AngioDynamics, Inc.

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© transcript Emily Beynon Thank you. Thank you.

Good morning and welcome to the AngioDynamics fiscal year 2024 third 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 conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded. The news release detailing AngioDynamics fiscal 2024 third 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 would 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 2024, 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 the actual results or events to differ materially from those described in the forward-looking statements. The company will also discuss certain non-GAAP and pro forma 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 and pro forma 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 Investor 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 operating results and financial performance during this morning's conference call. I'd now like to turn the call over to Jim Clemmer, Angio Dynamics President and Chief Executive Officer. Mr. Clemmer.

Thank you. Good morning, everyone, and thank you for joining us for Angio Dynamics Fiscal 2024 Third Quarter Earnings Call. Joining me on today's call is Steve Trowbridge, Angio Dynamics Executive Vice President and Chief Financial Officer. who will provide a detailed analysis of our third quarter financial performance. Unless otherwise noted, all financial metrics and growth rates provided during the call today, with respect to our results, will be on a pro forma basis, which excludes the impact of our divested dialysis, biocentury, PIC, and midline businesses, and our discontinued radiofrequency and Syntrax support catheter products. We are very pleased with the solid performer revenue growth that we saw during our third quarter. We executed on a number of significant strategic milestones during and after Q3, including securing an expanded indication and reaching a settlement agreement with BD Bard. Additionally, we announced another significant step in the optimization of our portfolio with the divestiture of our PICC and midline product portfolios. This divestiture, combined with the ongoing shift of manufacturing out of our upstate New York manufacturing facilities and the divestiture of our dialysis and biocentury businesses to Merit Medical at the beginning of this fiscal year, positioned us to drive further growth from our key MedTech platforms while also expanding margins and driving towards profitability. We will cover this in more detail shortly. But now, turning to our third quarter results. Our third quarter of fiscal 24 saw a return to double digit year over year growth in our med tech segment and solid mid single digit growth from our med device segment. We ended the third quarter with revenue of $66 million, representing growth of approximately 8% year over year with growth of nearly 13% from our med tech segment and 5% from our med device segment. Growth in the med tech segment was driven by Aurion, which grew nearly 15% year over year, and NanoKnife, which grew approximately 47% during the third quarter, with sales of probes increasing approximately 20%. Our mechanical thrombectomy business which includes AngioVac and AlphaVac, declined roughly 12% year-over-year. While AngioVac stabilized, as we discussed last quarter, AlphaVac sales slowed due to a wind-down at many of our sites as we completed enrollment in the APEX PE trial. We expect to continue softness in AlphaVac sales between the completion of the trial and the FDA approval of the PE indications. We are pleased to announce today that we've received our clearance from the FDA for the use of AlphaVac to treat pulmonary embolism. This approval came in ahead of our expectations, and I'm proud of the strong submission that our team put together and the compelling data generated by our APEX trial. This expanded indication is a significant piece of the long-term strategy that we laid out for you in July of 2021. It validates the unique design elements of our product and the significant benefit it provides to physicians and patients. This approval opened up another large, fast-growing market for us, and we are excited to put AlphaVac in more physicians' hands. The results of our APEX trial exceeded our expectations, comfortably hitting our targeted endpoints and comparing favorably with other catheter-based PE treatment trials. Given the unique design elements of our device, specifically the one-to-one torque maneuverability and the expandable funnel, physicians were able to remove significantly more clot burden and complete the procedure in less time than has been reported in other PE trials. We look forward to more specifics being announced in publications over the coming months. This business will play an important role as we execute on our growth strategy. We expect to initiate a limited launch release during the end of our fiscal Q4, with a full launch scheduled during our Q1 of FY25. Additional near-term catalysts include expected MDR approval of AlphaVac, for treatment of PE in European and other markets, which we expect by the end of June. During the third quarter, we launched the Ariane XL radial catheter, and this product is intended to give physicians another access point to treat peripheral artery disease. Many physicians like the radial approach, as they can perform more procedures per day, and the patient follow-up is faster and generally has fewer potential complications. This is another reason why potential customers will consider Arion for use in their cath labs for their OBLs. We currently expect to receive CE marks for Arion by the end of June, allowing us to expand promotion beyond the U.S. and into the EU markets. Turning to our nanonife business, we continue to see increased interest in the usage of nanonife for patients and caregivers seeking options to treat intermediate-risk prostate cancer. We look forward to completing the 12-month patient follow-up in July for our PRESERVE study, and then we will submit our data to the FDA, and we are currently expecting clearance by the end of calendar 2024. Growth of approximately 5% in our med device segment was primarily driven by our EVLT and our angiographic catheter products, which grew 22% and 11% respectively. In the third quarter of FY24, our international business grew approximately 21% year over year, including approximately 53% growth for MedTech and 7% growth for MedDevice. We also hosted our fifth International Clinical Life Symposium These symposiums continue to drive increased interest in our MedTech products, and we have generated a meaningful pipeline of global physicians who are excited to utilize our products in caring for their patients. Now, turning to our portfolio optimization that I mentioned earlier, on February 15th, we sold our PIC and midline portfolios to Spectrum Vascular, for a total consideration of up to $45 million, with roughly $30 million received in our Q3. Additionally, we discontinued sales of our Uniblate and Starburst RF products, as well as our Syntrac support catheter, as these were older products that are not core to our growth strategy and would have cost us to transition them to our new outsourced model. In total, These divested and discontinued products contributed approximately 50 million of sales in FY23. We are much happier with where our portfolio sits today, with a higher growth med tech business that is the foundation of our future growth and profitability, along with a less complex med device segment that can help support our investments in organic growth. The transition of our manufacturing to a fully outsourced model, which we announced on our last call, is now well underway and on track to generate approximately $15 million in annualized savings, starting in FY26 and being fully realized in FY27. Looking at the combined divestitures to Spectrum and Merit this year, we received approximately two times sales for the combined assets and we were able to pay down all of our outstanding debt and strengthen our balance sheet significantly. Finally, as Steve will discuss in more detail, we reached a settlement of the more than a decade of IP litigation with BD Bard, providing us with clarity and certainty and allowing us to focus on our strategic transformation. With that, I'll turn the call over to Steve Drobridge, our Executive Vice President and Chief Financial Officer to review the quarter in more detail.

Thanks, Jim. Good morning, everybody. Before I begin, I'd like to direct everyone to the presentation on our investor relations website summarizing the key items from our quarterly results. As Jim mentioned, unless otherwise noted, all metrics and growth rates mentioned during today's call are on a pro forma basis and exclude the results of the dialysis and biocentury businesses that we divested last June, the pick and midline products that we divested last month, and the radiofrequency and Syntrax support catheter products that we recently discontinued. Our revenue for the third quarter of FY24 increased 8% year-over-year to $66 million, driven by growth in both our MedTech and MedDevice platforms. MedTech revenue was $25.7 million, a 12.6% year-over-year increase, while MedDevice revenue was $40.3 million, growing 5.2% compared to the third quarter of FY23. Year to date, our overall revenue is up 6.5% year over year, with our MedTech segment up 9.6% and our MedDevice segment up 4.6%. We were pleased with the return to growth that we saw across both our MedTech and MedDevice businesses in the third quarter, which we had expected and is reflective of the strength of our portfolio. For the third fiscal quarter, on a pro forma basis, our MedTech platforms comprised 38.9% of our total revenue compared to 37.3% of total revenue a year ago. For the nine months ended February 29, 2024, our MedTech segment comprised 38.4% of our total revenue base versus 37.3% as of one year ago. Our Arion platform contributed $11.8 million in revenue during the third quarter, growing 14.7% compared to last year. Year-to-date, our Arion platform is up 17.4% year-over-year. Mechanical thrombectomy revenue, which includes AngioVac and AlphaVac sales, declined 11.6% over the third quarter of FY23. AngioVac revenue was $5.5 million in the quarter, similar to prior year sales. We were pleased to see this stabilization in AngioVac revenue during the quarter. AlphaVac revenue for the third quarter was $1.1 million. As Jim mentioned, we are very pleased to announce the clearance of an expanded indication for AlphaVac to treat pulmonary embolism. We remain confident that mechanical thrombectomy will be a significant contributor to our long-term growth strategy, and we are excited about the planned new product introductions as well as our clinical initiatives. NanoKnife disposable revenue during the quarter increased 19.8% year-over-year. Capital sales were robust in the quarter, growing 230.9%. and are a strong driver of future disposable sales. Year-to-date, nanonife disposable sales are up 15.1%, and total nanonife sales are up 25.7%. Now, in addition, as a reminder, earlier this year, we announced that enrollment in Preserve is now 100% complete, and as this data starts to be made public over the course of this calendar year, we look forward to sharing it with you. In the third quarter, our med device segment grew 5.2% year over year, led by strength in our EVLT and angiographic catheter products. Moving down the income statement, our gross margin for the third quarter of FY24 was 51.1%, a decrease of 290 basis points compared to the year-ago period. For the third fiscal quarter, med tech gross margin was 61.5%, a decrease of 300 basis points, and med device gross margin was 44.4%, a decrease of 330 basis points, each one compared to the third quarter of last year. The year-over-year decline in gross margin for the med tech business was primarily driven by products mix, as sales of our higher-margin thrombectomy products declined, and geographic mix, as we saw growth in our international markets. Gross margin for the med device business was impacted by a supplier recall and costs associated with the transition to outsourced manufacturing. Year-to-date gross margins for FY24 was 53.6%, a decrease of 150 basis points versus prior year, with MedTech gross margin of 63% and MedDevice gross margin of 47.7%. As a reminder, the gross margin numbers that I'm referring to for this year as well as last year are pro forma numbers following the divestiture of our PICs and midline businesses. We did see significant margin expansion when comparing this to our pre-divestiture margins. As we discussed last quarter, our gross margin profile has been negatively impacted by the scale and structural limitations of our operating footprint. To address this, we announced that we are restructuring our manufacturing operations to move to a fully outsourced model. Again, we expect this restructuring to result in annualized savings of roughly $15 million, with the full annualized impact being realized in FY27. Until we can complete this transition, we will see some ebbs and flows in our reported gross margins. Our transition incorporates moving manufacturing to third-party partners. The faster we do this, the quicker we end up double paying for manufacturing overhead and therefore increasing the impact of underabsorption in our Queensberry manufacturing plant. The right thing to do in connection with our plan, but we cannot fully recognize the impact of our overhead savings until the full transition is complete. In addition, we anticipate building inventory to facilitate the outsourcing moves. While there will be continued noise in our gross margins, we're committed to our strategy to ultimately drive efficiencies in our operating footprint and maximize the gross margin expansion that results from growing the percentage of our MedTech revenue base. Turning to R&D, our research and development expense during the third quarter of FY24 was 8.1 million, or 12.2% of sales, compared to 6.7 million, or 11% of sales a year ago. SG&A expense for the third quarter of FY24 was 34.2 million, representing 51.9% of sales compared to 32.5 million or 53.3% of sales a year ago. Our adjusted net loss for the third quarter of FY24 was 6.5 million or adjusted loss per share of 16 cents compared to an adjusted net loss of 5.4 million or adjusted loss per share of 14 cents in the third quarter of last year. The year-over-year decline is largely attributable to the lower gross margin and noise associated with the ongoing manufacturing transfer. On a GAAP basis, we recorded a GAAP net loss of $190.4 million, or a loss per share of $4.73 in the third quarter of fiscal 24. The GAAP net loss includes a goodwill impairment charge of $159.5 million, settlement charges, which I will discuss in further detail in a moment, of $22 million, and asset impairment charges totaling $6.8 million related to the transition to outsourced manufacturing and discontinuation of Syntrax. Now, the goodwill impairment amount is preliminary. It's undergoing further evaluation, and it will be adjusted if necessary prior to filing our quarterly report on Form 10Q. Adjusted EBITDA in the third quarter of FY24 was negative $3.6 million compared to adjusted EBITDA of negative $1.5 million in the third quarter of 2023. At February 29, 2024, we had $78.5 million in cash and cash equivalents compared to $44.6 million in cash and cash equivalents at May 31, 2023. As a reminder, we currently have zero debt compared to $50 million a year ago. In the third quarter of fiscal 24, we used $12.5 million in operating cash, had capital expenditures of $0.6 million, and additions to ARION placement and evaluation units of $1.2 million. Similar to our discussion around gross margins, we expect that there will be ebbs and flows in our quarterly cash utilization as a result of our manufacturing transfer. Our third fiscal quarter was particularly noisy with the divestiture of PICs and midlines, the supplier recall I mentioned earlier, and the impacts of initiating our strategic manufacturing transfer. While we expect continued ebbs and flows in cash, for example, as is always the case, we expect our Q1 to exhibit higher use of cash than other quarters, we are confident that our capital allocation strategy has put us in a strong position. We have a very strong balance sheet with zero debt and a significant cash position, allowing us the flexibility to fund investments necessary to drive growth in our MedTech segment and execute on our strategic manufacturing transfer. We went from having $50 million of debt to zero debt in the midst of this high interest rate environment. And in connection with that, we've undergone a significant portfolio optimization, recapitalized our balance sheet, and now have a significant cash position. There will be ebbs and flows to our uses of cash as we work to complete our manufacturing transfer over the next 18 to 24 months, but we will continue to remain focused on maintaining a strong balance sheet. Earlier this week, we announced that we entered into a settlement agreement with Becton Dickinson and agreed to settle all outstanding intellectual property litigation with Bard. This has been an overhang on our company for more than 10 years. Although we felt very confident in our position, there's always uncertainty in litigation. We're very pleased to come to this settlement and avoid the significant cost of further litigation. This settlement also provides clarity and certainty, allowing us to remain focused on growing and transforming our business. We will essentially be paying out the equivalent of what was a two-year run rate worth of legal fees in this matter, but now over the next six years, while also removing the unlikely but still possible threat of a much larger judgment that might have been made against us in the future. Turning now to guidance. We now anticipate that FY24 revenue will be in the range of $270 to $275 million. The only change in our guidance relative to last quarter is that it contemplates the recent divestiture of the PIC and BIDLINE businesses, and discontinuance of the radiofrequency ablation and Syntrax businesses. These businesses accounted for approximately 50 million of our prior revenue guidance of 320 to 325. We now expect full year adjusted loss per share to be in the range of 54 to 58 cents. We expect FY24 gross margin to be in the range of 52 to 54% above our prior estimate of 49 to 51% as the divested and discontinued businesses have a lower gross margin relative to our overall corporate margins. For FY24, we continue to expect MedTech revenue growth in the range of 10 to 15%, and we now expect MedDevice revenue growth in the range of 2 to 4%. We expect MedTech gross margins in the range of 61 to 63%, which is unchanged, and MedDevice gross margins in the range of 46 to 48%, up from our prior guidance of 43 to 45%. Finally, I would like to thank our team here at AngioDynamics for their hard work and commitment in making our transformation possible. With that, I'll turn it back to Jim.

Thanks, Steve, and thanks for joining us on our call today. We acknowledge that there are a lot of moving pieces this quarter between the divestiture and the discontinued products, the barred settlement, and the manufacturing transition. With that said, all of this in service of executing against the strategy that we laid out back in July of 2021 and moves us closer to being a high-growth medtech company The approval of our AlphaVac PE that we announced today is another great example of our strategic focus on adding indications in large, high-growth markets. Moving ahead, as we are able to leverage these significant changes, the benefits of our transformation will become more and more apparent. Operator, we can open up the line for calls.

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 remove your question from the queue by pressing star 2. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question comes from the line of Jason Bedford with Raymond James. Please proceed with your question.

Good morning. Can you hear me okay? Hi, Jason. Good morning. Yes. Okay. Maybe just a few here. So you piqued my interest with your comments around the results of the APEX trial. When do we see data from that trial?

We've got some trade shows that are coming up soon, Jason. One, I think, believe this month, another one in a couple months, so it's the Sky as well as PERT. We do expect you're going to start seeing a pretty good release, both the publications as well as podium presentations from our principal investigators that were part of the APEX trial. As Jim mentioned, we're excited for that data to get out there. The results of the trial, they exceeded even our expectations. We knew we had a good product, but we were very pleased with what we saw, both in terms of hitting the primary endpoints And especially what Jim talked about around overall clot removal, we think it's going to be a nice differentiator for us.

Okay. And can you just remind us on the timing of enhancements to AlphaVac?

Sure, Jason. In the second half of this calendar year, you'll see a couple new products being launched, a couple new R&D design element changes that we added based on feedback we received during the study. So we look forward to the second half of the year. At this point, we're not going to comment on specific details, but you'll see that in the second half of the calendar year.

And those are contingent on, it's a 510K? There's regulatory clearance involved, right?

There are. We have a couple things coming out. I think one might be a letter to file. One's a 510K, but just, you know, depending on which design element we're going to add.

Okay. I appreciate the, just on, there's obviously a lot of moving pieces here. I appreciate that you're not changing guidance outside of the divestiture, but the guidance seems to imply a little slower growth in the fiscal fourth quarter. Are you seeing anything relative to the third quarter specifically? Is there anything that you're seeing specifically in the business, or is this just more a function of not wanting to make it no easier by keeping the guidance as is?

Jason, we're not seeing anything in the market that has shifted or changed There's always a blend of headwinds and tailwinds, and we've talked about some of those. But no, we haven't seen any market forces, nor are we changed really in the guidance we gave. We really just wanted to keep it consistent with all the moving parts we have going on right now. We thought it was simple to keep it consistent. We're comfortable with that range and think for our investors it shows a simple, stable change.

And as you said, there's disruption going on in terms of the best in the products, making some of the changes that we made in the sales force, dealing with the manufacturing transfer. There's a lot going on, but we're confident we can manage through that and maintain the guidance level that we had set out. Okay.

Maybe just the last one for me. You kind of alluded to capital deployment plans. You've got a lot of cash. I realize there's a need to fund the business, but any thought of either kind of buyback or just being a little bit more active with the cash?

So two points. Active with the cash, I think we've signaled, Jason, we really love the portfolio we have today in the MedTech side. Three great platforms. They're not just product. They're really platforms that you'll see more opportunities spin off in the coming years. So we're not looking to maybe acquire anyone else's product or assets. to add to our base. And second, as far as a buyback, those are things we'll discuss at the board level and communicate maybe in the future. Okay, thank you.

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

Thank you. Good morning, Jim and Steve. I guess first, can you talk about the rollout plans for AlphaVac in PE? What kind of training effort will be needed, and will you look to add to the commercial team so as not to impact AngioVac? Just wondering how you're thinking about that.

Yeah, thanks, Steve. Good question. So if you go back to nearly a year ago, we added a new head of sales for that group, really experienced, great sales leader that we brought on. We added some people to our training and education departments. We changed some of our sales management team and our sales team. So we've done a lot of moving parts over the last six to nine months, adapting to what we thought would be necessary changes and the build we wanted to do to get our team ready for this moment. So we're still going through some of the educational changes, some of the validation of our training and education here for our internal team. We're really excited about the level that we raised our bar to because this is such a significant event for us. So, Steve, we really have a really disciplined approach towards this. Put a lot of energy and effort, as you know, in the design elements of the product. And then the APEX study itself, which was really well done. We had some great PIs and some sites that generated good data for us. But we're putting the same level of discipline into our preparation for our launch. So you'll see, as we mentioned on the call today, we've only got about two months left in our fiscal 2024. We have a limited market release. That will do now. So it will be controlled so our reps are well-trained and ready to support our customers today. And then looking for the summer launch of FY25, we'll be ready to go on a larger basis.

Thanks, Jim. Steve, you mentioned on gross margin, some ebbs and flows. Just in terms of an early look at FY25, I mean, directionally, do you anticipate gross margin on a pro forma basis being up or any color that you can provide?

Yeah, so we'll typically give detailed margin guidance for 25 when we get to our Q4 results. That's typically our cadence, and we'll stick to that. I think the high-level trends that you're going to see is we do expect the step-up that we saw with the divestiture, and that's going to continue. But as I mentioned in our overall manufacturing transfer plan, there's going to be noise in gross margin. You've got a little bit of the kind of balancing act here where the faster we move products out of our Queensberry manufacturing facility and get them into our third party manufacturing hands, while we're doing that, we're still double paying for overhead. So you're going to see some pressure on gross margins until we can fully get through that manufacturing transfer. So it's almost like the faster we get going, the more we see a little bit of a hit. It's the right thing to do for our plans, but it is going to create some of that noise. We'll give you a little bit more detail as we get into 24, but Look, overall, margin, we believe, is one of the areas that we absolutely have to address to really see that continued gross margin accretion that you get from the larger portion of our overall revenue base coming from MedTech. We've seen that, but it's been eaten up by some of the structural limitations that we've talked about over the last couple quarters. So once we get through this transition, you're really going to see that margin profile take off. It's going to be noisy as we go through it.

And just lastly, just on cash, obviously you're clear in terms of the gross margin impact of the most recently divested products. Were they sort of cash accretive, though? How should we be thinking about what kind of cash that those businesses threw off that may not be in place, or are they not? Thanks.

No, they were cash accretive, and we talked about that before. So there's a couple things going on. If you remember when we did the divestiture of the dialysis and biocentury products in the very beginning of this fiscal year, We had said that that was going to be a little bit more dilutive to EPS and certainly more dilutive to cash because there weren't any direct costs that went out when we did that divestiture. But it was the right thing to do for us opportunistically. We timed it. It led to us getting a combined multiple for all the assets that we sold into the two times. These assets did allow us to take some direct costs out. And so we talked about some assets that went with our pick and midline business as well as the restructuring that we did. So we're able to mitigate that. There's no doubt, though, as we said, these products, they didn't take a lot of investment. There was some cash generation that provided to us in the overall company that we'll be working through as we create the overall structure of the company heading into 25 and beyond.

Okay, got it. Thank you, guys.

Thanks, Steve.

Thank you. As a reminder, if you'd like to join the question queue, please press star 1 on your telephone keypad. Our next question comes from the line of John Young with Canaccord Genuity. Please proceed with your question.

Good morning, Jim and Steve. Thanks for taking our questions. Maybe just to turn back to the AlphaVac with a new indication, and can you talk about what the commercial sales force size is today, how many centers you're in, and just, you know, the approach going forward? Do you think you need more registries and studies given just the high level of data that's being generated in this sector? And lastly, just on pricing strategy. Thanks.

Hi, John. Thanks for the questions. We'll try to make sure I remember them, Steve, and I'll cover them for you. So today, a couple things. We have 40 sales reps. We've talked about it before in this business, dedicated to AlphaVac and AngioVac. As I said in the last question, they're now being well-trained, being prepared for the launch. So we really had a little over 20 sites in our APEX trial. So not all of our reps actually serviced each of those sites. So the ones that did we think are really well-versed and ready to go, and other ones are being properly trained and ready to launch. So a couple things like that are happening as we speak. But we like the sales force we have. We like where they're located, how they've been trained, and their quality of what they know and the knowledge of the space. We also have a plan to add as we grow. But today we're going to start with the 40 reps we have today. So there's a question about the clinical data.

We're excited to get the APEX results out. We think that those APEX results are going to be meaningful. We're also excited to get the CE mark that Jim talked about and launch it in international markets. I would expect that you're going to see some continued data generation efforts for us around thrombectomy. As we know, this is a very exciting space. It's growing. You've also got a number of very well-situated competitors that we're going up against. We think our product has some real advantages. And so, yeah, we're going to support that with continued data generation efforts. That could be in the form of some registries. It could be in the form of some investigator-initiated trials. But I would expect that you'll see us to continue to build that foundation over the coming years.

And finally, as far as pricing, John, we have a unique device. You know, you call it about the $9,000 range is what you'd expect for AlphaVac.

Great. Thank you so much for answering. I was going to throw a lot at you. And just, you know, turning to now, nice, too, and the strong quarter you had around there. Can you talk about, you know, what's clicking there? When can we see the initial preserved data this year? And is there any way to characterize how much of the pro sales were for prostate? Thanks so much, again, for taking the questions.

Yeah, really good question. So we are excited about some of the strong capital sales that we've seen. As we've said, capital can be choppy. That's why we started a couple years ago, making sure that we were focusing on probe growth, because that's a nice proxy for what you're seeing in terms of procedure growth for NanoKnife. So we're seeing both good things. We're seeing good 20-plus percent growth in probes. That's pretty consistent, as well as some of the nice growth that we saw in capital. Capital is going to be a harbinger for future probe sales. With respect to when we're going to see some data out of preserve, as we said, we completed the enrollment last July. We're going to finish the 12-month follow-up this summer. Coming out of that, you're going to, very similar to what we talked about with Alphaback, you'll start seeing publications, you'll start seeing some podium presence from our principal investigators there, kind of coming on the heels of the submission as well as the expected approval that we are looking for for Nanonife for prostate. On the probe growth, Prostate is a big driver of that. There's no doubt about that, both here in the United States as well as in international markets. I think prostate is probably our highest utilization organ now. That flips from where it had been, where typically in liver and pancreas. So the prostate initiative that we've embarked on, getting the trial done, what our expectations are going forward, we're really seeing strong momentum coming from urologists picking up this technology and using it to treat prostate.

Thank you. Ladies and gentlemen, I'm showing no other questions at this time. I'll turn the floor back to Mr. Clemmer for final comments.

And thank you. And again, thank you guys for joining us today on our call. I really want to reach out to our employees who have worked really, really hard in the last number of years and years, especially the last few quarters, preparing our company for this transformation to a high-tech, high-growth company with unique design elements built into each of our products. Our team has gone through a lot of adversity and powered through it. And now we've delivered excellent clinical results with the AlphaVac as one example of what you think you can come to expect from us in years to come. So a shout-out and a thank you to our employees. Talk to you soon.

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