Q4 2023 Clearpoint Neuro Inc Earnings Call

Participants

Joseph Burnett; President, Chief Executive Officer, Director; Clearpoint Neuro Inc

Danilo D’Alessandro; Chief Financial Officer; Clearpoint Neuro Inc

Frank Takkinen; Analyst; Lake Street Capital Markets

Emily Christy; Analyst; Stifel

William Wood; Analyst; B Riley Securities

Presentation

Operator

Greetings, and welcome to the ClearPoint Neuro Inc fourth quarter and full year 2023 financial results conference call. (Operator Instructions) As a reminder, this conference is being recorded. Comments made on this call may include statements that are forward-looking within the meaning of securities laws These forward-looking statements may include, without limitation, statements related to anticipated industry trends, the company's plans, prospects and strategies, both preliminary and projected size of total addressable market or the market opportunity for the company's products and services and management's expectations, beliefs, estimates or projections regarding future revenue, results of operations or the adequacy of cash and cash equivalent balances to support operations and meet future obligations.
Actual results or trends could differ materially. The Company undertakes no obligation to revise forward-looking statements for new information or future events. For more information, please refer to the company's annual report on Form 10-K for the year ended December 31, 2022, and the company's quarterly report on Form 10-Q for the three months ended September 30, 2023, both of which have been filed with the Securities and Exchange Commission and the company's annual report on Form 10-K for the year ended December 31, 2023, which the company intends to file with the Securities and Exchange Commission on or before March 31, 2023. All the company's filings may be obtained from the SEC or the company's website at www.clearpointneuro.com. it is now my pleasure to introduce to you Joe Burnett, Chief Executive Officer.
Thank you, Joe. You may begin.

Joseph Burnett

Thank you, Diego. And as always, thank you to all of the investors and analysts on today's call. Our mission and our priority are to help restore quality of life to patients and their families who suffer from some of the most debilitating neurological disorders imaginable. We are thrilled to have you here on this journey with us.
Clearpoint had an excellent fourth quarter of 2023 and is off to a strong early start here in 2024, both financially and in the execution against our four pillar growth strategy, which includes biologics and drug delivery, functional neurosurgery, navigation therapy and access products. And in achieving global scale, we continue to expect growth in 2024 of approximately 25% to 35%, fueled by the continued expansion of Preclinical Services, the progression of our pharma partners through the global regulatory and clinical trial process, as well as the introduction of numerous exciting clinical products to our new and existing hospital customers.
I will now turn the call over to Danilo, our CFO, to review our financial performance in the fourth quarter and full year 2023, after which I will add some additional detail on progress relative to our four pillar growth strategy here in 2024, Danilo?

Danilo D’Alessandro

Thank you, Joe, and thank you all for being with us here today. Let me start by looking at the full year 2023 results. Clearpoint Neuro total revenues were $24 million for the year ended December 31st, 2023, which represents a 17% increase over revenue of $20.6 million in 2022. Our revenue is made up of three components, biologics and drug delivery, functional neurosurgery, navigation therapy and capital equipment and software.
Biologics and drug delivery revenue includes sales of disposable products and services related to customer sponsored preclinical and clinical trials utilizing our products, biologics and drug delivery revenue increased 49% to 13.6 million in 2023, up from $9.1 million in 2022. This increase was due to an expansion of our services and increasing commitments by our current partners and new pharmaceutical partners.
Functional neurosurgery navigation revenue consists of commercial sales of disposable products and services related to cases utilizing the ClearPoint system to deliver medical device therapy to the intended target.
This revenue segment declined 7% to $8.5 million for the year 2023. The decline in this segment was fully due to lower service revenue of 0.6 million as a result of pausing a co-development program with one of our brain computer interface partners in 2023 compared to 2022. Capital equipment and software revenue consisting of sales of ClearPoint, reusable hardware and software and related services was $1.8 million for the year 2023, a 21% decline compared to 2022.
Gross margin for the full year 2023 was 57% compared to 66% in 2022. This decrease in gross margin was primarily due to an increase in biologics and drug delivery. Preclinical Services, which to date have had a lower margin than in prior years as we launch new services and increase our presence in this space, increased costs related to the transition to the new manufacturing facility contributed as well to the decrease in gross margin compared to the prior year.
Research and development costs were $11.7 million for the year 2023 compared to $10.9 million in 2022, an increase of $0.8 million or 7%. The increase was due primarily to increases in personnel costs, including share-based compensation expense of $1.2 million due to growth to growth in headcount, partially offset by a decrease of $0.6 million in research costs as a result of reprioritization of certain activities.
Sales and marketing expenses were $12.6 million for the year 2023 compared to $9.4 million in 2022, an increase of $3.2 million or 35%. This increase was primarily due to increases in personnel costs, including share-based compensation expense of $3 million, resulting from increases in headcount in our clinical and marketing teams as we expand our commercial reach in preparation for multiple new product launches over the next 12 to 15 months. That hiring reflects the learning curve required to train and educate on the expanding ClearPoint Neuro product portfolio, which will be targeting new physician customers and new surgical arenas within hospitals.
General administrative expenses were $11.8 million for the year 2023 compared to $9.6 million in 2022, an increase of $2.1 million or 22%. This increase was due primarily to an increase in the allowance for credit losses of $1.4 million and the increase of share-based compensation of $0.8 million.
Net interest income for the year 2023 was $0.4 million. I will now turn over to the fourth quarter 2023 results. Total revenues in Q4 were $6.8 million for the three months ended December 31st, 2023, an increase of 32% over $5.2 million in the fourth quarter of 2022. Biologics and drug delivery revenue increased 76% to $4.1 million in the fourth quarter of 2023 from $2.3 million in the same period in 2022 the increase was predominantly due to a 122% increase in biologics and drug delivery service revenue, partially offset by a slight decrease in product revenue.
Functional Neurosurgery and therapy revenue decreased 11% to $2 million for the fourth quarter of 2023 from $2.3 million for the same period in 2022 capital equipment product and related service revenue increased 23% to $0.7 million for the fourth quarter of 2023 as compared with $0.6 million in the same period in 2022 due to an increase in the placements of ClearPoint capital and software.
Gross margin was 59% for the fourth quarter of 2023 compared to a gross margin of 64% for the same period in 2022. The decrease in gross margin was due primarily to an increase in biological drug delivery Preclinical Services, which to date have had a lower margin than in prior years as we expand into new services and increase our presence in this space.
Operating expenses for the fourth quarter of 2023 were $8.7 million compared to $7.8 million for the fourth quarter 2022. The increase was mainly driven by the increase in headcount across the organization and share-based compensation as well as an increase in the allowance for credit losses.
With respect to our cash position at the end of December 2020, three, we held cash, cash equivalents and short-term investments balances of $23.1 million. Our cash burn in Q4 was $1.2 million, down 60% from the prior year fourth quarter and the lowest cap quarterly cash burn since 2020.
We maintained our focus on appropriate resource allocation and cash management and remain committed to effectively and carefully managing our operating expenses as anticipated in our prior earnings call, our operational cash burn in the second half of 2023 at $3 million was meaningfully below the operational cash burn of the first half of the year. We expect to continue to have a very disciplined approach on managing our expenses. We continue to believe that our current headcount is sufficient to support our business for the next 12 months.
On March 2024, we also completed an equity offering with gross proceeds of $50 million, which further strengthened our balance sheet. The proceeds will allow us to retire fully our into our outstanding convertible debt in the next 10 months.
I'd like now to turn the call back to Joe.

Joseph Burnett

Thanks Danilo, as you can see, we ended the year with a strong fourth quarter and that momentum is now carrying over into 2024. Let's break that progress and that momentum down into our four growth pillars.
First, our biologics and drug delivery team has made significant progress in building our capabilities and winning contracts with our gene and cell therapy partners. This allows us to perform these new services already in 2024 to secure this year's plan and to build next year's funnel.
Q4 was our best quarter yet for the segment which grew 76% to $4.1 million. We expect this business to continue to be a significant driver for us this year and should contribute more than 50% of the total ClearPoint revenue in 2024 as we add additional partners, perform more advanced services and see our partners progress through the development and regulatory process here in the United States and globally, we are thrilled by the reinvigoration of the capital markets in biotech that have seen multiples, ClearPoint partners successfully raised capital.
And just the last couple of months, ensuring their continued investment and initiation of first-in-human clinical trials throughout 2020.
For Next, our functional neurosurgery navigation pillar has also made significant progress and is already yielding early results here in the first quarter. Since the beginning of Q4 2023, we have executed on multiple FDA submissions and clearances for new products. Our latest ClearPoint MRI navigation software version 2.2 is now released into limited market release and has been used in a number of successful early claim cases. This version now has our Maestro Brain Model available within the navigation software itself so that it may be used during a live surgery to help target specific structures in the brain.
We were also proud to see our first Maestro validation paper published in the peer-reviewed journal neuro image, demonstrating very clear advantages of the Maestro software compared to manual tracing as a free surfer, a priority for ClearPoint Neuro is not only offering innovative and effective products, but to demonstrate the clinician how and why these products outperform what is currently available through thoughtful and rigorous validation.
We were also thrilled to have received FDA clearance for another new product this time for the smart frame operating room or smart frame OR, which is a pivotal product for ClearPoint Neuro as we expand our presence beyond the MRI suite and into the operating room. As a reminder, more than 95% of all stereotactic procedures take place in the operating room today.
And these are procedures that we have not had access to in the past, but now with smart frame OR, we have the ability to penetrate this new and fragmented market that has a need of a better solution. We have now shipped our first smart marketing, our products to customers at the new Carl's bed facility and expect to give a further update on our initial experience in clinical cases with smart frame alarm. When we get together again for our Q1 earnings call, awareness around the new clinical products has driven significant momentum in our navigation business here in the first quarter.
Now if you look back at our history over the past few years, we have activated approximately six new clinical hospital customers each year. Now to put things in perspective, we have already activated six new clinical customers in just the first two months of 2024, pretty much an entire year of activations and just a couple of months I would also report that our funnel of potential customers is the largest that it has ever been, which is only additive to new product introductions like Maestro, like smart frame OR. and like Prism, which can also be launched into existing customers and to drive same store sales.
As I mentioned on our previous call, some hospitals are asking for lease or rental program that somewhat slows down our recognition of revenue. However, that is still just a portion of our placement strategy and we fully expect our capital revenue to grow significantly here in 2024 for our third pillar of therapy and access products, our Prism laser therapy business continues to grow, highlighted by another ClearPoint validation paper that was just announced by us yesterday.
This paper, peer-reviewed and published in the Journal of Neurosurgery shows the step-by-step preclinical validation of our non-food PRISM Therapy System comparing results not only to tissue temperature measurements, but to actual histology. This demonstrates the confidence we have in this product. And I believe this validation paper will be incredibly well received by the neurosurgical community as it is arguably the most robust preclinical analysis performed and published to date on any laser system.
We continue to make progress in our limited market release, having now activated our first General Electric MRI suite customer. We anticipate clearance of an important operating room accessory kit here in the first half of 2024 that will allow our laser system to be compatible with other navigation systems used in the operating room and not only ClearPoint navigation. We also expect submission of data for our 1.4 or 1.5 Tesla clearance later this year. However, we have more than enough potential three Tesla customers to meet our 2024 expectations.
So the 1.5 Tesla is not slowing us down right now. This will be a continued growth driver for us going into 2025. We also recently achieved FDA clearance for our RAY version 1.2 software, which includes a unique parallel trajectory feature designed specifically to allow neuro oncology surgeons, the ability to perform a biopsy, done one channel and a laser ablation down a different channel to reduce signal dropout in the MRI scanning this software has now been used successfully at multiple centers and with excellent results.
Pairing our navigation with our therapy is one key advantage, and we have now successfully closed our very first purchase order that included both navigation and present laser therapy at the same new hospital. All of the advantages of not requiring cooling fast ablation times, lower energy requirements and faster refresh rates combined with these new and innovative products like array 1.2 software and these operating room accessories, we believe will make PRISM the clear choice for hospitals interested in expanding their lift business.
We also learned that reimbursement to perform these laser procedures increased more than 30% this year. Rewarding hospitals for moving to this more minimally invasive approach, which benefits the patients with shorter hospital stays and benefits for hospitals with increased throughput.
And last but not least, our fourth pillar of achieving global scale has made great strides as well we recently received our first product approval under the new European MDR program, which is a significant milestone and demonstrates to our biotech and pharma partners that we are willing and able to provide our products beyond the United States as they have requested.
We are now shipping product globally out of our new Carlsbad facility and has completely exited our historic facility in Irvine and eliminating those redundant costs that impacted gross margin in 2023, we have also meaningfully reduced our operational cash burn. And in the last six months of 2023 only used $3.0 million of cash in operations.
We continue to expect improved cash performance for the full year 2024, as we believe we can grow into these 2024 revenue targets without any meaningful increase in headcount this year as headcount is by far our largest expense. This improved cash performance enabled us to do a small and targeted equity raise of approximately $15 million just a couple of weeks ago.
These proceeds put us in the position to retire our only outstanding debt, which comes due in January of 2025 and also to bolster our balance sheet, making us more attractive to pharma companies interested in long-term partnerships with ClearPoint. These proceeds are, of course, additive to the $23.1 million that was already on the balance sheet at the end of 2023. We continue to anticipate revenue in 2024 to be in the range of $28 million to $32 million or approximately 25% to 35% growth for the year. We also expect that full year 2024 revenue will show meaningful growth in all three product segments. I would like now like to open the call to any questions.

Question and Answer Session

Operator

Thank you. Ladies and gentlemen, we will now be conducting a question-and-answer session. (Operator Instructions)
Frank Takkinen, Lake Street Capital Market.

Frank Takkinen

Well, congrats on all the progress. Appreciate you taking the questions. I wanted to start with the expectations around Q1 obviously were a good portion of the way through Q1. Sounds like you have to really start strong start to the year, our new product clearances as well as the six new hospital customers you announced. So maybe if you could kind of continued on that thought process and how should we be thinking about Q1. I don't know if it's easiest to talk about it from a seasonality perspective sequentially versus Q1, but any insight you can help us out with Q1 would be helpful.

Joseph Burnett

Sure. Thanks. Thanks for the compliment and the question, Frank. Yes, you know, again, our business can be a little bit choppy in that if we have a large capital deal or a large service contract that where we get sort of paid and recognize revenue on the completion of that install or the completion of that product. If that happens, March 31 versus April 1 thing, since you think you can make the quarter look very different.
What I can tell you right now, as we wrap up the last few weeks of the quarter is that we're absolutely on track for another record quarter. So if you think about Q4, where we did about $6.8 million in total revenue, we fully expect Q1 of this year to be above that. And that's probably the best the best sort of, hence we can give you at this point based on a closing note, the last three weeks of the quarter here.

Frank Takkinen

Got it. Okay. That's helpful. And then maybe on smart frame, or maybe bring us into how you're thinking about that launch process. I think I heard correctly a limited launch to start and then I assume that flips to a full market release potentially later this year, but maybe think about Help us understand that launch process as well as how you're thinking about contribution or inclusion of smart frame OR. in the 2024 guidance?

Joseph Burnett

Yeah so my friend of ours, a very interesting product for us for a number of reasons, and it's typical for us, not just for this product is to do something called the limited market release where we hand select some specific customers that are either friendly to ClearPoint and no are no our procedures and are happy to be part of a development process.
But in some cases, like smart frame OR we're actually approaching customers that have never used ClearPoint before at all. And they've helped us to design this product and to give a clear point solution where they haven't had a clear point solution that fit them in the past. So it is part of the limited market release. It's probably to the tune of 30 to 50 cases is what I would expect sometime over the next three months, maybe maybe a little bit longer than that.
But really the goal is to test drive not just the product and some of the features and benefits and build testimonials and build training materials, but also to test drive pricing and what the messaging is to different hospitals that might be using different technologies. The The approach we have with someone using ClearPoint in the MRI who wants to do some of their additional overflow procedures in the operating room.
That message is very, very different than like. I said somebody who has never used ClearPoint before, and this is our first introduction and their first ability to work with us that that approach is different. It has a different message a different focus, a different follow up. And we want to be very prescriptive with our sales organization by providing the materials that allow them to do that in a very in a very tactical fashion.
And the last thing I would bring up with SmartBeam alarm, however, is again, it is designed to work with some of the hardware and software that's already in the hospital. So if we are approaching a new hospital that never use ClearPoint historically, we would have to go through the entire capital purchase process work with IT work with lead legal work with business agreements, get generated IP address inside the hospital.
So there's a lot of gymnastics that it takes to get any capital equipment, no matter how simple it is through a hospital system with this device, we can say, hey, this is just the razor blade and it works with the razor that you've already got in your hospital. So we do expect the transition out of limited market release and into full market release to be a little bit faster than it has been historically. But I would say in the revenue guidance that we've given of between $28 million and $32 million for the year, the smart frame, oh, our product is still a very small small percentage of that it will be a much larger percentage in 2025.

Frank Takkinen

Got it. Okay. And then maybe one more on PTC. I think if I read correctly in their earnings late February, they stated they expect to submit their BLA for Phase four ADC. in March of 2024. Can you maybe talk about the significance of this filing and how we should read through on what we should read through when that filing does occur.

Joseph Burnett

Yes, we're super excited and we believe things are on track from our standpoint as well, as a reminder, this would be the drug stays that this BLA represents is the very first neuro gene therapy ever approved anywhere in the world. And it is in fact, commercially available in Europe today, patients are being children really are being are being treated with this particular drug and to be able to get the BLA submission in in front of the FDA by no means is this a process where you're just kind of throwing it over the wall and hoping for the best that there have been years of phone calls and meetings and pre submissions and clinical trials, design and everything that's kind of leading up until this point.
So we're you think in the device world of just filing a special five, 10-K and I'm thinking you've got all your documentation ready. You know that this is a much more collaborative effort with with the FDA. And as a result, I think anything that even gets accepted by the FDA at this data probably has a very reasonable shot at seeing it all the way through which I think could be exciting for the entire biotech community to see eventually on the United States market, a drug that has passed all the GMP requirements and manufacturing, clinical trial requirements, et cetera, and they make us therapy available here in the United States.
Perfect.

Frank Takkinen

That's good color house up there. Thanks for taking the questions.

Joseph Burnett

Thanks.

Operator

Thank you.
Emily Christy, Stifel.

Emily Christy

Hi. Congratulations on the quarter and the strong start to the year so far, it sounds like based on what I said, a kind of a high level, you have a lot of new products out there at various stages of launch, but most probably will be in full launch by the end of the year.
How are you balancing that internally in terms of resource allocation, sales force, training, all of those kind of pieces. How does that come together?

Joseph Burnett

It's a great question, and we're trying to balance all of that with the other commitments we've made to scale and, you know, getting to a cash flow breakeven that we've done and operational standpoint as well. So the luxury that I think we have that a lot of other companies don't is the piece of everything we do in the clinic today is linked by the common and ClearPoint platform and the fact that we now have 90%, 95% of the workflow and the same even if you're doing a DBS case or a drug delivery case or laser place or a biopsy or even a stereotactic EG lead placement, for example.
So the button Knology, the software, the workflows, incredibly similar. So what we've been doing is really cross training our entire clinical team across all of the different product lines. And yes, we have a little bit of redundancy where in many cases we've got two specialists right now, one to help with navigation when to help with laser, for example, but we believe very strongly in this team and the ability to operate and navigate an entire procedure across all of these, I think we don't we don't see a need to hire twice the sales and clinical organization, for example, to be able to grow with these particular products.
And now the smart frame of our project is an interesting one. However, because in that circumstance, remember, we're not a ZDF company and we are a laser company. So we're delivering the therapy. We are a drug delivery company. We're delivering the therapy through our cannulas and other accessories there, too. But for DVS, we're just there to navigate. Someone else is therapy to a target.
So with smart frame OR. We believe there's the potential that after training a site with 5 or 10 clinical cases, which which again are a lot more common and a lot more frequent, it's possible that we'll be able to certify certify an employee there at that site at that hospital to be able to perform these procedures. And in the future, the ClearPoint representative would be there to launch new products and train on new techniques and new software. However, not necessarily have to be there for every case like we've historically done. So that is another tool that we think will help us get scale, especially in some more remote hospitals where we don't have to put someone on an airplane and stay in a hotel too. It's cover one of those live cases.

Emily Christy

Right. Okay. Makes sense. Just on the biologics side, I know adding new partners kind of moving up the chain in terms of level of service how do you think about kind of the margin impact of that going forward relative to some of these first entries you have that maybe are lower margin? Is that just scaling up from here.

Joseph Burnett

And yes, it's a tricky question. And if I I would love to protect us better than that. I think I can at the current moment. Yes, the important thing for us is number one is every single agreement that we do is really gross margin positive from day one. If you think about the distinction of us in a biotech company like, yes, we both get rewarded by progress and commercial launch of these amazing drug therapies down the road, but we don't have the burden of funding a $20 million or $30 million or $40 million clinical trial to be able to get to that point. In fact, we actually can make product at a reasonable gross margin sell product at a reasonable gross margin during the preclinical and clinical trial process.
So we don't have a massive reward, but we also don't have that same risk here. So that every engagement that we have, we are bringing gross margin dollars into the Company. So it's really a gross margin percentage that we're talking about. And again, that can really fluctuate based on the design of the study and the level of services that we provide.
And I would say typically at this point, there's very few of these programs that are less than less than our capital margin for example, which are in that 35% to 45% range. The vast majority of the deals that we do are above 50% and some even north of that, however, just based on a quarter-to-quarter basis, it can be a little bit choppy. So that's one thing to think about.
The other thing that Emily, that I that I see being an impact on gross margin here in 2024? Is this acceleration we're seeing in capital placements as well?
So yes, as we put in the press release today, we've already installed six systems here in Q1. We aren't getting the systems away. We're by no means. But if you had a quarter, for example, last year where we maybe we did $400,000 in revenue in a quarter that's capital this year. We might have a quarter that's over $1 million, for example, in which case it's a larger percentage of the overall revenue, which can again be a drag on gross margin percentage, but not necessarily gross margin dollars. And obviously, the more systems we place out there, the more stores that we're opening. So it's in our best interest to do that as quickly as we can.

Emily Christy

Right and paint. Great. And just one more from me following on that. In terms of the installs. So I noticed some new placements abroad in the UK and in China. Just wondering if you can give a little bit more color on those new relationships in those markets.

Joseph Burnett

Yeah, it's really from a few different places. So the sites that we have in China, for example, is a preclinical sites. So a CRO similar to a Charles River here in North America that we partner with as well. This is a situation where ClearPoint equipment is now or will be available in an on-site there, along with our own special special specialists to be able to work directly with Chinese or other pharmaceutical companies that want to do their large GLP, our preclinical testing over at that particular site.
So the same way you see some of our other preclinical centers that are based in Europe and Canada, et cetera. This is another version of that, but it allows us to it kind of plant the flag there and be able to say, hey, yes, clear point here is open for business. You know, if you're a pharma company, you don't have to find another navigation or a catheter or cannula technology to be able to do your development work. We can be there for you as well.
And I think that's that kind of as an example there versus some of the places places in Europe are actually actual clinical systems at this point. So our products are approved to be used clinically in humans and under CE mark and many of these new hospitals are interested in doing drug and delivery patients in the future.
It might be a site that is tentative to be included in a clinical trial later in this year, and we're installing the system now so that they can get practice on the system and do some more routine laser procedures or DBS procedures or biopsy procedure today to give them 5 or 10 cases of experience before they do their first, very elaborate and very expensive and biologics patients. So that's kind of the thought process, but there's a lot of different flavors of these new installs that are going into that.

Emily Christy

Great. Okay. Thanks for taking the questions.

Operator

Thank you. (Operator Instructions)
William Wood, B. Riley Securities.

William Wood

Thanks so much and congratulations on a great quarter from just a click away from us. Absolutely on. So curious about sort of on the Prism laser system limited release would love just to get a little bit extra color on how that's been going on. And then as far as the full release in, I believe in the second half 2024 if that's it, that's still going to be there on expected to take place in the second half. And then how we should are you thinking about those those revenues? And if they're in the '24 guidance already.

Joseph Burnett

Yes, sure thing, William, so on. So just to set the stage of kind of where we are today, there's there's sort of two vectors to think about, right. There's two primary types of MRI scanners, okay? So there's a 1.5 Tesla and three Tesla. So not a big difference between the scanners. It's more the power. It's the same companies like Siemens and GE, Philips and Marisa, our data and our satellite, but that had access to both of those. And we kind of think the neurosurgery market is roughly split in half between hospitals that have 1.5 hospitals that have three Tesla.
Okay. So from that standpoint, we are currently only approved on the three Tesla scanners. So that entire validation paper that we just did incredibly robust, thorough thorough, thoughtful science that was published just Friday in the New England Journal about not knowing what the rules are in the Journal of Neurosurgery. That is a lot of the data that was submitted to the FDA to be able to earn clearance on the three Tesla scanners.
So if you think of it that way, we have access to about half of the hospitals today that have the 3T scanner that's out there to get access to the rest of them. So worst case scenario is we repeat the exact same study that we did, and no invention, just simply execution that would allow us to provide the FDA with the exact same data for the 1.5 Tesla.
So that study is currently being scheduled and planned in. Our goal is to collect all of the data, do the histology have that ready to submit by the end of this year. So that sometime early in 2025, we can now unmask every hospital and say it doesn't matter if you have 1.5, Tesla or three Tesla, we have FDA clearance and compatibility with both.
Okay. So that's that's one staging item, if you will. But if you heard in my prepared remarks, here, we have plenty of three Tesla opportunities out there that even if we're not going after 1.5 Tesla right now, it's really not slowing us down. It's really the install process and the evaluation process, the back committees at hospital, that's still something we have to do, but we have plenty of shots on goal with three Tesla.
The other vector that will get us into full market release, I would say sooner is the ability to go where the procedures are, and that's probably 10% to 15% of all laser procedures today that are done using ClearPoint in the MRI suite. And that means 85% to 90% of these procedures are using someone else has navigation in the operating room and then moving the patient from the operating room to the MRI to do the laser procedure.
So these accessories that I'm talking about will allow us to do that same exact workflow these sites are already doing where they use someone else's navigation, like the like a robotic system or like cell frame or something like that place, a clear point prison laser catheter at Target and then move the patient to the MRI, just like they would do with any of the laser systems out there today. So that's something that I think we expect to have in the first half of this year.
And if we can get into the LMR and the full market release in the second half of this year, that again unmasked and opens up a lot of new opportunities for us as well. So it's really those two primary triggers one in the first half of this year and then one, hopefully by the end of this year that would get get to the point where and any hospital could be using ClearPoint prison if they wanted to.

William Wood

Understand. Thank you for that extra color on in terms of you do in terms of your three sort of the drivers of growth. You've got a BTD, which clearly looks like it's going to be the main driver with over 50%. And I believe you said for the revenues on, but then you also have your capital equipment and then your functional your FNN on just when we're thinking about sort of parsing those out, it sounds like CapEx or capital equipment already has a pretty strong first quarter when thinking about 2020 for revenues and sort of modeling that out on, where should we think about them the growth occurring? Or how should we think about the growth occurring in each of these segments through 2024 on when we look to model these.

Joseph Burnett

Yeah. I mean, I think I made one comment in the remarks that this is going to be an interesting year for us where really all of our different segments are growing. So we expect significant growth from capital placements as well as capital revenue, even if a little bit of that revenues deferred based on rental or lease program, it's still going to be a significant growth over prior year. So that's one contributor.
If you look at our device business, we have an opportunity here to launch two or three key new product here, that smart frame LR, which gives us access to navigation in the operating room, which we've never had before. So that's growing from zero and every new person account is an additional new growth where we've never had a laser therapy system and we do now as well. So that device business, including navigation and Laser Therapy together, those are going to be significant and exciting growers for us.
And then as you pointed out, biologics, just doing what we continue to do. I mean, if you look at what we did in the fourth quarter of $4.1 million. There's no reason that we expect that to decline at all. So even if you take that 4.1, 4.2, whatever million multiply that times four quarters, you're already looking at 20% growth. And that's assume we just stay flat there, which is which is not the plan either. So it's exciting to be part of something where, you know, last year we kind of had an anchor relative to capital and some of that our device business now we've got three different. Yes, three different segments that we expect growth from all of them.

William Wood

Got it. And then one last quick one on just thinking about the EU MDR approved certification that you got recently? And how would this really a factor or help your international adoption, what specifically the EU adoption and expansion in and does not having this? How does it affect other companies who have to still go through this approval process?

Joseph Burnett

Yes, it's really a it's an important decision that a lot of companies have to make right now. And sometimes they're going to partially make it. So if you if you're trying to get a new product approved in Europe right now, it's more challenging than it has ever been based on increased documentation and many cases increased clinical evidence and usability studies that makes the development of mathematics of launching a new product, much more expensive than they have in the past.
If you have to add time and add studies and even do some clinical work, you could look in some cases a doubling or tripling the cost of bringing a new product to market. So in some cases, if you're if you're making Taiwan all their sure there's a big enough market that you're going to go after it. But if you have a product. That's sort of a niche right now, like like we kind of do in biologics and drug delivery because nothing is commercially available and it's really participation in clinical trials.
It makes it a little bit more difficult to justify the added spend to go into Europe. And quite frankly, if we didn't have such important pharma partners that are there by our side to help us with some of the work and funding that we probably come to the same conclusion that some other smaller companies would as well to say now is not the time, let's see how the EU MDR plays out and we'll make a decision down the road.
But we've taken a different approach to say, look, let's invest less solidify these partnerships, let's show them that we might be the one company that has the full suite of products in Europe in the United States, in Canada, in Asia and Japan. So if we can be that one one partner where a pharma company says, hey, wherever I wanted to go, ClearPoint is going to be there for me. We think that's going to help us win additional business as well.

William Wood

Thanks, Joe. I appreciate that, and congratulations again on a really nice quarter.

Joseph Burnett

Thanks, William.

Operator

Thank you. There are no further questions at this time. I'll hand the floor back to Joe Burnett for closing remarks.

Joseph Burnett

Once again, thank you to everyone on today's call. This is an incredibly exciting time for ClearPoint where we are earning new FDA global clearances, launching new products and expanding our portfolio and driving new customer activations as well as same-store sales and importantly, growing our terrific team and infrastructure that can help us gain scale towards cash breakeven here in the next couple of years.
We look forward to updating this group again through press communications and certainly at our next earnings call, likely sometime in early May. Thank you very much for your attention and hope to speak to many of you soon. Goodbye.

Operator

Thank you. This concludes today's conference. All parties may disconnect. Have a good day.