IceCure Medical Ltd. Q2 FY2025 Earnings Call

Thank you, Joni, and welcome to IceCure Medical's conference call to review the financial results for the six months ended June 30, 2025, and to provide an update on recent operational highlights. You can refer to the earnings press release we issued earlier today. Joining us on the call are IceCure Medical's CEO, Eyal Shamir, and the company's CFO and COO, Ronen Tsimerman. Before we start, I will take a moment to read a statement regarding forward-looking statements. This call and the subsequent question-and-answer session include forward-looking statements as defined by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Terms like expects, anticipates, intends, plans, believes, seeks, estimates, and similar phrases are meant to identify forward-looking statements. For instance, we are using forward-looking statements when we mention our optimism about receiving regulatory approval for ProSense before the end of 2025, our expectation of more clinical data from independent researchers, the belief that the recent rights offering signals strong support from our shareholders and will ensure enough cash for the anticipated FDA marketing authorization decision, our expectation that revenue and gross profits may differ each quarter as we concentrate on building commercial-scale sales, and the belief that our growth could significantly increase upon receiving the FDA's decision. We will also highlight our upcoming presentation at the H.C. Wainwright & Co Conference, participation in Maxim Group LLC's Conference, and our belief that the company's financial position, comprising cash, cash equivalents, and short-term deposits, will enable us to continue executing regulatory, clinical, and commercial initiatives. The forward-looking statements discussed during this call carry risks and uncertainties, many of which the company cannot control, as outlined in the Risk Factors section of our annual report on Form 20-F for the year ended December 31, 2024, which was filed with the Securities and Exchange Commission on March 27, 2025, and is available on the SEC's website. The company has no obligation to update or revise forward-looking statements unless required by law, regardless of new information or future events. This conference call contains time-sensitive information and is valid only as of the live broadcast today, August 13, 2025. Furthermore, during this call, we will discuss non-GAAP metrics, and we encourage you to consult the reconciliation tables and information regarding these non-GAAP measures in the earnings press release we issued earlier today. I will now hand the call over to IceCure Medical's CEO, Eyal Shamir. Eyal, please proceed.

Thanks, Michael, and 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 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 the productive meeting with leadership at the FDA Center for 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 results and the growing body of independent clinical evidence. We were 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, 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, during which 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. This 17-year follow-up for over 600 breast cancer patients shows only a 1% recurrence, which means a 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 shareholders. We expect this to provide a sufficient cash run rate for the anticipated FDA marketing authorization decision. Our largest shareholder and a Board member, Mr. Li Haixiang of Epoch Partner Investment Limited, participated in the rights offering. I will now turn the call over to Ronen.

Thank you, Eyal. For the 6 months ended June 30, 2025, revenue was $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. This will be recognized in the third quarter. Gross profit for the first half was $349,000 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 6 months 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 on August 1, 2025. During the first half of 2025, IceCure raised $2.65 million in net proceeds from the sales of 2,127,961 ordinary shares under our 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 conference, and we'll be participating at Maxim Conference in October.

Good day. What's the nature of the additional information that FDA requested?

Good morning, and thank you for your questions. This is Eyal, the CEO. The FDA is seeking important information regarding the post-market study. As we announced, it is set to take place after the approval, involving 400 patients across 30 sites, and we need to complete patient recruitment within three years. They would like a list of potential participating sites, a qualification form for those sites, and an overview of the recruitment plan that we will use to conduct the post-market study after they issue the approval letter. This is to ensure confidence and demonstrate that IceCure, like other companies that received de novo approval, can carry out the required post-market study. We want to make sure we can successfully conduct it.

And I mean just 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?

We are working now to update the budget. Maybe Ronen could give some more light on it. But we work with the site. Of course, we need to have some support like any study from a CRO and basically, it's a normal post-market study. We have also the current CPT3 code that will be able to cover the cost of the probe and more for the sites, and we will work according to a normal course of the study.

The final budget will be determined once we have a complete understanding with the FDA regarding all the requests, along with the costs from the CRO, the follow-up expenses, and payments to the facilities.

Great. And then a question on a separate topic, and that is given the expected timetable for an approval, are you still expecting, for instance, late '26 for CPT1 code from AMA, possibly sooner from the other specialist societies? And are there any changes in how you're thinking about the build-out of your commercial efforts as a result?

I will start from the last part of your questions. As soon as we will get the clearance, we have Mr. Shad Good, our VP sales for North America, who is bringing over 20 years of experience in breast field from J&J, Mammotome 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, and then after the clearance, we will be able also to apply to AMA in order to move to CPT1. We have support from about 5 societies that we 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 AMA is doing, and then we will get the code and the reimbursement attached to it. In parallel, we will work with the other societies and some other payers.

So just to follow up on the post-market study. So that's been submitted and accepted by the FDA in terms of the submission has been accepted, and now they're reviewing the protocol before making a final decision. Is that correct?

Yes, we provided any information that they asked, even including the intended use, the IFU as well as the indication there; they require a patient leaflet with all the information. Everything in the package that's related to the post-market study, 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, we have continuous discussions, and we are giving them information whenever they ask.

Okay. Great. So 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.

And leadership, which is extremely important, Anthony, that leadership that participated in the last 2 months or whatever. They're 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 worked closely with us in order to get this positive decision.

Okay. Great. And then just in terms of how IceCure 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 needs to do to prepare to hit the ground running once the decision has been made?

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— 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 would like to participate in the study but also to be a commercial site. I'm not looking for sites just to join the study. On average, 400 patients to divide by 25 or 30, it's about 16 patients. All sites will be also commercial sites, so we've created a lot of traction of sites who are waiting for the FDA, and they would like to participate to be users. This could be part of the study. So it's creating a lot of excitement about sites who'd like to join, be they breast surgeons or radiologists. Even some of them we would like to start to be fully trained and be commercial users purchasing the console even before the officially study starts, so it's creating, and we will look for new team members that we will start to hire immediately after we get the grant letter.

So 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, and you're already starting to train the interventional radiologists and breast surgeons, or you're lining them up to be trained immediately following anticipated approval, correct?

Yes. They see it as a great opportunity to provide additional new data and to be commercial users.

And be commercial users as well. That's great. Okay. And then just in terms of how are things progressing in Europe? And just an update on the expense regulatory clearance in Israel.

In Europe, there is significant interest in breast interventions. In mid-September, we have the largest interventional oncology and cardiovascular event called CIRSE taking place in Barcelona. This conference typically focuses on various organs, with past presentations highlighting kidney, lung, bone, and liver topics, mainly concerning soft tissue ablation. However, this year, the primary focus, led by Professor Franco and other users, is on breast interventions. Consequently, the interventional oncology conference has shifted predominantly towards breast topics, resulting in numerous independent studies in Europe and beyond. Breast interventions have become a crucial area of interest, and we will present significant real-world data at this upcoming conference, leading to increased activities in the field.

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

September 13 to 17. Yes. And even later, in late September, we have the EUSOBI, which is the European conference for breast imaging, similar to the American SBI, Society of Breast Imaging. So both conferences, the topic will be breast cancer, and we have like 7 to 8 presentations of independent studies. So, quite a lot of new information on this important topic. And this will drive utilization and additional new sales.

Okay. Great. So these conferences are expected to help drive new sales and utilization in Europe. In addition to the conferences and the data you have, do you believe that sales will accelerate in Europe following potential FDA approval? Do you think that will serve as an additional catalyst?

Yes, absolutely. I personally attended the Japanese Breast Cancer Society conference, which was excellently led by Dr. Fukuma and Dr. Richard Fine, the main Principal Investigator of our study and a past President of the American Society. The conference was well received. In Japan, there is significant interest in the FDA, and this approval will be a crucial catalyst for Terumo. The leadership of the Japanese society is eager to support us, as are many others. Even with a CE for breast cancer, everyone is focused on the FDA.

This is Eduardo on for Yi. I would like to ask a question about the 7-year follow-up study you mentioned earlier. Could you provide more details about the specific patient population and cancer type, and how the 1% recurrence rate you referenced compares with the historical expectations for those patients?

Yes. The 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. And then the second peak is 65 and up. In Japan, they are giving all breast radiation to any patients. So this is why they have excellent results of a 1% recurrence, only 1% or 99% free from 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 cryoablation with adjuvant therapy and radiation, we had a 0% recurrence, but most of our patients in the ICE3 study didn't get radiation, and this is why we believe that this is part of why we got 97%. We still have very good results even compared to the lumpectomy recurrence rates with the standard of care. But in Japan, they have better results. Hard for me to evaluate if whole breast radiation to any patient is good or not, but this is the difference between the two standards of care.

I see. So I guess more aggressive maintenance with the radiation in Japan could be driving the difference?

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 is low-risk patients. So in Japan, ICE3 study, the PMS study, for sure, it will be according to the indication. The same pool of patients in Europe is the same. But Japan has, you could call it maybe a bit more precise or aggressive standard of care, and this is why they have better high rates of free from local recurrences.

Got it. That's helpful. I'm curious about your commercial launch strategy and how you are preparing for the possibility of FDA approval. Is your current cash position sufficient to support those operations until you receive FDA clearance, or do you anticipate needing additional funding for that?

Ronen?

So currently, we have enough funding to get the FDA authorization and past that. Of course, when we finalize the costs and budgeting of the expected post-marketing study. We will understand our full cash demands and management will operate accordingly.

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

Thank you, Joni. 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 finding in Japan for ProSense in breast cancer. Also, on the regulatory front, we expect a response from the Israeli Ministry of Health on our next-generation access. We have continued to get strong commercial and practitioner traction at the medical conferences where data from the independent study of ProSense are presented. We expect more broad exposure at major conferences in September, including at the European Society of Breast Imaging and 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 on ICE3, including from trials in Italy and Brazil. Thanks, and have a great day, everyone.

This concludes the IceCure Second Quarter 2025 Results Conference Call. Thank you for your participation. You may go ahead and disconnect.