IceCure Medical Q2 2024 Earnings Report

IceCure Medical EPS Results

• Actual EPS: -$0.06
• Consensus EPS: -$0.07
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: -$0.09

IceCure Medical Revenue Results

• Actual Revenue: $1.01 million
• Expected Revenue: $0.90 million
• Beat/Miss: Beat by +$110.00 thousand
• YoY Revenue Growth: N/A

IceCure Medical Announcement Details

• Quarter: Q2 2024
• Date: 8/20/2024
• Time: Before Market Opens
• Conference Call Date: Tuesday, August 20, 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 Q2 2024 Earnings Call Transcript

Key Takeaways

• iSecure reported 20% year-over-year sales growth for ProSense systems and disposable probes in H1 2024, driven by higher demand across Europe, the U.S., Japan, and Asia.
• The FDA will convene a public medical device advisory panel in Q4 2024 to review ProSense for early-stage breast cancer, a key regulatory catalyst ahead of U.S. market authorization.
• Five-year follow-up data from the ICE3 study showed a 96.3% local recurrence-free rate and 100% patient and physician satisfaction, supporting ProSense’s efficacy versus surgery.
• Non-GAAP gross margin improved to 42% from 35% YoY, net loss narrowed to $6.7 million (vs. $7.66 million), and cash reserves stood at $10.3 million as of July 31, 2024, extending runway into 2025.
• In Japan, distribution partner Terumo plans to file for PMDA approval of ProSense in Q1 2025, advancing the company’s international commercialization strategy.

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 will be recorded. I would now like to 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 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 IceCure Medical's VP of North American Sales, Shad Good, and the company's CFO and COO, Ronen Tsimerman. Before we begin, I'll now take a moment to read a statement about forward-looking statements. The 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 nineteen ninety-five and other federal securities laws.

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

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 were using forward-looking statements in this presentation when we discuss upcoming regulatory review ProSense by the FDA and its Medical Device Advisory Panel, the expected timeline for reporting interim analysis of ICESECRET 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 IceCure's minimally invasive cryoablation technology, advancing the regulatory, marketing, and commercial strategies, and our belief that we have resources to execute our clinical, regulatory, and commercial objectives through the end of twenty twenty-four and into twenty twenty-five.

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

Because such statements deal with future events that 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, deemed, 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 Factors section of the company's annual report on Form 20-F for the year ended December thirty-one, twenty twenty-three, filed with the SEC on April third, twenty twenty-four, 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.

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

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, including in the earnings press release that we issued earlier this morning. I will now turn the call over to IceCure Medical's VP of North American Sales, Shad Good. Shad, please go ahead.

[Shad Good, VP of North American Sales at IceCure Medical]

Thanks, Michael. Hello, everyone, thank you for joining us today. As Michael mentioned, Eyal is 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 continued 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 IceCure. Moreover, in December, we anticipate reporting interim analysis of ICESECRET kidney cancer trial.

[Shad Good, VP of North American Sales at IceCure Medical]

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 ProSense to help the FDA make a sound decision on regulatory approval of ProSense in the early-stage 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 minimally invasive alternative to surgery available for women with early-stage, low-risk breast cancer in the United States.

[Shad Good, VP of North American Sales at IceCure Medical]

As a reminder, ProSense is already available and approved to treat breast cancer in 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 incision. The wealth of evidence that has accumulated, including our ICE3 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.

[Shad Good, VP of North American Sales at IceCure Medical]

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 nonsurgical 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 U.S. 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 ICE3 study, the patient and doctor satisfaction rates were both 100%.

[Shad Good, VP of North American Sales at IceCure Medical]

Per the analysis, at the five-year follow-up evaluation, 96.3% of the subgroup of patients treated with ProSense cryoablation, followed by hormone therapy, were estimated to be free from local recurrence. This recurrence rate is similar, 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 thirty-second annual meeting of the Japanese Breast Cancer Society, where the demand of minimally invasive breast cancer treatment was an overarching theme.

[Shad Good, VP of North American Sales at IceCure Medical]

Our team attended, and we were very pleased with the high level of interest in ProSense. Terumo, our distribution partner in Japan, and also the largest medical device company in that country, plans to file for regulatory approval of ProSense's 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 Medical Device Advisory 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.

[Shad Good, VP of North American Sales at IceCure Medical]

Now, I'm going to turn it over to Ron to go over the numbers. Thank you.

[Ronen Tsimerman, CFO at IceCure Medical]

Thank you, Shad. As Shad mentioned earlier, growth momentum continues for ProSense console and disposable cryoprobe sales. For the six months ended June 30, 2024, ProSense systems and disposable probe sales 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.

[Ronen Tsimerman, CFO at IceCure Medical]

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 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 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.

[Ronen Tsimerman, CFO at IceCure Medical]

Gross margin remained consistent at 46% for the six months ended June 30, 2024, and the six months ended June 30, 2023. Non-GAAP gross profit, which represent 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-GAAP figures are included in the earnings press release that we issued earlier today.

[Ronen Tsimerman, CFO at IceCure Medical]

Total operating expenses for the six months ended June 30, 2024, decreased to $7.68 million, compared to $8.8 million for the six months ended 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 ended 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.

[Ronen Tsimerman, CFO at IceCure Medical]

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 H.C. Wainwright's Annual Global Investment Conference, being held in New York from September ninth to eleventh. Additionally, Eyal will be participating at Lake Street's Annual Best Ideas Growth Conference, also being held in New York on September twelfth, to provide an overview of the IceCure story and educate investors about the opportunities we are addressing with our novel process technology.

[Ronen Tsimerman, CFO at IceCure Medical]

Operator, we will now open the call for Q&As.

[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 want to cancel your request, please press star two. The first question is from Anthony Vendetti of Maxim Group. Please go ahead.

[Anthony Vendetti, Executive Managing Director of Research and Senior Healthcare Analyst at Maxim Group]

Thank you. Ronen, 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 twenty twenty-five, 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 twenty twenty-five?

[Ronen Tsimerman, CFO at IceCure Medical]

So thank you, Anthony, for joining us and for the question, and I'll refer to Shad.

[Shad Good, VP of North American Sales at IceCure Medical]

Yeah. Hi, Anthony. Hopefully you can hear me okay.

[Anthony Vendetti, Executive Managing Director of Research and Senior Healthcare Analyst at Maxim Group]

Yes, post, 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.

[Anthony Vendetti, Executive Managing Director of Research and Senior Healthcare Analyst at Maxim Group]

In Japan, I know you're working with Terumo. Can you talk about the plan there and the expectations there?

[Ronen Tsimerman, CFO at IceCure Medical]

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 ICE3 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.

[Anthony Vendetti, Executive Managing Director of Research and Senior Healthcare Analyst at Maxim Group]

Okay, great. Thanks so much. I'll hop back to you, too. Appreciate it.

[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]

Great. Thank you. First, you know, with regard to the first half, China was zero, or 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 year to date?

[Ronen Tsimerman, CFO at IceCure Medical]

So, thank you, Kemp. China is a little bit different than other territories and has its own complications. So, and, you know, sometimes the sales are in one quarter, sometimes they are in a different quarter. We can't really give any guidance regarding China, but, you know, we're optimistic, and we believe that we'll be able to sell in China in the next quarters in the future.

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

Okay. Thank you. The next question relates to the ICESECRET data and your plans and ability to leverage that data in the U.S. in particular.

[Ronen Tsimerman, CFO at IceCure Medical]

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. It will definitely assist us.

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

... Okay, great. Thank you.

[Ronen Tsimerman, CFO at IceCure Medical]

Thank you.

[Operator]

The next question is from Ben Haynor of Lake Street. Please go ahead.

[Ben Haynor, Senior Research Analyst at Lake Street]

Good day, gentlemen. 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 ICE3 cohort was. And I'm just kinda curious if you guys have any commentary on that, and, you know, what should investors take away from this? You know, the potential for broader applicability of ProSense.

[Ronen Tsimerman, CFO at IceCure Medical]

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.

[Ben Haynor, Senior Research Analyst at Lake Street]

Makes sense. That's, that's helpful. And then, you know, maybe this is, this is an unfair question, but I think you mentioned that as a press release, there's something like fifteen ongoing independent studies being performed out there. Are there any specifically that you'd highlight for investors to take a look at? And, you know, 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.

[Ronen Tsimerman, CFO at IceCure Medical]

Most of the studies are for breast, mostly breast cancer. If I remember correctly, about eight of the fifteen 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-

[Ben Haynor, Senior Research Analyst at Lake Street]

That makes sense.

[Ronen Tsimerman, CFO at IceCure Medical]

Themselves present it.

[Ben Haynor, Senior Research Analyst at Lake Street]

Got it. That's all I had. Congrats on the progress, gentlemen, and good luck at the advisory committee.

[Ronen Tsimerman, CFO at IceCure Medical]

Thank you. Thank you very much.

[Operator]

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

[Yi Chen, Managing Director and Senior Healthcare Analyst at HC Wainwright]

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 hoc committee, and whether they will only review material submitted to the committee?

[Ronen Tsimerman, CFO at IceCure Medical]

Okay, thank you, Yi. Thank you for joining, and thank you for the questions. I'll defer the question to Shad.

[Shad Good, VP of North American Sales at IceCure Medical]

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?

[Yi Chen, Managing Director and Senior Healthcare Analyst at HC Wainwright]

How many members will be in the ad hoc committee, and whether they will only review material or submitted to you?

[Shad Good, VP of North American Sales at IceCure Medical]

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.

[Yi Chen, Managing Director and Senior Healthcare Analyst at HC Wainwright]

Okay. All right. 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. There are no further questions at this time. I will now turn the call over to Ronen Tsimerman for his concluding statement. Please go ahead.

[Ronen Tsimerman, CFO at IceCure Medical]

So we want to thank everyone for participating on today's call. We have achieved our goals through the first half of twenty twenty-four, and for the remainder of twenty twenty-four and into early twenty twenty-five, 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.

Participants

Executives

• Michael Polyviou, Head of Investor Relations
• Ronen Tsimerman, CFO
• Shad Good, VP of North American Sales

Analysts

• Ben Haynor, Senior Research Analyst at Lake Street
• Kemp Dolliver, Director of Research and Senior Analyst at Brookline Capital Markets
• Anthony Vendetti, Executive Managing Director of Research and Senior Healthcare Analyst at Maxim Group
• Yi Chen, Managing Director and Senior Healthcare Analyst at HC Wainwright