IceCure Medical Ltd (NASDAQ:ICCM) Q4 2022 Earnings Call Transcript March 29, 2023
Operator: Good morning, and thank you for standing by. . I would now like to turn the conference over to Todd Kehrli. Please go ahead.
Todd Kehrli: Thank you, Operator, and welcome to IceCure Medical’s conference call to review the financial results for the 12 months ended December 31, 2022, and to provide an update on recent operational highlights. We ask that you refer to this morning’s press release and 20-F to review the audited 2022 year-end financial results. Participating on the call are IceCure Medical’s CEO, Eyal Shamir; and CFO & COO, Ronen Tsimerman. After the prepared comments, Eyal and Ronen will be available to address your questions. Before we begin, I will take a moment to read a statement about forward-looking statements. This call and the question-and-answer session that follow 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 statement in this presentation when we discuss the achievements we expect to accomplish as we continue to advance our growth strategy, our positioning to make significant commercial advances in key markets, pursuit of regulatory approvals in various jurisdictions, expansion of clinical applications, release of results from our clinical trials, potential market adoption and future sales of IceCure’s minimally-invasive cryoablation technology, advancing regulatory and commercial strategies, strategic plans, and our belief that we are well-capitalized to execute on commercial opportunities to increase shareholder value.
Photo by National Cancer Institute on Unsplash
Because such statements deal with future events and are based on IceCure’s current expectations, they are subject to various risks and uncertainties, and actual results, performance, or achievements of IceCure 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 20-F for the year ended December 31, 2022, filed with the SEC on March 29, 2023, which is available on the SEC’s website, www.sec.gov. The company undertakes no obligation to update these statements or revisions or changes after the date of this release, except as required by law.
I will now turn the call over to IceCure Medical’s CEO, Eyal Shamir. Eyal, please go ahead.
Eyal Shamir: Thank you, Todd, and welcome, everyone. My comments will be brief and will focus on the significant achievements we accomplished during the year, as well as those we expect over the coming months as we continue to advance our growth strategy. I will begin with yesterday development, the receipt of regulatory approval in China for our disposable cryoprobes. The latest approval allow us to use the IceSense3 disposable cryoprobes in combination with our previously approved IceSense3 console. This is exciting catalyst, and we believe that this will generate increased commercial activities in China. This will be driven by our exclusive distributor agreement in China with Shanghai Medtronic Zhikang Medical Devices Co. Ltd, an affiliates of Medtronic PLC, and Beijing Turing Medical Technology Co. Ltd.
If you recall, the initial three years period of this agreement includes minimum purchase targets of $3.5 million. In the US market, which we believe represents the sizable addressable market, the revenue trend we are currently experiencing are encouraging and consumable sales represented 20% of our 2022 revenues, almost double the 11% reported in 2021. Globally, our consumable sales accounted for 43% of our 2022 revenue, up from 29% in 2021, indicating increased physician awareness of our system. On the regulatory front, we are waiting the US FDA response to our regulatory filing for ProSense in treatment of early stage breast cancer. We believe, based on our data emerging from our ICE3 trial, ProSense is highly beneficial, invasive option for physicians treating breast cancer to address the initial indication market of 43,000 women in the US annually.
Moreover, last year we received an initial reimbursement code from the Center for Medicare and Medicaid Services, to help offset some of the cost for the treatment with respect to the facility fee. Globally, we’re expecting responses to applications filed in several other countries, including Brazil, Vietnam, and Canada. On the clinical front, we reported positive interval results from the ICE Secret study, which continues to validate that ProSense is safe and effective in treating kidney cancer tumors, with an 89.5% recurrence-free rate. In summary, our results demonstrate that we are a results-oriented company, and I believe we are well-capitalized to execute on commercial opportunities in the US and globally to increase shareholder value.
With that, Ronen and I are ready to take your questions. Operator, we would like to open the call for questions.
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Q&A Session
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Operator: The first question is from Kemp Dolliver of Brookline Capital Markets. Please go ahead.
Kemp Dolliver: Hi. Thank you and good morning. I’ll ask a couple of questions and go back into the queue. Now that you have the approval in China, how will the rollout proceed? And some of these decisions, I acknowledge, may be in the hands of your partners, but I’m assuming they’ll – I mean, are they contemplating pursuing government reimbursement at some point, or strictly focused on the cash pay market? I’ll start with that.
Eyal Shamir: Thank you, Kemp. We are very excited about the opportunity in China. We always believe China will be a growth market for IceCure. Our partner in China, which is both mainly Shanghai Medtronic Zhikang, and together with Turing Medical, they will approach public hospitals mainly at the beginning, because most of those cases will be done in hospitals, and later they will go for private clinics. Even in public hospitals, they will be able to start with some co-payment by the patients, and in parallel, they will pursue for reimbursement in China.
Kemp Dolliver: Okay, very good. Thank you. And just switching to the US, you have been evaluating partnering versus self-distribution. How’s that thought process evolving over the last few months?
Eyal Shamir: Yes, we are still in process on that. I think that it might be a combination of a direct sales team with some partners, but this is still under evaluation as we did a strategic market approach and market plan in order to enter the market. But it might be some level of combination.
Kemp Dolliver: Would that be by geography or some other criterion?
Kemp Dolliver: It’ll be by geography, but also by some other partnering that will have some benefits with specific organizations, DNAs, and other aspects that will help us to make the market penetration.
Kemp Dolliver: Okay. Very good. Thank you. I’ll go back in the queue.
Operator: The next question is from Yi Chen of H.C. Wainwright. Please go ahead.
Chaitanya G.: Hey, everyone. This is Chait on behalf of Yi. And I’m sorry if I missed some of the information in your prepared remarks. My call was in and out, but any guidance on the anticipated sales of – in China this year or even next year would be helpful. And also again, please bear with me if I’ve missed it. Any guidance for 2023, topline guidance for 2023. And also, on ICE Secret and other – any other indications? Are there any future data presentations that may happen this year? Would be very helpful. Thank you.
Eyal Shamir: So, thank you very much. On China, we are not giving a specific guideline on specific sales every year. The minimum quantity agreement that we signed, the triangle agreement with Shanghai Medtronic Zhikang, and with Turing Medical, is a minimum of $3.5 million for the next three years. Other than that, we are not giving a specific guideline on sales every year. IceCure is running two sponsor trials. One of them is the ICE3 breast cancer cryoablation trial that we did the file, that we filed on October last year. And we have the interim results on the kidney that we published on last December. At this stage, we don’t have other sponsored study. There are some other studies that they are investigational studies, and they will make their publication and results according their own study and time.
Chaitanya G.: Thank you. And if I may sneak in one more quick question, also could you provide some color or elaborate on the impact that the CPT Category III code that was assigned to you by the CMS in November, 2022? How has that impacted your marketing efforts or the uptake or adoption that you’ve seen in the US? Any trends would be very helpful after you’ve received the CPT code.
