Q2 2021 AngioDynamics Inc Earnings Call
Good morning, and welcome to the Angiodynamics fiscal year 2021 second quarter earnings call at.
At this time, all participants are in listen only mode.
A question and answer session will follow the formal presentation.
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As a reminder, this conference call is being recorded.
The news release detailing the fiscal 2021 second quarter results crossed the wire earlier. This morning and is available on the company's web site. This conference call is also being broadcast live over the Internet at investors section on the company's website at Www Dot Angiodynamics dot com and the webcast replay of the call will be available.
The same site approximately one hour after the end of today's call.
Before we begin on whats 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 on gross margins for fiscal year 2021.
It's really encourage you to review the company's past and future filings with the FCC, including without limitation. The company's forms 10-Q, and 10-K, which identify specific factors that may cause the actual results or events to differ materially from net was described on the forward looking statements the.
Slide package offering insight into the company's financial results is also available on the Investor section on 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.
I'd now like to turn the call over to Jim Clemmer, Angiodynamics, President and Chief Executive Officer Mr. Clemmer.
Thank you, Rob and good morning, everyone and thank you for joining us for Angiodynamics does Scott 2021.
Second 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 second quarter financial performance.
I'm very pleased with our second quarter performance.
We delivered strong revenue growth welcome.
While continuing to invest in our key technology platforms are.
Oh, sorry on Angiovac and then on life all delivered strong performances during the quarter, resulting in second quarter revenue of $72.8 million from 4% year over year.
Additionally, we continue to balance near term cash on expense management.
With a strategic investment in our long term growth initiatives and were pleased to deliver an adjusted EPS of one cents for the second quarter.
The COVID-19 pandemic continues to impact both the angiodynamics team and our customers.
However, we observed improvements in certain geographies throughout the quarter.
Thats hospitals on local governments continue to navigate the pandemic.
We're very excited that there have been several positive developments in the global fight against COVID-19, including the approval of several vaccines.
However, we expect headwinds to continue to impact our markets.
Back half of our fiscal year and do not anticipate a full return to pre cope with levels of demand in the near term.
I am extremely proud of the resilience our team has shown over the past several mark as we continue to navigate this unprecedented global crisis.
We have established a very solid momentum through the first half of our fiscal year, while continuing to make progress on our key growth initiatives.
I'm excited about the upcoming product launches, we have planned throughout calendar year, a 2021, including the planned release.
On a new multi purpose mechanical aspiration from back to meet device, which I will discuss in more detail later on our call.
As we've discussed about in recent quarters we.
We are focused on driving growth across our three key technology platforms.
Internal R&D.
M&A and clinical and regulatory pathway expansion.
Are you on what's the most recent acquisition and continues to perform well and in line with our expectations for the year.
We successfully launched our already on atherectomy system during the quarter and we have seen strong customer interest in this new product.
We reported already on related revenue of $2.1 million in the quarter, bringing our fiscal year first half revenue to $3.2 million.
We continue to anticipate Ari on revenue in the range of $7 million to $10 million for the full fiscal year.
Wow like last quarter M&A was not in the area of focus on spending on the quarter. It will continue to play an important role in our transformation in the future.
We continue to pause on any M&A activity until we're comfortable that the cobot pandemic is behind us.
At which time, we will resume our disciplined approach of identifying appropriate M&A targets.
Thanks strategic opportunities.
In terms of internal R&D.
We continue to invest for growth.
And during the second quarter, we saw continued strength from our Angiovac platform, which grew 24% year over year.
We're also very excited about the upcoming launch of our multi purpose mechanical aspiration thrombectomy device on.
Another product, resulting from our focused internal research and development.
We have continued to see strong momentum in our Nanoknife platform.
With strong disposable sales in the quarter building off the strong capital sales last fiscal year.
As well as the increased visibility into the uniqueness of this technology provided by the comprehensive direct study.
On that note our sponsored clinical studies direct and Pathfinder remain a primary focus I continue to require flexibility in the current environment.
As of today, we have 26 direct study sites and have secured IR be approval.
Any additional sites since the update we provided you on our first quarter earnings call.
We are pleased with a significant number of leading hospitals that have signed on to participate in this important study.
Moving forward, we anticipate shifting efforts from additional site initiation.
True patient screening and enrollment.
As can be expected.
Screening activity has been challenging in the current environment.
Due to cold weather related protocols at many hospitals.
Our Pathfinder Ari on registry study.
Nine sites initiated and enrolling subjects.
As of today, we're about 75 per cent of the way toward our enrollment target.
And we expect enrollment to be completed.
By the end of the third quarter.
The vast majority of sites participating in Pathfinder, our office space laboratories.
Good day.
These ob elds are not experiencing the same type of significant cobot related delays as hospitals.
Finally with respect to reimbursement.
We would like to highlight CMS is final decision to provide for an increase.
Medicare payment IRA, which is nanoknife method of action.
In the hospital outpatient setting.
This is a significant milestone for the technology.
As we previously discussed I are really received the tissue agnostic CPT three codes.
These codes now have pain associated with them in the hospital outpatient setting at least on par with other ablation technologies and we believe that the advantages of IRA.
On the newly established reimbursement levels will drive adoption in the outpatient setting.
Setting that is very well utilized in Europe by specialties, like urologists and interventional radiologists.
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.
Thanks, 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.
As I've done in each of the last two quarters I'd note that with respect to the second quarter and our business moving forward. We will continue to provide slightly more intra quarter detail than we would in a normal operating environment.
Our net sales for the second quarter fiscal 2021 increased 4% year over year to $72.8 million.
As I stated last quarter, our same customer analysis of our business has indicated that volumes remain below pre coated levels and assuming the recovery continues along its current trajectory. We do expect this to remain a factor throughout the course of fiscal 2021.
Our second quarter results reflected less severe declines than the 10% to 15% decline we discussed on last quarter's call, but we are still keeping a close eye on the third quarter and currently expect the third quarter is likely to see a more pronounced impact from corporate related headwinds.
As I've been true with our recent quarters. The ongoing pandemic has impacted each of our three businesses in very weighs on.
Okay, and VIP businesses performed the strongest during the quarter as the number of procedures improved from the coated lows. We saw in the second half of last fiscal year, but still remains below pre corporate level.
Alright ecology business also performed well during the quarter, but did face a difficult comparison on the capital side.
Our total VIP business increased 8.8% year over year, driven by Angiovac sales growth of 24%.
I know that this is the first quarter that comps get the launch of our Gen. Three platform. So well in absolute terms the growth rate appears lower than previous quarters. The trajectory of this business remains quite strong and unchanged.
Our VIP business also benefited from $2.1 million in sales related to Oreo.
We officially announced the commercial launch of Ari on in September and the early response from the marketplace has been positive.
As we stated in the past we anticipate this product will represent an increasing part of our VIP business moving forward with sequential quarterly improvement throughout the rest of this year.
For our VIP business. This growth was driven by Angiovac and Ari on was somewhat offset by a 10.6% decline in Vienna sales, resulting from a decline in the number of elective procedures being performed due to the COVID-19 pandemic. This.
This impact is consistent with what we've seen in the previous two quarters and we anticipate these headwinds will continue throughout the remainder of fiscal 21.
Vascular access revenue increased 5% during the quarter.
Growth in this business was driven by growth in Piccs and Midlines for the third straight quarter as well as growth in ports and dialysis.
Our strong second quarter performance was partly attributable to the fact that the headwinds we faced as a result of the COVID-19 pandemic, we're less severe than we had expected, but again, we expect a more pronounced impact during the third quarter, given elevated cases across the country and the globe.
Revenue from our oncology business declined 7% during the quarter. This decline was the result of lower Nanoknife capital sales on a year over year basis, when compared to the second fiscal quarter of last year during which we saw strong capital sales driven by the release of our Nanoknife 3.0.
We were very pleased that Nanoknife from sales grew 30% in the quarter led by 76% growth in the United States.
This strong pro growth is driven in large part by the increased installed base, resulting from the strong capital sales, we reported in previous quarters, giving us further confidence in our ability to drive growth in probes through an increasingly large installed base.
Moving down the income statement, our gross margin for the second quarter of fiscal 2021 was 55.2 per se.
A decrease of 410 basis points compared to a year ago, but an increase of 430 basis points sequentially from our first quarter.
The decline was split fairly evenly between already on startup costs and planned under absorption in our manufacturing facility as we have discussed in the past. This decline was anticipated given the ongoing focus on employee safety and predictability.
In addition, we reported an inventory reduction during the quarter of 3.2 million, resulting in a year to date reduction of $10.3 million.
As previously noted our plans will have an impact on our full year gross margin as we assess the shape and timing of the COVID-19 recovery.
Well, we continue to expect to finish the year with quarterly gross margin running closer to pre corporate levels.
Our research and development expenses during the second quarter of fiscal 21 were 9.7 million or 13.3% of sales compared to 7.8 million or 11.1% of sales a year ago.
We remain focused on strategically investing in R&D in order to improve our key technology platforms, while remaining thoughtful about our investments given the current environment.
Staying true to this plan, we expect to accelerate our investment in anticipation of the launch of our new multipurpose mechanical aspiration thrombectomy device in calendar 2021 with opportunities for additional investment in the back half of fiscal 21.
This investment is included in our R&D guidance and why we reserve the right to pull back on these investments if the environment changes meaningfully for fiscal 21, we anticipate that R&D spend will come in at the higher end of our previously provided range of between 35 and 40 million as we accelerate certain investments on the heels of our first half performance.
As Jim <unk> expense for the second quarter of fiscal 21 decreased slightly from the previous year to 29.4 million, representing 40.4% of sales compared to 31.1 million, representing 44.4% of sales a year ago.
Continually assessing controllable discretionary spend with an eye toward cash management, while maintaining investment in our key technologies. We now anticipate our full year EPS DNA spending to come in towards the lower end of our previously provided range of between 123 and 127 million.
Our adjusted net income for the second quarter of fiscal 21.6 million or earnings of one cents per share compared to adjusted net income of 2.2 million or six cents per share in the second quarter last year.
Adjusted EBITDA on the second quarter of fiscal 21 was 5.2 million compared to 6.4 million in the second quarter fiscal 2020.
Turning to our balance sheet in the second quarter of fiscal 2001, we began the quarter with roughly 47.9 million in cash and cash equivalents and we generated 11.5 million of cash from operating activities.
During the second quarter be a capital expenditures of 1.4 million as.
As of November Thirtyth, 2020, we had 58 million in cash and cash equivalents and 40 million in debt outstanding.
Subsequent to the end of our second fiscal quarter, we repaid 10 million of our outstanding debt and now have 30 million in debt outstanding at the time on this call.
Turning now to guidance.
Based upon what we're currently seeing we continue to anticipate fiscal year 2021, net sales will be in the range of 278 to 284 million at full year adjusted earnings per share to be in the range of zero to five cents.
Well, we obviously had a strong second quarter, we do expect to see a sequential decline in third quarter revenue as a result of the typical seasonality in our business and reflecting our current thinking around the impacts of the COVID-19 pandemic on our third quarter results.
Historically, we have seen a 1% to 3% sequential decline in revenue from our second fiscal quarter, two our third fiscal quarter.
Overall, we are pleased with our strong performance in the second quarter. Despite continued headwinds from covert day team.
We will remain committed to growing our key technology platforms, and we'll continue to invest to support new product launches and product updates for 2021 and beyond with.
With that I'll turn it back to Jim.
Thanks, Steve.
I am pleased with our balanced approach of managing expenses and cash while continuing to strategically investing in our three key technology platforms and you go back already on and then on dice I.
I believe this approach will position us to achieve profitable long term growth as the effects of the COVID-19 pandemic begin to subside.
Before moving on to the question and answer session.
I want to take the opportunity to highlight one of our key areas of investment during the quarter.
Our new multi purpose mechanical aspiration thrombectomy device.
Over the course of the past 18 months, we have discussed with you our desire to expand our offerings in the mechanical thrombectomy space with an off circuit device.
Today, we are excited to announce the planned release of this device in calendar year 21.
Which will expand our angiovac platform and open up a significantly larger piece of the addressable market and the moderately complex area.
You can see on page 12 of our Investor presentation.
We anticipate filing a 510 cash in the first half of calendar year 21.
And expect to receive clearance in the second half of calendar year 21.
Followed by commercial launch.
As many of you know this is a large and rapidly growing market, where physicians are becoming increasingly comfortable with choosing mechanical thrombectomy to treat DBT case.
And we look forward to providing them another choice and the treatment of their patients.
Our new device will be a unique design, which has been guided by the well respected key opinion leaders on our medical Advisory Board.
And we believe once physicians experience the intuitive and thoughtful design of this product they'll want to have this device in their arsenal.
What you'll see over the coming 36 months are extensions to this product family. So the introduction of new sizes as well as the clinical and regulatory initiatives necessary to secure an indication for pulmonary embolism.
Positioning us to enter additional sizeable addressable markets.
To provide you with some context in that regard.
Our current Angiovac system.
Serves a market that is made up of approximately 15000 cases annually.
While our new multi purpose mechanical aspiration thrombectomy device will.
There will be aimed at a D.V.T. market. That's he's over 200000 cases treated annually.
And eventually the P. indication, which.
Which sees over on hundred 50000 cases treated annually.
This is a significant increase in the size of the addressable market.
And we believe the design of our platform positions us well.
Take share and what is on already growing market.
Innovation drives outcomes and outcomes drive growth and.
And that is what this industry is built upon.
We are really excited to be bringing this new product to market.
As I mentioned earlier in our remarks.
I am pleased with our performance during the quarter and thrilled about the future here into dynamics as we continue to execute on our transformation.
Our quarterly performance underscores the long term growth potential of our key technology platforms.
We still have a lot of work ahead of us, but I am encouraged by the progress we continue to make against our long term goals.
I would like to thank the incredible Angiodynamics team once again for their commitment and dedication as we continue to deliver innovative solutions that improve the lives and treatment of patients worldwide.
With that I'd like to turn the call back to the operator for questions.
Bob.
Thank you well now be conducting the question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad and the confirmation tone indicate your line is in the question queue.
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One moment, please while we poll for questions.
Thank you. Our first question is from the line of Jason Bedford with Raymond James. Please proceed with your questions.
Good morning, guys and a happy new year to you. So I guess just a few questions first on the quarter or do you think there was any benefit from from catch up at all in fiscal Twoq you here.
The Jason's Jim.
Maybe a little we tried to measure that closely there might have been a little bit in the beginning of the quarter. I don't think there was a lot Jason because we also measure closely what we call quote unquote same store sales as well and there's still a decline as to what we would have expected based upon prior year. So I think I know what you're looking for.
They may have been a little bit of effect, but I, but I don't think it was measurable.
Okay.
And then if there's any way you can compare the trends you saw in fiscal Twoq, you, which ended in November and maybe the trends you are seeing there were you saw on December I'm, just kind of curious as to kind of the step up if there's a difference here with the severity of coke that ramping.
So so Jason I'll give you what's going on on the field and Steve give you some numbers to highlight that but you know again, we're hearing from our customers as probably many of our peer companies are on that they're very concerned and there there are limiting some care no limiting our access so that has been in effect on we've seen that some customers have asked us to stand down some of the.
Outpatient centers that we serve have actually shut down temporarily deal on the Cove and and Steve What do you think from the number side yes.
Yeah look we're keeping an eye on it as we've said in the prepared remarks, there's there's no doubt that it is a or an impact or globally.
Quite frankly, we expected a little bit more of an impact on our Q2.
Got the odd key to September October November we were pleased with how we came through that we're keeping an eye on our Q3, you know as I did say, we'll give a little bit more intra quarter detail than we have in the past probably I was expecting a little bit more of a pronounced impact in December than we actually saw so you know our trajectory so far have have been hold.
Relatively consistent and we like what we're seeing but we're keeping an eye on it because there's no doubt that you're seeing increased stress in the system throughout the U.S. and globally.
Okay. That's good that's helpful.
On the new multi purpose mechanical aspiration device.
Will you have some data at launch.
So this is if I can keep device and so it's it's not requiring a lot of clinical data for clearance.
You know as we've shown with with our other product launches, we are absolutely committed to creating a foundation of data to support those watches and so I would expect that we're going to continue to do the same thing and that may take the form of registration may take the form of other studies will support the watch with data but.
But we see this as an extension that is going to be building off of the strong use cases and data that we have with the current angiovac platform moving into that you know less complex a D.V.T. section that is off circuit and that will be continuing to support that product launch with the collection assessment in generation of Cliniqa.
To date as we move forward.
Okay, and maybe Steve or Jan <unk>.
Well you build a separate sales team for this or will it go through the existing team.
Yes, so Jason I think you know two years ago, we kinda ill re shifted some of the priorities on our sales bags. So what we'll do today they'll still be sold by the same sales team that sells the angiovac product today, and we'll add that selling resources. There. So we look to expand that team on but the current Angiovac sales force will take this product.
To market to our customers.
Jason we've talked about we've talked about the different spectrum of treatment and we talk about the very complex were Angiovac. Currently plays on the other end of the spectrum, you've got the less complex, where you made your catheter directed thrombolysis and then you've got the Middle section, which is really what we're looking to go after with this new product launch on the call point is all the thanks. This other physicians.
You know the same physicians that are doing those procedures or are the ones that are typically doing. This now there may be some cardio thoracic surgeons that are focusing more on the right heart procedures that current angio has and this maybe a product that may be more indicative of an IR, but the call points that were currently going after all the same so it's going to fit right into that same sales force with the additional investment.
That Jim talked about.
Okay.
That's helpful [noise] call us on.
And then I'll, let someone else jump in.
You mentioned early on [noise] excuse me, Jim product launches throughout 21 outside of the new aspiration to realize what else are you looking to launch this year.
Yes, so the most impactful was the aspiration device, we have some other products Jason that we're looking at you know in our vascular access business, there's extension to our dialysis catheter line I'm willing to launch this year, which is really important on that business has been as you've seen you know you've done on our company for years, it's been really well run company.
Based on the new products Weve added in the VA business and just really good management by that team has helped and James who are also you know you and I have talked and we talked to our investors about our interest in expanding nanoknife into other organs. Eventually now that we have you on the direct study, which is you know we're trying to prove that it's the right product for pancreas treatment.
And we've talked about prostate being the next organ that we're interested in and so Jason what you'll see from us and I'll give more details in the near future, but last year. The F.D.A. released new guidance on focal therapy in prostate, which really aligns well with the technology and the mechanism of action of net.
And we've seen some a lot of positions on urologist outside of the U.S. utilize this product for successful treatment. So now we're looking at now we're engaged with the FDA discussions as to what it will take to gain an indication on we'd like.
Have minimized on label for prostate when you when you do that Jason you'll probably see us launching maybe some different products and set ups that are geared towards servicing that urologist. The treaty unique need a focal therapy in a prostate case. So that's something we're excited about and well give you more details on that.
Okay. That's helpful. Thank you.
Your next question.
<unk> comes from the line of Matthew Mission with Keybanc capital markets. Please proceed with your question.
Hey, good morning, guys.
Just for for the new mechanical thrombectomy device.
What is the technology differentiation that you're migrating down from angio back to the wider market.
And specifically, but just how do you think this device can improve patient outcomes.
So a couple of things that we can both answer you know really when you look at how successful Angiovac has been and really the product. We launched in November of 19. The newest version a lot of the physicians that have adopted this product I've asked US boy. This works really well for a few reasons, it's very special and yet you've seen our debt we show the uniqueness of the product.
And it's really a couple of unique factors one of which is on circuit allows reperfusion applaud you the patient healthy during a complex procedure, but number two the vortex funnel tip allows us to really pull massive clot burden.
Into the device out of the patient's body and they love that features they've asked us to design a product now off circuit. So they can utilize it more cases that don't require the complexity of the profusion circuit.
And that's really what we've done so well we can share with you the device design, you'll see we've taken so kind of the best features of that Gore Tex funnel chip and how that works to pull mass clock burdens with a really uniquely designed tool on the other end, which gives physicians control that they've asked for control of the process and procedure utilizing the amount of.
Tore can pull that we can give to remove clot, yet giving their position the control day aspired to Howard.
So that's really kind of a blend of technologies and that's what we're excited about the medical Advisory Board has guided you know these positions are excited by what range about can do and what this new off circuit product can do in their hands to treat less burden.
Let less aggressive Scott.
Yeah, the control that Jim talked about Matt is really important. So you know we understand this market. We've learned a lot we know where the current angiovac product plays and Jim mentioned, the funnel tip, which is proprietary to angiovac, which is a huge advantage. It allows a much greater clot burden to come out.
What are the big advantages of the current Angiovac system is the minimum minimization of blood loss, because we've got that re infusion circuit, but.
But as Jim said, it's a very complex procedure. It requires additional specialties requires per fusion.
So we're looking at a product we're listening to our customers and we think that it's important to provide that funnel tip to go after the big clot burden will take away the complexity of adding for fusion, but still give the physicians that control to know that when they're going after clot. They have the ability to limit blood loss, while going after that clot burden. We think that's the way the benefit that we're going to provide.
Yeah.
Excellent.
Of the.
The 2.1 million for Ari on how much of that was recurring revenue and how much of that was was the initial placements.
Yes. So that's that's all recurring you know as we said this is a the.
Moving a little bit more time with the overall sales as opposed to the hospital day setting just given the current environment.
The marketplace. There as we've mentioned has been to place lasers pursuant to use agreements and then have the recurring revenue with the with the catheters and that day.
That's all of what we saw in Q2.
Is the expectation that the two point that the $2.1 million recurring.
Increasing sequentially from here or are there some level of like inventory build with like initial stocking.
Yeah, We mentioned, we expect to see sequential increasing throughout this year.
With with the on sales that we had become out at the beginning of the quarter. We said, we expect to see seven to 10.
Where we're very comfortable with the pace that we're seeing and that implies some sequential increases and that's what we'd like to see.
Yeah, Matt we're very we're measuring the cases performed each week on very carefully and we've added if you remember back we made the acquisition. There was one commercial person on that came on the excimer acquisition, maybe on the great scientist in Israel, but one commercial person. We now have over 30 people dedicated this business on a commercial side, whether they're selling.
Marketing or feel clinical support specialists and our customers. Each day, so we're making sure that each week that goes by we have the capability that ramps up from.
The support to our customers. So we expect sequential usage to keep growing.
Huh.
And last question when do you think you'll be able to give the <unk> and and update or milestone for for the nanoknife trials outside of the number of sites registered.
Yes, so it's a good question and we you know were continuous testing, where we are on that so.
So with that one statistic we have given is the number of sites and we gave that this quarter with 26 coming up from 23.
We had talked about timing of our expectations of enrollment of the registry side of that study and that indicated that as covert. It. We certainly saw a a delay in a push out and probably you know restarting of that clock.
And we had always talked about two and a half years is our expectation for enrolling the registry side of the study, but felt that Kobe did impact that and we were restarting that clock kind of the.
During our first quarter of this year.
And I think that that's fair to say that we're not seeing you know that same.
Full pause right. So so we're we're we're a quarter plus into that two and a half your expectation as we're seeing enrollment go.
Right. Thank you.
Thanks, Matt Thanks, Matt.
Our next question comes from the line of Bill Plovanic with Canaccord Genuity. Please proceed with your question.
Great. Thanks, Good morning can you hear me okay.
Hi, Bill good morning. Thanks.
Thanks.
So just a couple of questions just started out on the Angiovac product you.
It's pretty strong growth year over year, how much of that you think is covered related versus or new account related or any color would be greatly appreciated.
Yeah, we don't think that that's coated related I mean, as we talked about earlier kind of mid last year when when the cold a bit of it was first hitting there was some discussion in the medical community via increased flooding, but the Angiovac cases that we're seeing we don't feel that there that they're covert related we feel that this is pretty good.
On rate for the overall TVT market going back from the market.
On reality I bring new new cases on so we have some new customers that are signing on and we're increasing growth.
With our current base as well so so we've been pretty pleased with the performance.
Okay. Thanks, and then Uh huh.
In terms of the mechanical product you know just looking at the timeline. So it looks like this will be a lunch.
Approval and launch late this calendar year.
And I'm looking at slide 12 of the chart and I'm. Just so that's first just to clarify that and then secondly, trying to understand what's the difference between Gen. One Gen. Two.
And if you can help us out with that.
Yeah sure Bill so what you'll see again as I said in my prepared remarks, we expect to file from the 5% came in the first half of calendar year and as you see on the chart you're correct. We expect approval second half clearance. So gen. One will be on a larger board device general too well start to introduce smaller fringe sizes, enabling us.
To go deeper into the body and access other DVT, so would expand the market. That's what the chart here shows. So we intend to have overtime different sizes to make sure physicians can access different parts of the body treat different areas of DVT and ultimately again, you know working on a p. indication we think the product is.
Really really well designed on its.
So really be a a really good product for PE over time, So we'll do the clinical and regulatory work necessary.
I think that indication.
Yeah, Thanks, and then just I'm.
Im sorry, the one of the defining element to this market is that we know that there is not a one size fits all fits all solution angiovac in its current form has a great role to play we like the space that we're playing in there we show that in the slide deck or moving into an area that we think is a bigger market. There's some other customer competitors in there they've done a good job they've got Prada.
Thanks.
You know physicians will have a number of products in their tool bag.
We think that this is going to be a great product to add to that but you don't have to displace everything out. There. This is not a one size fits on there's a plenty of room and this really attractive growing market for a number of solutions and we think we've got a really good one here.
Okay, and then two more questions just one clarity on mechanical product as you talk about control would that be some sort of automated aspiration associated with it or would it be bad at all.
So its a manual piece bill it really allows the ppas, where the physicians helped US design. They really asked US. He said look we're really good day.
Give us a tool that enables us to utilize our scale here. That's what we did is we designed it really on their their guidance.
So don't be no automation is a fully mechanical device that I feel utilize their hands on their skill.
Okay and then just last question was a bigger picture volume related I think you mentioned you were a bit pleasantly surprised that the.
The amount of Cobiz impact in December and I. Just you know as we think about that as you think about kind of moving into your fiscal third quarter. There's two impacts your seasonality, which is typically down 1% to 3% and there's the cobot impact I mean, how is we're through December and in January and it seems like it's less it's seen it.
That's what words in your mouth, but it's more of a stable environment its or from its down whatever it is 5% to 10% profit normal volumes, but that seems to be kind of stable. The last couple of months is is that what I'm hearing if you could just clarify help clarify that for me from a broader volume standpoint.
Yeah, Bill I think your characterization is absolutely fair.
As we said, we're very keenly keeping an eye on on what's going on in the broader environment. There's there's no secret that you are seeing increased cases. There is no secret that you are seeing in pockets ER stress being put on the system.
But as we talked about you know when we came out with guidance at the end of our first quarter. The way that we saw this happening and our expectations for the markers that you will see a lot of these peaks coming up but it's going to be a little bit more geographically isolated and that's going to be a more specific on certain areas they'll have stress from down other areas will be okay. We're not seeing full.
Across the board shutdowns like we saw back in the March April timeframe that is held consistent that is what we're seeing that's what we expect to see going forward for the rest of our fiscal year here as well as those those little flare ups in different geographies and stresses coming around but more more isolated. So as is so far yes, we were not back to pre coke at levels, we are still.
Seeing the resilience and stability we.
We may be moving into a little different time period as we get to the end of January and February but with some of these increases cases that were seeing in the U.S., but as what we're seeing now I think the way that you characterize it is exactly right.
Great. Thanks for taking my questions.
Thanks, Bob.
Thank you at this time, we've reached the end of the question and answer session I will turn the call over to Jim Clemmer for closing remarks.
Thanks, Rob and we at Angiodynamics are pleased with our performance we understand the global complexity that everybody is facing dealing with co bid our customers are under stress and pressure on our people our as well you know we work really hard to maintain a safety and security of our people and our workforce our folks in our operations on quality team have.
Then on amazing job now working to produce our products that produce lifesaving ability for physicians to utilize for care.
So we're really committed to making sure we can get through this pandemic keep our people safe and secure and make sure our customers are getting access to the products. They need. We're also really excited about our future and we shared some of that today, but our new multi purpose mechanical thrombectomy product will have other products coming out of our R&D pipeline. So we're very pleased with our quarter we're lucky.
Forward to the future. Thank you for joining us again today.
Thank you. This will conclude today's conference you may disconnect. Your lines at this time. Thank you for your participation.