Q3 2023 Profound Medical Corp Earnings Call
[music].
Speaker 1: Good day and thank you for standing by. Welcome to the profound medical third quarter 2023 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 to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your questions, please press star 11 again. Please be advised that today's
Good day and thank you for standing by welcome to the profound medical third quarter 2023 financial results conference call at.
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 this session you will need to press star one one on your telephone you will then hear an automated message advising your hand is raised to withdraw your question. Please press star one again.
Please be advised that today's conference is being recorded.
Speaker 1: I would like to hand the conference over to your first speaker today, Stephen Kilmer, Investor Relations. Please go ahead.
I would like to hand, the conference over to your first speaker today, Stephen Kilmer Investor Relations. Please go ahead.
Yeah.
Thank you good afternoon, everyone.
Speaker 2: Let me start by pointing out that this conference call will include board-licking statements within the meaning of applicable security files in the United States.
Let me start by pointing out that this conference call will include forward looking statements within the meaning of applicable securities laws.
Speaker 2: All forward-looking statements are based on profound current beliefs, assumptions, and expectations, and relate to, among other things, expectations regarding the efficacy of the company's treatment technologies, results of future clinical trials, the ability to obtain coding and or reimbursement from third-party payers, anticipated financial performance, business prospects, strategies, regulatory developments, market acceptance, and future commitments.
Okay.
All forward looking statements are based on per pounds current beliefs assumptions and expectations and relate to among other things expectations regarding the efficacy of the company's treatment technologies results for future clinical trials, the ability to obtain coding and our reimbursement from third party payers and anticipated financial performance business prospects strategies.
Tori development market acceptance and future commitments.
Speaker 2: Such statements involve known and unknown risks and uncertainties and other factors that may cause actual results, performance, or achievements to be materially different from those implied by such statements. No part of this recording may be reproduced without M
Such statements involve known and unknown risks uncertainties and other factors that may cause actual results performance or achievements to be materially different from those implied by such statements.
No forward looking statement can be guaranteed.
Speaker 2: Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this conference call. 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.
Listeners are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of this conference call.
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.
Speaker 2: For the benefit of those who are new to the profound story, I would also like to take a moment to summarize our...
For the benefit of those who are new to look about story I would also like to take a moment to summarize our business.
Speaker 2: profound development market customizable incision free therapies for the ablation of disease tissue.
Developed markets customizable incision free therapies for the ablation of disease tissue.
Speaker 2: We are currently commercializing TulsaPro, a technology that combines real-time MRI, robotically driven transurethral ultrasound, and closed-loop temperature feedback control.
We are currently commercializing Tulsa pro a technology that combines real time, MRI robotically driven transfer urethral ultrasound and closed loop temperature feedback control.
Speaker 2: The technology is designed to provide customizable and predictable radiation free ablation of a surgeon defined prostate volume while actively protecting the urethra and rectum to help preserve the patient's natural functional ability.
The technology is designed to provide customizable and predictable radiation free ablation of the surgery.
Prostate volume, while actively protecting the urethra and rectum to help preserve the patient's natural functional abilities Tulsa.
Speaker 2: Tulsa Pro is CE marked, Health Canada approved, and 510K cleared by the FDA.
Tulsa Pro is CE marked health, Canada approved and 500 10-K cleared by the FDA.
Speaker 2: In the U, actually employ a pure recurring revenue model for Tulsa Proq, whereby we charge customers on a per procedure basis for Tulsa Proq and Fumiples, Lisa Medical Devices, and services associated with Expanded Awards.
In the U S. We employ a pure recurring revenue model for Tulsa pro whereby we charge customers on a per procedure basis for Tulsa Pro consumable medical devices and services associated with the extended warranties.
Speaker 2: As the United States, we primarily support a possible and consumable sales and service model, definitely in the situation more in fact.
Outside of the United States, we primarily deploying our capital and consumable sale and service model separately as the situation warrants.
Speaker 2: We're also commercializing Fonilave, an innovative therapeutic platform that is being marked for the treatment of uterine fibroids and palliative pain treatment of bone metastas.
We're also commercializing final is an innovative therapeutic platform that is CE marked for the treatment of uterine fibroids and palliative pain treatment of bone metastases.
Speaker 2: Finally, it's also been approved by the China National Medical Products Administration for the noninvasive treatment of uterine fibroids. And it's reasonably obtained FDA approval under humanitarian device exemption for the treatment of osteoid osteo.
<unk> has also been approved by the China National Medical products administration for the noninvasive treatment of uterine fibroids and has recently obtained FDA approval under a humanitarian device exemption for the treatment of COPD osteotomy.
Speaker 2: The business model for China leads the system to currently a one-time scale pickup.
The business model for cyanide Leach system. It's currently at one times to healthy capital equipment.
Speaker 2: On the call today representing the company or Dr. Rue Menowat who found the Chief Executive Officer and Rashad Duwan was Chief Financial Officer. With that said, I'll now turn.
On the call today, representing the company are Dr room megawatt bounce Chief Executive Officer, and <unk> Chief Financial Officer.
With that said I'll now turn the call over to Richard.
Speaker 3: Good afternoon, everyone, and welcome to our start quarter, 2023 conference calls. On behalf of the management team and everyone at profile, I would like to thank you for your ongoing interest in our company.
Good afternoon, everyone.
And welcome to our third quarter 2020 conference call on.
On behalf of the management team and everyone at profound I would like to thank you for your ongoing interest in our company.
Speaker 3: For those of you who are shareholders, we appreciate your continued interest and support.
For those of you who are shareholders. We appreciate your continued interest and support.
Speaker 3: I will turn the call over to Arun in a moment for an update on our commercial activity.
I will turn the call over to early at the moment.
Alright update on our commercial activity.
Speaker 3: However, before I do, I would like to provide a brief update on our third quarter 2023 financial results. The screen lengthing.
However.
Before I do.
I would like to provide a brief update on our third quarter 2023 financial results.
The streamlined game.
All of the numbers will referred to have been rounded.
Speaker 3: for the three month period ended September 30, 2023.
Approximately.
For the three month period ended.
September 32023.
Speaker 3: The company recorded revenue of $1.7 million with the full amount coming from recurring revenue.
The company recorded revenue of $1.7 million.
With the full amount coming from recurring revenue.
Speaker 3: presenting an increase of 9% in recurring revenue compared to Q2 2023 and 40% compared to the same period of 2020.
Presenting an increase of 9% in recurring revenue.
Q2, 2023 and 40%.
Get to the same period of 2022.
Speaker 3: Total revenue in last year's start quarter was $2 million with 800,000 of that coming from one time sale of capital equipment in international markets.
Total revenue in.
Last year third quarter.
<unk> was $2 million with 800000 of that coming from one time sale of capital equipment in international markets.
Speaker 3: total operating expenses in the 2023 third quarter, which consists of R&D.
Total operating expenses.
In the 2023 third quarter.
Which consist of R&D.
Speaker 3: and selling and distribution expenses for $7.6 million.
G&A.
Selling and distribution expenses.
Seven 6 million a.
Speaker 3: decrease of 18% compared with $9.3 million in the third quarter of 2022.
A decrease of 18% compared with $9 3 million.
In the third quarter of 2022.
Breaking that down further.
Speaker 3: then reaches for RMB for 3.4 million dollars.
Expenditures for R&D or.
<unk> three point.
Speaker 3: Decrease of 28% compared to the third quarter of 2020.
$4 million.
A decrease of 28% compared to the third quarter of 2022.
Speaker 3: DNA expenses decreased by 15% to $2 million, and selling and distribution expenses were $2.2 million consistent with the same period of loss.
G&A expenses decreased by 15%.
$2 million.
Selling and distribution expenses were $2 2 million.
Consistent with the same period of last year.
Speaker 3: Net Finance in-term for the 2023 starts quarter, where $1 million, compared with net finance in-term, of 3.3 million in the same three month period of 2020.
Net finance income.
The 2023 third quarter were $1 million.
Compared with net income up $3 3 million in the same three month period of 2022.
Speaker 3: Overall, the company recorded a third quarter, 2023 netlots of $5.6 million are 26 cents per common share.
Overall.
The company recorded.
Quarter 2023 net loss.
Five $6 million or 26 per common share.
Speaker 3: Compared with the net loss of $5 million at $24 cents for a common share for the same three month period in 2020.
Paired with a net loss.
$5 million.
<unk> 24 per common share for the same three month period in 2022.
Speaker 3: PAS of September 30, 2023, profound has cashed up $33.6 billion. With that, I will now turn the call over to a room.
As of September 32023, profound had cashed up 33 six.
$6 million.
With that I will now turn the call over to Earl.
Thank you Chad.
Good afternoon, everyone.
Speaker 3: Q3 2023 was our six consecutive quarter of recurring revenue growth. And our rolling four quarter US growth rate is at just over 60%.
Q3 2023.
It was our sixth consecutive quarter.
Recurring revenue growth.
And our rolling four quarter U S growth rate is just over 60%.
Speaker 4: There are two main drivers of that trend. Despite Tulsa still currently being predominantly private pay.
There are two main drivers of that trend.
Despite Tulsa.
Currently the predominantly private pay.
Speaker 4: Our strategy to focus on educating our surgeons on the flexibility of TELSA in that it can be used to treat an unparalleled variety of prostate disease patients continues to show signs.
First.
Our strategy to focus on educating our surgeons on the flexibility of telecom.
In that it can be used to treat and unparalleled variety of prostate disease patient continues to.
Please show signs of success.
Speaker 4: Indeed, we saw more and more sites increase the variety of health patients they treated in the third quarter.
Indeed, we saw more and more sites increase the variety of Tulsa patients treated in the third quarter.
Speaker 4: With respect to indications, approximately 57% were treated for prostate cancer.
With respect to indications.
Approximately 57%.
Were treated for prostate cancer.
Speaker 4: 32% were hybrid patients suffering from both cancer and BPH.
32% more hybrid patients suffering from both cancer and BPH.
Speaker 4: 7% were salvage and 4% were men with BPH only.
7%.
Salvage.
And 4% where men with BPH only.
Speaker 4: Telsa is increasingly being used in patients who are diagnosed with prostate cancer, but also have symptoms of BPA.
Tulsa is increasingly being used in patients who are diagnosed with prostate cancer, but also have symptoms of BPH.
Speaker 4: We continue to see Tulsa as the only viable minimally invasive option for such patients.
We continue to see Tulsa as the only viable minimally invasive option for such patients.
Speaker 4: The cancer grade, approximately 8% were grade group one, 55% were.
The cancer, great approximately 8%.
Great Group one.
55% Great group too.
Speaker 4: 27% were grade group 3 and 10% were grade group 4 and grade group 5.
27% were great group III.
And 10% were great group, four and Great group five.
Speaker 4: In terms of ablation, around 60% were whole gland, 26% were subtotal, but more than half the gland, and 14% were focal tear.
In terms of abrasion around 60% or whole gland, 26%.
Our subtotal, but more than half the gland and 14% were focal therapy.
Speaker 4: The prostate size, approximately 2% were less than 20 cc, 38% were 20 to 40 cc, 31% were 40 to 60 cc, 24% were 60 to 100 cc, and 5% were over 100.
The prostate side.
Approximately 2% or less in 'twenty cc, 38% were $22 47, 31% or 40 to 60 SEC.
24% were 60% to 105% over 100 SEC.
Speaker 4: We have been presenting this data to you on a quarterly basis, and there are two valuable dynamics worth watching.
We have been presenting this data to you on a quarterly basis.
And there are too valuable dynamics.
We're watching.
First.
Using Tulsa.
Speaker 4: our surgeons have a choice of performing whole gland or partial gland therapy. And yet, 60% of patients treated are whole gland therapies, which tells us that TELSA is mostly about mainstream adoption as majority of cancer patient population require whole gland therapy.
Our surgeons have a choice of performing whole gland or partial rent therapy, and yet 60% of patients treated our whole gland therapies, which tells us that Tulsa.
Mostly about mainstream adoption.
As majority of cancer patient population require <unk> therapy.
Speaker 4: And second, the number of patients being treated who have both diseases, cancer and BPH, is increasing.
And second the.
The number of patients being treated who have both diseases cancer and BPH is increasing.
Speaker 4: Feeding such variety of populations is only possible with calcium.
Treating such variety of population is.
Is only possible with Tulsa.
Speaker 4: That fact not only separates Tulsa from the niche focal only therapy space.
That fact.
Not only separates Tulsa from the niche focal only therapy space.
Speaker 4: but is also helping the urology community gain an understanding that TELSA is poised to become a mainstream treatment alongside radical prostatectomy and radiation therapy.
But is also helping the urology community gain an understanding that Tulsa is poised to become a mainstream treatment alongside radical prostatectomy and radiation.
Radiation therapy.
Speaker 4: And that mainstream position for Taoism is coming at an opportune time.
And that mainstream position.
So it's coming at an opportune time.
Since we announced.
Speaker 4: The AMA's establishment of three new CPT-1 Category 1 codes for Tulsa
The Ama's establishment of three new CPT, one category one code for Tulsa.
Speaker 4: which will be effective on January 1, 2025, we have started to see a change in market dynamics.
<unk> will be effective on January one 2025.
We have started to see a change in market dynamics.
Speaker 4: with providers who were previously reluctant to build out a cash pay model, now wanting to establish themselves as Tulsa users ahead of the transition to a pair paid model.
With providers, who were previously reluctant to build on a cash pay model now wanting to establish themselves as Tulsa users.
Of the transition to repair paid model.
Speaker 4: A prime example of this is the Cleveland Clinic.
A prime example of this.
Is the Cleveland clinic.
Speaker 4: recognizing our strong clinical data, the flexibility of our technology, and that a CPT code is on the horizon, we have just signed a master agreement that will include over 20 sites.
Recognizing.
Our strong clinical data the.
The flexibility of our technology and that a CPT code on the horizon. We have just signed a master agreement that will include over 20 sites.
Speaker 4: they intend to start with three sites, including their main site in Cleveland and their largest prostate cancer site in western Florida.
They intend to start with three sites, including their main site in Cleveland and their largest prostate cancer site in West Florida.
Speaker 4: We're thrilled that one of the leading medical centers in the US recognizes the value of the technology and is preparing 14 months in advance to get many of their sites up and running.
We're thrilled that one of the leading medical centers in the U S recognizes the value of the technology and is preparing 14 months in advance to get many of their sites up and running.
Speaker 4: Going forward, we anticipate that newer TELSA sites will also be those that are looking to adopt TELSA for its payer pay model and not necessarily to build a cash pay practice.
Going forward, we anticipate that newer Tulsa sites will also be those that are looking to adopt telecom.
For its payer pay model and not necessarily to build a cash pay practice.
Speaker 4: The second driver of our recurring revenue growth has been our low-cost, high-impact marketing efforts to educate patients.
The second driver of our recurring revenue growth has been our low cost high impact marketing efforts.
Educate patients.
Speaker 4: More and more, TELSA pro sites are telling us that patients are asking for TELSA by name.
More and more Tulsa pro sites are telling us that patients are asking for Tulsa by name.
Speaker 4: The number of hits to the Telstra procedure.com website, which is designed for patient education, has increased by fivefold to approximately 40,000 per month in the last 18 months.
The number of shifts to the Tulsa procedure Dot Com website, which is designed for patient education has increased by five fold to approximately 40000 per month in the last 18 months.
Speaker 4: Many international pro sites are also informing us that they are getting inquiries through.
Many international Tulsa Pro site are also informing us that they are getting enquiries.
Through our web site.
Speaker 4: supporting the efforts, the feedback from patients who have undergone Talsa remains extremely positive.
Supporting these efforts.
Feedback from patients who have undergone Tulsa remains extremely positive helped.
Speaker 4: helping to start making Tulsa a brand name with Pace.
Helping to start making Tulsa, a brand name with patients.
Speaker 4: On the product development front, we're also continuing to build the Telsa AI brand aggressively.
On the product development front, we're also continuing to build the Tulsa AI brand aggressively.
Speaker 4: Telsa AI is a brand name for software modules, where each module is designed to perform a certain intelligent function elegantly.
AI is a brand name for software modules, where each module is designed to perform a certain intelligence function elegantly.
Speaker 4: Thermal Boost, for which we received 510k clearance from the FDA this quarter, is the first of those.
Thermo boost for which we received five 10-K clearance from the FDA. This quarter is the first of those.
Speaker 4: Thermal Boost allows a Tulsa surgeon to provide extra heat at a tumor region if they suspect that there is extra capsular involvement or protuberance of the prostate tissue into the muscle of the patient.
Boost allows eight.
Tulsa surgeon to provide extra heat at eight tumor region.
If they suspect that there is extra capsular involvement or <unk> of the prostate tissue into the muscle of the patients.
Speaker 4: The Thermal Boost application has already been used by many sites with excellent reviews, both in terms of usability for later stage disease patients, as well as time savings.
The thermal boost application has already been used by many sites with excellent reviews. Both in terms of visibility for later stage disease patients as well as time savings.
The next Tulsa AI module.
Speaker 4: we are working on is the contouring.
We are working on is the country assistant.
Speaker 4: This is about Audibly, the close-up treatment design, in itself a game-changing technology.
This is about <unk>, the Tulsa treatment design.
In itself a game changing technology.
Speaker 4: The module is already developed, and at the moment, we are in the clinical validation phase for FDA submission.
The module is already developed.
And at the moment.
In the clinical validation phase for FDA submission.
Speaker 4: The technology is such that uses past treatment designs and recommends a design in a new procedure based upon that model.
The technology is such that users tax treatment designs and recommend a design.
The new procedure based upon that knowledge.
Speaker 4: We are already getting positive reviews from the physicians who are performing the clinical validation.
We are already getting.
Positive reviews from the physicians, who are performing the clinical validation.
Speaker 4: As you know, our treatment and outcomes database will continue to grow and the knowledge of the AI will continue to increase. And the proposed treatment design will continue to improve.
As you know our treatment.
An outcomes database will continue to grow and the knowledge of the AI will continue to increase.
And the proposed treatment design will continue to improve.
Speaker 4: We believe that this has a potential to also continue to improve outcomes even further and Tosa is the only system that will have that capability.
Believe that this has the potential to also continue to improve outcomes, even further and Tulsa is the only system that will have that capability.
Speaker 4: We have agreed with the FDA to conduct rigorous clinical analysis, a high bar that is normally set for diagnostic level AI software.
We have agreed with the FDA to conduct rigorous clinical analysis.
High bar.
Is normally set for.
Gnostic level AI software.
Speaker 4: Having such rigorous data analysis will give us significant flexibility to market the product in terms of critical outcome and time-saving messaging.
Having such rigorous data analysis will give us significant flexibility.
To market the product in terms of clinical outcome.
And time saving messaging.
Speaker 4: We continue to expect that we will gain SBA clearance in or around Q2 2020.
We continue to expect that we will gain FDA clearance in or around Q2 2024.
Speaker 4: Coming back to the dynamic, the TALSA is increasingly being used to treat patients who also have VPH. We also announced at our recent analyst and investor day that we are developing a BPH specific application using the core TALSA technology. We are also developing a BPH specific application using the core TALSA technology.
Coming back to the dynamic the Tulsa is increasingly being used to treat patients who also have BPH. We also announced at our recent analyst and Investor day that we are developing a BPH specific application using the core Tulsa technology.
<unk>.
This new application.
Speaker 4: will also use the TALSA AI automated treatment design capability, which will allow our surgeons to custom design the treatment plan.
We will also use the Tulsa AI automated treatment design capability, which will allow our surgeons to custom design the treatment plan.
Speaker 4: We believe that the customization capability of ultrasound, the fact that there is no blood loss, risking the patient.
We believe that the customization capability of telecom.
The fact that there is no blood loss.
Risking the patient during the procedure.
Speaker 4: and tells us proven durability due to its prostate shrinkage over time. We'll position it as a best-in-class treatment model.
And <unk> proven durability due to its prostate shrinkage over time will position it as a best in class treatment modality.
Speaker 4: We are making the information public at an early stage, due to the request from our physicians, but we are not prepared to talk about further privatization of the technology at this stage, except to confirm that we believe that it will be a faster procedure.
We are making the information public.
Or at least stage due to the request from our physicians, but we are not prepared to talk about further prioritization of the technology at this stage except to confirm that we believe.
That it will be a faster procedure.
Speaker 4: We will make timing of the project available by next summer, but in the meantime, I can assure you that we're not talking about a project that will take several years to bring to market like it would for a new indication.
We will make timing of the projects available by next summer.
But in the meantime, I can assure you that we're not talking about a project that will take several years to bring to market like it would fall into.
Speaker 4: Tosa is already cleared for the emulation of both malignant and benign tissue. And as such, there is a lot of clinical and safety data already available.
Indication.
Telstra is already cleared for the ablation of both malignant and benign tissue and as such there is a lot.
Clinical and safety data already available.
To summarize.
Speaker 4: Our team has done extraordinary work in driving adoption of Tel-Saf Pro so far.
Our team has done extraordinary work.
And driving adoption of Tulsa pro so far.
Speaker 4: We are commercializing an autonomous robotic technology that is in vision free and radiation free. We will.
We are commercializing and autonomous robotic technology.
That is incision free and radiation free.
Speaker 4: doesn't require a hospital stay and preserves a prostituted disease patient's natural functional ability.
Results in low blood loss.
It doesn't require a hospital stay.
And preserves a prostate disease patient natural functional abilities.
Speaker 4: H-A-I initiative is advancing the technology further.
Our AI initiatives.
Is advancing the technology further.
Speaker 4: to create a continuous improvement technology, which we believe can break the barriers of today's accepted clinical alks.
To create.
Continuous improvement technology, which we believe can break the barriers of todays accepted clinical outcomes.
Speaker 4: We have generated significant positive clinical data in various patient segments that have been confirmed by real world data.
We have generated significant positive clinical data.
In various patient segments that have been confirmed by real world data.
Speaker 4: Our hospital and early adopter surgeon partners.
Our hospital and early adopter surgeon partners have become experienced with the Tulsa Pro system and can help to drive future adoption.
Speaker 4: have become experienced with the TOSA PRO system and can help to drive future adopt.
Speaker 4: We are thrilled to have partnered with leading hospitals as well as provider companies, such as RedNet, who have figured out how to use the MR not only for diagnosis, but also for treatment and create efficient patient care workflow that also optimizes economics.
We are thrilled to have partnered with leading hospitals as well as provider companies such as Radnet, we have figured out how to use the EMR not only for diagnosis, but also for treatment.
Create efficient patient care workflow that also Optimizes economics.
Speaker 4: We have received overwhelmingly positive patient feedback.
We have received overwhelmingly positive patient feedback.
Speaker 4: This is helping new patients to become educated and empowered.
This is helping new patients to become educated and empowered.
Speaker 4: And our unique ability to customize treatment is a new concept that is resonating well with them and surgeons alike.
And our unique ability to customize treatment is a new concept that is resonating well with them and surgeons alike.
Speaker 4: The A&A has established PPT category one codes that come into effect in January 2025.
The MAA has established CPT category, one codes that come into effect in January 2025.
Speaker 4: our focus on investments in sales, marketing, and research and development is producing meaningful results.
Our focus on investments in sales marketing and research and development is producing meaningful results.
Speaker 4: We believe PASA is proving to be the most versatile technology for prostate disease with a total addressable market in the 600,000 patient range, which is greater than that for any other technology that can be used to treat patients with prostate disease.
We believe Tulsa is proving to be the most versatile technology for prostate disease.
With a total addressable market.
In the 600000 patient range, which is greater than that for any other technology that can be used to treat patients.
With prostate cancer.
Speaker 4: We are thrilled that we'll renowned Cleveland Clinic as recognized the value of our technology and have just signed a master agreement for over 20 years.
We are thrilled that world renowned Cleveland clinic has recognized the value of our technology and has just signed a master agreement for over 20 sites.
Speaker 4: We are developing a set of software modules to further improve clinical outcomes, procedure planning,
We are developing a set of software modules to further improve clinical outcomes.
Procedural planning.
And time efficiency.
Speaker 4: We received FDX clearance for the first module thermal boost in the third quarter.
We received.
Clearance for the first module thermal boost in the third quarter.
Speaker 4: We are targeting FDA appearance of our second module, a contouring assistant later next year, and believe that the appearance will allow us to more confidently enter the VPH state.
Our targeting FDA clearance of our second module a con touring assistant later next year and believe that the clearance will allow us to more confidently enter the BPH.
Speaker 4: This ends our prepared remarks for today. With that, Rashad and I are happy to take any questions you might have. Operator.
This ends our prepared remarks for today.
That reset and I are happy to take any questions you might have.
Later.
Speaker 1: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment while we compile the Q&A roster.
Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
One moment, while we compile the Q&A roster.
Speaker 1: Our first question comes from the line of Rahul, Sarah Gasser of Raymond James. Your line is now open.
Our first question comes from the line of Rahul <unk> of Raymond James Your line is now open.
Speaker 5: Good afternoon, everyone. Good afternoon. Good afternoon, Ryshead. Thanks so much for taking our questions.
Good afternoon, everyone. Good afternoon. Good afternoon, Richard Thanks, So much for taking my question.
Speaker 5: So, congratulations on this Cleveland Clinic Master Agreement. A couple of key questions there. So, you mentioned 20 sites with three up front. So, could you give us a little bit more color in terms of how you expect the cadence of that site deployment to roll out over the next year before – will it go into 2025-1CBT, or will it all be rolled out by then?
So congratulations on this Cleveland clinic Master agreements a.
A couple of key questions there so.
Mentioned 20 site.
The upfront so could you give us a little bit more color in terms of how you expect the cadence of that.
Right.
<unk> to rollout over the next year before.
Will it go into 2020 for 2025, what CPG or will it all be rolled up by them.
Speaker 4: 18 roads. Our expectation is that
No.
Our expectation is that.
Speaker 4: we will, you know, get these first three sites going very, very quickly.
We will we will.
Yes.
First.
Three sites going very very quickly.
Speaker 4: And I don't think that we will be installing every site before 2025, but I do think that they are going to be educating their physicians at all of the sites. So then by the time 2025 rolls out, they can get ahead, you know, pretty good start. But you know, I think realistically, I don't expect that all the 25s.
And I don't think that we will be installing every side before.
2025, but I do think that they're going to be educating their physicians.
All of the sites so that by the time 2025 rolls out.
They can get ahead pretty good start.
I think realistically I don't expect that all the 20 sites will be operational before 2025, I think it's possible that there will be more than three by that time, but I would say for now.
Speaker 4: operational before 2025. I think it's possible that there will be more than three by that time, but I would say for now, you know, this is about the best that we have in terms of our
This is about the best we can.
Half.
In terms of our plan.
Speaker 5: Perfect, thanks so much for that extra color. So pivoting to the number of sites, you'd previously indicated a goal of 50 sites by the end of this year. I believe it was 38 sites up and running last quarter. Would you possibly get an update on the number of sites deployed?
Perfect. Thanks, so much for that extra color.
So pivoting to the number of sites you had previously indicated.
The goal of 50 sites by the end of this year I believe that with 38 sites up and running last quarter.
What do you, possibly get an update on the number of sites deployed.
Speaker 4: Yeah. So in terms of contracts, we have enough contracts.
Yes.
So.
In terms of contracts, we have enough contracts to achieve 50, we have.
Speaker 4: to achieve 50. We have other couple of hospitals that are very big name hospitals that have also found. In terms of installs, we did in the third quarter, we added another three sites.
There are a couple of hospitals that are very big name hospitals to have them firsthand.
In terms of installs we did in the third quarter, we added.
Speaker 4: We are working to get to the 50th more about court addition and so on. I think that, you know, overall, we remain up to the stick to get to that number.
Three sites.
We are working to get to the 50, its more about coordination and so on.
Thanks.
Overall, we remain optimistic to get to that number.
Speaker 4: And I think 2024, we, you know, again, our contracts are doing very well. So we'll see how it goes in 2024. But I think certainly we are, you know, continuing to make progress and increasing the...
And I think 'twenty 'twenty four with.
Again, our contracts are doing very well so we'll see how it goes in 2024, but I think certainly.
We are continuing to make progress in increasing the installed base.
Speaker 6: Great, thanks very much. And if you'll indulge in one last quick question, you highlighted at the analyst day, the expansion of the BPH and you provided a little bit more color today, talking about likely to be a fast procedure. Of course, you said that you are going to be circumspecced. But in terms of using the new contouring assistance and
Great. Thanks, very much you will indulge me one last quick question.
Yeah.
You highlighted at the analyst day, the expansion of the BPH and can provide a little bit more color today.
I'm talking about is likely to be a fast procedure.
You said that you are going to be circumspect.
But in terms of using the.
New contouring assistance.
And.
Speaker 6: Do you expect that utility and DPH could, especially beyond these hybrid or into the extremely large prostate and what are we looking at in terms of the tan there?
Do you expect to that.
The utility in BPH could potentially be beyond the hybrid or.
It's extremely large prostates.
What are we looking at there in terms of.
The Tam there.
Speaker 4: Yes, no, I'm happy to provide you a little more color on that. Well, as I mentioned in the prepared remarks, this is more of a request that we were getting from position and patient.
Yes, no I'm happy.
To provide a little more color on that.
As I mentioned in the prepared remarks.
This is more of a request that we were getting from physicians and patients.
Speaker 4: And when we did some research, what was...
Yes.
When we did some research.
What was interesting is that.
Speaker 4: Initially, the paradigm was well, you know, some of the technologies in VPS can be very fast and maybe, you know, patients and physicians, you know, it matters to them a lot. But as we did the work. What we actually.
Initially the paradigm as well.
Some of the technologies in Vps can be very fast and maybe.
Patients and physicians.
It matters to them a lot, but as we did the work.
What we actually found was that.
Speaker 4: you know, certainly a BPH procedure will be much faster than a cancer procedure. But what they were really interested in was the aspect in terms of the prostate shrinkage, the aspect that if there is any lingering, you know, even our loose-aid cancer, that it could be visualized and that the whole thing could be taken care of in one sitting with confidence because there is a good bit of clinical data.
Certainly in BPH procedure will be much faster than a cancer procedure, but what they were really interested in was the aspect in terms of the prostate shrinkage.
I'll take that if there is any lingering.
Even our new stage cancer, but it could be visualized and that the whole thing could be taken care of in one sitting.
With confidence because there is a good bit of clinical data.
Speaker 4: And the fact that we have country and assistant and modify that, that to be able to do a very quick treatment plan that could be really big customized to each prostate type.
And the fact that we have controlling assistant and modifying that that to be able to do a very quick.
Treatment plan that could be really be customized to each prostate tight and to be honest I cannot stress that point enough because prostates as you know can be smaller than 2016 and larger than 116.
Speaker 4: And to be honest, I cannot stress that point enough, because prostate, as you know, can be smaller than 20 cc's and larger than 100 cc's. And not just the size, but also the shape really matters. And so to be able to...
And not just the size, but also the shape really matters.
So to be able to use.
Speaker 4: our technology and really custom designed to be sure that none of the white holes functions are affected and at the same time, enough tissue is ablated to be able to provide the patient with a durable treatment and do not have to worry about, you know, and see any cancer at that time at least. I think that's a value proposition. So...
Our technology and really custom designed to be sure that none of the vital functions are affected and at the same time enough tissue is a blade to be able to provide the patient with a durable treatment.
And do not have to worry about.
Nancy and cancer at that time at least I think that's the value proposition. So.
Speaker 6: I think again, I feel very good about it. I think our team feels very good about it. I think that we will definitely start from the larger prostate, but I think we will, over time, look to where it's going into the mainstream as well. Thanks, but thank you again for taking our questions. We'll get back in. Thank you.
Again, I feel very good about it I think our team feels very good about it I think that we will definitely start from the.
No.
Larger prostates, but I think we will.
Time look towards going into the mainstream as well.
Great. Thanks for that thank you again for taking our questions I'll get back in the queue.
Thank you Robert.
Thank you one moment for the next question.
Okay.
Speaker 1: Our next question comes from Ben Hainer of Alliance Global Partners. Your line is open. Good afternoon.
Our next question comes from Ben Hayner of Alliance Global partners.
Your line is open.
Good afternoon, gentlemen, thanks for taking my questions.
Speaker 7: It's pretty tough for me. Curious some of the hybrid cases that are being done? Are those more kind of incidental where you have patients that have prostate cancer and also BPH, and they would be operated on any way or is it more?
First off for me I was curious on the hybrid cases.
Are being done are those who were kind of incidental where you have a patient that.
Have prostate cancer.
Also BPH.
It will be operated on any way or is it more.
Speaker 7: You know, patients that might have been candidates for watchful waiting and that might be say, great group one that are saying, well, let's kill two birds with one stone here and do get rid of the cancer and hopefully solve the PPH as well. Any color on the mag group of patients?
Patients that might've been candidates for watchful waiting and that might be say, great group, one that are saying well, let's kill two birds with one stone here too.
Get rid of the cancer.
Hopefully solve that.
So as well.
Any color on that group of patients.
Speaker 4: Yeah, but I think you're thinking in the right place.
Yeah, but.
But I think you're thinking in the right place.
Speaker 4: If you look at our data that we talk about every quarter, the number of patients who have
If you look at our data that we talk about every quarter.
Number of patients who have.
Speaker 4: early stage cancer and also have EPH. That's a segment that has been growing.
Early stage cancer and also have BPH.
The segment that has been growing for us.
Speaker 4: And as you know cancer is not a monofocal disease, it's a multi-focal disease and we can, you know, wherever it resides, we can get...
And as you know cancers not in mono focal disease, it's a multi focal disease and we can.
However, it resides we can get to it.
Speaker 4: So the treatment designs that we are seeing for those types of patients, that typically in the 50 to 80% ablation range, and they are ablating the tissue that normally...
So the treatment designs that we are seeing for those types of patients that typically in the 50% to 80% ablation range and they are bleeding.
Shoe that normally.
Speaker 4: you know the symptoms of VPH and they're most certainly targeting explicitly.
Causes.
Symptoms of BPH and they are most certainly targeting explicitly where the cancer has the highest end theres usually they add some safety margin to that so that there is high level of confidence.
Speaker 4: where the cancer is high and there's usually, you know, they add some safety margin to that. So that there's high level of...
Speaker 4: that the cancer is taken care of at the same time, BPH is taken care of. So it really is modes that they look to do, so it's a two-for-one. And as you might know, there's a large population of patients who are on active surveillance, it's million plus, and these...
Cancer is taken care of at the same time BPH is taken care of so it really is both.
They look to do so it's a two for one and.
And as you might know.
There is a large population of patients who are on active surveillance.
Its million plus.
And these patients have also have BPH more many of them and so that is the initial target market and I think that's where that population that we're starting to see is growing and will be our <unk>.
Speaker 4: have also had VTH more many of them. And so that is the initial target market. And I think that's where that population that we're starting to see is growing and will be our market.
Market entry.
Speaker 7: Okay, that's very helpful. Thank you for that. And then, you know, I appreciate that you may not want to share kind of everything on this just yet. But on the BPH AI, you know, I think it was Dr. Hong during the investor day talking about how if you are going to do a volume similar to what's being done in the trip today, you could get a procedure done with Tulsa.
Okay.
Very helpful. Thank you for that and then.
I appreciate that.
May not want to share.
Kind of everything on this just yet but on the BPH AI I think it was Dr. Hong during the Investor day talking about how you are going to do.
Similar similar to what's been done with TERP today, you could get a procedure done with Tulsa.
Speaker 7: you know, a clean and similar volume in, I think he said less than an hour if I understood him properly. You know, just curious if, you know, that is...
Hopefully thats similar volume and I think you said less than an hour if I understood them.
Happily.
Just curious.
That is.
Speaker 7: you know, reasonably accurate. And then also, you know, are the BPH cases that are being performed as we speak? Are those informing what ultimately goes into the, you know, kind of contouring assistant BPH AI for the automation of the treatment plan?
Reasonably accurate and then also.
The BPH chases that are being performed as we speak are those.
Informing what ultimately goes into the kind of contrary in our system.
Yes.
Th AI for the.
Automation of a treatment plan.
On the road.
Speaker 4: Yes, Ben, I think you're on. Absolutely. That's the idea is that we have.
Yes, Brian I think you're.
Absolutely. That's the idea is that we have.
We think we can get the BPH.
Speaker 4: quite a bit faster with virtually more risk of any blood loss, which means that any comorbidity are not likely to be an issue. And I think as you said,
John.
Quite a bit faster.
With virtually no risk of any blood loss, which means that any comorbidities.
We're not likely to be an issue.
And I think as you said.
Speaker 4: the base technology of contouring assistant will apply and we are already gathering quite a bit of cure for ph patients as
The base technology of country and assistance will apply and we are already gathering quite a bit.
Your BPH patients as well as the hybrid patients and we'll be able to apply those.
Speaker 4: and will be applied those to the new type of patient. So your, your, your,
To the new type of patient so youre.
Speaker 4: I think there is definitely enough information to be able to get it. I'm just a little bit cautious because we are certainly very early-stay. And I think I just want to make sure everybody recognizes it also. But the technology is there and we're going to invest in getting it out as fast as we can. But we do need to get the contouring assistant, you know, FDA.
I think there is I think there's definitely enough information to be able to get it im just a little bit cautious because we are certainly very early stage.
I just want to make sure everybody recognizes that also but the technology, there and we are going to.
And last and getting it out as fast as we can but we do need to get the country assistant FDA appeared.
Speaker 4: Okay, good. That's helpful. I guess I'll leave it there. I mean, we just had the investor day, so lots of information already out there. Appreciate the question. Thank you, Ben.
Okay.
Oh.
I guess I'll leave it there I mean like I said at the Investor day, So lots of information already out there I appreciate it I appreciate the question, yes, yes, okay.
Thank you ma'am.
Thank you one moment for our next question.
Okay.
Speaker 1: Our next question comes from the line of Frank Takaman of Lake Street Capital Markets, LLC. Your line is now open.
Our next question comes from the line of Frank <unk> of Lake Street Capital markets LLC. Your line is now open.
Speaker 8: Hey, this is Nelson Cox. I'm just Frank apologies if I missed it, but last quarter you mentioned seven signed purchase contracts in late 15 late stage prospects. Can you maybe update us on those two buckets.
Hey, This is nothing Cox Sciences, Inc.
Apologies if I missed it last quarter, you mentioned seven signed purchase contracts in late 15 late stage prospects can you maybe update us on those two buckets.
Speaker 4: Oh, yes. I'm happy to, I think.
Yes.
Im happy to I think.
Speaker 4: You know what I was saying earlier, when Raul was asking the question, we have enough contracts.
What I was saying earlier.
And Robert when asking a question.
We have enough contracts to be able to get to 50 sites.
Speaker 4: And you know, the problem with these numbers and so on, the reason I'm staying with the way I'm saying it is, you can tell from the prepared remarks, we have another major agreement with number of sites. We also have a couple of other eating hospitals that we've signed with big name hospitals in Toronto.
<unk>.
The problem with these numbers and so on the reason.
It's the way I'm, saying it is as you can tell from the prepared remarks, we have another major agreement with number of sites. We also have a couple of other EDA in hospitals.
We have signed with big name Hospital cancer hospitals.
Speaker 4: So it isn't about the pipeline, it's not about the number of contracts. I think the message that Tulsa is a versatile technology and that all these capabilities is getting there. So I think for us,
It isn't about the pipeline, it's not about the number of contracts I think the.
The message that Tulsa is a versatile.
Technology.
And that all of these capabilities is getting there so I think for us.
Speaker 4: Stage is really streamlining the installation process, streamlining the startup, and ultimately, really, I think we're gonna be in this.
Next.
Stage is really streamlining the installation process.
Jim lining the startup.
And ultimately Neely I think we're going to be in this.
Speaker 4: transmission phase at the moment when everyone is sort of waiting for 2025, when the reimbursement starts to kick in and so on. I think for us, it's really more of that dynamic at the moment. I think we will get the number of sites going. And I think these things that I'm talking about in terms of streamlining, the startup process, and so on, that's going to happen.
Transition phase at the moment when everyone is sort of waiting for 2025, when the reimbursement starts to kick in.
So long I think for us, it's really more about that dynamic at the moment.
I think we will get the number of sites going and I think these things that I'm talking about in terms of streamlined streamlining the startup process. So that's going to happen.
Speaker 4: It's starting to happen. I think there are still a couple of sites where the MR installations are delayed. And so that, you know, a couple of them, which were supposed to have happened in Q3 didn't, but they'll happen in Q4. So I hope.
If it's starting to happen I think there are still a couple of sites, where the MLR installations are delayed and so the cup.
Couple of them, which were supposed to have happened in Q3, but it will happen in Q4.
So I hope.
Speaker 4: I've sort of answered your question, but I hope you can see.
Hugh.
Sort of answering your question, but I hope you can see.
Speaker 4: why the number of contracts is not an issue for us.
Why.
<unk>.
Contracts is not an issue.
For us at this point.
Speaker 8: Yeah, no, that makes sense. Thank you. And then one more quick one. With your use, skewing more heavily towards old land, with your early users. How do you think about this concept over a long period of time? Do you think there could be a time where you only do heavy or whole, given you can effectively cover an area with limited quality of life risk?
Yes, no that makes sense. Thank you and then.
One more quick one.
With your youth skewing more heavily towards whole gland with your early users. How do you think about this concept over a long period of time do you think there could be a time, where you only do hemi or whole given you can effectively cover an area with limited quality of life risk.
Speaker 4: Yeah, I think that's a very good question actually. One of the things that we have watched is, as you know, there has been this paradigm that says, of latest technologies are for focal and things like.
Yes, I think thats a very good question actually.
One of the things that we have watched it.
Is.
As you know there has been this paradigm that says.
Latest technologies for focal and things like that and we have.
Speaker 4: And we have, you know, a surgeon wants to do focal. We've always said, hey, you can do focal with this. But what we have witnessed over the last-
If a surgeon wants to do four call. We've always said Hey, you can do for go with this.
But what we have witnessed over the last.
Speaker 4: several months is that surgeons on their own are in fact ablating more of the prostate.
Several months is that.
<unk> on their own.
Leading more of the Prostates.
Speaker 4: then they used to when they started out. What I mean by-
Then.
Used to when they started out.
What I mean by that is that.
Speaker 4: that more often than not, focal therapy can certainly ablate the index lesion properly, but there is always a risk that if you do not ablate enough of the prostate or that because it is not a monofocal disease normally that there is cancer lingering around somewhere else.
More often than not focal therapy can certainly a blade the index lesion properly, but there is always a risk that if you do not have enough of the prostate or that because it is not.
Mono focal disease normally that there is cancer lingering on somewhere else and so I think what we are have watched is that the.
Speaker 4: And so I think what we have watched is that the amount of ablution of the...
Amount of ablative.
Speaker 4: we're watching then surgeons increase because we're getting more confident that they can save the vital functions and they're feeling more comfortable that they can go more towards higher volumes of ablation. And so I think you're right in the center.
<unk> of the prostate actually we are watching them surgeons increase because we're getting more confident that they can save the vital functions and they are feeling more comfortable that they can go more towards higher volumes of ablation and so I think you're right in the center.
Speaker 4: I think as the position community has become more comfortable, times that they will be ablating more of the prostate than less.
I think as the physician community as surgeons become more and more comfortable tons that they will be abating more of the prostate than less.
Speaker 8: I'll congrats with the Cleveland partnership, and thanks for taking the questions.
Got it well congrats with the Cleveland partnership and thanks for taking the questions.
Thank you.
Speaker 1: Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. One moment for our.
Thank you as a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced one moment for our next question.
Speaker 1: Our next question comes from the line of Scott McCauley of Paradigm Capital. Your line is now open.
Okay.
Our next question comes from the line of Scott Mccauley of paradigm capital. Your line is now open.
Speaker 9: afternoon. Thanks for taking the question. Just one for me on risk staffing as we ramp up these installations and support the earlier doctors, we continue to start using it. You know, do you expect you have the personnel capacity to support your pipeline or do you think you're going to have to expand the HR
Good afternoon. Thanks for taking the question just one from me on staffing.
As we ramp up these installations and supports the early adopters.
Okay.
Start using that.
Or do you expect to have that.
Personnel capacity for.
To support your pipeline.
Thank you Greg.
The HR base.
Speaker 9: to help make sure everyone's up as speed quick enough.
Okay.
Sure everyone's up to speed quickly.
Quick enough.
Speaker 4: I think that's a great question. I think that should be honest, we have...
Yes.
Scott.
I think thats a great question I think.
To be honest we have.
Speaker 4: You know, we have a great team, to be honest, and I think that, you know, I've seen them in the crunch time install three sites in one week. So, I know that we have.
We have a great time to be honest.
And I think that.
I've seen them in the Crunch time installed three.
In one week, so I know that we have the capability to do it.
Speaker 4: Our, you know, we are certainly also managing our cash very carefully and you've seen from Brushad's presentation that, you know, in every function except for sales, you know, our costs are actually, our spending actually down compared to a year ago.
We are certainly also managing our cash.
Carefully and you've seen.
<unk> presentation.
And every function except for sales.
Costs are actually spend is actually down compared to a year ago.
Speaker 4: And at the moment, our expenses on the sales and marketing side are about the same as what we had this time last.
And are.
At the moment, our expenses on the sales and marketing side are about the same.
What we had this time last year.
Speaker 4: So the way you might think about this is that incrementally, as the schedules for installation increase, we will add people to our sales marketing and service functions. And we're trying to be a little bit ahead of that, obviously, to make sure our people are trained. So I think, you know, anticipate that.
So the way you might think about this is that incrementally.
As the schedules for installation.
Greece, we will add people.
Two two our sales marketing and service functions and we're trying to be a little bit ahead of that obviously to make sure. Our people are trained.
So I think.
Speaker 4: incrementally, quarter over quarter, that's where the increase will be. But certainly, the revenue should catch up to that. And the revenue should be perhaps, you know, three to six months behind, you know, as we add the revenue and the sales and marketing.
Anticipate that.
Incrementally quarter over quarter.
That's where the increase will be but certainly the revenue should catch up to that and the revenue should be perhaps three to six months behind.
As we add the revenue.
Sales and marketing function.
Speaker 4: So that's how you might think about it. This little bit further so we hired a little bit earlier, but we think we can now start adding people based upon, you know, the rate of installation.
So that's.
That's how you might think about it.
Little bit further so we hired a little bit earlier.
We think we can now start adding people based upon.
The rate of installation growth.
Speaker 10: That's great. I appreciate it. Congrats. And they didn't think for taking the question.
That's great I appreciate it congrats and thanks for taking my question.
Thanks Scott.
Speaker 1: I am showing no further questions at this time. I would like to turn it back to Dr. Menowat for closing remarks.
I am showing no further questions at this time I would like to turn it back to Dr. <unk> for closing remarks.
Speaker 4: Thank you so much for time and thank you for being part of this evolution.
Excellent. Thank you so much for time and thank you for.
Being part of this evolution.
Talk to you next time.
Speaker 1: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Okay.
Speaker 11: And.
Okay.
[music].