Earnings Call Transcript - PROF Q3 2021

Operator, Operator

Welcome to the Profound Medical Third Quarter 2021 Financial Results Conference Call. My name is Hilda, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note, that this conference is being recorded. I will now turn the call over to Mr. Stephen Kilmer, Investor Relations. You may begin.

Stephen Kilmer, Investor Relations

Thank you. Good afternoon, everyone. Let me start by pointing out that this conference call will include forward-looking statements within the meaning of applicable Securities Laws in the United States and Canada. All forward-looking statements are based on Profound’s current beliefs, assumptions, and expectations, and relate to, among other things, expectations regarding the efficacy of the company’s treatment technologies, results of future clinical trials, the ability to obtain coding and or reimbursement from third-party payers, anticipated financial performance, business prospects, strategies, regulatory developments, market acceptance, and future commitments. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from those implied by such statements. No forward-looking statement can be guaranteed. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this conference call. Profound undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, other than as required by law. For the benefit of those who are new to the Profound story, I would like to also take a moment to summarize our business. Profound develops and markets customizable, incision-free therapies for the ablation of diseased tissue. We are currently commercialized in TULSA-PRO, a technology that combines real-time MRI, robotically-driven transurethral ultrasound, and closed-loop temperature feedback control. The technology is designed to provide customizable and predictable radiation-free ablation of a surgeon-defined prostate volume, while actively protecting the urethra and rectum to help preserve the patient’s natural functional abilities. TULSA-PRO is CE-marked, Health Canada approved, and 510(k) cleared by the FDA. We’re also commercializing Sonalleve, an innovative therapeutic platform that is CE-marked for the treatment of uterine fibroids and palliative pain treatment of bone metastases. Sonalleve has also been approved by the China National Medical Products Administration for the non-invasive treatment of uterine fibroids and has obtained the FDA approval under Humanitarian Device Exemption for the treatment of osteoid osteoma. While we did not expect this FDA HDE approval to have a material impact on revenues in the near term, it is a significant milestone for our company, and we are making preparations for its US commercial launch later in 2021. On the call today representing the company are; Dr. Arun Menawat, Profound’s Chief Executive Officer; and Aaron Davidson, the company’s Senior Vice President of Corporate Development. With that said, I’ll now turn the call over to Aaron.

Aaron Davidson, Senior Vice President of Corporate Development

Good afternoon, everyone, and welcome to our third quarter 2021 conference call. On behalf of the management team and everyone at Profound, I would like to thank you for your ongoing interest in our company. For those of you who are shareholders, we appreciate your continued interest and support. I will turn the call over to Arun in a moment for an update on our commercial activities. However, before I do, I’d like to provide a brief update on our third quarter 2021 financial results. As a reminder, we have changed our presentation currency from the Canadian to the US dollar. To streamline things, all of the numbers we will refer to have been rounded, so they are approximate. For the three-month period ended September 30th, 2021, the company recorded revenue of $2.5 million, up 13% from $2.2 million in the third quarter of 2020. Total operating expenses in the 2021 third quarter, which consists of R&D, G&A, and selling and distribution expenses were $8.6 million, an increase of 30% compared with approximately $6.6 million in the third quarter of 2020. Breaking that down further, expenditures for R&D increased 14% on a year-over-year basis to $4 million. This was primarily driven by increased costs associated with new and existing clinical trials, increased spending on MRI utilization, consultants to assist with clinical trial initiatives, travel restrictions being lifted, additional lab rentals in Germany, options awarded to employees, and additional headcount. G&A expenses increased by 35% to $2.5 million due to options awarded to employees, increased insurance costs and an overall increase to general expenses as offices continue to reopen from COVID-19 restrictions. Finally, selling and distribution expenses increased by 72% to approximately $2 million. Overall, the company recorded the third quarter 2021 net loss of $6 million or $0.29 per common share, compared with a net loss of $6.1 million or $0.33 per common share for the same three-month period in 2020. As of September 30th, 2021, Profound had cash of USD 72.2 million. With that, I’ll now turn the call over to Arun.

Arun Menawat, CEO

Thanks, Aaron. As many of you know, most of the MedTech sector faced additional headwinds from the resurgence of the COVID-19 Delta variant in the third quarter. Unfortunately, the pace of new US TULSA-PRO system installations, as well as revenues generated in international markets like China and Japan continued to be negatively impacted by the pandemic. TULSA-PRO procedure volumes in the United States, however, grew 20% sequentially over the second quarter of 2021. This isn’t a blip, but rather a developing trend as procedure volumes grew by the same percentage in Q2 compared with Q1. On our last two calls, I focused my remarks on explaining why the disruptions from COVID had translated into not being any less bullish on our business in the mid and long-terms. Today, I would like to reiterate that by underscoring how the foundation we have been laying this year should translate into exciting results in 2022 and beyond. We believe the strong and steady increase in utilization we have seen throughout 2021, even in the face of COVID, is a testament to the high quality of our installed base and the unrivaled variety of prostate disease patients that are being treated with our technology, and both bode well for the future. With respect to building a high quality US installed base, we have been targeting three major types of end-users: early adopters, independent imaging center companies, and opinion-leading teaching hospitals. Our early adopter TULSA-PRO sites have continued to treat a growing number and an increasing variety of patients. Regarding the imaging center companies, we have already signed multi-center agreements with two industry leaders, RadNet and Akumin, and hope to sign additional agreements in the future. Finally, as I highlighted in our last call, we also have agreements with renowned institutions like UCLA, Stanford, Johns Hopkins, Yale Cancer Center, WellSpan Advanced Prostate Cancer Center, Mayo Jacksonville and Mayo Rochester, MGH Cancer Center, UT Southwestern, Memorial Hermann, and Methodist San Antonio. We expect that list will continue to grow as we move forward. Recurring revenue in Q3 was generated from a total of 16 sites. We already have sufficient contracts in hand to install a total of more than 30 sites in the United States and expect to have more by year-end. Initially, the typical time from the signing of a sales contract to the site being operational was generally around three months. During this COVID period, however, we have been experiencing delays due to a variety of factors, including a lack of labor at hospitals, parts shortages from our MR partners, and hospital administration’s desire to delay deployment of new technology during uncertain times. These delays have increased the average time from contract to installation to 5.2 months. As a result, we now expect that the US installed base will be approximately 20 by year-end, as compared to our previous estimate of 25. While not what we had hoped, there are actually two good news stories buried in this headline. First, we believe we are only about two months behind at this point, such that we now anticipate achieving the 25 site goal by the end of February. Second, we are cautiously optimistic that the delays will begin to diminish by year-end. And in the meantime, the team will continue to focus on optimizing the onboarding process, with the goal of achieving installation times of even less than three months once the pandemic impact is behind us. While the pace of installation is likely to ebb and flow somewhat, even without COVID challenges. The available market for TULSA-PRO is as large, if not larger than what we first envisioned due to its flexibility to treat an unrivaled variety of patients. Based on a utilization analysis that we shared on our last call, TULSA was used in all grades of cancers, ranging from low-risk to the highest risk patients in the first half of 2021. Importantly, the percentages of patients treated in those risk categories roughly corresponded with what we see in the real world with respect to the patient population distribution. Recently, one of the major universities even treated a patient with metastatic cancer, first ablating the patient’s prostate with TULSA, and following that up with radiation therapy to kill lymph nodes and other remaining cancer outside the prostate. Based upon the patient population that is being treated with TULSA, we believe TULSA can treat more than 80% of prostate cancer patients. Additionally, publications continue to show that patients treated with TULSA continue to show superior outcomes that include minimal side effects, such as urinary incontinence or severe erectile dysfunction. Interim results of a European trial named FARP, which was conducted at Oslo University Hospital, were presented at the AUA in September. Oslo University is widely considered to be one of the most credible sites in Europe. So, this interim analysis garnered quite a bit of attention with urologists. This is a single site, Level 1 study, where they compare whole-gland robotic prostatectomy or RP for short, to focal therapy using either HIFU or TULSA. Their interim results were poor for robotic prostatectomy, with more than 75% of those patients reporting urinary incontinence or erectile dysfunction of various degrees. The trial design only used HIFU or TULSA for the focal therapy arm. So, as you can imagine, the reported results for focal therapy were significantly superior to RP. And accordingly, Oslo is recommending focal therapy for a certain subset of patients where localized therapy is possible. Since we joined relatively late in the study, the full results of TULSA won’t be reported until next summer. But, even without published data in this trial, there is a rather telling indication of how TULSA performed: instead of returning the TULSA-PRO system after completing patient recruitment, the site purchased it from us for commercial use, as they informed us that TULSA was clearly the technology of choice as a wide variety of patients could be treated with it, and that it was the easiest technology to use. To summarize, while we look forward to the full data, which will include the TULSA results, we believe there are already two key takeaways from this study. First, the FARP study was the first direct comparison between HIFU and TULSA, and the investigators voted with their pocketbook in favor of TULSA. Second, FARP’s Robotic Radical Prostatectomy arm is similar to that in our planned Level 1 CAPTAIN trial. Accordingly, if the RP outcomes in CAPTAIN match what was seen in FARP, we believe there is potential to demonstrate clear superiority, even though the CAPTAIN trial has been designed with a non-inferiority endpoint. That provides a good segue to updating you on our reimbursement strategy. We continue to view coding and ultimately payment coverage as a three-year plus process. In the short to medium terms, we are operating in a cash pay and fee code environment. And we think we can continue to grow well there for the next couple of years. As I mentioned in our last call, based upon feedback from the relevant societies, including the American Urological Society and the American College of Radiology, we continue to believe that the clinical publications on the TULSA procedure, including those we anticipate later this year, will likely be sufficient to meet the requirements for our CPT-1 application by the end of this year. If the adoption of TULSA usage continues to increase as we anticipate, we may get the support that we need to file in 2022. In the meantime, we expect to initiate patient recruitment in the CAPTAIN trial before the end of this year. In the study, 201 prostate cancer patients will be randomized 2:1 to receive the total procedure or robotic prostatectomy. The primary endpoints will include safety and efficacy, including measurements of side effects and non-inferior progression-free survival over time. So, as you can see, our strategy is to run CAPTAIN in parallel with the filing of the CPT-1 application. Our rationale is that even though CAPTAIN is not a requirement to obtain the CPT-1 code, the trial may support coverage by insurance payers, and will also provide additional critical data to support significant adoption. To summarize, our team has continued to execute well. We are building a high-quality install base with users, including an attractive mix of early adopters, large imaging center companies, and some of the country’s most prestigious teaching hospitals. We continue to see broader TULSA adoption, both in terms of procedure volumes and types of patients treated. Our utilization data points to TULSA becoming a mainstream treatment in the US, providing us with a large market opportunity. And finally, we are progressing TULSA-PRO’s reimbursement strategy by conducting additional studies to apply for a specific CPT code and ultimately a reimbursement determination.

Operator, Operator

This ends our prepared remarks for today. With that, we’re happy to take any questions you might have. Operator? Thank you. We will now begin the question-and-answer session. The first question comes from Anthony Petrone from Jefferies. Please go ahead.

Zach Weiner, Analyst

Hi, thanks for taking the question. This is Zach on for Anthony. First one, can you provide an update on the TACT trial?

Arun Menawat, CEO

Sure, Zach, good afternoon. The TACT trial is pretty much near completion. I think we do have a few patients left. And I think we are looking to close that either by the end of this year or maybe another month or two after that. And I guess you’re probably also thinking about the three-year data, I think we did announce three-year data on the TACT trial and there’s nothing unusual in that trial. If anything, the number of patients that have Grade 2 erectile dysfunction continues to reduce to low double-digits. At this point, there’s one patient which had incontinence continues to improve. So there’s basically on all the side effects, it continues to show improvement with time and there’s no severe erectile dysfunction. And in terms of repeat requiring secondary procedures, there’s nothing unusual. I think we moved double-digit patients that are requiring secondary procedures at this stage. Typically, it would be in mid-double-digits. So, we think that the predictability that a fewer number of cancer-free patients in the 12 months leads to a declining likelihood of needing further procedures. So, I think the data from TACT II or TACT in general continues to be on track with what we have reported previously.

Aaron Davidson, Senior Vice President of Corporate Development

Arun, you said that data was presented at the AUA. Where can people find the publication and the key results?

Arun Menawat, CEO

So it is published. So, it’s a presentation at the moment.

Aaron Davidson, Senior Vice President of Corporate Development

Abstract.

Arun Menawat, CEO

It’s an abstract, so I think, Zach, we can make that available to you. I’m sure if you connect with me offline, we can make that available to you. There’s actually a presentation by Dr. Klotz; we can make that presentation available to you.

Zach Weiner, Analyst

Okay, great. And then on the install base expectation for 20 by year-end and 25 early next year. Is that 25? The – was there any drop out when installs got pushed? Is that the same 25 that was expected by year-end 2021?

Arun Menawat, CEO

Yeah, yeah, Zach. So there is no dropout whatsoever. There is no site that where we’ve installed the system that is not using it; every site is looking to increase. That is why you’re seeing that our utilization, even though the number of sites did not increase significantly, the utilization continues to increase. And the contracts that I talked about in the prepared remarks, every site is defined, there are timeframes that are defined for these sites. There’s still some uncertainty because of delivery issues from our MR partners and so on. But there’s no site that has canceled the contract. I mean, I mentioned 30 by the time we finish this year; will be more than that, in fact.

Zach Weiner, Analyst

Got that, that’s helpful. Thanks. And then one last question just on procedures. We’re hearing through the 3Q earning season, staffing shortages are impacting procedure volumes across MedTech. You guys obviously are performing well on the procedure volume side. But I’m curious if staffing. You know, if that procedure volume number would have been even higher had it not been for staffing shortages, if you guys are seeing any impact on that front? Thanks, and we’ll hop back in queue.

Arun Menawat, CEO

Sure. No, Zach, I think, you know, I know everybody’s hearing about COVID, so are we. And as I mentioned in the prepared remarks, we grew 20% sequentially from Q1 to Q2 and 20% from Q2 to Q3. And if you analyze – annualize these numbers, that is about 80% growth over last year. There’s no doubt in my mind that if there were – if there were no COVID, we would be growing in triple-digits. There’s absolutely no doubt in my mind about that. And so yes, I think, the staffing shortage issue, in particular, that you asked, we’re seeing that at large hospitals; we don’t necessarily see those issues at imaging centers, but we do see that at large hospitals. Thank you, Zach.

Operator, Operator

Thank you. Our next question comes from Rahul Sarugaser from Raymond James. Please go ahead.

Rahul Sarugaser, Analyst

Good afternoon, Arun, Aaron, and Stephen. Thanks so much for taking my questions. So recognizing, of course, that we’re all quite tired of hearing about COVID. And so not to beat that dead horse, do you have a sense now as we are in Q4 and hopefully entering into Q2, what you’re seeing on the ground in the hospitals in terms of their capacity to accommodate your teams for installations? And then just to sort of a follow-up to that question, could you maybe speak to your team’s capacity to install this backlog throughout 2022, such that it’s likely more than the 5 per quarter that you had previously indicated was your capacity?

Arun Menawat, CEO

Yes. And Rahul, you’re right in the sense that we’re all tired of COVID. With respect to the capacity, we have enough people in the company to be able to install at a pretty rapid pace right now. As you can imagine, this is a very high priority. And as you can imagine, our sales team exceeded their goal in terms of new contracts. Installing and getting going, and we also know already from our install base, that once the sites get the product, it may take them a little bit slower, but every one of them will use the product. And so we are absolutely anxious to get there. And it is a high priority. So, number one, it is not an issue that we have the capacity to do it. And number two, we will not let it be an issue, I can assure you that. We have enough people and we will get the devices installed. The bottleneck really is at the hospital level. The first question you asked was related to, are we seeing a change in the hospitals? And I have to be honest, we are not seeing big changes yet. We are tracking, for example, like everybody else, the number of patients who are COVID-related patients at these hospitals. And we are certainly seeing a significant drop. And we’re watching the warm belt, which is where we are, and that is where generally the COVID issues have been most severe. We’re not seeing a significant change at the moment. And part of it is related to labor shortages, part of it is related to parts shortages. That is still going to take some time to resolve. But, our best guess at the moment is that we should be able to get to 25 by the end of February.

Rahul Sarugaser, Analyst

Great, thank you. Thank you for that clarity. And then moving on to reimbursements. You sort of were speaking about the CAPTAIN trial and reimbursement in tandem, so please forgive me if I missed this. You previously indicated that you would have everything in place sort of by the end of this year to be able to get your application in next year. So could you maybe elaborate a little bit in terms of the timelines we should expect when things are being submitted and when we should expect to hear responses from CMS?

Arun Menawat, CEO

Yes, absolutely. So, you know, Rahul, the reimbursement process is a complicated process. We modularized and basically looked at different things that need to be done to get to the finish line. The finish line is not only getting the CPT-1 codes but convincing insurance companies that they should cover, which means they should actually pay for the procedure. By separating them, we think it’s a smart strategy because it reduces the total time; it will still take three years or so. But we think it’s a smart strategy to be able to do this in parallel. So let me clarify the results statement to remove any confusion. By the end of this year, we will have everything that we need to qualify to file for the CPT-1 application next year, in terms of publication and clinical publications—typically the biggest bottleneck. That’s what I’ve been saying, and we will absolutely meet that objective. The reason we are doing another clinical trial in parallel is not for the purpose of filing for the CPT-1 application, but to provide extra high-quality data that would be Level 1 data, making it much easier for insurance companies to then decide to pay for this procedure. It’s really planning for the longer-term future, that is why we have started this study now rather than later. That’s the goal. We’ve received very positive feedback from our urology community, seeing this as a way that, if they get the CPT code, coverage will be much easier to manage with that data. They see our efforts as credible and driver recommendations from the society. Those are the broad objectives. But, as I said, we will definitely meet the objective of the clinical requirements to start providing the CPT-1 application and file for it in 2022.

Rahul Sarugaser, Analyst

Terrific, thank you very much. And if you could indulge me with one more question, please. You talked about the FARP study and timeline readout for TULSA likely next summer, recognizing that in that study, we saw superiority of HIFU over RP, and we've separately seen superiority of TULSA over HIFU. What do we see as initial data readouts on CAPTAIN? Could you elaborate on the timeline for the data readouts for CAPTAIN?

Arun Menawat, CEO

Sure. Absolutely, Rahul. That study design has 201 patients and we will be in low single-digits in terms of patients treated by the end of this year. That’s our goal, so we’ll probably have two or three patients. If I look at the timeline and compare recruitment rates to TACT, we started with about five patients a month and ultimately we were treating about ten patients a month. So, if I look at it from that perspective, I think sometime in 2023, we should be able to complete recruitment. Once we have finished recruitment, we should be able to present at AUA every year, much like TACT. Data such as PSA and Immediate Information on Incontinence should begin to come out. I want to emphasize that these being multisite Level 1 study means lead investigators will ultimately decide when to publish the information. But my best guess would be that sometime in 2023, we should start sharing information. In the meantime, we will talk about recruitment rates as we go, so you’ll have a much better idea of when we’d begin to start reporting.

Rahul Sarugaser, Analyst

Great, thanks very much. I’ll get back in the queue.

Arun Menawat, CEO

Thank you, Rahul.

Operator, Operator

Our next question comes from Josh Jennings from Cowen. Please go ahead.

Neil Chatterji, Analyst

Hi, this is Neil on for Josh. Thanks for taking the question. I think several of my questions already got answered. So when I just maybe shift focus to just in terms of the sales funnel and how that’s tracking? Could you, you know, do you have any updates in terms of the imaging center channel and kind of your expectations from the partnerships with Akumin and RadNet?

Arun Menawat, CEO

Sure. Neil, good afternoon. The RadNet site that we have is fully operational, and they are continuing to increase the number of patients. RadNet has identified the other two sites; they are looking to add MRIs. So, I think there is some construction that will need to take place. But our best estimate is mid-2022 for those sites to be operational. Again, this is not a commitment at the moment, just our best estimates given the uncertain environment. But we’re pretty much on track with increasing those RadNet sites next year. For Akumin, our anticipation was operational this year for our first site; we should have that site identified, and everything is on track. By the end of February, as I mentioned, we should be able to get that first site operational. We've been in dialogue with them about picking additional sites and they have acquired an oncology company; we're going to explore additional sites that take advantage of the C-code and so on. The interest level in general from Imaging Center Companies is quite good. We are talking with additional Imaging Center Companies, and this is why in the prepared remarks I mentioned, we may have more agreements like this. It’s a paradigm shift for these Imaging Center Companies; they’re used to a high volume, low margin diagnostic business. With RadNet starting, they know this is a low volume, high margin business, which looks attractive for us long-term.

Neil Chatterji, Analyst

Got it. And I think you may have been alluding to this already, but just in terms of the Akumin acquisition of Alliance. I was just kind of curious—you know it sounds like you’re already—that’s already impacting the dialogue. Could you talk about what kind of impact that could have on the partnership?

Arun Menawat, CEO

Yeah, Neil, I think from our perspective—and I must preface that this is a relatively new development. From our perspective, it’s a positive move because oncology and prostate cancer treatment will take on hospital sites that can use the C-code to treat complicated patients like this. Their infrastructure can manage the staffing to do that, which we see as a positive development. We're looking forward to increasing that relationship in the oncology side.

Frank Takkinen, Analyst

Arun, Aaron, thanks for taking my questions. I wanted to circle back to the installs a little more. I heard many different things—staffing shortages, training—all those types of things, but maybe just bring us a layer deeper into what are the main things holding up the installs from actually becoming active, or asked slightly differently, what are you specifically counting on getting resolved to get to the 25 number by February?

Arun Menawat, CEO

Frank, I appreciate your question very much. I wish I could tell you that there is just one issue that is holding things up. Unfortunately, that is not the case. It is a little bit case-by-case basis. You know, there are hospitals where they’re not able to operate all of their operating rooms because of staffing shortage. I’m sure it’s not the first time—we’ve heard this from numerous companies. The staffing shortage translates to administration saying, 'I’m having a hard time keeping my current operating rooms running, I don’t really want to start something new at this stage. If I can delay it by a few weeks, I would like to do that.' There are certain delays in, you know, modems and imaging and parts from our MR partners that need to be there in order for us to communicate with the existing MR unit. So, there are a series of these little things, which is why it’s very frustrating for companies like ours right now. But the number that we are relying on, which I mentioned in the prepared remarks, is our original goal was from contract signing to three months operational. At this point, given all these small things, we are at 5.2 months. That is where you can see the numbers add up. We’re saying end of February based on real data that we have seen in terms of delays. Our hope and expectation is there will be no new delays, and that things will start to normalize even though it may be early; we haven't seen a lot of normalization yet. But I think they do normalize, and we should not see an increase in that installation time.

Frank Takkinen, Analyst

Alright, that’s really helpful. Maybe speak to utilization. I don’t think I heard you reference at this quarter. But speak to what kind of utilization rates you’re getting out of your earliest users, as well as the two new activations that occurred in this quarter?

Arun Menawat, CEO

Yeah. I mean, there’s no significant news on that. I think the sites that are more than a year old, we are very confident that they will hit the number of 100 user—100 procedures per site. That number is very much intact. I think we are beginning to see very early but beginning to see more than one urologist per site; that at a couple of our sites now. I think as that begins to happen again, we should feel pretty confident about getting to the 100 procedure run rate. At the big-name hospital sites, our original goal was to be at about 40 procedures per year; I think that’s a solid number and continues to be a solid number. Some of the newer sites are more commercial sites, and we are quite excited about some of these. We haven’t necessarily publicly announced them because they’re not installed yet. I think some of those types may go beyond 40 in the first year. So, from a utilization perspective, I feel pretty good overall.

Frank Takkinen, Analyst

Okay, that’s helpful. And the last one for me just wanted to circle back to Neil’s questions on the Akumin acquisition of Alliance. Maybe level set us on what this does to the Akumin installed base, and more specifically, what of that installed base looks like directly applicable opportunity to Profound?

Arun Menawat, CEO

Sure. I think that we were, in fact, negotiating this under a confidentiality agreement, so I was certainly aware that something was happening. I didn’t know exactly what it was, but I knew there was dialogue. This acquisition for Akumin broadens beyond imaging service provider. An imaging service provider business is a high volume, low margin, diagnostic business that PD management focuses on utilization of devices. The oncology side can treat complicated patients; they already have the required infrastructure that will enable them to utilize the C-code. They don’t need to build a cash practice. We can help them do that. I think this becomes an easier startup. Our strategy sees this as a positive for both companies.

Scott McAuley, Analyst

Good afternoon, guys. Thanks a lot for taking my question. I just wanted to maybe put a finer point on the kind of contract backlog. As you mentioned, you know the signed contracts for more than 30 sites. So that’s kind of net new sites that are signed but have not been installed. And that’s kind of—you just mentioned—reiterating, that does not include the kind of Akumin sites as part of that multi-site agreement. So, you know, that 30 plus is actually 40 plus if you include those, is that correct?

Arun Menawat, CEO

So it includes one site from Akumin, because it’s defined. But the total number that I was defining is the total number of contracts that we have signed in this year or total that includes the existing sites also.

Scott McAuley, Analyst

I see, so that 30 includes sites that have been installed so far this year. So it’s kind of total net, potential net new sites moving forward?

Arun Menawat, CEO

That’s right. Our goal for the number of contracts or number of sites for this year was in that range of 25, as we have talked about before. Our sales team has actually exceeded their goal in a difficult year. That’s the point I wanted to make about our Profound team executing really well. If there were no COVID, we would have exceeded that 25 goal.

Scott McAuley, Analyst

That’s great. Thank you very much.

Arun Menawat, CEO

Thank you, Scott.

Scott McAuley, Analyst

Lastly for me, just on kind of procedure volumes and how that relates to the revenue you saw in the quarter. You highlighted that 20% plus increase in procedure volumes, but looking at that recurring revenue line that you’re starting to report looks about equivalent to last quarter. And I know that’s not just the per-procedure payments. There’s the leases and other things that I believe are in there, but can you talk about that disconnect between that increase in procedure volumes and kind of that maintained level of revenue?

Arun Menawat, CEO

Yeah. No, I think that is exactly as you said, that is in the numbers, and the absolute numbers being small is why there’s a certain lease that comes in one quarter and doesn’t in the next quarter. Those are yearly things. But if I look at the number of patients treated and the revenue from that patient, it is 25% higher. I recognize we don’t want to get granular, because those things can seem endless. But our price point is maintaining the numbers we’ve talked about in that $7,500 to $8,000 range in most cases. So, there is no dilution on pricing, no dilution on anything else; what you’re seeing is the service and the shortage, particularly from the international market. Recurring revenues made up the global number.

Scott McAuley, Analyst

Definitely, you know, that’s great. And lastly for me, just on BPH versus cancer patients, are you seeing any trends there again highlighting the recent IPO of PROCEPT and kind of their technology that’s focused only on BPH? Any comments around that?

Arun Menawat, CEO

Sure. Scott, a large majority of our patients are prostate cancer patients today. In fact, not every site is treating for BPH; there are a few sites in the US that are treating for BPH, but they are focusing on very large prostates. You may have heard about one that was done recently, that was like 277 CC treated in one shot. So, our market really is prostate cancer-first. The extreme, as I call it, is prostate disease. The one area I think is going to be very important to our business, where we will not compete with PROCEPT is that there are over 2 million patients in the United States diagnosed with early-stage prostate cancer, who are on active surveillance. This patient population also has a high percentage of BPH. The 510(k) clearance for PROCEPT explicitly says it is not approved for patients who have cancer; it is for BPH only. For patients who have BPH and early-stage cancer, we provide them with a twofer in the sense that we can take care of the BPH while also treating early-stage cancer. We’re likely to conduct a trial design particularly for that subset of the population. I think that will allow us to broaden our BPH application for TULSA as well. We are working on this for the first half of next year but are excited to see the PROCEPT come out. They’ve already covered the CPT-1 part; they're ahead of us in that sense, and we’re starting our process in that area. We will stay with cash and C-code for now but this long-term, seeing another company with imaging and incision-free type procedure going is good. Thank you so much. Our next call will be the year-end call. We look forward to connecting with you again at that time.

Operator, Operator

Thank you. Ladies and gentlemen, this concludes today’s conference. We thank you for participating. You may now disconnect.