unique device that we have, will give physicians a different option and patients a different option for that treatment. So we're really pleased. We believe the direct study fostered a lot of that knowledge base that's now expanding into the market.

Great. Thanks, Jim. And then lastly, Steve, thanks for the details in terms of how some of the macro issues are impacting growth smart rates. gross margin in the quarter. Going forward, are you assuming those impacts are steady? Do they get less with some, you know, net offsets that you guys have going on? How are you thinking about sort of the sequential impacts, you know, of some of the sort of the macro headwinds?

Yeah, a lot of those macro headwinds, there are some offsets. I mean, we talked about the mix impact that we had in Q1. We had a nice pickup year over year in product mix, but a lot of that was eaten by some of the macro effects that we talked about. Given the current environment, we really believe we're probably at the early stages of some of that raw material inflation that we talked about being roughly 10 basis points. I would expect that may accelerate as we head into Q2. We'll see where it goes into our Q3 and our Q4. you know, the tight labor market, we're doing everything we can. I would expect that would continue. We really haven't seen an influx of applications coming past, you know, the early parts of September. And so we're keeping an eye on that. And I think that that's probably with us for a little while too. Freight expense, we're going to do everything we can to try to mitigate that. We're seeing both in and out of our facility increased freight expense. A lot of other companies are seeing that too. But there might be a little bit of an opportunity to try to negotiate some long-term agreements or deal with freight that way. So I expect they'll continue. We're going to do what we can to mitigate them on their own. We're also going to look to other areas that can mitigate the overall margin impact, like the mix that we talked about. But it's a challenging environment, no doubt. We're going to keep our eye on it.

Got it. Thank you, guys.

Thank you.

Thank you. Our next question comes from the line of Bill Pulvonek with Canaccord Genuity. Please proceed with your question.

Great, thanks. Good morning. You've answered a couple of these questions with a little more granularity. Just how, you know, in terms of the COVID impact, you know, we're not back to normal. You're seeing an improvement. But how are you thinking about the impact relative to the guidance you have going forward? Go ahead, Steve.

So, Bill, we definitely included an assessment of COVID throughout fiscal year 22 when we came out with our guidance initially. We were expecting that there was going to be some continued impact. There was an element of a quantitative nature. There was also an element of a qualitative nature just based upon the experience we had going into last year. So we were always expecting there was going to be some COVID impact. As we said, we've seen that in Q1. We're certainly not back to normal. We are seeing some improving trends. And then, you know, if you look at what we did with our increased guidance this call, you know, that's coming off of the performance that we saw in our Q1. It still incorporates some assessment of continued COVID impacts based on what we're seeing today. Now, if that materially changes, that could have an impact on where we're going. But we've always tried to build in our best assessment based on our experience where COVID is going to be. And so that's still baked into what we're seeing.

Okay, and how should we think about Q2, given that you had such a robust Q1 and you're basically lifting 2022 for the Q1 results? And I think historically, you'll probably see something like a 3% to 5% increase from Q1 to Q2, but I don't think that's where consensus is now. How should we think about that?

So you're correct. Historically, we have this seasonality where you have Q2 being slightly up from Q1. We did have a strong Q1. Our typical seasonality is a little bit skewed based upon some of the new product introductions, and so you see the strength that we saw in Arion coming in. So the way that we're looking at this is we don't expect to go sequentially backwards, but you may not see that same full uptick coming from Q1.

Okay. And then Yeah, one of the questions we've actually received lately from a lot of investors is just nursing staff shortages, and especially and probably because Wall Street is so New York centric, but especially as some of these mandated vaccine requirements go into effect. And just curious if you have any thoughts regarding what you've seen regarding if any of these mandates going in and nursing staff shortages and impact on your business.

Yeah, Bill, it's Jim. We're watching that very closely as well. Again, we have great field intelligence with our people globally. But, yeah, we're watching it. Hospitals are under pressure and stress. And a lot of times right now I think they're balancing how they deliver care with stresses on their workforce and also with full ICUs. The good news is they've learned more when COVID hit a year ago. They've learned some lessons, and they've done a better job, I think, of balancing how to still keep care being delivered. in a better way than we did a year ago. So the whole healthcare system is working collaboratively as part of that. So that's an important aspect of what we do, Bill. And the contact we have with our customers has changed. We're being challenged as to how we interact. But they ask us for help. They want us to communicate. And if you even look at a couple of our most difficult businesses, we had great performance in our EVLT vein laser business, driven by a really great product we have. But we have a great team of people who represent that product line and communicate to our customers how to use it and how to treat people quickly and safely. You look at the great performance in our vascular access business. You talk about nursing, you know, nursing-driven call point, really important product for hospitals. We have a really tough competitive group there, and our team delivered great results. Again, good products, great selling and marketing communication, and us adapting to the customer mix, as you're talking about, where customers are challenged and asking us to deal with them differently. So I'm proud of the way our team has reacted, and when we have more info, we'll share it with you as well.

Great. And then the last question for me is just, you know, with the Arion business and what you're seeing, how much of that is replacing laser atherectomy versus mechanical atherectomy devices?

You know, it's a really good question. We monitor it really closely. We monitor every case that we can count. And we have a mix. I think, Bill, at first, I can't give you a rough number. I don't want to put a ratio out there yet. But I know out of the gate a year ago when we launched, it seemed like we're getting mostly customers who are familiar with the other laser that had been in the market jumping to us first, saying, let me try this new product, because they knew the other laser had some limitations. And our new product, the way it works with the 355 nanometer laser, eliminated many of those limitations. So a lot of initial interest was there, and now over the last few months and quarters, we've seen interest coming from across the spectrum. People who have experience utilizing the other mechanical tools are now looking, going, hey, wait a minute. We didn't know that that new Arion laser actually is not really a laser because it can treat above and below and treat different care aspects and deliver different interventions. So we're really pleased, Bill, that over time we'll try to give you a ratio. But my final statement, I guess, is the ratio is expanding significantly. beyond just former laser users.

Bill, just to add to that, you know, there's two things that really make us confident and excite us about the current Ariane business. And one, of course, is the performance that we've seen and the sequential quarterly performance that we've seen in overall revenue. But that breakdown of procedure volume that Jim talked about above and below the knee, that's the other thing that excites us. You know, we're roughly half of our procedures are below the knee and half above the knee. And so that's a an indication of proving out that thesis that we had when we looked at this technology before we did the acquisition, that we felt it could be more than just a replacement laser. So we are seeing it move into procedures that had historically been done by those mechanical atherectomy businesses, and we think that trend will continue.

Great. Thanks for taking my questions.

Thank you. Our next question comes from the line of Matthew Michon with Cuban Capital Markets. Please proceed with your questions.

Hey, good morning, guys, and congratulations on all the progress you're making across the platforms. Just first question on the Thrombectomy platforms. The 30% growth, is there any chance you could ballpark or range a good starting point from fiscal 21 on that?

A good starting point from fiscal 21?

On the revenue, yeah.

Sure. 25 to 30 is what you can think of as a starting point coming off of 21 in that business.

Okay. And then how should we think about going from – and your pathway of going from a limited market release on AlphaVac towards a full commercial release on AlphaVac? And I'm sorry if I missed that and I was discussing it.

Okay. No, thanks, Matt. So we installed a process a few years ago here with our increased R&D process you know, investments. We also have a release process that has rigor and discipline in it. And if you look at, go back to November of 19, we launched our new AlphaVac version 3 and our NanoKnife 3.0. Really successful launches there following this rigorous LMR process. Then last year, the launch of Arion, even though we bought Eximo Medical, we put Arion through our process. And now, Matt, we're excited to announce today, we just started the launch of the LMR version of our AlphaVac. So again, we expect six to eight weeks doing a limited release just to make sure that we're aligning with customer expectations during this period. And then we hope to move to a full market release around that six to eight week period. And what that really means is today, only a small portion of our sales force has been specially trained for the LMR process and engaging with certain customers. And when we get that confidence that our message is resonating, the product's performing as they expect, then we'll go into that full release. I'll communicate that, but you can expect it about six to eight weeks out.

Okay, excellent. And then through the quarter, I've noticed that there's been a couple of acquisitions by a couple of larger competitors of competitive technologies in that thrombectomy space. As you've had a chance to kind of evaluate some of those technologies, are they going direct head-to-head with AlphaVac? Or are they coming at it from a different perspective and going after adjacencies or complimentary type areas?

You know, Matt, good question. We've taken a look at the products that have been available externally, some really great innovations people are thinking about. Because I think the basic thesis, and we've heard it before in the other companies in the space, the thesis is that physicians are trusting mechanical interventions at a higher rate than they had in the past. We think that's going to continue. And so we designed AlphaVac uniquely, starting with the base of AngioVac and then created, obviously, the unique handle, other aspects of why it's so important. So we're pleased, Matt, to enter the space today. We think the space is going to grow dynamically with AngioDynamics entering it. The two competitors that were there before, the other big competitor that's been in the space for a long time, and maybe some other innovative products. They're all going to perform differently. If you look at how AlphaVac – performance is very different than the other products in the market today. We're proud of those differentiable features. I tripped over that word. So, Matt, we think other innovations will come out, but we're really pleased with the design and development that our team did with Alphavac, and we hope we can become part of the care continuum as mechanical interventions grow to treat different levels of VTE.

Yeah, and just to add to a little bit of what Jim said, Matt, you know, I think More than anything, we know these products. We've been looking at them. We see this as a validation of this market and the fact that there's continued growth opportunities and that this is going to be an exciting market going forward. I think the other thing that it validates for us is if you look at where a lot of these products are playing, it really fits into the narrative of how we've talked about this market. There isn't really a one-size-fits-all product. And there's going to be a number of tools that are going to go after all the different segments in the market. So we see the acquisitions that you've talked about as further validation of our overall portfolio position in this business. We love what we have with AngioVac on circuit. We love where we're starting with Alphavac with the 22 French. And as we've talked about coming out with some of those smaller French sizes of Alphavac, we're going to be creating that full suite of products to go after this market. And we think a lot of the other companies who are getting into this space are trying to follow suit with that same strategy.

Okay. And then lastly, just on Orion, I believe there were some proposed changes to reimbursement in the physician office that could, if finalized, impact reimbursement for some of those procedures. How do you see that impacting the total addressable market and the opportunity there? And did you comment on that?

So you're correct. There's been a couple of suggestions, and we've seen some proposed rules. We're not going to comment on exactly where the government processes are going to land here. I think that that would be a fool's errand. It could go anywhere. What we are comfortable, though, is that wherever this goes, we don't see this as derailing to our business. We think that our business has that value proposition that we talked about before, being both above and below the knee, what had historically been the laser procedures as well as moving into some of those mechanical procedures. And we think we're pretty well situated to continue to go after those procedures, and we're well situated that wherever this falls out, it's not going to be derailing to us, and we think that we can continue to grow the business.

Excellent. Thank you very much. Thanks, Matt.

Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back over to Mr. Klemmer for any final closing remarks.

Thank you, Melissa. Thanks for joining us on our call today. And I hope we're able to explain our company delivered terrific performance in Q1, and we believe we have a really bright future as we continue to innovate and transform our company into a company driven by technology that drives patient outcomes that can be measured, and those outcomes drive change in physician behavior. I want to, again, thank the angiodynamics team in this challenging environment, from our supply chain team and our quality team and our logistics people who work really hard to produce these quality products and to get them to where they're needed for care delivery. We have a dedicated team of people that we're really proud of. Thanks for joining us today.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.