IceCure Medical Q2 2023 Earnings Call Transcript

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Provided by Quartr
August 14, 2023

There are 6 speakers on the call.

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 would now like to turn the conference over to Todd Kehrli.

Operator

Please go ahead.

Speaker 1

Thank you, operator, and welcome to IsoCare Medical's conference call to review the financial results for the 1st 6 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 Icicleer Medical's CEO, Eyal Shamir and the company's CFO and COO, Roman Zimmerman. Additionally, Doctor. Robert Ward is joining the call today to share his experience using ProSense and will be available during the Q and A session, which will follow the prepared remarks.

Speaker 1

Before we begin, I'd like to remind everyone that 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 iSphere's minimally invasive cryolipulation technology, advancing regulatory and commercial strategies, strategic plans and our belief that we are well capitalized 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 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.

Speaker 1

The company undertakes 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 IsoCare Medical's CEO, Eyal Shamir. Eyal, please go ahead.

Speaker 2

Thank you, John. Hello, everyone. Thank you for joining us today to review our financial results in addition to sum up our key achievements over the past quarter. I will start with a review of our significant business development for the Q2 of 2023 and Ronnen will provide an overview of our financial results for the 6 months ended June 30. Additionally, Doctor.

Speaker 2

Robert Ward will provide key value perspective as a doctor building process for breast tumor cryoablation. Doctor. Ward is an Assistant Professor of Diagnostic Imaging at the Rowan Alpert Medical School of Brown University, Program Director for the Breast Imaging Fellowship and Associate Chief of Diagnostic Imaging at the WIMA Infant Hospital specializing in the REMA imaging and breast tumor cryo patients. We are grateful that he is taking the time to share his knowledge and experience using process with us today. We will then open the call for Q and A.

Speaker 2

We are effectively executing our objectives of transitioning from clinical to commercial stage this year as we are experiencing increased adoption of Pronfence Worldwide. We reported a 32% increase in system and disposable growth sales compared to the first half of twenty twenty two, which we believe reflects a greater awareness of our benefits of our cryo operation solution when compared to the standard of care of rhamptaxone. The U. S. FDA reviewed of our de novo application for processing ongoing.

Speaker 2

We believe a favorable response from the U. S. FDA would be a game changer and could significantly impact our performance. As a reminder, the FDA submission 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.

Speaker 2

Outside of the U. S, ProSens recently received the regulatory approvals in Canada and China. This demonstrates the global momentum and reinforce our transition to a commercial stage company as we expand our revenue generating efforts in multiple markets. For example, we signed a new nonexclusive distribution agreement in Portugal with ENSI, the largest contributor of a third party medical devices in Portugal. Initial purchase by the distributor includes 2 process consoles along with numerous disposable cryoprobes and introducers.

Speaker 2

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 3rd party studies that prove cryoablation efficacy in treating in a variety of other indications. During the Q2, ASCARDI was published in the Journal of Vascular and Interventional Audiology, reporting 92.8% efficacy in avoiding secondary surgery when using cryoablation for percutaneous endometriosis. The independent study conducted in terms and the published data were not sponsored by EyeScale. Orphan was one of the 2 cryoablation system used in this study.

Speaker 2

Global adoption of cryoablation continues to gain momentum and we believe the positive published data from our clients 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 prior to our nation continuing medical education, CME, course at the American Society of Dead Surgeons or the ASBRS Annual Meeting in April. Moreover, we see this continue as a process with these features in several other upcoming phases 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 raising other significant milestones, mainly the U.

Speaker 2

S. Regulatory approval, it is encouraging to have so many champions advocating for process. We will hear from one of them in a few moments, Doctor. Ward, about why he as well as other doctors are adopting process. For now, I will turn the call over to Romain for a summary of our financial results.

Speaker 2

Romain? Thank you, Iain.

Speaker 3

For the 6 months ended June 30, 2023, revenues increased by 9% to $1,650,000 compared to revenues of $1,500,000 for the 6 months ended June 30, 2022. Exclude licensing revenues from our distribution agreement with Terumo Corporation of Japan, product sales increased by 32% in the 6 months ended June 30, 2023, to $1,370,000 compared to 1 point $3,000,000

Speaker 1

for the

Speaker 3

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 $750,000 for the 6 months ended June 30, 2023, compared to approximately $82,000 in the same period last year. Gross margin was 46% for the 6 months ended June 30, 2023 compared to 54% for the 6 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.

Speaker 3

Research and development expenses for the 6 months ended June 30, 2023, were $4,190,000 compared to $4,650,000 for the 6 months ended June 30, 2022. The decrease is primarily due to the effect of the devaluation of the Israeli shekel compared to the U. S. Dollars on Israeli shekel denominated expenses and a reduction in development expenses of Istear Next Generation Synagogue System and the decrease in clinical and regulatory costs. In anticipation of ramping up U.

Speaker 3

S. Commercial efforts, sales and marketing expenses for the 6 months ended June 30, 2023, were $2,250,000 compared to 1.5 $3,000,000 for the 6 months ended June 30, 2022. General and administrative expenses for the 6 months ended June 30, 2023, were $2,350,000 compared to 3 point $34,000,000 for the 6 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 U. S.

Speaker 3

Dollar on Israeli shekel denominated expenses. Total operating expenses for the 6 months ended June 30, 2023, were $8,790,000 compared to $9,520,000 for the 6 months ended 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 6 months ended June 30, 2023, decreased by $77,660,000 or $0.17 per share compared with a net loss of $8,970,000 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 $16,700,000 compared to $23,660,000 as of December 31, 2022.

Speaker 3

I will now turn the call over to Doctor. Robert Ward. Doctor. Ward?

Speaker 4

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 3 different cryoablation consoles, and I've done nearly 100 cases within the breast, which have been a mix of benign symptomatic fibroadenomas and cancers.

Speaker 4

Most of the 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 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 interesting cry ablation 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.

Speaker 4

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 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 iSecure's ProSense cry ablation system, I've actually been using this console for the last 2 years or so.

Speaker 4

And I can say that iSecure 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, ICE CURE 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 really, they've provided as much support as we've ever requested.

Speaker 4

As it turns out, the device itself is incredibly easy to use and intuitive, perhaps even more so than other devices than I've used before. One example is that if you 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 that kind of additional information really increases our confidence that we're covering the area in a highly targeted and accurate way. The console itself is very small.

Speaker 4

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. So the cryogen is liquid nitrogen. The other device on the market currently is an argon device.

Speaker 4

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 kind of 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 is 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.

Speaker 4

Some seat based ablations, for instance, laser, 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 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 break. And amazingly, patients can return to normal activities right away.

Speaker 4

My schedule is such that I tend to perform these procedures in the afternoon at about 2 And once the procedure is 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. Additionally, anecdotally, patients have been very, very pleased with the cosmetic outcome. There's no deformity to the breast whatsoever.

Speaker 4

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 by a lot of manuscripts that have been reported in peer reviewed journals, including excellent outcomes when it comes to complete ablation, 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 2nd most deadly.

Speaker 4

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 had 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.

Speaker 4

In any case, I think I'll stop there and I will save some time for questions at the end. Thank you so much.

Operator

So I'll go into the questions. Thank you. Ladies and gentlemen, at this time, we will begin the question and answer Anthony Vendetti of Maxim Group. Please go ahead.

Speaker 2

Thank you. First for the doctor, maybe if you could just talk a little bit about the advantages of cryoagulation over I don't know if you want to talk to me. I know you mentioned the advantages of liquid nitrogen, which is ice cures rate of freezing the tumor, but versus argon. But maybe just the advantages of the lumpectomy and then what you have been able to witness in terms of the currents in terms of your lumpectomy cases versus chronic issue?

Speaker 4

Yes. Happy to seal that question. Cryoablation versus surgery. Well, 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.

Speaker 4

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, anesthesiologists. Some patients actually are at increased risk from having general anesthesia because of medical issues. We're seeing that more and more as patients live longer and have chronic issues that they have to deal with. Also, you have to pay the pathologist to look at the surgical specimen related to surgery.

Speaker 4

So there's a lot that goes in to coordinating surgery. And as we've seen in medicine in general, over decades, periods of time, people tend to trend toward less invasive treatment so long as they are effective. And that's what is bearing out in the literature is that cryoablation is effective in treating these targeted lesions. In 2016, they published a study with 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.

Speaker 4

And that's been our experience as well. So cosmetic outcome, less costly to the health care system, patients that have medical issues may be placed at higher risk if they have anesthesia for surgery. Again, it's a painless procedure for cryo that only requires local. So I think it's just better for patients, patients that qualify. Of course, there are some breast cancers that are not appropriate for breast cry ablation, being very extensive cancers and cancers that don't have good ultrasound correlate because right now these procedures are performed generally under ultrasound guidance.

Speaker 4

If I didn't answer that question, please feel free to let me know, and I can elaborate more.

Speaker 2

No. That was great. Just a quick follow-up. And so right now, it's for your Stage 1, Stage 2 cancers. Do you think it's possible that it could be eventually for Stage III?

Speaker 2

Or do you think it's LAGE I, Stage II is the most appropriate? And then just in cases, you've done what has been the recurrence?

Speaker 4

So my the cases that I view 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 1 tumor that's recurred within our at the margin of the ablation zone.

Speaker 4

We have had other patients develop what we call an ipsilateral breast tumor occurrence, but those tumors have been greater than 2 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 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.

Speaker 4

And again, those are the patient population of those that are actually, they did not qualify for clinical trials because they were perhaps considered less ideal cryocannabis. What was the other part of that question?

Speaker 2

Well, that's helpful. Just really quickly on lumpectomy, which has been around for much longer. Do you or your colleagues see the current rates of 15%, 20% -plus in the pet company? No. No?

Speaker 2

Okay. So what's your normal recurrence, you think, for 1 pet company?

Speaker 4

Well, so the thing is, 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 if there's cancer at the margin, they assume that they've left some cancer behind the breast. So 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 pathologists. You're relying on imaging follow-up.

Speaker 4

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 ombectomy anyhow. We've shown that the recurrence rate is not is certainly not in that 10% to 20% range.

Speaker 2

Okay. Great. And lastly, and this is for Ronen 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.

Speaker 2

This is Eyal. I will answer on that. We achieved our solution timeline, and we had always anticipated advancing new process. The interactions with the FDA has been further, consistent and following the normal procedures and protocols. There is nothing out of the ordinary.

Speaker 2

And today, the review period has been to our expectations. According to statistics, it's take us 300 to 400 days for the FDA to give a decision and this is why we have always said that our expectation is to be back by the end of this year. All the information is now in the hands of the FDA's review team and it's not wise, not prudent for us to make public statement with regards to the conversation on timing since our mother wants to get ahead of the FDA and Anthony and the rest of the audience, rest assure that we will communicate the FDA response when we receive it. Thank you. Thank you, Yag.

Speaker 2

That is all for helping me achieve.

Operator

The next question is from Ben Haynor of Alliance Global Partners. Please go ahead.

Speaker 5

Good day, gentlemen. Thanks for taking the questions. First off for me, Doctor. Ward, you mentioned that the national societies are thinking more interested in cryovulation. In your career, have you seen other technologies or other sort of procedures or things where the national societies have taken an interest at a similar level?

Speaker 5

And what has become of them? I guess another way of asking is, does it typically become some of them a paid account lead once the society is trying to get onboard these days.

Speaker 4

Yes. I mean, I think these societies 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 this is definitely something that's going to be around, 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.

Speaker 4

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 that are just as effective, if not more, then that's the right thing for patients.

Speaker 2

Okay. That's helpful. And then

Speaker 5

for those patients that are candidates for cryo, I mean, you mentioned that you do cryooxone patients that may not be considered the ideal patients to enroll in clinical trial perhaps. But with the folks that would be potential cryopacients that do choose surgery, of characteristics do they have? I mean, is it just that someone see a lump of tissue on

Speaker 2

a pill? Or who is that?

Speaker 4

So the question was, what are the patients that are given the choice cryo versus surgery and then 2 surgery? Is that is that right?

Speaker 5

Yes. That's probably the simple way of asking that, I suppose.

Speaker 4

So what we end up doing is presenting all patients in a multidisciplinary tumor board setting. That's not unique to our facility. It'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.

Speaker 4

That's the period of time when patients are presented with the option of cryo, they're going to choose cryo because it's less invasive. If it's going to affect and we 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.

Speaker 4

It's a very, very small number of people. I can probably count on one hand how many people have brought that argument forward Because the idea is we're treating the cancer within the breast and we're killing the cancer And therefore, no need to actually remove that tissue at all. So once you educate people about kind of the mechanism of how cryo works, they typically buy into that.

Speaker 5

Okay. So just kind of a single digit percentage of people that might kind of object that you're not thinking it out?

Speaker 4

Yes. I mean very, very, very few. I mean actually there are many more patients that have come to me and to other procedure lists across the country that are seeking cryoablation for their breast cancer when they have a very extensive breast cancer that occupies the majority of the breast and involved in the skin, like an inflammatory breast cancer. And actually, right now, from what we know, there's not really enough evidence for me to kind of support you in cryo in those patients. If the cancer involved in the scan, which is a very small number of patients, then we shouldn't be doing cryo in those cases probably the vast majority of the time.

Speaker 4

But maybe we'll learn stuff in the future about, again, kind of immunologic benefit of cryo where you're killing the tumor in situ and you're releasing intact tumor antigen from 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 get too much into the immunotherapy side of things. But yes, the vast majority of patients, if given the option, would choose trial in my experience.

Speaker 5

Yes. And on the last thing, kind of on signaling patients' own cancer response.

Speaker 2

I mean,

Speaker 5

the speculation that, that gives a pretty it's projected for a pretty strong signal there?

Speaker 4

I'm sorry. Can you repeat that?

Speaker 5

So on the patients where that's kind of that last point that you mentioned on trial kind of activating the patient's own response to yes, they mean response to the cancer. Do you think there's a potential for that to come out favorably?

Speaker 4

Yes. I mean, I absolutely do. I mean immunotherapy is kind of like 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 and really cryo is kind of the ideal ablative modality for a variety of reasons.

Speaker 4

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 have been published since probably 2016 and there are a couple that are ongoing right now. And so yes, 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-four antagonist. So it basically releases the brake on the immune system, and they showed very favorable intratumomol and systemic antitumorantigen specific responses.

Speaker 5

That's fascinating. I'll have to check that out.

Speaker 2

And then I guess lastly for me, for you, Doc, is

Speaker 5

the follow-up imaging post trial ablation, are there any kind of caveats or any challenges to interpreting that?

Speaker 4

From 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. There are cases where there's like a new kind of density at the edge of the ablation margin or immediate tissue, which we just recommend a biopsy for and it oftentimes turns out to be a benign process called statin necrosis. But that same process happens after surgery as well. So it's really no different.

Speaker 2

Okay. Got it.

Speaker 5

Thanks for taking the question, Pat. Just a couple for the company. On the endometriosis study that came out, obviously, endometriosis generally has a lot of challenges on the diagnostic front. As you guys kind of analyzed

Speaker 2

the potential opportunity in

Speaker 5

endometriosis. What's kind

Speaker 4

of your thought there given

Speaker 5

the nature of the disease?

Speaker 2

Thank you, Ben. This is Rejal. The KOL, Professor Kurnenich, we did the trial in Paris and he is now part of a memorial as long as he's in New York. He is planning to treat it and to do more research and publication. And from the indication point of view, this is something that we could treat.

Speaker 2

And we believe that this is a very important indication for us as part of our women's health strategies in both breast cancer, breast benign tumors and also endometriosis could be as part of a very big venue for IQ in the future.

Speaker 1

Okay.

Speaker 5

Got it. And then also, I don't know if you have the information on this, but I think you mentioned that the investigators have used a couple of different cryopulation systems that look like they're using the end of care system. Also, presumably, from the dates of the procedure, they switched from end of care to iSecure? Or is that correct or unclear?

Speaker 2

He knew, in some cases, the problem, some cases, the other systems that he had in the hospital. As far as we understand, so in future usage in MSK, he is going to use our preference as a liquid nitrogen single use probe that he believes that will be giving more benefits and easy to use.

Speaker 5

And can

Speaker 2

I add to that

Speaker 4

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

Speaker 5

Okay. Got it. And maybe one more quick one. Just give me any color on the reactions to the trade thing on caribulation and ASVRS?

Speaker 2

As you recall, ASBRS sponsored continuing the education study on prior operation. We have several process system on display for demonstration and the session was oversubscribed and it was extremely successful. The cryoabation for breast cancer discussed also in the ultrasound course and in other events during so it was really the top topic of the last ASBRS this April in Boston. And as also Doctor. Ward mentioned, some other societies like the SIO Society Interventional Oncology, they already published that they are going to do a master class on breast cancer cryoablation on January 24 as part of our coming session and this has been discussed also at the SIR, Society Interventional Therapy that will be later next year.

Speaker 2

So breast cancer cryoablation topics are on all of our 3 core points, breast surgeons, breast adelogist and interventional adelogist.

Operator

The next question is from Kemp Dolliver of Brookline Capital.

Speaker 2

Thank you. So first couple of questions are for Doctor. 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?

Speaker 4

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 proximity. If you're driving more than 15 minutes

Speaker 2

in Rhode Island, that's a

Speaker 4

long way. Obviously, we're buying new probes, obviously, we're buying new probes for each case, right? The needle itself is kind of a disposable that we're purchasing for each case. So we're probably looking at 1 case per week right now, just me alone, but that's going to increase significantly once we see the FDA step up hopefully.

Speaker 2

That's right. And how many physicians in your group would likely perform the procedure?

Speaker 4

Well, the great thing about the procedure is that it's an ultrasound guided procedure that it's 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. Once you've seen one and you've already done a bunch of ultrasound guided procedures like biopsies in the past, you should be able to pick this up, no problem. So the learning curve, if you've done ultrasound procedures, which 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.

Speaker 4

That's a pretty major advantage.

Speaker 2

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

Speaker 4

Well, so women and infants hospital is kind of notoriously slow and 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 almost a year, but that is not typical of what I would expect elsewhere. We were dealing with the private craft side of our group. We would have had a short discussion over lunch sometime, and we would have made a decision to go ahead and move forward with it.

Speaker 2

Would FDA approval shorten that?

Speaker 5

Yes, absolutely.

Speaker 2

Great. And then a question for the management team. Where do you How would you, I guess, estimate where you are with your build out of your U. S. Commercial capabilities?

Speaker 2

Do you think 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 6 to 12 months? Thank you very much, Kempe. This is Eyal. Some aspects of our plan already being implemented with a great success.

Speaker 2

I mentioned or we discussed our attendance to some important conference, mainly in the coming ASADRS. We have added several team members in the U. S. And we are mainly we are actively recruiting the seasoned Vice President of Sales for North America, which he will be focused mainly in the U. S.

Speaker 2

But as we all remember, few weeks ago, we got the regulatory approval in Canada. So we will be managing North America. We are in a final stage and we expect to announce someone soon. So this new Vice President Sales North America will lead the sales team and will build 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.

Speaker 2

And what's your target for the size of your commercial team? It will grow with the expectation of sales. I cannot say number 1. We will soon start to work on 24 plan, of course, as part of 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 that we need us to view all the claims for coverage.

Speaker 2

Okay. Thank you.

Operator

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

Speaker 2

Hey, everyone. This is Chetan on behalf of Yi Chen. I just one question for the doctor. I know you mentioned that there are indications that may not actually benefit from cryoablation. So following up on that, we think this is the optimum indication that will irritate low risk breast cancer.

Speaker 2

Is it the ideal target patient population that you would like to go after with cryoabulation? Or do you think there are other indications that may benefit from this technology? If so, please provide some color. Thank you so much.

Speaker 4

Yes, sure. So I think the ideal candidates for breast cancer cry ablation are those kind of screen detected small breast cancers. 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, 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.

Speaker 4

So I think the indication beyond kind of early stage breast cancer should certainly expand. And some of this also depends on how things play out with kind of the immunotherapy side of things, which is pretty interesting, I've already discussed. Pro ablation 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 non malignant disease such as breast fibroadenomas that are painful and palpable. There is a Category 1 CPT code for that and I've treated plenty of patients with those symptomatic fibroadenomas.

Speaker 4

And what happens in those cases is that after done treatment within a period of weeks to months, the fibroadenomas shrinks down to typically basically nothing. So it's no longer palpable and it relieves the pain right away. There are other indications like patients with really advanced metastatic disease that has painful metastases, you can do cryoablation to alleviate their pain, for instance. We had touched on endometriosis, which I think is kind of an underappreciated cause of cyclical pain, typically happens in women that have had a prior C section. In the process of the C section, some endometrial tissue is kind of dragged out into the abdominal wall.

Speaker 4

And that tissue is under hormonal insulin. So as the month cycle, they experience pain. And surgery is not a good option for those patients because dealing with the abdominal wall and the underlying musculature and it's not particularly effective either. So prior ablation represents a very good treatment option in those cases as well. I hope I answered your question.

Speaker 2

Yes. Thank you so much. And the one thing that you said which peaked our attention was evaluating immuno therapeutic agents plus cryomobilization. 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 anything.

Speaker 2

Thank you. This is Eyal, the CEO. I'm explained to on catering with the Procent system, Doctor. Ward also mentioned in one of the studies that they published a small three arm study, just a cryo, just a immunotherapy drug and the combination. And they published that the combination showed much more effect to the patients.

Speaker 2

Our technology, the process technology also used in a mice animal study of cryo immunological effect that's done in the Case University Cleveland Clinic. And I think that just in the last 2 or 3 weeks, they published a new paper on that. So with some of our partners and maybe some of the top KOLs, we will support this kind of studies that mainly will be done as an investigator initiative.

Speaker 4

Sorry. Yes. No, I was just going to say about the immunotherapy thing. Just you should look up the scopal effect. And it's this kind of idea that if you treat one site, you actually get an effect away from that target site.

Speaker 4

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 the immune system's ability to recognize the tumor's form and to attack it.

Speaker 2

That's fascinating. And lastly for the management, is the 5 year readout from the I3 study to be created to occur in the first half of twenty twenty four? Thank you so much. Yes. If the last patient will come on time, we anticipated that during the Q1 of 2024, we're going to have the final results.

Speaker 2

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 sign with the FDA around mid next year the final result of the IHANCE study. As I mentioned, the patient is officially scheduled for the last follow-up February 23. We need another 6 months to finalize the study.

Speaker 2

Great. Thank you so much.

Operator

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.

Speaker 2

Thank you very much for everyone. I would like to thank especially to Walt for taking the time to share his experience and his knowledge using the trial operation, mainly for breast tumors, breast cancer and as Doctor. Ward mentioned also some experience in ambulatory office. I feel we'll continue to work hard in order to get some other milestones that we anticipated to get in the next few months, 6 12 months. As we mentioned, we're expecting to get regulatory approval for the system from Brazil.

Speaker 2

And of course, FDA is the most important one and we have continued to expand in the market. So thank you very much for the time today.

Operator

Thank you. This concludes the Ice Cure Second Quarter 2023 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.

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Earnings Conference Call
IceCure Medical Q2 2023
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