IceCure Medical Ltd. Q3 FY2025 Earnings Call

Good morning, and thank you for standing by. Currently, all of the participants are in 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 Michael Polyviou. Please go ahead.

Thank you, and welcome to IceCure Medical's conference call to review the financial results as of and for the nine months ended September 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 CEO Eyal Shamir and the company's CFO Ronen Tsimerman. Before we begin, I will now take a moment to read a statement of our forward-looking statements. This call and the question-and-answer session that follows contains 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 terms are intended to identify forward-looking statements. For example, we are using forward-looking statements in this presentation when we discuss how the FDA's marketing authorization process will drive meaningful growth for us and support broader access for patients. We believe the global interest following the FDA authorization will support international adoption based on the belief that ProSense will be the only cryoablation system cleared in the U.S. for breast cancer in the foreseeable future. We also expect that Terumo Corporation will submit regulatory applications for ProSense in Japan in the first half of 2026. Additionally, we believe revenue and gross profits may continue to vary quarter-to-quarter as the company focuses on building commercial scale sales. We maintain that the company's cash, cash equivalents, and short-term deposits position us in a stronger financial position to continue executing across regulatory, clinical, and commercial initiatives. Forward-looking statements made during this call are subject to risks and uncertainties, many of which are beyond the company's control. These are outlined in the Risk Factors section of the company's annual report on Form 20-F for the year ended December 31, 2024, which is filed with the Securities and Exchange Commission. This conference call contains time-sensitive information and speaks only as of the live broadcast today, November 19, 2025. During the course of this call, we will also discuss certain metrics that are non-GAAP measures and refer you to the tables and other information about these non-GAAP measures included in the earnings press release we issued earlier this morning. I will now turn the call over to IceCure Medical's CEO, Eyal Shamir. Eyal, please go ahead.

Thanks, Michael, and hello everyone. Thank you for joining us today to review our results for the first nine months of 2025. During the third quarter, we remained focused and executed a growth multiplication process, including commercial operations, technology, intellectual property, and regulatory matters. In October, we announced the most significant milestone in IceCure history when the FDA granted marketing authorization for our cryoablation system to treat low-risk breast cancer. This authorization validates the clinical research we have invested in over many years and positions IQ at the forefront of minimally invasive breast cancer care. As a reminder, the authorization is for women aged 70 and older with tumors up to 1.5 centimeters or for those receiving adjuvant endocrine therapy, including women who are not eligible for surgery. This indication covers a population of roughly 46,000 U.S. women over 70 diagnosed each year. Additionally, there are an estimated 88,000 patients who are not candidates or willing to go through surgery, and patients who can be treated for palliative purposes. By addressing the needs of patients who cannot choose to undergo surgery, ProSense offers an important alternative to treat cancer that was not previously available to them. Furthermore, 10% of women are diagnosed with benign tumors annually, and approximately 63,000 U.S. women undergo surgery to remove benign breast tumors through a procedure called lumpectomy. Collectively, this presents a significant addressable market for ProSense of roughly 200,000 patients annually, indicating a substantial opportunity ahead for IceCure. The response to the FDA decision has been exceedingly encouraging. We are witnessing growing interest from U.S. clinicians, including breast surgeons, interventional radiologists, and breast imagers, many of whom are requesting demonstrations and installations. Our U.S. commercial team is focused on expanding ProSense installations, enhancing volume and utilization. We believe ProSense is well-positioned at this time for several reasons, including the fact that the FDA marketing authorization establishes that any other company wishing to file for a 510(k) marketing authorization for a different cryoablation system to treat breast cancer will be required to submit five years of follow-up data, use a liquid nitrogen-based system, and use probes with specific specifications. To our knowledge, no other company is currently conducting a breast cryoablation study in the U.S. Given this significant barrier to entry, we believe ProSense will be the only cryoablation system cleared in the U.S. for breast cancer in the foreseeable future. We currently have over 20 commercial sites using ProSense prior to the FDA marketing authorization, and we expect the number of commercial sites to increase organically, in addition to the 30 clinical sites planned for our forthcoming post-market study. We have submitted the study design to the FDA for review and will provide an update once we receive FDA approvals to proceed. As a reminder, the clinical sites will allow for treating study patients, benefiting from reimbursement while also being available for any appropriate patients opting for ProSense commercially. We anticipate this rollout will drive meaningful growth in both clinical applications and product adoption. ProSense currently benefits from a CPT 3 code that covers approximately $3,800 in costs. This is expected to increase to just over $4,000 in early January 2026. This improvement, combined with the FDA authorization, should facilitate broader access for patients. Beyond the U.S., we are experiencing a high level of global interest from clinicians in response to the FDA decision in markets where ProSense is already approved for breast cancer treatment. Recently, we added Switzerland to our expanding list of countries in which ProSense has been approved. At our office in Israel, we are currently hosting a visit from a distinguished Brazilian medical delegation. Their visit includes a clinical overview and a roundtable discussion with key opinion leaders, along with presentations regarding ongoing clinical trials for breast treatments. The delegation, which comprises five interventional radiologists and breast surgeons, also observes live clinical cases at local medical centers in Israel. In Brazil, the largest healthcare market in South America, ProSense is approved for breast cancer and other indications, and we have a distribution agreement valued at €6.6 million expected over the next five years. Moreover, our global marketing and clinical teams have been approached by numerous medical societies to ensure our participation in upcoming conferences in 2026. European and Asian medical societies are specifically incorporating breast cancer cryoablation master classes featuring ProSense. On the innovation front, we continue making strong progress. In September 2025, our next-generation system received regulatory approval in Israel for breast cancer and other indications. We have recently secured a notice of patent allowance for our innovative products in the U.S. and Japan, further strengthening our intellectual property portfolio. ProSense continues to gain significant visibility at leading medical conferences worldwide. Since the beginning of the third quarter, it has been featured at notable events including the Japanese Breast Cancer Society Conference, the European Society of Breast Imaging Congress, and the Breast Cancer Care Summit in New Orleans. Additionally, we have collaborated with Karig Hospital in Florence, Italy, to conduct a two-day course of theoretical and hands-on training for physicians worldwide, broadening adoption and expertise in breast cancer cryoablation. Lastly, ongoing clinical validation continues to reinforce the safety and effectiveness of our technology. During and following the end of the third quarter, 13 independent studies regarding breast cancer were presented and published, along with promising data in lung cancer and endometriosis that further demonstrate the clinical value of ProSense. In conjunction with the recent approval in Switzerland, we are advancing our global regulatory strategy with our partner in Japan. Terumo Corporation plans to submit a regulatory application for ProSense in the treatment of breast cancer in the first half of 2026, marking a significant step toward expanding access to ProSense in new international markets. In summary, we believe IceCure is entering an exciting growth phase. We are implementing our sales and marketing strategy in the U.S. to target a patient population of about 200,000 women annually to drive and accelerate growth. We will continue to expand clinical evidence, improve investments, and enter new markets. We are confident in the path ahead for both patients and shareholders. I will now turn the call over to Ronen.

Thank you, Eyal. For the nine months ended September 30, 2025, revenue was $2.1 million compared to $2.4 million for the same period in 2024. Revenue for the first nine months of 2024 included $100,000 from our exclusive distribution agreement and other services with Terumo, our distributor in Japan, while no revenue was booked during the first nine months of 2025. We experienced a $316,000 decrease in sales during the nine months ended September 30, 2025, primarily due to a decline in sales in Japan and other territories in Asia and North America, partially offset by an increase in sales in Latin America. As we have stated in the past, we expect fluctuations in quarterly revenue as commercial activities ramp up in the U.S. and globally following the FDA's marketing clearance for ProSense in low-risk breast cancer treatment. Gross profit for the nine months ended September 30, 2025, was $626,000 compared to $134,000 in the prior year period, resulting in a gross margin of 30% versus 43% in the same period in 2024. As we previously communicated, we expect gross profit to rise quarter-to-quarter as the company focuses on building commercial scale sales. Overall, total operating expenses decreased to $11.5 million for the nine months ended September 30, 2025, compared to $12.2 million a year ago. This reflects our efforts to optimize spending without sacrificing commercial or regulatory execution. The net loss for the nine months ended September 30, 2025, was $10.8 million or $0.18 per share, relatively unchanged from a net loss of $10 million or $0.22 for the same period last year. As of September 30, 2025, we had $10 million in cash, cash equivalents, and short-term deposits, compared to $7.6 million as of December 31, 2024. In July 2025, we completed a rights offering that was approximately 2x oversubscribed, raising $10 million in gross proceeds to support the commercialization of our ProSense systems. During the first ten months of 2025, we raised approximately $5.87 million in net proceeds from the sale of 5.4 million ordinary shares through a market offering facility, bringing our cash balance as of October 31, 2025, to $11.8 million. We believe this positions us in a stronger financial state to continue executing across our regulatory, clinical, and commercial initiatives. Operator, we will now open the call for Q&A.

The first question is from Anthony Vendetti of Maxim.

Ronen, I just want to find out where it's at with the FDA for approval of the post-market study. I know you're awaiting that final approval; has there been any communication with them, or are you just in a wait-and-see mode?

As I described in my part, we submitted the protocol to the FDA and have begun interactive communication with them to finalize it. The official protocol along with all other elements has already been submitted to the FDA.

Okay, so there's no indication or expected timeline for when they'll officially sign off on it? But you've identified 30 sites and, in the last quarter, you said 20 have been identified. Can you give us an update on those numbers, please?

Yes, we have about 20 sites identified, and we are adding more. It's mainly around the clinical protocol, the statistical analysis plan, and the claims database. We are working on all elements, and I believe that by the end of the year, or maybe the shutdown may delay things a bit, but by very early next year, we will get the final approval. Then, by summer 2026, we will need to recruit the first patient, with a target of reaching 80 patients by the end of 2026.

That certainly seems like a very easy hurdle. In this press release, you mentioned that there might be more patients who could benefit from cryoablation because the ones that are low risk over 70, I think it was originally identified as around 46,000. But in this press release, you mentioned there's 88,000 additional patients that could benefit, as well as another 63,000 that could be treated for benign tumors as well. Is that new information? Could you elaborate on that, please?

Yes, so part of our grant letter authorization we received from the FDA contains two components. One is low-risk early-stage patients who are 70 and older with tumors of up to 1.5 centimeters. This, as you mentioned, represents about 46,000 new patients every year in the U.S. The second part is due to the breakthrough device designation we received in 2021, which includes patients who are not eligible for surgery. This could be patients with comorbidities who cannot undergo general anesthesia or those who are unwilling to pursue surgery. Based on evidence from sales and other data, we believe the number is 88,000 new patients annually in the U.S. regarding those who are surgical or unwilling to proceed with the surgery. As for benign breast tumors, while breast cancer remains our primary focus, we also attract younger patients, with about one million new patients every year, primarily between the ages of 21 to 35 years old. Approximately 63,000 of them undergo surgical removal of benign breast tumors. We believe that part of this addressable market could be replaced by cryoablation due to its minimally invasive nature. This is especially important for younger patients, considering aesthetics. The reimbursement coverage for this is the same, which in January will be about $4,000. For this, we have a specific indication and a specific CPT code for benign breast tumors. All of this gives us a potential addressable market of over 200,000 new patients each year just in the U.S.

There are no further questions at this time. I will turn the call over to Eyal Shamir for concluding remarks.

Thank you for joining our call today and for the great questions. We believe the FDA marketing authorization has dramatically changed our growth trajectory. We look forward to updating you all as we continue to execute our commercial rollout of ProSense in the U.S. and globally. Have a great day, everyone, and for those in the U.S., have a happy Thanksgiving. Thank you.

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