Prepared remarks
Greetings. Welcome to ClearPoint Neuro, Inc. Fourth Quarter and Full Year 2024 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference call is being recorded. Comments made on this call may include statements that are forward-looking within the meaning of the security laws. These forward-looking statements may include, without limitation, statements related to anticipated industrial trends, the company's plans, prospects, strategies, both preliminary and projected, the size of total addressable markets or the market opportunity for the company's products and services, the management's expectations, beliefs, estimates or projections regarding future revenue, results of operations or the adequacy of cash and cash equivalent balances to support operations and meet future obligations.
Actual results or trends could differ materially. The company undertakes no obligation to revise forward-looking statements for new information or future events. For more information, please refer to the company's Annual Report on Form 10-K for the year ended December 31, 2023, the company's Quarterly Report on Form 10-Q for three months ended September 30, 2024, both of which have been filed with the Securities and Exchange Commission, and the company's Annual Report on Form 10-K for the year-ended December 31, 2024, which the company attempts to file with the Securities and Exchange Commission on or before March 31, 2025. Although the company's filings may be obtained from the SEC or the company's website at www.clearpointneuro.com. It is now my pleasure to introduce Joe Burnett, Chief Executive Officer.
Thank you, Sherry, and thank you to all of the investors and analysts today joining us on today's call. This is an important and truly exciting moment in the history of ClearPoint as we enter the next phase of the company. This is a phase that we refer to as Fast. Forward. Successful companies continuously evolve as they mature. We at ClearPoint started first in the Discovery and Design phase, working alongside neurosurgeons and biopharma partners to identify the tools required to build an ecosystem suitable for the future of cell and gene therapy. Once that roadmap was created and confirmed, we graduated into a more foundational phase. Over the past few years, we've built the tools and the infrastructure necessary to not only gain regulatory clearance for the products in this drug delivery ecosystem, but we also put the people, the processes, and the capabilities in place to attract hospital customers and very sophisticated biopharma partners alike.
From a product standpoint, we successfully launched new MR navigation systems, operating room navigation systems, drug delivery technologies, laser therapy and access products, and preclinical and clinical drug discovery services, driving both our revenue growth and customer adoption of the ClearPoint ecosystem. From a structural standpoint, we added a new manufacturing facility, global regulatory clearances beyond the United States, a sound quality system capable of welcoming routine pharma company audits, an IP portfolio of more than 100 owned and licensed patents safeguarding our inventions in multiple countries, a biopharma partner base of more than 60 customers and more than 100 activated ClearPoint centers around the world. Here in 2025, we enter the Fast. Forward phase, which is where we put that foundation to work and build a thriving scalable business on top of it. Fast. Forward has three primary commitments that we are making as an organization.
First, we will extend our lead in cell and gene therapy delivery by leveraging our complete and unique drug delivery ecosystem, including navigation hardware, predictive modeling and monitoring software, Cannula based routes of administration, preclinical and clinical drug discovery services, and clinical case support. We will use this ecosystem to support our more than 60 active biopharma partners in their path to regulatory clearance and eventual commercialization. Second, we will evolve our portfolio to focus not only on accuracy and precision, but also on fast, simple, predictable workflows. These new product launches are designed to increase hospital efficiency and throughput and to create capacity for the significant demand that we believe is coming when patients learn that these new restorative therapies have proven effective. And third, we will expand our global installed base to enable more patients around the world access to the ClearPoint system that will be used for these novel treatments.
Let's remember the first of these cell and gene therapies is already commercially available in the United States, European Union, and Brazil. And there is the potential of additional approvals in the next two years for much larger patient populations. There is no time to waste and the time to Fast. Forward is now. And like any successful team, we not only look to the ground ahead of us, but we also look to the horizon as well. We have already named the aspirational phase of ClearPoint that follows in the years ahead a phase that we call Essential. Everywhere. The Essential. Everywhere phase will begin when our 60+ biopharma partners not only have clinical success, but commercial success and start to achieve full market release across the more than 20 disease indications for which potential therapies are enabled by ClearPoint technology. It is crucial to note as seen with the very first approval here in the United States and Europe, we believe these drug platforms will continue to be co-labeled with ClearPoint technology, making us an essential vendor and relationship for any hospital that wants to be a regional treatment center delivering these cell and gene therapies to their patients.
And because our products are co-labeled with the drug, we will not only be an essential vendor to hospitals, but we will continue as an essential supplier to biopharma partners. These partners will want to control the delivery of their drug within the ClearPoint ecosystem for decades. If the drug can only be delivered using ClearPoint technology, well then we have 60+ biopharma partners, including some of the biggest pharma companies in the world that will want and need to see ClearPoint succeed. There are billions of dollars being spent developing these new cell and gene therapies each year and any commercial success will move the entire new and transformative market forward. Our biopharma partners will all benefit if ClearPoint can build this global ecosystem including consistent navigation, consistent infusion technology, consistent software monitoring, consistent quality case reporting, and consistent in-person clinical support.
To ensure quality, we want every drug infusion to be the same, akin to a lean manufacturing line set up at hospitals all around the world, delivering the exact same quality to every patient, essential and everywhere. With that backdrop for context, I will now turn the call over to Danilo, our CFO, to close the books on 2024, after which I will provide additional commentary on what we expect in 2025 and beyond as a part of our four pillar growth strategy and our next phase Fast. Forward.
Thank you, Joe, and everyone for being here today. Let's begin by reviewing our full year 2024 results. ClearPoint Neuro total revenues were $31.4 million for the year ending December 31, 2024, representing a 31% increase from $24 million in 2023. Our revenue comprises three areas: biologics and drug delivery, neurosurgery navigation therapy, and capital equipment and software. Biologics and drug delivery revenue, which includes sales of disposable products and services related to customer-sponsored preclinical and clinical trials utilizing our products, increased 27% to $17.3 million in 2024 from $13.6 million in 2023. This growth was mainly due to higher product sales as our pharmaceutical partners progressed with their development programs. Neurosurgery navigation revenue, derived from sales of disposable products and services related to the ClearPoint system, grew 21% to $10.3 million in 2024, driven by an increased installed base and the launch of our Prism Laser system and SmartFrame OR solution.
Capital equipment and software revenue, from sales of ClearPoint reusable hardware and software and related services, was $3.8 million in 2024, reflecting a 107% increase from 2023 as we expanded our installed base. Our gross margin for 2024 was 61%, up from 57% in 2023, primarily due to lower costs associated with our new manufacturing facility and higher volumes. Research and development costs reached $12.4 million in 2024, compared to $11.7 million in 2023, a 6% increase. This rise was mainly due to higher personnel costs, including a share-based compensation expense of $1.2 million because of increased headcount, which was partly offset by a $0.5 million decrease in research costs from reprioritizing certain initiatives. Sales and marketing expenses totaled $14.5 million in 2024, up from $12.6 million in 2023, a 15% increase driven by higher personnel costs and travel expenses, though partially offset by a decrease in other marketing activities.
General and administrative expenses were $12 million in 2024, compared to $11.8 million in 2023, reflecting a 2% increase mainly due to higher personnel costs and increased rent and occupancy costs related to our new Carlsbad site, despite a decrease in the allowance for credit losses. Our net interest income for 2024 was $0.9 million. Moving on to the fourth quarter of 2024, total revenues were $7.8 million, a 14% increase from $6.8 million in Q4 2023. Biologics and drug delivery revenue rose 4% to $4.2 million in Q4 2024, driven largely by a 74% rise in product revenue, though it was partially offset by a 12% decline in service revenue. Neurosurgery navigation revenue grew 43% to $2.9 million in Q4 2024, up from $2 million in the same quarter of 2023. Capital equipment revenue was $0.6 million in Q4 2024, slightly down from $0.7 million in the previous year. Gross margin for Q4 2024 was 61%, compared to 59% for the same quarter in 2023.
Operating expenses for the fourth quarter were $10.4 million, compared to $8.7 million in Q4 2023, primarily due to increased headcount and share-based compensation. Regarding our cash position at the end of December 2024, we had cash and cash equivalents totaling $20.1 million, down from $23.1 million at the end of 2023. This decline was primarily due to our operating cash requirements. Our operational cash burn in Q4 2024 was $1.4 million, consistent with both the prior year's fourth quarter and the third quarter of 2024. We remain focused on resource allocation and cash management while carefully overseeing our operating expenses. In 2024, our operational cash burn reduced to $9 million, a 35% decrease from 2023. We plan to continue managing our expenses with discipline. In March 2024, we completed an equity offering, generating net proceeds of $16.2 million, which strengthened our balance sheet and allowed us to fully retire our outstanding debt, leaving us debt-free as of December 2024. As of December 31, 2024, and currently, we have not issued any shares through our ATM facility.
Thank you, Danilo, for helping us close out 2024 with a strong financial performance and achievement of many of our key factors for success. Now let's look ahead to 2025. As mentioned before the next phase of ClearPoint we have named Fast. Forward and we will present how this next phase will be deployed across our four pillar growth strategy, starting with pillar number one biologics and drug delivery. Our Fast. Forward theme for biologics and drug delivery is to extend our lead. We believe that we are already the premier neuro cell and gene therapy delivery partner to more than 60 active biopharma engagements. This first position is built upon our unique and complete ecosystem of complementary technologies, our clinical solutions, and our significant regulatory experience that is more than 10 years in the making. When this market was still in its infancy, we were investing. This investment has led to a product portfolio that is headlined by the SmartFlow Cannula, which has been granted FDA de novo authorization for delivery of the first and only gene therapy that is administered by a direct infusion to regions of interest in the brain.
This head start is significant and has allowed us to build a competitive advantage making it very difficult to follow or to catch up. This competitive advantage is multifaceted and includes not only intellectual property but also global regulatory clearances, a mature quality system, demonstrated manufacturing audit readiness, and a complete medical device dossier created over more than a decade and available to regulatory bodies worldwide. This combination of assets gives any of our 60+ pharma partners the ability to use a known entity when preparing for an IND all the way up to a BLA or other formal product approval submission. Furthermore, the drug development team and capabilities that we have built allow all preclinical and bench top studies performed with a new drug to effectively mimic any human deployment because of the continuity of the technology and the team in both settings. When the FDA asks as part of an IND review what is changing between preclinical testing and human clinical trials, it is always preferred to have as few changes as possible and our ecosystem enables exactly that.
To-date, seven of our partners have already been selected to some form of FDA expedited review across multiple small and large indications including AADC, Huntington's disease, Parkinson's disease, epilepsy, and dementia. In a best-case scenario, some of these larger indications could potentially be approved as early as in the next two years. This is a lead that we do not intend to lose. In 2025, we expect to extend this lead with multiple new initiatives and factors for success. First, we expect our partners to continue to initiate and execute new clinical studies either as part of the FDA Fast Track designation, RMAT process and/or prior to review or in preparation to submit a new drug for expedited review. In 2024, there were 10 clinical studies initiated that we expect additional first-in-human infusions here in 2025 as well as more partners progressing through the regulatory process.
Second, we will continue to develop and validate new technologies that will be used in these studies, sometimes as test devices themselves, which we believe can then be granted clearance in parallel to the drug and co-labeled for delivery as such. These would include anything from new predictive modeling software, infusion monitoring and confirmation algorithms, and even totally new routes of administration delivery devices that would include mechanized infusion controls. In many cases, our pharma partners are co-funding the development of these delivery tools so that they may be included in future submissions and likely co-labeled as well. Third, we will execute additional long-term strategic agreements with our pharmaceutical partners to monetize our relationship beyond simply product sales. To-date, these have included milestone payments, co-development revenue, royalty revenue, and agreed to commercial pricing once the drug is approved.
Again, if our technology is co-labeled with the drug, we believe that we will be essential to the delivery of these drugs. As a result, partners desire long-term agreements for that assurance of supply, which we are happy to contractually provide. And finally, in 2025, we expect to add additional capacity and GLP capabilities to our preclinical team, so that we can participate in larger and more complex FDA required studies. We believe we could start preparing for these larger studies or GLP studies sometime in the second half of 2025 with more meaningful revenue in 2026. If you take the commercial use of cell and gene therapy out of the picture and only consider preclinical and clinical trial revenue for ClearPoint, we believe the potential market that exists today is approximately $300 million annually, of which ClearPoint currently has less than 10%. This expanded facility and GLP capability will allow ClearPoint to compete for a significantly larger portion of that $300 million market than we do today.
Now let's move on to discuss our device business, represented by our second and third growth pillars, neurosurgery navigation and laser therapy and access products. For these pillars, our Fast. Forward theme is to evolve our portfolio to focus on fast, simple, predictable procedures. We will do that through multiple new product introductions here in 2025. Historically, ClearPoint has offered a relatively niche technology. Our MR guided navigation system was unique and arguably the most accurate tool available. This will always be a part of our portfolio as it lends itself perfectly to many drug delivery applications, single room laser therapy procedures, and complex deep brain stimulation and biopsy procedures. Fast. Forward to 2025 and our portfolio will evolve. We will no longer be limited to the most complex procedures but gain access to the rather routine mainstream procedures as well, and we will do so in an environment much more familiar and friendly to neurosurgeons, the operating room where procedures will be guided by CT and not directly with MRI.
First, we will achieve full market release for the ClearPoint 3.0 Software, which just recently gained FDA clearance just a few weeks ago. This software workflow mimics the ClearPoint MRI workflow for consistency in both surgical arenas and also leverages the same disposable components, making inventory management easier for the hospital and enabling scale inside of our factory. We have already performed multiple procedures in the first month across different centers with consistent feedback from surgeons that this is a winning product for ClearPoint. Our initial cases, as in our FDA labeling, have shown sub-millimeter accuracy to the planned target. Furthermore, our initial case times have been significantly faster than typical MR guided procedures for these more routine targets. In multiple examples, these were cases that ClearPoint would not have been used in the past because either the MR was not available or the patient had an implant that made MR navigation impossible.
Furthermore, a crucial part of this product strategy is that we are no longer dependent on any third-party navigation in the operating room as we were before. We can do an entire procedure from start to finish with only the connection to the CT scanner and do not need optical navigation for these routine procedures. Second, we plan to also achieve full market release for the Prism 3.0 Laser therapy software, which incorporates multiple enhancements. One important feature enables background imaging transfer for when our Prism Laser system is used without ClearPoint navigation. This allows us to better compete with existing laser manufacturers by enabling our laser system to fit seamlessly into the hospital's existing workflow and not have to completely switch over to ClearPoint navigation from the start. The hospital can then benefit from the Prism features like non-cooled applicators, fast refresh rates and multi-use fibers and experience our mantra of fast, simple, predictable ablations in tumor and epilepsy, but not have to totally change their navigation preference.
We can work to win them over to our navigation system sometime later down the road. Third, we expect to receive FDA clearance in the second half of 2025 for the 1.5 Tesla regulatory labeling for Prism. As a reminder, we only compete today in less than half of the laser ablation market because we only have regulatory clearance on three Tesla scanners. Once we achieve 1.5 Tesla labeling, we can access and compete in the entire U.S. laser therapy market. We plan to add additional geographies outside of the U.S. in the future as well. Finally, we have also completed the development of the Velocity Alpha MR Conditional Power Drill in collaboration with our partner Adeor and the FDA submission has been completed for regulatory clearance. This pneumatic power drill, which spins at 75,000 RPM, will significantly reduce cranial access time for these minimally invasive procedures by replacing a manual twist drill; another perfect example of our fast, simple, predictable mentality for 2025.
We believe that the combination of the cranial neuro navigation, laser therapy, and cranial drill markets represent approximately $200 million in annual opportunity and once again, ClearPoint currently represents less than 10% of this available market today. These 2025 product launches will enable share gain and scale within our existing customers as we expand into the operating room, into laser therapy, and intracranial drill access to drive same-store sales. All of the technologies we just spoke about not only provide a meaningful growth opportunity for ClearPoint and a clear path to cash breakeven, but also they very much support the future of cell and gene therapy in two fundamental ways. First, the delivery of fast, simple, predictable products will increase hospital and surgeon capacity to help clear the way for the influx of cell and gene therapy patients in the future. And second, the software will be almost identical across all of these use cases, meaning every case at a hospital that is done with ClearPoint in the operating room today is a way to practice and get familiar for drug delivery cases that may be in the MR or the operating room in the future.
Hospitals are always looking for scalable technology, so that when they invest not just their money but the time of their staff to learn something new, they want to make sure that that investment is worth it. ClearPoint can now provide an MRI and operating room flexible workflow for DBS, laser, biopsy and other stereotactic navigation today and also provide a training ground for drug delivery in the future. We feel this investment is very much worth it and as it helps every hospital prepare for this new cell and gene therapy future that is coming. Now let's turn our attention to our fourth growth pillar of achieving global scale, a topic that is hand-in-hand with our 2025 Fast. Forward strategy to expand our customer base. In 2024, we saw significant progress as we activated 25 new global customers, which was more than 3x our historical average. There were many other key factors for success that the team accomplished, including changing our European Union Notified Body, receiving EU MDR certification on our first product, performing our first clinical cases without direct in-person clinical support in the operating room, expanding our gross margins and achieving a 35% reduction in operational cash burn.
We believe we demonstrated how fast our company can create operating leverage based on this existing infrastructure and foundation that we have built. In 2025, that progress will continue. We expect further site activations of between 15 and 20 global sites that have a strong funnel of interested customers that are already in the capital acquisition process. This demand will be driven by the flexibility of the ClearPoint 3.0 in the operating room, the meaningful workflow advantages of our Prism Laser therapy system and Velocity MR Drill, and by accelerated interest in cell and gene therapy where hospitals want to start using the ClearPoint system today to gain workflow proficiency in preparation of clinical trials and later commercialization. We are pursuing additional global regulatory clearances and have started the process in Japan, Canada, Hong Kong, Taiwan, and others. We will continue to gain scale as the majority of our hiring needs will be field personnel to support clinical cases, preclinical personnel to support GLP expansion, and operators to not only build product, but to participate in manufacturing automation studies to continue our path to 70% gross margins in the years ahead.
As a company, we expect 2025 revenue to be between $36 million and $41 million, representing growth between 15% and 31% for the year. The largest driver of that range being the timing of our preclinical GLP expansion and what months those services become available. These new product launches will fuel meaningful growth in 2025 and beyond as we increase our share in an existing $500 million market and prepare to play an essential role in the cell and gene therapy market that we believe one day will represent a multi-billion dollar opportunity for ClearPoint. This is an incredibly exciting time for our employees. It is both substantial and symbolic when you all graduate together from one phase of the company to the next. We are thrilled that we will be an important and essential contributor to these new cell and gene therapies futures and that future is a lot closer than you might think. With that, I would like to open up the call to any questions.
Questions and answers
Thank you. Our first question is from Frank Takkinen with Lake Street Capital Markets. Please proceed.
All right. Thanks for taking the questions and congrats on all the progress. I was hoping to start with some of your comments...
Thanks, Frank.
Yes, for sure. I was hoping to start with some of your comments around some of the fast-tracked assets that your partners are now advancing in the next couple of years versus the previous expectation for after 2030 with uniQure and BlueRock. Can you maybe kind of size up those opportunities and then extend that to how impactful that can be to ClearPoint from a revenue perspective?
Yes, I'm happy to. So it's really been nothing but good news that we've seen from these expedited processes from the FDA. And the highlight we've seen over and over again has really been flexibility that's disease specific. So for example, one of our partners, uniQure that got some positive feedback from the FDA. The clinical trial strategy is vastly different than other examples like Neurona or like BlueRock that have different disease indications and therefore different strategies to get these drugs approved. But the most consistent thing has really been the simplification of the clinical strategy and the reduction in patients required, which also leads to a, of course not to steal the Fast. Forward term, but a fast forward of the potential approvals of these drugs as well. If you can eliminate a Phase 2 study, for example, you could be saving two, three, maybe even four years off of that timeframe.
So I think that's good news. We've actually uploaded or will be today uploading a new corporate presentation as well that'll provide a little bit more detail. But the important question I think you're asking this Frank is, how meaningful could this really be to ClearPoint and how quickly. So I already made the comment that it's possible that one or maybe even a couple of these drugs could be approved sometime in the next two years, kind of give or take based on the best information we have. If you look at these disease indications that we're talking about that are in expedited review, there's kind of five that highlights been highlighted. So AADC, Huntington's disease, Parkinson's disease, epilepsy, and dementia, Frontotemporal dementia are the five that are included in those Fast Track designations. There are more than 2 million patients in the United States alone that are living with those disorders.
So just to put some scale in place, if just 1% of those patients were treated, not even enough to dig into the number of patients, this is less than the new patients that are diagnosed each year. Just 1% would lead to approximately, at our current ASVs approximately $250 million in added revenue at more than 70% gross margin. So all of that in addition to kind of our structural growth rate that we see today. So obviously, we would be an incredibly profitable company if that type of scale were to take place. And we believe that these therapies again are designed to be restorative, so not masking a symptom, but potentially curing or restoring some of the function that's been lost. If that's really the case, I can't imagine there would only be 1% of patients that would chase down this therapy and ensure that they're a candidate for it. So that's kind of the scale that we're talking about.
Got it. That's helpful and appreciated all the comments about continuing to build out the global footprint of active sites. I think you mentioned in your prepared remarks 15 to 20 activations this year. Is that the number that you think you scale to and kind of plateau at that number, and that's enough to service the market or maybe ask a little differently, how many sites do you need to be able to service some of these opportunities coming down?
Yes, I mean, I think if you look in the U.S., there's probably about 250 hospitals that are capable of doing these complex procedures. I come from a cardiology background and we were calling on 2,000 hospitals, for example, that have cardiac cath labs. So it's a significantly smaller number of these sites. But I think that's a very, very good thing in the future. These are complicated procedures. The training and the support of the team and the drive by the hospital to work with the drug company, work with pharmacy. I mean, these are all very, very real complicated things that are not for the faint of heart. So we do not believe the best result is to go after 2,000 hospitals. It's more likely that we focus on 200 or 250 hospitals around the world. And then, as I said in my remarks, kind of turn them into these lean manufacturing lines where they're doing procedures each and every day, so that they get economies of scale, they get faster procedures, faster recovery, less anesthesia time, better results and outcomes long-term.
So we want to help facilitate that with these regional treatment centers. And if you think about the commitment we made maybe three or four years ago, we said by 2025, we want to be at 100 centers. We accomplished that. And we think in the next three years, if we can get to 150, that's going to be perfect timing to be able to insert some of these new commercial drugs that we hope to get approved by then into that network and into that infrastructure. So I think that 15 to 20 number is probably the right one. I think we'd probably top out worldwide, maybe at 300 to 400 hospitals. But that would all be driven by the success and the demand of these drugs in the future.
Okay. That's helpful. And then just last one for me. In light of all the Fast. Forward commentary, how should we think about this impacting operating expense for 2025 or the burn rate versus previous years?
Yes. It's a really good question, and it's one we put a lot of thought into as well. We wanted to prove to our team, to our investors that we do have the capability to sort of pull these different levers and focus on cash burn whenever we can. In light of these new FDA clearances that we've seen, or not FDA clearances, but new designations of expedited review, we really feel like we're onto something special. And we know that there are additional investments that we could make if we want to. So we're looking at each project and each training material and each clinical specialist that we hire to increase our own capacity, sort of in its own frame. So we're not committing to a full year of operational cash burn guidance at this point because we do want to evaluate each one of these opportunities. But we will continue absolutely to be very thoughtful with the cash that we have on hand, the $20 million that we've got to make sure that we're moving in the right direction and we're constantly growing the revenue faster than we're growing the operating expenses.
Okay. That's helpful. Thanks for taking the questions and congrats again on all the progress.
Thanks, Frank.
Our next question is from Mathew Blackman with Stifel. Please proceed.
Hi, guys. This is Anna on for Matt. Thanks for taking the question. I just wanted to ask a little bit more on the 2025 guidance. It's a pretty wide range that you've given 15% to 31% growth at the top and bottom end. I was just wondering if you could sort of walk through what's contemplated in that guide and what gets you to the top and bottom end there.
Yes. Happy to provide a little bit of color. And we have to remember we're still here in February of the year, so things change throughout the year. We want to be thoughtful and conservative where we can. It's important to kind of break it down into a few different comparison aspects to 2024. So if you think about, for example, I'll start with the thing that's the most predictable and those are the things that are in our control, right? They don't depend on drug companies, they don't pretend on biotech. It's really our core medical device business. And that's something that we do have quite a bit of confidence in, right? So if you think about it, I think in Danilo's report that that disposable business grew about 21% year-over-year. We expect that growth this year to be higher than that. So we think we'll grow faster than 21%. And that's of our core navigation disposable business, our laser therapy business, and our new cranial access business when that, that product gets approved, the Velocity Alpha.
So I think that'll be at least at the high end of that range and contribute very meaningfully. And again, those products have very strong gross margins as well. So that's a very, very good and important contributor. Similarly, we think the products that we sell to pharma companies will also be a strong grower. So this is when I'm talking about navigation systems that are used in clinical trials as our pharma companies are progressing through the regulatory strategy. These are the Cannulas that are sold for clinical trials and preclinical trials. So overall, our products grew 72% in 2024. I don't know that the total will grow that fast in 2025, but the total will certainly be higher than the upper end of that range. The two things that would maybe contribute to slower growth or what I would say is more uncertain growth are number one capital equipment that's really not that uncertain. The only issue is that in 2024, we had a very, very strong year.
I think we had 107% growth total, so more than double that capital business. We're not expecting a massive clip in capital sales again, especially as some of our customers are turning towards rental or pathfinder agreements, where it's more of a lease agreement. And we don't recognize all the revenue upfront. So that'll be closer to flat, if you will. We're not expecting a huge bump there. And then to the most important part of your question, which is this wider range, it's really driven by these preclinical services and how quickly we can scale and expand that facility. So it's kind of akin to, if you remember two years ago when we were closing down our Irvine facility and opening up our Carlsbad facility, we had some redundant costs and then we also had some distraction, if you will, right? If the same team is moving products and getting new regulatory clearances and certifications for a new facility, maybe they're not quite as focused on cost reductions and things like that.
So our margin took went from the 60s down into the 50s and now a year later, it's back in the 60s again, now that that transition is complete. We expect something a little similar here where our preclinical services might not grow as quickly as they have in the past, but as soon as we turn on the expanded facility and have those GLP capabilities, that's when that growth is going to return. And the biggest question for us is that, does that happen in June? Does that happen in September? Does it happen in December? So it's really that timing uncertainty is what's providing the biggest part of that range.
And our final question is from Anderson Schock with B. Riley Securities. Please proceed.
Hi, this is Anderson on for Kyle. Thank you for taking our questions.
Hey, Anderson.
So you had a really great year for new account activations at 3x the historical average. Was this mainly driven by the expansion of the OR, are there other drivers you would call out?
Yes, there are definitely multiple drivers at play. I would highlight three in particular. First, there is a strong interest from hospitals and especially from the chair of neurosurgery to acknowledge that the future of cell and gene therapy is approaching sooner than anticipated. If they want to engage with this, gaining access to a ClearPoint system to participate in clinical trials is a significant motivator for demand. We offer one of the most cost-effective solutions for hospitals to begin these procedures, making it a relatively modest investment to prepare for future developments. Second, our laser therapy business is contributing to expansion as well, although it's currently limited to the U.S. due to the lack of global clearance. We have a highly competitive laser system that facilitates collaboration between the hospital team and ClearPoint, which has proven to be an attractive advantage.
This factor is likely attracting new customers. Lastly, as you noted, the operating room is going to be a crucial part of our future. However, we did not see substantial activity related to this in 2024 since we were just starting out. Among the 25 sites activated in 2024, only four or five were driven exclusively by the operating room. Initially, we focused on customers already familiar with ClearPoint who were using us in the MR, allowing them to opt for both MR and operating room usage rather than approaching completely new customers without prior experience. Now that we have established ourselves and gained insights into the product's strengths, especially with the new 3.0 software that removes the dependency on third-party navigation, I anticipate that the mix of new sites in 2025 and beyond will show a greater proportion of operating room expansion. While the impact so far has been modest, I expect a much larger effect over the next few years.
Okay. Got it. Thank you. And is there any color you can provide on the new activations so far in the first quarter?
We'll probably hold that. What I would tell you is that the funnel is very strong. It's as strong as it's ever been and it's very much a global funnel. So it's sites in the U.S. that want to use us in the operating room. It's European sites, sometimes funded by pharma, that want to get our equipment in and there's some new geographies as well that we believe we'll have clearance for this year that will allow our very first installation in countries that we've never done an installation to. So we're seeing all three of those strategies progress here. And I mean, I'll kind of leave it at that, other than saying that we have already activated additional customers here this year and it's February 26. Well, thanks again to everyone joining our very detailed call today. As we hit the Fast. Forward button to build on the foundation that we've created over the past decade. This is an exciting time for ClearPoint and I can tell you that there is no place I would rather be as we are going to play an essential role in many patient lives. Thank you and please have a good night.
Thank you. This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.