AngioDynamics Inc (ANGO) 2022 Q1 法說會逐字稿

Good morning, and welcome to the AngioDynamics Fiscal Year 2022 First Quarter Earnings Call. (Operator Instructions)

The news release detailing the fiscal 2022 first quarter results across 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 1 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 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 the 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, AngioDynamics' President and Chief Executive Officer. Mr. Clemmer?

Thank you, Melissa. Good morning, everyone, and thank you for joining us for AngioDynamics' Fiscal 2022 First Quarter Earnings Call. Joining me on today's call is Steve Trowbridge, AngioDynamics' Executive Vice President and Chief Financial Officer. Steve will provide a detailed analysis of our first quarter financial performance and our updated FY '22 guidance.

We delivered a strong first quarter performance, and I'm 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. AngioDynamics is in the midst of a transformation into a high-growth Med Tech 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 variance. 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, given 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 Med Tech business, which, as a reminder, includes Auryon, 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 PICCs and Midlines. We believe these results reflect our momentum entering FY '22 and to demonstrate that we are well positioned to drive further adoption of our unique platforms as procedural volumes normalize.

Our Auryon 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 FY '21. The market reaction to our Auryon technology has demonstrated that we offer a differentiated technology with a wide array of treatment options driving positive patient outcomes. To date, overall, Auryon procedures have been roughly split between above-the-knee and below-the-knee interventions, proving the versatility of our technology.

For FY '22, we expect Auryon to continue to grow meaningfully. And based off the strong first quarter performance, we now expect Auryon to generate revenue in the range of $24 million to $26 million compared to our prior expectation of $18 million to $22 million. We continue to see year-over-year growth from AngioVac during the quarter, which grew 12% over the first quarter of FY '21. 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 Gen 3, NanoKnife 3.0 and Auryon. 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 AlphaVac platform and provides us access to a much larger segment of the DVT venous thromboembolism market. As we discussed during our Investor and 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 FY '22. The 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 continue to strategically invest in growth initiatives during the first quarter as we supported our Med Tech 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 Auryon 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 FY '22, it is an investment that gives us another tool in our bag in support of our continued build-out and growth of our Auryon 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 Dr. S Jonathan Coleman, a Memorial Sloan Kettering Cancer Center and Dr. Arvin 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. And 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 FY '21 in the face of the current environment.

As Jim noted, our revenue for the first quarter of FY '22 increased 9.6% year-over-year to $77 million. Our growth was driven by continued strength in our Med Tech businesses, including Auryon, 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 FY '21, which included that $5.2 million NHS order.

Revenue in our Endovascular Therapies business, formerly named our VIT business, increased 27.5% year-over-year to $38.1 million. This business benefited from continued strong growth of our Auryon platform and a greater impact of COVID-19 on the prior year period. Auryon 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 FY '21. As we discussed at our Investor and Technology Day in July, Auryon 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 Auryon to generate revenue in the range of $24 million to $26 million for the year. AngioVac revenue grew 12% over the first quarter of FY '21. 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 PICCs, 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 NanoKnife capital and disposable sales, as well as strong sales of our BioSentry Tract Sealant System. And 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 NanoKnife growth across procedures, probes and installations. We reported 34% growth in probe sales, which we believe is driven by 2 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 US.

Moving down to the income statement. Our gross margin for the first quarter of FY '22 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 FY '22.

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 continue 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 Med Tech platforms comprise an increasing percentage of our overall revenue.

Our operations team remains focused on labor, service efficiency, material pricing opportunities and make-versus-buy analysis. With all that in mind, we continue to expect FY '22 gross margin of approximately 55%, but we will be monitoring this dynamic environment closely. Our research and development expense during the first quarter of FY '22 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 FY '22, 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 FY '22 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 FY '22 SG&A spending to approximate 40% to 45% of revenue. Our investments in our Med Tech 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 Med Tech platforms.

Our adjusted net loss for the first quarter of FY '22 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 FY '22 was $3.6 million compared to $4.5 million in the first quarter of FY '21. In the first quarter of FY '22, we used $8.9 million in operating cash, had capital expenditures of $1 million and additions to Auryon placements and evaluation units of $4.5 million.

Typically, the first quarter sees heavier cash utilization for us, given the annual year-end incentive comp and other annual expenses such as D&O insurance. As of August 31, 2021, we had $35.5 million in cash and cash equivalents compared to $48.2 million in cash and cash equivalents on May 31, 2021. We had debt outstanding of $25 million on August 31 compared to $20 million on May 31, with the $5 million draw on our credit facility linked to the acquisition that Jim mentioned.

Turning now to guidance. We anticipate that FY '22 net sales will be in the range of $310 million to $315 million, an increase from our prior range of $305 million to $310 million. We continue to expect that full-year adjusted earnings per share will be in the range of $0.00 to $0.05 as we invest in R&D and sales and marketing to drive sustainable growth in our key Med Tech 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 2 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 and 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?

(Operator Instructions) Our first question comes from the line of Jayson Bedford with Raymond James.

Can you hear me okay?

Sure.

So just a few questions. First, 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 Jayson. We don't want to focus a lot on that, but that's exactly right. So we monitor our landscape very carefully and discuss every day with our customer-facing people, washing the shift. So we have seen during the month of September a little bit of improvement. And we've seen some healthcare systems just recently started to do elective procedures, again that were challenged during the last kind of part of the summer. So we're seeing a slow tick back. It's not normal yet. We're monitoring it closely.

And then, I'm just going to bounce around a little bit on some product categories. On Auryon, the installed base of 205 lasers was a pretty big jump from fiscal fourth quarter. Was there something specific that drove this, John?

So a couple of 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, Jayson. We've had a lot of customer demand, some of which is 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. 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 Jayson, 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. So we'll still grow our installed base. We have a lot of demand, but I wouldn't want to mirror (inaudible) sequentially.

No, no, understood. And just as I think 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. Now that we have 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, Jayson. It takes 3 to 4 months from 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 3 to 4 months, utilization looks like it's creeping up. So we're still measuring that and monitoring it. We see it as a strong sign.

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

So as we mentioned, we did our launch, the limited market release on our 22 French, and the 18 French [device] 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.

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

It is, Jayson. 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. We do have Uni-Fuse 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.

Our next question comes from the line of Steven Lichtman with Oppenheimer & Co.

I just wanted to ask a couple on Auryon. 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 by detailing Auryon and where you think you might be exiting the fiscal year.

So in respect to your question of the OBL hospital mix, I think we told you we launched this last year during COVID. So 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 of months, we've seen a 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 3 quarters of our launch. That's a good sign for us, because I think you're also seeing doctors who have 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, Steven, 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 we had started with due to the challenges of COVID. And Steve, do you have a comment on this?

Yes. So Steve, on the size of the sales force, roughly 60 field-based employees that we have currently that are in the Auryon business and that comprises 37 territory managers and regional managers, combined with about 2 sales VPs and then, we have 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.

Shifting to NanoKnife, great to see the impact that your DIRECT is having on the current business. How are you seeing that play out? 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 by DIRECT into the NanoKnife business.

So Steve, it's interesting. I think the fact that DIRECT has been out for a little bit, people understanding now the mechanism of action, how it works. We're seeing physicians involvement. We're thinking about utilizing this technology for other aspects of treatment, other organs. So, 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, give 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, where a little over a year ago, they came out with new guidance for focal therapy treatment option. So we aligned with that guidance they gave and talk to the FDA, and that's how we're able to get the PRESERVE 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 to see what we want to prove with the quality-of-life aspect that we can offer, treating it focally and utilizing the unique device that we have and 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.

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

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 of being a 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.

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 the early parts of September. And so, we're keeping an eye on that. And I think 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 we'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.

Our next question comes from the line of Bill Plovanic with Canaccord Genuity.

You've answered a couple of these questions, but a little more granularity, just how -- in terms of the COVID impact, 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 the 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, if you look at what we did with our increased guidance this call, 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 in. So that's still baked into what we're seeing.

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 will probably see something like 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 the 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 Auryon 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.

And then, 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 there's some staff shortages and impact on your business?

Bill, it's Jim. We're watching that very closely as well. Again, we have great field intelligence with our people globally. But yes, 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 the 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 contract we have with our customers has changed. We're being challenged at the -- how we interact, but they asked 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 to 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 talked about 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 thus adapting to the customer mix as you're talking about where customers are challenging and asking us to deal them differently. So I'm proud of the way our team has reacted and when we have more info, we'll share with you as well.

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

It's a really good question. We monitor really closely, 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 there yet, but I know out of the gate a year ago when we launched this. It seems like we're getting mostly customers who are familiar with the other laser that had been in the market jumping to us first. Let me try this new product because they know the other laser had some limitations and our new product the way it works for the 355-nanometer 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 new Auryon laser actually -- it's 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. Over time, we'll try to give you a ratio. But my final statement, I guess, is the ratio is expanding beyond just former laser users.

Bill, just to add to that, there's 2 things that really make us confident and excited us about the current Auryon business. And one of course is the performance that we've seen in 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 where roughly half of our procedures are below the knee and half above the knee. And so, that's an indication of proving out that thesis that we had when we looked at this technology before we did the acquisition that we felt that 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.

Our next question comes from the line of Matthew Mishan with KeyBanc Capital Markets.

And congratulations on 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 a range -- a good starting point from fiscal '21 on that?

A good starting point for fiscal '21.

On the revenue, yes.

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

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. I'm sorry if I missed that and it was discussed in the prepared remarks.

So, we thought a process a few years ago here with our increased R&D investments. We also have a release process that we're -- it has rigor, a 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 Auryon, even though we bought Eximo Medical, we put Auryon through our process. And now, Matt, we're excited to launch -- announced today, we just started the launch of our -- the LMR of our AlphaVac.

So, again, we expect 6 to 8 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 6 to 8-week period and which will -- what that really means is today, only a small portion of our sales force has been specially trained for the LMR process, engaging with certain customers. And when we get that confidence that our message is resonating and the product is performing as they expect, then we'll go into a full release. I'll communicate that, but you can expect it about 6 to 8 weeks out.

And then through the quarter, I've noticed 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 complementary type areas?

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 and the other companies in this 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 2 competitors that were there before, the other big competitor has been in the space for a long time and maybe some other innovative products.

They're all going to look -- perform differently. If you look at our AlphaVac form, it 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.

And just to add a little bit of what Jim said, Matt, I think more than anything, we know these products we've been looking at. 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, but 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 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 suite with that same strategy.

And then lastly, just on Auryon, I mean there was -- I believe there were some proposed changes to reimbursement of physician office that would -- that could the 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 is 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 has 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.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back over to Mr. Clemmer 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 could 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, 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.