Building a Stronger & Better AngioDynamics

I'm well. Thanks for the opportunity today.

Well, it's funny. Thank you for the opportunity. You know, I was fortunate. I was a sales and marketing major when I went to school in college and started my career in field sales and I wanted to get into the medical industry and I was able to join a company in 1989, my first career job in the Boston area as a sales professional and I learned the industry from the customer first. So I learned it from the customers which helps me now learning what they're interested in, what their pressures are, what they're focused on for patient care. So I worked for many years as a sales rep, then manager, worked my way up and did different things. I joined Tyco Healthcare in the 2000s and then Tyco spun Tyco Healthcare and formed Covidien in 2007. Sure. And many folks know Covidien. So I was asked to join to run one of the two operating companies for Covidien essentially up until 2015 when Medtronic acquired Covidien and I stepped aside and took a time out. Actually did a brief job in academia for a while and then Angio Dynamics reached out and asked me if I'd be interested in joining our company and I did and I'm excited to be here today.

Yeah. Yeah. I've been lucky because I got to work. I started with a private company, kind of smaller mid-size private company. Then I worked for a really large public company obviously and then a committee and we spun or independent and then here I am today at a smaller midsize public. So I've kind of worked public and private different sizes, Omar. I've really had the blessing of seeing this industry from different different kind of views.

Yep. So the company was founded nearly 40 years ago and our primary call point and customer was the interventional radiologist and the company did a really good job building a trusted legacy with providing really important tools to that IR community. Over time I think the company then diversified its product portfolio but became less focused on true patient care and technology and innovation. So that's really why I was asked to join the company, kind of refocus us on where we should be, not just where we were. But Angio Dynamics does have a really large and proud legacy of how we've called upon and served that community. Now we serve a few more communities. Our company's diversified its product portfolio. We now serve interventional radiology as well as oncology, cardiology, vascular surgery. So we're really a little more targeted to different specialties.

You know, so we did a job here in 2019. We really looked at our entire portfolio. Sure. And it took a strategic view of not just where we were where we are but where we should be and decided we had a couple things that were really special and unique but required more work from us whether it was R&D development on the products itself or the clinical work necessary to prove safety and efficacy to collect more data around our products or to expand the geographic approvals to get us into more markets around the globe. So we decided in 2019, Omar, to divest our largest single business at the time but it had become kind of commoditized and less special and we weren't able to compete with the really large players in the space on that scale. So we did that in 2019. We forged a strategy saying that we really wanted to be a cardiovascular company and an oncology company built on three different disease states utilizing opportunities that we had either in our portfolio or we're building out. So that's really what happened for us is when we kind of put the stake in the ground to say our company was going to change based on our portfolio changes because we wanted to serve a changing need in the marketplace.

You know, it was interesting being that I was still kind of the new guy on campus. I could take what I called a dispassionate view towards the portfolio and I talked to others about the need for us to be dispassionate because it's easy to say, well, wait a minute, this is part of our legacy and history and it is, but is it part of our future? Is it where we should be, not where we were? So, I was able to take that viewpoint, convince others that was how we had to treat our portfolio. And we did. And there's always folks that said, 'Hey, look, that was part of the journey we were on. I want to go with that.' And they did. We had some good folks go with us to the company that acquired that asset. They're doing well today. But we needed to move on. And that's why you need to take what I call that dispassionate approach towards where the company should be, not really where you were.

Yeah, you know, we were pleased to report those results not just for the quarter, but you know, we have an odd fiscal year. So, it was our Q4 as well for FY25. I think we're the only company that I know of that starts its year on June 1 each year. I've not found somebody else that has the courage that we have to do that. So it was great, Omar, but it was well-received and our company did a terrific job. So there were financial highlights within the year. Our revenue growth was exactly what we would hope or more in both our historic our medical device businesses that compete in slower growing markets, more of our legacy products. That team did a terrific job during the course of the year. Then in our future, our medtech products, we really exceeded our expectations actually in all three of the categories there. So the team did a great job. Then throughout that process, we had good gross margin growth during the year. We were really, really good on our investments and our expenses and we dropped operating profit through the P&L kind of one year ahead of schedule. So we've been in this kind of turnaround period. We knew we were going to invest forward into the business, but 2025 was the year we could actually then keep those investments, but breakthrough, create positive EBITDA for our investors to see we could do that. And we're looking forward to 2026. We'll continue that good revenue growth. We'll drop more profit to the bottom line and we'll go cash flow positive as well. So, we think for investors, they'll really see a company that's very different than how we looked 5 years ago. But overall, Omar, financials were terrific for our company. But beyond that, what our teams did to facilitate our products being utilized around the globe to treat more and more patients in need of care that we could deliver, our teams did a lot to hit the milestones necessary to get the products utilized safely and effectively and to get them on label or certified to be approved in different locations around the world, which can be very difficult. As you know, the medical device industry, there are high hurdles that exist and should exist to make sure products can be safe and effective. And our team did a really, really good job getting those in use.

Yeah, I can. I'm really excited to tell this story. So, yeah, I mentioned earlier we have our cardiovascular focus. So what we decided in 2019, we wanted to be a cardiovascular company that can help treat venous disease, veins or arterial disease, in this case peripheral arterial disease or PAD. So we had a pathway in 2019 to treat venous disease with our AngioVac product and our soon-to-be-developed AlphaVac, but we hadn't had an arterial product. We had watched the space. Some of us knew the space from our past lives. And we came across this technology from a company called Eximo Medical which used a laser-based approach towards delivering energy through catheters into the artery to break up the calcium and the plaque that can clog those arteries and create PAD which is a terribly debilitating disease. Over 10 million people in the US can be affected with PAD every year. And over 150,000 limbs are lost to PAD each year. So, it's a really tragic disease. So, we thought we could change it. We thought Eximo Medical had a great unique device. So, we bought the company and a year later we launched the product. During the pandemic, really difficult time for a small company like us to launch a product when our customers were saying, 'Hey guys, stand down. We've got to take care of patients here. We can't really look at new technologies.' So, it was a tough time to launch it, Omar. But our team did a great job. The product is unique and it delivers what we thought it would do. The laser energy breaks up the calcium and the plaque in the artery and we're able to treat those patients and give our doctors confidence in the safety and efficacy that although we're delivering high levels of energy to break up the calcium and the plaque, it's safe on the vessel wall which is really important to caregivers and the patients. So Omar, we launched that product in September of 2020 and the results we just reported had over $55 million of revenue in only our fourth year. So we've really taken a lot of market share from five of the largest companies in our industry, right? Really good large companies that are very good at what they do. But it shows what a small company like ours can do. When you have a great product, you build a great team around it. Clinical specialists who help our customers, train them, our selling and marketing team to get our messaging out there. And then the other folks that we needed to do R&D development to launch new iterations of that product. So Omar we think the Auryon is a good kind of conduit to what AngioDynamics can do in the future as well. Launching a product that cures a need for patient care and helps our company grow.

Yeah, I'm really proud of our company. You know, we almost had to prove it to ourselves. We really believed what we could be. When you do a transformation, it's easy to say you're going to do it, but to actually do it. Again, when we sold that business in 2019, that was real revenue going and real profit. And we took a risk. The Eximo company we bought had zero revenue. We had a great product, but no one ever bought one. So, we had to take a risk here. We believed in what we could do. So, it's really empowering when you can see your people deliver. We put new people into new roles. We knew they could thrive and they did. And they brought in new other people. We actually have attracted a lot of new people to join our company because they've watched what Auryon can do and our commitment to the patient care that we deliver through Auryon. So we've got some really good people that work here now. So it's really been a fun journey for us.

We agree. You know, NanoKnife has a history here at AngioDynamics. What NanoKnife is, it's an ablation tool to ablate tumors. It uses energy that we deliver. So, it's a non-thermal approach, meaning it doesn't use heat or cold. No thermal energy is used to freeze or to burn the tissue. But energy is delivered through our probes. A small electrical field is created around the tumor which lets that tumor die naturally actually within the body and we don't damage surrounding tissue or vascular structure that supports the organ you're treating. So NanoKnife is an amazing product. The challenge we've had for years is we've had an FDA approval since 2012 to market the product with just a soft tissue indication. No specific organs that we could treat. So the company struggled and was challenged for a couple years to try to get an organ specific code. So when I arrived and others, we decided to focus our energy in those spaces. The first area that we thought we could treat was folks with stage three pancreatic cancer, which is a really difficult treatment. There's no real standard of care today for those people, but we thought our product could help there. So we launched a study called DIRECT four years ago and we're actually getting ready now to launch the results of the DIRECT study soon so people can see how our product works in that difficult disease. But along the way the FDA actually came out with a guidance document, a pathway for products like NanoKnife to become enabled to treat men with intermediate risk prostate cancer which is a really large market and men today need an alternative treatment if you have intermediate risk prostate cancer. Today, some men are told their prostate cancer isn't moving that rapidly. So, they take a watchful waiting approach to monitor the disease in their bodies. Then, men on the aggressive schedule are told that, 'Hey, we've got to get this out of your body. We're going to take your prostate out.' And unfortunately, with that come side effects of incontinence and impotence that affect many men who have that treatment. Well, in the middle, there's about 40% of the men diagnosed annually. Here in the US, 300,000 men are told annually they have some level of prostate cancer. We think about 40% of the men that we can help with NanoKnife. And NanoKnife again can deliver energy to the tissue, not going to harm the other structure around the tissue, hopefully treat that tumor and give men a chance to have that recovery period, have their prostate treated safely and not have those side effects of incontinence and impotence. We proved that in our PRESERVE study and the PRESERVE study had really favorable outcomes. We presented that data to the FDA last year and they gave us an approval in December. For the first time we can now market the product and educate people around this product. So we're really excited, Omar, to become a new part of what we think will be a treatment protocol over time, become a standard of care we believe and give men this option and also give the urology community a new treatment option they can offer to men today. So we're really excited about this. We think it'll help our company grow as well. Today we're early, only six or seven months into the approval phase. So, we're doing the early level education, talking to the urology community about our unique device, doing some awareness campaigns, so men can go online now and Google, you know, find out what they've just learned if they've been unfortunately told they have intermediate risk prostate cancer. They can learn about our device and learn about why it's different, maybe talk to a caregiver to see if we're a good option for them. But, we're really excited. Our healthcare economics team did a really good job working to get us a CPT1 code that'll kick in and become effective January 1 of 2026. So, we're excited. We look at the landscape, Omar, not that far into the future, even next calendar year, we're going to have a device that's approved. We're going to have a CPT1 code to get reimbursement for caregivers who deliver care and hopefully men who will become aware and educated about this new device and have a new treatment option. So we think NanoKnife can be a really important product for men in the healthcare community and for our company to grow over time.

You know, you're right. You understand this market really well. Yeah. I talk a lot internally and our teams talk about market access. You know, it's amazing to get a device like NanoKnife or like AlphaVac or like Auryon that work really well. But as you said, that's only one part of the equation. You've got to prove that you developed something that's special and unique. You got to then show it's safe and effective. And as you said, prove it. Then get the regulatory bodies to let you into the marketplace. And that takes an approval cycle that proves it's safe and effective. And then the reimbursement aligning all those things together as you said that holy trinity is not easy to do and many stumble and fall in that process and we understand that there's a lot of risk there and this industry is really capital intensive because it requires a lot of capital that you have to invest forward not just in the R&D development cycle but in those other stages of approval to gain market access. So, Omar, this industry, as you know, can be challenging and can be hard. But when you get it right and can clear those, you can become a really important part of the care continuum to treat patients around the globe that need access to care and help your company grow and thrive as well.

Yeah. So, that's a great question. Thank you for the opportunity. You know, we're going to do what we've said we'd do. We took the courage to change this company about five years ago to like I said earlier divest some things that were stable good businesses but not right for us and invested forward into these three disease states to treat PAD, PE pulmonary embolism and then solid tumor cancers and we really believe we're in spaces that matter. These are large total addressable markets. The markets are growing rapidly but there's also really good companies in these spaces as well so we're going to have some good competitors to work with. We have good customers to talk about our products, to educate and inform about our products, people who want to give care around the globe. So, we think we're going to be an important part of that continuum over time. And we think we're already looked at differently, the respect that we've gained in the community by us investing forward, not just into our products, but into the data collection and the proof that they're safe and effective. So Omar, two years from today, I hope that AngioDynamics is a company that'll be larger, faster growing, and be utilizing what we've done to give care options around the world. Our company will have more opportunity, not just for patients to be treated, but for our employees, people who want to join our company and do more. Maybe do a pathway like I've done. Start off as a field sales rep serving a customer. Maybe learn around our business, learn the process like I've done in others, maybe run a company like ours one day. So we'll create opportunity at the patient caregiver level here at the company level for others and again in an industry that I've come to love and I'm proud of. You look at how the folks that the life expectancy of people today, you know, we're going to live longer than our parents did, right? Our kids will live longer than us. Not just longer lives but healthier lives. Quality of life has improved. So I'm proud to have served in this community for years where med device really deserves credit for helping that happen. So, it's an area that we're proud to be a part of, Omar, and I think our company will be an important part of that for years to come.

Thank you very much.