IceCure Medical Ltd.

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 Curley. Please go ahead.

Thank you, Operator, and welcome to iSecure Medical's conference call to review the financial results for the first six months ended June 30, 2023. and to provide an update on recent operational highlights. Please refer to the earnings press release that we issued early this morning. Participating on today's call are Ice Care Medical's CEO, Eyal Shamir, and the company's CFO and COO, Ronan Simerman. Additionally, Dr. Robert Ward is joining the call today to share his experience using ProSense and will be available during the Q&A session, which will follow the prepared remarks. Before we begin, I'd like to remind everyone But this call and the question and answer session that follows 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 minimally 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 ice cure 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 an obligation to update these statements for revisions or changes after the date of this release, except as required by law. I'll now turn the call over to iSphere Medical's CEO, Eyal Shamir. Eyal, please go ahead.

Thank you, Richard. Hello, everyone, and thank you for joining us today to review our financial results in addition to some of our key achievements over the past quarter. I will start with a review of our significant business developments for the second quarter of 2023, and Ronen will provide an overview of our financial results for the six months ended June 30. Additionally, Dr. Robert Ward will provide his valued perspective as a doctor using ProSense for breast tumor cryoablation. Dr. Ward is an Assistant Professor of Diagnostic Imaging at the Warren Alpert Medical School of Brown University, Program Director for the Breast Imaging Fellowship, and Associate Chief of Diagnostic Imaging at the Women and Infant Hospital, specializing in women imaging and breast tumor cryoablation. We are grateful that he is taking the time to share his knowledge and experience using ProSense with us today. We will then open the call for Q&A. We are effectively executing our objectives of transitioning from clinical to commercial stage this year as we are experiencing increased adoption of ProSense worldwide. We reported a 32% increase in system and disposable probe cells compared to the first half of 2022, which we believe reflects a greater awareness of our benefits of our cryoablation solution when compared to the standard of care of a lumpectomy. The US FDA reviewed of our de novo application for process is ongoing. We believe A favorable response from the US FDA would be a game changer and could significantly impact our performance. As a reminder, the FDA submission was for the indication of early stage low risk breast cancer in patients who are high risk to surgery. The FDA review is progressing and it is important to note that the timeline is consistent with the standard de novo review process and we remain highly engaged with the FDA. Outside of the U.S., ProSense recently received the regulatory approvals in Canada and China. This demonstrates the global momentum and reinforced our transition to a commercial stage company as we expand our revenue-generating efforts in multiple markets. For example, we signed a new non-exclusive distribution agreement in Portugal with MC, the largest distributor of third-party medical devices in Portugal. Initial purchase by the distributor includes two process consoles along with numerous disposable cryoprobes and introducers, so the partnership is already off to a solid start. While we believe our largest market will be for breast cancer in North America, we are pleased to see third-party studies that prove cryoablation efficacy in treating in a variety of other indications. During the second quarter, a study was published in the Journal of Vascular and Interventional Radiology reporting 92.8% efficacy in avoiding secondary surgery when using cryoablation for percutaneous endometriosis. The independent study conducted in Paris and the published paper were not sponsored by iSQ. ROSENS was one of the two cryoablation systems used in this study. Global adoption of cryoablation continues to gain momentum, and we believe the positive published data from our trials combined with our efforts to raise awareness among end users is a key factor in this trend. Specifically, ProSense was used in the first time ever cryoablation continuing medical education, CME, course at the American Society of Breast Surgeons, or the ASBRS Annual Meeting in April. Moreover, we see this continuing as the process will be featured in several other upcoming courses and medical exports later this year and into 2024. In summary, we are executing our key initiatives and we believe the momentum will continue. While we are awaiting other significant milestones, namely the US regulatory approval, it is encouraging to have so many champions advocating for process. We will hear from one of them in a few moments, Dr. Ward, about why he, as well as other doctors, are adopting process. For now, I will turn the call over to Ronen for a summary of our financial results. Ronen?

Thank you, Eyal. For the six months ended June 30, 2023, revenues increased by 9% to $1.65 million, compared to revenues of $1.5 million for the six months ended June 30, 2022. Excluding licensing revenues from our distribution agreement with the Rumo Corporation of Japan, product sales increased by 32%, in the six months of June 30, 2023 to $1.37 million, compared to $1.03 million for the same period last year. Product revenues were driven by higher sales in the United States, China and other territories, partially offset by a decrease in sales in Europe. Gross profit was $0.75 million for the six months of June 30, 2023, compared to approximately $0.82 million in the same period last year. Gross margin was 46% for the six months ended June 30, 2023, compared to 54% for the six months ended June 30, 2022. The decrease in gross profit and gross margin is primarily attributable to the decrease in revenue recognition from the Terumo Distribution Agreement. Research and development expenses for the six months and the June 30, 2023 were $4.19 million compared to $4.65 million for the six months and that June 30, 2022. The decrease is primarily due to the effect of the devaluation of the Israeli shekel compared to the US dollars on Israeli shekel denominated expenses and a reduction in development expenses of ISTO next-generation single-prop system, and a decrease in clinical and regulatory costs. In anticipation of ramping up U.S. commercial efforts, sales and marketing expenses for the six months end of June 30, 2023 were $2.25 million compared to $1.53 million for the six months end of June 30, 2022. General and administrative expenses for the six months ended June 30, 2023 were $2.35 million compared to $3.34 million for the six months ended June 30, 2022. The decrease is mainly due to a decrease in directors and officers insurance costs and the effect of devaluation of the Israeli shekel compared to the US dollar on Israeli shekel denominated expenses. Total operating expenses for the six months and the June 30, 2023 were $8.79 million compared to $9.52 million for the six months and the June 30, 2022. The decrease in operating expenses was primarily attributable to the reduction in research and development expenses and directors and officers insurance costs. Net loss reported for the six months and the June 30, 2023 decreased by $7.66 million or $0.17 per share, compared with a net loss of $8.97 million or $0.24 per share for the same period last year. As of June 30, 2023, The company had cash and cash equivalents, including short-term deposits of approximately $16.7 million compared to $23.66 million as of December 31st, 2022. I will now turn the call over to Dr. Robert Ward. Dr. Ward.

Well, thanks everybody for having me on. It's a pleasure to be here today. Just a little bit of additional background about myself. I've been doing breast cryoablation since 2016. I've used three different cryoablation consoles, and I've done nearly 100 cases within the breast, which have been a mix of benign symptomatic fibroadenomas and cancers. Most of the cases have been cancers, and all of these have been done for patients instead of surgery. Because of my experience, I've been able to publish pretty extensively on the topic, and I've been invited to speak at multiple national meetings. And what I can say is, you know, the number of cases have kind of started to accelerate since 2016, having done only a couple of cases in those early years. But we've been doing substantially more. There's been a lot more interest in cryoblation because I think people are more aware of the technology. Not only do breast radiologists like myself perform the procedure, but breast surgeons also do, as well as other radiologists such as interventional radiologists. What else can I say about cryoablation in general within the breast is that a lot of national societies are taking a lot of interest in doing this. The American Society of Breast Surgeons had a half-day course earlier this year dedicated to breast cryoablation and the Society of Breast Imaging and the Society of Interventional Oncology are organizing their own courses in the near future. So, you know, I feel like we're kind of at an inflection point when it comes to breast cryoablation. This is consistent with people wanting to move toward less invasive treatment modalities for the breast. Now, specific to IceCure's ProSense cryoablation system, I've actually been using this console for the last two years or so. And I can say that IceCure has been incredibly helpful throughout the entire process. When we first were interested in acquiring the device, they were incredibly supportive. Once we were able to get the go-ahead from our hospital value analysis team and leadership, IceCure was incredibly helpful in educating our ultrasound technologists in an in-service prior to starting procedures. They were also willing and able to be present for some of the first cases that we did. And, you know, really they've provided as much support as we've ever requested. As it turns out, the device itself is incredibly easy to use and intuitive. perhaps even more so than other devices that I've used before. One example is that if you, you know, what we do is we place a single needle through the center of the targeted lesion along its long axis, and this device actually allows you to enter the long axis dimension into the system, and it tells you exactly how far past the lesion you have to put the tip of the needle in order to center the mass within the growing ice ball. So, you know, that kind of, you know, additional information really increases our confidence that we're covering the area, you know, in a highly targeted and accurate way. The console itself is very small. We actually probably have relatively smaller ultrasound procedural rooms than most places. And the device fits very comfortably within that space without any issue at all. The other advantage is that it's a liquid nitrogen device. The cryogen is liquid nitrogen. The other device on the market currently is an argon device. Argon is a little bit more expensive. It's a little bit harder to utilize. Liquid nitrogen is very easy to get your hands on, cheap, and you can set up for all of your cases for an entire month by buying a very... small amount of liquid nitrogen to be stored as cases are needed. Cryoablation has a lot of advantages over other ablative modalities in that it's a painless procedure and it only requires local anesthesia. It does not require any kind of sedating medications whatsoever. Some heat-based ablations, for irreversible electroporation, and other ablative modalities all require conscious sedation because it tends to be a painful experience. But the ice itself is analgesic, and using just the same amount of local anesthetic as you would for a biopsy is all that you need. The thing that amazes me and patients the most is once we get underway, they're anticipating they're going to feel something, and they don't feel anything at all. So, you know, it's an office-based procedure that takes 15 to 30 minutes of treatment time, depending on the type and size of lesion that you're looking to ablate. And, you know, amazingly, patients can return to normal activities right away. My schedule is such that I tend to perform these procedures in the afternoon at about 2 o'clock, and once the procedure's done, they leave, and oftentimes they go out to dinner at a restaurant with their family, they're pretty impressed that they can go right out and do that after they've had their breast cancer treated in this minimally invasive way. You know, additionally, anecdotally, patients have been very, very pleased with the cosmetic outcome. There's no deformity to the breast whatsoever. It's just a single small entry into the skin with a needle that's about the same size as biopsy needles we use all the time within the breast. And this has been backed up, you know, by a lot of manuscripts that have been reported in peer-reviewed journals, you know, including excellent, you know, outcomes when it comes to complete ablation, you know, longer-term follow-up without recurrence, actually in some cases less so than surgery. And quality of life measures have also had an advantage for cryo relative to surgery as well. As you probably all know that cancer is very, very common. It is the most common breast cancer diagnosed in women and the second most deadly. And with increased improvements in screening technology, we're finding cancers earlier when things like this minimally invasive cryoablation can be used to treat these cancers instead of surgery. And as I said before, patients are now learning about the procedure, not only through just kind of media, but from the referring physicians themselves. And they are pretty much always choosing cryo over surgery when they have a reasonable option. And that's kind of been our experience so far. We see about 10 to 15 new cancers at our facility alone each week, and greater than 50% of those patients have these small screen detected cancers that would qualify for the procedure. In any case, I think I'll stop there and I will save some time for questions at the end. Thank you so much.

So I'll go into the questions. Thank you. Ladies and gentlemen, at this time we will begin the question and answer session. If you are dialing via phone, please press star 1 to ask a question. 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. If you join via link, please raise your hand at the bottom of the screen. If you click on the chat button, you can send your question. The first question is from Anthony Vendetti of Maxim Group. Please go ahead.

Thank you. First for the doctor, maybe if you could just talk a little bit about the advantages of cryoablation over lumpectomy. I know you mentioned the advantages of liquid nitrogen, which is ice cure's way of freezing the tumor versus argon, but maybe just the advantages over lumpectomy and then what you have been able to witness in terms of recurrence, in terms of your lumpectomy cases versus cryoablation. Thank you so much.

Yep, happy to field that question. Cryoablation versus surgery. You know, the main advantage is that it's less invasive procedure to perform, right? Surgery patients are going to have to have a preoperative localization procedure where we put either a wire or a magnetic seed or something like that at the site of the cancer so that the surgeon can find that area in the operating room. Those patients are going to have to go to the operating room and undergo general anesthesia. So there are a lot of people involved, operating room time, surgeon, anesthesiologist, You know, some patients actually are at increased risk from having general anesthesia because of medical issues. We're seeing that more and more as patients, you know, live longer and have chronic issues that they have to deal with. Also, you know, you have to pay, you know, the pathologist to look at the surgical specimen related to surgery. So there's a lot that goes into coordinating surgery. And, you know, as we've seen in medicine in general, you know, over, you know, decades, periods of time, you know, people tend to trend toward less invasive treatments so long as they are effective. And that's what is bearing out in the literature is that cryoablation is effective in treating, you know, these targeted lesions. In 2016, they published a study. It was a prospective study where they did cryoablation and those patients went on to lumpectomy right after so that they can get a surgical specimen and evaluate whether the tumor was killed or not. And they showed that for cancers less than a centimeter in size, it was 100% effective in that study. And that's been our experience as well. So, you know, cosmetic outcome, less costly to the healthcare system. You know, patients that have medical issues may be placed at higher risk if they have general anesthesia for surgery. Again, it's a painless procedure for cryo that only requires local, so I think it's just better for patients, the patients that qualify. Of course, there are some breast cancers that are not appropriate for breast cryoablation, being very extensive cancers and cancers that don't have a good ultrasound correlate because right now these procedures are performed generally under ultrasound guidance. If I didn't answer that question, please feel free to let me know and I can elaborate more.

No, that was great. Just a quick follow-up then. So, right now it's for, you know, stage one, stage two cancers. Do you think it's possible that it could be eventually for stage three? Or do you think it's stage one, stage two is the most appropriate? just in the cases you've done, what has been the recurrence?

So the cases that I do tend to be kind of older, kind of more frail patients that are at risk for general surgery. And actually, they tend to be less ideal for cryo in the sense that the tumor is very big, it's close to the skin, and things of that nature. And we've had excellent results So far, we've actually, of all of those cases that I've done, probably about 75 of them have been cancer cases. And we've only had one tumor that's recurred within or at the margin of the ablation zone. We have had other patients develop what we call an ipsilateral breast tumor occurrence, but those tumors have been greater than two centimeters away from the original site or in a different quadrant of the breast altogether. So that's kind of considered more of a different entity. So we've had a really excellent success in locally treating the targeted cancer. So that's what I can say about recurrence rates. We're actually in the process of analyzing our data and data from other institutions and we should be publishing that hopefully later this calendar year or early next calendar year. And again, those are the patient population are those that are actually, they did not qualify for clinical trials because, you know, they were perhaps considered less ideal cryocandidates. What was the other part of that question?

No, that's helpful. Just really quickly on lymphectomy, which, you know, has been around for much longer. Do you or your colleagues see recurrence rates of 15%, 20% plus in lumpectomy? No. No? Okay. So what's your normal recurrence, you think, for lumpectomy?

Well, you know, so the thing is, you know, when it comes to doing the lumpectomy, right, they're removing the tissue and they're giving it to the pathologist to evaluate the margins. And, you know, if there's cancer at the margin, they assume that they've left some cancer behind in the breast. The re-excision rate in that case is anywhere from 10% to 20%, depending on the surgeon group you're dealing with. So when it comes to cryoablation, you're not giving the tissue to the pathologist. You're relying on imaging follow-up. You're relying on treatment planning in the beginning and then follow-up imaging. And using the multiple imaging modalities that we have, that would normally be used post-lumpectomy anyhow, you know, we've shown that the recurrence rate, you know, is not, is certainly not in that 10 to 20% range.

Okay, great. And lastly, and this is for Ronan maybe, and then I'll hop back in the queue. Do you have any update, any communication recently with the FDA regarding the approval process?

Thank you, Anthony. This is Eyal. I will answer on that. You know, we achieved our submission timeline and we had always anticipated lengthy review process. The interaction with the FDA has been, you know, cordial, consistent and following, you know, normal procedures and protocols. There is nothing out of the ordinary. And today, the review period has been to our expectation. According to statistics, it takes 300 to 400 days for the FDA to give its decision. And this is why we have always said that our expectation is to hear back by the end of this year. You know, all the information is now in the hands of the FDA review team. And it is not wise, not, you know, prudent for us to make public statement with regards to the conversation on timing since, you know, no one never wants to get ahead of the FDA and Anthony and the rest of the audience. Rest assured that we will communicate the FDA response when we receive it. Thank you.

Thank you, Yael. That was helpful.

I'll hop back in the queue. The next question is from Ben Hainer of Alliance Global Partners. Please go ahead.

Good day, gentlemen. Thanks for taking the questions. First off for me, Dr. Ward, you mentioned that the national societies are taking more interest in cryo-ovulation. You know, in your career, have you seen other technologies or other technologies you know, sort of procedures or things where the national societies have taken an interest at a similar level and, you know, what has become of them? I guess another way of asking it is does it typically become somewhat of a fait accompli once the societies kind of get on board with these things?

Yeah, I mean, you know, I think these societies, you know, are kind of run and organized by kind of very kind of senior, kind of typically academic faculty. And they have a really good finger on the pulse of kind of what's going on. And now that they realize that, you know, this is definitely something that's going to be around, you know, they kind of want to take ownership of it and promote it. And I think that's what we're seeing here right now. Cryoablation can, like I said, be done by surgeons and by radiologists, and both groups are actually working together really quite nicely to kind of advance this technology and, again, hopefully soon kind of bring it into the mainstream with FDA approval and so forth. That's certainly what we hope for because I think everybody recognizes that, again, if you can get away with less invasive treatment options, you know, that are just as effective, if not more, then, you know, that's the right thing for patients.

Okay. That's helpful. And then, you know, for those patients that are candidates for cryo, and you mentioned you do cryo on some patients that, you know, may not be considered the ideal patients to enroll in a clinical trial perhaps, But the folks that would be potential cryo patients that do choose surgery, what sort of characteristics do they have? I mean, is it just folks that want to see a lump of tissue on a table, or who is that?

So the question was, what are the patients that are given the choice cryo versus surgery and then choose surgery instead? Is that right?

Yeah, that would probably be the simple way of asking that, I suppose.

Okay. So, you know, what we end up doing is presenting all patients in a multidisciplinary tumor board setting. That's not unique to our facility. That's how it typically works everywhere. And so everyone gets together to talk about the best treatment options for the patients. So these patients are presented with surgery and cryo as both reasonable treatment options typically. The vast majority of the time when patients are presented with the option of cryo, they're going to choose cryo because You know, it's less invasive. If it's going to effectively treat their cancer, they're going to go ahead and do that. The cases of patients that have heard about both cryo and surgery and then have chosen surgery, they typically think to themselves, well, you're going to freeze the cancer, and then you're leaving the cancer in my breast, and I don't want that. I want it removed. And so there's a little bit of just an educational barrier I think you have to get over. with those particular patients, it's a very, very small number of people. I can probably count on one hand how many people have brought that argument forward, you know, because the idea is we're treating the cancer within the breast and we're killing the cancer, and there's therefore no need to actually remove that tissue at all. So once, you know, you educate people about kind of a mechanism of how cryo works, You know, they typically buy into that.

Okay. So it's kind of a single-digit percentage of people that might kind of object that you're not taking it out.

Yeah. I mean, very, very, very few. I mean, actually, there are many more patients that have come to me and to other proceduralists across the country that are seeking cryoablation for their breast cancer than You know, when they have a very extensive breast cancer that occupies the majority of the breast and involves the skin, you know, like an inflammatory breast cancer. And actually, you know, right now from what we know, there's not really enough evidence for me to kind of support you in cryo in those patients. You know, if the cancer involves the skin, which is a very small number of patients, then, you know, we shouldn't be doing cryo in those cases probably the vast majority of the time. But, you know, maybe we'll learn stuff in the future about, you know, again, kind of immunologic benefit of cryo where you're killing the tumor in situ and you're releasing intact tumor antigen for your immune system to kind of pick up and recognize it as foreign and essentially kind of creating a sort of kind of personalized cancer vaccine. But that's a little bit of ways down the road there where people are currently still in pilot studies for that. So I don't want to. I don't want to get too much into the immunotherapy side of things. But, yeah, the vast majority of patients, if given the option, would choose cryo, in my experience.

And on that last point, kind of simulating the patient's own cancer response, I mean, the speculation that there's a pretty strong signal there,

I'm sorry, can you repeat that?

So on the patients where, that's kind of that last point that you mentioned on cryo kind of activating the patient's own response to, yeah, the immune response to the cancer. You know, do you think there's the potential for that to come out favorably?

Oh, yeah. I mean, I absolutely do. I mean, immunotherapy is kind of really hot right now, if you will. There are a lot of research dollars that are kind of focused on evaluating immunotherapy in combination with other treatments. And this has been done in other tumors throughout the body, but also with breast cancer, combining an ablative-type modality with And really, you know, cryo is kind of the ideal ablative modality for a variety of reasons. To combine that with immunotherapy to kind of unleash the immune system on the patient's own tumor, there have been some very fascinating studies that I won't get into here, but, you know, have been published since probably 2016, and there are a couple that are ongoing right now. And so, yeah, I'd encourage you to take a look at some work done by Memorial Sloan Kettering Physicians, looking at cryoablation and ipilimumab, which is an anti-CTLA-4 antagonist. So it basically releases the brake on the immune system, and they showed very favorable intratumoral and systemic antitumor antigen-specific responses.

That's fascinating. I'll have to check that out. And then I guess lastly for me, for you, Doc, is... The follow-up imaging post-cryoablation, are there any kind of caveats or any challenges to interpreting that?

You know, it's very easy to teach other radiologists how to interpret post-ablation imaging, and the vast majority of the time it is typical and there's no issue. You know, there are cases where there's like a new kind of density at the edge of the ablation margin or in the adjacent tissue, which, you know, we just recommend a biopsy for, and it oftentimes turns out to be a benign process called statinicrosis. But that same process happens after surgery as well. So it's really no different.

Okay.

Got it.

Thanks for taking the questions, Doc. Just a couple for the company. You know, on the endometriosis study that came out, you know, obviously endometriosis generally has a lot of challenges on the diagnostic front. You know, as you guys kind of analyzed the potential opportunity in endometriosis, what's kind of your thought there, you know, given the nature of the disease?

Thank you, Ben. This is Eyal. The KOL, Professor Cornelius, who did the trial in Paris, and he is now part of Memorial Sloan Catering in New York. He is planning, you know, to treat it and to do, you know, more research and publication. And from the indication point of view, this is something that he could treat. And we believe that this is a very important indication for us as part of our women health strategy. So both breast cancer, breast benign tumors, and also endometriosis could be part of a very big venue for ICU in the future.

Okay, got it. And then also, I don't know if you have the information on this, but I think you mentioned that the investigators had used a couple different cryoablation systems. It looks like they were using the EndoCare system. also presumably from the dates of the procedures that they switched from endo care to ice cure or is that, isn't that correct or unclear?

He used, you know, in some cases, the process, some cases, the other system that he had in the hospital, as far as we understand for his future treatment, A usage in MSK, he is going to use our process as a liquid nitrogen single-use probe that he believes that will give him, you know, more benefit and easy to use. Okay.

May I jump to that as well? Because as a user of both argon and liquid nitrogen devices, if given the choice, I would go with liquid nitrogen. you know, because it creates extremely cold temperatures and a rapid growth of ice that gives you confidence you're completely treating the lesion that you're targeting.

Okay, got it. Maybe one more quick one. You know, just any color on the reactions to the training thing on cryoablation and ASBRS?

You know, as you recall, ASBRS sponsored the continuing education seminar on cryoablation. We had several process systems on display for demonstration and the session was, you know, over subscribed and it was, you know, extremely successful. The cryoablation for breast cancer discussed also in the ultrasound course and in other events during, so it was really the top topic of the last ASDRS this April in Boston. And as also Dr. Ward mentioned, some other societies like the SIO Society, Interventional Oncology, they already published that they are going to do a masterclass on breast cancer cryoablation on January 24 as part of our coming session, and this has been discussed also at the SIR, Society Interventional Radiology, that will be later next year. So breast cancer cryoablation topics are on all of our three call points, breast surgeons, breast radiologists, and interventional radiologists.

Okay, great. Well, thanks for taking the questions, gentlemen. That's it for me.

Thank you. The next question is from Kemp Dolliver of Brookline Capital. Please go ahead.

Great, thank you. So first couple of questions are for Dr. Ward. And how is your institution thinking and your department thinking about the number of consoles you would need to, for your patient population, both in terms of volume and also depending on the geographic footprint of your locations?

Well, I think it depends on the number of people that are performing the procedures and if you're spread out over a larger geographic footprint. Here in Rhode Island, the smallest state in the nation, We're pretty packed in close in proximity. If you're driving more than 15 minutes in Rhode Island, that's a long way. So I get away with using a single console, but obviously we're buying new probes for each case. The needle itself is kind of the disposable that we're purchasing for each case. So we're probably looking at one case per week right now. just me alone, but, you know, that's going to increase, you know, significantly, you know, once we see, you know, the FDA step up, hopefully.

That's great. And, you know, how many physicians in your group would likely perform the procedure?

Well, you know, the great thing about the procedure is that it's, you know, it's an ultrasound guided procedure that is just really a basic extension of a biopsy technique, essentially. So any one of the 10 breast imaging radiologists in my group could do the procedure. It's not just me with some special skill set. You know, once you've seen one, and you've already done, you know, a bunch of ultrasound-guided procedures like biopsies in the past, you should be able to pick this up, you know, no problem. So the learning curve, if you've done ultrasound procedures, which, you know, a lot of all breast imaging radiologists, all interventional radiologists, and quite a few breast surgeons too, if you're familiar with that, then you're going to have no problem doing this procedure. That's a pretty major advantage.

Great. And how long was the decision making purchasing cycle for your institution?

Well, so, you know, Women and Infants Hospital is kind of notoriously slow in dragging their feet and going through a value analysis committee to make any kind of capital purchase decisions and things of that nature. So for us, I mean, it took it took almost a year. But that is not typical of what I would expect elsewhere. If we were dealing with the private practice side of our group, you know, we would have had a short discussion over, you know, lunch sometime, and we would have made the decision to go ahead and move forward with it.

Would FDA approval shorten that?

Oh, yeah, absolutely.

Great, thank you. And then a question for the management team. How would you, I guess, estimate where you are with your build-out of your U.S. commercial capabilities? Are you about halfway there, a quarter of the way there, 75% of the way there? What should we be looking for over the next six to 12 months?

Thank you very much, Kemp. This is Eyal. Some aspects of our plan have already been implemented with great success. I mentioned or we discussed our attendance to some important conference, mainly the coming ASBRS. We have added several team members in the U.S. and we are mainly, we are actively recruiting assistant vice president of sales for North America, which he will be focused mainly in the US. But as we all remember, a few weeks ago, we got the regulatory approval in Canada, so he will be managing North America. We are in a final stage and we expect to announce someone soon. So this new vice president, CELS North America, will lead the CELS team and will grow the team in order to welcome the FDA first indication and the final of our study that last patient expected to come on February 24, and then the study supposed to be finished. So we are building the team to welcome the regulatory approval and to build our commercial stage.

And what's your target for the size of the commercial team?

You know, it will grow with the expectation of sales. You know, I cannot say number one. We will soon start to work on plan, of course, as part of a much long-term plan, and we will build the team accordingly, both self and clinical support that we'll be able to support, especially at the beginning of new users, to do all the case coverage.

Okay, thank you.

The next question is from Yi Chen of HC Wainwright. Please go ahead.

Hey, everyone. This is Chet on behalf of Yi Chen. I guess one question to the doctor. I know you mentioned that there are indications that may not actually benefit from cryoablation. So following up on that, do you think this is the optimum indication that is early stage low risk breast cancer Is this the ideal target patient population that you would like to go after with cryoablation? Or do you think there are other indications that may benefit from this technology? If so, could you provide some color? Thank you so much.

Yeah, sure. So I think the ideal candidates for breast cancer cryoablation are those kind of screen-detected small breast cancers. you know, they are small and you have a very high degree of confidence that you're going to be surrounding that lesion with lethally cold ice. Now, you know, like I said, most of the patients that I've treated have been less ideal candidates and we're kind of trying to push the envelope on that. We've had very good results. So I think, you know, the indication beyond kind of the early stage breast cancer could certainly expand. And some of this also depends on, you know, how things play out with kind of the immunotherapy side of things, you know, which is pretty interesting I've already discussed. You know, cryoablation has been used in other body parts, other types of cancers for quite a long time for both curative intent and palliative purposes. And also, you know, nonmalignant disease such as breast fibroadenomas that are painful and palpable. You know, there is a Category 1 CPT code for that, and I've treated plenty of patients with those symptomatic fibroadenomas. And what happens in those cases is that after done treatment within a period of weeks to months, the fibroadenoma shrinks down to typically basically nothing. So it's no longer palpable, and it relieves the pain right away. You know, there are other indications, like patients with really advanced and metastatic disease that have painful metastases, you can do cryoablation to alleviate their pain. For instance, we had touched on endometriosis, which I think is the kind of an underappreciated cause of cyclical pain typically happens in, in women that have had a prior C-section and in the process of the C-section, some endometrial tissues kind of dragged out into the abdominal wall. And you know, that tissue is under hormonal influence. So as the, you know, month cycle, you know, they experience pain. And, you know, surgery is not a good option for those patients because, you know, dealing with the abdominal wall and the underlying musculature and it's not particularly effective either. So, prioblation represents a very good treatment option in those cases as well. I hope I answered your question.

Yes, thank you so much. And the one thing that you said which piqued our attention was evaluating immunotherapeutic agents plus cryoablation. And maybe this is a question for the management, but any plans to do that with ProSense? Or if there are already studies being conducted, if you could shed some light on it, that would be amazing.

Thank you. This is Eyal, the CEO. You know, MSK, Sloan Catering, used the ProSense system. Dr. Ward also mentioned in one of the studies that they published a small three-arm study, just the cryo, just the immunotherapy drug, and the combination. And they published that the combination showed much more effect to the patients. We, our Technology, the process technology also used in a mice animal study of cryoimmunological A fact that done in the case University Cleveland Clinic, and I think that just in the last two or three weeks, they published a new paper on that. So, with some of our partners, and mainly, you know, some of the top KOLs, we will support this kind of studies that mainly will be done as an investigator initiative trials.

Gotcha. Sorry, go ahead.

Sorry. Yeah, no, I was just going to say about the immunotherapy thing, just, you know, you should look up the abscopal effect. And it's this kind of idea that if you treat one site, you actually get an effect away from that target site. So if a patient has metastatic disease, for instance, if you treat a single lesion, all of the other lesions will shrink down after that because of, you know, the immune system's ability to recognize the tumor is foreign and to attack it.

That's fascinating. Thank you so much. And lastly, for the management, is the five-year readout from the I3 study still slated to occur in the first half of 2024? Thank you so much.

Yeah, if last patient will come on time, we anticipated that during the first quarter of 2024, we will have the final results. As we all know, sometimes patients do not necessarily come when scheduled. And then it will likely take us a few months to analyze the data So we currently expect to file with the FDA around mid-next year the final results of the ICES restudy. But as I mentioned, the patient is officially scheduled for the last follow-up February 24. We have another six months to finalize the study.

Great. Thank you so much.

There are no further questions at this time. I'll now pass the call back to Eyal for his closing remarks. Eyal, please go ahead.

Thank you very much for everyone. I would like to thank especially to Dr. Ward for taking the time to share his experience and his huge knowledge using cryoablation. mainly for breast tumors, breast cancer, and as Dr. Ward mentioned, also some experience in endometriosis. iSQ will continue to work hard in order to get some other milestones that we anticipated to get in the next few months, six to 12 months, as we mentioned, We're expecting to get the regulatory approval for the system from Brazil. And, of course, FDA is the most important one, and we are continuing to expand in the market. So thank you very much for the time today.

Thank you. This concludes the IceCure second quarter 2023 results conference call. Thank you for your participation. You may go ahead and disconnect.