Q2 2021 Profound Medical Corp Earnings Call
[music].
Good day and thank you for standing by welcome to the profound medical second quarter 2021 financial results Conference call.
At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need of press star 1 on your telephone.
The advice of today's conference is being recorded if you require any further assistance. Please press Star then zero I would now like to hand, the conference over to your Speaker today, Stephen Kilmer Investor Relations. Please go ahead.
Thank you good afternoon, everyone let.
Let me start by pointing out that the conference call will include forward looking statements regarding profound and that's perfect.
Which may include but are not limited to expectations regarding the efficacy of profound technology and the treatment of prostate cancer BPH uterine fibroids panel of the pain and osteoarthritis.
Often but not always forward looking statements can be identified by the use of words, such as plans is expected expects.
And Tim contemplates anticipates believes proposes or variations, including negative variations of such words and phrases or statements third and actions events or results may could would might or will be taken occur or be achieved.
Such statements are based on the current expectations of the management.
The forward looking events and circumstances discussed in this conference call may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company, including risks regarding the medical device industry economic factors, the equity markets generally and risks associated with growth and competition.
Although profound has attempted to identify important factors that could cause actual actions events or results to differ materially from those described in forward looking statements there.
There may be other factors that cause actions events or results to differ from those anticipated estimated or intended.
No forward looking statement can be guaranteed.
Except as required by applicable securities laws forward looking statements speak only as of the date on which they are made and profound undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information future events or otherwise other than as required by law.
For the benefit of those who are new to the profound story I would like to take a moment to summarize our business.
Profound develops and markets customizable and friction free therapies for the ablation of disease tissue.
We are currently commercialized and Tulsa pro of technology that combines real time, MRI robotically driven trends urethral ultrasound and closed loop temperature feedback control.
The technology is designed to provide customizable and predictable radiation for the ablation of the surgeon defined prostate volume, while actively protecting the urethra and rectum to help preserve the patient's natural functional abilities.
Tulsa Pro of CE marks and Canada.
Canada approved and 5.10-K cleared by the FDA.
We have also commercialized and finally and the innovative therapeutic platforms of the CE Mark for the treatment of uterine fibroids and power of the pain treatment of bone metastasis.
The only it is also being approved by the China National Medical products of administration for the noninvasive treatment of uterine fibroids and has recently obtained FAA approval under a humanitarian device exemption for the treatment of the Australia the osteoma.
While we do not expect this FDA hte approval to have a material impact on revenues and the near term and is a significant milestone for our company and we are making preparations for the U S. Commercial launch later in 2021.
On the call today, representing the company, our Doctor of Rune megawatt per pounds, Chief Executive Officer, and Aaron Davidson, The company's senior Vice President of corporate development with that debt I'll now turn the call over to Eric.
Good afternoon, everyone and welcome to our second quarter of 2021 conference call on behalf of the management team and everyone at profound I would like to thank you for your ongoing interest and our company for.
And for those of you who are shareholders. We appreciate your continued interest and support and we will.
Turn the call over to a run in a moment for an update on our commercial activities. However, before I do I'd like to provide a brief update on our second quarter 2021 financial results.
As a reminder, we have changed our presentation currency from the Canadian to the U S dollar the <unk>.
Streamline things and all of the numbers, we referred to have been rounded so our approximate.
For the 3 months period ended June 30 of 2021, and the company recorded revenue of $2.6 million up 156% from $1 million and the second quarter of 2020.
As we mentioned in today's press release, the U S. Tulsa Pro business rebound and it started in March continued through the second quarter, driving a 145% sequential increase and recurring revenue.
Total operating expenses and the 2021 second quarter, which consists of R&D G&A and selling and distribution expenses were $7.6 million and increase of 74 per cent compared with approximately $4.4 million and the second quarter of 2020.
Breaking that down further expenditures for R&D increased 99% on a year over year basis to $3.4 million and this was primarily driven by increased new and existing clinical trials increased spending for R&D initiatives and projects travel restrictions being removed.
Options awarded to employees additional head count and overall increases to general expenses, partially offset by decreased consulting fees.
G&A expenses increased by 49% to 2 and a half million due to additional head count increase salaries and directors fees.
Higher Nasdaq and TSS listings fees and.
Increased legal and accounting fees and options awarded to employees.
Finally, selling and distribution expenses increased by 74% to approximately $1.7 million.
Overall, the company recorded a second quarter 2021, net loss of $7 million.
<unk> 35 per common share compared with the net loss of $5.3 million or <unk> 33 per common share for the same 3 months period in 2020.
As at June 32021, profound had cash of $73.8 million with that I'll now turn the call over to Iran.
Thanks Aaron.
And as many of you know COVID-19, and negative impact and the beginning of 2020.1 what's the VR.
Not only for profound but across the U S Med Tech space.
That was followed by the late March rebound, which as Eric mentioned continued through the second quarter.
And our last call.
Focus my remarks on explaining why the disruption and Q1 had not translated into our being any less bullish on our business on.
On this call I would like to reiterate that.
In fact and a fee.
Few minutes I will share with you some real world utilization data that I believe really serves to underscore the tremendous opportunity that Tulsa represents.
But first.
Let me update you on our continuing progress and laying the groundwork to drive adoption of Tulsa Pro and the United States.
The first pillar of that is building and high quality U S installed base targeting 3 major types of end users.
Early adopters independent imaging center companies and opinion, leading teaching hospitals.
Each of the are expected to play different roles and supporting both short term and long term adoption.
Our early adopter Tulsa pro sites have continued to see a growing number and an increasing variety of patients.
With respect to the imaging Center company.
Net Liberty Pacific Westfield Center in Los Angeles is treating patients using Tulsa.
After initially experiencing delays related to COVID-19.
Midway through Q2, we also announced a U S multicenter Tulsa Pro agreement with acumen, which currently has 79 operating clinics in Florida and a total of 134.
Across its network and southern States.
We expect to install and Tulsa pro system and up to 10 acumen and men's health centers across Florida, Texas, and Pennsylvania over the next year or so with the first site anticipated to be operational and the fourth quarter of 2021.
Based upon the success of the first 10 installations, we hope to expand our relationship and the future to include additional acumen and centers.
Moving to the third type of end user.
As I highlighted in our last call. We now have agreements with renowned institutions like UCLA and Stanford Johns Hopkins.
The cancer Center, well spend advanced prostate cancer Center, Mayo, Jacksonville, and Mayo, Rochester, and GH Cancer Center, Ut southwestern Memorial Hermann and method of South and tenure.
That list continues to grow nicely and <unk>.
Fact, I'm pleased to report that in Q2, our team signed 6 additional new agreements with hospitals for installations later this year.
The price point of all agreement remains the same at 7000 and $710 or higher part patient.
To summarize the installed base status of Tulsa, and the United States.
Day, we have about 14 installs and 10 of those sites were treating patients in Q2, plus we have the enough contracts on hand for over 20, new installs over the next 12 months.
With the pond that we continue to anticipate approximately 25 installed several systems in the United States by the end of the this year.
As we saw previously doing initial limited commercial launch of Tulsa and Europe.
As U S physicians are becoming more confident with.
And accustomed to the.
And the technology there.
And using it and a wide range of patients.
We believe.
This confirms Tulsa pro's flexibility and suggests that the available market.
Large if not larger and are not what we parsed and vision.
Based on and utilization and Alistair.
Our confidence is growing the Tulsa will be adopted as of mainstream technology, rather than a highly specialized tool that can only be used and a small subset of patients.
Let me share some of the of raw patient characteristics data with you.
All of this come from the U S.
Total site component of all 3 and user types that actively treated patients and the first half of 2021.
86% of patients received ablation of greater than 50% of the processing.
63% received whole gland.
28% parcel of land.
6%, BPH, only and 1% solvents.
As an aside.
And as some of you know I personally make up part of that BPH group, having successfully undergone.
A few weeks ago.
Of the prostate cancer patients treated 11% were great group, 1 and our low risk.
53% were great group too.
Low intermediate risk.
28% of Great group, 3 or high intermediate risk and 8% were great group for 2.5 which is considered high all day high risk.
With respect to the size of Prostates treated.
75% or greater than or equal to 33 cc and.
And many were greater than 160.
To put that and perspective.
Especially with respect to Tulsa relative ability to become a mainstream treatment the VAT.
Majority of prostate cancer patients.
And.
Pretty much all prostate of BPH patients are greater than 30 cc.
Summarizing.
The analysis shows.
The Tulsa was used and all grades of cancer.
Ranging from low risk to the highest risk patients.
And the percentages of patients treated and those risk category roughly corresponded with that.
What we see and the real world with respect to patient population distribution.
In addition.
Recent publication on clinical outcomes of patients who have been treated and real world setting continue to show the pulsar patient.
Experienced minimal side effects, such as urinary incontinence or severe erectile dysfunction.
Coupling the too.
We have increasing confidence.
And that of all of the emerging technologies for prostate disease.
Outside of is the most flexible.
It can be used and the virus variety of prostate disease for customized whole or partial and treatment with demonstrated superior outcomes.
In order to maximize the opportunity that we see ahead of us.
There is no question that the successful execution of our reimbursement strategy will be key.
To that and.
And I mentioned in our last call.
We have initiated dialogue with relevant societies, including the American neurological Society and the American College of radiology to get initial feedback on the requirements to qualify for our CPT 1 application.
Based upon their feedback we continue to believe.
And that the clinical publications on the Tulsa procedure.
And the publications that we anticipate later this year will likely be sufficient to meet the requirements for the application by the end of this year.
If the adoption of Tulsa usage continues to increase as we anticipate.
And we may get the support that we need to file in 2022.
Our strategy is to not only continue to pursue the CPT 1 application with the combination of clinical data that already exists.
And that will likely be published by end of this year, but also.
Part of it.
Planned level of 1 study called Captain.
That will run in parallel with the filing of the CPT 1 application.
Okay.
While the Captain study is not a requirement to obtain the code.
Many further support coverage by insurance Payors and will also provide additional clinical data to support significant adoption.
The planned captain trial will enroll 201 prostate cancer patients across approximately 10 to 12 sites.
Patients will be randomized 2 to 1 to receive the Tulsa procedure.
Or a radical prostatectomy.
The primary endpoints will include safety and efficacy of.
The including measurements of side effects.
And non inferior progression free survival over time.
This trial.
We'll primarily be run in the United States.
And we continue to anticipate per.
<unk> recruitment to begin before the end of this year.
In the meantime.
<unk> 2 point of load continues to progress well and we anticipate that patient recruitment will be completed by the end of this year.
We also anticipate the 3 year data from the initial tact trials will be published later this year.
In addition, we are aware of 1 additional level to a study and.
And 2 additional level to be studies that will be submitted for publication later this year.
So to summarize.
Our team has been executing well.
We have been signing additional Tulsa pro site agreements and debt.
The increased pace over 2020.
We expect to install new Tulsa pro system at the rate of approximately 4 to 6 per quarter going into 2022.
With that accelerating once COVID-19 is fully behind us.
We're continuing to see broader Tulsa adoption, both in terms of procedure volume and types of patients treated.
Utilization data points to Tulsa of becoming a mainstream treatment and the U S.
Providing us with a large market opportunity.
And we're progressing Tulsa pro's reimbursement strategy.
By conducting additional studies.
To apply for a specific CPT code and ultimately a reimbursement determination.
This ends our prepared remarks for today.
With that we're happy to take any questions you might have.
Operator.
Okay.
Thank you as a reminder, if you would like to ask a question at this time. Please press Star then 1 on your Touchtone telephone to withdraw your question. Please press the pound key.
Our first question comes from the line of around how great, Yes, with Raymond James Your line is open. Please go ahead.
Thank you very much operator, a red and Erin. Thanks, so much for taking my question congratulations on strong results today.
And can I.
My first question is just sort of the.
The details a little more detail in terms of the new sites that you were talking about so you mentioned 14 installed.
And then treating and we.
We recognize that there are about 9 sites listed on the Tulsa Pro websites.
How do how should we be thinking about visibility on the.
The sites that are being installed as well as the ones that are coming online and then also with the you know the totaled 25 that you expect to come on line 2 and 3.
And the install through the remainder of the year.
Yes, so so.
I think the what we put on the Tulsa Peru.
The procedure of website.
Really those sites, where we have permission from the hospital of the remaining centers to be able to provide the name.
And public domain and.
And so there are certain sites, which we which we do not have permission yet so in some cases it can be a.
The leading indicator of cause some sites would like to put their name out. So they can start recruiting prior to even installation and to be honest and some sites. They have a pretty good start and the <unk>.
And then 2 sort of 1 of wait until they are treated 3 patients before they go there so.
I would suggest that we not look at that site as only.
And a leading indicator.
But as the site that were full commercial activity is taking place at this point.
And I did mention a couple of new names when I missed the number of of leading hospitals that are either signed up or are using the technology.
And I to be honest I think that it's a very impressive list and this early stage of our company and I think.
What I can tell you is and the second half of this year you will continue to see and we will be announcing as these hospitals come on stream.
Of the big name hospitals Big name cancer centers. So.
As you know, we sort of talked about the 3 channels. It's important for us to not just have only the leading hospitals, but the imaging center channels, where we get off to a good start with the 2.
Companies that we've signed up with and with early adopters and you will see additional early adopters also and you will see more sites coming on stream would be given the kind of the companies so to be honest clearly.
Hum.
<unk> used the word excited all the time or anything either.
Almost none of it use it but I'm pretty excited about the fact of we are really marching to the strategy that we put together and I think you will continue to see.
For the 6 new sites every quarter and that they will be.
Representing the full range of the 3 channels and we talk about.
Terrific, Thanks for and that's great clarity.
I guess my next question is this is the first time, you've really been talking about really broad utility of.
The device and initially talked about of course of course, the prostate cancer and the BPH and Thats all the patients, but and you really are talking about a much broader workhorse type of scenario here. So with those numbers that you talked about 60% whole, 20% partial et cetera, et cetera, when and when should we expect to see some of the data coming out of this 2 to illustrate everything that you would just talk.
And you know.
Yes, so as you know we analyze.
Everything to confirm that hey, what and where we are doing is actually producing the kind of the results that we anticipated and if theyre not to be able to adjust ourselves to fit fit.
Better.
Provide better execution so to answer your first question directly.
And we'll see additional publications that will be coming out within the next 6 months.
And which will include this broader variety of patient usage.
And we'll also see debt in addition to the capped and trial, we will announce additional smaller trials that will start focusing on the subset of patients because the data that we see we're.
Quite quite pleased to see that we are not only treating the full variety of the patients but the other part that we are seeing is debt.
Our patient population tends to be more and the larger prostate side, which are the more difficult patients to treat so.
If we can treat the most difficult patient suddenly we'll be able to treat the average.
Diseased patients and so I think.
The only that we then the sort of analyze this data of the last 18 months.
Feeling very comfortable that we can treat the full range of the cancer population and.
And a pretty large subset of the BPH population, but we're also finding comfort in the sense that patients who tend to be more complicated the largest of the prostate the larger the more complicated the procedure is and in fact, if you do and analysis on larger Prostates you will find the the side effects.
<unk> become even more critical and those larger prostates.
And we're delivering in fact quite phenomenal results with almost no side effects and larger prostate and that's really where the confidence is coming from and you will absolutely see this and publications and as we begin to unravel more and more of the data we will in fact support additional specific trials.
To make sure that our community urology community.
And as everything that they need to drive the adoption.
Great. Thanks, and then if you wouldn't mind the adult just 1 last question so given the broad and utility and now that you have such a 10 treating sites and also the the usual for our debt.
So for that of installed and coming out very soon can you speak to utilization rates that youre seeing.
Pacifically given the breadth of the breath of applications of the.
The application, yes. So good question, because we didn't have that in the prepared remarks, but.
Number 1 and certainly in the early adopters, we are seeing that the run rate. We've talked historically about 60, we originally thought it would be 40, but in reality it was pretty good.
And tell you that that number of 60 is increasing and those sites. So I think 6 months from now I anticipate that they'll be able to give you a number that will be higher run rate and 60 in those sites.
In the teaching.
Teaching hospitals, and what are the things I've talked about it.
Okay, and the guidelines that they provide the debt.
Debt or sort of.
Agreed upon in the Urology Department and they typically will not deviate from those guidelines and so for the Tulsa and.
The stores they have sort of developed and initial criteria of what type of patients they will be treating.
Hum.
And the beginning but I can only tell you that they are starting to broaden those in fact, and so I think that the rate with which is.
As we've talked about before and the teaching hospitals, we thought the first year will be sort of in the range of 30, 30 ish and maybe it will grow to 40.50 and the second year.
At this point I would anticipate that we will grow at a little bit better faster pace, even and the teaching hospitals and couple of indices and the hospitals. As an example are already doing keep 3 procedures and 1 day and as you as you know longer term our goal is to be at 4 procedures per day, but within the first 6.
Months, we're starting to see that at least a couple of the teaching hospitals are already at the 3 procedures per day also so generally.
I think that again, we want to be cautious, we don't want to over shoot or anything, but I would say generally speaking.
The utilization story is certainly continuing to be.
Better or at least as good as we anticipated and I think it is reflecting and the fact that between Q1 and Q2 you saw.
Pretty good increase and the recurring revenue dollars.
Great. Thank you so much of it and then.
Regulations on the on the quarter I'll go back and the thank you. Thank you. Thank you so much of it.
Thank you and our next question comes from the line of Josh Jennings with Cowen. Your line is open. Please go ahead.
Sorry about the that was on mute.
This is actually Neil on for Josh Thanks for taking the questions and good afternoon Neil.
How are you and congratulations on the quarter.
You talked to them about the the CPT reimbursement path can you maybe just.
Prevail the more detailed in terms of what the process looks like with those societies and I'm talking about.
Absolutely absolutely.
Part of the reason that it's an important topic is that.
1 of the things that we want to convey is that the.
We are off to a pretty good start from our perspective.
Hum in the with the current situation that we have but getting the CPT..1 is and remains a key priority for us so with the way the process has been working but we've had multiple meetings with both the American Urological Association and with the.
Great.
And our SMA, which is the radiology.
Location.
<unk> is the sister organization and.
We're meeting with the at the American neurological meeting is coming up the annual meetings coming up in September and Las Vegas. This year, we have another meeting planned with them and so what we're doing is we're keeping them fully abreast of the progress that we're making the clinical data that is coming out and we're finding.
The both of these societies are generally quite positive in the way we are presenting the information the clinical data publications that are that they look the what they look like and so at least.
Our interpretation is that both of the subsiding unlikely to be supporting as we prepare the applications in the first half of 2022 and that is in terms of the process of re.
The important goal because 1 of the societies support the adoption of the new technology the.
The.
Ultimately the decision comes from the.
And the American Medical Association and that.
If.
They look for the support from the societies. So obviously I cannot guarantee that we have it but certainly based upon our current day.
Dialogue it looks positive.
But the process would be that we would then work with the societies. They will either provide of support letter or they may in fact co sponsor, we'll see how that goes typically societies and provide support letters and with that we would be in a position to file for the June meeting of Ami.
That decision then will come in the fourth quarter of 2022.
And once we know what that decision is if it is positive then it sent.
Sent over to the Rec committees to determine the RV use and and so on and that process typically takes about a year and so the effective codes. If they are are assigned will become effective for treatment by January.
2020.
Sure.
And so 2023, where they'll do the analysis.
So from today, its about it too and of half year of process.
Great great. Thanks for that detail just the 1.
1 follow up just in terms of the.
And your visibility into the.
And so the sales funnel for the the imaging center side any updates there in terms of.
Partnerships with.
And then yeah.
No.
I think.
And I've said and the last quarter.
Overall, our pipeline continues to be strong.
And the fact that some of the leading hospitals are now treating and giving us good feedback.
And I think debt as you know.
Urologists would like to talk to there.
<unk>.
Kelly and I think that dialogue is beginning to sort of take place, even though our installed base as well.
The relatively small but that dialogue is starting to take place and and we're starting to see more and more urologist.
Wanting to become what we call authorized users, meaning they're going to get trained and be able to start using the technology and existing sites whenever it's possible, even if they have to travel and little bit and the early days. So that they can get firsthand experience and then be able to then work with their own hospital system to be able to.
The adopt the technology. So overall I would say some of the pipeline is better our sales methodology is stronger today than it was 6 months ago, even and.
And.
<unk>.
I think that you will you will see that in the imaging center channel that.
More than 1 neurologists will start using the so that the old cut the cord.
We saw concept that we will over the long term it will drive adoption.
And without necessarily increasing the number of sites I think that you will start to see and the next 6 months will start to come become reality and.
And I also think that a number of early adopters, who have been using other specialized technologies.
And begin to see that they will start to gravitate more towards you and in Tulsa as compared to other specialized technology. So I know I'm, sorry, I'm, giving you a bit of of a more general response here, but that's sort of how we look at the landscape.
That's helpful.
I'll jump back in the queue.
Thank you thank you and.
Thank you and our next question comes from the line of Anthony Petrone with Jefferies. Your line is open. Please go ahead.
Great Thanks and the.
Glad to hear that debt everything is going well with your health and and good luck and and glad to hear all went well with the procedure of few weeks ago. Thank you.
Thank you.
Question on our and wood would just be when you look at.
The total of 14, Tulsa and installed.
A little bit.
And at the mid point of the year of 11 more to go and the back and how should we think about installations between <unk> and <unk> I would assume there would be more heavy weighted towards towards <unk>.
And as you sort of look at the the funnel.
8 to 9 contract you mentioned last quarter.
And that could represent sort of even a multiple of.
Of the units over a multiyear period, how do you how should we think about how that funnel will evolve into the second half of the year and then I'll have 1 follow up.
Sure and.
Some of these are very good questions.
And so.
I think in terms of the 1 of the goals. We've talked about is can we get to the 25 and.
And our team has pretty detailed.
<unk> in place to achieve that goal and it certainly is not limited by the contracts that we need to do we have enough on hand to be able to achieve that goal.
And we have 6 more months to go so high.
But I think there's 1 point that I would like to make the.
And it's an important point.
We see of.
Big impact of Covid is behind us in terms of driving utilization of sites that are operational.
But we do see still a little bit of and impact of Covid and driving the new installed base and.
And to give you a specific example.
1 of our EMR vendors has is backorder on some of the routers and we need the router to be able to install the site with Tulsa and so it has caused about a 6 week delay.
For us before we can actually install the site and so we are seeing a little bit of of that supply related delays and even and hospitals a little bit of low.
Low necessary sluggishness in getting the labor content and in place to be able to do the b.
Appropriate modifications and so that is 1 of the reasons why I think 25 is still the.
And the right way.
And the goal to be <unk>.
Even though in terms of the contracts I think we will have.
The more months, many more than that by end of this year too.
To answer your question in terms of capabilities. So the way we're looking at it is that for the.
The next 2 quarters at least I think 4 to 6 and storms per quarter is still a reasonable place to be but then I think in 2022.
We are looking to add into our resources to be able to increase that capacity, perhaps to 7 or 8 per quarter and then ultimately may be in the range of <unk> 10 per quarter and.
And I apologize I cannot give you specific timing just yet but that's the plan is that we do think that the demand we are seeing that even with the current.
The code and patient pay.
And there is a robust patient population, who is interested and the procedure. So that I do think that we will be increasing the capacity in 2022.
That's helpful and then.
2 quick follow ups and I may have missed this out and between calls, but the TAC 2 extension study enrollment and it looks like EMEA of completed enrollment and just wondering if.
If we should still expect the publication by year end and and anything of note on the GE collaboration.
Should we expect that collaboration of sort of play out over the next couple of years. Thanks again, yes, yes, great question and then.
So the <unk> 2 trial has been recruiting really well the only reason we have not closed the because there are a couple of sites that we felt would be good to include them into the tech too. So they are now recruiting as well and so this is why we're saying we will more than likely close the recruitment in the queue.
4 as compared to the originally we thought we would be able to do it a little bit earlier than that.
But to your question with respect to the publication of <unk>.
Key publication will be coming out at the <unk> and September where the.
And the.
The independent investigators will be presenting 3 year data.
For the tact.
And so that 3 year is considered another milestone and again the focus will be on an.
The side effects and progression free survival and so those are the 3 things that we were looking for in the and the 3 year data.
And that will be coming out and then the the captain trial, which is sort of the level..1 trial is actually also moving very well with most of the sites of already identified the.
<unk> R R.
And generally in good place and so we feel pretty confident we will be recruiting in Q4 for the captain trial as well.
Thanks again.
Thank you and our next question comes from the line of free checking with Lake Street Capital markets. Your line is open. Please go ahead.
Thank you operator of Rune air and congrats on the progress and the quarter couple from me.
Start with.
The first thinking about the mix of procedures and the quarter do you by chance on hand half of the mix of patients that were purely cash pay versus those who had utilized the C code and successfully and whether or not those were partial reimbursement cases, and the full reimbursement cases, just trying to get a feel for the reactors that have no risk.
And it's.
Absolutely, it's a great question and to be honest we are.
Trying to fill.
Figure out what that ratio is also and.
And as you can imagine, it's a very difficult ratio too to get handle all of them because we for HIPAA reasons, we don't have access and we can.
Case.
Having said that I would say.
And as a.
And as I kind of a.
Educated guess is it's probably in the range of 60% to 65% cash pay and 30% to 40%, perhaps or the rest of it perhaps in the.
FICO category.
And we.
What is interesting is.
We do continue to see patients are willing to travel and we do continue to see that the the <unk>.
Number of.
Sites that are saying look we have enough population of cash pay and we don't need to bother with C code, which we are trying to change in fact, a little bit.
And we are also seeing so we do see the aggregate the and we are seeing that when they do apply for the C code.
Or even private insurance, whether they might use unlisted codes. The similarly, everybody is getting paid so.
1 of our plans.
Plans in fact is too low.
Uh huh.
Double up on our strategy to really educate particularly the hospital systems on the C code and really encourage them to use it more often and fact, but at the moment.
That doesn't seem to be that that doesn't seem to be the bottleneck here.
Got it okay that makes sense and.
Thinking about the mix of low to more severe grade.
And prostate cancer.
Understanding that this is a lot of net and the early days, but I was hoping you could just kind of talk to trends use case pattern trends you are seeing from when they start to once a day or a little bit more established are you seeing them.
And the lower grade and then move into some of the the higher grade cases or is it vice versa. How is that trending and the limited data you have to date.
Yeah, no very good question.
So.
We sort of encourage them to start with their sweet spot.
And.
For example, the outspend started with nothing but some of which cases because that was the biggest unmet need and now they're moving onto sort of intermediate risk and then the debt.
And so I think every site, we sort of customize the plant based upon their patient population and what they see as the most.
Pelling unmet need.
So Texas is an example of started with day.
And they wanted to do more focal therapy cases.
And what we're seeing from this data analysis that we did and this quarter.
Is that the start wherever they start but they are starting to gravitate more towards whole gland therapy, which we're really pleased to see.
And that they're starting to recognize that they can literally died and I call. The dialing because I see it happen pixel the pixel to amazing accuracy of 1 to 1.5 millimeters or they can literally by the and what to ablate and we're not too of blade and so just to answer your question.
For example, the higher risk, which.
We're not necessarily anticipating that will go that there. This early is when there's we've seen cases, where there is.
External involvement so there might be some some involvement beyond the capsule of the prostate and theyre able to sort of incorporate that into the the boundaries and be able to ablate and that the ability to be able to really define the boundary is y.
At least we believe is why we're starting to see that in certain cases, they are going after some of the higher risk patients and <unk>.
I think that the patient demand even in those cases really is hey, Gee can you save by nerve bundle and so we've seen examples where on 1 side. The nerve bundles are involved in the cancer and theyre going to ablate. It the other side of the prostate they will save the nerve bundles to make sure that the patient can still have.
The function and so debt flexibility I believe is what's driving this change and we've seen quite of few cases, now where they can really really customize that treatment to be able to make sure that the clinical.
Procedure from the cancer outcome perspective is completely intact, but at the same time they are able to save these.
Vital functions by dialing it in the right places.
So.
Again, I agree with you that it is a little bit early.
But we're certainly encouraged and as I said before I think you will start to see some more attention that we would pay in towards that.
Over the next 12 months.
Got it okay I'll cut it off there thanks for answering the questions.
Thank you.
Thank you and our next question comes from the line of Ben Hayner of with Alliance Global Partners. Your line is open. Please go ahead.
Good afternoon, gentlemen, thanks for taking the questions.
First of all permanent.
I guess more of a.
And of a housekeeping 1 on the capital revenue what was that comprised of I mean is that Tulsa Pro's and Europe is that some of them leave.
And then.
Just from thinking about the capital pipeline, what does that look like the remainder of the year.
Yes.
<unk>.
And we are on the call did you undertake 1.
Sure So bad and we don't provide guidance by policy at this point because our revenue is not predictable enough and.
And as such we don't provide the ow.
Outlook for the remainder of the year on capital sales.
Outside of <unk>.
And that.
And to date, we have not provided the breakdown of suddenly vs. Tulsa again, when it gets predictable we'll do that at this point of the numbers are too small to be predictable. So we don't.
And we don't want to get people chasing down rabbit holes. So we haven't been doing that and we're not ready to start.
Okay.
Understand.
And then.
The progress that you've made and obviously the there's publications out there there's data out there and more to come and but what have you seen from some of them.
All of the treatment modalities that are out there I mean, what's been the reaction from the folks that are due and cryo ablation.
All of the types of HIFU or things like that.
And also proud to total growth.
Yeah.
And so.
I think.
Well, let's start with cryo.
The cryo typically is used in salvage patients and.
And we have seen.
The bill.
Those who have actually used Tulsa for salvage patients.
And are generally quite.
Pleased with that and so.
I think we.
We're certainly encouraged that I think that it's the it's a very niche area.
The relatively small volumes, but I do think that.
Urologists.
Gravitating towards.
The total procedure for salvage.
And.
And the.
The Big difference I think here is the control right you can you can literally.
Design the whole the.
The those prostates tend to be.
The.
Irregular in shape and quite unique for each patient and because of their bid.
And they behave.
<unk> for each patient so the fact that we can draw pretty intricate boundaries and still maintain that precision is.
As 1 of the things thats driving them.
And I think.
Debt.
2.
I guess to go to the next 1 of the HIFU.
We are seeing.
No.
And.
More dialogue going on with HIFU I understand the companies that are hmm provide.
Providing HIFU.
Have.
And the marketing quite aggressively.
I think in terms of.
Of.
Hardware technology versus any other technology and I think.
To me Cryo HIFU and these technologies has been out there for 7 to 10 years in fact.
And what.
At least historically, what we've seen is low.
The the types of Prostates of their treating are in the range of maybe.
30, <unk> or less and the clinical data has to be generally and that in the smaller profit states because for the larger prostates.
Of that distance from the clients.
Hum.
The vector of distance you have to travel you have certain limitation and.
And that you tend to 2.
You may need of.
The prior to that which sort of defeats the purpose of a little bit.
No.
The the other difference is that.
And the speed with which we can do whole gland.
Is is.
About 3 to 4 times faster and.
And because we're right in the center of the prostate we blocked the.
Ultrasound and we can and will take that.
The catheter.
Pretty quickly.
So I think when you were talking about whole brand when you're talking about larger prostates.
Debt.
And also is.
Is inherently.
And the technology that I think is the superior too.
And Q2 of none.
Of these niche technologies.
No.
I think it's the marketplace I think the technology has evolved and we'll see how it goes but at least historically.
And I would say the ability to treat.
Hoagland.
Large prostates.
The procedure high speed gentle heating in the sense of we're not boiling or charging the tissue, which means basically no virtually no paid and literally be able to work. The same afternoon, if you're having the proceed in the morning.
I think there are several.
Functional benefits and clinical benefits to Tulsa, and the fact that you can treat the full range I just think that the urologist would like to have.
Technology that has the versatility to be able to.
Keep more of those patients because they don't want to learn of tools that they will use once a month or twice a month. They are going to have a tool that they can use routinely.
And that makes a lot of sense and thanks for the.
Color there and then.
Kind of thinking about it from the imaging center standpoint, and a lot of these guys are used to doing just the tunnel and ton of imaging studies.
The relatively low margins.
You don't do do they.
And then the grass grasp of the economics fairly.
Tulsa, pro's procedures and and.
How does that look I mean, do you need to kind of lead the horse the water or is that something that.
The good immediately.
And then that's a great question actually because the right. It is a paradigm shift for the imaging center of companies, but their mindset is.
The story has been <unk>.
Youre right day.
They want to have more they have substantial investment in the ground lease mris cost.
Millions of doctors and so on and and so volume is really really important to them and so.
And the margins are thin and volume is how they make their money historically and so when.
When we talk about this.
And of the explicitly now is that if you are doing a diagnostic MLR typically will take about 30 to 40 minutes to do it and.
And typical reimbursement and nationally is under $500 now.
For the diagnostic EMR. So if you do 10 patients.
You may.
$5000.
In terms of patients.
Yes.
2 of those patients tend to also get the.
The total treatment, where they can charge the.
$25000 per patient.
Non youre going from 10 patients.
$5000, the 10 patients $60000.
Think about that it is an amazing paradigm shift.
Alright Amazing revenue story, they have too low.
Invest and.
Putting anaesthesia or they have to really change the mindset from high volume to high quality and specialize and really working with urologists or.
Before.
Hum.
The treatment application and then they can bring that patient back for long term follow up so they sort of start to really connect with that patient. So I think the long term proposition for imaging center is quite of bidding and yes. The.
I mean, that's 1 of the reasons why the top 2 and then you kind of companies.
Companies are working with us and I believe they understand the proposition. There also we also think it's not going to happen and 1 day, but yes, I think that sort of a financial point of view is of very strong proposition.
Kind of the changes everything from a kind of of transactional mindset more of a relationship mindset.
Absolutely that's exactly right.
Okay.
And then just lastly for me.
And the recently underwent a procedure and you know obviously not to get the 2 personal but.
What was your.
And the experience as a patient.
Of Tulsa Pro.
So Ben.
Happy to talk about it and I can get pretty emotional about it too but there are a couple of things I would say that are really interesting that I went through in my mind.
First of all I really really had heard about this the patients were saying theres no pain and so on and that they would go home. The next day and have dinner or worked in the afternoon.
And then literally happened that way.
And you broke up the drilling was no pain.
And really woke up within 5 minutes after I woke up from anesthesia I was in the car 10 months later, we were in the and.
And the hotel.
And it.
It really was amazing.
And.
I did have a UTI, which is what's happened to lessen and 10% of the patients, but it really didnt bother me to be honest. It really has not bother me at all.
Because the mindset that I went through is really what has really.
Given the a lot more conviction about Tulsa and the mindset really is today of the paradigm is.
The lay of the procedure because of the side effects and I'm going to really get you and 1 of those side effects.
But there's another side of that story and that is if you can avoid those side effects you almost want to get it done sooner than later because the what was going through my mind.
And if I wait for another 5 years.
<unk>.
I'm going to the aging Unfortunately, just like everybody else and.
And based upon history.
Could be in a more.
You know some morbidity condition, maybe on some heart condition and the diabetes sort of these are progressive condition that people and the age that happen. So to me 1 of the things that really resonated was my God I know that I would not have those side effects and why would I wait so that paradigm shift.
From waiting until I, absolutely needed to Oh, My God, Let me just get it done sooner than later, that's the paradigm shift that I'm really excited about.
And then.
And then there's plenty of benefit there.
The overall just the younger patients better outcomes that will look at it and that'll show you and that'll be good for you guys.
Exactly.
Well, great. That's all I had thanks for thanks for the color of both business and personal lives.
Thank you. Thank you.
Thank you and our next question comes from the line of non Hickey private Investor. Your line is open. Please go ahead.
Hi.
Viewed your video of the other week, it's fantastic.
And I'm, a physician and I was in the early investor So I'm well aware of how the system works.
I've been a corresponding with some of my colleagues down in South Texas and.
And they are going nuts, calling each other as hospitals looking for ICU beds.
And I reflect debt with an aging population.
ICU beds, we're already getting premium before COVID-19 hit and so.
Rather than asking about the system and the installation and I wanted to ask about the complication rate because that's going to be another big selling points to any hospital administrator.
So we know that radical prostatectomy and robotic prostatectomy.
Our highly operator dependent and the larger of the center. They are performed at the lower of the complication rate I Wonder if you know ICU admission rate and a number of.
And the admission days that occur when there is of complication with.
Your system as opposed to the other systems or is that something capped and hopes to look at.
And worked out.
Sure.
John Thank you. So thank you for the color.
I can tell you that the ICU days post Tulsa.
<unk>.
Incredibly minor if any.
Particularly in the commercial settings and <unk>.
And just not heard that.
We have heard of.
The range of patients who end up with the UTI.
Is somewhere between.
4% to maximum of 10% and.
And.
And those patients do not need to be a bit it is basically.
Identifying which.
Which bacteria.
It has been.
It has affected the patient and really customizing, which antibiotic would work and typically they go away within.
5 to 10 days, so we've not seen.
Pete patients needing to go back to the hospital.
Doing the tact trial, which was the original trial, we did have.
The 4% of the patients where we needed.
Some.
Care post treatment, but in the commercial setting we're just not seeing that so I think and and I.
I think your other point is really also quite important to recognize that this.
And you said the procedures that are prevalent today are dependent are quite dependent on the.
The the physician and there is sufficient data, even and robotics that.
The physicians, who have been more than the 1000 cases tend to have better outcomes than those who have done less.
Vs here.
The the surgical planning is really the key part of it.
Once the surgical planning is done it is and autonomous robot.
And we're actually watching the.
And it performed well during during the the.
Abrasion process and 1 of the things the technology that we introduced.
About a year ago and little over a year ago.
Is.
And the ability to change the.
Boundaries of the design of the treatment on the fly so when there is a demo of some swelling of the prostate the.
Of the heat coming and they are able to literally.
Erase the boundaries and on the fly change huh.
So that allows them to really have that decision.
And and reduce the impact of.
Hum of newness and this case.
And.
And those who know me well enough to know that we will continue to come up with innovations and I think part of our goal is to continue to make it.
So that.
The variability from physician to physician will reduce if any over time so.
I really appreciate your question, but I think that.
To your point.
I think the ICU, you're absolutely right. They are premium and I don't I think we will have an impact on that and I also think that over the long haul.
We will continue to be a much more reproducible and predictable treatment.
Okay.
Thank you John.
Thank you and our next question comes from the line of Scott might not Cali with paradigm capital. Your line is open. Please go ahead.
Hi, everyone and arrow and that thanks, again for taking the call and congrats on the quarter.
I just wanted to quickly touch on the process from kind of signing an agreement to installation to operation.
And kind of how youre seeing that.
And of the timing between those processes.
No change and evolve and as you get more of these contracts signed the net more of these installations and and hopefully as the Covid impact is kind of.
Potentially the lessening or going away and.
And how you see that moving forward.
Yeah, Scott very good question and.
We think about that every day.
When we started.
In fact, I remember talking about it in Q1 last year of <unk>.
And in 'twenty.
Our anticipation has been that from the time, we have the contract to the first patient treated.
Our expectation was about 90 days and that our.
Plant based upon our <unk>.
Programs that we were running that we felt that we could reduce debt to about 60 days.
At the moment.
It is actually running closer to 4 months.
And it is related to various factors and they are all pretty minor thing and some of them if not all of them our debt transitory things that are sort of pop up because of COVID-19. There's some bottleneck that showed up that normally you would not even think about so at the moment it is running a little bit higher.
Than what we anticipated and we will overcome that and our team is getting pretty adept at doing that but I think over the long haul I think the original expectation that we will be able to reduce it to somewhere between 60 to 90 days perhaps.
Perhaps in 2022.
Still a reasonable reasonable expectation.
Definitely that's.
That's great and then just to kind of clarify with the you mentioned 25.
And by the end of the year do you see that as 25 installations or 'twenty 5 operational installations like operational sites.
Think of that.
And I framed it of installation, but to be honest the.
Once we are installing the.
The time from the for.
From the inflation to treating the first patient is really.
Almost never more than a couple of weeks, so where the.
We're proud of.
Within the range and of the margin of error there on that point got it got it and sort of most of that 4 months the.
Process from contract to installation once installations and it's a quick turnaround.
Got it yeah, I mean, usually the the physicians seem to be weighted.
We are pretty interested in it because the obviously with the spend the time and so they typically the once they know all of the bids and so on and their firm on when the system will be ready.
About 2 weeks prior to that they're already sort of starting to screen the patient and.
And usually.
The assign a date of the first patient treated and that date actually works really well because it focuses the hospital and focuses our team because of it that's the base of the first patient and then be treated and we really worked backwards from the date at that point.
Perfect.
1 of them and then quickly and maybe it is looking better and sort of crystal ball, but.
In terms of kind of the rise of the Delta, there and kind of especially kind of and the south Texas and Florida.
Are you seeing that impact and a procedure kind of the current procedure volume was like July August and.
Or are things kind of chugging along as they were in Q2 of that.
The numbers of relatively low.
Yes.
You are right Scott, it's a bit of a crystal ball and Florida, Texas certainly.
And.
And you read this morning, and the journals that.
Florida and it has more patients at the moment, and ICU and hospitals and ever even and the become the beginning of the of the.
Of the epidemic. So so far we have not seen any major impact, but it's certainly 1 of the reasons why we are continuing to be cautious.
And because it is unpredictable.
We do see a number of patients who are willing to travel so hopefully the impact of we've done the 2 big even if it is.
The patients coming to Florida and.
And we are we're opening sites and.
The other parts of the country, so if reducing 1 reason being the.
Down the curve that I think there will be some of the ability to.
Uh huh.
On the transfer of the patient to other areas as well. So we are sort of very diligent and with our sales team is really really pretty it's starting to become really good at managing that situation actually.
And we have a couple of factors working in our benefit is.
The demographics.
So far have shown the man of the age of prostate disease tend to be vaccinated.
And then the states where we operate.
The most like Texas and Florida.
Do not seem like the government's intended on shutting down the states again for good or bad.
Yeah definitely.
And that's all for me, Thanks, again, guys and the conduct.
Okay. Thank you. Thank you and I'm showing no further questions at this time and I would like to turn the conference back over to Dr. Tim Miller for any further remarks.
Thank you so much and.
Thank you for the questions.
Our company continues to evolve and.
And the.
Alright, and continuing to gain strength from what we see.
And I look forward to really.
Presenting to you in Q3, Thank you have agreed evening.
Today's conference call. Thank you for participating you may now disconnect.
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