IceCure Medical - Earnings Call - Q2 2025

Transcript

Speaker 2

Ladies and gentlemen, thank you for standing by. 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 hand over the call to Michael Polyviou. Please go ahead.

Speaker 1

Thank you, Yani, and welcome to IceCure Medical's conference call to review the financial results as of and for the six months ending June 30, 2025, 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 CEO, Eyal Shamir, and the company's CFO and COO, Ronen Tsimerman. 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 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, states, 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 that the company is optimistic that regulatory approval for ProSense will be granted before year-end 2025. The expectation is that there is more clinical data forthcoming from independent researchers. The belief that the recent rights offering is a strong indicator and a vote of confidence from the company's shareholders and that it will provide sufficient cash runway for the anticipated FDA marketing authorization decision. The expectation that revenue and gross profit may continue to vary quarter to quarter as the company focuses on building commercial scale sales. The belief that the company's growth trajectory could meaningfully accelerate upon receiving the FDA's decision. The company's upcoming presentation at the H.C.

Wainwright & Co Conference, participation in Maxim Group LLC's conference, and the belief that the company's cash, cash equivalents, and short-term deposits position it in strong financial position to continue executing across regulatory, clinical, and commercial initiatives. The forward-looking statements contained or applied 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, 2024, filed with the Securities and Exchange Commission on March 27, 2025, 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.

This conference call contains time-sensitive information and speaks only as of the live broadcast today, August 13, 2025. In addition, during the course of the 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 CEO, Eyal Shamir. Eyal, please go ahead.

Speaker 4

Thanks, Michael. Hello, everyone, and thank you for joining us today to review our results for the first half of 2025. This is a pivotal time for IceCure Medical Ltd as we are experiencing momentum building across several fronts, including regulatory, clinical, and commercial. Let me begin with our regulatory progress in the U.S. for ProSense for the very important indication of early-stage low-risk breast cancer in women aged 70 and over, combined with adjuvant endocrine therapy. We believe that this is a significant opportunity to change the paradigm of breast cancer care for the estimated 46,000 women in the U.S. annually, with the alternative to lumpectomy. In the second quarter, we concluded a productive meeting with leadership at the FDA Center of Devices and Radiological Health regarding our de novo marketing authorization request. Importantly, the FDA requested a post-market study to be conducted after marketing authorization has been granted.

The post-market study has been fully submitted to the FDA. We believe the plan reflects a comprehensive and well-structured approach. We were asked to provide additional information, which we are actively working to complete. Assuming the FDA finds the supplemental data satisfactory, we remain optimistic that approval will be granted before year-end 2025. Meanwhile, we are also experiencing a positive shift in adoption in Europe, especially in breast cancer cryoablation. While ProSense is already approved in Europe for several indications, including breast cancer, we believe the increase in usage for breast cancer is being driven by the ICE3 study results and the growing body of independent clinical evidence. We are aware of many more studies and expect more clinical data will be forthcoming from independent researchers that our commercial team is prepared to leverage to drive further adoption and utilization.

ProSense was featured prominently during the second quarter at several high-impact medical forums, including the American Breast Surgeons Annual Conference, the Society of Breast Imaging Symposium, and the European Conference on Interventional Oncology. Demonstrating the growing interest in ProSense during the Society of Breast Imaging Symposium, both hands-on breast cryoablation training courses were sold out. At the European Conference on Interventional Oncology, our technology was featured in a separate event, including data showing that 91% of patients would choose ablation over breast-conserving surgery. Earlier in this quarter, ProSense was featured at the Japanese Breast Cancer Society Conference, which during the conference, a respected expert and ProSense user, Professor Fukuma, presented 17 years of data from over 600 breast cancer patients showing a 99% recurrence-free rate with cryoablation. I would like to repeat this message of this amazing follow-up and results.

17 years of follow-up for over 600 breast cancer patients showing only 1% recurrence, which means 99% recurrence-free rate, which is the biggest global clinical evidence using our technology. In summary, we are executing and laying the groundwork for future success. Recently, we strengthened our financial position with the closing of our $10 million rights offering that was significantly oversubscribed. We believe that this is a strong indicator and a vote of confidence from our shareholder. We expect this to provide a sufficient cash runway for the anticipated FDA marketing authorization decision. Our largest shareholder and a board member, Mr. Li Haishiyang of EPOC Partner Investment Limited, participated in the rights offering. I will now turn the call over to Ronen.

Speaker 2

Thank you, Eyal. For the six months ended June 30, 2025, revenue was about $1.25 million compared to $1.75 million for the same period in 2024. As previously disclosed, over $200,000 in product shipments originally scheduled for Q2 were delayed due to the Israel-Iran conflict in June. These will be recognized in the third quarter. Gross profit for the first half of 2025 was $339,049 compared to $799,000 in the prior year period. This resulted in a gross margin of 28% versus 46% in the first half of 2024. As we previously communicated, we expect revenue and gross profit may continue to vary quarter to quarter as the company focuses on building commercial-scale sales. Overall, total operating expenses decreased to $7.39 million for the six-month period compared to $7.68 million a year ago. This reflects our efforts to optimize spending without sacrificing commercial or regulatory execution.

Net loss for the first half of 2025 was $6.95 million or $0.12 per share compared to a net loss of $6.69 million or $0.14 per share in the same period last year. As of June 30, 2025, we had $5.38 million in cash, cash equivalents, and short-term deposits, which included a $2 million loan from our major shareholder. This excludes the $10 million in gross proceeds raised from our rights offering, which closed at August 1, 2025. During the first half of 2025, IceCure Medical Ltd raised $2.65 million in net proceeds from the sales of 2,127,961 ordinary shares under our at the market offering facility. We believe this puts us in a stronger financial position to continue executing across our regulatory, clinical, and commercial activities. We believe our growth trajectory could meaningfully accelerate upon receiving the FDA decision.

To help raise awareness of IceCure's story and broaden investor engagement, Eyal and I will be presenting at next month's H.C. Wainwright & Co Conference and will be participating at Maxim Group LLC Conference in October. Operator, we will now open the call for Q&A.

Speaker 6

We will now start the Q&A session. If there are any questions, please press star one. If you wish to cancel your request, please press star two. If you're using speaker equipment, kindly lift the handset before pressing the numbers. Your questions will be pulled in the order they are received. Please stand by while we pull for your questions. The first question is from Kemp Dolliver of Brookline Capital Markets. Please go ahead.

Speaker 3

Hi, good day. What's the nature of the additional information that FDA requested?

Speaker 4

Hi, Kemp. Good morning, and thank you for your question. This is Eyal, the CEO. The FDA would like to get quite important information around the post-market study. As we announced, it's supposed to be after granting the approval. It's going to be 400 patients in 30 sites, and we need to conclude the participation of the patient recruitment of the patients within three years. They would like to get some list of potential participating sites, some kind of a qualification form of the site, and to see the recruitment plan that we will be able to conclude and to run the post-market study after they will grant us the letter. This is to build the confidence and the information that IceCure Medical Ltd will be able, like other companies that got de novo approval, that need to run this post-market study.

Just to be sure that we will be able to conduct it.

Speaker 3

Right. Does going through this exercise lead you to increase your budget for recruiting for the trial, for instance, or do you expect the cost of the trial to be about the same as you previously suggested?

Speaker 4

We are working now to update the budget. Maybe Ronen could give some more light on it. You know we work with the sites. Of course, you know we need to have some support, like any study from a COO. Basically, it's a normal post-market study. We have also the current TTTs record that will be able to cover the cost of the probe and more for the sites. We will work according to a normal cost of a study.

Speaker 2

Yeah. The final budget will be decided when we have the full, let's call it, understanding with the FDA regarding all the requests, as they offer the CRO, the costs of the follow-up, and the payments to the facilities.

Speaker 3

Great. Thank you. A question on a separate topic, given the expected timetable for an approval, are you still expecting, for instance, late 2026 for CPT1 code from AMA, possibly sooner from the other specialist societies? Are there any changes in how you're thinking about the build-out of your commercial efforts as a result?

Speaker 4

Yeah. I would start from the last part of your questions. As soon as we will get the clearance, we have Mr. Chad Good, our VP Sales for North America, who is bringing over 20 years of experience in breast imaging from JJ Mamato and other leading companies. We have a current small team. As soon as we will have the clearance, we will start the recruitment in order to start commercialization in 2026, under the assumption of getting the clearance, the grant letter. After the clearance, we will be able also to apply to AMA in order to move to CPT1. We have support from about five societies that are going to support us for this application to move to CPT1. There is a process in place, which is 12 to 18 months in order to get the approval, some kind of a survey that the AMA is doing.

We will get the code and the reimbursement attached to it. In parallel, we will work with the other societies and some other payers.

Speaker 3

Great. Thank you.

Speaker 6

The next question is from Anthony V. Vendetti of Maxim Group LLC. Please go ahead.

Speaker 0

Thank you. Just to follow up on the post-market study, that's been submitted and accepted by the FDA in terms of the submission's been accepted. They're reviewing the protocol before making a final decision. Is that correct?

Speaker 4

Yeah. We provided any information that they asked, even including the intended use, the IFU, as well as the indication. They require a patient leaflet with all the information. Everything in the package that's related to the post-market study, to the recruitment plan, as well as all the package to build the final decision letter and grant letter, we provided all the required information. They reviewed them. We have continuous discussions, and we are giving them information any time they ask.

Speaker 0

Great. You've submitted everything. You're just waiting for them to either make a decision or see if they have any other information requests at this point.

Speaker 4

Yeah. Leadership, which is extremely important, Anthony, that leadership that participated in the last two months or whatever, they still shown in any meeting that we have with them in order to be a positive decision. Leadership of the FDA, not for sure leadership of IceCure, but leadership of the FDA, management of FDA that participated in the last round and working closely with us in order to get this positive decision.

Speaker 0

Okay. Great. In terms of how IceCure Medical Ltd is preparing for the potential acceptance of the post-market study and therefore FDA approval, I know you've already implemented some steps and hired a few people. Is there anything else that you feel IceCure Medical Ltd needs to do to prepare to hit the ground running once a decision's been made?

Speaker 4

I think that after we had the meeting with the FDA and we already agreed with them on the indication for patients who are 70 years and over, and they asked us to work on the post-market study, and we were able to announce it. It allowed us to have a discussion with some breast surgeons and breast radiologists who like to participate to the study, but also to be a commercial site. I'm not looking for sites just to join the study. In average, 400 patients to divide by 25 or 30, it's about 16 patients. All sites will be also a commercial site. We've created a lot of traction of sites who are waiting for the FDA and they like to participate to be users and to be part of the study.

We're creating a lot of excitement about sites who would like to join, both breast surgeons, both radiologists. Even some of them we would like to start to be fully trained and to be a commercial user purchasing the consent even before officially the study will start. It's creating, and we will look for new team members that we will start to hire immediately after we will get the grant letter.

Speaker 0

The sites have been selected. They will be both the sites that are part of the application for the post-market study. They'll also be commercial sites. You're already starting to train the interventional radiologists and the breast surgeons, or you're lining them up to be trained immediately following anticipated approval, correct?

Speaker 4

Yeah, they see it as a great opportunity to provide additional new data and to be a commercial user.

Speaker 0

That's great. Okay. In terms of how are things progressing in Europe, just an update on the accents regulatory clearance in Israel?

Speaker 4

Yeah. You know, Europe, we are seeing again a lot of interest around breast. Even the coming, I think that I mentioned it, you know, with the public information. Mid-September, we have the biggest, it's called CIRSA. It's Interventional Oncology and Cardiovascular Event. This is the biggest European event this time in Barcelona. Usually, in this conference regarding interventional oncology, in the past, you saw a lot of publication presentations regarding kidney, lung, bone, liver, and other organs, mainly soft tissue ablation. Last year and mainly this year, the main topics and all the opening ceremony running by Professor Franco Olsen and some of our other users, it's all around breast. Interventional Oncology Conference becomes mainly around breast. This is creating around our many independent studies in Europe and other places. Breast becomes an extremely important topic.

We have the biggest real-world data that's going to present in this coming conference. This is creating much more activities.

Speaker 0

Okay. That conference in Barcelona, what's the date of that?

Speaker 4

September 13 to 17. Yeah. Even later, in late September, we have the EOSOBI, which is the European Conference for Breast Imaging, similar to the American SBI Society, Breast Imaging. Both conferences, the topic will be breast cancer. We have like seven to eight presentations of independent studies, quite a lot of new information on this topic, important topic. This will drive utilization and additional new sales.

Speaker 0

Great. These conferences, you expect to be able to drive new sales and utilization in Europe. Do you think that, in addition to these conferences and the data that you have, sales will accelerate in Europe following potential FDA approval? Do you think that will be an additional catalyst?

Speaker 4

Yeah. Yeah. Absolutely. You know, same world. You know, we had a very, I personally participated in the Japanese Breast Cancer Society. We had an excellent conference led by Dr. Fukuma and also Dr. Richard Fein, who was the main PI of our study, past president of the American Society. It was well accepted. In Japan, also, they are looking very much on the FDA. This will be an extremely important catalyst, you know, for Terumo, for the leadership of the Japanese Society, who would like to support us very much. Also in other places, even if you have a CE in breast cancer, everyone is looking on the FDA.

Speaker 0

Okay. Great. Thanks so much for all that. I'll hop back in the queue.

Speaker 4

Thank you.

Speaker 6

The next question is from Eduardo Rafael Martinez-Montes of H.C. Wainwright & Co. Please go ahead.

Speaker 5

Hello. This is Eduardo on for Ye. I guess maybe if I could ask a question regarding the seven-year follow-up study you alluded to previously. Could you add a little bit more detail about the specific patient population and cancer type and how that, I think it was 1% recurrence rate you mentioned, compares with the historical expectation for those patients?

Speaker 4

Yeah. Their standard of care in Japan is a bit different from the U.S. In Japan, they are treating patients even from the age of 50, or basically, officially, they don't have, or they are not going to have, age limitation. In Japan, firstly, the first peak in Japan for breast cancer, it's mainly for patients who are 45 to 49. The second peak is 65 and up. In Japan, they are giving whole breast radiation to any patients. This is why they have excellent results of a 1% recurrence, only 1%, or 99% free from a local recurrence. In the ICE3 study, or even as part of standard of care, especially elderly patients, they are now with the de-escalation. They try to omit radiation, for example, or at least it is not mandatory by the societies.

Even in the ICE3 study, patients who got a cryoablation, adjuvant therapy, and radiation, we had a zero recurrence. For the most part, our patients in the ICE3 study didn't get radiation. This is why we believe that this is part of why we got a 97%. We still have very good results, even to compare to the lumpectomy recurrence rates with the standard of care. In Japan, they have better results. It is hard for me to evaluate if whole breast radiation to any patient is good or not good. This is the difference between two standards of care.

Speaker 5

I see. I guess more aggressive maintenance with the radiation in Japan could be driving for you.

Speaker 4

Oh, yeah, definitely. From the tumor biology or cancer grade, both Japan, U.S., and all the European or other independent studies are goals for the same group of patients. Low-risk, early-stage breast cancer, usually up to 1.5 centimeters from the tumor site. It's called Luminal A. Luminal A, it's a low-risk patient. In Japan, ICE3 study, the PMS study, for sure, it will be according to the indication. The European is the same group of patients. Japan has, you could call it, maybe a bit more precise or aggressive standard of care. This is why they have a better, high rate of free from local recurrence.

Speaker 5

Got it. That's helpful. I guess I'm curious in terms of the commercial launch strategy that you have. You're in the process of preparing and the contingency of the FDA approval. Would you, is your current task position sufficient to fund those operations through FDA clearance, or are you planning you might need a little bit more funding for that?

Speaker 4

Ronen?

Speaker 2

Currently, we have enough funding, you know, to get the FDA authorization and pass that. Of course, when we will finalize the final costs and the budgeting of the expected post-market study, we will understand our full cash demands and management will operate accordingly.

Speaker 5

Understood. All right. Thank you for answering the questions.

Speaker 6

There are no further questions at this time. Eyal, would you like to make your concluding statement?

Speaker 4

Thank you, Yani. Thanks for joining our call today and great questions. We are excited about what is ahead. Some key value-driving milestones that we expect in the second half of the year include, most importantly, a final FDA marketing authorization decision. Additionally, we expect our partner in Japan, Terumo, to submit a regulatory filing in Japan for ProSense in breast cancer. Also, on our regulatory front, we expect a response from the Israeli Ministry of Health on our next-generation accents. We are continuing to get strong commercial and practitioners' traction at the medical conferences where data from independent studies of ProSense are presented. We expect more broad exposure at major conferences in September, including at the European Society of Breast Imaging, at the Cardiological and Interventional Radiology Society of Europe, which I mentioned earlier, CIRSE, which is in mid-September.

Additional data releases may be coming from independent studies modeled on ICE3, including from trials in Italy and Brazil. Thanks, and have a great day, everyone.

Speaker 6

This concludes the IceCure Medical Ltd second quarter 2025 results conference call. Thank you for your participation. You may go ahead and disconnect.