All right, good morning, everyone, and welcome to the TransMedics 2024 Investor and Analyst Day. If you could please take your seats and just remember to silence your phones and your devices if you haven't already. Before we get started, I'd just like to remind you that during today's presentation, we'll be making some forward-looking statements, so please refer to the Investor Relations section of the TransMedics website and all filings with the Securities and Exchange Commission to review disclosures and risk factors outlined there, and with that, it's my pleasure to introduce Waleed Hassanein, Founder, President, and CEO of TransMedics.
Thank you, Brian. Good morning, everyone, and welcome to our first Investor and Analyst Day 2024. We're very excited to be here today, and thank you for taking the time to join us today. I don't like to stand on the podium, so if you allow me, I'm just going to be walking back and forth. That's not a nervous tic. It's just to keep the flow of the dynamic of the presentation. This is our forward-looking statement. Let me share with you why we are excited about being here today and, most importantly, what gives us the significant amount of confidence in TransMedics' future. What we're going to try to do throughout the day is to present you with the way we are seeing the business evolve, our effort to expand and grow the business beyond even what you think our limits are.
We will share evidence with all of you of why we are excited about TransMedics and why we're bullish about the future of TransMedics. First, I want to start with walk down memory lane and remind everybody in the room or who's listening on the webcast of how did we build TransMedics. What is TransMedics' focus on? What is organ transplantation? Why is it one of the most exciting fields of medicine today? Second, I'm going to spend quite a bit of time talking about the next wave of growth catalysts for the business to go to 10,000 transplants and beyond. I know the publicly stated goal is 10,000. We'll show you today why we're very confident in achieving the 10,000, and we're actually setting our sights for a much bigger number than that.
Next, we're going to talk specifically about the next-gen OCS technology and clinical program that we believe will represent the second gear of growth for TransMedics. Then Tamer is going to take over and walk you through the linkage between our clinical program and how he's going to translate it into a commercial success for the business, and he's going to walk you through near and midterm to make sure that we're linking the two together for all of you. Nick will join me later after lunch to talk about, okay, so we achieve everything that Waleed and Tamer are talking about clinically and commercially. Does TransMedics have the infrastructure to be actually able to capitalize on that growth? The answer is absolutely yes, and we're just getting started, and Nick will show you evidence of that, then Stephen is going to come up and talk about the financial model.
How did we build the financial model? How did we build the financial success that we have achieved to date? How we got here? And then Gerardo is going to end up with a forward-looking statement about what he will be doing to help TransMedics plan for the future growth from a finance standpoint. Ultimately, what we would love you to, what we hope to achieve by the end of the day is to convince you of why we believe that we are transforming the standard of care to be the bulk of organ transplant in the U.S. and around the world will be done on OCS and hopefully with an NOP type of service in the near future. This is the standard agenda, just highlighting that after my and Tamer's section, there will be an area of Q&A. We love Q&A, so please don't be shy.
After that, there's a lunch break between 11:45 A.M. and 12:30 P.M. Then from there, Nick will start at 12:30 P.M. and then the financial overview. And then we end again with a longer section of Q&A, and then we'll close around 2:00 P.M. So let's get started by how did we get here? How did we build the business? And I want to start that section by reminding everybody about this exciting field that we call organ transplantation, that we live, breathe, and eat organ transplant every day.
First, let me remind you that organ transplant is not just any therapy. It's the gold standard for treating end-stage organ failure. End-stage organ failure is a highly complex disease condition. It is extremely expensive. It costs healthcare systems hundreds of billions of dollars to manage patients with end-stage organ failure. Why is it the gold standard? Because of two important factors.
One, organ transplant delivers the highest quality of life or the best quality of life and the longest life expectancy for patients with end-stage organ failure. By doing these two things, it becomes the most cost-effective treatment for treating these very complicated, very expensive disease conditions. So CMS has published decades ago that organ transplant is the most cost-effective therapy. That's why they want to see more organ transplants in the U.S., and that was followed by all the commercial payers. That's why the reimbursement strategy for TransMedics is what appears to be easy. It's not easy. It's based on this fundamental fact. So what are the challenges in organ transplant? The challenges in organ transplant is the demand for organ transplant is very high, and it's continuing to grow with aging population, with the different disease conditions, but the donor utilization is still at an infancy stage.
Importantly, as we become more and more bullish and tackle very complex donor conditions, the outcomes become compromised, so we need a method, a way to improve post-transplant clinical outcomes in organ transplant, so great. This is all wonderful, so where are the problems? So when you look at organ transplant, for the last five decades, which is the age of organ transplant therapy, you found that it has seen significant innovations both in the pre-transplant and the post-transplant section. In the pre-transplant, there have been a lot of new modalities and technologies and therapies developed to better medically manage the patient, circulatory support technology, renal dialysis, liver dialysis, synchronization therapy, and the post-transplant innovation, the development of new surgical procedures, the immunosuppressives, the anesthesia management, et cetera, so where is the missing link?
The missing link is for 50 years, organ preservation for transplant has remained in a very rudimentary stage, which is basically Igloo cooler filled with ice. Cold storage has worked when the average age of the donor was 18 to 20, and the average distance between donor and recipient was less than three hours away. It doesn't work today. Why? Because of three major limitations. The first limitation is the minute you stop blood supply to an organ and you starve it from oxygenated blood, the organ goes through a time-dependent injury called ischemic damage. The longer the organ spends on ice, the higher the probability that this organ will die. That alone limits the utilization of organs because it limits the time and distance of how far can you go out to procure a donor anywhere in the world. Second, the organ is not alive.
The organ is not metabolically active, so there's no way of you treating or optimizing or improving or enhancing the organ viability, so the minute the surgeon hears about a blemish in organ function at the body of the donor, that organ is immediately turned down. Why? Because the surgeon knows the calculus. So if I'm worried about a clinical situation, I know this organ is going to be subjected to a time-dependent injury called ischemia that's going to take four to six or eight hours to get here, and the longer the organ spends on ice, that complicates the picture, and that increases the probability of these organs being injured and not functioning and actually will not survive the transplant procedure. That's why that adds to limits to the utilization of deceased donors today. The third one, and the most important, is there's no assessment capabilities.
The organ is not functioning. The organs are not living. So you cannot evaluate the viability of these organs for transplant. And that alone limits not only the utilization, but limited the donor pool to DBD donors for the last 50 years until the OCS was approved for DCD donation. Today, DCD donation, donor after circulatory death, meaning you can take organs after the heart stops beating, is the fastest growing segment of organ transplant worldwide thanks to TransMedics and the OCS technology. Before OCS, there was no such thing as a DCD heart transplant. Today, DCD heart transplant is the fastest growing segment of heart transplantation in the U.S. and around the world. So let me show you the proof of what I've just described to you. We all are very familiar with this chart.
This is the deceased donor pool in the United States last year, approximately 16 or 17,000, between DBD 10,500 and DCD of about 6,000. Despite that, we're only utilizing less than 20% of lungs, less than 30% of hearts, and about 60% of livers, leaving the vast majority of the donor pool completely untapped. That's a huge, huge opportunity for growth and opportunity to maximize donor organ utilization in the U.S. But it's not just about utilizing more organs. The time the organ spends on ice is directly correlated with the incidence of very bad things that happen after transplant called primary graft dysfunction, delayed graft function, early allograft dysfunction, or primary non-function, which means that the patient requires a second transplant. The longer the organ spends on ice, the higher the probability of the patient dying after transplant. What does that mean? What is PGD and EAD and PNF?
Why are we even focusing on it? Because, one, they happen in a very, very frequent incidence. It costs the system a lot of money, and it costs the patient a lot of morbidities in the hospital. And it's all related to the time the organ is ischemic. Very important to focus on ischemia because a lot of these pseudo-competitors out there that are bringing the organ ischemic, and they talk about improving organ function and improving post-transplant outcome. It's absolute farce because these organs are ischemic. There's ischemia- reperfusion injury. And we'll show you evidence of that in our preclinical data. So now, with that as a backdrop, let's talk about establishing TransMedics' business, the gear one of growth that we are at the tail end of today.
So before we go there, let me remind everybody that in TransMedics, we don't tackle problems in a normal, traditional, linear fashion. We're extremely non-linear in our thinking. We think differently. When we tackle a problem, we approach it in a very different way than many traditional med tech companies, and many times, we act different. We bought 20 planes or 19 planes to establish the first-in-its-class logistics network where you all thought that I completely lost my mind and TransMedics is going down the tank. Without it, TransMedics would not have achieved the success that we've achieved today. Frankly, I am bullish about the future of TransMedics because we're starting 2025 with the infrastructure, the network that we built in 2024, so with that in mind, here's how we established the business.
First, we developed the first and best-in-class technology that comprehensively tackles and overcomes the three major challenges of cold ischemic storage. I'll show you how in a minute. Second, we built the largest body of global clinical evidence based on level one trials that are FDA-level trials, meaning it's third-party validated, it's independently monitored, and independently validated for every data point we have. That's very important because when you look at companies that don't have that, companies that have a pretty Igloo cooler, they talk about data. Where's the data? The data is highly selective, single-center experience, highly cherry-picked, and they've never been subjected to the level of rigor that TransMedics has been subjected to in building our clinical evidence, and then finally, we didn't stop here.
We developed another first and best-in-class network of OCS NOP that is now we can leverage into as a growth pivot or a growth launchpad for our business in 2025 and beyond. So before I show you how the OCS works, again, I'm going to focus for 30 seconds about the capabilities and how unique these capabilities are. Why? Because many of you are now, again, faced with all these expert opinion panels that are being hosted and talking about all these things. You need to understand what's real and what's fiction. So first, we had to develop a technology that minimizes or eliminates ischemia. To do that, you cannot do that if you do not have a portable technology that goes right at the donor site that perfuses the organ with warm oxygenated blood-based perfusion. No technology called cold perfusion or static storage or controlled temperature does that. Zero.
Or warm perfusion, but it doesn't go to the donor. We bring the organ to the transplant program, calling it bring to base or end- ischemic and all these wonderful terminologies are nothing but limitations of these entities that are claiming that they want to compete with TransMedics. There's only one technology that delivers this value, and it's been proven, is the OCS. Next, we needed to develop technology that optimizes, improves, enhances the organ function outside of the human body, provides treatment for the organ. For us to be able to do that, we have to maintain full metabolic condition of the organ. You cannot give medications or enhancers to an organ that is sitting on ice or perfused with ice-chilled saline or ice-chilled preservation solution. That's not optimization. That's not recruitment. That's not enhancing anything.
Next is to enable full diagnostics of the organ condition to give a high degree of confidence or lack thereof, identifying problems with these organs, XVIVO . That's the way you can improve the utilization of organs. For that to happen, you need the organ to be completely functioning. The heart has to be beating. The kidney has to produce urine. The liver has to produce bile. The lung is breathing. No other technology allows that to happen except the OCS. And we believe at the time that if we do these three, we have comprehensively tackled the fundamental limitations of cold storage. And I believe we've done that. Today, the OCS system or the Organ Care System is the only multi-organ portable platform perfusion technology on the planet. We have the lung, the heart, and liver. And you will hear a lot today about kidney. It's coming.
And that will complete the circle of all the solid organs that are broadly transplanted today. How does it work? You're very familiar with that. Again, everything I say, hold us accountable to it. I said our organs are not ischemic. Our organs are not ischemic because they're perfused with bright red blood. The organ is oxygenated with blood. The organ is functioning. The lung is breathing. The heart is beating. The kidney is making bile. The liver is making bile. The kidney is making urine in a full active metabolic condition. You can provide medication, substrate enhancers, metabolic and functional enhancers, antibiotics to these organs throughout preservation from donor to recipient. Data, evidence. We have sponsored the largest body, the largest number of clinical trials in the field of organ transplant that happened to be the largest size trial in the field of organ transplant, period, full stop.
Nobody has sponsored more trials in that field of organ preservation for transplant than TransMedics, and not only did we focus on one segment of the market, we did it in a broad fashion. We tackled the current transplantable organs in DBD and the non-utilizable organ in DCD. We tackled standard criteria organs and extended criteria organs. We did all this because we knew the value of achieving this success we have on the utilization of donor organs. The most important thing, and without burning the next slides, is we will show you that not only we believed in this, but we actually delivered on our promise and our vision. We were responsible for double-digit growth in national transplant volume in the United States in one year that never happened in the past two decades. Example of our clinical trial results.
We've demonstrated the highest utilization rate in the history of solid organ transplant. We moved lung transplantation from 23%. This is at the end of the EXPAND trial. It was 23%. Now it's down to 18%. We took it up to 87%. We took heart utilization from 32% to 81% in DBD hearts. But this is something that we're extremely proud of. Before 2002, there was no such thing as DCD heart transplant procedure in the United States. It was only on trial, and it was only the OCS trial. I'm sorry, 2019, there was zero DCD heart transplants in the United States. Not only we demonstrated during the trial that we took utilization of DCD hearts into 89%, but we demonstrated that their outcome after transplant is as good as, if not better than, a standard criteria heart.
Today, DCD heart transplant is the fastest growing segment of heart transplantation in the United States thanks to the OCS and TransMedics. We didn't just focus on utilizing more organs. We had to ensure that these organs are resulting in good, at least acceptable outcomes compared to the standard of care. We didn't stop here. We demonstrated that we can actually improve outcomes in lung transplant by reducing PGD by 50%. We've reduced PGD reported in heart transplant by 65%. And in liver, the publication speaks for itself. We reduced short-term outcomes by 40% and long-term the Achilles heel of liver transplant ischemic biliary complication by 84%. These are very, very, very great results. But that's all pre-market. We will share with you data from the NOP that now takes this even an order of magnitude higher and better.
All these results that I just shared with you, they're not secret. They've been published in high-impact journals for lung, for heart, and for liver. Again, the key message here is published in high-impact journal. Look at the others out there. Look at the pseudo-competitors out there. It's e-publication at best because the data is not there. The rigor is not there. The outcomes are not there. Okay? Lancet, we have five publications in Lancet across the multi-organ. New England Journal of Medicine, JAMA. So this is something we're extremely proud of. But we didn't stop here. As I said, as I showed you the slide of the big gorilla and the fish jumping out of the bowl , COVID hit. And I would never forget this week before COVID started.
Tamer has gone out and interviewed three large lung transplant surgeons across the country that are just launching the lung program then. At the time, we were waiting for the FDA to review the heart and liver PMAs. Tamer came home to Andover, and he said, "Waleed, I have bad news. These guys are telling me that they don't have the infrastructure to be able to leverage the OCS capability to bring more lungs." I asked three independent programs, one in the East Coast, one in the Far West Coast, and one in Arizona. They all told him the same message in so many different words. "Who's going to do all this work?" We both agreed right there and then that we absolutely have to accelerate this plan that we had in our plan when we were going public in 2019.
We said in two or three years, we think that we should be able to do this because we think that the center capability will be a bottleneck. And that's we accelerated that plan into 2020. Then a few weeks later, COVID hit. And it was not a question if TransMedics is going to do it. It was the only way we maintained some level of transplantation in this country by having our team going out because if you remember at the time, teams in New York could not leave New York. Teams in North Carolina couldn't leave North Carolina. They shut down heart transplant in New York. There are two patients that we worked with our lead transplant programs in New York that were moved to North Carolina to be transplanted with organs that TransMedics, the nucleus of TransMedics NOP team, started. But that's all history.
That's in the early days. Today, we have 17 hubs across the United States. We have 19 planes as of this week. We have a team of procurement surgeons. We have 250 clinical specialists across the country. We believe this is one of the best, if not the best, transformative decision we've made since the invention of the OCS. But before I show you the detail of the NOP, remember one important thing because, again, the market is being bombarded by every Tom, Dick, and Harry saying, "Oh, I can do NOP like TransMedics even though I'm using cold storage." Why do you need an NOP if you're putting an organ in a nice-looking Styrofoam box? Or why do you need an NOP team if you're going to bring the organ on ice and you're going to hook it up in your device, the warm perfusion device at the center?
It doesn't make any sense. The most comical thing that happened two weeks ago is the warm perfusion technology that is non-portable announced collaboration with a national provider of logistics. It's like, how does that make any sense? You're not even approved to be portable. You have to be moved with a car because you don't have batteries in the system that can accommodate that but enough of that. Let's focus on NOP, and let me show you how the NOP is here today and nothing is better. We wanted to host this at our facility to show you the command center and the depth of NOP. Many of you have visited, but we felt that creating this video will give you a fulsome picture of how we run NOP across the United States.
Hello, and welcome to TransMedics. I'm Andre Costa, Vice President of Transplant Logistics.
At TransMedics, we are hard at work to deliver on our mission to save more patients' lives by becoming the trusted partner to transplant stakeholders, delivering the highest quality technology, service, and clinical care. Our vision is to increase the number of organ transplants by expanding access to more donor organs via our OCS technology. To provide greater access to the OCS across the country, we launched our National OCS Program, or NOP. Today, the NOP consists of an expanding network of 17 hubs strategically placed across the United States. We have over 250 clinical staff working across these hubs, cardiothoracic and abdominal procurement surgeons, as well as highly trained clinical experts who specialize in perfusion management and the operation of the OCS. These always-on-call teams are ready to deploy our OCS devices and perfusion modules at a moment's notice.
In 2023, we created TransMedics Logistics to provide air and ground transportation 100% dedicated to transplant missions for the NOP network. Today, TransMedics Aviation consists of a growing team of over 100 pilots and a fleet of nearly 20 highly efficient aircraft. In a maximum of two flight hours, we can reach anywhere in the continental U.S. All our jets are 2021 or newer models featuring the latest Wi-Fi connectivity and the highest safety standards in the aviation industry. As a fully integrated end-to-end service network, all the components of the NOP work in synchrony to deliver on-demand services to our partners, from our hundreds of OCS devices to our clinical staff and now our pilots and ground transportation teams. To manage the NOP network 24 hours a day, 365 days a year, we created this: the NOP Logistics Command Center.
Located at our headquarters in Andover, Massachusetts, the Command Center was launched in early 2024. Since then, this space has become the base of operations for all TransMedics NOP. It's from here that we securely coordinate every aspect of our missions. Inside the Command Center, we have logistics managers, aviation specialists, ground transportation coordinators, and everything in between to handle every aspect of our missions. It's a carefully orchestrated process with one goal in mind: to save lives. This 25-foot 8K resolution screen behind me provides full visibility to our team of each mission happening across the country and tracks all available resources in real time. This allows us to simultaneously manage dozens of missions, not in isolation, but as a network, and to make course corrections immediately if needed be.
Available surgeons and clinical staff, as well as our OCS devices, are represented by a series of icons at each hub that let us know what's available and where. And every organ type is represented by a different color. When a new case is initiated by a transplant center, it displays on the map as a new case alert. Our team immediately begins coordinating every detail necessary to efficiently support the mission, from organizing the ground transportation of our clinical teams to coordinate the most efficient flight routes to the recipient, all while making sure every organ gets where it needs to go safely and timely.
Before any case assignment or team deployment, the Command Center's algorithm, developed in partnership with MIT, enables our logistics managers to run multiple different scenarios that take into account the location of the donor and recipient, donor OR time, and the probability of case progression to match them efficiently with our available resources. Our logistics managers then analyze different travel route options to determine the optimal logistics for each phase of the mission. Once the proposed logistics is approved by the transplant center, represented by an active case card that details the mission's current status, the type of organ being transported, and the ETA to the transplant center. No matter the stage of an active case, we have full visibility of its minute-by-minute status, so our Command Center team always has a clear picture of the case's timeline and the status of each in-transit organ.
As a major component of our logistics management, the Command Center enables full visibility and control of our aviation operation. Whether a plane is flying a mission, it's in maintenance, or ready to deploy, we have up-to-the-minute data on its status and location. Our aviation team monitors everything from real-time weather data, pilots' duty times, and each plane's status, 24 hours a day, ensuring that our fleet can be ready and in the right location to be deployed at a moment's notice. The NOP Logistics Command Center effectively coordinates every aspect of TransMedics missions between our NOP clinical teams, OCS technology, and dedicated air and ground transportation so that we can deliver better service for our customers and their patients. These innovations in our fully integrated network enable us to make progress every day towards our mission of making donor organs available to all who need them.
The Command Center is the heartbeat of the entire NOP network, ensuring that every organ gets where it needs to go, and every life we touch has the best chance for a successful outcome.
So, with that in background, let me now walk you through TransMedics with our data post-approval. What have we done since these large clinical trials that we've completed to get approved? To date, we've completed north of 7,000 cases in NOP in the United States, and that number is growing very rapidly. Second, in the first year of growth, we proactively and selectively focused our effort on becoming the go-to partner for DCD heart transplants and DCD liver transplants. Today, we are responsible for 75% of DCD heart transplants in this country, and we're not going to rest until we have near 100% of that. The same thing for liver.
We are today at 55%, and we're not going to rest until we achieve high penetration rate because we believe that's the best outcome for patients to have OCS available for them, to give them the best chance, the best organ, and the best quality of life. As I stated earlier in the presentation, within 18 months from launching NOP, last year, we've achieved something, a major milestone in the U.S. transplant that hasn't even been achieved in two organs in nearly two decades: double-digit growth in heart and liver transplantation in a single year, all driven by OCS and DCD contribution in the United States, 12% for heart and liver nationally, and all driven by OCS and NOP, and we'll show you that data in a minute.
Finally, and this is very, very important, people always ask me, "Waleed, what's the difference between liver and heart and lung?" We will show you what the differences are today, and we'll show you how we're going to tackle them, and we'll show you how we're going to get it close, if not the same as liver. But one unique thing that happened in liver that is a major catalyst for adoption is this last bullet point. Today, more than 76% of liver transplanted in the United States are transplanted during day-hour transplant, day-hour morning hours, where the surgeon can show up to the operating room at 7:00 A.M. There is one, two, three, and up to four organs waiting for them with the TransMedics staff managing it for them, and they can run multiple transplant procedures in one day. Historically, that never happened.
Historically, the best they could do is to do two transplants, and the team will be dead, and then they will have to shut down the transplant program because surgeons have to go home and rest. We have taken that market by storm. More than 76% of livers transplanted at NOP sites today were done in morning-hour transplants. We are planning to replicate that. We will bring daytime transplants to heart and lung next year, starting in 2025, and that will have a huge catalyzing effect to our growth in cardiothoracic transplantation. Here's the evidence. This is the data out of OPTN showing that last year, heart and liver transplants grew by 12% in the United States.
This is data from our OCS heart perfusion registry that we showed that with the use of NOP, we were able to decrease the rate of primary graft dysfunction in DCD heart transplant by 50%. That shows you the importance of NOP and better management of the organ and the better care that our team is applying and minimization of the learning curve that we are being exposed to in the pre-market setting. That is a testament of that. Next, you heard me say Achilles' heel of liver transplant is a complication called ischemic biliary complication. It starts with the word ischemic. DCD liver transplant was being used in single-digit numbers until the OCS was approved. Why? Because when they experimented with DCD liver transplant in the late 1990s, early 2000s, the mortality rate was 50%-60%.
Many major liver transplant surgeons almost lost their license in the U.S. because they got sued for taking a DCD liver, and patients died within the first 30-45 days or six months because of the development of a very nasty disease called ischemic biliary complication. What it means is the biliary tree in the liver literally gets damaged because of the ischemia-reperfusion injury, and then once the liver is reperfused again in the body of the recipient, literally the bile leaks all over the body and causes the patient to have severe, severe complications. The liver pretty much dissolves and disintegrates in the body of the recipient. Huge, huge problem. Costly. If you survive it, you need a second transplant, another $1 million of expenses.
During the trial, that's one of the major endpoints we looked at, and we have proven that we reduced it compared to cold storage by significant reduction. But let me show you since the trial, with more than 4,200 liver transplanted, where that ischemic biliary complication is today. It's even lower at 1.7% with a p-value of 0.0001. But more importantly, this low rate didn't come from cherry-picked donors. This came from a very complex donor-recipient group in a real-world setting. Again, others that are out there that are trying to claim that they can do what TransMedics does. Ask about the data. Ask about the validity of the data. Ask about the magnitude of the data. I'm presenting you here data from 4,300 liver transplants. Okay? This data has been third-party adjudicated, independently adjudicated by a panel of liver transplant expert hepatologists and surgeons.
That's the level of rigor that our data here shows. We're very, very proud of this, and we're looking forward to this data being published in early 2025. This is the other point that I was referring to. This is the progression of daytime transplant in liver transplants in our centers versus non-OCS centers over the last four years. You can see the rate is growing. This is a catalyzing influence on the adoption of OCS liver in the market today. We believe this is a game changer. It was a game changer for us in liver, and we are determined to make it a game changer for heart and lung, as you will hear Tamer and I talk about in the second half of today's presentation. Now, morning-hour transplant is not just about the surgeon being rested.
Morning-hour transplant has huge ramification and outcome, has huge financial ramification to the transplant bottom line. Morning-hour transplant allows you to do several transplants in one day. These are real-world cases. Mayo Clinic, Arizona, on the far right. Atlanta, Emory on the left. Transplant program administrators look at this as a very unique capability. Why? Historically, a transplant administrator would have to scramble in the middle of the night, put together a team, pay them one and a half to double time because it's off-hour procedure, and they may not get the expert team that does liver transplant every day. They might get a trauma team that's on call. They might get an OB-GYN team. That's completely different now. That having a morning transplant gives you the ability to do the best procedure because you're using the liver transplant expert team.
It protects the transplant program from the cost overruns of doing a transplant in the middle of the night. But more importantly, it gives the transplant program the financial power to do more than one transplant today without overtaxing the time and burden on the transplant surgical team and the financial well-being of the transplant program. That's why we're very, very proud of this. And again, this is one where we have our sight set on this to replicate it for heart and lung transplantation. Now, I walked you through the first year of growth that we are in the tail end of today. Now, let me shift gears, no pun intended, and talk about the next wave of TransMedics growth and where is it going to come from. And we'll show you evidence of why are we bullish on it, why are we excited about it.
This is what we've done to date. We established the OCS NOP. We focused on DCD to become the lion's share in heart and liver and established TransMedics Logistics Network. Now, we're going to leverage that network to do what? The next year of growth will start in 2025. There are three next-gen programs that I will detail for you in the following slides. The first is the next-gen lung program. We cannot wait to start that program because we believe that this program is going to resurrect the sleeping giant called lung transplant market, and we'll explain to you why that sleeping giant has been sleeping since COVID or maybe even before COVID. Next is the next-gen heart clinical program. That program is going to really elevate the baseline of how we describe heart transplant and completely remove the time limits, and we'll explain that in a minute.
Next, you've seen Andre present the NOP network. Now, to plan on 10,000 transplants and beyond, we're going further into building a digital ecosystem that has full transparency to all stakeholders involved, from the transplant administrator to the transplant surgeon to the NOP team, to enable us to grow and show the transplant administrator and transplant team full transparency on how the cases are going and how their financial well-being is being managed, as well as closer integration into their daily workflow. These are the three programs that I will present. The next three programs Tamer will describe and share with you in his presentation, which is basically what are we going to do leveraging the network that we've already established in the current transplant programs that we're currently at for heart and liver.
How are we going to increase DBD and DCD utilization in liver transplant today and crossing the chasm? This is an internal term we use. Tamer will show you the different penetration rate at our different program centers that we're working with and how we cross these programs through the chasm of utilization from where we are, where they start as a low utilization of OCS to become a major utilizer of the OCS, and he'll show you a real-world example of that that will be anonymized. But we're not stopping here, guys. There's a Gear Three that I want to touch base on before we finish today. OCS kidney is coming. Next-gen OCS technology is coming. So everybody that's trying to replicate the OCS today and they're failing miserably, they have something coming to them.
We are already well underway to develop the next-generation OCS platform, and we will share with you our vision for that and what does it mean and why are we thinking this is going to be a huge catalyst for our growth. This is what's going to enable us to scale even well above 10,000 transplants. And finally, replicating the successful NOP model outside of the U.S. So far, TransMedics has been a U.S.-focused company. Many of you forgot that transplant is a global market. We haven't forgotten. We just wanted to prioritize our effort to put TransMedics on a financially stable platform that allows us to make investment while we're waiting for the long bureaucratic reimbursement process outside of the U.S., and we'll share with you the timeline for that.
We believe that the combination of Gear Two and Gear Three will take TransMedics well beyond 10,000 transplants a year, and hopefully the bulk of that, the lion's share of that, will be done in an NOP-type setting, whether in the U.S. or OUS. So let's start with Gear Two. These are the three programs I'm going to talk about. The first is the OCS Lung. Before I talk about the OCS Lung program, let me walk down memory lane one more time and highlight to you what are the challenges in that field and why our vision of invigorating that market makes any sense and why are we very excited about this. First, and I see some of XVIVO investors in the room, edema. Edema is the Achilles' heel of XVIVO lung perfusion. We've known that from day one.
The longer the lung stays on a perfusion setting, whether it's XVIVO or TransMedics, the higher the probability that the lung becomes edematous. What is edema? I'll show you a video in a second. Basically, the lung fills up with fluid from the perfusate, and it impedes the lung's ability to oxygenate the blood, hence the lung would lose its functionality. So you end up with a post-transplant complication called PGD. In the OCS case, it recovers. In non-OCS case, it may not recover. Second, because of the different techniques and the different competitive dynamic, there has been a lack of evidence, of prospective evidence, on the full capability or the full potential of XVIVO perfusion to recondition, to optimize lung function XVIVO . It's always been a vision.
We know that the competing technology, the non-portable technology, had a big megaphone coming from north of the border promising the world that XVIVO and his technique is going to revolutionize lung transplantation in a single center experience. When that was tested in a rigorous FDA trial, it failed, and that left the U.S. market with very, very sour taste in their mouth because during that time, TransMedics was conducting our trials but outside of the U.S. because most of the lung transplant program centers in the U.S. were engaged in the competing trial. But that's all history. I'll tell you how are we going to change that, but it was very important to describe to you these challenges and their ramification. So what are the ramifications today? There's a broad lack of belief in EVLP in the marketplace today in the U.S.
There's a conservative approach of saying, "No, I'm not going to put the lung in a machine, whether it's XVIVO or TransMedics or even a home-brew machine, because I'm worried that the lung will become edematous over time." That resulted in minimal use of EVLP across different platforms, not just an OCS thing. The numbers of EVLP lung machine perfusion are very, very low for both DBD and DCD. In fact, DCD lung transplants are now back to prehistoric numbers of less than 5%, all because the promise of EVLP has not been materialized to make DCD lung utilizable because of the worry about edema and the lack of prospective data to show that we can recondition or recruit the lung.
And now the market generally is relying on cold storage despite its limitation. The market has grown numb, and they're just using cold storage. So that's where we're starting.
And this is why Tamer and I have been saying we need to be patient because we knew this, and we knew that the only way we can tackle this is we needed to fundamentally change these two pictures. If we're able to change these two pictures, we are going to take the lung market by storm, and that's what we're planning to do. Let me show you how. So as we sit here, we're no longer interested in doing anything. Any of the clinical programs I'm talking about today are not going to be anything but a superiority program. We have to demonstrate superiority. For us to be able to do that, we have to have the right technology, the right technique, and the right designs to enable us to do that. And we're going to focus on two primary clinical goals.
First is to make normothermic cardiothoracic transplant a clinical reality, meaning long-term perfusion, 12, 14, 18, up to 24 hours, and two, generate prospective superior clinical outcome in both DBD and DCD. That's our goal. How are we going to tackle it technologically? First, we developed a new proprietary novel physiologic high-viscosity, high-oncotic pressure perfusion solution to tackle the problem of edema. Two, we completely redesigned the way the ventilation system works in the OCS to give us the ability to better ventilate the lung, manage the acid-base balance much better. Three, we have changed the perfusion circuit to make the perfusate more physiologic, and it doesn't get damaged with prolonged perfusion.
Four, we're providing a much more physiologic comprehensive lung assessment protocol or functional assessment that will make sure that lungs coming out of OCS are fully validated for transplant to give the lung transplant clinicians confidence that these lungs should be transplanted, and we're tackling all comers: DBD and DCD, high risk, low risk, and we're going to do it competitive to cold storage, so let me share with you the first technical innovation. Let's talk about edema and EVLP-associated edema. As I said earlier, what edema means is you can see the functioning unit of the lung, the alveoli, is full of the perfusate. That immediately compromises the lung's ability to oxygenate that blood, and when the lung cannot oxygenate, the function of the lung is only to oxygenate the blood. With our solution, we will show you evidence that we have stopped that phenomenon.
We've eliminated edema up to 24 hours in lung transplant. So that's the first innovation that we are going to be introducing to the market in the U.S. next year. Let me show you the evidence. Why are we excited about this? This is data comparing our current OCS perfusate with the next-gen perfusate to a set of lungs that we're calling control. What is a control lung? Control lung in these experiments are lungs that were literally harvested and immediately evaluated for water content. So this could not be more than the most rigorous competitor. This is a fresh set of lungs that has not seen any preservation technique. That is the gold standard that we measure ourselves against. What is the data showing?
The data is showing that the new OCS solution with 24 hours of perfusion had edema equivalent to a fresh set of lungs, meaning it has zero edema. However, there was significant edema differences between our current OCS solution and our new solution, and there was even more significant edema between our current OCS solution and control. That proves that with using our new solution, we were able to overcome this limitation of EVLP edema up to 24 hours. This is not 10. This is not 6. This is not 4. This is 24 hours prospective preclinical or animal experiments. The detail of these experiments will come out at the ISHLT. So please, if you have the time, please join us in Boston. You'll see the detail presented by our internal investigators and external investigators. Next, we didn't stop here. We said, "Okay, so we reduced edema.
Let's look at ischemia-reperfusion injury. "Are these lungs less edematous but injured or less edematous but good functioning lung?" The answer is the latter. They're less edematous and significantly have less ischemia-reperfusion injury as compared to control lungs. So literally, our lungs, after 24 hours of perfusion, they are significantly lower ischemia-reperfusion injury than lungs that were just procured using cold flush and sent to a pathologist. All these pathologies, by the way, were not done by TransMedics. They were done blindly by Professor Jake Demetris from the University of Pittsburgh Transplant Pathology Lab. He's one of the world experts in transplant pathology, and we have a long-standing relationship with him and his lab for close to a decade and a half. He receives these samples completely blinded, and he analyzes it, and then we open the blind together with our R&D team.
So we could not be more encouraged and more bullish. This is the data that gives us the confidence of the new clinical program. We saw that momentum and saw that excitement when we shared these studies two weeks ago, two and a half weeks ago at our Transplant Leadership Forum in Boston, where we had 175 transplant surgeons, physicians, and administrators in Boston for two and a half or three days talking about the next-generation heart, lung, and liver programs that are coming into the market in 2025. Next, let me show you the next innovation technologically in the lung circuit. This is something that we're very, very excited about.
To keep a lung perfused for 24 hours, you need to make sure that you're not just reducing edema, but you need to make sure that the perfusate is in the healthiest possible condition because if you don't, and if you hemolyze the blood that you're using, you'll end up injuring the lung, even though you have less edema, but you could end up injuring the lung, so one of the things that we wanted to do is to do a better way to preserve the blood and the perfusate in the lung for up to 24 hours. Two, we wanted to make it as physiologic as possible because the more we come close to physiology, the better the outcome is, and we removed one of the major sources of hemolysis in the circuit, which is the oxygenator.
Now we developed a new way to ventilate the circuit using the lung, the natural oxygenator that was created by nature and by God. There's nothing better than that, and here's the evidence. By analyzing plasma-free hemoglobin in the circuit for up to 24 hours, we were able to demonstrate that our hemolysis levels are significantly lower than the traditional OCS circuit that included an oxygenator that is hemolyzing the blood as it goes through. Again, that's 24 hours. We don't use the current circuit for 24 hours in the field every day. But now, with this design, we will be using this for 24 hours or near 24 hours more repeatedly, and that gives us huge leverage on scheduling a daytime lung transplant.
It gives us huge leverage to go procure donors from far distances that are currently not being utilized, specifically the Pacific Northwest, huge, huge donor catchment area. Very few lung transplants are being done there. These organs are being thrown away every day because the East Coast and the Midwest don't dare to accept or even evaluate these organs because they're worried that by the time they arrive, the lungs will be dead. We are going to change all that. Next, this is something that I am very, very, very excited about. Everybody that does EVLP tells you after two or three hours of EVLP, your sodium levels in the circuit start shooting up, and it's because you're chasing the acid-base balance in the circuit and adjusting pH by giving sodium bicarb. We changed all that. But I'm sorry. Oops.
You heard me say that the recruitment capabilities of EVLP have never really been validated, and I'll show you pictures of that. Historically, in the OCS circuit and definitely in the EVLP circuit, the lung sits on a hard surface. So when you ventilate the lung, the lung is not being physiologically ventilated because the back of the lung is sitting on a hard surface, so the lung is not really expanding at the back of the lung. So if you leave the lung longer than four or five hours, the back of the lung turns dark. It becomes atelectatic, meaning the alveoli collapse, and the lung looks really, really bad. That sometimes raises red flags to the transplant team not to accept these lungs.
We've developed a whole new organ chamber that has a silicone hammock, but more importantly, a mechanism by us to prone or overturn the lung upside down. This is not something we invented. This is something that we use in ICUs every day to manage patients with ARDS. We prone them. We put them in their tummy, which gives us the ability to better inflate the lung, better ability to recondition and recruit the lung, and better ability to use lungs that are not utilizable. Let me give you an evidence of that. This is an animal, a pig lung. This is the normal picture that you see after extended perfusion time on the old circuit. This is the same lung. The same lung. We took this lung out, and we put it in the new circuit. We flipped it up, and you'll see the back.
It's a completely different picture. This is the same lung. Surgeons sometimes see this lung, and they worry that this is, "Oh, this is an infarct." "Oh, no, no, guys. This is atelectasis, and there's some hemolysis in there." "Well, what guarantees me that that's the case?", and they would turn the lung down. Here, that's the picture that we see, but let's not just believe a pig organ. Let's go to a human organ. This is in the clinic, in our NOP team today. This is a real lung that's been declined by 39 transplant programs in the United States because of this picture. Pretty much the left lung is completely collapsed.
The bottom of the right lung is completely collapsed, and it looked dark and dusky, and people thought, "Oh, this is a dead lung or infected lung." We took these lungs, and we put them in our circuit, and we prone them with the new technique and looked at what the lung is. This lung was transplanted, and the patient was discharged less than seven days post-transplant. This is the real-world evidence that gives us the confidence that these new techniques are going to have a huge positive impact on lung transplantation. I can't tell you how excited we are about getting these programs into the clinic in 2025 to help resurrect this huge giant of a market called lung transplantation.
We strongly believe that this would have a, if we just get the lung to generate growth opportunity for TransMedics equivalent to the heart today, that will have a huge impact on our growth trajectory in 2025 and beyond. So to summarize, all these techniques that we talked about, all these modalities that we talked about, all this improved functionality that we talked about in a single slide to summarize why are we excited about this, why are we bullish about this, the way we're envisioning the clinical value for the next-gen lung transplant, how we translate that into value to drive growth. One, we're going to deliver superior clinical outcomes that nobody else can deliver. We are going to shift to daylight, a daytime organ transplant. We will provide better management of clinical and financial resources for the transplant program.
And most importantly, we will increase the utilization of lung transplant from 18%. Our vision is to nearly double the lung transplant over the next five years with these techniques. We think we can do even better than that. So how are we going to prove it? Again, in our traditional history, we are going to prove it in a rigorous clinical program. Please don't ask me about the detail until I finish the IDE. Okay? I'm not going to talk about the detail, but I'm going to give you a perspective of what are we talking about for you to understand the magnitude of the data that will come out of these programs. We are going to prospectively target morning-hour lung transplant. Period. We're not going to handwave. We are going to go prove it in a pre-market setting.
And we are going to target head-to-head comparison with cold storage, the best cold storage that the transplant programs are using, and we're going to prove that we have superior outcome than there. Doing these two things will completely allow us the opportunity to reimagine, reinvigorate the lung transplant market because we will take all the negative perception of EVLP out of the equation. We will deliver superior clinical outcomes, and that is why we are so excited about this. I can share with you things that we've already agreed to with the FDA, that all these clinical programs will be run exclusively through NOP. This is not going to be your traditional clinical trial where we're relying on the centers to recruit and manage.
FDA is so excited about allowing us the opportunity to do the first blinded trials in the field because we're using our NOP team, and the goal is to demonstrate superior clinical outcomes. No more non-inferiority trials. This is all going to be geared towards superiority. Stay tuned. Hopefully, in the end of Q1, beginning of Q2, we'll have more details around these clinical programs. But I'm telling you, we cannot wait to get started. Let's shift gears and go to the heart. Same concept. Let's start with where the heart problem today, the challenges that we are trying to overcome. Same thing. Edema formation with prolonged OCS perfusion. Why? Because we are using the historical OCS perfusion solution, and beyond eight hours, the heart becomes edematous. We know that. Everybody talks about that. So what does it mean?
The patient might require a balloon pump for a day or two, but the perception is negative. Second, we don't have a clinical indication in the U.S. that gives us access to donor hearts that are preserved for less than four hours today. That's Paragonix's sweet spot, and we knew that, and we allowed them to enjoy that while we're focusing on NOP, but we're not going to leave it out for too long, and most importantly, this is very important for you all to understand and for people who are listening to understand. To date, TransMedics, OCS, any other preservation technology in the marketplace that are either in the heart market or aspiring to be in the heart market, all they're focusing on is preserving the heart condition as is from the body of the donor.
None of us was able to claim that we can improve the function of the heart XVIVO . We are going to change that. These limitations resulted in conservative reaction to length of perfusion time and outcomes for heart, and the cold storage is used predominantly in less than four hours preservation, short distances, local transport, etc. Let me show you how we're going to turn all that upside down. We are going to stop talking about number of hours. We're going to change the lexicon in heart transplant. It's not going to be about less than four hours, more than four hours. It's going to be, "You want to do daytime heart transplant or not? Yes or no? Yes or no?" It's a yes or no answer.
Do you want to benefit from having your team do multiple heart transplants a day and not lose the next day of elective surgery or not? That's the power of making morning-hour heart and lung transplants a clinical reality. The second is it's not about four hours or six hours or eight hours. It's not about DBD or DCD. It's not about extended criteria or standard criteria. Can we go beyond preservation? Can we have a claim that we can improve cardiac function outside of the donor body? We are going to prove that. And with these two, we will become a major dominant player in the field of heart transplant, and that's what we're planning to achieve. How are we going to do it? Two things. Use the same solution that we've proven for the lung, for heart, and we'll show you the results.
Add proprietary metabolic and functional enhancers into the circuit throughout the preservation period that nobody else can do it except us because we're the only metabolically active, functionally active device in the field. This is why I spent the time earlier in the presentation to show you what is the fundamental value of OCS. Without active metabolism, you cannot claim that. You cannot even use that. So if you hear a cold perfusion technology like, "Oh, yeah, we can use a metabolic enhancer," what are you going to do with it? The heart is not metabolically active. How could you enhance metabolism when you don't have metabolism? Let's show the data. First, I'm sorry, we're data geeks, so please forgive me, but many of you would understand this. Historically, the OCS has always been associated with very high perfusion hemodynamics. We would use 800, 900 cc of coronary flow.
You see it right here. This is OCS, six hours versus new OCS or next-gen OCS, six hours versus next-gen OCS, 24 hours. The same thing in aortic root pressure. And what this shows is that for the first time, we can achieve near physiologic pressures and flow for coronary and hemodynamic in heart transplant XVIVO . What does that mean? It helps us control edema even better than just the viscosity and oncotic pressure. It minimizes hydrostatic pressure on the coronary circulation. That's what allows us to maintain the heart for 24 hours. And remember, we're comparing a 24-hour heart to six-hour OCS and six-hour next-gen OCS. Here's the key slide. The edema formation. 24 hours compared to six hours of standard OCS. Significantly lower edema. Huge, huge impact. Same thing.
Jake Demetris and his team evaluated samples from all of our preclinical testing showing that all OCS, whether next-gen solution or old, had associated with significantly lower ischemia-reperfusion injury. That's something we should expect because our current OCS is working great. It's just the heart gets edematous after eight hours of perfusion. But the OCS today is working great because we have less ischemia. We can even do better. We can achieve the same low ischemic index with 24 hours of perfusion with a much lower, much lower, significantly lower edema formation. Again, guys, I'll be happy to address your questions at the end, but this is very, very exciting data that gives us the confidence about these clinical programs. So now, let me summarize to you what you just heard and what does it mean on the business, on the clinical indication for the next-gen OCS Heart.
First, we will be able to do daytime heart transplant. We will be delivering superior clinical outcomes. We will be pushing a whole new lexicon, new terminology of beyond preservation. We no longer should be compared with a preservation technique because we are improving cardiac function XVIVO . And the same cost-effectiveness argument of doing morning-hour transplant stays true here. And that's, again, the reason for us being bullish about these programs and the impact of these programs Tamer will highlight for you in his presentation. The same concept applies for the clinical program that we're going to be running for these innovations in heart transplant. Daytime heart transplant and superior clinical outcomes run through NOP and, again, running superiority programs, non-inferiority programs.
Now, let me walk you through something you probably didn't think you're going to hear about today, but something that we are very, very proud of and we're very excited about and we frankly believe that will help stimulate adoption for OCS even deeper beyond or assist all these clinical and technological innovations, which is the next-gen NOP digital ecosystem. What does that mean?
So envision an Uber-like ecosystem that manages all aspects of organ procurement to transplantation with a layer on top of that for the transplant financial administrator at every hospital to have full visibility to their case count of OCS, their cost of OCS, the outcomes of OCS, and for our ERP system to be fully integrated so we can automatically bill for the NOP case as soon as the case is over rather than taking two or three weeks to figure out where the bill goes. Running through the entire gamut of the transplant center being able to initiate a case to our logistics command center and clinical command center to triage the case, launch the case, the transplant administrator monitoring the case, and live communication with the transplant team at the center. Let me show you the video of how it works. We call this platform NOP Connect.
The concept is to link all of our NOP cases, allowing the center to initiate a case instead of a 1-800 number by just logging into their NOP Connect terminal or app and initiate the case. The case will go into our digital command center through a secure HIPAA-compliant portal. Our command center will manage the case in a traditional fashion.
They identify the best possible route, the best possible clinical team to go out and procure, communicate with our team through the same system, generate the transportation quote, send it to the transplant program for approval, and then once the case starts, there is active communication between our NOP team and the transplant program's team to make sure that they have full visibility on the status of the organ, the health of the organ, the hemodynamics, the functionality of the organ, and they could even see video, pictures, and they can live accept or decline the organ. And after that, full transparency to the case, an invoice will be generated automatically, and now the transplant administrator can have full visibility to the case.
Simply stated, our hope is all of our OCS centers in the United States and ultimately when we go outside of the U.S. will be using this platform to manage their daily activities in organ transplantation. And that's when we truly feel that we became the trusted partner that we all aspire to be for these transplant programs. And it's fully transparent, fully visible to all stakeholders at that institution. And it gives us, and it's designed to be scalable so we can do more than 10,000 transplants using this and walking away from the phone lines, etc. So that summarizes Gear Two of growth. All Gear Two is launching in 2025. Now, let me take you even further into Gear Three. Three major programs that we're focusing on. Kidney. We're starting development in kidney in 2025.
We anticipate to be in the FDA clinical trial starting in 2027, and we're anticipating launching the kidney at the end of 2029. This is just a high-level metric that we wanted you to be aware of. It's very important for us for you to be aware of this because you will hear later from Tamer and Gerardo and Stephen that kidney adds 25,000 disease transplants a year in the United States and approximately another 25 or 30,000 kidneys transplanted OUS. So that has a huge impact on our team. It's always been our next frontier, and now we're committing that we're starting the full development effort in the OCS Kidney starting in 2025. Next is something that I am very, very, very excited about, which is our next OCS platform, next-gen OCS platform. You might wonder, why the heck do we need to invest in a next-gen OCS platform?
I tell you because we are not satisfied of doing 10,000 transplants. We want to do double or triple that number. We cannot do that with the current platform of OCS, and I'll show you why. Some development is already underway. Some of the early markers or early development of next-gen is already you've seen for heart and lung. There will be more to come, and I'll show you specifically what I mean by that. But the full effort will be starting now, and it will continue throughout 2026. We envision a period of PMA supplements throughout end of 2026 into end of 2027 because we don't know how much of that would require new clinical programs versus just a PMA supplement based on preclinical activities, and then full launch in 2029 to give us that breathing room in case we need to do another clinical program.
What is next-gen OCS platform? This is just a vision. This is not the design. This is just a vision to give you what we are aiming to. This is a huge opportunity for us to completely reimagine how the OCS works. It's reimagining the OCS in an era called NOP, which we did not have back then. It's envisioning the new OCS platform with the digital ecosystem that I just described. Everything in the new OCS is going to be highly automated, highly communicable to the cloud, remote control, remote monitoring, and disseminating the information to all the stakeholders that are waiting for that organ to arrive. Fully automated, secure remote control, real-time visualization of the organ condition, fully integrated into the OCS NOP digital platform.
That is the way we can scale above 10,000, driving huge financial efficiency, not just to the transplant program, but many of you that focus on our gross margin. This is a huge opportunity for us to cut down on the part count, to aim and design for automated assembly, minimizing human error, human error in assembly, human error in managing the OCS. How do we scale beyond 10,000? I'm not going to have an army of 1,000 clinical specialists to be out with every case. That's a bottleneck in and of itself. Many of you remember in 2022 when we ran into this bottleneck. Our ability to manufacture OCS quickly was challenged, and Nick will talk about that. Our ability to satisfy the clinical requirement was challenged.
We got into a critical mass right now, and we think we're going to be great for the next two or three years, but we are already aiming beyond 10,000. Beyond 10,000, we need that platform. So everything will be managed from the digital command center or the NOP command center that Andre showed you. That's why next-gen platform is very important. Again, distancing ourselves from anybody in the field that is still trying to catch our coattail about preserving organs. We're well beyond that already. Now, OUS NOP. Very exciting for us to do that. And you've heard me say in the past, we will not be engaged with transportation OUS. I still hold that view, but there are some very, very unique opportunities that are presenting itself in front of us that we may change that view.
This is why I showed you the picture of the goldfish jumping from the bowl because, again, our goal is to capitalize on opportunities in front of us. But this is an amorphous area because we rely on reimbursement and market development activity. So you need to know that today, our European team is heavily engaged. Many of you saw my LinkedIn post about me being in Rome 10 days ago, having a press conference in the Italian Parliament, lobbying the Italian government to increase healthcare budget by EUR 10 million to be spent on machine perfusion in Italy to create an NOP model in Italy. We presented them the NOP model. So these activities are ongoing, but it's never going to materialize until it materializes. We're not going to wait for it to materialize.
We are going to selectively launch a pilot NOP program as early as 2026, maybe even sooner if the opportunity presents itself, and to try to stimulate clinical excitement, clinical momentum for them to envision the health economic benefits of NOP in their European system. Then beyond that, once we achieve reimbursement, we are no longer selling OCS direct like we did in the U.S.. Susanne Montag is our head of our European commercial team. She is here today, and she is convinced that this is the future. We just need to be patient and fight the market access battles, and I am confident under her leadership we will be successful. Now let me leave you with an eye chart of what are the pipeline of everything we talked about today and what is the time horizon for everything that we talked about so far.
So this is the next five years. The next two years is focusing on Gear Two, the new next-gen OCS Lung, next-gen OCS Heart, and NOP Connect. From there is Gear Three, kidney, next-gen platform, and OUS NOP program. As you can see, we're going to be very busy in the next five years. Okay? Our sight is not on, obviously, we focus on quarter to quarter, but our sight is to win the marathon, and that's what we're putting these infrastructures in place to do. This is why our financial discipline is going to help guide us to execute in these programs. We are fortunate. We're extremely fortunate, and thanks to our shareholders for being in a position that we can afford these programs. We're not going to go back to the market.
We are going to finance these programs ourselves, and we'll be very, very methodical in our investment to make sure that we're making the right investment for these right programs. But the key message I want to leave you here is we are already beyond 10,000. So if you're doubting our ability to deliver 10,000, guess what? We're not just going to do 10,000. We're going to do more. And the rest of the day, you're going to hear from Tamer, from Stephen, from Gerardo, from Nick, how are we going to get there? What is the infrastructure that we're putting together to help us get there? So again, we're very, very excited about where we are. And with that, I'll pass it on to Tamer to walk you through how is he going to translate everything we talked about into commercial momentum for the business. Tamer? Thank you all.
Good morning, everyone. So what I've described to you, the details of the clinical programs and the indications that we're developing to drive. And I'm going to describe to you on the commercial side how we're going to benefit from these commercial programs. So from existing clinical indications and existing clinical programs, we're driving towards deeper penetration. And I'll show you examples of what penetration means and how we're going to change that. NOP network effect. This is huge, guys. There has never been a network, a logistics network in the U.S. or anywhere in the world that's dedicated 24/7 with the infrastructure that we have clinically and logistically to gain access nationally to every organ and allow every patient to have that life-saving organ transplanted. This translates into huge cost efficiencies.
And I'll show you that we can share, and we've been sharing these cost efficiencies with the transplant centers. Outcomes. We're the only entity in transplantation that has the largest and the strongest body of clinical evidence. Publications that we showed you and more are coming with updated data from our registries. That's how we drive deeper adoption and growth of transplant volumes for the transplant centers and our business. The next-gen clinical programs. It is really taking our OCS, as I see it, to its fullest potential. When we developed OCS, having it portable and near physiologic, warm, oxygenated, perfused by donor blood, it wasn't just for preservation. But because of the challenges that Waleed went through and described, it has been, to some extent, limited to preservation. We haven't been able to improve functionality to really extend time on OCS to date.
That is what these two programs that Waleed described for heart and lung are going to do and change the perception, drive clinical confidence, drive adoption, because it all starts with clinical. When the customers see clinical value, adoption follows. Growth follows. If clinical value is not there, it's not going to happen. Daytime transplants is big. We've seen this in the liver. Liver has already demonstrated that the preference now is to do the procedure during the day, is to stagger organs overnight and do them back to back throughout the day. We're trying, and we will replicate this experience for heart and lung. That will and should drive adoption. DCD utilization, as Waleed mentioned before, TransMedics and OCS, there was really single digits to zero DCD utilization. Now, it's the fastest and largest growing section of the donor pool that's being utilized.
We, TransMedics, have the largest share of that pool and still have the opportunity to improve and go deeper in that donor pool. Let's go through some more details, which I know most of you would love and like. I usually don't like to get to that level of detail, but I have to today. Please give me some credit for that. This is just an example of how we categorize, and I'm going to go through the slide and similar one for the heart, how we categorize our customers, our centers from a penetration standpoint, adoption of OCS standpoint. Liver to start. This category here represents 27% of our customer base of all of our centers that do liver OCSs.
Three have been chosen just by selection here to give you an example to show you what it means to be a highly penetrated center with OCS. So you're really north of 75% or so, approaching 100% at the top level. This is another sample or examples of another three centers. Happens to be 27% as well representation of our customer base that's showing the mid-penetration range, anywhere between 40% to 70% to 75% use of OCS in the transplant volume, and the last one is the low penetration rates. 46% of our liver customer base falls in this category with nearly teens to 30% OCS penetration. Our goal is to move from right to left, and that's how we're driving adoption. And you can see that in spite of, even with the liver great performance to date, more than 50% of the centers are still in the low category.
This is a huge opportunity for us to move liver to the left. And we're working on that, and we'll drive penetration by publication, by clinical data, and by managing and leveraging the logistics network that we have and clinical network. Heart. Same concept, different numbers. Lower scale penetration rates across just by volume, by sheer volume. But the more important pieces, look at the high penetration category. Only 15% of our heart centers belong to that category. 60% belong to the low category and 25% in the mid-penetration rate. So the opportunity here is even much bigger than the liver. And that's why the clinical programs were actually designed to address this opportunity and overcome the challenges to allow us to move these centers from right to left. There's no slide for lung. It's not existing. It's single digits, double digits.
So there's no data actually to look at. But that tells you that the opportunity is maybe 90% instead of just 60%. So heart and lung, there's huge potential ahead of us. And we will leverage the clinical expertise that we have. We will leverage the clinical data, the network that we have to drive this adoption from right to left. And we've been doing this and we'll continue to do this. So the clinical drivers in 2025 and beyond from existing indications before we start the new programs and until we start the new programs, we will continue to lead by clinical data, clinical evidence. Again, our outcomes are unparalleled. Clinical outcomes, be it the post-transplant outcomes or the utilization rates, no one can claim similar outcomes to what we have. And that's the leading edge of our driving for deeper penetration.
Publications, as I said, will follow, especially on the liver front, where we have the largest body of clinical evidence that from a sample size is huge and will be published soon. Creating competitive dynamic is key in regional practice and national practice. And actually, our logistics and workflow that's very efficient now across the entire country is lending itself to helping us create that competitive dynamic by giving access to transplant centers to organs across the country. They're no longer limited by the regional pool. They're no longer limited by time it spends on OCS. They can go anywhere and get these organs and compete with larger volume centers within the region. So that's how the network is clinically and logistically helping drive adoption and competition. Back to the network effect, economic drivers. So it's not just clinical.
Having close to 20 planes, 100 pilots, 250 clinical staff across the U.S. wasn't put in place just because we'd like to have more resources and more assets. It's for a reason, guys. We were about to lose 30% of our volume if we didn't do it the way we did it, if we didn't invest the way we invested. And when we did, it resulted not just in maintaining and growing our volume of transplants, but also in creating cost efficiencies because of the proximity of our resources and assets to donor and recipient locations. That now we're in a position to offer something they've never heard of in the practice, which is 50% sharing, cost sharing with the transplant centers on dry runs.
This is hugely important because dry runs is the main limiting factor for going after organs that today would be considered higher risk, DCD, older donor, fatty livers. Now, with our system, if we don't procure, if we don't get the organ transplanted, we share 50% of that cost because we have proximity and access to all these organs in a way that nobody else has. So it's really benefiting every transplant center seeing that cost sharing efficiency across all organs. Now, the next level, which is the next-gen clinical indications and clinical programs, how is this going to help us? It's going to help us immensely because it addresses the, again, as Waleed said, it addresses the key issue, as we always do. We go address the problem to generate clinical outcome that drives adoption. Edema is being addressed.
And that will result in being able to move to morning transplants for heart and lung, as well as result in more organs being transplanted across the country, again, at a national level, because the whole timeline shifts and it becomes really, as you've heard, not just below four hours, above four hours. It's going to be next-day transplant, daytime transplant, staggered organs transplants, heart and lung similar to liver, which is going to add significant volumes. So just roughly expectations for how the programs would run for heart and lung specifically. Both of them once started, which expected to be second half of 2025, will go through the same initial phases of any clinical trial initiation. So initially, slow adoption that will build up momentum afterwards and then ramp up volumes as the clinical trial ramps up and gets concluded. We expect this for both heart and lung.
Liver, we have superior clinical outcomes. We have the body of evidence. We want to publish this soon because it will drive adoption in DBD and DCD livers. Now, let's move on to competitive market dynamics because many of you have asked the question, what is the competitive market dynamics space? So warm perfusion liver, cold perfusion heart, OrganOx, XVIVO . OrganOx, actually very limited use because of the reason of not being portable. Has to be back to base, has to bring the organs back on ice and then start perfusion at the transplant center, and what this means, the organ is going to suffer ischemic damage. Outcome is impacted.
And not just that, once the organ is back, it's technically a very complicated process to do it on OrganOx with very limited ways of even trying to preserve and optimize the function if they can and they can't on OrganOx, resulting in very limited utilization rates. So yes, it created distraction, but it's not real palpable market share gaining for OrganOx that we see. XVIVO cold heart, that's even at an earlier stage. They're now finishing the trial in the U.S. From the track record we've seen, as Waleed mentioned, with the lung negatively perceived in the U.S., couldn't generate good outcomes. And the European trial failed to meet their trial endpoint for the heart. So we're not expecting a different track record. So both of them really, we don't see as having any palpable impact on our OCS market share.
Now, I'm going to focus on this because this took a lot of your time, our time discussing NRP. What NRP means? Is it cost-effective? Is it taking market share from OCS? And why, if not, if we're not seeing it the same way you guys are seeing it? So I'm breaking it down by cost category and whether NRP is used by program, transplant center, or third party. Or OCS, NOP is being utilized. What's the cost? What is the competitiveness? First, clinical resources and fixed costs. If a center wants to do NRP on their own, they need a team of at least five team members, two surgeons, two to three perfusionists to do the retrieval and perfusion on the system, on the circuit for NRP. Or they go to a third party that does it on their behalf and will charge them, as you'll see.
For OCS, our team takes care of that, so there's no resources related on the transplant center side. NRP perfusion system, the hardware, there has to be an investment by either the transplant center or the third party to purchase the device that they would perfuse the donor body with, which is about $100,000 for the hardware. We don't sell hardware for OCS, zero cost. Perfusion module, disposables, and the related services. If the transplant center is doing it on its own, it costs about $20,000. If third party is doing it, the numbers we've heard, and I'm using an average number, is $50,000-$60,000. It goes higher than that. For OCS, it's $85,000 every time for the OCS plus the services.
Blood products and additives, $5,000-$10,000 either way with a transplant center or third party to get the blood that they need, impact RBCs and medication to be added to the circuit. For OCS, $2,500 just for four packed RBCs. Post-NRP preservation, and this is a piece that none of your calls with any of the clinical experts is brought up. They never admit to this. So please be aware that after NRP, they have to use one of the three technologies to transport the organ back to the transplant center. So if they're using SherpaPak, it's about $20,000. If they're using XVIVO, $40,000. If they're using OrganOx, $40,000. So you add this to all the incremental costs above. Dry run cost, 100%, as I mentioned before, is being swallowed by the transplant center.
So if they send a team of five resulting no transplant, at the end of the day, they're responsible for that cost. With OCS, we share 50% of that. And that's what I meant by it's unheard of, unparalleled. Liver utilization rate, and this is huge. 50%, two livers are needed in NRP to get one transplanted. So with all these costs multiplied by two to get one transplant, done. With OCS, we're approximately at 97.5%, the highest reported ever. Heart utilization rate, the data is even so scarce that it's not reported. With OCS, it's 97% approximately. Access to national DCD donors, and that's very important because NRP is limited to local geographies. They cannot move all the surgeons and teams and ECMO and perfusion disposables beyond their local geography. OCS is national. We'll get you DCDs from anywhere in the country and extension to Hawaii, Alaska, Puerto Rico.
Impact on lung retrieval, so NRP is correlated with losing lungs. Lungs get edematous in the donor, not being utilized. So lungs here, that's the biggest opportunity in transplantation to be grown and utilized, is not being used once NRP is used. So huge negative impact on lungs. With OCS, we take lungs and hearts and livers from the same donor with no issues. Finally, ethical concerns. Many regions have already banned NRP. OCS, we don't have any ethical concerns. So this, you put this list together, and I really wonder how NRP is being used today, and I think it's just going to the wayside very soon here because many of this has been experienced by the centers and even by the OPOs who are starting these processes.
Now, let me end by just a quick update on the next phase commercial team that we're assembling to help drive clinical programs and the resulting commercial success. So we are actually getting a commercial team in place that's clinically focused, that can talk using data and lead with the senior clinical level interactions, not just being distracted with agreements and contractual agreements and the administrative issues, but focus on clinical driving of adoption and commercial success and being data-driven from day to day, quarter to quarter, and throughout the year. So that's the team we're assembling today, and hopefully at some point, we'll see the outcome of their execution. So I'll stop here and I think we can now take questions. Stay here, right?
Yeah, you can stay here. Just a few reminders for people. If you'd like to ask a question, just raise your hand. Our team will bring a handheld mic. As a reminder, we're going to have a much lengthier session after lunch and our final presentation. So if we could just keep it to one question per person for now, that'd be very helpful. And then also just if you could state your name and your firm before asking your question, that'd be great. Thank you.
Please.
Josh.
Yeah, Josh.
Thanks so much, Josh Jennings from TD Cowen. It's great to see your confidence in the outlook here on the new NOP kind of strategy that you put in place. I wanted to just talk about the randomized control trials for lung and heart. When you talk about superior outcomes, can you just share your optimism level about whether we could see a mortality benefit? And then also just on Tamer's presentation, just we're linked to it. Will there be cost-effectiveness analyses as well to demonstrate the benefits, not just on the clinical side, but also on the economic side for adoption and utilization of OCS and NOP?
Great. Josh, thank you for the question. Let me address the second half first. The beauty of continuing to invest in evidence building is it gives us an opportunity to fill in these gaps. And yes, the answer is absolutely yes. We are going to be collecting all the traditional and non-traditional cost-effectiveness metrics because with NOP, we're looking at a completely different set of data to prove the cost-effectiveness and cost-efficiency, some of which Tamer alluded to. The protection of dry runs or DCD non-progression, all that is cost-effectiveness to the center. The ability to do morning-hour transplant. These are things that you can never talk about, we could never talk about in the pre-approval phase because we didn't even know if we're going to be safe and effective. So that answer is absolutely yes. On the first one, please forgive me.
I don't want to burn the bridge just yet. This is a public forum. We are in negotiations with the FDA, but the plan is to show superiority of the outcomes we are going to list as the primary outcome measure, whether it's survival or PGD or something else, and the plan is to follow the same patient long-term to look at survival metrics, maybe not in the actual trial, maybe later on, maybe when you have an aggregated number, large number, because sometimes survival, you need a very large sample size. I'll leave it at that, but the answer is, or the key that I want to leave a message to and leave for everybody is we are no longer interested in doing non-inferiority studies.
It's all about superiority because we believe now we have the tools to be able to demonstrate that, and that's what we're designing these trials to achieve.
Bill Plovanic at Canaccord. I was wondering if you could talk about just the heart transplant market. It's definitely different from the liver market. Kind of where do we sit today with the number or percentage of DCD time for heart? And kind of you're.
None.
None.
Zero.
So you're starting at a much different level.
Yes.
So how do you think that progresses then?
Clinical confidence. When they see the outcome based on the data that you've seen here in their own hands in the clinic, that's what will change this number. The question back to you, where was DCD before 2019, heart transplant? What was the numbers?
Zero.
OCS, clinical confidence, market is established. That's exactly how we're moving the next wave of adoption based on these clinical programs. So I'm not worried about the big gap because that big gap gets quickly filled once clinical outcome is there.
And Bill, I would add to what Tamer said. Where is NOP for heart? Remember when we launched NOP, the liver guys were all over it. The heart guys are like, "Whoa, whoa, whoa, whoa. What are you guys thinking? We need to see the heart. We need to touch it. Nobody can do it better than we do." Look where we are. It's all based on the confidence, the clinical confidence in the results in their own hand. So this is why Tamer is being appropriately conservative and saying, "Guys, give us the time. Let us launch these trials in the second half of the year," because he's counting that in his mind. So yes, morning-hour heart transplant is zero, but once the first few centers experience it, it hopefully will take off like wildfire.
We're almost certain of it because that's how, and we know that the cardiac surgeons are the fastest to move, but they need to be convinced. They're the hardest to be convinced. So we are going to show them the data in their own hands. So I share Tamer's.
Sorry, we had one here before you guys. In the middle.
Yep, right here.
Yes, you.
David Rescott with Baird. You talked about the markets in the U.S. accelerating to double digits in 2023. And I think if you were to look at where some of those markets are year to date in 2024, you've seen a slowdown so far. So I guess wondering what your view is on why that's happening because it sounds like or looks like a lot of it is growing DCD and then DBD is offsetting there. So one, why is that happening? And two, I guess what gives you the confidence that longer term, every incremental transplant coming from the DCD side wouldn't impact the DBD volumes that ultimately should still be out there?
Dave, that's an excellent question. I'll start, and Tamer please weigh in from your perspective. Why the sudden deceleration that we're seeing year-over-year in Q3 and maybe early Q4? Nobody has the correct answer or the real answer. We can hypothesize about it. There's no fundamental reason or shift in heart transplant that makes us worry. There isn't. Some people said, "Oh, because of the growth of DCD and the growth of the DCD donor pool is growing so fast that that might impact because we have a lower percentage of utilization of DCD than DBD." It could be, but I suspect this is nothing but a noise or a tempest in a teacup, and it's going to correct itself.
I tell you why we are hopeful, at least in the liver front, that we will see another year of acceleration: it's that we've never seen the rate of DCD utilization in liver transplant like we've seen in 2024. That alone should grow the liver transplant market. And we think the heart nationally year-end might actually catch up. Maybe it's not two double digits, but these are the two comments I have for your question. I don't know if Tamer.
I think I'll add to what you commented on, which is transplantation is really, when you look at it quarter to quarter, you'll see some variability, and yes, there may be some deceleration, but the trend, as we've seen for the last few years, by the end of the year, you have an increase in volume of transplant in general, and that's what we're focusing on, is how over the next few years, we scale up the growth curve given the programs that we're focusing on. Quarter to quarter, you may continue to see what you just said.
Yeah. And the conference we have about the long-term impact of these clinical programs is, again, heart failure is not slowing down. The need for heart transplants is not slowing down. The need for lung transplants is not slowing down. Our job is to make more organs available and give the clinical community, the transplant community, the confidence that these organs are at the highest level, the highest standard that gives them the confidence to transplant it to their patients. That's what we can do, and that's what's going to generate the growth in the market. And another element to that is what Tamer talked about, which is the competitive dynamic, the regional competitive dynamic, the national competitive dynamic. Transplant is a very competitive business. In one city, you have two or three different transplant programs like New York City. They are competing for transplant market and volume.
We all know that there is a mandate by UNOS and I'm sorry, by CMS, not UNOS, that we need to achieve high level of utilization of donor pool by end of 2025. Otherwise, some OPOs may actually lose their ability to operate. There's a lot of push to grow organ transplant. To date, the limitation or the argument has been we don't have the techniques or the modalities or technologies or the quality of the donor organs that gives us the clinical confidence to transplant. That's what TransMedics is addressing at the core. That's what gives us the confidence that it will generate the momentum to the volume.
Justin Wang with Morgan Stanley. I think Tamer mentioned that for liver, around 46% of transplant centers are in that lower penetration cohort. In terms of size or geography, what are the characteristics of these centers and what has the resistance been for these centers in using more OCS technology? And on that note, can you provide some more color on how your conversations have been with these lower penetration centers to win more share? Thank you.
So first, I don't provide that much detail on the names of centers and the geographies, but here's, in general, the trend. One, you have to be cognizant that these numbers here in any of the categories, especially on the right-hand side, the lowest penetration rates, some of those centers are newcomers, new users. So there's always a curve of adoption to get from the right to the left. The discussions have been always data-driven, challenged by cost. That's the biggest challenge. If you're asking me, "So how do they challenge you? What's the imperative or the obstacle?" It's cost. Once they see more transplants, and I always tell this to the centers, for the center to realize the economic benefit of OCS, they have to grow the use of OCS. You cannot do two-one-stop and say, "Let's analyze those two cases." That's not going to show any impact.
In fact, it may be showing negative impact, so the small volume centers who use the OCS infrequently will never realize the economic benefit. I advise them to actually get out of the OCS use. You're not going to see it, so don't waste your time and hours. Once they start going to three, four, five, six, seven, eight, 10 transplants, this is when now the administration starts pushing the clinicians to do more because they see the economic benefit of the outcome and the increased revenue coming to the center.
To build on what Tamer said, there's three characteristics in the right-hand category, especially in liver. New centers, that's the biggest category. They're just starting the NOP program. That's one. Two, with that comes the education around the cost efficiency. Three, they haven't used the logistics network yet because, again, they're focusing only on the cost of the NOP, and they're not leveraging a very important arm of our value proposition, which is the NOP logistics center and all the cost sharing that Tamer does. So it's only a matter of time where they come up the scale of learnings and understanding of the capabilities of the full network effect and seeing the clinical results in their own center. That is the biggest catalyst. That is the fastest way to melt these inertia factors.
Suraj Kalia Oppenheimer. Waleed, Tamer, thank you for presenting the long-range plan. Pretty exciting on many fronts. Tamer, a couple of your comments caught my attention. Maybe Waleed or Tamer, either can you take it? First is for your four trials. How do you blind OCS, even with the next-gen perfusion aid? You mentioned something about blinding, and that blindsided me. How do you do that? And I guess the subset to that is, just overall, when you take some of these organs, especially the confidence you'll have accrued with the trials, can you give us an idea how many preclinicals have you all done? Quantify the confidence you'll have.
Sure. So the first question, Suraj, read any publication we had in a competitive trial we've done. PROCEED II Lancet, INSPIRE. You will find, even though it was a randomized trial, because the center staff was not blinded to the preservation method, you will find one reported result that is completely skewing the results, the total cross-clamp time. You will find the total cross-clamp time in the OCS arm double what it is in the cold storage. To be specific, if you look at the PROCEED II Trial results, the OCS arm had 6.7 hours cross-clamp time versus the control arm had 181-minute mean cross-clamp time because they were not blinded. So if it's a distant donor and they've already opened up the randomization and it says ICE, and it's a distant donor, they're worried about distance, they're worried about cross-clamp time, they turn it down.
But if it's OCS, "Oh, yeah, let's go and try it." That's called the unblinding. The unblinding is to the staff that is transplanting these organs and whether or not they're accepting the initial offer. That is the most important blinding that we would achieve with NOP. Let me explain it again. So the vision for a randomized trial that is blinded through the NOP is the following. The randomization envelope or randomization scheme has to be controlled by the transplant program, but they're not allowed to open it until they accept the organ blindly based on the clinical characteristics that will be communicated to them by our staff. Only then it can open the randomization envelope. Before, the argument was, "We cannot do that. Our staff is not going to go out to the donor center with the igloo box and with TransMedics. That's too much work.
We need to know before we leave." But that resulted in literally doubling the cross-clamp time. So with NOP, we are going to hold that decision until our team will take on the burden of carrying cold and OCS. Our team will carry the burden of doing the full cannulation and everything else after the randomization envelope is open so we can blind the clinical bias towards putting questionable organs or organs that may not be acceptable for transplant in the OCS arm just to try the OCS. That's the blinding that we're talking about. It's a nuance, but for us, it's a scar on our back that almost cost us the heart program with the PROCEED II Trial. So that's why it's very important. And actually, frankly, it's not just exciting the FDA, it's exciting the clinical community because they know that. They know.
They admit it to what I'm just telling you. This is not a secret. Okay? So that's number one. Number two, Suraj, we've been in this business for 25-plus years. We've done clinical programs with a lot less number of animal experiments than the one I showed you today. The one I showed you today, this is just the leading group of animal experiments. The animal experiments that we've done, it's three times, four times the one that you've seen. And that's all going to be coming at the ISHLT. That's why we did not want to burn the ISHLT presentation. But our confidence is at all-time high because of that data. And we had confidence. We had the confidence to start many clinical trials with a lot less data than the one we currently have. So that piece, I'm not worried about one bit.
The results we're seeing are transformative in nature. The new modalities that we're using, the new enhancers that we're using, we feel very confident on it. And there are IP being created as we speak that will give us an exclusive right to these enhancers because they've never been tested. They've never been utilized. And more importantly, many of these, when we reveal the name of these enhancers at the ISHLT, many will say, "Oh, well, maybe we can use it and we'll put it with this technology or that technology." Well, good luck. Good luck. It's been costing us $4.5 million and counting to get a simple compound to be used clinically. It's not easy. It's the same as bile salts that we did for liver. It's not easy. And only companies that have that capabilities and clinical confidence, we can do that. So I'll leave it at that.
So we have time for just one more question here, and then we're going to need a break for lunch. But I'll remind you that we have plenty more time at the end of the session.
Okay. Two questions, please.
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Let's do Matt and Chris.
Okay. I'll try to be quick. Matt O'Brien and Piper Sandler. Just curious about the paradigm shift on the superiority side from non-inferiority to superiority, the extra risks that that layers on, and then specifically on timing, could you get delayed because you're trying to change this paradigm, and then you did mention PROCEED II , Waleed. Is that a good jumping-off point in terms of number of patients? I think it was 130 over a three-year enrollment period, or because it's superiority, it needs to be much larger than that. Thanks.
That's an excellent question, Matt. So again, I promised that I'm not going to talk about the design. Think about a design that will give us approval in the earliest possible time, yet we can continue to collect data to achieve the level of clinical confidence in the post-market setting. I'll leave it at that. That's the design we're going after. So we're not going to delay approval to prove superiority because we all know superiority requires significantly larger sample size. But we're not also afraid by a large sample size. No, it's not going to be 150 patients. The heart trial, the two trials combined will be somewhere between 400 and 500 patients combined. But it doesn't mean that we need to wait for 400 or 500 patients to be enrolled and followed up for us to file the PMA supplement.
And again, I'll leave it at that, guys, because it's very important to give the FDA the ability to weigh in from their perspective before I map out the detail. Hopefully, by ISHLT, we'll have that finalized and we can map out the detail. But think about an innovative approach. And again, we couldn't even think about that without a collaboration and really partnership with the FDA, who's very, very excited about these programs. And we cannot thank them enough for giving us this opportunity to do something very different and innovative like the one I'm talking about, where we can, because they're seeing the preclinical data, and they're giving us the ability to execute a plan that gives them the confidence to hopefully be able to approve us and give us the ability to collect additional data to prove superiority. Chris.
Thanks. Chris Pasquale, Nephron. Waleed, I had a question about the next-gen heart system. You talked about moving to more physiologic pressure, more physiologic flow. Are you still using retrograde perfusion, and does that kind of non-physiologic blood path have any challenges over longer preservation times or cause any issues with assessing function?
Chris, that's an excellent question. We're using the same perfusion direction as we're doing today, but we're doing it in a more physiologic way. It's not retrograde perfusion. It's antegrade perfusion. It's just the heart is not loaded. That's the difference. And yes, the heart is not going to be loaded. And yes, it's just going to be more physiologic hemodynamics that gives us the ability to control edema and really convince the transplant team that at physiologic pressures and flows, they're seeing superior outcomes.
Okay. Thanks, all. As a reminder, lunch will be served over there. For the folks listening on the webcast, we'll reconvene closer to 12:35 P.M. for the next session. Thank you.
Thank you. All right, everybody, we're going to be starting here in just a few minutes. If you could take your seats. Thank you.
Okay. Good afternoon, everybody. Can you hear me okay? Mic is on. Okay. So I get the post-lunchtime gig. Hopefully, everybody can stay awake for a few slides. I will call you out if you doze off. My name is Nick Corcoran. I lead Supply Chain and Ops at TransMedics. It's a great honor to be here, to spend a few minutes to give you guys some updates on our scaling. So I'm going to touch on our ops journey. I will talk about our scaling to 10,000 transplants and beyond. And just because you guys need to talk about numbers and that's what stirs your pot, I did include something on margin.
You can thank me later. Jumping in. I joined TransMedics in January of 2023. Those that cover TransMedics for more than a couple of years, Waleed referred to it earlier. We were in the midst of some challenges, what I would call typical scaling challenges for a business that's growing at the pace that TransMedics was growing at: inconsistent raw material supply, single-point failures in our supply chain, and internal capacity limitations. That was what I walked into. But again, for a business scaling the way we were, pretty typical. Since then, we've sort of engaged our supply base on a much more strategic basis. We've brought in-house some of those pain points that were preventing us from getting product out at that point.
We've moved to a much more long-term planning horizon, allowing us the opportunity to invest in physical infrastructure, in people, in technologies, allowing for the much more realistic time horizon of how long it takes to get these things done. If you're talking about 10, 15, 20,000 transplants in the future, 2028 and beyond, you need to be making those investments today. We look at that time horizon and we make those decisions upfront. One of the things that we did, and many of you have been to see the facility, we brought in a leading engineering company who broke down our manufacturing process. They recorded up to 100 hours of video, broke down every step in that process, and helped us to re-engineer and rethink how we put that product together. We expanded our clean room by 3x.
We didn't move in there until we had the plan, until we had that optimization plan ready, determined not to make the same mistakes that we had made in the past. Again, not unique to TransMedics. So when we moved in, we moved to a much more optimum layout. We had production lines for each product. Of course, liver is different from heart, which is different from lung from a volume standpoint. So that layout and that design was unique to each product. At the time, I remember Waleed would ask a question of me on a frequent basis to the point where I would take the back exit out of the building some evenings while I was working on it. And that key question was, what is our capacity? Can we meet our number for 2023? Can we meet our number for 2024 and beyond?
Without this data, without taking this analytical approach, that was an impossible question to answer. And that is the basis. In fact, this image that you see here was a picture that we took on the liver line last week. We continue to look at innovating. We continue to look at streamlining that manufacturing process using the same approach: time and video studies, breaking down the process, incremental improvements, tweaks in our design that allow us to continue to push the boundary by way of efficiency and productivity. So the other thing that we've started to do, and I'm not going to oversell this because we're not there yet. And in fact, we are limited in what we can do on a PMA product to really transform our manufacturing processes. But we have started the journey to automation. And we're not yet building hundreds of thousands of devices.
You guys are more than intimately and familiar with our numbers. But our motivation, our return on investment for automation and the automation of our manufacturing processes is really a quality one. It's removing that dependency on human error, the risk of human error at critical points in our manufacturing process. These are just a small handful of examples of where we've started, and in a couple of slides, I'll talk about our future, but this is very much part of it: investing in automation, reducing our dependency or the risk of human error in our manufacturing process, so let me run a quick video. Again, many of you have seen this.
Hopefully, those that have seen it early on or over the last couple of years will have observed, as well as we have, what I said is a very conscious transformation of how we put our product together, how we organize ourselves, so welcome to Andover Manufacturing: 20,000 sq ft of world-class modern manufacturing facilities, three shifts in a 5,000 sq ft Class 7 FDA-approved clean room, approximately 60 direct labor resources, as I mentioned, working over three shifts, where quality really comes first in everything that we do. This is an example of a piece of equipment that we've invested in that allows us to redeploy five resources from a task that was so manual in its nature to now something that's completely automated, and what you'll see is the design of this particular production line for our leukocyte filter.
These are technology investments that will drive modern manufacturing and the results that you expect from modern manufacturing in terms of scale, efficiency, productivity. We've got a highly motivated and purpose-driven team of people, and I'll talk about that a little bit in a second, so in the future, this is the margin reference. There are no numbers. Manage expectations. Like every great manufacturing company, we focus really hard on the main drivers of our costs: people, and in our case, even more so on the material side, so we tightly manage our expense lines there. Last year, I would say it was about stability. Now we're into more transformative, proactive strategic initiatives, really targeting the management, the control of our spend lines in both materials and overhead. In the future, and Waleed referred to this earlier, he mentioned the number of parts that will go into our designs.
In the future, our products, our new product pipeline provides an opportunity for us to design in price targets, to think about design for automation, design for assembly, design for serviceability, all of those things that ultimately determine the costs of the products that we manufacture. We do it upfront, and we can achieve it in a much more sustainable way. Future focus. So what will manufacturing look like at TransMedics in the future? Andover will continue to be our HQ for manufacturing. I expect we will supplement that in different geographies over time. We will build out more capability in the U.S., for sure. But what you can expect to see is production lines that are automated, robotic. As Waleed said, we will reduce the part counts. We have far too many parts in their designs as they are today, the legacy designs that we have.
We will design the supply chain from the ground up. We will partner with capable suppliers that can meet our expectations for scale, for quality, for price. We'll do that from the outset rather than retrospectively having to identify the suppliers on the basis of what we've designed in. So a much more strategic, proactive approach. We will reduce our dependency on the external suppliers, on larger external suppliers where we have little to no leverage. We'll do that by targeting and bringing in-house to design the manufacturer of key subsystems.
The image here on the right is a prime example of something we've done over the last couple of years where one of the manufacturers, the manufacturer of that device that you see on the right-hand side or the predicate of that device, if you want to call it, called us out of the blue to advise that they were no longer going to supply that component. That leukocyte filter is critical to every heart transplant that we support. So the clock was ticking. What we did was we stood up, we designed and stood up the manufacturing capability, and it was the one that you saw at the latter part of the video for our own leukocyte filter, which today runs more than sufficient capacity to meet our needs of 10,000 and beyond, to meet our needs from a pricing and a productivity standpoint as well.
That is a really important muscle for us in the future, something we will continue to rely on. Whereas today and historically, we have been dependent on those larger entities in different geographies, this is something that we're really going to concentrate on together. Those four building blocks are what manufacturing from TransMedics, for TransMedics, will look like when you visit our facilities in Andover and beyond in the future. So key question: 10,000 transplants and beyond, as Waleed and Tamer referred to earlier. How are we doing in terms of scaling operations? I sort of think about this in three ways. The first thought I have is I share Waleed's optimism and realism when it comes to our capability. We can do this. We have the physical capacity to scale to 10,000 and beyond that.
We get there through a number of the physical capacities, probably the easiest and obvious one: talent and leadership. We've been fortunate enough to attract experts from Intuitive Surgical, from a variety of different industries, Verizon, from J&J, from a number of different companies that have come to join us. We've had people that have turned down offers to be with Tesla as a recent example. We do that because what we're trying to do in the future is different to what we've done in the past. We need the skills, people that have experienced it and delivered that at other companies. Really fortunate and happy to say that we're in good position. From a technology standpoint, we will continue to make investments. The eagle-eyed on that video will have seen a lot of paper.
We will be out of paper mid to the latter part of next year, and that's not just an important sustainability commitment. It's a really important efficiency commitment as well. Paper and the recording of manual records for our devices at scale becomes really troublesome and cumbersome as well, and our physical infrastructure, that long-range planning that I referred to earlier, we have to continue to look out that three, five-plus years, make the investments upfront. I've experienced it firsthand at previous companies coming out of COVID as a great example. Everybody was mothballing facilities and not thinking about when it came back and found themselves behind the eight ball. We're determined not to do that at TransMedics. We believe passionately in 10,000 and beyond, as the guys have articulated earlier, and we're prepared to put our money where our mouth is in that sense in building that infrastructure.
And again, I've referenced it already: process optimization and automation. We have scattering of this starting to - you're starting to see it now on our production lines. But in the future, we want end-to-end production lines for our products, fully automated, controlling the process, engineers controlling the process. Of course, we will always have people, and we're very fortunate to be in that position. But the key areas of our manufacturing will be automated to support, like I said, first and foremost, our quality objectives. So I feel really good about our position today. We have work to do to continue to go beyond 10,000. That's an important checkmark and one that we stay on top of each and every day. Finally, let me make a couple of comments.
The most important people, as I referenced and mentioned just a second ago, are a handful of whom you can see in this image. We are really fortunate. I consider myself very proud to lead a team of highly committed, mission-driven people who care deeply about what we do, the mission of TransMedics, people that love nothing more than to hear that we've moved that needle even higher to save more and more lives. So very fortunate and thankful for that group. We have work to do. The phrase, "We have much done, we have a lot to do," that's for sure applies here as well. As we think about expanding our manufacturing capabilities and thinking about different geographies and locations, business continuity becomes really important for us, and we have work to do in that space. We're significantly dependent on Andover as a site today.
We want to sort of dilute that a little bit in the future. That's something you guys can hold me accountable to as well, and like I said, we are establishing a supply chain and taking very affirmative action to ensure that supply chain is in position to go to 10,000 and way beyond 10,000, in fact, and also to do it, hopefully, as you can hear, in a different way than we've done it in the past, and with that, I will hand it over to Stephen. Thank you.
Thanks, Nick. Good afternoon, everyone. I think I know just about everyone in the room, so it's great to be talking to you today. A little bit about the evolution of TransMedics' financial model, as well as some dynamics about the market itself, and give us a sense of confidence of why getting to 10,000 we think is a very, very, well, ambitious, a very reasonable approach, and even beyond that. So let's start with the revenue of the company. And I'll start in 2020. Prior to 2020, we were mostly selling internationally and kind of finishing up some of our early clinical trials, so with kind of a modest amount of revenue. So in 2020, really, the driver was our first product that was approved, which was the OCS Lung. And we started to build a little bit of momentum. At this point, we were really selling devices traditionally.
As Waleed talked about, COVID hit us in 2020. It really put a delay in all of transplantation, in particular lung transplantation, as it was a disease of the lung, and that was really our commercial product. Right around that time, we were looking, even before COVID, we were looking at the pace of adoption of lung and felt like if we want to have the impact on transplantation that we think the value of the OCS brings, we can't wait for the surgeons to be trained and to always be available. The pace was just not at the rate that we thought was appropriate. Even then, we were starting the seeds of the National OCS Program, or NOP. In 2021, we started to put that in place for the lung.
Finally, after delays because of COVID, the end of 2021, both the OCS Heart and the OCS Liver are approved. Now we have the early beginnings of an infrastructure on the NOP, and we can start to see that. Even in 2021, there was some growth in revenue. It really picked up in 2022 with now we had the full suite of products moving away from a company that sells devices to one that's really providing this clinical service of surgical removal of the organ, of clinical management of the organ that takes a huge burden off of the transplant center. As we've said many times, putting the NOP together, in my opinion, was the strategic decision of the company that really allowed us to grow at a pace we've seen. That begins in 2022. In 2023, there's a tremendous momentum.
And now, as we've talked about before, as clinicians who said they would never really be giving this opportunity for TransMedics to do procurement and to do management, now in 2023, it ramps to kind of 98%. So we've really changed the way transplantation is done. This becomes the business model for TransMedics in the U.S. as the NOP. And at that time, we're now looking at what is the next bottleneck, what is the next obstacle that's getting in the way. And that was right in front of us. We knew that all these cases are going through some kind of transportation. You have to move the organ from the donor to the recipient. And in most of them, there is a charter plane involved.
But it was very clear that the charter networks and the charter aviation that was being used was not appropriate for what we were trying to do for the industry. They weren't ready for long-distance cases. They weren't ready for many cases in one week. They weren't ready for complex cases. And so what we saw was many cases were not being done. We were leaving the organs, and they were being wasted. And so as we do, as we think differently, we made the next big decision, which was we were going to do this ourselves. And we insourced the aviation. We bought a small aviation company at the end of 2023. We began to purchase a fleet of jets and hire pilots. And now in 2024, we now really have the full solution. We have the innovative device. We have the clinical service. We have the logistics service.
I would just remind everyone in the room that it only works with all three of these things, as Andre says, in synchrony. That is the key to really the growth we've seen. The CAGR over this period of time is 102%. When we talked early in the early days that we thought we could double revenue each year for the first several years, we've really been able to do that over the last few. Next slide, I want to talk a little bit about what's happening in the market at the same time. This is a picture of the donor pool. Donors listed in the OPTN. During that time, in 2020, there was about 12,500 donors, about 9,400 DBD, about 3,200 DCD. That number has grown during that time.
Modestly in DBD, about 4% growth annually, but pretty rapidly in DCD, 22% growth. The donor pool is growing at 9%. Why is DCD growing? Prior to the OCS, the whole system, including OPOs, they didn't really look at DCD donors as potential donors because the chances of getting an organ transplanted were just very, very low. OCS comes into play. DCD starts to become a big part of the donor pool. That really has grown significantly to now where we have 16,000 donors in the United States. At the same time, transplant has been growing as well. Heart transplant over the last three years through 2023 grew at about 8% annually a year, with the most recent year in 2023 growing 12%. Liver grew about 6%, again, with the most recent year growing 12%.
What you can see here also is a big driver of the growth. The gray bar is the DCD, again, highly influenced by TransMedics. Let's look a little bit about TransMedics' volume compared to the market volume. You can see our first pretty strong year of revenue. We did about 1,000 transplants. In 2023, we did about 2,300 transplants. This year, the year's not done yet. It's probably going to be about 3,600 transplants, maybe a little bit more than that. But for now, that's probably the best number we've got. Based on where the OPTN market is, it's probably going to finish just shy of 18,000.
So what's interesting about this slide is almost all of the growth in heart, liver, and lung transplant. You could really look at it as the introduction of TransMedics into the field because the non-TransMedics, it has grown a bit, but not nearly like we've grown, which is really the mission of the company is to grow transplant volumes. And then if you go back to the slide that we show a lot, which is donor and transplants. So back in 2020, that same number, about 12,500 donors. And you remember that you have to multiply that by three, 12,500 lungs, hearts, and livers, about 36,000 donors. We were doing about 13,700 transplants in the United States, about 2,500 lungs, 3,200 hearts, and 8,000 livers, very low utilization rates.
So only about 20% of the lungs are used, only about 25% of the hearts, and 63% of the livers. Fast forward to 2023, we've grown transplant about 7% annually. We're doing over 16,000 transplants among the three organs. But the utilization rates are still pretty low. In fact, the donor pool grew a little faster, and so utilization is actually a little bit lower today. Again, the mission of TransMedics is to increase that utilization rate. Those donors are available. I often say that if we could just get heart and lung to be at the same rate as liver, those donors are there. They've donated a liver, and for whatever reason, they're not using the heart and lung. That's going to be a huge benefit for TransMedics, but more importantly, for the patient population.
We've talked about these deceased donors over the last few years growing at about 9%. If we look out in 2028, if it happens to grow at the same pace we've seen for the last few years, we're probably going to have somewhere about 28,000 donors if we continue to see DCD growth at 22%, DBD growth at 4%. There's really no reason that shouldn't continue through 2028. If we look at it on a little bit more conservative view and say, let's assume there's no growth in DBD, and it grows about zero and stays the same, and DCD just catches up to DBD, and they're equal in 2028, it means we'll probably have somewhere over 20,000 donors. Again, it's conservative. You think about what is a DCD situation where someone passes because the family has decided to remove life support.
That happens probably a lot more often than a DBD case where it's a very specific way of dying, where you declare brain dead. That just doesn't happen that often. Again, if you think about the millions of probably, I think there's 3 million people that die every year, only 10,000 die in that particular way. So it's not unreasonable to think we'll have donors of over 20,000. Again, that's about more than 60,000 organs available. And it's not unreasonable to think that in 2028, at that 5% donor growth rate, if we can just improve the utilization 5 percentage points in lung, heart, and liver, that means transplant of almost 24,000 transplants. And our goal is to get 10,000, so less than 50% of that number in 2028. That's really why we think it's right in front of us.
There's no reason we shouldn't be able to achieve that with all of the technology and value that we're bringing to the market. So what would that mean? From a transplant perspective, if we do 3,600 this year, it's about a 29% CAGR between now and 2028 after growing 129% for three years. It probably means about $1.2 billion in revenue, again, if we grow at that 29% rate. So that's the revenue side of the picture. Let me talk a little bit about the business structure. In that same time period, we really changed TransMedics from an investment business, a business that was losing money, to one that's pretty consistently profitable now. So one thing I've changed from a guidance perspective to the last 12 months, so this is the first three quarters of 2024 and the last quarter of 2023, a last 12-month look.
In that time period, we have changed it to a positive operating profit company. We expect that to continue in the future, and the reason we've been able to do that is because of the gross profit we're seeing on the sales, so we talk a lot about the gross margin, and we were a device sales company. We had about a 70% gross margin. As we added the services, that gross margin has come down to the mid-60s%. This year, it's a little bit less than 60%. But the dollars, which is why we did it in the first place, is tremendously growing, and that's been able to drop down some of that to profitability, so if we had stayed as a device company, there's just no way we would have seen the growth that we've put on this page.
We absolutely are confident that's the right move. We're also confident that there's opportunity to grow the 59% back up into the mid-60s over time as we become more efficient with our service. That is my section. Before I turn it over to Gerardo , I just want to say it's been really just a privilege working with all of you over the last five, six years. Great telling the story about TransMedics. You can see I'm still very passionate about it, and I'm sure our paths will cross again in the future. So thank you.
Thank you, Stephen. Up to now, you probably already hear multiple accents from Egyptian, Brazilian, Irish. I wouldn't say Bostonian, but the hardest one is about to come. It's a mix of different places, so please bear with me. I've been in the company for barely a week.
It feels more, but it's just barely a week. I think one of the first things, which actually gives me the opportunity to see things with fresh pair of eyes. One of the things that immediately stood out is the passion and the innovative thinking that the team always operates in. To me, that's really remarkable because every patient counts, and that's really encouraging. What I'll be sharing in the next few slides is a little bit about the market size or the opportunity that we are targeting to tackle with the Gear 3 activities that Waleed mentioned earlier today. I will also address how our finance approach will amplify the impact of the different initiatives that you saw today. All that to drive growth and operational efficiency.
As we go through the journey of growing, my focus will be in balancing the excitement that strong growth brings with the discipline of operational efficiency. That will help us to really continue to grow faster and also continue to grow in a smarter way. All that basically to continue to drive shareholder value as well as value for the patients that we serve. All right. So with that, I'm going to keep going. As Stephen mentioned, in 2024, we probably will be around the 3,600 transplants by the end of the year, which represents approximately 20%-21% of the total transplants, heart, lung, and liver U.S. transplants in the year. That's a low share. You can see the big opportunity, and that is the base for the 10,000 transplant goal that we have and we want to achieve by 2028. But there is more.
There is more than that, and Waleed alluded to that earlier. We also have the U.S. kidney opportunity, which is approximately 25,000 transplants a year, and which really represents an incredible and attractive market in which we could certainly enter, and if it wasn't enough, we still have also the international side, which accounts for approximately 40,000 transplants a year, and which we will pursue selectively, so that's a huge opportunity beyond the 10,000 mark. The business has evolved over the last years, and really today, it's very different from what it was about two, three years ago. We have multiple elements that are affecting our P&L, and what we need to make sure is that our financial models are dynamic enough, flexible enough, so that we can capture the impact of all of those different variables.
That is something that I will be focusing on in the next few weeks. Besides working together with Stephen to ensure a smooth transition, I will be focusing on getting a deeper understanding of the models, get my hands around the models in order to prepare the company and myself for our Q4 earnings release early next year, in which we will be communicating our 2025 guidance. Having said that, today, I can share with you that we do are expecting a total revenue growth in 2025 of somewhere between 20%-25% over the midpoint of our 2024 guidance. We're confident that we can achieve that. And again, we'll revisit this during our 2024 results earnings release. Capital allocation, it's an important topic.
We will maintain a strong discipline in capital allocation in a way that every decision that we make is driven by a commitment to drive growth or operational efficiency. So whether we invest in the next generation OCS, in U.S. kidney, or optimizing a system, changing a process, et cetera, all of that will be driven to make sure that we improve either growth or operational efficiency, as I said before. Yeah. I have been asked multiple times what brought me to TransMedics, and I think these slides, besides wrapping up what we saw today through all the presentations, also shares what my thinking was when I decided to join TransMedics. One, it really is in a space that has immense unmet needs, which basically translates in a lot of potential growth opportunities. So that's a very strong one. It has had a disruptive technology.
I don't know if you have really seen the device, but at least with the video that we saw today, it's really impressive, and that is really disrupting the market and transforming how the transplantation industry or field is behaving. We have exciting clinical programs that will help us to unlock additional growth opportunities, and that will certainly help us to get to those 10,000 transplants mark. The NOP that Waleed shared earlier, and also we saw with the video from Andre, it's also something that is really resolving and simplifying the overall process from sourcing, transportation, and preservation. That is really simplifying the overall process, and certainly that's a value that we are adding, not only in terms of efficiency, but also in terms of reducing the overall cost of that part of the process.
Last but not least, I am really. I feel honored and privileged to be working with a group of talented individuals, talented and passionate individuals that really every day, and you should see literally every day, continue to push the boundaries of science and technology to increase the number of transplants, which is really our mission. So clearly, the 10,000 transplant milestone is really a bold goal, but it's really just the beginning of what it is possible. So thank you very much, and I think we move to Q&A. And I don't know what accent is going to come next. A mix of.
Yeah, we're just going to take a few minutes to reset the stage here, and we'll be back with Q&A in about two, three minutes here. Matt. You need some mic, guys, over here.
Thank you, Matt O'Brien, Piper Sandler.
Maybe for Gerardo, sorry, I keep mispronouncing your name. I apologize. Just maybe talk a little bit about the guide for next year, just given some of the unlocks that are coming late next year on the top line. I think it'll be maybe 4%-6% impactful second half of next year, but it looks like we're probably going to get more flat in the first half of the year. So just the confidence in getting to that kind of 22.5% midpoint of the range for next year. And then I didn't hear anything on profitability as well. Kind of longer term, should we expect a similar margin profile right now with all the investments you're making, or can you see a degradation and then a recovery? Thanks.
I have been one week there in the role, right?
So I really haven't, and by the way, a large part of that week has been preparing for today. So I really haven't had the time to wrap my hands around the model. So I wouldn't like to answer something that I'm not. I don't know just yet. We need to go through the process. I need to understand the model. We need to go through the analysis, the internal discussions, and then we will be able to answer that question confidently.
Yeah. I'm sorry, guys. This seat is very uncomfortable, so I'm going to stand up. It's like a balcony. Yeah. Matt, that's a great question. The way we are going to approach the guidance is the same philosophy that we've been approaching guidance for the last how many years that we've been issuing guidance. We take guidance very seriously. We're conservative by nature.
We feel comfortable in that range as a starting point, and then we let the execution dictate where we are. Tamer has been advocating what he shared with you today, that this is the second half of the year. But also, he's the one who showed us that there is a lot in front of us with the existing programs, with the existing penetration, crossing the chasm, with the leveraging of the NOP network that we spend a lot of time in 2024. So on balance, with all these puts and takes, we think this is the right starting point for the business. Let us execute, and then we will tweak as we need to execute. As far as the margin is concerned, and I'd love to hear Stephen's perspective on this, nothing has changed. What Stephen and I have been advocating, it's the same.
We envision ourselves to be a highly profitable med tech company on the Six Sigma side of profitability. Period. Full stop. This is why I brought up the issue of cost of goods on the next gen. This is why we're investing in next gen. We're not happy about where we are. We think we can do better. So what does that mean, Matt? I mean, we have to give Gerardo some time to really get his arms around this, and there's a lot ahead of us, so I have to give him that time to get his arms around this. Stephen, do you see it differently?
Yeah, the only thing I would add is, yes, we are making quite a few investments, especially in the R&D side.
But at the same time, we should start to see some leverage on the SG&A side because we've got that infrastructure that we've been building for many years now that's in pretty good shape. So maybe I'll just leave it at that.
Hi, I'm Mike Matson, Needham & Company. I just want to ask about this clinical adoption team. So is this something that you already have to some degree, and you're going to be expanding it? Are you going to have to go out and build this from scratch? And can you just talk about maybe the size of the team and any impact it would have to the cost side of the equation?
Sure. It's not going to be a big team. It's a nucleus team that drives adoption clinically, East, West, and Midwest, similar to the sales structure that we used to have.
Then we'll grow from there. The key here is not the size. It's the efficiency and the knowledge and the driving force of that team, which is the clinical evidence and clinical discussions. It's not a huge team. The big team we already have, which is the clinical adoption team and clinical specialists in the field. This is a team that can have and carry on the strategic level of the discussions with the customers, satisfy their needs, assess data, assess demands, move, and help move the needle strategically, commercially in the right direction. It's not a sales team. It's not a sales force.
Okay, got it. Then just maybe you can talk about your assumptions for pricing.
I mean, given the dollar amount, it looked like at least through 2028, you're assuming your kind of average revenue per transplant's flat, I guess, or similar to where it is now.
The prices you're charging on average. OCS pricing is not changing.
Okay. Over the next through 2028. Foreseeable future. For now. Okay.
I think it would be unwise to assume any change in the OCS pricing structure before the next gen platform hits. Again, we pride ourselves for not gouging the market. We let others do that. We believe in the fair pricing that we currently have to stay until we have something more meaningful, which I believe will be the first opportunity would be the next gen platform, which will be somewhere closer to the end of that horizon.
Okay. And then just one follow-up on that.
In terms of kidney, though, I mean, would kidney be at the same price, or would that need to be at a lower price? Because my understanding is very much different.
That's an excellent point. That's an excellent point. None of the assumptions that you heard, none of the $1.2 billion counts kidney. This is only heart, lung, and liver. Kidney will be at a lower price than the current price point. But remember, we have two kidneys per donor. So ultimately, when you factor in the two kidneys, maybe you'll end up with a similar price structure for the two kidneys. But definitely, kidneys would have to have a slightly lower price. We think the kidney will have a huge clinical value. So that's why we're going to fairly price it to deliver to price to match the value that we're delivering.
Thank you.
Great. Thanks.
Bill Plovanic, Canaccord. Two questions. One, in the earlier session, you didn't touch on the cold perfusion heart. I was wondering if you could touch on that. And then the dry run rate today in the future, and how does that impact margins? Does that get better or worse with new products? And then just lastly, does the OUS number that you showed, the 40,000, include kidney or not?
Sure. Sure. That's an excellent question. So three questions. Cold perfusion. We didn't bring up cold perfusion not because we shelve cold perfusion. No. We are a warm perfusion company.
We've always said we're going to develop a cold perfusion product to deliver for that small segment that's going to be left over after the big revolution we're going to have in heart transplant next year, the smaller centers that we'd want to use some form of cold technique with lower price point. That's not our priority. Plus, based on what we've seen from the data coming from cold perfusion from Europe, frankly, we're not excited about cold perfusion. So we think cold perfusion might have a role to play. We're still developing cold perfusion. The program is still active, but it's not a priority. We're prioritizing the warm perfusion because we think ultimately, if we succeed in achieving what we said we are trying to achieve, that opportunity will shrink significantly. But we will be ready for it if that doesn't happen. So as a fallback position. The second.
I was going to say, also, we're going to leverage a lot of the design learnings to the next gen OCS, the video you saw. A lot of that is leveraged from the cold perfusion design.
Yeah. The second piece is about the dry run. So actually, one shareholder kindly pointed out the issue around dry run, and it's going over a lot of non-clinical perspectives in the room. So let me be clear about what we talk when we talk about dry run and the 50% cost sharing that Tamer's talking about. There are two types of dry run. The biggest one, the one that impacts businesses like TransMedics that is driving huge volume in DCD, is the dry run of DCD donors' lack of progression, meaning that donor heart doesn't stop beating within the 30-35-minute window that is currently the acceptable range.
That is at 45% today, and that hasn't changed in the last two years. We've seen one quarter where it spiked, but then it normalized again around 45% for heart and liver, and let me address that and just build on what Tamer said, and Tamer, please add in from your perspective as well. When we say we share the cost of dry runs, let me be very specific. No dry run case. The centers do not get charged a dime for the technology. So what are we talking about? What we're talking about is the cost of service of our team that went out to evaluate that donor and the cost of logistics that we mobilized the team to get there. Today, these programs that don't use TransMedics logistics, they are liable for a full round-trip logistics bill to take them from New York to Chicago and back.
What we're saying is running it through NOP logistics network, that center, when we send them a quote, New York, Chicago, and back, if the DCD doesn't progress, we send them only 50% of that bill. That is a huge cost saving that no other company or entity or even logistics, transplant logistics partner can afford. That efficiency comes from our ability to manage the network that we've created, the leverage that we have in that network. That's the next piece, which is the service cost. So the service cost is $20,000, right? That's been our pricing since we launched the NOP. So today, centers pay for that cost.
However, Tamer has different commercial models that, with high users, high adopters, he can pass some cost savings there as well and let him describe them.
We have a sliding scale discount model that's tied to the monthly and quarterly transplant volume on OCS. So the more you do transplants, the more we share and give discounts on the clinical service side. So that's another program that we have ongoing with centers to, again, drive transplants, drive adoption, drive more cases.
The bottom line there is we do not want any center to shy from taking donor calls because they're worried about the cost to TransMedics. We would fail as a business if we allow that fear to materialize because we will not be able to achieve our big goal, which is increasing the transplant volume.
This is why we pursued that strategy from day one when we said, "Ask us to go NOP for every DCD. Don't worry about the cost. You're not going to be charged a dime." Because we knew that with our team, we're going to be more efficient. They're more knowledgeable. Their dry run rate will be capped. But the dry run for donor lack of progression, let me go back to this, will come down over time as we gain more confidence in the technology. And I repeat what Tamer said. As transplant programs gain confidence in the new next-gen technologies that we're talking about, they will become more and more comfortable not just leaving the room or telling us to leave the room at 30 or 35 minutes, but say, "Go to 40. Now I can assess the heart." Oh, the heart.
We know that with the new next-gen OCS, we can improve its functionality. Wait a little bit longer, and we're starting to see the leading edge of that. We can't really declare it's been solved yet. I think this will come with time. Once these next-gen programs are fully exercised, we'll see more and more of that, and that's where we gain some confidence that that 45% will drop down. It will never go to zero, but it will be a lot lower than 45%, which is where we are today. Chris? OUS includes kidneys. Oh, I'm sorry. OUS includes kidneys, yes, and these are based on the OUS geographies that publish their data. So this is not the entire world. This is just Europe, Middle East, Australia, and Canada. We didn't include the Far East. We didn't include South America because the data is not as readily available.
Chris, thanks. Chris Pasquale and Nephron. Two questions. First, just want to follow up on kidney. Even at half the price point of the existing system, my understanding is that it could still be a little bit tough given the current economics in that market. So are you developing this in anticipation of any reimbursement changes or policy changes affecting kidney? Or do you think that this system could be economically attractive even if nothing changes on that front?
We are confident that the economics of kidney will be palpable to the sole reimbursing agency in the U.S., which is CMS. CMS cares about two things because they cover 100% of kidney transplant in the U.S. One, to do more transplants. Two, that the patient doesn't go back in dialysis after transplants. That's what they're trying to solve for. Today, the rate of kidney discard is an all-time high.
It's approaching 40%. It used to be kidney used to have the lowest discard rate. Every kidney was to be transplanted. Today, it's like in the high 30%. So that's an alarming signal to CMS. The second is we know that DGF, which is patient going back in dialysis after kidney, is directly related to the ischemic injury to the kidney. So we're hoping that we will prove the case. We will price it fairly, and we will price it based on the clinical value that we're delivering to CMS. But there's a reason why. I mean, these are some of the challenges. There's a reason why we wanted to tackle that important market late in our growth trajectory to give us the credibility, the critical mass, so we can have these discussions with CMS and OPOs and the transplant program.
Thanks. And then on the logistics network, as you think about a future where you're doing 10,000-plus transplants a year, what does that entail in terms of the incremental investment in aircraft? You've talked about getting into the 20s and then kind of pausing. How should we think about a future where you hit some of these transplant targets in terms of what that's going to require for future investment and capacity?
That's an excellent question, Chris. I think the way we envision it is we are going to stop at having operationally available 20 aircraft, which means that we would need to own somewhere between 22 and 23 aircraft. So we don't run into the issues we ran into in Q3, which is having planes non-available or not available, airplane on ground, AOG.
Having two or three planes, always assuming to be down for some level of maintenance, is safe. The plan is to leverage these assets and sweat these assets. As the demand increases, we will obviously improve that we need additional aircraft. We will supplement that. At the 10,000 level, we envision adding somewhere between 10 and 15 more aircraft, but we're not going to make that decision anytime soon before we see significant volume increase. Frankly, until we see our ability to satisfy missions being compromised again, we're not going to acquire any additional aircraft. The other thing that we need to be sensitive to is, are we going to see a shift in the distance that we travel? Are we going to see a shift for transplant programs being more patient and saying, "Fine, use the same type of aircraft, the Phenom 300E"?
We're going to wait till the morning anyway." And I apologize for digressing here, but that's very important because if we see that behavior, we could build a fleet from one type of aircraft, which is a light jet, that is the same jet that we're operating today. If we don't see that dynamic, we might want to invest in super mid-range, which is one longer-range aircraft without stopping for refueling. A lot of dynamics that will depend on how the market is going to react. And that's why we want to stop our investment or temporarily pause our investment in fixed assets until we see that dynamic materialize. The volume increase and the confidence, the clinical confidence that would give us indication whether or not we buy the same type of aircraft or maybe invest in a longer-range aircraft. Josh?
Thanks a lot. Josh Jennings from TD Cowen.
I think Tamer mentioned just stoking some competitive fires between transplant centers in his presentation. And these transplant centers are competing for organs, for best clinical outcomes, and for surgeon talent. And I think you guys have done a great job kind of demonstrating the clinical outcome piece in terms of why transplant centers need to adopt and utilize TransMedics's offerings to drive better outcomes. I wanted to ask two questions. First, on surgeon talent. I mean, with the 76% rate of day surgeries in the liver currently for OCS adopters, have you seen in the field? We've heard anecdotally that some non-adopters have lost surgeons to other programs. There's such a quality of life difference when you're only doing day surgeries versus half of your surgeries being done in the middle of the night.
Is that occurring, and do you expect that to occur more robustly as we move forward over the next couple of years, especially as you move to day surgeries only for heart and lung indications? And one follow-up.
Josh, thank you for the question. Tamer, allow me to address the first part, and then please weigh in. Josh, I think it's too early for us to make that as this positive conclusion. What we're seeing, however, is the American Society of Transplant Surgeons are now talking more openly about surgeons' fatigue in the field of organ transplant. In fact, at the last ASTS session last January, January 24, there was a whole half-day session about surgeons' fatigue.
And I remember the past president of ASTS in his concluding remarks saying that the new generation of transplant surgeons are going to have it made because of the introduction of machine perfusion and allowing day transplant. But we're excited about it. I think it's more than just work-life balance. We think it's better medicine. It's better surgical procedure. It's better financial leverage for the transplant institution. And we believe because of all these factors, I think if we can deliver the technology that makes daytime surgery a clinical reality in heart and lung transplant, it will have the same catalyzing impact that we've seen in liver. I don't know. So competitive dynamic, Josh, if you don't mind repeating the question on that piece.
Just curious if you're seeing surgeon attrition at centers that have not adopted OCS, NOP, and the transplant logistics.
I haven't seen that.
I haven't seen that. Great. And then just on the organ, competing for organs and to grow volumes. You mentioned a Waleed earlier in your comments that OPOs are beholden to drive organ transplant volume growth. And by the end of 2025, they could lose their contracts. I wanted to ask about transplant centers. What's the dynamic there? I mean, is there a stake in the ground by HHS or just the efforts to restructure this transplant network just in terms of do transplant centers have a risk of losing accreditation if they don't grow their volumes to a certain level? And is there any time period around that? Could you remind us? Thanks.
Sure. Thanks, Josh. I think both are at play, Josh. If I remember correctly, the CMS final rule, they didn't just put the OPO as a focus.
They put OPOs that was the primary focus and then the transplant programs as well because to the OPO's defense, the OPOs are not responsible for transplantation. The OPOs just deliver the donors. It's up to the transplant program. So I believe both of them are being tasked to deliver growth and organ transplant. And the timeline that is out there in the public domain by CMS is by the results of 2025, the end of year 2025, is what the CMS is going to use to make their final determination on who stays in business and who doesn't. But again, we will have to see what will happen when it happens. We need to run our business completely independent of these kind of political dynamics. So, Allen.
Thanks, Allen, J.P. Morgan. I have one question longer term, and then I'm going to follow up as a bit shorter term.
But I guess starting with the longer-term one, when we look at lung, this was the first product that you came out with, but it's been a market that has been kind of continuously challenged. And when you were kind of talking to your presence in centers, high volume, middle volume, low volume, you didn't even include it just because it's been that difficult. So when we think about your target of 10,000 and getting beyond that, how confident are you that next year's kind of trials alone will kind of be enough to get you there? And what other kind of market development efforts do you think might be necessary?
Allen, that's an excellent question. And for us, we wouldn't be doing these programs if we don't believe that these programs are important to resurrect the lung market. We believe that we could reach 10,000 even without the lung.
But that's not something that we are saying we would do or something that would make us excited to do. We are doing the next-gen lung programs to resurrect the lung market. Why? Because we believe that we could double lung transplantation in the United States. If we can deliver technology that excites the clinical users and addresses their fundamental concerns. That's why I started these two clinical programs both for lung and heart with an honest assessment where the market is and where the lung. We were very transparent. They don't even think about EVLP. And it's not just OCS. It's EVLP in general. EVLP is just limited across the U.S. because of the concerns.
If we can prove to them that we have overcome these concerns, and yes, Suraj, I am very confident in our animal data, we are hoping that it will be hugely catalyzing to the lung program, but our confidence in 10,000, we can reach 10,000 with just liver and heart. Kidney is not included in that number at all, but I don't think that's not what we're saying. We're going to get there with three organs, and we're hoping that a year from now, we'll be in a similar setting, and we will show that the lung program had a huge catalyzing impact on lung transplantation.
As I mentioned before, I'm not worried about the gap of where we are today versus where we want to get because the in-between, what will bridge this gap, is the huge clinical outcome that we can deliver that doesn't exist today.
So there is no comparison now that we can refer to until that outcome is achieved.
Thanks. And then I guess the shorter-term question, when we look at that 20%-25%, we've seen this year, we've seen a little bit of market softness. It's impacted you. I'm sure it's impacted everyone else. And when we look at the transplant volumes, when we look at the updated guide for fourth quarter, you had a strong October, but then November kind of took a step back again. And we'll have to see where December plays out. But when we look at that 20%-25%, what does that assume for the health of the underlying market? And then a lot of your clinical trials, they're going to start benefiting you a little bit in the back half, but the indication expansion, that's obviously a longer-term story.
So what really gets you kind of reaccelerated as you wait for those really exciting catalysts?
So three things Allen. We're going to end this year somewhere between 75%-80% growth over last year. Okay? Wherever we are, it's like in the high 70s. Or if we do a little bit better, we could even hit 80%. Despite all these ups and downs in the background in the market, you've always heard me repeat the same thing. Please don't follow the monthly transplant volumes. They mean very little. The annual volumes is really where we focus on. That's why we never announce our total volume nor the penetration until year-end. I think what's been happening in Q3 and first month or second month in Q4 ultimately is going to be noise level.
I think we're going to end the year wherever we're going to end the year, and we're going to go back again and outpace the market at some level. Not necessarily maybe as we used to do before, but at some level. That's number one. Number two, you've heard Tamer, and that's part of the strategic part of the presentation today is we have already ingredients at play that he can leverage from leveraging the network effect that we've already established in the NOP to bringing the adoption rate, shifting the adoption rate from low adopters to high adopters or even middle adopters, mid-level adopter. And then the clinical programs will come in at the second half of the year and boost that up. So when we talk about 20%-25%, we're talking about an annual event.
And again, our expectation is we're going to continue to look at that as every quarter we report in 2025, and we will adjust accordingly based on execution. But we have a fairly high degree of confidence that starting at 20-25 range is the right thing for the business. We see a path towards that, but ultimately, we need to go execute it. And then we'll refocus if we need to up or down based on execution. But we're not sitting here accounting for, "Oh, November was soft, so next year is going to be soft." That's not how we do it. We look at the full year. We need to look at the full DCD penetration this year because we don't expect that to slow down. And also, there's a lot that we can leverage from what Tamer described.
Yeah.
As I said before, guys, looking at the quarterly and monthly transplant volumes, it shifts. It's variable. You'll see another improvement next quarter. You'll see picking up momentum the following quarter. Our job here is until we have the next gear programs picking up is that we bridge this gap with what we have in hand. We have the strongest clinical data. We have the most experienced team in the field, best technology, and the only unique national logistics and clinical network. So with all these ingredients, we can bridge the gap and wait till the next gear, showing growth between now and next gear picking up.
Dave Rescott with Baird. If you do some back-the-envelope math on the 3,600 U.S. transplants you called out on the slide for this year, it looks like it's a 54%-55% volume growth.
Maybe revenues for disposables or products are up 50 or so, and so there is a gap between that, which suggests some pricing pressure maybe on the disposable side, so wondering if that math is right, and if so, why that's the case.
No, I think the difference is the logistics revenue has grown at a much faster pace than product revenue this year,
and are logistics revenue baked into product revenue or into service?
Into service. Logistics into service.
Okay, so my second question, I guess, is more on the gross margin side than longer-term. You talked about the potential for next-generation products to have a benefit on the COGS side. My guess is more so on the disposable or the product revenue segment. Obviously, the margins you have on the product side are probably best that you can see maybe in med tech.
And the biggest lever, the bigger lever, is more so on the service side. So is there anything with the next-generation products that help you expand the gross margin line on the service side, or is that more baked into increasing utilization of the planes that you plan to bring on? Thank you. Yes. And I would leave it at that.
Well, I mean, also, Waleed already talked about the next generation having automation and remote control, so you don't need as many clinical specialists because today we have a clinical specialist with every transplant. You won't need that in the future with the next gen. We've already said that. Yes.
Hey, Waleed, you and Tamer have been very consistent on NRP. And I'm paraphrasing your comments were like, "NRP is going to die on the vine."
That was not my comment. That was his. I'm just kidding. Mine.
Fair enough. Throw Tamer under the bus. Okay. So Waleed, you go out in the field, right? The clinicians have a certain viewpoint on NRP. And the data point Tamer presented in one of his slides is 50% utilization with NRP. It gets lost in the weeds, but that's an important point. Help us understand what is going to resolve the situation here in terms of NRP, whether it goes ahead or it dies on the vine.
Sure. So my view is NRP and Suraj, you and I had this conversation before, but thank you for asking the question. It's a very important question. We have no issue with NRP for liver. Zero. Because we can take livers today. NRP and OCS is not mutually exclusive. So NRP could continue for livers because we take livers today after NRP. We don't think the premise of NRP was one.
It's cheaper than OCS. I think what Tamer is showing you, that's fiction. Fiction. Whether OPOs or transplant programs are personally vested to continue to do NRP, by all means, head of the class. Let's keep wasting your money. But the transplant programs want to double down on OCS. And we will continue to do it. I think ultimately, what Tamer meant to say is rather than dying on the vine, ultimately, these economic data that he shared with you is becoming more and more familiar. Okay? And this notion that I can do 100 NRP for the price of one OCS is not real. It's just a facade. Okay? And it's propagated by people who are making money on NRP. Okay? That's one. Number two, the utilization rate. And whether it's 50% or 55% or 54% or whatever the utilization rate is, OPOs cannot afford to lose organs.
OPOs are asked to increase your utilization. That's why many of the large volume OPOs or mid-volume OPOs come back to us and say, "We tried this NRP thing, and it's not working. We need to work with TransMedics." That's what Tamer is saying, that the NOP network gives us the ability to help OPOs overcome the challenges of NRP with a much more seamless, more cost-effective treatment called the OCS NOP. By the way, the way NRP is run today, as Tamer said, and in many of the calls you've been to, you've never heard that after NRP, these livers have to be preserved on a preservation method. God help us if they're doing back to base. They need to get cold technology to bridge the gap between NRP.
When they get to the center, they put it on the warm perfusion platform and then stack up or stack up on cost. So it doesn't make any sense, Suraj. It's a nice concept that is not scalable. Thoracic NRPs are a completely different ball of wax. I said that's a surgeon-driven phenomenon. We got to let them do it. It's not scalable. And now it's not scalable. They've admitted it's not scalable. It's a localized type of things in two areas in the country or maybe three areas in the country. So be it. We have 75%-76% of DCD hearts. We're happy. So the net question is maybe it doesn't die on the vine. Maybe it stays on the vine. Maybe it withers on the vine. It doesn't really matter for us.
It doesn't impact us one bit because the cost issue is going to catch up. The outcome issue is going to catch up. And that's what Tamer meant to say, that ultimately, they're going to come back to the OCS. And if they don't, the center is going to demand that after NRP, bring me back the organ and OCS because I want to protect that organ from ischemia. And we've done few livers that way. The data is still too small to really make a determination should we continue to do it or we stop. But we're seeing the market dynamic completely different than the calls that you've been a part of. I mean, we've been dealing with NRP for a good portion of 14-16 months. So this is not a new phenomenon for us.
Waleed, finally, in terms of you'll have laid out a really good roadmap long-term for growth and sustainability of your technology and iterations thereof. I guess you can see everyone is pretty hung up on the short-term, right? So maybe just help people understand. Was Q3 a blip in terms of share gains? If it was a blip, help us understand what all do you think we should be watching besides the numbers? How do we get confidence again that you all are going to start gaining more and more share? Because the math that Stephen did conservatively for 2028, you stripped that out. I mean, you're talking about at least 35%+ share gains on the conservative side. So just walk us through how should we get the confidence back?
Sure. Suraj, two-part. I have always said Q3 is a blip. I said that on Q3 call.
That hasn't changed, and it is a blip. How do you gain confidence? The only way I can convince you is by execution. We have to put points on the board, and we still have three more weeks in the year. We'll report the year-end results, and we will be right or wrong. It's only execution that can gain confidence. Me telling you I feel good doesn't matter really. It's all about our ability to show again that we are growing at a healthier pace than the market is and prove yet again that looking at the monthly transplant volume sometimes doesn't really translate well to our business. It's only by execution.
Justin Wang with Morgan Stanley. I just wanted to quickly expand a little bit more on the Uber-like digital system launching next year.
Can you provide a little bit more color on how you expect this to catalyze growth and what 2025 guidance assumes in terms of potential incremental contributions on this front? Additionally, do you expect any margin expansion from this sort of launch? Thank you very much.
Thank you. We're assuming zero impact for the guidance or the preliminary kind of framework that Gerardo mentioned. All of our assumption is based fundamentally on existing network effect, pulling low utilizers to high utilizers by engaging with them with an upgraded adoption team, not an expansion or not a replacement, just an upgraded quality of engagement with the accounts and just continuing to educate them and being patient until the next-gen clinical programs lift up in the second half of the year.
We are excited, however, about the digital ecosystem because, again, it gives us more opportunity to be more integrated into the fundamental workday of the transplant program. Every member of the transplant team will be conducting their work as a member of the transplant team, whether it's the transplant coordinator, the transplant administrator, the transplant surgeon, or the transplant nurse that are on call at night waiting for the organ. All will be using one platform. And the more they get integrated into this, it gives us a little bit more stickiness into the account. They literally will be doing their day work on our platform. And that's something that we're very excited about. I think it will have a longer-term impact, but it's not something that we're counting in the 25 assumption.
Yeah, but none of our elements really has on its own a linear impact.
As you heard Andre and Stephen saying, this is a toolbox. This is a band of instruments that plays together in synchrony. So clinical with logistics with now digital that makes the life of the customers, the transplant surgeons, transplant teams much easier, which helps drive adoption. You can't quantify it and say, "Yeah, we're going to get 10% to 20% to 50% increase in revenue because of that." Never this way. But it definitely makes progress and adoption softer and easier to achieve.
Any more questions?
Six minutes above time.
Okay. One more time.