Mike Carrel: Yes. So the new cryoSPHERE product is a much more efficient use of the energy source. So it should allow for the kind of the ball at the end of the tip of it to really freeze much more quickly and actually have very focused energy to get to the end, because it’s got a sheath that’s protecting it kind of early on. So that – some of that – freezing does not escape through the shaft. That is an incredibly important innovation and expansion for us and we think that – it’s going to become the new standard of care as we roll that out. We think what that’ll do is it’ll just allow for much better application of cryo and possibly might be able to reduce some of the time they actually have to spend. We do have to study some of that to see if we can kind of see some sort of time reduction, necessary per nerve that they basically go after on that side.
In addition to that, it’s actually got a better protective sheath on it, which allows them to be much more flexible in their approach and the ease of use for the surgeon that’s going to be doing it is a lot better from that standpoint. So again, we think that they’re going to move towards this pretty quickly over the course of the first six to 12 months of next year.
Unidentified Analyst: Perfect, thanks so much. And then our second question is just on the LeAAPS trial and maybe when do you think we could see any outcomes from that and any impact to the business in terms of revenue and maybe when that could come in?
Mike Carrel: As we briefly mentioned, we’re having great results on the enrollment. We’re enrolling a lot faster than we ever expected at this point in time. So we definitely think that we might be able to get enrollment in faster than expected. That we feel really, really confident and feel really good about the teams are doing a great job on that front. It’s still a long trial though, even with that, we still have five years of follow up once we complete the enrollment on it. So the impact on revenue is really the back half of the decade versus really in any kind of short-term three year time frame from that standpoint. That being said, the excitement in the market around this trial is palpable. We see it with sites.
We’re at over 50 sites that are enrolling at this point. We should have our first patient enrolled in Europe by the end of the year and we feel like next year is just going to be – we’re going to rock and roll really on the overall basis of enrolling in this trial.
Operator: Thank you. [Operator Instructions] The next question comes from Rick Wise at Stifel. Rick, your line is live.
Rick Wise: Thank you. Hi, Mike. Hi, Angie. I was hoping, again, this is not a bid for 2024 guidance or more, I hope you could talk about 2024 from two aspects, you’ve had obviously 2022, 2023, you’re showing terrific growth, broad-based growth, launching new products. At a high level and you’ve touched on it a little bit, but maybe help us think through the incremental drivers. Is the biggest driver that might get you toward that 20% in 2024, the opening of new accounts? Is it – you’re not talking about obviously all the new products you might launch. Is it that? And to what degree could price play a role that might get you above that historic pre-pandemic 15% that you reference?
Mike Carrel: Yes, thanks for the question, Rick. And as we look at next year across each of the franchise, I think you hit up on a couple of them and maybe I’ll – may put a finer point on it. If you look at our open franchise, we continue to see penetration and the volume base that we’re getting off of that base. EnCompass has really been – it’s such an easy product to use. It reduces the time significantly of the ablations that are being done and people are really kind of leveraging that technology and the ablations are incredible. I mean, they’re incredible how well it does the ablation on that front. So we feel like, we’re making great progress on that and that could be a good driver of our growth above what we had historically seen on the open side of our franchise.
So that first and foremost, I’d say is kind of really driving a lot of our growth today and we anticipate that continuing some strong growth into next year. As you look at our AtriClip franchise, we’re seeing more and more attachment on that as well. We think that’s going to be strong both on the open side, but also we continue to see attachment on the hybrid side. And then leading us to the hybrid side, we’ve made all these improvements relative to workflow at the hospitals and having stickiness no sites and we anticipate the growth rate in our hybrid business next year to make a step up from that standpoint. So that’s how big of a step. We’re not ready to kind of put something down on that yet, but we do feel like we’re going to make some progress next year and then continue that progress for years on out as well.
So those are some of the key drivers on that front. On the Cryo Nerve Block, we’re really underpenetrated. I mean, it’s still less than 15% penetration overall in Cryo Nerve Block. We believe that all these patients that are going in can benefit from having Cryo Nerve Block for their analgesia and their pain management while they’re there. And so we do anticipate that we’ll continue strong growth in that area as well. You referred to new products, 2024 isn’t going to benefit from new products as much, but the excitement for it and that’s going to build to help us with 2025 and 2026. So when you look at new products, you can see in our clip franchise, we’ve got a new product coming out at the end of next year, which reflects many products that is going to be one that we think is another one that is even its a more flexible tool.
It’s smaller. We think it’s another leapfrog innovation even from our Flex-V that we’ve got out there today and we think there’s going to be a lot of excitement in the market for that on the open basis. And then there’s going to be a fast follow on that on our pro, which is the kind of the minimally invasive device. And from that standpoint, we also anticipate that impact us kind of in the back half of the decade for sure. So those are kind of two product lines that are coming out here. In addition to that, on our hybrid side, we’ve got HEAL-IST, which is the trial, but we actually have a new clamp that’s going to come out simultaneous to that at the end of next year that will then hopefully be driving growth in the 2026, 2027 time frame.
So not much next year, but you see our product pipelines really building for future growth as well, in addition to all the clinical trials that we’ve talked about. Hopefully that gives you some context there, Rick.
Rick Wise: Yes, that’s great context and great color. I appreciate it. And sort of a pendant question, if you will, and Mike or Angie or both, is just thinking about the operating leverage. I mean, it sounds like the opportunities are there, you’re demonstrating it. But when I think about 22, 23 so far and what seems like the set up for the year, top line growing 20%-ish, SG&A growing 8 or 10. If I take those inputs and continue it into 2024. I don’t know. In the roughest of rough terms, EBITDA doubles to like $40 million as a midpoint of some range. But how do I think about your need to invest back to sustain the growth, to drive the growth, to create the penetration that you’re talking about, roll out all these excellent new products. Maybe just talk about your investment and the operating leverage that you hope to get.
Angie Wirick: Yes. Specifically, focus on the operating expenses. I would say, think about continue to sustained pretty high investment in research and development. This is continuing the work that we’ve started so far on different product development projects, but then also starting in kind of to the next generation of work that you’ll see the benefit from a growth perspective, as Mike mentioned, towards the end of the decade and that’s both in product development as well as the different clinical trials and studies that we run. So part of the calculus should be R&D is a percentage of revenue staying in that kind of high-teens or 20% range. That’s what we’ve kind of been operating at throughout this year and would expect for that to continue.
