ClearPoint Neuro, Inc. (CLPT) Earnings Call Transcript & Summary

Good morning, everybody. My name is Matt Blackman, I'm a member of the Stifel medtech research team. Thanks for joining us for our session with ClearPoint Neuro. Just by of way of quick background, ClearPoint Neuro is, it's roughly a $400 billion market cap company with a really interesting platform technology that provides stereotactic navigation, which facilitates minimally invasive surgical procedures in the brain under MRI guidance. Current applications of the system include electrode lead placement, placement of catheters and biopsy. And the platform is also being used for the delivery of biologics, gene therapy, stem cell therapies to the brain. It's FDA cleared, CE marked. There are over 60 active clinical sites across the U.S., Canada and Europe. So a really exciting technology that I think everyone will look forward to hearing about. It's our pleasure to have Joe Burnett, the President and CEO; Danilo D’Alessandro, Chief Financial Officer. They're here to walk us through, as I said, the technology, the opportunity, the strategy. This will be a presentation by time permitting, we'll open it up for questions. And so if you have any, please feel free to type them in the box, and I'll do my best to layer them into the conversation. So thank you, gentlemen, for joining us. Really appreciate it. The floor is yours.

All right. Well, thank you, Matt, and thank you, everyone, for joining us today to learn a little bit more about ClearPoint Neuro. My name is Joe Burnett, and I have been the President and CEO here at ClearPoint for the past 4 years. Now we at ClearPoint, we describe ourselves as a platform therapy enabling company, and we're focused exclusively in neurosurgery and spine, and we have one of the most comprehensive portfolios and services in the space. Our strategy is connected by a common platform that you can see here in the center, which is -- which represents the ClearPoint Neuro navigation system, which bridges the gap between 2 very exciting and diverse opportunities, okay? On one side, which you can see it here on the left, we are a Biologics and Drug Delivery platform company currently working with approximately 40 different pharma partners and academic centers to provide gene therapy and stem cell delivery in this space. Now importantly, we do not manufacture a biologic ourselves. What we do is we provide the navigation, we provide the delivery cannula and we provide the infusion services to get whatever that agent is to a specific location inside the brain or spine. So think of us as we are -- where a pharma company is developing the drug itself, we are the medical device company that becomes an extension of that pharma company to get their drug to a specific target. On the other side of the equation, on the right-hand side, we are a more traditional and predictable device business focused both on navigation and therapy to the brain, primarily looking at deep brain stimulation and brain computer interface implantation as well as delivery of other therapies like laser ablation therapy, which is a therapy we're developing on our own as well. Here, we continue to penetrate these existing markets that are there today by launching new products and growing our share inside of these markets as well. Now we believe both of these markets, the drug delivery business as well as the medical device business, each represent a potential addressable market of more than $1 billion annually. And we're going to show you how that adds up. Now the ClearPoint system itself, our growing installed base and our team of expert clinical specialists are the common threads that connect these 2 fantastic opportunities and give us financial leverage and scale as we grow. So for a quick summary of the company itself. We're based in Southern California. I'm here at our training and innovation center in Solana Beach, California today, along with the very recent expansion into Europe. So our products are both approved by the FDA and CE cleared today. Importantly, we operate as a razor-razorblade model with more than 85% of our revenue coming from recurring disposable sales as well as recurring services that we provide to our pharma partners, okay? To the razor in our equation, as you can see on the right-hand side here, represents the ClearPoint system itself. In general, that system or the cost to start up a new hospital is anywhere between $150,000 and $250,000 depending on the level of customization, and we make about a 40% to 45% gross margin on each one of those transactions. The disposables themselves, as you can see here on the left-hand side, whether it's the navigation frame in the center or the SmartFlow cannula for drug delivery that you see on the left-hand side, these represent about 85% of our revenue, and a typical procedure generates between $6,000 and $14,000 in revenue that comes to ClearPoint. That revenue is closer to about a 70% gross margin, give or take, today. We have more than 65 issued patents here in the United States alone and even more globally, and we currently employ about 70 employees, not the majority, but a large portion of those, about 20 or so are what we describe as clinical specialists who actually scrub into the procedures and are present at each one of these operations to ensure quality control, troubleshooting and proper training as well. Now the problem that we solved here is both obvious and challenging as well. Everywhere in the body, minimally invasive procedures have replaced or are in the process of replacing open procedures. We've seen it in coronary stenting. We've seen it at heart valves. We've seen it in spine. We've seen it in peripheral vascular. The brain is the one remaining place where this transition really has not taken place. Now to enable a minimally invasive procedure, the surgeon needs another way to see in the body, right? If you're not going to open up the skull, you need some other way to put eyes on what it is that you're trying to do. In most indications for minimally invasive procedures throughout the body, this is done with either X-ray or with CT. Now the problem with neuro is that X-ray and CT, they do not give you the resolution required to delineate between the different intimate structures of the brain itself. Now MRI is by far the preferred imaging. However, MRI comes with its own challenges as well. Obviously, if you're operating inside of a giant magnet using different metals and other materials are no longer an option for you as it would be sucked in the magnet itself and create some very, very significant safety issues. Now common practice today and how more than 95% of the procedures are still performed is to fuse an old MRI image with a live CT. And then after that fusion of the 2 images has taken place, you hope that nothing has moved. You hope that the fusion is accurate and that you hope that during the procedure itself, everything stays in exactly the same place. And as we know, anytime you start to fuse different images together, each time it introduces a little bit of error. Similarly, the moment you drill a hole into the skull, depending on the size of the hole, you can actually reduce quite a bit of pressure, and as the pressure releases, the brain can actually shift and move from its original position. These are all things that when you're looking at a CT, you can't always appreciate versus if you're looking at a live MRI image, you can adjust your course right there on the spot. It's also common, as you can see in this one Parkinson's patient that you see here on the left-hand side that patients are kept awake for these procedures because you're not looking at a live MRI image, therefore, you need to test the patient and see how they're responding to the therapy to ensure that you're in the right place. As you look on the right-hand side, our procedures all take place inside of an MRI magnet today. So what that allows us to do is to put the patient asleep under general anesthesia. Okay this is obviously much more comfortable for the patient. Truthfully, if a patient had a choice in the matter to be able to say, "Hey, would you rather be a wake or a sleep for a 4-hour procedure," I'm pretty sure you and I would choose the same option there as well. Now an important aspect of what we do is that we do not require an expensive interoperative MRI to do our procedures. We can work inside of a diagnostic magnet. So our team shows up, we drape the bore and we even turn a diagnostic magnet into a surgical suite for the day. So that dramatically reduces some of the barriers to getting MRI access where we don't need one of those sort of more expensive interoperative suites today. So this is where ClearPoint comes in. Effectively, what we have done is we have taken all of those metallic instruments that you would typically see in the operating room. We have miniaturized them, and we have made them out of MRI compatible materials like you see here, which include plastics, ceramics. We even embed in this targeting cannula in the center, an MRI-visible fluid, which allows our system to interact with its software directly with the MRI scanner itself. So this allows a surgeon to attach the frame to the patient's skull, to drill the whole appropriately in the right location to have everything lined up to insert it to the brain. And most importantly, it allows the surgeon to then take one final image to ensure that, that trajectory is perfect and you're going to deliver submillimeter accuracy, right? That is the most important part or one of the most important parts of our procedure is confirming everything right before you insert because the goal is to do everything with just one single pass. The more passes you go through healthy brain tissue, the higher risk there is for hemorrhage or cognitive defects, we want to do a single pass through each one of these procedures. And by doing this live in the MRI, we allow that very, very important confirmation step right there at the end. Now the ClearPoint system comes in 2 complementary versions, as you can see here. There's the traditional SmartFrame XG, which is on the left-hand side. This has been used in more than 4,000 procedures to date, so it's very tried and tested throughout the -- not just the FDA regulatory process, but they're common practical clinical use today. And then on the right-hand side, which you can see, which we call the SmartFrame Array. This is a new system that was just FDA cleared this year, and this is designed to be used not only in the MRI suite, but to also do part, if not all, of the procedure inside of the operating room. So this is an important pivot in our strategy is that in the future, we are no longer going to be an MRI only company, but rather have a solution that has similar software between the 2 that can be used either in the MRI suite or in the operating room as well. As a reminder, about 95% of all procedures are done in the operating room today. So rather than focus all of our energy and transitioning and changing the arena of these procedures. This is an example of the -- if you can't beat them, join them. So we're going to offer both options for that particular hospital and for those surgeons. Similarly, our yet to be released Maestro Brain Model will serve as our platform engine across all of our procedures. And this has been made possible the re-collaborative license agreement with Philips. This is an example of a big part of our strategy, as you'll see repeated over and over again, where we try to keep our core team small and then use our tentacles, if you will, to reach into other companies and pull out the expertise that we need when we need them. And it makes us be able to compete as a much larger company. In this particular example, rather than us building our own AI and machine learning team, we can actually leverage the expertise that Philips already has in-house and use that expertise when it's appropriate to develop a better product for our patients. This product that you can see here, we expect to release the engine itself of the brain model sometime in 2022 for our first clinical cases there. And then each subsequent year after that, we will be adding new applications on top of that model that solve certain problems, whether it's in drug delivery infusion, laser ablation, temperature control, directional lead assessment from a DBS lead. Each one of these applications will be able to ride on top of this Maestro Brain Model that you see here. Now this is just an example of some of the most common applications that we see growing in the next 5 years. On the biologics and drug delivery side, you can see in this column, we are currently working with more than 40 different individual partners and academic centers. And that's a very, very important part of our strategy here, which we'll talk about in a little bit more detail. In these particular cases, we are providing the navigation, the cannula or both as well as providing clinical services. So for example, if you're a pharma company and you haven't had a lot of expertise working with a neurosurgeon or working in the surgery suite rather than building your own clinical specialist team to do the infusion, that's a service that we can provide to these companies as well to limit their costs and provide them direct turnkey access to our team. On the right-hand side here, you see implantable neuro stimulation leads. This is true for deep brain stimulation and things like Medtronic, Abbott, Boston Scientific and Neuropace. We've successfully done cases with all of these different platforms, primarily for Parkinson's disease, essential tremor and for epilepsy. Recently, we just announced in the last quarter a partnership with BlackRock Neuro, which is a brain computer -- sorry, BlackRock Neurotech, which is a brain computer interface company, one of the most experienced, they actually have 29 human cortical implants that have been planted to date over the past 7 years. This is another tool that's going to help work with patients with ALS, paraplegia, et cetera, and help with communication as well as muscle movement, robotic arm control and things like that. So that's another version where our navigation system is designed to be able to take a brain-computer interface chip and put it into the right location in the brain. And then on the far right-hand side, you see the laser probes themselves. These are laser ablation procedures that are commonly used today to treat either small tumors or to treat epilepsy and to actually ablate the region of the brain where the seizures are originating. These are procedures where part of the procedure always takes place in the MRI. So as an example, you cannot turn on the laser unless you're in the MRI because the MRI is what tells you what temperature the ablated tissue and the surrounding tissue is getting to. It's a key safety feature of the system. Since this has always taken place in the MRI, we saw this as a great opportunity for us to enter the laser therapy market. So we partnered with a company called CLS. And in the future, we'll be providing not only the navigation, but we'll also be providing the laser ablation system itself to complete the therapy. Now by 2025, as you can see here on this slide, we expect our current installed base to expand to approximately 100 sites around the world and us to be able to equip them with our platform, our head fixation frames, our Maestro software engine as well as our MRI-compatible robotic platform, which is currently in development. Now we believe the future of neurosurgery is a little bit different than some other models today. If you notice all the procedures we talked about on the prior slide, these are very chronic conditions, Parkinson's disease epilepsy, paraplegia, et cetera. These are things where the patient has been living with this disorder for years. So it's not like acute stroke where you have 45 minutes to get to the hospital across the street. You can plan out your schedule, you can go to a center of excellence that's an expert in doing these procedures over and over again. So again, we believe the future is these neurosurgery centers of excellence that are doing hundreds of procedures a year instead of 1,000 procedures just doing a handful. It's almost like a lean manufacturing line where you want to go to the center that has the most experience in this case. So now let's talk a little bit about how we get there, starting with biologics and drug delivery. So why is ClearPoint so important for drug delivery to the brain, particularly around gene therapy and stem cell delivery. Most importantly, the field of gene therapy is littered with failed trials that have happened over and over and over again. And we believe a primary reason of this is not always the drug, but the fact that the surgeon was not able to see or identify or reach the proper targe. And once they were there, the infusion of the drug was potentially incomplete. So there's effectively 3 things that we are able to do here at ClearPoint and under MRI guidance that's a benefit for these pharma trials today and eventually a commercial launch. Number one is we can select and confirm the most accurate trajectory to make sure that you're doing everything with a single pass. Again, you don't insert anything into the brain, as you can see here. This is our cannula going in on the left-hand side. You don't insert anything into the brain until you've confirmed that you're on the right trajectory, and you're going to be able to accomplish that with just one path through the healthy tissue. Secondarily, you can identify these periprocedural issues that come up very rarely, but they can come up. So imagine in 1% or 2% of the time as you're sticking something into the brain, you create a hemorrhage. In this particular case, you can identify that bleed right away as opposed to finding out about that bleed 6 to 8 hours later when you're doing a post-op CT. So again, it's very, very important to be able to see this information live on the scan itself. And then arguably most important is that as you're putting the drug into the target, you are able to actually quantify how much drug is going in and what the coverage is of the target. Now it's very common that a pharma protocol will say, "I would need to achieve at least 50% or 80% coverage of whatever structure it is that I'm going after." If you can't see the infusion, how as a surgeon can you possibly be sure that you've achieved that proper coverage? When you're using the ClearPoint system under MRI guidance, you can actually watch and calculate what that coverage is. And as a doctor, you can say, okay, I'm at 20%. I'm at 40%. Greenlight, I achieved 60%. It's okay to close up the patient now because I've done everything that the protocol stated and have given this patient the best possible chance of success, okay? This is an absolutely crucial part, not just for the regulatory process of getting a new drug approved, but for appealing to insurance companies down the road as well. So imagine you're approving a $200,000, $300,000, $400,000 procedure for insurance based on this new-to-world gene therapy and one of those patients doesn't respond. It's crucial that you're able to explain why that patient didn't respond and have all of this data there in the permanent patient record. Now the potential for gene therapy, albeit high risk is incredibly exciting as well. Now to be very clear, to date, there are 0 gene therapy or stem cell delivery mechanisms to the brain that are currently approved commercially. Everything is still in a clinical trial or preclinical phase. However, if you think about the patient populations that are out there, it's pretty significant what the opportunity is. Each one of these procedures that are done generates an ASP for our team at ClearPoint here, anywhere between $5,000 to as much as $20,000 or more per procedure today, and that's simply in selling the equipment that are used per -- procedurally in those particular cases. There's also opportunities to work with pharma companies on, as I mentioned, providing our clinical services where we can actually provide training. We can handle the infusion for them. We can actually be their commercial channel, if you will, because again, many of these pharma companies, they've been focused on a neurologist and selling a tablet, much more so than they've ever had a relationship with the neurosurgeon itself, okay? So this really unlocks some pretty significant opportunities for us. If we look over the course of the next 5 years, the opportunities for a potential commercial release are in smaller markets, but are much more closer than they've ever been before. And if you can actually see these bubbles here on the left-hand side, the most likely first approvals are going to be in the realm of very rare child to genetic disorders like AADC deficiency syndrome, Friedreich's ataxia, Angelman syndrome, et cetera. So these are devastating diseases that often the patient really has no other opportunity today. That's something that we want to be able to provide in the near term. And it's interesting, the FDA and other notified bodies, they certainly recognize how there's not really good alternative treatments for these children. So in many cases, there's -- I wouldn't call them short cuts, but they're more aggressive clinical trial protocols that can be followed to give these kids a chance. On the right-hand side is where you start to see the more adult disorders where there are alternative treatments today, albeit sometimes not the best ones are not very significant in their efficacy. These are ones that are much larger opportunities, but they're going to take a little bit more time because there is an alternative, the FDA is often unwilling to take any short cut whatsoever, and you're going to have to prove this, both clinically as well as economically the benefits of these treatments. But the bottom line is that if you could be able to start to treat some of these very, very challenging disorders with no good alternatives today with a single infusion of gene therapy or stem cells. That's going to be a very, very exciting thing, and that's why there's a tremendous amount of investment that's going into the biotech and gene therapy space. Now as I mentioned before, a crucial part of our strategy here in a very, very important one that sometimes overlooked is that we have partnered with more than 40 different pharma companies that are in this space, either pharma or academic centers. What that does is that provides us as a portfolio play that derisks any sort of individual investment in the biotech space. As an example, I believe we're currently working with 7 different companies in the Parkinson's space. I think about another 7 companies or so in the Huntington's space. So even if -- these are very challenging regulatory approvals and technology that we're working with, in the event that one falls off, it doesn't mean that we've lost that opportunity. We have additional shots on goal. Similarly, when we have an individual partner like PTC Therapeutics, for example, one of our most mature relationships, even though we're working with PTC on AADC deficiency, which could very well be the first commercially approved version, we're also working with PTC on multiple other indications as well. So it's very common that when we have a pharma partner, that partner actually has 1, 2, 3, even 4 different platforms that have the potential to work with us. And in addition to offering the [ Perry ] procedural equipment, I would say, which is the navigation, the cannula, the clinical support and the training, what we also offer is we've gone upstream in the funnel as well to begin to engage with these pharma partners well before they ever implant their first clinical patients. So we've expanded our team and our clinical services to provide advisory panels to provide protocol writing and consultation, toxicology studies, nonhuman primate studies, all types of things that are required preclinically before you ever get that first clinical patient. So this has allowed us to engage these companies much earlier in the development process and make this relationship as sticky as we possibly can so that once they've got used to benefiting from our services, there's no reason for them to want to switch to some alternative down the road. So moving on beyond biologics, we'll move on to the navigation side of things, which is now we're no longer navigating a biologic to a target, but rather navigating a device to a target. This could be a deep brain stimulator lead, brain computer interface, a laser ablation catheter, a biopsy needle, et cetera. So for deep brain stimulation, we'll start there. There are generally 2 different parts of the surgical procedure. The first one, as you can see in this image, is that a lead is placed to the target deep in the brain, a typical target is something called the subthalamic nucleus or the STN. That has been closed off, and a wire i threaded underneath the scalp down into the chest. And then on a second surgery, it is hooked up to an IPG or think of it as a pacemaker that controls the DBS system. So just to be very clear, we are involved in the part of the surgery sort of part 1, if you will, where the lead is implanted. We don't have anything to do with the surgical implant of the stimulator itself. Now if you think about how these procedures today, there's about 1.2 million patients here in the United States today, yet even though there's 1.2 million patients that are suffering from this debilitating disease, there are only about 12,000 procedures that are done each year. So a tiny, tiny little proportion of the actual patient volume is making it all the way through to surgery. Now part of that, we believe, has to do with education and that a lot of patients are simply unaware that DBS is a technique. Another very reasonable reason that we think these procedures are not being done is that patients are scared of being awake for that procedure. And the more awareness that we can create relative to helping them understand that a sleep DBS is an alternative and a very rational one to what is being done awake in the operating group today. So we've just now begun in the last month, I believe, started our patient outreach to help understand and educate them on both of those different options. Today, there's obviously a lot more potential for DBS. But even in the 6,000 new leads that are implanted each year today, we are only at about 7% of those procedures. So even in the existing market, we have quite a bit of opportunity to grow even if the market itself continues to only grow at about 10%. Now just like on the biologics and drug delivery side of things, we're very, very excited about some of the new potential applications toward deep brain stimulation. As you can see on the left-hand side, it's currently being used for epilepsy, but there are clinical trials underway looking at OCD, Alzheimer's disease, early Parkinson's, major drug-resistant depression, stroke rehabilitation, et cetera. So what's really, really exciting for us in these markets or these opportunities is that we were late to the game with deep brain stimulation. So for Parkinson's disease and essential tremor, we've had to spend the last 5 years changing behavior and switching surgeons from what they've been doing for 20 years over to something new. These are all applications where we can be involved in the clinical trials from the very beginning. So as that new indication gets approved, they can actually pull our technology along with it. So here, we're getting in from the ground floor instead of playing catch-up. Now moving on to laser therapy. As I mentioned, this is another procedure, a typical procedure that's done for laser ablation is that you take a laser catheter to a target, as you see here on the left-hand side. That target might be a small tumor near a very, very eloquent region of the brain that you don't want to do any additional damage. It could also be the HIPAA campus where you've confirmed seizures are originating at that location and you want to ablate that tissue to stop the seizures and their tracks, okay? We make the complete portfolio of tools that are used in this procedure. In the past, we would only provide the navigation system, as you've seen before. In the last couple of years, we've partnered with 2 companies, one is a company called CLX out of Sweden, in Lund. They make the laser system, the TRANBERG system that you see here on the right-hand side. This system is actually FDA cleared and available for surgeries today. However, it's missing a key software component, which is currently -- we're currently developing alongside of their partner company, IGT in Bordeaux, France. They are taking -- we plan on submitting that software component by the end of this year and be doing our first clinical procedures with our complete laser system in 2022. And to show you the impact that it'll have on us today, today, there's about 15,000 patients a year that have Focal Epilepsy, meaning they -- not only do they not respond to a drug and they can't control the seizures or the symptoms. But number two, the seizures are originating in the same spot over and over and over again. So by ablating that one particular region, you should be able to stop the leisures. That's the opportunity of about 15,000 procedures per year. Similar in patients, not every tumor is the right one for laser ablation. If the tumor is larger than 3 centimeters, for example, then an open resection is probably the best way to go. But if it is a small tumor and you want to do it minimally invasively, there's at least about 5,000 of those procedures each year that would fit the bill. If you add that opportunity together, in the past, we've only made about $5,000 to $6,000 per procedure navigating someone else's laser to the target. So we would make 5,000 to 6,000, the laser company would make $10,000 to $12,000, let's say. In the future, we'll be able to combine our navigation with our partners' laser system, and therefore, we'll be generating about $15,000 to $18,000 in revenue per case. So this is at least a $300 million to $400 million market potential just based on these small procedural subsets that we see here. And then as I mentioned, education is an essential part of what we do and our focus today, we have formally opened our global training and innovation center here in Solana Beach. This is nick name the Cove, and this is a place where we host not only investors, we host patients, we host surgeons, we host pharma partners, et cetera. Even as -- I think we opened on August 27, and we've had more than 100 different people come through this education center just in the past few months alone. So I think we're off to a great start, and we're very excited to -- now that we have access to capital like we've never had in the past to facilitate these training programs and be much more aggressive in the way that we position ourselves and we position these very important therapies. So as I mentioned, we did close a substantial capital infusion back in February of this year. We -- the company currently has approximately $57 million in cash on hand, and we're currently burning between $3 million and $4 million a quarter. So a very significant run rate, as you can see. What this has allowed us to do is to commit to schedules and deployment of a number of these different product development efforts that you can see. So anything that would help us in the navigation and robotics bucket, the biologics and drug delivery service and technology bucket as well as some of these enabling therapies like laser ablation where we're not navigating someone else's tool to a target we're navigating our own therapy to a target. So as a result of this, I think we have one of the more impressive and innovative product pipelines that you see in the neurosurgery space. And part of that is again because we are focused on this space. Anything a neurosurgeon would do in the brain or spine, that's kind of where we draw the line. So we're not competing with resource requirements for companies that also have to deal with heart valves and renal renovation and pacemakers, things like that, right? We're focused exclusively in this space. So if we had to summarize our 4-pillar growth strategy. Pillar 1, is to continue to execute in the biologics and drug delivery space. We want to continue to accumulate global partners and diverse indications. Again, there's about 30 different indications that we're involved with today across 40 different partnerships and the rate at which we've been adding partners has accelerated. So what I mean by that is, in the first 10 months of this year alone, we've actually added 15 additional partners. So the fact that we not only have expanded our preclinical services to have broader offerings and earlier in the development cycle, but we've also expanded into Europe, which has helped us to win a number of European partnerships over that period of time. Pillar #2 is around neuro navigation for deep brain stimulation and brain computer interfaces. Here, it's important that we enter the microelectric recording market. So that will be another disposable product we offer in the procedure. And that, in turn, will allow us to enter into the operating room. So again, 95% of procedures are done in the OR, only 5% in the MRI suite. This tool or this combination of tools, along with Array, will allow us to compete for those other 95% of procedures and not depend on moving the procedure out of the OR and into the MRI suite. Pillar #3 is to launch our own therapeutic products. The Maestro Brain Model is an example of that. That's an engine that will apply across our entire platform. But as you'll see, many of the individual applications that are added to it, we'll have specific uses in these therapy cases. Similarly, we need to enter the laser ablation market with a very competitive product, if not a best-in-class product, which will give us a chance to penetrate that existing market as well as enter the biopsy market through our own product or series of products, too. So again, we're working to accumulate all of the different avenues of per procedure revenue that you can find. And finally, pillar #4 is to achieve global scale. This is to expand our footprint outside of the U.S. to attract additional pharma additional device partners. We want to launch our robotic platform so that many of these procedures can be consistently performed site to site. And then we want to also launch a remote support facility here in Solana Beach, meaning that instead of us flying or providing a surgical consultant for every procedure, us being able to cover some of those remotely to reduce our cost and achieve greater scale. Our facility -- our manufacturing facility to [ say ] in Irvine, for example, even though we are close to 68%, 67% gross margin, we can do approximately 4x our current production through that same facility without having to expand. So let's quickly take a look at the financials. As you can see, our case volume or our surgical procedure volume has increased almost like clockwork, I would say, over the past few years, albeit COVID obviously had a negative impact there in 2020 and a bit in 2021 as well. From a case volume standpoint, at the beginning of this year, we predicted between 900 and 1,000 cases, and we continue to believe in that forecast. Similarly, on the revenue side of things, this year, we've guided to between $16 million and $17.5 million back in January of this year. We continue to expect to land in between $16 million and $17.5 million this year as well. The one thing I will call out on this particular chart, however, is that even though the navigation business, as you can see, has continued to grow over those years, except for 2020 when elective procedures were halted for some period of time, our biologics business has actually started to explode over the past couple of years. Going from $1.1 million to $2.4 million to $5.0 million and will represent a larger proportion of sales here. If you noticed in our last quarterly earnings in Q3, our sales of biologics revenue was actually over $2 million in the quarter for the very first time. So that particular part of the business is growing faster than the traditional device business, if you will. So in summary, we believe we have a very unique platform technology in our drug delivery cannula in our navigation software and the ability to operate in the MRI environment, which we're going to be able to leverage everything we've learned there and move into the operating room as well. We have an exciting pipeline of new revenue streams. Some are near term relative to laser ablation, DBS, navigation, et cetera, preclinical services. Some are farther out there, but massive opportunities around brain computer interfaces and biologics and drug delivery. Our procedure volume has grown about 33% CAGR over the past 5 years, give or take. And arguably, most importantly, the total addressable market that we see out there is greater than $2 billion between our biologics and our device business. And importantly, there's a lot of redundancy across that. So what I mean by that is a Parkinson's patient could be treated in a number of different ways. You could treat them today with deep brain stimulation. You can treat them today by doing a paladotomy and actually using a laser to ablate a region of the brain or you can treat them in the future using a gene or stem cell agent. As I mentioned, we're in 6 or 7 different trials or partnerships today looking at Parkinson's disease. So think of us as kind of that Swiss Army knife, where if a hospital has access to ClearPoint, it's unlocking the ability to treat that same patient in 3 different ways and allow the surgeon to match the right therapy with that right particular target. We have a large growing installed base. We're currently in about 60 -- a little over 60 hospitals of about the 250 hospitals in the United States, capable of doing these types of procedures. That number, if you go worldwide, is about 2x. So we're still underpenetrated relative to the sites that could be doing these procedures using ClearPoint. And then most importantly, we have an incredibly passionate team that is always putting the patient first. In my entire career, whatever I learned is, you have the right people that are motivated by the right thing and you're capitalized to make it happen, you can do pretty exciting things, and I believe that's exactly where we are today. So with that, I thank you very much for your attention, and happy to answer any questions either today or throughout the rest of the day as well. Thank you.

All right. Thanks, Joe. I think we're out of time. Really appreciate it. Great overview. And thank you, everyone out in the audience for listening.

Right. Thanks Matt.

Thank you, everybody. Bye.

Thank you.