IceCure Medical Q3 2024 Earnings Report

IceCure Medical EPS Results

• Actual EPS: -$0.08
• Consensus EPS: -$0.07
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: N/A

IceCure Medical Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

IceCure Medical Announcement Details

• Quarter: Q3 2024
• Date: 11/26/2024
• Time: Before Market Opens
• Conference Call Date: Tuesday, November 26, 2024
• Conference Call Time: 10:00AM ET

IceCure Medical (NASDAQ:ICCM) (NASDAQ: ICCM) is a clinical-stage medical device company specializing in the development and commercialization of proprietary cryoablation systems for the treatment of tumors and other pathological tissues. The company’s core technology employs a unique liquid-nitrogen-based platform to deliver rapid cooling through fine-gauge cryoprobes, enabling precise and minimally invasive tissue ablation under imaging guidance. IceCure’s lead product, ProSense, is designed to offer a single-probe approach that can be deployed in an outpatient setting, reducing procedure time and patient recovery periods.

Originally founded in Israel, IceCure Medical obtained its first CE mark for the treatment of benign breast tumors and fibroadenomas in 2017. Since then, the company has expanded ProSense’s indications to include treatment of various soft-tissue lesions and small renal tumors. IceCure continues to pursue regulatory approvals in multiple jurisdictions, leveraging partnerships with distributors and clinical research organizations to support both commercial launches and ongoing clinical trials.

With its headquarters located in Caesarea, Israel, IceCure Medical maintains a presence in Europe and Latin America and is actively engaged in preparatory work for entry into the U.S. market. The company has submitted an IDE application with the U.S. Food and Drug Administration to initiate pivotal studies assessing ProSense’s safety and efficacy in the treatment of malignant lesions in the breast. IceCure’s commercial strategy focuses on penetrating high-volume oncology and interventional radiology centers, as well as expanding its footprint through strategic collaborations.

Under the leadership of an experienced management team with deep expertise in interventional oncology and medical device commercialization, IceCure Medical continues to advance its platform through product enhancements and new clinical applications. The company’s ongoing research efforts aim to broaden the utility of its cryoablation technology to address additional indications, underscoring its commitment to offering minimally invasive therapeutic options for cancer and other serious diseases.

IceCure Medical Q3 2024 Earnings Call Transcript

Key Takeaways

• During the first nine months of 2024, ProSense sales rose 36%, non-GAAP gross profit more than doubled (104% growth), and gross margins expanded from 27% to 40%, underscoring growing market adoption.
• The pivotal I3 trial was completed and published in peer-reviewed journals, and a favorable FDA advisory panel vote sets up an expected marketing authorization decision in Q1 2025 for a non-surgical breast cancer alternative.
• An expanding clinical evidence base includes 11 independent studies published or presented in Q3, selection of ProSense for the 233-patient PRASAN European study, and interim ICE-Secret kidney cancer results due in early December.
• iSecure’s U.S. commercial infrastructure is operational with a VP, two sales reps, and clinical support, and the company plans to scale to six–ten reps by the end of 2025, while pursuing full CPT reimbursement coverage.
• Through its partnership with Terumo, iSecure anticipates a ProSense regulatory submission in Japan in 2025, complemented by multiple third-party study publications and presentations throughout 2025 as key catalysts.

Presentation

[Operator]

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 will now turn the conference over to Michael Polyviou. Please go ahead.

[Michael Polyviou, Head of Investor Relations at IceCure Medical]

Thank you, Yoni, and welcome to IceCure Medical's Conference Call to review the financial results as of and for the nine months ended September 30, 2024, and provide an update on recent operational highlights. You may refer to the earnings press release that we issued earlier this morning. Participating on today's call are IceCure Medical's CFO and Chief Operating Officer, Ronen Tsimerman, and the company's VP of Business Development and Global Marketing, Tlalit Bussi Tel-Tzure. Additionally, IceCure's VP of Regulatory and Quality Affairs and Clinical Applications, Shay Levav, will also join the call for question-and-answer session. IceCure CEO, Eyal Shamir, is unable to join today's call due to a personal matter and asks that I wish everyone in the U.S. a happy Thanksgiving on his behalf.

[Michael Polyviou, Head of Investor Relations at IceCure Medical]

Eyal will be attending next week's Radiological Society of North America, or RSNA, annual meeting in Chicago, and I'm sure some of you will be seeing him there. Before we begin, I will now take a moment to read a statement about forward-looking statements. This call and the question-and-answer session that follows that 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.

[Michael Polyviou, Head of Investor Relations at IceCure Medical]

For example, we are using forward-looking statements in this presentation when we discuss the belief that the company's financial results demonstrate growing adoption and traction for its cryoablation system worldwide, the prospective timing of the FDA decision concerning potential marketing authorization for ProSense, the belief that the FDA advisory panel meeting is the final milestone prior to the FDA's decision on the marketing authorization.

[Michael Polyviou, Head of Investor Relations at IceCure Medical]

The potential benefits from receiving FDA marketing authorization, the belief that the growing body of evidence on ProSense's safety and efficacy across indications gives doctors and patients confidence and supports the company's commercial efforts, the belief that the company has several upcoming catalysts that are value-enhancing, that Terumo Corporation expected to file regulatory approval of ProSense for breast cancer in Japan in 2025, the belief that the company's balance sheet positions it well to execute on revenue growth opportunities worldwide should the FDA grant marketing authorization in the first quarter of 2025 for ProSense in early-stage breast cancer, and the expectation that should the FDA grant clearance to ProSense, prospective sales in the U.S.

[Michael Polyviou, Head of Investor Relations at IceCure Medical]

As a result will further add momentum to its current upward trend in revenue. 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 of performance or achievements of IceCure 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 20-F for the year ended December 31, 2023, filed with the Securities and Exchange Commission on April 3rd, 2024, which is available on the SEC's website, www.sec.gov.

[Michael Polyviou, Head of Investor Relations at IceCure Medical]

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, November 26th, 2024. In addition, during the course of this call, we will discuss certain metrics that are non-GAAP measures, and we will 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 IceCure Medical's VP of Business Development and Global Marketing, Tlalit. Please go ahead.

[Tlalit Bussi Tel-Tzure, VP of Business Development and Global Marketing at IceCure Medical]

Thanks, Michael. Hello, everyone, and thank you for joining us today to review our nine months' 2024 results. This has truly been a transformative year for us at IceCure, both in terms of milestones, improving financial metrics, and our growth trajectory. During the first nine months of 2024, ProSense's consolidated probe sales increased by 36%, non-GAAP gross profits more than doubled, growing by 104%, and non-GAAP gross margin increased to 40% from 27% as compared to the same period last year. Our financial results demonstrate growing adoption and traction for our cryoablation system worldwide, and Ronen will go over the numbers during his prepared remarks. In April 2024, we successfully completed our ICE3 trial.

[Tlalit Bussi Tel-Tzure, VP of Business Development and Global Marketing at IceCure Medical]

Following this, the impressive data for ProSense as an alternative to lumpectomy in early-stage low-risk breast cancer patients were published in a highly prestigious peer-reviewed publication and were presented at a leading conference, including the influential American Society of Breast Surgeons. The positive outcome of the FDA advisory panel earlier this month brings us one step closer towards potential marketing authorization for ProSense. We believe this is the final milestone leading up to the FDA's decision on marketing authorization. We remain engaged with the FDA both regarding the authorization and to ensure the opinion of the panelists is addressed in the labeling of ProSense. We continue to expect that the FDA decision will occur in the first quarter of 2025. If marketing authorization is received, it would potentially allow us to offer women in the U.S. a non-surgical alternative to lumpectomy as early as in the next few months.

[Tlalit Bussi Tel-Tzure, VP of Business Development and Global Marketing at IceCure Medical]

Our U.S. sales team and infrastructure are ready and poised to deliver. We have already established a reimbursement code for facility expense. Then, upon marketing authorization, we will be applying for additional reimbursement, including the physician's expense, widely known as the CPT I code. We believe ProSense will become an indispensable tool for breast surgeons, interventional radiologists, interventional oncologists, and patients alike.

[Tlalit Bussi Tel-Tzure, VP of Business Development and Global Marketing at IceCure Medical]

We believe that the large and growing body of evidence on ProSense safety and efficacy in breast cancer, as well as in other indications, gives doctors and patients confidence and supports our commercial efforts. Since the start of the third quarter, an astonishing 11 independent studies have been published and presented on ProSense, most of which were for breast cancer. We are particularly pleased that ProSense was recently chosen as the exclusive Cryoablation System in one of the world's largest breast cryoablation studies to date.

[Tlalit Bussi Tel-Tzure, VP of Business Development and Global Marketing at IceCure Medical]

The PRECICE study, which is financed by the Umberto Veronesi Foundation and the Italian Ministry of Health and led by multidisciplinary collaborators, will treat 233 patients at the prestigious European Institute of Oncology. Interestingly, this study will expand on the treatment population in our ICE3 study. PRECISE will treat younger women aged 50 and older and will also treat patients with both Luminal B and Luminal A breast cancer. Looking ahead to the rest of the year to 2025, we believe that we have several upcoming catalysts that are value-enhancing. Interim results from our ICESECRET study are expected in early December. ICESECRET is a prospective multicenter single-arm clinical trial of ProSense for the treatment of kidney cancer. Prior interim results demonstrated an 89.5% recurrence-free rate at a mean follow-up of 22.2 months.

[Tlalit Bussi Tel-Tzure, VP of Business Development and Global Marketing at IceCure Medical]

Our partner in Japan, Terumo Corporation, is expected to file for regulatory approval of ProSense for breast cancer in Japan in 2025, with the aim of receiving clearance. We also expect that numerous additional third-party data on ProSense will be published in medical journals and presented at prestigious medical conferences throughout 2025. Now, I will turn the call over to Ronen to go over the numbers. Ronen.

[Ronen Tsimerman, CFO and COO at IceCure Medical]

Thank you, Tlalit. As Tlalit mentioned earlier, growth momentum continues for ProSense sales. For the nine months ended September 30, 2024, ProSense systems and disposable probe sales increased by 36% to $2.32 million compared to $1.7 million for the nine months ended September 30, 2023, driven primarily by higher sales in Europe, the U.S., and Japan. Total revenue, when including revenue recognition and other services from our Terumo Corporation agreement in Japan, grew by 22% to $2.42 million for the nine months ended September 30, 2024, as compared to $1.97 million for the nine months ended September 30, 2023, due to the increase in sales of ProSense systems and disposables, which was partially offset by a decrease in revenue recognition and other services in Japan of $100,000 and $274,000 in the first nine months of 2024 and 2023, respectively.

[Ronen Tsimerman, CFO and COO at IceCure Medical]

Gross profit increased by 41% for the nine months ended September 30, 2024, to $1.03 million compared to $731,000 for the nine months ended September 30, 2023. Gross margin increased to 43% for the nine months ended September 30, 2024, compared to 37% in the nine months ended September 30, 2023. We are pleased to report that Non-GAAP gross profit, which represents gross profit from sales of our products, not including revenue recognition from distribution agreement, more than doubled for the nine months ended September 30, 2024, to $934,000 from $457,000 for the nine months ended September 30, 2023, an increase of 104%. Non-GAAP gross margins for the nine months ended September 30, 2024, increased to 40% from 27% for the nine months ended September 30, 2023. Reconciliations of these Non-GAAP figures are included in the earnings press release that I issued earlier today.

[Ronen Tsimerman, CFO and COO at IceCure Medical]

Total operating expenses for the nine months ended September 30, 2024, decreased to $12.21 million compared to $12.89 million for the nine months ended September 30, 2023. The decrease is attributable mostly to a reduction in research and development and general administrative expenses. Net loss narrowed during the nine months ended September 30 to $10.84 million or $0.2022 per share compared to a net loss of $11.66 million or $0.26 per share for the same period last year. As of September 30, 2024, the company had cash and cash equivalents of approximately $10.7 million, and as of October 31, 2024, the company had cash and cash equivalents of approximately $10 million. During the first nine months of 2024, we raised $8.1 million in net proceeds from the sales of ordinary shares under our at-the-market facility.

[Ronen Tsimerman, CFO and COO at IceCure Medical]

We believe that the expected milestones position us well to execute on revenue growth opportunities worldwide, and particularly sales in the U.S., should the FDA grant marketing authorization in the first quarter of 2025 for ProSense in early-stage breast cancer. Operator, we will now open the call for Q&A.

[Operator]

Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. If you have a question, please press star one. If you wish to cancel your request, please press star two. If you are using speaker equipment, kindly lift the headset before pressing the numbers. Your questions will be polled in the order they are received. Please stand by while we poll for your questions. The first question is from Anthony Vendetti of Maxim. Please go ahead.

[Anthony Vendetti, Executive Managing Director at Maxim]

Thank you. So I want to talk about first the U.S. and then Japan. Based on the 9-5 AdCom meeting vote in favor for ProSense, in your discussions with the FDA, is it likely have they given you guidance that they would likely make a decision before the end of March? Could it be sooner? Could it be later? And then in Japan, I know you mentioned in the press release that you expect Terumo, your partner, to file for regulatory approval in 2025. Is that in the first half of 2025, second half of 2025? And then what's the approval process there once they file for approval? Thanks so much.

[Ronen Tsimerman, CFO and COO at IceCure Medical]

Hi, Anthony, and thank you for your questions. I will start with the FDA in the U.S. with your questions regarding that. So the FDA didn't provide us exact timing for providing clearance, but we do believe, based on our discussions, that we should expect to receive the final answer somewhere in Q1. Of course, when we have more data, we'll be happy to share it with the public. As far as in Japan, we know that Terumo are working on their submission, and we're assisting them. We're working with them very closely. They are using the trial data, and they are planning to do it in 2025. We're not on the date, but again, we will probably update everyone as we go forward in our work with Terumo.

[Anthony Vendetti, Executive Managing Director at Maxim]

Just to follow up on that, though, what is the approval process like once you actually file? Is there a clock ticking? I don't know how Japan works in terms of reviewing the actual application.

[Ronen Tsimerman, CFO and COO at IceCure Medical]

So I will defer this question to Shay. Shay, can you please answer?

[Shay Levav, VP of Regulatory and Quality Affairs and Clinical Applications at IceCure Medical]

Yes. Hi, Anthony. Ronen. So taking into account the submission that will be done by Terumo in Japan with the ICE3 study data, including the outcomes from the FDA, we expect that it will be approximately a year from submission until Terumo will get approval from the PMDA in Japan.

[Anthony Vendetti, Executive Managing Director at Maxim]

Okay. That's helpful. Thanks so much. I'll hop back in the queue. Thanks.

[Operator]

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

[Kemp Dolliver, Director of Research and Senior Analyst at Brookline Capital Markets]

Hi. Thank you for taking the question. Where do you stand with regard to your U.S. sales effort? And as you look into 2025 and 2026, assuming the approvals and the timetable you've mentioned, what's the expected pace of build-out of the U.S. commercial team?

[Ronen Tsimerman, CFO and COO at IceCure Medical]

Thank you, Kent, for the question. We will start the year 2025 with the same number of sales reps we currently have. Currently, we have our VP, Mr. Shad Good, two sales reps and clinical support. As we get the FDA clearance, hopefully, we will continue to grow and add sales reps. It will be a step approach based on our plans, but we expect that we will finalize 2025 probably at around between six to 10 sales reps.

[Kemp Dolliver, Director of Research and Senior Analyst at Brookline Capital Markets]

Right. And with regard to your R&D expense, it has decreased this year, as you expected, though it appeared in this period the decline was smaller. I'm assuming that was probably spending in preparation of the AdCom. So as we look into, say, the balance of the year and early next year, do you expect any further sequential decreases in R&D spending or somewhere around the current level?

[Ronen Tsimerman, CFO and COO at IceCure Medical]

So as far as the R&D expenses, we did expect to see a reduction in costs for R&D since we finalized the development of our new ProSense system. We are working also on new probes, but the costs are definitely not the same as developing a completely new system. In 2025, it's too early to say right now, but we do expect to work. Actually, we did start to work on our multi-probe system. So we will continue to work on that in 2025.

[Kemp Dolliver, Director of Research and Senior Analyst at Brookline Capital Markets]

Super. Thank you.

[Operator]

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

[Yi Chen, Managing Director and Senior Healthcare Analyst at H.C. Wainwright]

Thank you for taking my questions. So for those five panelists who did not believe that ProSense benefits outweigh the risk and voted no, do you think their viewpoint is valid? And do you think there's any aspects of ProSense that could be improved in the future to address those panelists' concerns? Thank you.

[Ronen Tsimerman, CFO and COO at IceCure Medical]

Hi. Thank you for your question. I will defer to Shay.

[Shay Levav, VP of Regulatory and Quality Affairs and Clinical Applications at IceCure Medical]

Yes. Thank you for this question. So the five panelists that voted no, actually, they also mentioned it during their explanation to the voting. So three of them said that they would have voted maybe if they could. The main reason for most of them was to encourage FDA to work with IceCure closely and to define special controls post-marketing in order to have a continuous control on the safety and efficacy of the product and the way it performed in the field. One of the additional ones who voted no, it was the statistical person who believed that there are some uncertainties in our ICE3 study.

[Shay Levav, VP of Regulatory and Quality Affairs and Clinical Applications at IceCure Medical]

This is something that by getting the approval and starting to use the product more widely and collecting the data, we will be able to determine that the results that are being seen out there in the field are similar to what we have seen in the ICE3 study.

[Ronen Tsimerman, CFO and COO at IceCure Medical]

I would like to add that some of the panelists who voted no also said that they're a little bit worried about other companies using the De Novo clearance in order to get their own predicate device, and this is some of the special controls that they requested for the FDA to work with us.

[Kemp Dolliver, Director of Research and Senior Analyst at Brookline Capital Markets]

Okay. Thank you.

[Operator]

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 Anthony Vendetti. Please go ahead.

[Anthony Vendetti, Executive Managing Director at Maxim]

Yes. Hi. On the ICE3 trial, are you still expecting interim top-line results in 2024 by the end of December? And then can you also talk about because we know that ProSense can treat other tumors and there's other indications: liver, lung, kidney? Can you discuss the U.S. kidney cancer treatment market, what that opportunity is, and how far down the road is that in terms of I know the breast cancer indication is the priority. But I'm just curious, as we think out in 2025, 2026, what's the opportunity for kidney? Thank you.

[Ronen Tsimerman, CFO and COO at IceCure Medical]

Great. Thank you, Anthony. So regarding the ICE3 trial, we expect to release the results or see them at the beginning of December, somewhere in the first week. And these are interim results still with about approximately three years' follow-up. As far as the indication in the U.S., we know that there are about 80,000 new patients every year. So this is also an unmet need, and we're definitely looking at it. But as you said, our first priority is, first of all, to use our ProSense for breast cancer, mostly because the unmet need in breast cancer is extremely high. And we do see the demand, and we also see the utilization in the U.S. and the traction that we have.

[Anthony Vendetti, Executive Managing Director at Maxim]

Okay. Great. Thank you for that call.

[Ronen Tsimerman, CFO and COO at IceCure Medical]

All the answers.

[Anthony Vendetti, Executive Managing Director at Maxim]

I'll hop back.

[Ronen Tsimerman, CFO and COO at IceCure Medical]

Great. Thank you.

[Operator]

There are no further questions at this time. I will turn the call over to Ronen Tsimerman for a concluding statement.

[Ronen Tsimerman, CFO and COO at IceCure Medical]

Thanks, everyone, for participating on today's call, and for those listening in the U.S., have a happy Thanksgiving. We look forward to the FDA's decision on marketing authorization of ProSense in early-stage breast cancer. Should the FDA grant clearance, then we expect sales in the U.S. to add further momentum to our current upward trend in revenues. Also, Eyal and I will be in San Francisco in early January and meeting investors during the J.P. Morgan Healthcare Conference. Please reach out to Michael if you want to schedule a meeting. Thank you all.

[Operator]

Thank you. This concludes the IceCure third quarter 2024 results conference call. Thank you for your participation. You may go ahead and disconnect.

Participants

Executives

• Tlalit Bussi Tel-Tzure, VP of Business Development and Global Marketing
• Shay Levav, VP of Regulatory and Quality Affairs and Clinical Applications
• Ronen Tsimerman, CFO and COO
• Michael Polyviou, Head of Investor Relations

Analysts

• Kemp Dolliver, Director of Research and Senior Analyst at Brookline Capital Markets
• Anthony Vendetti, Executive Managing Director at Maxim
• Yi Chen, Managing Director and Senior Healthcare Analyst at H.C. Wainwright