8-K: AngioDynamics Outlines Growth Strategy at J.P. Morgan Healthcare Conference

AngioDynamics presented its strategic focus on high-growth medical technology markets and provided updates on key product developments at the J.P. Morgan Healthcare Conference.

Summary

• AngioDynamics is focusing on high-growth medical technology markets with significant unmet needs.
• The company is transforming its portfolio to prioritize innovative technologies backed by scientific and clinical data.
• AngioDynamics is targeting markets such as cardiac thrombus and emboli, pulmonary embolism, prostate cancer, deep vein thrombosis, and peripheral arterial disease.
• The company's investments in Med Tech platforms are funded by operating cash flows from its Med Device portfolio.
• Key product updates include the launch of a radial length catheter for peripheral arterial disease in January 2024, and expected CE Mark for Auryon in the first half of 2024.
• The company has completed enrollment in the APEX-AV study for pulmonary embolism and the PRESERVE study for prostate cancer.
• AngioDynamics achieved over $100 million in cumulative sales for the Auryon Atherectomy System as of November 2023.
• The company is expanding its international presence and preparing for CE Mark and other international launches of the Auryon and AlphaVac F1885 systems.
• AngioDynamics expects full-year adjusted EPS profitability in FY27.
• The company has revised its full year revenue guidance to $320-$325 million and adjusted EPS to a loss of $0.35-$0.42.

Sentiment

Score: 5

Explanation: The document presents a mixed picture with positive growth in some areas and negative revisions in guidance. The company is making progress in key clinical trials and product development, but the revised financial outlook and some sales declines temper the overall sentiment.

Positives

• AngioDynamics is focusing on high-growth medical technology markets with significant unmet needs.
• The company is transforming its portfolio to prioritize innovative technologies backed by scientific and clinical data.
• The Auryon Atherectomy System has achieved over $100 million in cumulative sales since its launch in September 2020.
• The company expects CE Mark for Auryon and AlphaVac F1885 systems in the first half of calendar 2024.
• The PRESERVE study for prostate cancer and the APEX AV study for pulmonary embolism have completed enrollment.
• The company is expanding its international presence and preparing for CE Mark and other international launches of the Auryon and AlphaVac F1885 systems.
• AngioDynamics expects full-year adjusted EPS profitability in FY27.

Negatives

• AngioDynamics has revised its full year revenue guidance to $320-$325 million, down from $328-$333 million.
• The company has revised its adjusted EPS guidance to a loss of $0.35-$0.42, down from a loss of $0.28-$0.34.
• NanoKnife disposables were down 3.6% year-over-year in Q2 FY24.
• Mechanical Thrombectomy sales were down 4.7% year-over-year in Q2 FY24 and 5.3% year-over-year YTD FY24.
• AngioVac sales declined 10.8% year-over-year in Q2 FY24 and 9.2% year-over-year YTD FY24.

Risks

• The company's forward-looking statements are subject to risks and uncertainties, including the scale and scope of the COVID-19 pandemic.
• There are risks associated with the development of new products, technological advances by competitors, and potential infringement of AngioDynamics' technology.
• The company faces competition from companies with greater resources.
• Future actions by the FDA or other regulatory agencies could impact the company.
• Economic conditions, including inflation, labor shortages, and supply chain challenges, could affect results.
• The company is subject to risks related to ongoing litigation, third-party distributors, and product recalls.
• The company's ability to obtain regulatory clearances or approvals for its products is not guaranteed.
• The planned portfolio additions and new indications are based on management estimates and industry sources as of July 2022 and are not guarantees of future performance.

Future Outlook

AngioDynamics expects full-year adjusted EPS profitability in FY27 and is focused on expanding its international presence and launching new products.

Management Comments

• Jim Clemmer, President & CEO, presented at the J.P. Morgan Healthcare Conference.
• Dr. Curtis Anderson, Vascular & Interventional Radiologist, stated that with the new hydrophilic coating, they should be able to prove Auryon's technology is one-of-a-kind and unmatched case after case after case.

Industry Context

The presentation highlights AngioDynamics' focus on high-growth areas within the medical technology sector, particularly in cardiovascular disease and cancer, which are leading causes of mortality worldwide. The company's strategy aligns with the broader industry trend of developing innovative solutions to address unmet clinical needs.

Comparison to Industry Standards

• AngioDynamics is competing in the medical device market against companies such as Medtronic, Boston Scientific, and Abbott, which have significantly larger resources.
• The company's focus on specific high-growth areas like peripheral arterial disease, pulmonary embolism, and prostate cancer is a common strategy among medical device companies seeking to establish a strong market position.
• The Auryon Atherectomy System's $100 million cumulative sales since 2020 is a positive sign, but it is still relatively small compared to the revenue of larger competitors in the atherectomy market.
• The company's focus on obtaining CE Mark for its products is a standard practice for medical device companies seeking to expand into European markets.
• The completion of enrollment in the PRESERVE and APEX-AV studies is a positive step, but the time to FDA approval and market launch will be critical for the company's success.

Stakeholder Impact

• Shareholders may be concerned about the revised revenue and EPS guidance.
• Employees may be impacted by the restructuring of the manufacturing footprint.
• Customers may benefit from the new product launches and expanded treatment options.
• Suppliers may be affected by the shift to a fully outsourced manufacturing model.
• Creditors may be impacted by the company's revised financial outlook.

Next Steps

• The company plans to submit to the FDA in early calendar 2024 for the AlphaVac F1885 System.
• The company expects CE Mark for Auryon and AlphaVac F1885 systems in the first half of calendar 2024.
• The company plans to begin an IDE clinical trial for Auryon DVT in late 2024.
• The company expects a prostate indication by December 2024.
• The company will continue to increase its global presence through life symposiums.

Key Dates

Keywords

AngioDynamics, Medical Technology, Auryon, AlphaVac, NanoKnife, Peripheral Arterial Disease, Pulmonary Embolism, Prostate Cancer, Thrombus Management, MedTech, Med Device, FDA Clearance, CE Mark