Q3 2024 AngioDynamics Inc Earnings Call

Participants

Jim Clemmer; President & CEO; AngioDynamics, Inc.

Steve Trowbridge; EVP & CFO; AngioDynamics, Inc.

Jayson Bedford; Analyst; Raymond James Financial, Inc.

Steven Lichtman; Analyst; Oppenheimer & Co., Inc.

Jon Young; Analyst; Canaccord Genuity Group Inc.

Presentation

Operator

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. (Operator Instructions)
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 Investors 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 identifies 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 our 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 the press release discussing the company's operating results and financial performance during this morning's conference call. And I'd now like to turn the call over to Jim Clemmer, AngioDynamics' President and Chief Executive Officer. Mr. Clemmer.

Jim Clemmer

Thank you. Good morning, everyone, and thank you for joining us for AngioDynamics' fiscal 2024 third quarter earnings call. Joining me on today's call is Steve Trowbridge, AngioDynamics' 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, BioSentry, PIC and midline businesses and our discontinued radiofrequency and Synteract support catheter products. We are very pleased with the solid pro forma 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 PIC and midline product portfolios. This divestiture, combined with the ongoing shift of manufacturing out of our upstate New York manufacturing facilities and at the divestiture of our dialysis and BioSentry 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 MedTech segment and solid mid-single digit growth from our med device segments. 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 MedTech segment and 5% from our med device segments.
Growth in the MedTech segment was driven by REM, 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 APEXPE. trial, we expected continued softness in AlphaVac sales between the completion of the trial and the FDA approval of the PE. indication. We are pleased to announce today that we 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 opens 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 TE. 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 that has been reported in other PE. trials. We look forward to more specifics being announced and 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 FY '25. 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 Auryon 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 Auryon for use in their cath labs for their OBLs. We currently expect to receive CE Mark for Auryon by the end of June, allowing us to expand promotion beyond the US and enter the EU market.
Turning to our NanoKnife business, we continue to see increased interest in the usage of NanoKnife 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 for 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 FY '24. Our international business grew approximately 21% year over year, including approximately 53% growth for MedTech and 7% growth for med device. We also hosted our fifth international clinical lives symposium. The 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 and caring for their patients.
Now turning to our portfolio optimization that I mentioned earlier on February 15, we sold our PiC and midline portfolios, the 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 unit blade and Starburst RF products as well as our Synteract 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 FY '23. We are much happier with where our portfolio sits today with a higher growth MedTech business that is the foundation of our future growth and profitability, along with our 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 FY '26 and being fully realized in FY '27.
Looking at the combined divestitures to spectrum and Merrick, 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 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 Trowbridge, our Executive Vice President and Chief Financial Officer, to review the quarter in more detail.

Steve Trowbridge

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 BioSentry businesses that we divested last June. Picking midline products that we divested last month, the radiofrequency and Centrex support catheter products that we recently discontinued. Our revenue for the third quarter of FY. '24 increased 8% year over year to $66 million, driven by growth in both our MedTech and med device platforms.
Medtech revenue was $25.7 million, a 12.6% year-over-year increase while med device revenue was $40.3 million, growing 5.2% compared to the third quarter of FY '23. Year to date, our overall revenue is up 6.5% year over year, with our MedTech segment up 9.6% and our Med Device segment up 4.6%. We were pleased with the return to growth that we saw across both our MedTech and med device 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 Auryon platform contributed $11.8 million in revenue during the third quarter, growing 14.7% compared to last year year to date, our RCM 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 FY '23. Angiovac revenue was $5.5 million in the quarter, similar to prior year sales. We were pleased to see the stabilization in AngioVac revenue during the quarter after that, 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, but 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 our strong driver of future disposable sales. Year to date, NanoKnife disposable sales are up 15.1% and total NanoKnife sales are up 25.7%. And in addition, as a reminder, earlier this year, we announced that enrollment in preserve is now 100% complete and that this data start to be made public over the course of this calendar year. We look forward to sharing that 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 FY '24 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 when compared to the third quarter of last year.
Year-over-year decline in gross margin for the MedTech business was primarily driven by product 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 outsource manufacturing.
Year to date, gross margins for FY '24 was 53.6%, a decrease of 150 basis points versus prior year, with medtech gross margin of 63% and med device 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, our pro forma numbers following the divestiture of our PICs and midline businesses, and 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 FY '27. Until we can complete this transaction transition, we will see some ebbs and flows in our reported gross margins.
For example, our transition incorporates moving manufacturing to third party partners. The faster we do this quicker, we end up double paying for manufacturing overhead and therefore increasing the impact of under-absorption in our Queensbury 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. 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. It results from growing the percentage of our MedTech revenue base.
Turning to R&D, our research and development expense during the third quarter of FY '24 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 FY '24 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 FY '24 was $6.5 million or adjusted loss per share of $0.16 compared to an adjusted net loss of $5.4 million or adjusted loss per share of $0.14 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. For 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, an asset impairment charges totaling $6.8 million related to the transition to outsource manufacturing and discontinuation of Synteract. Now the goodwill impairment amount is preliminary was undergoing further evaluation, and it will be adjusted if necessary, prior to filing our quarterly report on Form 10-Q.
Adjusted EBITDA in the third quarter of FY'24 was negative $3.6 million compared to adjusted EBITDA of negative $1.5 million in the third quarter of '23.
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 and capital expenditures of $0.6 million and additions to REM placement and evaluation units of $1.2 million. Similar to our discussion on 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 fourth 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 and 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, recapitalize 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. And 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. It has been an overhang on our company for more than 10 years.
So although we felt very confident in our position. There's always uncertainty in litigation. We're very pleased to come to the settlement and avoid the significant costs of further litigation. The 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 FY '24 revenue will be in the range of $270 million to $275 million. The only change in our guidance relative to last quarter is that it contemplates the recent divestiture of the ticket midline businesses and discontinuance of the radiofrequency ablation and Centrex businesses. These businesses accounted for approximately $50 million of our prior revenue guidance of $320 million to $325 million .
We now expect full year adjusted loss per share to be in the range of $0.54 to $0.58. We expect FY '24 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 FY '24, we continue to expect medtech revenue growth in the range of 10% to 15%, and we now expect med device 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 med device 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

Jim Clemmer

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 BART settlement and the manufacturing transitions. 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.

Question and Answer Session

Operator

Thank you. And at this time we'll be conducting a question and answer session. (Operator Instructions)
Jayson Bedford, Raymond James.

Jayson Bedford

Good morning.
Can you hear me okay?

Jim Clemmer

Hi, Jason.
Good morning. Yes.

Jayson Bedford

I guess Okay, maybe just a few here. So you piqued my interest with your comments around the results of the APEX trial or when do we see data from that trial?

Steve Trowbridge

We've got some trade shows that are coming up soon, Jason. The one that I believe this month, another one in a couple of months. So it's the Sky as well as as part 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. We have 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 then especially what Jim talked around about around overall clot removal, we think it's going to be a nice differentiator for us.

Jayson Bedford

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

Steve Trowbridge

Sure, Jason, in the second half of this calendar year, you'll see a couple of new products being launched a couple of new R & D design element changes that we added based on feedback we received during the study. So as 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.

Jayson Bedford

And those are contingent on it's a 5-K, 10-K yet there's regulatory clearance involved, right ?

Steve Trowbridge

There are we have a couple of things coming out. I think one might be a letter to file one's a 5-K, 10-K, but just depending on which design elements we're going to add.

Jayson Bedford

Okay. And 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 plus it 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. In addition,

Jim Clemmer

we're not seeing anything in the market that has shifted or changed?
It was obviously a blend of headwinds and tailwinds that we've talked about some of those. But no, we haven't seen any market forces nor have 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 that it was simple to keep it consistent. We're comfortable with that range. And think for investors, it shows a simple, stable change.

Steve Trowbridge

And as you said, there's disruption going on in terms of divesting 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.

Jayson Bedford

Okay.
Maybe just 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?

Jim Clemmer

So two points active with the cash. I think we've signaled, Jason, we really love the portfolio we have today the medtech side, three great platforms, not just product there, really platforms that you'll see more opportunities kind of spin off in the coming years. So we're not looking to maybe acquire anyone else's product or our asset to add to our base.
And secondly, as far as a buyback. Those are things we'll discuss at the Board level and communicate maybe in the future.

Jayson Bedford

Okay.
Thank you.

Operator

Thank you.
Steven Lichtman - Oppenheimer & Co.

Steven Lichtman

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

Steve Trowbridge

And Thanks Steve, and good question. So if you go back to two up 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 PI.s and some sites that generated good data for us where 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 we'll do now. So we controlled. So our reps are well trained and ready to support our customers. And then looking forward, you know, the summer launch of FY '25, we'll be ready to go on a larger basis.

Steven Lichtman

As Jim and Steve, you mentioned on gross margin, he does have some ebbs and flows.
And just in terms of an early look at FY '25, I mean, directionally, do you anticipate gross margin on a pro forma basis being up or any any color that you can provide?

Steve Trowbridge

Yes.
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, you know, 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 in our overall manufacturing transfer plan, there's going to be noise in gross margin. You've got a little bit of the on can you kind of balancing act here where the faster we move products out of our Queensbury manufacturing facility and get them into our third party manufacturing hands. While we're doing that we're still double pay for overheads. 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 is the right thing to do for our plans, but it is going to create some of that noise will give you a little more detail as we get into '24 plus.
Look, our 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 those from the larger portion of our overall revenue base coming from medtech, we've seen that, but has been eaten up by some of the structural limitation that we've talked about over the last couple of 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.

Steven Lichtman

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

Steve Trowbridge

So they were cash accretive and we talked about that before. So there's a there's a couple of things going on. If you remember when we did the divestiture of the dialysis and BioSentry products. In the very beginning of this fiscal year, we had said that that was going to be a little bit more dilutive 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 into the two times these assets did allow us to take some direct costs out as we talked about some some assets that went with our pick and midline business as well as a restructuring that we did. So we're going to 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 go as we create the overall structure of the Company heading into '25 and beyond.

Steven Lichtman

Okay, got it. Thank you, guys.

Steve Trowbridge

Thanks, Stephen.

Operator

Thank you. (Operator Instructions)
Jon Young, Canaccord Genuity.

Jon Young

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 here and just 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.

Jim Clemmer

Yes.
Hi, John. Thanks for the questions. We're trying to make sure I remember, I'm Stephen. I'll cover for you on is certainly a couple of things. And we've 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, you have there now being the 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 on each of the 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 of 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're often have a plan to add as we grow. But today, we're going to start with the 40 reps we have today from a muscle.

Steve Trowbridge

So was the question about the clinical, the clinical data that we're excited to get the APEX results out. We think that those APEX results are going to be meaningful. And we're also excited to get the CE mark that Jim talked about and launch 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 were going up against. We think our product has some real advantages. And so yes, we're going to support that with continued data generation efforts that could be in the form of some registries 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.

Jim Clemmer

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

Jon Young

Thank you.
So transparent about a lot at you. And just turning to now nice to have and the strong quarter you had around there.
Can you talk about what's clicking there? When can we see the initial preserve data this year? And is there any way to characterize how much of the probe sales were for prostate? Thanks much, again, taking the question.

Jim Clemmer

Yes, 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 of years ago, making sure that we are focusing on pro growth because that's a nice 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 20 plus percent growth in probes. That's pretty been 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. And with respect to when we're going to see some data to 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 see very similar to what we talked about with after that, you start seeing publications, you'll start seeing some podium presence from our principal investigators. They're kind of coming on the heels of the submission as well as what the expected approval that we that we are looking for for NanoKnife for prostate on the pro 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 we have flipped from where it had been, where you have typically in liver and pancreas. So the prostate initiative that we've 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.

Jon Young

Great.
Thank you.

Operator

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

Jim Clemmer

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 power through it and that we've delivered excellent clinical results with the AlphaVac is one example of what you think you can come to expect from us in years to come. So shout out and thank you to our employees, talk to you soon.

Operator

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