Hello, everyone. My name's Leo Kenzikher. I'm an associate here in the J.P. Morgan Healthcare Investment Banking team. And this evening, it's my pleasure to introduce Roger Susi, Founder, President, and CEO, along with Jack Glenn, CFO. And I'll pass it off to Roger to kick off the presentation.
Thank you.
Thanks, Leo. Hello, everyone, and welcome to our IRadimed device company presentation. Again, as introduced, I'm Roger Susi. I'm the President and Founder of IRadimed Corp. Quickly go through some forward-looking statements as we are a public company. I'm not going to read all that. You've probably seen that many times. And get right into it. I'm going to begin by talking about the end, just kind of go over some numbers. So as you see there, IRadimed is a revenue-producing business. We just wrapped up 2024 at $72 million, Jack. And we are a profitable business. We generate cash, have good growth, and we actually pay dividends. So we've also a robust balance sheet, as the little bag of money there on the slide shows. How do we get there? So we are a safety play. We make devices. We don't rely on reimbursements.
It's not a directly billable kind of device or single-use part of it. It's simply a safety device for MRI, so I'm going to back up just a skosh and mention where we came from with this timeline slide, so both Jack and I had been in a previous business called Invivo in the mid-'80s at Invivo. I founded that also company in a garage, literally, and we were in the patient monitoring space, competing with some of the larger boys at the time. Accidentally, in the mid-'80s, fell into this MRI niche, and we discovered that patients undergoing MRI had no way to be monitored. That was the initial problem. Also, the IV pump idea was there, too. They didn't really have a way to continue pumping fluids in the MRI, but we started with this monitor concept, and that's way back. That's '87, as the slide shows.
That company went public in 1993, and in 2004 or 2005, it was acquired ultimately by Philips, so our former company is part of Philips and still did and maintained a huge piece of the market for MRI patient monitors, about 95% of it. I left there at that time, had the idea for this IV pump, and formed IRadimed, and so IRadimed really got off the ground about 2005 with a non-magnetic, MRI-safe IV fluid delivery device, so timeline moves forward, and you can see that we started business with this pump. We went public in 2014, and then we entered the monitor space to compete with my former business, which Philips owns, with this patient monitor in 2016, and soon to be a next-generation yet MRI-safe IV pump coming, so we're going to definitely get into that more later.
So a little bit of background, you know what's going on in the MRI environment. It is somewhat dangerous. IRadimed has this very enjoyable position where we have no competition with this MRI-safe IV pump. And really, our only competition in the monitor is my former monitor that Philips has. So it's a rather sheltered, competitive market. It's very niche, though. So what's the hazards? This quick slide kind of goes over some of the, I guess, the things that create the need. So an MRI is obviously a gigantic magnet. The slide shows a device that was supposed to be MR conditionally usable, but obviously, it had something magnetic in that upper box, and it got sucked into the bore. You also have burn risks because the magnet uses a lot of RF energy. You can burn patients who have wires or conductors touching them.
And around the pie is a list of all the various other sorts of things that can lead to adverse events in the MRI suite. So this is a shot of our founding MRI-safe non-magnetic IV pump. Again, as I said, it's the only one in the world. This device here shown has been really on the market pretty much in this look since 2005 or 2006. So we are well due for a new device. Some of the takeaways here are what we've got out there. We've got about 7,300 of these pumps installed, most of them with a second channel. This is the second channel so the device can actually provide two fluids of delivery. Most U.S. customers buy it exactly like in the picture, a two-channel product. And then the other box with the antenna sticking out of it, it's the remote control.
So if you're familiar with MRI, shielded box, nobody's in there with the patient usually. You have this pump running in there. Could need dosage titrated, could go into alarm, need some kind of attention. You do that, for the most part, from the remote control. So that is custom wireless link that we designed so that this remote control can operate wirelessly and yet not upset the MRI imaging process. This is a shot of our number two product. Our revenue is about evenly split now between the IV pump, which was launched a while ago, and this patient monitor, which was only launched about six plus years ago to compete with Philips. So the difference here is our monitor, unlike the Philips, is really non-magnetic. The Philips device that they bought from our former company, Invivo, was magnetic still.
We made it big and heavy so that it wouldn't fly. It's kind of, I lovingly refer to it as my washing machine on wheels. We learned quite a bit about how to make non-magnetic things doing this MRI IV pump. The core was actually based on a piezo ceramic motor. The motor doesn't generate, use, or make any kind of magnetic field. We learned a lot about how to use these ceramic and piezo elements. That's what led us to be able to make this patient monitor. As you see, that's the size of a lunchbox and it weighs eight pounds. The former device I left with Philips is the size of a small washing machine, like I said, and weighs about 105 pounds. This is quite an advancement to the state of the art. What keeps us in business?
What keeps people from competing with us? I'm often asked, right? Well, here's a slide. We have quite a lot of IP around the fundamentals of the IV pump, this ultrasonic ceramic motor, the way we can transmit signals out of this MRI shielded room. There's 19. I think I just got another one, actually. There's 20 now. And that's part of the story. But probably the bigger part of the story is not IP protection. It's just that we're in a rather hazardous environment. And it's a pretty heavy lift technically, even if you didn't have to get around these patents. It's a pretty heavy lift technically to do this. And the market is somewhat sheltered and somewhat small. If you're looking for a $1 billion market, this is not it. But I'll show you how we're going to get past $100 million in a skosh.
So some of the way we do that is by thinking about what the opportunities are ahead. Right? Here's some of the stats. 100 million MRI scans done a year, right? There's 12,700 or so MR scanners actively running in the U.S., maybe more like 7,000 or 8,000 of them in the more critical centers where we have a good opportunity to sell product. We are already in about half of those, so we still have plenty of greenfield to go, but keep in mind the stat of how many of this old pump, primarily, I'm talking about now, are out in the world. Some of these are very old and we haven't been able to launch.
And so this is the key to where I'll show you this next-generation pump soon in a slide or two, how we can do a big replacement market, how we have big replacement potential. A real quick thing that we also had happen with the IV pump, and we hope to do with the monitor, is it's not just a story of one pump per one MRI scanner. That is the case for about 80% of our customers when we first break in and we sell a customer. And what we're competing with is they've been running long lines. They've been stringing together IV tube and pumping fluid 30 feet from a magnetic pump, which they keep outside the room. Or they just free drip the fluid, or they stop it and send you to CT. That's how we get in. We plant one, and it grows from there.
About 20% of our customers have grown to where they're these power users, as we call them. And the key to that is on this slide. It's workflow. So if you're a facility that does a lot of moving of patients that need drugs maintained in MRI, like children, neuros, people from various critical care wards, that becomes this power user, multi-pump user that has this multiplying effect on what we sell. So you can imagine initially we were just targeting in the middle, putting a pump by a scanner. But then, like I said, 20% of our users start to work that into their workflow so closely, they realize, you know, we got a patient on a pump in the ward. We need to prep one from critical care or some other area of the hospital and be bringing them down.
They want to put them on our non-magnetic pump there and transport with that. So that's starting from the left side of the slide. Meanwhile, the patient just was scanned and got done. He's on his way back to the room somewhere, and he still has that MR pump on him. So this brought us into where we need three to four pumps to support each MR that these higher acuity centers have. Facilities like Boston Children's with three magnets only running very hard down in the radiology department, seeing a lot of children, they actually run about 15 pumps to keep up with their workflow to support three magnets. So that's this multiplier effect that's shown on this slide. And we hope to do that with our little portable patient monitor, too.
But so far, we've been eating very well, just picking off the Invivo Philips business one for one, but keep that in mind, so our commercial strategy, real quick, is in the U.S., we have a direct sales force. We have 30 territories and we have three international. We have three guys that work directly for us running the international business. We use distributors internationally and this is how we control our business. It's best done with a direct sales force, so here's the story I want to get to anyways. This is why I kind of sped through this rather quickly. Don't want to bore anybody and the heat in here is making us all drowsy, I'm sure, but this is the story. This is the new pump, so that pump that I showed you that we've been selling and still selling well is basically a 20-year-old design.
So we've been working on this next-generation pump for a good while now. And we're in the process of getting it cleared. It's a 510(k) device. And you can see by the look of it, it looks different, right? It's smaller, if you can tell. And it's horizontally laid. But with this device, instead of having a main brain with one pump channel in it and you attach a second channel for the dual, the twin channel setup, which is the majority of our customers in the U.S., with this device, you would buy two pumps. And they link together on a smart spine that's on this non-magnetic IV pole. And you can link together up to four. All four use one remote control. The remote control is a little different, too, than the one for the existing pump. It's a bigger screen.
And you can see up to four pumps and control up to four pumps with that one display. Price, here's where the pricing is. This typical kit that we sell at a U.S. hospital, two channels, remote control, IV pump, is around $37,000. That's our ticket. This replacement to replace those two pumps and the smart pole, this is about going to be not much more, but about $42,000. The real story is not the added money. The real story is how many are out there. So like we showed, you've got when we launch, you'll have close to 6,000 pumps, 11,000 or 12,000 channels that are older than five years old. And anything older than five years old in the device biz is ready to be replaced. They budget for this. They get in the cycle figuring the life of these.
The life of it is listed as five years. It's time to replace your five-year-old pump, even though because we haven't had anything to replace it with, we've got a lot of 12- and 14-year pumps running out there, too. This pent-up demand, though, is huge. We sell about 1,100 or 1,200 channels a year right now. That's where this revenue is coming from. With 11,000 or 12,000 pump channels out in the field, if we only take 10% of them and replace them a year, which we'll never catch up, that's a 100% increase in business, 120% in revenue because it's a little bit more expensive. We're looking at a big inflection here with this pump being cleared. Once it gets cleared, as we put on there, right, mid-year here, we plan to have it cleared.
Not going to have revenue in it this year per se. Maybe we'll sell 100 of them or so in the fourth quarter. This is really a big inflection in our revenue in 2026. So we hope to hold it down in the first year to only grow 120% and double our product, sell another 1,100 channels on top of the 1,100 we sell now to the replacement market. But in 2027 and 2028, that's going to have to grow. So this business has grown in the teens and 20% already for many, many years. But with this new pump, we're looking at probably a five-year, six-year run of much higher growth than that as we replace these old pumps out there. So that's really the key story to IRadimed and where we're going.
Very exciting to us that this replacement market is going to open up that much opportunity. To talk about some features of the pump itself, yes. We made this pump, obviously. It's a little fancier, obviously, and has more brains to it than the original pump. One of the things that slows us down in selling into the greenfield, if you will, is a typical hospital, if you can imagine, a 200-300-bed hospital. They might have 300 or 400 non-MRI pumps in there. They're everywhere. They're going to buy two, three, four, five of these. So one of the things that slows down or can lend to procrastination from the buyer's perspective is, yeah, we have this old antiquated workaround. We run these long lines or whatever. We've done that for 20 years. Yeah, we have problems with that. We waste drugs.
We get air bubbles in there. We pump air into patients. The pumps don't like pumping through long tubing. It's off-label, but we do it, and so now we'd have to learn a new pump, and that puts a little fear in the mind of some buyers, and it gives them reason to procrastinate. If there's a hard job that our salesmen do, that's it. It's overcoming that tendency that people have to just stick with what they were doing for 20 years, and to the extent that we win and have planted already quite a few pumps out there, they convince people otherwise, so one of the things we did with this pump to also help us penetrate our greenfield quicker is it's smarter. We added a lot of sensing. There's sensing that can tell when people are operating the door to open it to load the IV set.
They're sensing that they're loading the IV set correctly, and all the while on the screen are little animations, or cartoons, if you will, that are walking the user through, "Oh, don't do that. We just detected you went the wrong direction. Back up. Do this." And you get a little gold star, and we think it takes away the pain of having to actually be trained so hard and read the manual, for example, so that the pump, sort of like a cell phone, will walk you through how to use itself. This, we think, will actually allow us to also, beyond the replacement market, which is still the largest story, penetrate our greenfield deeper as well, and so cultivate more single users, get them to get that first one.
And then we move them into that power user area where they have three or four to support every MRI system. That's our strategy, commercial strategy. So growth, right? Where are we at? Well, we've been growing well the last number of years. We wrapped up, as I said, 2024 at $72 million a little plus. Can't quite give you guidance on where we're going in 2025. But there will be growth in 2025, even though this new pump won't be yet part of it. We still have growth in the monitor and the old pump. But by the end of 2026, we see us pass on $100 million.
Because in 2026, that's when that 120-plus% growth kicks in from just the replacement business, plus whatever we can get a little bit more out of the greenfield because the product is sexier and more easily thought about how you use it, getting it in the mind. So got a lot of bullets here on this slide. You can glance through them as I talk. But the takeaway is really the replacement market that will have potential with the new pump. Here's the last couple of years showing you the progression in our growth this way. This is by quarter, by the numbers. I'll just let people scan that. And here's the takeaways, right? We create customer value, of course. We have quite a bit of technical expertise. One of the reasons we probably don't have competition is who makes things with ceramic parts?
If you want a motor, you just go buy a motor, so one of those barriers that we have is we can't even buy those components. We make them because they're not available on the merchant market, so not only is the pump and monitor both full of these non-magnetic things like valves and motors and pumps and so forth, but a competitor can't just go look at what we have in there, where we bought it from, and just buy them and make one. We make those. Those are custom. Our radio is custom-made just to get out of the room, so there's some barriers to entry all along there, plus the patent protection. We do feel we're pretty strong with distribution, having our own sales force.
That definitely contributes to our success, being able to call directly on and have people who we train and we control to tell the story. Because on the one hand, sometimes having a competitor is not a bad thing. You can just follow them. But when you're the pioneer, there was never a device like this on the market. You have to sing your own song, and people have to start dancing to it. And you can't say, "Oh, we're just like so-and-so, only better." No, there's no parallel. So that's the good and the bad of being the only one doing something. And of course, the bottom line is obviously people are adapting and adopting to our technologies and our products and buying it so it is successful. And with that, maybe I'm almost ready for some questions.
But before I do that, I want to just highlight that replacement market, why we're so certain it's going to work. A lot of people just don't get that sometimes. So here is an actual thing we just did. In 2023, our team, careful how you reward the sales folks, right? Our team was rewarded a certain way when the commissions worked. And they sold this monitor pretty well in 2023. So the monitor, we're generally half and half from monitor and pump business. But the monitors did better in 2023, and the pumps were slowing down. Again, it's an old pump. We know we have this new pump coming. So in late 2023, I sat down with the team and I said, "I'm worried. I don't like this trend." Yeah, that pump's old, and we don't expect it to keep going crazy. But why did it slow down?
Probably self-inflicted because we gravitated to selling more monitors that year. They got compensated well that way. And so that's the way it went. So what can we do in 2024, this past year, to see if we can reverse that trend or at least slow it down with the old pump before this new pump comes? So we identified 300 customers in the U.S. who collectively have 1,200 to 1,500 pumps that are older than seven years, seven years or older. We sell extended maintenance to almost every pump. So for another $3,000-$4,000 a system, we take care of it. You break it, PMs even. You send it in. We send you a loaner, and we take care of it. That's kind of an insurance policy. And I looked at, well, we're selling insurance to 80-year-olds. Is that a good idea? These older pumps.
Maybe customers won't be too perturbed if we don't offer that anymore. So we sent a letter to those 300 customers, and we told them, "We're not going to sell the extended maintenance on seven-plus-year-old pumps any longer. And you have some starting January 1 of 2024." And at first, we hunkered down looking for the hate mail. Nothing. In fact, they just asked for quotes. And sure enough, starting first quarter 2024, we started to see a little uptick. And Jack and I had thought, "If we can get 100 extra pumps in 2024 because of this, that'll be great. That'll really fill in a nice, that'll turn the trend and be clear on the dial. You'll be able to see that effect." Well, Q2, Q3, and now wrapping up Q4 this year, we ended up with over 500. Now, think about what that is.
These are people that had seven or older, seven-plus-year-older pumps like the purplish one I showed you, those old pumps. I liken it to a - that was cleared in 2009. So I liken it to we're making a little violet-colored 2009 Toyota Corolla. And you have some that are now seven years and older. And we still make 2009 violet Toyota Corollas in 2025. You've run the wheels off yours. We think you should buy a new 2009 Toyota Corolla. And that's what that was. It's just phenomenal. So I think that shows pretty clearly that the replacement market has huge pent-up demand. They bought quite a few old design pumps to replace actual old pumps. When we actually have a new pump, that just, to me, gives the credibility to how huge that opportunity to replace those 11,000 channels will be.
So with that, I think I'll just entertain any questions, and we can just have a chat.
Perfect. Well, maybe before kicking it off to the audience, I'll start off with a couple of questions. Roger, touching on the replacement opportunity that you were speaking about and the recent successes that you've seen with that, how do you believe the numbers will look sort of going forward in 2026 and beyond? And why do you have confidence that it'll continue being such a significant opportunity?
Yeah. Well, you want to talk about the numbers, Jack, a little bit? I'll talk about why we're confident, maybe. But you can paint the number.
Yeah, sure. I think that when you look in 2026 with the introduction, we think hopefully we'll get some units out in the field in Q4 of this year. But really, it's going to be a 2026 story. And when you sort of, as Roger's touched on, the opportunity, I think we're going to—we believe that this is going to be quite significant. But as we roll out 2026, again, we believe that by the end of 2026, we'll be at a $100 million run rate. And a lot of that due to the pump. And going forward, though, the significance is that when you look at that installed base that we have, those older units will keep—there's another segment of four or five-year-old units that will become available the following year.
We think that as you look at the tail of this new pump, it could be significant, five to seven years plus going out.
Great. Thank you.
Yeah, it's not a shock that just works for 2026. Actually, we're kind of a little bit worried. When we do launch the new pump, we're worried it could be too much of a landslide. And so we're actually going to wind up our sales team, and we're going to give them each a few hospitals to target and talk about the new pump too. We don't want to go out en masse and just hit the whole installed base with one blast. We think it'll be too crazy.
Wonderful. Well, maybe touching on that point, actually, and thinking about your ability to manufacture all of these pumps, can you talk about the timing of your new facility opening and what the cost will be and sort of what that'll mean for manufacturing capacity going forward?
Great question. Yeah, great question. Sort of fill that in. We have a 24,000-sq ft facility, and we rent probably another 6,000 or 8,000 on top of that that's next door and some adjunct property there. So we are standing on top of each other, and we're very busy in that maybe total 30,000-sq ft of space. Yeah, we're pretty efficient space-wise, but at this point, doing the business that we do, it is high time for more space. So we started construction of a 62,000-sq ft facility here, oh, must have been March or April. And we plan to be in there in June. So that's also in the Orlando area. And it's, I don't know, 10-15 minutes from where we're at currently. So we don't think the move will be disruptive to our employees much. And that, we hope, will take us through actually. We moved in the building.
We're obsoleting now, exactly 10 years ago. It was a month before we went public. We moved into that building, and we've definitely got our money's worth out of that place, so we're looking to hopefully get another 10 or so years out of this next 62,000 sq ft. But the one thing that we did on top of that is we bought a pretty big piece of land so we can expand that same building without moving again, and so that's our capacity plan.
Yeah. And I would just maybe add to that. As far as the cost to us, when we purchased the land, Roger referenced, it was about a little over $6 million. And the total build for the new facility is probably somewhere around $13 million. So all in, somewhere around $19 million. And we, again, have been funding that internally out of our cash flow and been able to maintain the cash balance roughly of what we started the year with. So it kind of speaks to, on top of that, paying the dividend. So it kind of speaks to our ability to generate cash.
Very impressive. I'd like to open it up to the audience in case there are any questions.
What's the difference in price between the regular pump and base pumps?
It's huge. A typical pump that you would buy from an ICU Medical or a Baxter or something. Now, they're making, as I mentioned, we make 1,100 pump channels a year. They're making 20,000. But they sell them for $3,000 or $4,000, so we're like 10 times that price. Yeah, this is 10 times a non-magnetic pump.
Treatments every patient who goes to MRI needs?
No, no, no, no. Out of those 100 million scans, I think we had that backed up. I'll flash through that slide quickly. But out of that 100 million scans done a year, we are on 0.5% of them. So we have ways to go to get to that point. I mean, we're just scratching that. So yeah, there's still plenty of runway with this pump, quite a bit. The monitor business is a business, like I said, we're splitting now between ourselves and Philips. The monitor business is about a $100 million business in itself. But the pump business, though it's neck and neck with that monitor business, it's going to outpace the monitor over these coming five, six, seven years. It's the story. Oh, and there's a disposable with it, of course, I didn't mention. We'll come back into that a little bit.
So yeah, there is a disposable, but it's not. We don't give away the hardware to sell the disposable. We actually have almost the same gross profit on the hardware, the devices, as we do on the disposable. This device runs about 77% gross margin.
Fantastic.
Disposable as well.
So I noticed in your presentation, your corporate partnership is not with Philips. But Philips doesn't make the pumps. So is that part compatible with their magnets?
Philips makes only a monitor.
Right.
And so I'm missing that.
In your presentation, it said GE and Siemens and Canon.
I think he's asking, our pump works with all the.
Oh, yeah, of course.
It works with all of the...
Oh, of course. It works. It's non-magnetic.
So what's the relationship of the partnerships with these other companies? Is there something unique you have with them that you don't with Philips?
Again, I'm maybe missing that point.
No, I was just asking. In your presentation, it said partnerships with GE, Siemens, and Canon.
In one of the slides, if you go back.
Oh, it's just, I think we do have relationships with them as far as, for instance, in the GE, we're in their catalog.
Oh, yeah. Now, we don't work too well with Philips. Philips owns my former company Invivo and has their own monitor. But for the pumps, we do. And we have contracts, actually, with Canon and with GE and so forth. And we're just updating the one with Siemens right now. But they don't sell this stuff. We're in their catalogs. And customers could buy it that way. But I think in the U.S., it never happens. It happens a little bit in the rest of the world. For example, we have a distributor, for example, in India. Well, every now and then, an Indian hospital won't buy from him. They'll just buy it from GE. Happens. But by and large, we're doing all the heavy lifting of selling these things. Even though it sounds impressive to be in their catalogs, that and a quarter gets you a cup of coffee.
Not anymore, really.
You can get a coffee in a quarter. That's pretty good. Thank you.
You're welcome.
You had an illustration that showed prep, transportation, to, from, and recovery. So does the new device bring all of those together? Could one supplement what a hospital may have as four or five individual ones?
That transport methodology with the pump from the pump business is going to work the same. No difference. What we do with the current pump, we'll do with this new pump. We call on critical care, for example. And let's say an 18-24-bed critical care area, they typically would take two sets, not one for every bed. But they would take two for the traffic. They would look at their traffic. And out of our 24 beds in ICU here, we're sending one, two, three patients a day down to MRI. And so it makes sense to have one, two of these monitors, I mean, these pumps available sitting there in the critical care. So when that patient's time comes to head down to MRI, they switch them over there to the non-magnetic MRI-safe pump. Same thing will happen with the new, the next generation one here we're launching.
No different with the transport concept. With the monitor, we're not there yet with that monitor. With monitors, you're creating real-time vital signs data. And they really like to keep that going into the HIS, the Hospital Information System. And so what we're going to come up with here in about two years is a next-generation monitor that will add, we're going to make it a little more svelte, a little bit more transportable, even though it's quite small and only weighs eight pounds. But what it's missing is it's missing a way to, when you're transporting, keeping all that vital sign data that's occurring in real time while you're in the halls, in the elevator, etc., incommunicado, right? You're not hooked to the HIS briefly.
And when you get to your endpoint, whether you're going back to critical care or you're going from critical care down to MRI, once it gets to an endpoint, it'll relink with the, we're going to make essentially what I guess you could call an access point for our system. And they would relink one end to the other. And that's attached to the backbone of the hospital's network. And you can couple the data back into the record for that given patient. So we call it store and forward, for example. You're storing data when you're out of communication, and then you forward it back into that patient's record once you get on the end. With that added little feature, then we're pretty sure we can do this multiplier effect we do with the pumps with the monitors.
And that will take now the monitor business more than that $100 million in size. That'll open that up.
Wonderful. I think we have under a minute left. So with that, thank you very much.