IceCure Medical Ltd. Q1 FY2025 earnings call

Management Statement and Operational Highlights:

• Had a positive high-level meeting with the FDA in late April and submitted the post-market study plan.
• Noted sales growth in North America and Europe, while Asia saw a decline.
• Received a $2 million unsecured bridge loan from Epoch Partner Investments Limited.
• Experienced positive interest in ProSense at the American Society of Breast Surgeons 2025 annual meeting.
• Identified potential catalysts for 2025 including regulatory filings and approvals in Japan and Israel.
• The number of published independent studies of ProSense continues to increase globally.

For the three months ended March 31, 2025, revenue from ProSense system and disposable probe sales was $725,000, compared to $743,000 in the same period of 2024. Revenue was driven by growth in North America and Europe, offset by a decline in Asia. Gross profit for the quarter was $218,000 versus $269,000 in 2024, with a gross margin of 30% in 2025 compared to 36% in 2024.

Guidance:

• Anticipates revenue and gross profit to fluctuate quarter to quarter as it builds commercial infrastructure.
• Expects no material change in revenues before FDA marketing authorization.
• The post-market study is projected to recruit 400 patients across at least 25 sites within three years.
• Sees potential for expanded reimbursement through CPT code adjustments and AMA applications.

Risks:

• Affected by potential U.S. tariffs as per the U.S. Administration's policies.
• Uncertainty exists regarding the FDA's review timeline for the post-market study plan.

Q: Yes. Hi. Good morning, Eyal, Ronen. I am glad to hear that you have submitted the proposed post-market study to the FDA. I think that's a significant milestone. Just as you mentioned, the CDRH, the Center for Devices and Radiological Health at the FDA, is the division within the FDA that is going to review and ultimately decide on the approval of the post-market study. First, is it still expected to be a minimum of 400 patients over 25 sites? And is there any indication from the FDA when they would potentially respond to the submission of your post-market study?

A: Hi, Anthony. This is Eyal. Yes, the post-market study, which is common for de novo approvals, will require 400 patients in at least 25 sites. The top management of CDRH, including the director's office, promised to continue reviewing it and be part of the process, but couldn't guarantee a specific time. We submitted a large package and will have ongoing discussions.

Q: Okay. I am just curious about how I know these packages are fairly large and voluminous in terms of length. Approximately how many pages was the package that you submitted?

A: Quite a lot. It contains a lot of information.

Q: And then assuming that the study is reviewed and approved, how long is that post-market study expected to take?

A: This isn't finalized with the FDA yet, but from other PMS cases, the FDA likely wants recruitment to be completed within three years.

Q: Recruitment within three years. Okay. Thanks. So the 400 patients should be recruited during three years.

A: Yes.

Q: Okay. And you did mention in your prepared remarks that there's an opportunity potentially for expanded reimbursement. Can you get any more specific on what that potential is?

A: Once we have more records and claims on the specific CPT code for breast cancer and additional cost information for claims, we believe we can increase the CPT record. Second, after FDA marketing authorization, we'll apply to the AMA to move from CPT3 to CPT1, which includes the physician fee. We're preparing for meta-analysis and other AMA requirements and will seek a CPT1 code.

Q: Okay. Great. And then just lastly, before I jump back in the queue, Terumo, your partner in Japan, is still on schedule to file for approval in the second half of 2025. What is the size of the population there? I know in the press release, 46,000 women are potential candidates for the ProSense system. What about Japan? What's the size of the market or the opportunity there?

A: There are over 100,000 new breast cancer cases annually in Japan, similar to the U.S., with almost two-thirds being low-risk early-stage breast cancer. Terumo's assumption is that the approval won't have age or tumor size limitations like in the U.S. initially, similar to CE and other regulatory approvals in Europe.

Q: Great. Thank you. Can you give any more details on the geographic breakdown of revenue this quarter? You know, how much growth you saw in the US and North America and the size of the decline in Asia?

A: Hi, Kemp. North America saw an approximately 11% year-over-year increase. Europe had a about 60% year-over-year growth. Japan had a significant decline (about 60%) as the numbers were not large, and other parts of Asia had about a 40% decline. Numbers fluctuate and were not large anyway.

Q: Great. And these were entirely probe and system sales this quarter?

A: Yes.

Q: Curious if there's the ProSense subject to any of the new tariffs for US markets, kind of get some clarity on that.

A: Yes, currently there's a tax freeze, but we'll need to see what President Trump decides. Initially, we were affected by U.S. Administration tariffs.

Q: Understood. And I'm kind of curious if for the post-market approval, once the study assuming the study goes through, do you guys plan to expand your sales team in addition to the ones you currently have?

A: Yes, Eyal here. After marketing authorization, we plan to expand the sales team. We have a professional team in North America led by Mr. Shad Good with over 20 years of breast field experience from J&J and others. We'll build teams with sales reps, regional sales managers, technical applications, and expect significant growth from the U.S. market.

Q: Understood. And kind of also curious what strategies you guys have for pricing and sales. Specifically, do you guys primarily focus on purchasing outright? Do you guys have leases or pay-per-use agreements in place? Kind of getting more clarity on your commercial strategies in that regard.

A: We believe it'll be about 60/40 between placement and selling consoles, maybe half and half. For placement, we'll require a significant monthly probe commitment over 2-3 years at a higher price. We'll also have a separate model selling consoles and single-use probes.