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spk00: 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 will be recorded. I would now like to turn the conference over to Michael Poliview. Please go ahead.
spk02: Thank you, Yoni, and welcome to iSecure Medical's conference call to review the financial results as of and for the six months ended June 30, 2024, and provide an update on recent operational highlights. You may refer to the earnings release that we issued earlier this morning. Eyal Shamir, the company's CEO, is traveling, and due to a last-minute poor communication network at his location, is unable to dial in and participate. Therefore, joining today are iSecure Medical's VP of North American Sales, Shad Good, and the company's CFO and COO, Ronan Zimmerman. Before we begin, I'll now take a moment to read a statement about forward-looking statements. The call and the question and answer section that follows it contain forward-looking statements within the meaning of the state probable 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 upcoming regulatory review of process by the FDA and its medical device advisory panel, the expected timeline for reporting interim analysis of i-Secret kidney cancer trial, the pursuit of regulatory approvals in various jurisdictions, including with respect to reimbursement codes for physician expenses, potential demand for and market adoption of iSecure's minimally invasive cryoablation technology, advancing regulatory, marketing, and commercial strategies in our belief that we have resources to execute our clinical, regulatory, and commercial objectives to the end of 2024 and into 2025. Because such statements deal with future events and are based on iSecure's current expectations, they are subject to various risks and uncertainties, and actual results, performance, or achievements of iSecure could differ materially from those described in or implied by the statements during this call. The forward-looking statements contained or implied during this call are subject to other risks and uncertainties, many of which are beyond the control of the company, including those set forth in the risk factor section of the company's annual report on Form 20F for the year ended December 31, 2023, filed with the SEC on April 3, 2024. which is available on the SEC's website at www.sec.gov. The company disclaims any intention or obligation except as required by law to update or revise any forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and speaks only as of the live broadcast today, August 20, 2024. In addition, during the course of this call, we will discuss certain metrics that are non-GAAP measures, and we refer you to the reconciliation tables and other information about these non-GAAP measures included in the Earnings Press release that we issued earlier this morning. I will now turn the call over to ICER Medical's VP of North American Sales, Shad Good. Shad, please go ahead.
spk01: Thanks, Michael. Hello, everyone. Thank you for joining us today. As Michael mentioned, AL was unable to get on the call due to last-minute network difficulties, so I will provide his business overview. During the first half of 2024, we continue to experience increased demand for ProSense, as evidenced in the 20% year-over-year sales growth for ProSense systems and disposable probe sales, as reported in our press release earlier today. While the growth is a positive indicator, we believe the level of enthusiasm, physician engagement, and conversations at medical conferences specific to breast cancer and other indications along with upcoming catalysts over the rest of 2024 and early 2025, may have magnitudes of greater positive impact on ice cure. Moreover, in December, we anticipate reporting interim analysis of ice secret kidney cancer trial. During the second quarter, the FDA informed us that it will convene a public medical device advisory panel later this year to obtain independent expert advice on scientific technical and policy matters related to procents to help the FDA make a sound decision on regulatory approval of procents in the early stage of breast cancer. It's important to note that the current standard of care, lumpectomy, is a surgical procedure and is not regulated by the FDA. We believe the FDA's decision to convene the advisory panel demonstrates the extreme public health importance and specifically women's health importance. of making a mentally invasive alternative to surgery available for women with early-stage low-risk breast cancer in the United States. As a reminder, ProSense is already available and approved to treat breast cancer and other global jurisdictions, and our objective is to ensure women in the U.S. have the same access to the same care and realize similar benefits. Our team receives numerous calls from women in the U.S. and around the world who have recently been diagnosed with breast cancer. and they often ask for the nearest physician or hospital that uses ProSense. They are willing to travel, and in many instances, travel by plane because they want to have the choice of a minimally invasive treatment to avoid surgical excision. The wealth of evidence that has accumulated, including our I3 study and the growing number of independent studies we believe make the advantage of ProSense crystal clear for people participating in and watching the advisory panel discussion. The data from our study and the third-party investigator-initiated studies have been consistently and overwhelmingly positive. In fact, we believe that this transparent and public forum will raise awareness of ProSense as a non-surgical option and therefore support its rapid adoption in the United States. should the advisory panel recommend marketing authorization, followed by FDA granting such authorization. Our US commercial sales team is prepared for the initial push. As a reminder, a reimbursement code for facility expense of $3,600 is already in place, with more reimbursements, including the physician expense, expected to be applied for following marketing authorization. In our I3 study, the patient the patient and doctor satisfaction rates were both 100%. Per the analysis at the five-year follow-up evaluation, 96.3% of the subgroup of patients treated with pro-sense cryoablation followed by hormone therapy were estimated to be free from local recurrence. This recurrence rate is very similar to that of surgery, the current standard of care. We are confident that there will be a strong demand for cryoablation to treat early-stage low-risk breast cancer. In Europe, we continue to see excellent clinical results from independent studies investigating cryoablation of breast cancer among varying patient populations, including in more advanced and metastatic breast cancer, and publications such as the British Journal of Radiology and the highly influential medical journal, Cancers. Promising clinical results were presented at the 32nd Annual Meeting of the Japanese Breast Cancer Society where the demand of minimally invasive breast cancer treatment was an overarching theme. Our team attended, and we were very pleased with the high level of interest in ProSense. Furumo, our distribution partner in Japan and also the largest medical device company in that country, plans to file for regulatory approval of ProSense in early-stage, low-risk breast cancer with endocrine therapy in the first quarter of 2025. All of this data, as well as the data from clinical cases conducted from around the world, will be submitted to the FDA Advisory Committee panel. We believe that it will be a very positive factor in the panel's decision-making process. We believe our activities over the next several months will enhance our performance post-FDA clearance. We are planning to be very visible at numerous medical conferences in the United States and in Europe, where we will be engaging with our target audience, including interventional radiologists, breast radiologists, and breast surgeons. Now I'm going to turn it over to Rodney to go over the numbers. Thank you.
spk06: Thank you, Shad. As Shad mentioned earlier, growth momentum continues for process console and disposable cryoprobe cells. For the six months ended June 30, 2024, process systems and disposable probe cells increased by 20% to $1.65 million, compared to $1.37 million for the six months ended June 30, 2023. driven primarily by higher sales in Europe, the U.S., Japan, and other territories in Asia, partially offset by a decrease in sales in China. Total revenues, when including revenue recognition and other services from our Terumo agreement in Japan, grew by 6.5% to $1.75 million for the six months ended June 30, 2024, as compared to $1.65 million for the six months ended June 30, 2023, due to the increase in the sales of process systems and disposable, which was partially offset by a decrease in revenue recognition and other services in Japan of $100,000 and $274,000 in the first six months of 2024 and 2023, respectively. Gross profit for the six months ended June 30, 2024 grew by $799,000 compared to $754,000 for the six months ended June 30, 2023. Gross margin remained consistent and 46% for the six months ended June 30, 2024 and the six months ended June 30, 2023. Non-GAAP gross profit, which represents gross profit from sales of our products, not including revenue recognition from distribution agreements, increased by 46% for the six months ended June 30, 2024 to $699,000, compared to $480,000 for the six months ended June 30, 2023. The non-GAAP gross margin for the six months ended June 30, 2024 grew to 42% from 35% for the six months ended June 30, 2023. Reconciliation of these non-GAF figures are included in the earnings press release that we issued earlier today. Total operating expenses for the six months ended June 30, 2024 decreased to $7.68. compared to $8.8 million for the six months and the June 30, 2023. The decrease is attributable mostly to a reduction in research and development and general and administrative expenses. Net loss narrowed during the six months and the June 30, 2024 to $6.7 million or $0.14 per share compared to a net loss of $7.66 million or $0.17 per share for the same period last year. As of June 30, 2024, the company had cash and cash equivalents of approximately $10.5 million, and as of July 31, 2024, the company had cash and cash equivalents of approximately $10.3 million. During the first half of 2024, we raised $5.035 million in gross proceeds from the sales of ordinary shares under our ATM facility. The prudent management of cash has positioned us to execute major upcoming catalysts in the coming quarters, including the FDA advisory panel expected in Q4 2024 and the FDA's subsequent marketing clearance decision anticipated in the first quarter of 2025. Finally, I'd like to note that Eyal will be participating at the HC Weinreich's annual Global Investment Conference being held in New York from September 9th to 11th. Additionally, Eyal will be participating at TechSuite's annual Best Ideas Growth Conference also being held in New York on September 12th to provide an overview of the ISQ story and educate investors about the opportunities we are addressing with our novel process technology. Operator, we will now open the call for Q&As.
spk00: 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 want to cancel your request, please press star 2. The first question is from Anthony Vendetti of Maxim Group. Please go ahead.
spk03: Thank you. Ronan, I was just wondering, the pipeline, I know you have a sales force ready to go. If the advisory committee recommends that you get approval by the FDA in early 2025, can you just outline the planned rollout? Are you starting out with KOLs, physicians you're working with? And then how do you... What's the commercialization plan beyond the KOLs in 2025?
spk06: So, thank you, Anthony, for joining us and for the question, and I'll refer to Shad.
spk01: Yeah, hi, Anthony. Hopefully, you can hear me okay. Yes, post, I'm assuming we receive FDA approval authorization. We have a very detailed plan. really kind of a strategy that we've developed for the next five years. And it's a combination of, you know, targeting certain – working with certain societies, KOL development, but also just key roles that we need to put into place here in the U.S. to support the growth that we expect.
spk03: And then in Japan, I know you're working with Torumo. Can you talk about the plan there and the expectations there?
spk06: Yes, yes, Anthony. So we are expecting that Terumo will file the request for PMDA approval in early 2025, the first quarter. Of course, some of it will be based also on the I3 trial data that they have with them. So we're working very closely with them, our regulatory team, with their regulatory team, and with KOLs over there in Japan.
spk03: Okay, great. Thanks so much. I'll hop back in the queue. Appreciate it.
spk00: The next question is from Kemp Dolliver of Brookline Capital Markets. Please go ahead.
spk03: All right, thank you. First, with regard to the first half, China was zero in the first half, and I'm curious why, if this is just a matter of their Shanghai Medtronic working through inventory or just, you know, other factors behind the performance here today?
spk06: So, thank you, Cam. China is a little bit different than other territories and has its own complications. So, you know, sometimes the sales are in one quarter sometimes there are in a different quarter. Uh, we can't really give any guidance regarding, uh, China. Uh, but you know, we're optimistic and we believe that we'll be able to, uh, serve in China in, in the next quarters in the future.
spk03: Okay. Thank you. Um, The next question relates to the ICE secret data and your plans and ability to leverage that data in the US in particular.
spk06: So currently, Kemp, we're focusing in the U.S. mostly on breast. And at least in the next year, this is what we're planning to focus on. But we're definitely utilizing this data for other territories in Europe, in Southeast Asia, and also in South America. So it will definitely assist us.
spk03: Okay, great. Thank you.
spk00: Thank you. The next question is from Ben Hainor of Lake Street. Please go ahead. Good day, gentlemen.
spk04: Thanks for taking the questions. First off for me, just looking at some of these independent breast cancer studies, they're for slightly different patient populations and actually it seems like in several cases. patients that are less well-off than the I3 cohort was. And I'm just kind of curious if you guys have any commentary on that and what should investors take away from it, the potential for broader applicability of ProSense?
spk06: Hi, Ben, and again, thank you for joining. So I think the most important thing is to understand that KOLs see the potential in our cryoablation activity and they choose their own set of group in order to do independent studies. We look at it as a very good thing from our side and we can see that the data is also very consistent and showing great promise. So we do encourage physicians to do their own studies and of course we can see all the papers and all the abstracts which provides us with very important data for our next steps.
spk04: Makes sense. That's helpful. And then, you know, maybe this is a Unfair question, but I think you mentioned in the press release there's something like 15 ongoing independent studies being performed out there. Are there any specifically that you'd highlight for investors to take a look at? I know it might not be necessarily your domain, and I know I'm not on the call, but just curious if there are any that folks are really paying attention to or should be.
spk06: So most of the studies are for breast, mostly breast cancer. If I remember correctly, about eight of the 15 are breast cancer. And again, we are very optimistic regarding the studies and we're happy that so many KOLs are choosing our systems in order to do their independent studies. We can't really provide more data than this because, again, it's an independent study. We're not the sponsors. We do not decide when to submit a paper or when to submit an abstract to one of the conferences. But as soon as we have the data, as soon as we see it, we, of course, release it to everyone. And, of course, as soon as the researchers themselves present it.
spk04: Got it. Well, that's all I had. Congrats on the progress, gentlemen, and good luck at the advisory committee.
spk06: Thank you. Thank you very much.
spk00: The next question is from Yi Chen of HC Wainwright. Please go ahead.
spk05: Thank you for taking my question. Would you be able to comment on whether the advisory committee meeting will take place in kind of early fourth quarter or towards the end of the year? And do you know how many members will be in the ad comm committee and whether they will have, whether they will only review materials submitted to the ticket?
spk06: Okay, thank you, Yi. Thank you for joining, and thank you for the questions. I'll defer the question to Chad.
spk01: Yeah, and I'll have to have you repeat the second part of the question, but to answer your first part of the question, we expect to receive the date for the meeting shortly, and once we receive that notification, we'll issue a press release announcing the details. Also, the FDA will make the meeting available, and we'll provide a webcast link for the event. And can you repeat the second part of the question?
spk05: How many members will be in the Ad Con Committee and whether they will only review materials submitted to the committee?
spk01: So we're expecting right now, we don't know the exact number of, we don't know exactly who the members will be on the committee yet, but we're expecting breast surgeons, breast radiologists, oncologists, also regulatory experts as well to participate in this event on behalf of the FDA. And, you know, a lot of the additional clinical data that's out there will be used to help support our efforts in that event.
spk05: Okay. All right. Thank you.
spk00: If there are any additional questions, please press star 1. If you wish to cancel your request, please press star 2. Please stand by while we poll for more questions. There are no further questions at this time. I will now turn the call over to Ronen Zimmerman for his concluding statement. Please go ahead.
spk06: So we want to thank everyone for participating on today's call. We have achieved our goals through the first half of 2024 and for the remainder of 2024 and into early 2025, we expect more data from independent studies on breast cancer and other indication. As soon as we have the details on the date and the public link for the participation in the FDA advisory panel, we will share those with you through a press release. Thank you, everyone, for participating in our call today.
spk00: Thank you. This concludes the IceCure second quarter 2024 results conference call. Thank you for your participation. You may go ahead and disconnect.
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