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spk06: Good morning, and thank you for standing by. Currently, all participants are in a listen-only mode. After management's discussion, there will be a question-and-answer session. Please be advised that today's conference call is being recorded. I would now like to turn the conference over to Todd Carely. Please go ahead.
spk01: Thank you, Operator, and welcome to IceCure Medical's conference call to review the financial results for the 12 months ended December 31st, 2022, and to provide an update on recent operational highlights. We ask that you refer to this morning's press release and 20F to review the audited 2022 year-end financial results. Participating on this morning's call are IceCure Medical's CEO, Eyal Shamir, and CFO and CEO, Ronan Simmerman. After the prepared comments, Ayal and Ronan will be available to address your questions. Before we begin, I'll take a moment to read a statement about forward-looking statements. This call and the question and answer session that follow it contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Words such as expects, anticipates, intends, plans, believes, seeks, estimates, and similar expressions or variations of such words are intended to identify forward-looking statements. For example, we are using forward-looking statements in this presentation when we discuss the achievements we expect to accomplish as we continue to advance our growth strategy, our positioning to make significant commercial advances in key markets, pursuit of regulatory approvals in various jurisdictions, expansion of clinical applications, release of results from our clinical trials, potential market adoption and future sales of IceCure's mentally invasive cryoablation technology, advancing regulatory and commercial strategies, strategic plans, and our belief that we are well capitalized to execute on commercial opportunities to increase shareholder value. Because such statements deal with future events and are based on IceCure's current expectations, they are subject to various risks and uncertainties, and actual results, performance, or achievements of IceCure could differ materially from those described in or implied by statements in this presentation. The forward-looking statements contained or implied in this presentation are subject to other risks and uncertainties, many of which are beyond the control of the company. including those set forth in the risk factors section of the company's annual report on Form 20F for the year ended December 31, 2022, filed with the SEC on March 29, 2023, which is available on the SEC's website, www.sec.gov. The company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law. I now turn the call over to iSecure Medical's CEO, Eyal Shamir. Eyal, please go ahead.
spk04: Thank you, Todd, and welcome, everyone. My comments will be brief and will focus on the significant achievements we accomplished during the year, as well as those we expect over the coming months as we continue to advance our growth strategy. I will begin with yesterday's development the receipt of regulatory approval in China for our disposable cryoprops. The latest approval allow us to use the ISIN3 disposable cryoprops in combination with our previously approved ISIN3 console. This is exciting catalyst and we believe that this will generate increased commercial activities in China. This will be driven by our exclusive distributor agreement in China with Shanghai Medtronic Zika Medical Devices Company, LTD, and affiliates of Medtronic PLC, and Beijing Turing Medical Technology Company, LTD. If you recall, the initial three years period of this agreement includes minimum purchase targets of $3.5 million. In the U.S. market, which we believe represents the sizable addressable market the revenue trend we are currently experiencing are encouraging and consumable sales represented 20% of our 2022 revenues, almost double the 11% reported in 2021. Globally, our consumable sales accounted for 43 of our 2022 revenue, up from 29% in 2021, indicating increased physician awareness of our system. On the regulatory front, we are awaiting the US FDA response to our regulatory filing for process in treatment of early stage breast cancer. We believe, based on our data emerging from our I3 trial, process is a highly beneficial, minimally invasive option for physicians treating breast cancer to address the initial indication market of 43,000 women in the U.S. annually. Moreover, last year we received an initial reimbursement code from the Center of Medicare and Medicaid Services to help offset some of the costs for the treatment with respect to the facility fee. Globally, we're expecting responses to applications filed in several other countries, including Brazil, Vietnam, and Canada. On clinical front, we reported positive interim results from the i-Secret study, which continues to validate the process is a safe and effective in treating kidney cancer tumors with an 89.5% recurrence free rate. In summary, Our results demonstrate that we are a results-oriented company, and I believe we are well-capitalized to execute on commercial opportunities in the U.S. and globally to increase shareholder value. With that, Ronan and I are ready to take your questions. Operator, we would like to open the call for questions.
spk06: Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please press star 1. If you wish to cancel your request, please press star 2. If you are using speaker equipment, kindly lift the handset before pressing the numbers. Your questions will be pulled in the order they are received. Please stand by while we pull for your questions. The first question is from Kemp Dolliver of Brookline Capital Markets. Please go ahead.
spk03: Hi, thank you and good morning. I'll ask a couple of questions and go back into the queue. Now that you have the approval in China, how will the rollout proceed? And some of these decisions I acknowledge may be in the hands of your partners, but I'm assuming they'll, I mean, are they contemplating pursuing government reimbursement at some point or strictly focus on the cash pay market? I'll start with that.
spk04: Thank you, Kemp. We are very excited about the opportunity in China. We always believe China will be a growth market for IceCube. Our partner in China, which is both mainly Shanghai Medtronic Zika and together with Turing Med, they will approach public hospitals mainly at the beginning because most of those cases will be done in hospitals and later they will go for private clinics. Even in China, public hospitals, they will be able to start with some co-payment by the patients and in parallel, they will pursue for a reimbursement in China.
spk03: Okay, very good. Thank you. And just switching to the U.S., you have been evaluating partnering versus self-distribution. How is that thought process evolving over the last few months?
spk04: We are still in process on that. I think that it might be a combination of a direct sales team with some partners, but this is still under evaluation as we did a strategic analysis market approach and market plan in order to enter the market. But it might be some level of combination.
spk03: Would that be by geography or some other criterion?
spk04: It will be by geography, but also by some other you know, partnering that will have some benefits with specific organizations, DNAs, and other aspects that will help us to make the market penetration.
spk03: Okay, very good. Thank you. I'll go back in the queue.
spk06: The next question is from Yi Chen of HC Wainwright. Please go ahead.
spk00: Hey, everyone. This is Chait on behalf of Yi. And I'm sorry if I missed some of the information in your prepared remarks. My call was in and out, but Any guidance on the anticipated sales in China this year or even next year would be helpful? And also, again, please bear with me if I've missed it. Any guidance for 2023, top-line guidance for 2023? And also on IC CRETE and any other indications, are there any future data presentations that may happen this year would be very helpful. Thank you.
spk04: So thank you very much. On China, you know, we are not giving a specific guideline on specific cells every year. The minimum quantity agreement that we signed, the triangle agreement with Shanghai Medtronic Zika and with Turing Med, it's a minimum of $3.5 million for the next three years. Other than that, we are not giving a specific guideline on cells every year. You know, ICU is running two sponsored trials. One of them is the IS3 breast cancer cryoablation trial that we did the file, that we filed on October last year. And we have the interim results on the kidney that we published on last December. At this stage, we don't have other sponsored studies. There are some other studies that are investigative studies, and they will make their publications and results according to their own study and time.
spk00: Thank you, and if I may sneak in one more quick question. Also, could you provide some color or elaborate on the impact that the CPT Category 3 code that was assigned to you by the CMS in November 2022, how has that impacted your, you know, marketing efforts or the uptake or adoption that you've seen in the U.S.? Any trends would be very helpful after you've received the CPT code.
spk04: Yeah, so as you mentioned, November 1st last year we got a payment assignment on our CPT-3 code for breast cancer in the level of $3,428 for the first time ever. And this will be effective after we will get the first FDA clearance. And this will be for a facility fee. So it will be able to offset some of the cost. After we will get the FDA, we will be able to start the process to move from CPT-3 code to CPT-1 code, which will include also the physician fee.
spk00: Excellent. Thank you so much.
spk06: The next question is from Ben Hainor of Alliance Global Partners. Please go ahead. Ben, hey, Nor, could you ask your question? Sorry, can you hear me, gentlemen? Yes, now we can hear you clearly.
spk02: Got it. So for me, I apologize, I'm jumping between calls here, but just on the submission for a Category 1 CPT-1 code, Do you think you'll have enough society support and usage data to submit that next year, and could we expect a code to be in place come 2025, or what's the current timeline thinking on that?
spk04: Thank you very much, Ben. On 2019, when we did the submission to the AMA in order to create the CPT-3 code, we had five societies. Of course, the first one and the most important one is the American Society of Breast Surgeons, but other four societies, including interventional radiologists, supported that, and we are working very closely and participating to the interventional radiology societies' meetings, and they would like to adopt cryoablation for breast cancer. So they told us that they are going to fully support us for this application, moving from CPT-3 to CPT-1 code. And I believe that during 24, we will be able to make this process and to make the submission after we will collect all the relevant data in front of the AMA, which they need to make the decision to move to CPT-1. Okay.
spk02: Is there a chance that you guys might not even need to be kind of a sponsor of the CPT-1 submission? I ran across another company recently in a different space that the relevant societies actually are taking it upon themselves to bring it through uh, the process. Could that be, um, something that happens with you guys as well, do you think?
spk04: Yeah, the breast cancer and the head, the head of the coding and reimbursement committee of the American Society of Breast Children, uh, you know, they, they, uh, did it with a great support and together with the American Surgery Society. So, uh, they will give us the support or they will make it, you know, by themselves. Okay.
spk02: Great. Yeah. I know you guys have a lot of support. It's good to hear that. And then on the 3.5 million in minimum purchase targets for the, the, the Chinese distribution agreement with the, the affiliate Medtronic. I apologize if this has already been asked, but is that, 3.5 million over the next three years in the term of the agreement, or is that just for the current year's period?
spk04: The minimum quantity that they committed for the coming three years, it's a $3.5 million.
spk02: Okay, got it.
spk04: This is the minimum for the first three years. Okay.
spk02: Got it. And then, obviously, there's always considerations when you're setting the terms with a distribution partner anywhere. But are there any things that we should be thinking about when it comes to the potential for extending that agreement? Is it something that you guys need to see that they're hitting the ground running and generating a lot of sales for you guys? you know, would there be anything that would cause you to switch, try and switch to another partner or what, what kind of goes into a potential renewal there to the extent you can discuss it?
spk04: You know, of course you would like, uh, you would like to, to evaluate, you know, different, uh, aspects of calls. And the most important one is, you know, future sales, uh, relationship, uh, with the different societies, creating, you know, guidelines, working on the reimbursement, you know, all the educational stuff, all the clinical support that they need to be, you know, it is not, you know, only cells, you know, all the KOL support, clinical support, you know, especially for training at the beginning. So we will evaluate like any other partner, you know, all that aspect to be sure that they are delivering, you know, what we need in order to be very successful in the market.
spk02: Okay. Got it. Well, that's all I had. Thanks for taking the questions, gentlemen. Appreciate it.
spk04: Thank you, Ben.
spk06: If there are any additional questions, please press star one. If you wish to cancel your request, please press star two. Please stand by while we poll for more questions. The next question is a follow-up question from Ken Stoliver of Brookline Capital Markets. Please go ahead.
spk03: Hi, thank you. Just quickly, and I know you are reluctant to give specific guidance, but with regard to your spending this year, how should we think about it relative to 2022? And that would be for all three expense buckets.
spk05: So we're expecting that 2023 will be quite similar to 2022. If you will look at the numbers, you will see that we are investing more in R&D and all the regulatory affairs and clinical affairs and also in the marketing. So from all these aspects you can expect to see probably the same numbers. We are planning to spend a little bit more on marketing, especially in the U.S.
spk03: Great. Thank you.
spk06: The next question is from Yi Chen of HC Wainwright. Please go ahead.
spk00: Hey, this is Chait again on behalf of EE. Just a quick follow-up. I know I've seen that you've presented interim study results at the Urological Association Conference in Israel. And please bear with me if you've already touched upon this in your earlier calls. But what was the feedback from the physician community at that conference? with regards to the data that you've presented.
spk04: I would like to be sure that you refer to the kidney cancer interim study that we established on December. This is what... Okay. So, you know, the feedback that we got, you know, from the conference itself and with other... KOL and physician that we share this information in some of the events that we exhibited like on February in the interventional radiology meeting in India and January it was the Society Interventional Oncology in Washington, D.C. You know, they believe that the results are very good and they see the benefits of using, you know, one probe instead of a multi-probe system, you know, in one probe, which is less costly than two to three probes. This is how they use when they work with Galil Medical and EndoCare Argon and Helium cryoablation technology. So from the results of complication, navigation time, costing, the three probes cost much more, and the reimbursement, for example, in the US, it is the same amount if you buy one probe or three probes. From the results, they believe that the results are promising in the interim, and they believe that this is an indication that they will be more than happy to use it and actually we are treating, we are doing this study for clinical evidence. We have the kidney cancer cryoablation as part of our intended use and indication to use both in Europe and also in other countries. So they believe that the interim results are showing, you know, very promising results.
spk00: Thank you so much.
spk06: There are no further questions at this time. This concludes the ice cure fourth quarter and full year 2022 results conference call. Thank you for your participation. You may go ahead and disconnect.
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