Can hear and see us, I imagine. Welcome and good morning, ladies and gentlemen. My name is Steve Sargent, and I am the Non-executive Chairman of Nanosonics. I would like to extend a warm welcome to our shareholders here at the company's headquarters in Macquarie Park in Sydney, and to those joining us also online. It's my privilege to chair this our 18th annual general meeting. I would like to acknowledge the traditional owners of the various lands in which we meet today, and to pay our respects to all Aboriginal elders, past and present, and acknowledge today's Aboriginal communities who are the custodians on these lands. With me in the room, I'm joined by the Nanosonics Board of Directors, members of our management team, our company secretary, and representatives of the company's auditor, Ernst & Young.
I've been advised by our company secretary that we have a quorum for this meeting, and I therefore declare the meeting open. The number of valid proxies received by 11:00 A.M. on Sunday morning on the 10th of November was 386 proxies, representing a bit over 198 million shares, or 65% of the company's approximately 300 million shares on issue. I would like to take this opportunity to introduce the board and the company secretary and the auditor of Nanosonics. To my left here, we've got Michael Kavanagh, our Managing Director and President. We've got Tracey Batten. We've got Larry Marshall, Lisa McIntyre, Marie McDonald, David Fisher, Geoff Wilson, and we've got our general counsel and company secretary, Matthew Carbines, down the front here. And also, as required by the Corporations Act, the company's auditor, Ernst & Young, is also in attendance, represented by Miss Vida Virgo.
Welcome, Vida. Good to see you. The board, the company secretary, and the company's auditor are available to respond to any questions you may have during the meeting. Also, President, members of the management team, and Michael will introduce the team to you during his address. Today's meeting will commence with my Chairman's address, and then Michael will deliver his address. This will be followed by the formal business of the meeting, and then after that, we will have a time for more general business update and questions. As this AGM is being conducted in person and online, I will now provide some housekeeping instructions on how to ask questions and how each group of shareholders should vote. For those shareholders joining online, shareholders can ask questions which may be written or verbal. Online attendees can submit questions at any time.
To ask a question in writing, select the Q&A icon, type your question in the text box, and once you have finished typing, hit the send button. Please note that while you can submit questions from now on, I will not address them until the relevant time in the meeting. Please also note that your questions may be moderated or amalgamated if we receive multiple questions on the one topic. There is further information contained on the meeting platform under the Q&A tab for shareholders that wish to ask a question verbally. For those shareholders here in the room with us, please raise your blue voting card if you wish to ask a question, and one of our staff will provide you with a microphone for you to use when asking the question. We will set aside time after each resolution to answer any questions on the resolutions.
In accordance with our usual practice, in addition to having an opportunity to ask questions on the resolutions, we will also invite general questions after the formal business has been closed. This will avoid these questions getting mixed with any questions received on the resolutions during the formal business. For those shareholders joining online, while there will be time for voting after I have introduced each resolution, you may submit your votes at any time until I declare the poll is closed. There will also be some time to complete your voting after we have addressed any questions that are raised in relation to the resolutions. If you are eligible to vote, once voting opens, press the vote icon, and all resolutions will be activated with voting options. To cast your vote, simply select one of the options.
There is no need to hit a submit or enter button as the vote is automatically recorded. You'll receive a vote confirmation notification on your screen, and you can change your vote up until the time I declare voting has closed. For those shareholders joining in person, after I call for a vote on each resolution, all persons entitled to vote will be given a moment to complete their voting card before I move to the next resolution. Voting can be conducted on each resolution by poll. For this purpose, I now declare the poll open. Ladies and gentlemen, it is now my pleasure to deliver my address for this morning. At Nanosonics, we are committed to our mission to improve the safety of patients, clinicians and their staff, and the environment by transforming the way infection prevention practices are understood and conducted.
This is based on our aspiration to transform medical device reprocessing to improve patient safety and achieve better healthcare outcomes. While financial year 2024 represented a challenging year following a slower than expected first half, the team returned to growth and finished the year with significant progress against our key priorities. Key achievements were the installed base of trophon growing 7% to 34,790, which represents an ever-increasing asset to the business, as well as the lodgement of the FDA submission for CORIS in the second half of the year. There are several global trends underway in the healthcare industry that impact Nanosonics. I'd like to take a moment to briefly outline them as they represent areas of opportunity as well as challenge for us. Firstly, the ultrasound and endoscope modalities remain relevant as ever. In both cases, these medical instruments continue to be a mainstay of healthcare delivery globally.
Secondly, the negative impact on patients and the burden imposed on the health systems caused by hospital-acquired infections remains significant. The recognition that healthcare-acquired infections are an enduring problem and risk to patient well-being means that it is high on the agenda of governments and healthcare providers to address. Thirdly, there is a trend towards automation and connectivity of infection prevention workflows. Customers are shifting from manual to automated and paper to digital traceability. Finally, our customers face challenging economic forces with costs rising faster than revenue. This emphasizes the importance of continuing to ensure our offerings add value from a technological perspective, a patient outcome perspective, and an economic perspective. These evolving trends underpin the strong fundamentals for our ongoing growth as we aspire to transform reusable medical device reprocessing.
As I reflect on these opportunities, it's important to note that Nanosonics' key competitive differentiator is our ability to automate reprocessing procedures and provide digital validation of compliance requirements. The team have been successful in establishing trophon as the standard of care in a number of key markets and plans to continue this with the introduction of its CORIS technology, which automates the complex manual cleaning for flexible endoscopes. From an ultrasound reprocessing perspective, the team continues to invest in its core trophon platform to ensure it will continue its leadership in the ultrasound reprocessing market. We see strong opportunities remaining in both capital equipment sales as well as ongoing consumables, service, and upgrades. Transforming endoscope cleaning through our CORIS platform technology is also a key priority for the organization.
We anticipate that over time, CORIS will transform the way in which endoscopes are cleaned, which we expect will be a step change for both our customers, their patients, and the company. As a part of our ongoing product expansion strategy, we are taking a thoughtful and considered approach to M&A. While we haven't made any acquisitions to date, we see inorganic growth as an important part of our strategy. Attractive targets for us are those in reusable medical instrument reprocessing and associated value chain ecosystems. We are acutely aware that we need strong organizational capability to deliver on the potential of the opportunities that we have created. We have an active program in place to foster our unique blend of research and development, bioscience, and clinical expertise in infection prevention to solve the unmet needs of the infection prevention industry.
This is a key competitive differentiator and a key part of our strategy. Nanosonics has an incredible opportunity ahead that can create significant value for our customers and for our shareholders. Currently, the business generates significant cash from its core business to invest in these growth opportunities. We undertake a disciplined analysis several times a year where we consider what will generate the best return for shareholders. The investments outlined above aim to generate much higher returns for shareholders over the medium to longer term than by redistributing capital by way of dividends or share buyback. We will continue to assess these questions regularly as a part of our ongoing governance processes. As detailed in the financial year 2024 sustainability report, Nanosonics has continued to progress our sustainability agenda. Our customers have high expectations for their suppliers to meet their sustainability requirements.
We have begun a process of transitioning to renewable energy sources for our operations in Australia and the United States, which see around 98% of our Scope 1 and Scope 2 emissions eliminated by FY 2025. Like many other companies, Scope 3 is more challenging for us to influence the abatement because the primary source of those emissions is third-party sea and air freight. Nonetheless, we expect to see some progress in this area as we explore options to transfer some aspects of our manufacturing closer to our customer base. Diversity and inclusion are an important consideration as we build the capability of our workforce. Today, our workforce is comprised of people from 37 nationalities, with 44% of our employees being female.
We are particularly proud of the progress we've made in increasing the proportion of women in our senior leadership roles, and we remain dedicated to developing our talent pipeline to further improve female representation at the senior leadership and executive level. I would like to highlight changes to the board over recent years. We've continued to process a board renewal, onboarding new directors with diverse experience and perspectives while growing industry knowledge and maintaining corporate knowledge. As a part of the renewal process, directors David Fisher and Geoff Wilson will retire from the board at the end of this meeting. We thank both directors for their service and invaluable counsel that they have provided over the last five years from Geoff's perspective and over the last 20 years for David. Thank you very much to both of you.
I am pleased Marie McDonald is offering herself for reelection at this meeting. Marie's extensive experience in corporate and commercial law and on the board experience in the healthcare industry continue to be of significant benefits to Nanosonics. We have signaled that we are completing a search process for a new director. That process is well advanced, and we expect to be in a position to appoint a new director early in calendar 2025, which will add to the depth and the capability of our board. We are confident in our ability to seize the full potential of the growth opportunities before us. Our trophon technology, along with the ecosystem of products and services we have built to support our customers and the highly anticipated impact of our new CORIS technology, position us very well for the future.
We remain focused on creating long-term value for our shareholders, and we thank you for your ongoing support and trust. I'll now invite Michael to discuss the results in more detail and provide you with further insight into our strategic growth agenda. Michael.
Thanks very much, Steve, and a very good morning to all of you both here that are present here today, but also everybody that is online. What I'd like to cover over the next 15 minutes or so is a brief review of the FY 2024 achievements, and of course, all the detailed outcomes from FY 2024 was released in August, and there is a lot of detail there in the packs of information that was provided at that time. But also a very brief update on our current year-to-date performance and along with the outlook for FY 2025.
And spend most of the time really more focused on the strategic vision for the future and focusing really mainly on the key growth drivers for the business as we see them, and as Steve says, how we plan to seize what is a remarkable opportunity that lies ahead. Before we start, as Steve mentioned, we are fortunate we do have the whole executive team in town this week, and I certainly encourage you all to engage with those members of the team at the end of proceedings, and like myself, I've never seen so many people wearing ties. I think it's the first time I've seen so many ties in the last 12 months, but as Steve mentioned, FY 2024, it did represent a challenging year in some respects following a slower than expected first half due to a number of various factors out there.
However, when we then focus in on the second half of the year, we did see a significant turnaround, and that resulted in the overall revenue for the year of AUD 170 million, which was up 2%, but specifically in the second half, the revenue in the second half was AUD 90.4 million, and that was up 14% on the first half, and importantly, within that revenue construct, the capital revenue actually grew strongly. It was up 20% on first half as the time to close deals in what was a growing pipeline for new installed base and upgrades that recovered in the second half, and our consumables and service revenue, it also increased up 14% over H1 as the ultrasound procedural volumes increased after what we did see was a bit of a slowdown in ultrasound procedural volumes in the first half. It recovered in the second half.
Our service business also continued to grow strongly. What I think is important, because often people will sort of focus in on the first half, but what I think is important to recognize is despite the challenges that we did face in the first half, that infection prevention, in particular medical instrument reprocessing, that remains a significant requirement and it's a growing area within the healthcare system. The underlying fundamentals for the ongoing growth of the business remain. As Steve mentioned, the global installed base grew 7% for the year, where at the end of June, we had 34,790 units in operation. We shouldn't forget what that 34,790 units actually represent. It represents approximately 27 million ultrasound patients annually being protected against the risk of cross-contamination. That's an important number.
From an upgrade perspective, because it is a growing part of our business, despite year-on-year growth in upgrades since FY21, upgrades were particularly impacted in the first half of FY 2024 as customers extended the use of their existing trophon, the first-generation EPR units. However, the second half, again, we saw a very good turnaround in upgrades with 890 upgrades units sold. And that was a 44% increase over H1 in upgrades. And North America, where the majority of our upgrade opportunity actually resides, it actually delivered its strongest half to date in the second half. And it's worth noting that upgrades, they are significant and continue to be a significant opportunity because there's over 10,000 units out there that are over seven years of age or older. And these upgrades, they not only boost our capital revenue, but they provide the opportunity for additional annuity revenue through service contracts.
Now, why is that new and why does it mean new annuity revenue for us? For those who have been with the stock a long time, we'll remember that a lot of the very original units that were sold in North America were sold by GE Healthcare. GE Healthcare at that point in time, they sold the service contracts. Now, as we are fully direct in North America, as we sell the upgrades, we capture the service contracts associated with those devices. Upgrades is not just about capital revenue, it's about also boosting our annuity revenue. Indeed, service was one of the fastest growing segments of our revenue in FY 2024. We do expect this growth to continue driven by upgrades, driven by new installed base. Our goal of increasing percentage of customers adopting service contracts are being covered by service contracts as well.
You see the business. It delivered robust gross profit margin, 77.9% for the year. We anticipate maintaining margins in the 77%-79% range in FY 2025. With positive free cash flow and a very strong cash balance, we certainly continued and believe very strongly in continuing to invest in our longer-term growth strategy. Operating expenses in FY 2024 for the year were AUD 125.6 million. Those operating expenses spanned product expansion, all our R&D efforts, including all what we're putting into CORIS, geographical expansion, what we're doing out in the markets, as well as operational efficiency initiatives, including a new ERP upgrade and expanded manufacturing strategy, which I'll come on to a little bit later. With all of that, operating profit before tax for the year was AUD 13 million.
It is worth noting, however, and we do put this into our full-year results packs, that if you exclude the CORIS investments and those longer-term investments that are not generating revenue today and just focus on the ultrasound reprocessing business itself, the trophon business, that business alone generated AUD 40.4 million in profit before tax. So excluding all the longer-term growth initiatives, this is a very, very profitable business. And we aim to grow profitability and improve the EBIT margins further in that business moving forward. And of course, one of the outcomes from the investments we're making in R&D is an important milestone for Nanosonics was reached at the end of April when we submitted the De Novo application for our CORIS platform technology to the FDA. And CORIS, we believe, represents a significant opportunity for patient safety in particular, but also for the growth of this business.
I'll touch on CORIS very shortly. In terms of outlook, well, the strong second half performance coupled with the investments that we are making in our growth strategy has the business targeting revenue growth of between 8%-12% for the year. That is just revenue growth that's all driven by ultrasound reprocessing. Our expectation is for gross margins to be between 77%-79% and operating expenses to grow between 6%-10%. So far this year, so the first four months of this financial year, the growth momentum that we experienced in the second half has continued into the first four months of the year. The percentage revenue growth for the first four months compared to prior corresponding period is currently performing well against our full-year outlook.
Now, while this positive start to the year is very pleasing and we are certainly working extremely hard and diligently to make sure that we maintain that momentum, we do have to acknowledge that there are still eight months to go. And we must continue to navigate a range of market conditions. So as such, we are currently maintaining our revenue growth outlook for the year along with our gross margin and operating expense growth outlook. So what we announced in August remains. So moving to the broader strategy for the organization and the opportunity for the business. And within the context of the broader infection prevention mission for the company, as Steve mentioned, our aspiration as an infection prevention company is to transform medical device reprocessing for improved patient safety and better health outcomes. And this strategy on a page outlines really the core growth drivers for the business.
For us, it's all about establishing new standards of care. That's across ultrasound reprocessing and endoscope reprocessing, as well as we're looking at further product expansion through continued investment in R&D, but also through strategic partnerships and M&A. In doing this, our aim is to grow, expand value for, and protect our customer base. Ultimately, delivering value through operational excellence across all core parts of the business. Our strategy, of course, is underpinned by continuing to invest in building strong organizational foundations, ensuring that we have the necessary capabilities and infrastructure in place to navigate what is a great opportunity moving forward, but it is an evolving and complex market that we're dealing with as well.
Within the context of this strategy, I just want to touch on a couple of the core elements and some of the insights into some of these growth drivers, starting with leading ultrasound reprocessing and customer value expansion. Our global installed base growth opportunity for trophon, it's determined by two key factors. One is the total addressable market in each region. The second is the strength of the fundamentals for adoption within the countries of each region. The total addressable market, that's derived from the total number of ultrasound consoles in use and the growing number then of ultrasound procedures that require high-level disinfection. Whereas the fundamentals for adoption, this is really a function of current practices and the presence of guidelines or mandates for high-level disinfection by necessary authorities and societies.
And each region varies in size and opportunity or the TAM, but also each region varies and countries within each region vary based on the maturity of the fundamentals for adoption. And that then requires tailored strategies to optimize revenue and growth opportunities. In North America, it represents, I believe, a success story that we should all be proud of in terms of trophon establishing a new standard of care. It's a market where we've gone direct and established a necessary infrastructure and internal capabilities to execute on our growth strategy. And with over 270,000 ultrasound devices in use, and that's across approximately 5,700 relevant hospitals and 12,000 relevant private physician practices or offices, the estimated total addressable market for trophon in North America is 60,000 units. And today, we've reached just over 50% market penetration. So there's still great opportunity to continue to grow.
Of the remaining 30,000, approximately 20,000 of those are in hospitals and the other 10,000 in private practices. We have targeted strategies for both of these segments. In hospitals, this is a major focus for our direct operation in North America. There are two components to the hospital segment growth. The first being getting into all relevant hospitals who use ultrasound. Today, we are represented. Of that 5,700 hospitals, we are actually represented in a very large percentage of that 5,700. We still are selling into more and more new places. The larger opportunity, however, within the hospital market is expanding into all relevant departments within a hospital who use ultrasound. Ultrasound is used across many, many different departments within a hospital.
A significant percentage of our new installed base sales actually in the hospital segment is going into and accessing new departments with existing trophon-using hospitals. And that is a growing part. And then for the private practices, in addition to our direct team and infrastructure in North America, and they focus really on the larger physician practices, we also partner with specialized distributors like Henry Schein and McKesson and Medline, along with a number of other smaller ones that support these private physician offices and have great access. And this segment is also a growing component of our new installed base. So we certainly see runway to continuing to grow our new installed base in North America. But a significant component of our growth strategy also in North America is our customer value expansion strategy.
And with a significant installed base of over 30,000 units, and that continues to grow annually, there is an opportunity to add further value to our customers. And that can be through, A, our educational initiatives, and that's delivered by our clinical applications team. And that is to ensure that the number of HLD cycles in a trophon reflects the actual growing number of ultrasound procedures that require HLD. And there's a lot of educational efforts with that team taking place on a daily basis. But it's also then about delivering a range of products across the full ultrasound reprocessing value chain. And that's through our ecosystem offerings. And that can include products like cleaning and drying wipes or clean probe covers that get used after the probe has been high-level disinfected to protect that probe between patient use from environmental recontamination.
Growing our service business, as I mentioned, it's a significant opportunity through upgrades as well as new installed base growth, and we have established service infrastructure in place to drive this growth, and they're expanding that, but also expansion of our digital traceability offerings, and so indeed, with all of this, our expectation is that our customer value expansion strategy through these offerings will become and will be a fast-growing part of our revenue growth in North America, moving across the pond to Europe, well, in FY 2024, the revenue in the region grew 24%, and it's a region where ultrasound as a clinical modality is as prevalent as North America. A lot of ultrasound taking place, but the TAM, the size of the market, is smaller.
However, one of the key differences between North America and many of the countries in the EMEA region is the strength of the fundamentals for adoption, where in some places they're just not as strong as they are yet in North America, but many of them are improving, so strategically, the direction in EMEA is to have, one, it's the direct operations in the markets where the fundamentals are strongest, and currently, the fundamentals are strongest in the UK and Ireland with France and Germany improving, and today, we are direct in the UK, Ireland, and Germany. We also want to look at driving our growth through strategic distributor partnerships, in particular distributor partner relationships with specialized infection prevention companies and distributors, such as France and in some of the Middle East countries.
In recent months, we have partnered with Ecolab, which may be a name familiar to some of you as a major global infection prevention company. We have partnered with them in France and a number of countries in the Middle East where they are now selling trophon. Unlike the U.S., which is primarily a capital sale model, different markets within the European region require different sales models. So we do have to bring tailored sales models, which we do have for the European region, such as our MES model or managed equipment service model in the U.K. Because the fundamentals in some of these markets are weak, clinical applications and our educational efforts to increase the strength of those fundamentals is an ongoing important strategy for the business.
But also, we are now looking also at expanding our offerings and to leverage the current investments, and particularly in the markets where we are direct, by adding relevant, where it makes sense, third-party products to the bag, as we speak, for the sales reps. And to that extent, we have also partnered with Ecolab, where we are now the exclusive distribution partner for Ecolab in the UK and in Ireland for their TEE HLD product. And TEE is a specific type of ultrasound using cardiac. It's more like an endoscope without lumens that gets put down the throat to take cardiac image. And Ronan and his team have now signed an agreement with Ecolab to take that product on under our team. So despite the complexities and challenges that are there in Europe, we are confident in the long-term growth potential for this region.
From an Asia-Pacific perspective, our growth strategy in Asia-Pacific is really focused on maintaining our leadership position in ANZ. That is a market where it is probably over 80% market penetrated, and we are the leader out there at the moment. Most of the growth in Asia-Pacific will come through geographical expansion. From a geographical expansion perspective, our focus is on Japan. While the current adoption fundamentals are weak, which can be counterintuitive, I guess, they are beginning to improve. As I mentioned, counterintuitively, there are no requirements to decontaminate today ultrasound transducers, even intracavity for intracavity procedures. However, we believe this will ultimately change. Why? Because, well, if you take other intracavity procedures such as endoscopy, nasopharyngeal exams and scopes, cardiac transesophageal, etc., they already require decontamination in Japan. So it makes sense, and we are certainly working towards having ultrasound transducers to follow.
We are making some good progress there now. One, we've generated a lot of local evidence from two key studies showing contamination levels on ultrasound transducers exist. In actual fact, close to 90% of them. Another study is currently underway on the trophon technology's effectiveness. This is a study we have to do locally. Of course, we've got numerous studies demonstrating the effectiveness of trophon. Our educational efforts up there are gaining traction. Why I say that is I attended recently in Japan their annual infection prevention conference. At that conference, there was a symposium. Over 90% of participants in that symposium, and there was over 400 people that attended that symposium, recognized ultrasound as a cross-contamination risk and supported the adoption of high-level disinfection guidelines.
If we did that study, if we looked at that at a symposium four or five years ago, that 90% might have been 10% in terms of awareness. So we are making good progress. Outside of Japan, we are progressing our regulatory approval in China, and our goal is to get that this year. However, we're keeping very close to the economic situation in China. We know it is impacting the capital equipment growth for a number of large medtech companies. So we've got to pick our timing properly in terms of the time we enter China from a commercialization perspective. So the global opportunity for our trophon business remains substantial.
And while we must navigate the various market uncertainties and increasing competition, etc., our focus still remains on continuing to invest in R&D to continually deliver value to customers, to expand our installed base and markets with strong fundamentals, which we are doing, to strengthen the fundamentals in those markets where they're weak and our presence in key European and Asia-Pacific markets, and expanding our annuity revenue by enhancing customer value across the ultrasound reprocessing chain. And these strategies, I think, altogether are very much designed to drive robust growth and returns for years to come in the ultrasound reprocessing side of our business. Moving on to endoscope reprocessing briefly, and we believe that this also is a significant growth opportunity. And our CORIS technology, as you know, is currently under review with the FDA as part of the De Novo application.
Deficiencies in current endoscope reprocessing practices are well understood, and these deficiencies can result in significant adverse events. On the slide here, you'll see that in the U.S. alone, and this is on a quarterly basis, a report comes out from the FDA. There are over 8,000 adverse events reported quarterly through its MAUDE database. A significant percentage of those adverse events are related to reprocessing deficiencies. So CORIS is very much designed to overcome these shortcomings of the current manual cleaning by introducing automation and delivering significantly superior cleaning outcomes through its innovative mode of action. It is a complex problem to solve as we're dealing with the goal to remove cyclic buildup biofilm from all channels within an endoscope, including the smaller channels, which can be as small as one millimeter in diameter and 3.6 meters long.
The evidence is clear that biofilm exists in these channels. If that biofilm exists, well, then that in turn increases the risk of cross-contamination. We know today's manual practices are not effective in its removal, particularly in those small channels. During the year, one of our key studies on CORIS was published in the Journal of Hospital Infection. That study demonstrated the significant effectiveness of CORIS in removing biofilm from all channels, including those very, very small channels. This data has now been presented at numerous international conferences, generating significant interest. CORIS, it represents a significant opportunity for all stakeholders. Given that all major markets today mandate the cleaning and disinfection of endoscopes, so the fundamentals are strong, the potential for adoption is substantial.
With over 60 million flexible endoscope procedures conducted annually, that's just across seven major markets, and that is growing at about 6% per annum, the opportunity is very significant, and for us, it's starting with high procedure volume scopes. CORIS is designed to work with the full range of flexible endoscopes. There's many, many different types of flexible endoscopes and will be accessible as our indications expand. That full range, that's the intent, and commercially, our strategy is to leverage our existing direct infrastructure and supplement this with some specialist resources in our direct markets, and where it makes sense, partner with leading experts in endoscope reprocessing as well as we roll out the technology internationally over time, and as I mentioned earlier, CORIS is currently under FDA review, and we're currently working through questions from the FDA as part of the review process.
Our goal is to commence the first stage, as we said in August, of our commercialization in early FY 2026, and of course, subject to the requisite regulatory approvals across the different markets. We've put together a very brief, short video on CORIS. If we can play that now, that'd be great. Thank you.
For decades, healthcare professionals have faced significant challenges due to the complexity of cleaning flexible endoscopes. The CORIS system is a novel technology that replaces manual cleaning of endoscope channels with an automated, verified, and traceable cleaning process. Flexible endoscopes are complex devices that need to be meticulously cleaned between each use. They can be up to 3.6 meters in length, with lumens down to just one millimeter in diameter. Manual cleaning includes brushing of the working channel. However, other channels cannot be brushed and rely only on detergent flushing.
Inadequate brushing and flushing may not remove bioburden, especially hard-to-remove biofilm that forms in the small, inaccessible channels. Among reusable medical devices, flexible endoscopes have the highest number of reported outbreaks in the literature. Over recent years, there has been a huge increase in endoscope adverse event reports to the FDA MAUDE database. In the last quarter alone, there were over 5,000 reports of patient safety issues, including reprocessing breaches, residual contamination, retained debris, and infections caused by defective endoscopes. A 2021 study on gastroscopes revealed extensive biofilm accumulation in the majority of air-water channels within 30 days of clinical use, despite routine cleaning. Not only do scopes continue to be contaminated, but reprocessing staff experience pain and discomfort from the repetitive motions of brushing and flushing during the cleaning of endoscopes.
CORIS has been developed to overcome the challenges of scope design, bringing physical cleaning to all channels. As an automated system, it addresses human factors issues and relieves staff of some of the burden of manual cleaning, making the process simpler and easier. CORIS incorporates a simple user interface, allowing the user to scan the endoscope to be cleaned so that the correct cycle can be run. They then connect the CORIS adapter to each individual channel and connect the distal end of the endoscope to the smart drain. The cycle starts, and the CORIS Quantum Cleaning Agent is delivered to the endoscope. The environmentally friendly, non-toxic cleaning agent contains a precise mixture of water and low-hardness particles. The cleaning agent flows through the channels of the endoscope, gently lifting the bioburden and biofilm from the walls, reaching even those small channels that brushes can't reach today.
All cleaning agent and bioburden is sent straight into the drain to minimize the risk of cross-contamination to staff. A recent study published in the Journal of Hospital Infection showed that CORIS significantly outperformed manual cleaning in the removal of tough, cyclic buildup biofilm. Nanosonics is committed to transforming medical device reprocessing now and into the future.
A great technology. Before I conclude, I do want to highlight a few key aspects of our operational excellence priorities. First, in manufacturing, I mentioned earlier. And as you know, the manufacturing of our capital equipment takes place here in Sydney, co-located with our R&D facility, of course, and we've no plans to change that. However, we have started setting up a consumables manufacturing facility at our Indianapolis operation in the United States to produce consumables for both trophon and CORIS.
And this strategy aims to improve COGS and expand margins for our consumables over time, enhance our supply chain resilience and contingency, and also provide a more sustainable solution by manufacturing our high-volume consumables closer to our customers and thereby reducing international freight, which is a significant component of Scope 3 emissions that Steve mentioned. So setting up manufacturing in the USA is just another building block for supply chain optimization as part of our long-term growth strategy. And the second crucial element of operations and organizational growth is in our digital strategy. And as you know, we are investing in a new ERP system, and that will go live in the second half of this financial year.
This new system aims to deliver productivity through better capture and faster access to data, as well as enabling and laying the foundations to implement more customer transactional models around the world that can be SaaS models with our digital solutions or web stores, etc. And additionally, data as a strategy is becoming increasingly important, not just internally for the business, but for our customers' perspective, and particularly in terms of on-demand integrated traceability solutions. And we have been investing in our cloud strategy and expect to bring more solutions to market in this domain to support our customers. And finally, and most importantly, we are investing in our people strategy at all levels in the organization. As Steve mentioned, we do recognize the need for strong organizational capability to achieve our priorities and to capitalize on the significant growth opportunities that lie ahead.
And these investments are very much designed to ensure we've got the necessary breadth and depth of talent to drive and support our long-term growth aspirations. So in closing, I will, on the people matter, I do want to express my sincere thanks and gratitude to all our global staff for their unwavering passion, resilience, and commitment. They really are a fantastic team. I also want to extend my sincere thank you to you, our shareholders, for your continued support as we continue to transform medical device reprocessing to enhance patient safety and improve healthcare outcomes. So thank you very much, and I'll hand it back to Steve.
Thanks very much, Michael. That was, as always, incredibly informative. Thank you. I'll now move to the formal business of the meeting, and we'll go through the resolutions.
And then at the end of discussing each resolution and then taking questions on them, what we'll do is there'll be an open session for more general business questions. So we'll have plenty of time to discuss what's on your mind there. The notice of this meeting was circulated to shareholders, and copies are available at the registration desk and on the Nanosonics website. And I propose that we take that notice as being read. I'll now outline the procedure for this part of the meeting. Prior to calls for a vote on each resolution, the resolution and proxy votes will be shown on the screens, and I will invite questions or comments that are specific to each resolution that be read at the time of each resolution.
For shareholders who are online, you may either cast your vote at the time each resolution is read or complete voting on all resolutions after I've read all the resolutions, and we have concluded answering questions on those resolutions. I will then provide a warning that the poll is about to close. For those shareholders in the room, I've got the following specific instructions. Please use your blue voting cards. After I call for a vote on each resolution, all persons entitled to vote will be given a moment to complete their voting card before I move on to the next resolution. On the reverse side of your blue voting card is your voting paper instructions. For proxy holders, you need to mark a box beside the motion to indicate how you wish to cast your open votes for any votes you're entitled to cast.
For shareholders, you need to mark a box beside the motion to indicate how you wish to cast your votes. Once we've completed all the resolutions, please ensure you print your name where indicated and sign the voting paper. A representative from Computershare will then come around and collect your completed voting card. If you require any assistance during this process, please raise your hand, and a Computershare representative will come and assist you. As chairman, I have a number of undirected proxies, and I will vote these in favor of each resolution in the poll. The persons entitled to vote on the poll are all shareholders, representatives and attorneys of shareholders, and for those in the room, proxy holders who have a blue voting card. For those shareholders joining online, questions may be submitted at any time whilst resolutions are read using the functionality previously described.
Questions will be considered and answered for each resolution when the resolution has been read. However, there will be a pause at the end to ensure all shareholders are afforded an opportunity to ask questions on the resolutions. I will now turn to the first item of ordinary business, which is to receive and consider the company's reports for the financial year ended the 30th of June, 2024. No formal vote is required on this item of business. I would like to pause for a few moments to invite any questions, any questions you have for either myself, management, and we've got the representatives from Ernst & Young here as well. Any questions on the financial reports? The first resolution is the election of Marie McDonald. Marie was first appointed to the board in 2016, and this resolution seeks shareholder approval of her reappointment.
Marie's reelection is unanimously supported by the board, and I would now like to invite Marie to say a few words in respect of her reelection.
Well, thank you, Chairman, and good morning, ladies and gentlemen. I must say I'm pleased we're having our AGM again at our headquarters in Macquarie Park, where so many of our people work and our R&D and production takes place. I'm pleased to have the opportunity to briefly address you this morning as I seek your support for reelection as the director of your company. As Steve said, I was originally appointed to the board in 2016, and I'm currently the chair of the People, Safety, and Remuneration Committee, as well as member of the Audit and Risk Committee. It's a privilege to be able to serve your company in these capacities.
The notice of meeting has some information about me, but in brief, my professional career was spent as a lawyer specializing in corporate and commercial law, mainly mergers and acquisitions and often cross-border. This gave me significant expertise in public markets, regulatory policy, and compliance matters. After leaving legal practice, I became a non-executive director of several companies, each of which has a life science focus. Most of these companies have international operations, and that gives me insights into the management of risk, people, and safety in diverse locations. I believe this combination of skills and experience has been of value to Nanosonics in the past, and I hope it will do so in the future. We do have broad-ranging discussions at the Nanosonics board, where we constructively challenge management and ourselves.
And I think the openness and the diversity of capabilities and skills around the board table serves Nanosonics well. I can assure you that I have both the time and the energy to devote to my role. Like my colleagues, I'm conscious the last year was a challenging one for Nanosonics and in turn for our shareholders. After a slow first half, it was really pleasing to see the Nanosonics team rise to the challenge and see the company return to growth. At the same time, the team remained highly focused on advancing our strategic priorities, and we do have significant opportunities in front of us, and Steve and Michael have touched on many of them.
If reelected, I look forward to working alongside my board colleagues and management with the aim of creating long-term sustainable value for you, our shareholders, as well as for the patients and the clinicians who depend on our products, for our employees, and for the communities in which Nanosonics operates. Thank you very much.
Thanks very much, Marie. Appreciate that. The resolution and the proxies received for resolution one are shown on the screen. Shareholders are invited to vote on the resolution at any time before the formal business closes. I would now like to pause for a moment and invite any questions from shareholders. Firstly, from the room, are there any questions? No questions in the room. We have a written online question. We do. I'm happy to read that out. Yep.
Having already served eight years, is this Marie's last or a new term on the board, or will she be recontesting again?
I think what we typically do is assess that over a period of usually a three-year window, which is what we have for now. It's not exactly three years. It can be slightly different, which I think is the case this year for Marie. And we have a conversation with each of the directors and whether they are interested in continuing to serve. We also look at the skills that we have on the board, understand the strategic direction of the company, and what do we need on the board to support management for the direction of that strategy. So we will assess that at some point in time in the future. Just personally, I don't think tenure is a good measure of performance.
Marie has been an outstanding director and outstanding contributor for a very, very long period of time, and I can assure you she's fiercely independent. Are there any other questions online? No? No? Good. We'll now move to the next resolution. This is the remuneration report. For resolution two, the remuneration report is required to be considered for adoption in accordance with the Corporations Act. The remuneration report forms part of the director's report and appears on pages 42 to 65 of our 2024 annual report. The vote on this resolution is advisory only and non-binding. The resolution gives the members the opportunity to ask questions or make comments concerning the remuneration report during the meeting. The chairman of the meeting, other directors, other key management personnel, or any other closely related parties will not be included in the votes for this resolution.
Where, in my capacity as Chairman, I'm holding undirected proxies and the appointer has authorized the chair to vote undirected proxies on this resolution, I will be voting in favor. The resolution and the proxies received for resolution two are shown on the screen. Shareholders are invited to vote on the resolution at any time before the formal business closes. I would now like to pause for a moment. Do we have any questions in the room? None? Do we have any written online questions? We do, Matt.
We have a long question, but I'll summarize it. It's about the voting that we lodge after this meeting. And the question is, in addition to putting the percentages against each resolution, could we put the number of shareholders that voted for, against, and abstain against each resolution? I think that is something that we can do.
Yeah. Yeah. I don't see that as being an issue. Yeah. Sure. Any other questions? No other verbal questions from online? Sometimes these hybrid meetings can be a little cumbersome this way, where we're trying to navigate written online, verbal online, and the folks in the room. We'll now move to the next resolution, which resolution three concerns the issue of 21,914 service rights to the Chief Executive Officer and President Michael Kavanagh under the 2024 short-term incentive. The resolution and proxies received for resolution three are shown on the screen. Shareholders are invited to vote on the resolution at any time before the formal business closes. I would now like to pause for a few moments and invite any questions from shareholders. Firstly, are there any questions in the room on this resolution? Doesn't look like it. Are there any written questions online, Matt? No written questions online.
Are there any verbal questions? Virtually. It doesn't sound like it. We'll now move to the next resolution, which is resolution four. Resolution four concerns the issue of 470,877 performance rights to the Chief Executive Officer and President, Mr. Michael Kavanagh, under the 2024 long-term incentive. There are a number of refinements to the LTI framework, as explained in our remuneration report and notice of meeting. The resolution and proxies received for resolution four are shown on the screen. Shareholders are invited to vote on the resolution at any time before the formal business closes. I would like to pause for a moment and invite any questions on this resolution from shareholders in the room. There doesn't appear to be any from the room. Are there any written online, Matt?
There is one online. It's a reasonably long question.
It's about the CEO's LTI grants, and it's a question directed to the CEO. And I'll read it as follows. Could the CEO summarize his past grants as to whether they have vested or lapsed? Also, has he ever sold any ordinary shares in the company or bought any on market without relying on the incentive scheme to build his equity position in the company? Please don't say, "Look it up in the annual report," and through ASX announcements. It's complicated, and the CEO could actually summarize the situation if he's able to do so. Thank you very much.
First of all, have I ever bought shares outside of the LTI incentive schemes? Yes, I have. And I bought when I joined the board as a director. In terms of sales of shares, I have sold some shares, and they have been disclosed at every point in time.
And the reason for the sale of those shares has also been disclosed at those points in time. And the primary reason for any sale of shares has always been due to taxation. So the ATO got their fair share over time. In terms of the LTI, and I will have to go back and look up the details of the LTI, but as everybody knows, the LTI hurdles and LTI construct have changed year-over-year. But if I, on average, since 2016, I think the overall LTI vesting has been in the order of about 60%. And so in the earlier years, that could be go back to 2016, it was about three-quarters of the LTI would have invested in 2017. The LTI associated with 2017 would have vested at about, I think, 100% in the following year as well.
The year after that, with the hurdles that were in place, I don't believe the LTI vested at all that particular year, and in the 2020 LTI, I believe just about a third of that LTI vested.
Are there any other questions online? Any other verbal? No verbal questions online. Thank you. If I can go to resolution five, which considers the proportional takeover provisions in the clause 14 of the company's constitution in the form referred to in the notice of meeting, be reinserted into the constitution for a period of three years commencing on the day this special resolution is passed. Any questions in the room? There are none. Any questions online? There are none, and no verbal questions that I can hear.
Chair, there are no verbal questions right now.
Great. Thank you.
I'll pause for a few moments to provide shareholders with further opportunities to ask any questions in respect of the resolutions and to finalize your voting. Are there any further questions? One sec. Yeah, we've got one up there. Can we get the gentleman in the back of the room first? And then we'll go to general questions.
Chairman, my name is Anne Soprata. I am a shareholder. My question is about the De Novo application for CORIS in the U.S., which is currently underway. The question is, do you have any inkling of how long before it will be? We'll know whether it is underway. How long does the process take?
Yep. It's a valid question. Michael.
Yeah. Thank you for your question. The De Novo, the process, it's underway.
It's underway.
And unfortunately, we can't really have inklings.
You just have to follow the process as to where, but we anticipate that we would know about the outcome of the De Novo by the end of this financial year. That's why I said in my address, subject to all the regulatory approvals, our goal is to introduce the technology commercially into market sometime in early, probably first quarter in FY 2026.
Thank you.
Thank you. Now, Matt, there's another question online.
There is a question on the financial reports. FY 2024, financial reports sends out audits and goes as follows. How long has our external audit firm been in place? When did we last run a competitive tender for the external audit? And when do we next intend to run a competitive tender for the external audit? I think I said the last tender was 2017.
Yep, that's right. And that's when EY took over.
So they've been in place since 2017. We changed auditors. We haven't had a competitive tender since that time, but it's certainly a process we go through. The board considers at the end of when we close our accounts every year. So there's no pending intention to be able to want to change auditors at this stage. Any other questions from me? So are there any other questions on general business for Michael or myself? Formal business is closed. Formal business is closed. Yep. Yeah, but the polls are not closed. So formal business is closed. So we've got a couple of questions for the gentleman here. We'll get you a mic.
My name is sorry. I'm not able to stand up. I wish I could.
That's okay.
My name is Michael Kennedy. A few questions. One is the study that was referred to there on CORIS.
Where was that done?
That study was done here in Australia.
I thought so.
Yeah.
Okay. Two, I think the first investor conference. I get mixed up in the financial year and full year sort of thing. But you referred to a study being done in Germany at the Robert Koch Institute, where you were expecting automated disinfection to be validated. Therefore, it was used. I was expecting more news about that. I haven't seen it.
Yeah. What you're referring to, Michael, and welcome again. It's great to see you.
Thank you.
What you're referring to is in Germany, there's the Robert Koch Institute, the RKI. And it wasn't so much a study as the RKI were very much undertaking and looking at the relevance and applicability of manual processes for high-level disinfection, particularly the use of wipes. Plus, there's a lot of wipes.
In actual fact, most of the wipes were low-level disinfection. What the RKI have come out with is the absolute preference for automation. Now, that has to. There's mechanisms in Germany where that may go into legislation, actually, and that hasn't happened yet. So the way I would sum it up is that what I was talking about in terms of fundamentals for adoption, they're certainly beginning to improve in Germany, where automation is definitely the preferred mechanism. But probably the biggest challenge is we need to make sure that people then adopt that and comply with the requirements for high-level disinfection. It is certainly going in favor of automation.
Yeah. The word validation, I didn't quite get why that word was used.
The reason for validation is it's very. What automation will do is it delivers a repeatable process.
And so you can validate it. You can actually validate every step. What a manual process, unfortunately, it's very, very difficult to validate because it's not repeatable. You're going to have different people will approach it in different ways. They'll miss spots. They won't clean for the requisite time, etc. So all of these sort of things. And that was the crux of what they were trying to do is to get the requirement for validation. And the only real way you can get validation across is through automation.
Thank you.
Okay. There's a gentleman over the back corner here. Over the back, where he's next. And then we'll take the gentleman in the blue shirt. So the gentleman in the flashy purple shirt. Looking good, sir.
Peter Breden, shareholder.
Hey, Peter.
I'm just wondering why it's taking so long to get CORIS. I understand won't be available until 2026.
Yep. And thank you for your question. And I would like to bring it to market tomorrow because, as you saw with the adverse events that are happening, I believe that the market and patients really need this type of technology. We do have to go through the process from a regulatory perspective, however, and that takes time. I will also note though is that this is a really complex problem to solve. So when you're dealing with things from a technical perspective, an R&D perspective, we set ourselves pretty lofty goals in terms of requiring or ensuring that we can remove what's called this cyclic buildup biofilm. That is really, really, really difficult to do. And so we've had many iterations throughout the development.
But as you saw in the studies that have been published now, we've got a technology that can remove cyclic buildup biofilm, which is the toughest soil to remove from all channels, including the small channels that are only a millimeter in diameter and up to 3.6 millimeters in length. And when you look at the internal architecture of an endoscope, it is really, really complex. It's not just one straight tube. That actually would be quite easy to do. There's many changes, bifurcations, and connections, and all of these sort of things in an endoscope. So when you're dealing then with the complexities, not just of chemistry, but of physics and fluid dynamics, etc., to be able to get to all parts of it with the requisite forces to be able to remove this biofilm. So as you know, we're on this journey. It's in with regulatory review.
Our goal is by the end of this year, we'll know about the regulatory outcome and hopefully then start bringing this product to market. Right.
You've got all next year. I mean, I'm still a bit concerned at the time it's going to take. "Surely the FDA is not going to take what from now?" You submitted in April. Yeah. They're going to take all this year and all next year.
It's not what we're going to take. It's what the FDA takes. There is a review process. This is a De Novo approval. It's not unlike a 510(k), which is a lot faster. Because it's a De Novo, it means that there is no predicate device. The data that had to be submitted to the FDA was an extensive body of data. That's not just about does the product work.
It's all aspects of the technology. And then what the FDA so there'd be a truckload of documentation that was sent to the FDA. What the FDA then have to do is they farm out within their own specialist divisions the relevant aspects of that particular submission. And each one of those departments then has to review in detail the relevant aspects of the submission. So unfortunately, it's just a factor of it's not like, "Would we like things to go faster?" Without a doubt. It's just the process associated with a de novo approval.
Okay. So after that, I presume you haven't got a heap of inventory of CORIS out the back there.
No, no, no, no, no, no, no.
So you're going to have to build the machine to build the inventory as well.
Oh, without a doubt. And that's part of the commercialization process.
So the regulatory component's just one part. We're setting up the lines here. So CORIS will be proudly manufactured in Australia as well. The technology, the capital equipment. So behind the scenes, what goes on in readying from a commercialization perspective, that's all underway, be it in the supply chain and manufacturing, etc. So we don't have a ton of inventory sitting out the back waiting to go. There'll be a ramp-up associated with CORIS. But it is a good point because from a capital perspective, there will be. And that's why it's very beneficial that we've got a strong cash balance within the business because there will be a capital injection that'll have to go into the business on building things like inventory.
The gentleman in the blue shirt.
Thank you, Chair. My name is Peter Rea.
I'm holding proxies for my wife and also for the Australian Shareholders Association, representing 20 holdings and about 80,000 shares. I also hold shares myself. They're in my superannuation, which sits on a Wrap platform, which I'm not entitled to vote. Thank you, Michael, for an excellent presentation. I had a number of questions in my mind about the global opportunity, and I think you very, very clearly explained that and got an excellent understanding of that. I did read a report, a broker report in the last year or so, talking about patents on the trophon coming up for expiry over the next few years. Just wondering if you could talk about that.
And also when some of the patents do expire, what are the risks that someone else could come up with a competitor product to the trophon, which could potentially impact the market for trophon and the potential to build that or capitalize on that global opportunity?
Yeah. Thank you. That's a very important question. Thanks for asking. From a patent perspective, for trophon, we've got about 14, I think it's 14 families of patents for trophon. And many of those patents don't expire till after 2030. And the one common question I always get when it relates to patents relates to the consumables. In other words, can somebody else put their Nespresso pod into our machine, so to speak? And what you've got to think and also take into consideration that we have not stopped in terms of our developments in ultrasound reprocessing and trophon roadmaps.
And so you can expect to see new generations of trophon come over time. And with those new generations come, should come new patents as well. So as an innovator, yes, looking at patent growth and protecting our patents is really important. On the consumable side of things, what you've got to realize is besides just the patent protection, and we do have patent protections out beyond 2030 on that, besides just the patent legal protection, there are really two other aspects to the protection as well. One is from a regulatory perspective. And what's approved from a regulatory perspective is the system. So it's not the consumables separate to the technology. It's the system. So for somebody to come in and try to put something into their consumable into our machine, it has to be approved as a system.
And we're very unlikely to support anybody in trying to do that. Actually, I can confidently say we won't. The second part is, and it shouldn't be underestimated, is we lead the market in terms of probe compatibility. And in our labs, just 400 meters away in the other building, we've got a lab totally dedicated to probe compatibility. In actual fact, the ultrasound companies now will send us probes before they're even commercialized to test for materials compatibility and suitability. And so today, I think we've got over 1,300 probes compatible. And for anyone else that wants to come in with a new chemistry, you've got to have that tick in the box as well. That's a body of work. But your question is valid. But as I say, we'll continue innovating. We'll continue generating more patents to help protect our position in this market. Thank you. Thanks, Peter.
Another question over here.
I think we all know Trump has been elected in the USA and his favorite word is tariffs. So the question is, will there be a tariff on trophon?
Yeah. It's a great question and it's one who I expect not even Mr. Trump knows the answer to, but he'd pretend to, and so we sat at a board meeting this morning and Michael and I discuss things very often, like almost daily, have conversations on things, and one of my conversations with Michael about a week ago, a bit less than a week ago, was we've been living through some very volatile times. Get ready for a really different amplitude to that volatility. It's going to change quite significantly. It's going to increase the predictability of what happens, so that means we need to be more prepared to be able to see.
Jason, our CFO, is already working with the marketing teams on pricing strategies in the event tariffs are implemented. What does that mean for our customers? And so we're already working on that now without knowing the answers, so we're sort of doing all sorts of scenario analysis on it. But we'll be prepared that if it does happen, we'll be ready to respond and also understand what the competition are doing in the market as well at that point in time, so it's a difficult one. We know exactly what I think moving some of our consumables manufacturing to the United States will definitely help in a pretty significant way. And that should be up inside the next 12 months or so and running. And so that will definitely help that as well.
We also have a very clear understanding of what source of our supplies come from China. But what we don't know is what of our supplies that what is their source from China. So we're doing all that work now to make sure we be prepared in case something happens. But it's an unknown.
And a second question in relation to all this. I get the impression that Robert F. Kennedy Jr. will be in charge of health. And one of the things I saw him being interviewed, and I noticed he couldn't help getting into the FDA. He gave me the impression that it's a target of his. And I noticed during COVID, there were some complaints that certain devices were fast-tracked through. So I was impressed by the FDA's procedures. And as far as I could see, their authenticity and integrity.
But I get the impression that there's got to be some pressure on them.
Yeah. Yeah. Yeah. I think that's another unknown, unknown. It's certainly something we're aware of. And I've read the same articles. I have no idea whether they're believable or not. But it makes for fascinating reading. And my last thing, you mentioned 27 million patients knowing in their hearts and souls that are free from hospital-acquired infection. I think you should be putting that up on some sort of a sign for the morale of the company to see it every day. Yeah. We should put a ticker on the website, Michael, that says another 1,000 patients protected today. That's a good idea. Do you want to join our marketing team? Sure. Yeah.
So you got another question over here?
Peter Breden again. So Nanosonics, as far as I can see, is a two-product company.
So when will you introduce a third product to the shareholders?
Yeah. Michael, do you want to answer?
We actually got more products than two because there's an ecosystem around each of the core technologies.
As I said, when we looked at the strategy there, and there was a third arm in that strategy to talk about outside of ultrasound reprocessing and outside of endoscope reprocessing, our goal as an infection prevention company is to transform reusable medical device reprocessing. So we will certainly what I can say is we're committed to ongoing investment in R&D. There's ongoing investments in R&D, albeit at a lower percentage of revenue as revenue is growing. But those ongoing investments in R&D, where we put those investments, will continue into ultrasound reprocessing, will continue into endoscope reprocessing, and we will be putting monies into other areas over time.
I'm not at this AGM talking about a third product. I think we've got a huge opportunity today with ultrasound, as I presented. I think we've got an immense opportunity with endoscope that we're just embarking on. Even within both of those, we've got great opportunity through trying to own the ecosystem or the value chain associated with reprocessing. And even those value chains can have innovation. So another product at the moment is we're certainly thinking about, but not committing to anything at this stage.
Thank you.
Murray? Michael, the results of the trial in the Journal of Infection Control are outstanding. On the back of that, what kind of I know you can't sell a product that doesn't have regulatory approval, but you can communicate, and you've had lots of opportunities to interface in every country with the community.
What sort of feedback and acceptance are you getting of the principles of CORIS? Connected with that, we know that there's been real headwinds with radiology and most other areas of medicine having not enough staff. So automation will be a real driver in the future of consistency and outcomes. But I guess as a shareholder, as well as other roles, what's the feeling we're getting about the way this is being seen by the community?
Yeah. Thanks, Murray. Great question. First of all, you're right. This is a non-approved product from a regulatory perspective. So there are various constraints. We certainly can't be out there promoting it. But can we talk about it scientifically? Without a doubt. John Burdock, our Chief Scientific Officer, has presented this data at a number of conferences internationally now.
And what I can say, it has brought a lot of interest because it's one, confirming what people I believe already know and highlighting the problems, particularly with biofilm. And two, they are really amazed with respect to the efficacy that is being delivered. And there have been some customers that have seen the machine in terms of its operation. And it's not just the efficacy. When you're looking at a product, you have to think of the total value proposition. The efficacy is one outcome. But in terms of the automation and overcoming the challenges that people have today in manual, all the RSI, we could give a couple of hours presentation, or John could, on a lot of the challenges in endoscopy. And staff challenge is actually one of the biggest ones with people on RSI, people leaving, so having to be trained up again.
So they're really enamored by the fact that this automation can address that as well. So the feedback we're certainly getting is very pleasing feedback from the customer groups, again, all in the context of what we can talk to them from a commercial perspective. But I would also want to make a point with respect to any product launch. No matter how good a product is, there is always a ramp-up. It's not like overnight everybody's calling you and saying, "I want 10." There is always education. There is always a ramp-up, etc. And that's exactly what we expect to see from the CORIS perspective. But are we committed to, and are we confident of establishing this technology as a new standard of care, just like we have achieved in North America? Without a doubt. Great. Thank you. Any more questions in the room?
There is one more question online. Matt?
No? I've got a bunch of questions online. The point of order, Mr. Chair, I'll just confirm the formal business is closed. The poll is closed now. Those are the general questions.
Great. So the poll is closing now, correct? And we'll provide the Chair just a minute or two to finalize your voting. So please complete your voting now. Thank you. If you can hand your blue cards to the folks from Computershare, that would be great. I've had a number of questions online. Good. Will it be principally for Michael or myself?
Primarily for myself.
Okay. So it might be better if Michael can read them?
I'll push them to Michael. I'll say them in front of him. I can read them to the house. Let's do it together on CORIS, we should be able to see. I can read them.
One of the questions I think we've already addressed regarding when do we anticipate your new product to enter the market? Was that one of the questions, Matt?
Yeah. And again, just reiterating what I did say in the address, it's going to be subject to regulatory approval, but at the moment, we are targeting early in FY 2026 as the first commercial launch. And there was a second aspect as to whether the FDA only applies in the US. Oh, FDA, sorry, the question of whether or not the FDA only applies in the US, the simple answer to that is yes. From a regulatory perspective, internationally, there's always this ambition to get to regulatory harmonization. We're not there yet. The FDA is for the US and different requirements in the other jurisdictions. Thank you. TGA. TGA.
Yeah, what about that? We'll look to the TGA as we progress through the FDA. Because the FDA, they have the most comprehensive, and we want to understand everything the FDA is telling us or asking of us before we look at submissions to other jurisdictions.
Good. The next one from online is regarding competition. So the question is, could we provide Nanosonics' view on the competitive landscape, in particular UV, and how have any market entrants impacted our opportunities in any regions?
Yeah. Competition, and I think I also mentioned in my address, obviously, we have got to navigate various market uncertainties. And in some markets, the market is becoming more competitive. Well, in terms of competition itself, however, that hasn't changed that much in many, many years. It's just where the competition has become available has changed, and particularly in the United States.
In the last 12 months, you would have seen the manual wipe system, Tristel chlorine dioxide-based system being introduced into the United States. And that could be quite complementary to trophon. But we've not really seen that over the last 12 months have a major impact on our sales. One point I will make is that competition, and I've always said this, I think, Michael, you were even commenting on this earlier that I've consistently said this, is that competition is very good. Because one of the biggest issues that has to be addressed out in the marketplace is awareness. And the more people that are out there educating customers with respect to the requirements, the risks, and the requirements, well, then the better. And that can help grow the market.
And from a technical perspective, then, we're very comfortable in the technology that we have in delivering excellent solutions to our customers. UV was mentioned, particularly in that. UV as a modality for high-level disinfection has existed for many years in a number of markets in Europe, most UV actually came out of Europe, out of France. And it's now entering into the United States. The value proposition for UV may be attractive for some customers. For others, it may not. And I just stand by, we know the technology very well. We have our own labs here that we don't hide away from these sort of things. We've done many investigations ourselves with respect to all different types of technologies. And through those investigations, we still remain very, very comfortable with the offering that we have through trophon and the mechanism of action with trophon.
So again, the bottom line from a competition perspective is, in many senses, I welcome it because I think it can help grow the market. Then it's us. From a company perspective, it's just we have to keep innovating. And we've got an excellent R&D team to do that to stay at the forefront.
Any other questions, Ray?
We've got around 10 more. I don't know how many we have time for.
I think we've got is there anything material there? I'm happy to be. Perhaps I can ask one more on staying on the trophon topic. People might have talked about CORIS. It's about the relationship between the IB run rate and the OPEX or the SG&A growth and expenses. So the question is, in 2018, we were adding around 3,500 new IB per year. And that's now, according to the question, around 3,000 installs per year.
And yet SG&A expenses have grown three times since 2018, from AUD 32 million to AUD 90 million. And to summarise the rest of the question, could you comment on that?
I think if you look at the revenue as well, it has grown very, very significantly in that period of time. Also, in that period of time, we've made a couple of very strategic moves going direct in North America, which I think is a very important strategic move for us. So I think the return on investment, as I mentioned in my address, if you look at the trophon business alone, that trophon business with AUD 170 million generated AUD 40.4 million in PBT. So on any multiple today in the marketplace in med tech device, just valuing the company just on that multiple alone, I would say we're potentially undervalued today.
So I think the business, while OpEx does inevitably grow, our revenue has grown significantly as well.
Great. Thank you for that. So I think that concludes the business of the meeting. And we'll get no more pleas for those who were here with us in the room. There are refreshments outside, and we can have some further chats out there. So I'll conclude the business of the meeting, and I'll declare the meeting closed. Thank you.