Okay. Yeah. Well, let's get started. So good morning, everyone. Thanks so much for joining us. I am very pleased to have the team here from Profound Medical Corp. We've got Arun Menawat, CEO, and I think, Arun, we go back a ways. which we could talk, we could blow through this 25 minutes in no time. But on the subject of Profound, maybe for those folks who are a little less familiar, talk a little bit about, there's a couple of different, you know, platforms coming at this new technology. You're coming at it, from the position of prostate. Maybe talk a little bit about, you know, where you're at and what the benefits of your platform is over some of the other standards of care.
Yes. Well, Matt, thank you for inviting me first. It's great to be here, actually. So let me kind of share with you what Profound is all about and what our platform is, as you asked, as you said. So the idea is that we are bringing what we call incision-free surgery to market. And if you look at history, you will see, you know, surgery has been done, open surgery is minimally invasive, and robotic surgery is very big today. And so we're taking that to the next step, where although our mind, when we think about surgery, goes to, you know, blood and, you know, hospital stay and cutting and pasting, we're removing all of that, and we're basically saying future of surgery is about, incision-free surgery.
So we picked prostate as our first and the primary application because, number one, it is one of the largest cancers. It's after skin cancer, is the largest cancer, and it has tremendous side effect-related issues, to the point where patients who have early-stage disease are not really treated because they're more likely to have these side effects, and they're not gonna necessarily die quickly because it's slow-moving cancer. So over the last five years, there has been a lot of dialogue about how do you measure the, the, the cancer properly? How do you biopsy the cancer properly? And how do you treat to really rethink the whole pathway of taking care of the patients? And so today, when a patient...
You know, normally there's a PSA test, and if the PSA test shows that they are above their normal range, today a patient undergoes a diagnostic MRI. And the diagnostic MRI data basically showing that if the cancer is visible on diagnostic MRI, then patients need to be treated. And today, they also do a biopsy, and MRI is used to biopsy the patient. So what we are doing is we're using that MRI, and we're now using it to actually treat the patient. The idea being that if you can have pixel-by-pixel accuracy and phenomenal ability to see the cancer, why would you not then just treat it using the same imaging technology?
Now, in our case, not only that we can visualize the cancer properly, we can visualize, you know, the, we can also measure temperature in real time. And so we have a unique ultrasound technology, and it is actually, there is no other company that has this technology, where we actually insert a catheter into the prostate, and we gently send sound waves, and the absorption of that sound wave creates degree-by-degree heat. So we gently heat the tissue to kill temperature, which is typically 55 degrees. And that's really important because we are not charring, we're not boiling the tissue, which can create side effects or other reactions. But by gently heating the tissue, it's dead. On MRI, they can see it. It's completely dead before they pull the patient out of the MRI.
And so it's unique in the sense that it's—we call it incision-free, and incision-free to me, it means freedom from hospital stay. It means freedom from blood loss. There's no blood loss. It means freedom from maintaining your quality of life before and after the procedure. It means one and done, and you don't have to worry about it for the rest of your life. So it's a very change. It's a big game-changing technology, and we're, you know, quite excited to bring it to the market.
That's great. Ablation at an energy level that sort of reduces adjacent trauma, you know, but achieves what you're-
The desired effect of killing.
Exactly.
Yeah.
So, you know, maybe talk a little bit about where the technology stands in terms of, you know, reimbursements and commercialization.
Yeah. So Matt, as you know, this is such a game-changing technology that we've deployed a very disciplined approach to get to market. So with respect to commercialization, our primary strategy was to get a beachhead first with leading institutions in the United States, and we're really proud of the fact that we have actually achieved that. So today, you know, you go from around the country, we are in Brigham and Women's, MGH, Johns Hopkins, you know, West Coast, we're at Stanford, UCLA, we're at Mayo Clinic, Cleveland Clinic. We just signed a corporate agreement with them. We're at University of Washington, we're in MD Anderson, you know, all the main teaching hospitals. And I think it's an important point because that strategy means opinion leaders are now supporting what we're doing.
Another strategy that we took on was educating the patients, and we're also very proud of the fact we have amazing number of extremely happy patients, and we're now getting that word-of-mouth to help drive more patient population. So that initial market entry strategy overall has worked. Simultaneous with that, we worked with the societies, and quite frankly, we received new CPT code approval faster than any company like this all work I have seen. It was because it was supported by six societies. It was never, like, Profound was never a signatory to the application, and went through with no questions asked, and that was last year.
And so since that time, you know, to the extent that we can, we have worked with the RUC committees, and the physicians to define what the workload is, what the RVUs need to be. And so all that is now with CMS. We've met with CMS already twice this year, and so the actual payment against these approved CPT codes will be public by end of July this year as a proposed rule, and finalized end of October, and then effective next year.
Excellent. Okay, well, congrats on that.
Thank you.
And then in terms of centers, you know, as you would expect, I mean, that's a long list of academic centers currently up and running. You know, assuming that we remain on track, you know, CPT level one clicks into place, you know, January of next year.
Right.
You know, what's your expectation and plans for rolling out beyond those academic sites?
Yeah, that's a great, great question, Matt. So the CPT codes that were approved are among the broadest approval, so it will be effective in ASCs. It will be effective, in fact, even at a physician office setting. There's no other code that has that broad, utility. So at the moment, in 2024, our focus is still primarily in hospitals. You know, the key thing is that getting to the opinion leading hospital was a market entry strategy. I don't expect that those will be the highest volume users, right? So what we're doing this year is going more towards the higher volume sites, so that we can install the systems, and thereby they're all ready to go, they're fully trained.
We think that by end of this year, we should be able to get to at least 75 sites, and then that will then help drive utilization growth. Then later this year and early next year, we're also going to be working with ASCs and so on. As the numbers come out, it'll be much easier to be able to show them with the economic models that it will actually be a procedure that they want to do.
Sure.
And again, part of what's driving me is that they're already using MRI for diagnosing and biopsy. So to be able to say, "Here's a value proposition where you can combine all of this into what we call the modern treatment workflow," that can be economically viable.
Okay. And then, you know, that was, you know, a question around, you know, moving to a smaller center or sort of outreach center in the community. Is that something that, you know, a lot of these large networks, I'm sure a lot of the high-volume sites have those networks attached?
Yes, exactly. So I think it's a general trend that the number of urology practices are consolidating. So that perhaps 5, 10 years ago, it was not necessarily an idea where they could actually own their own MRI. But today, that idea is quite feasible because they have sufficient number of people, and they have enough patient population to be able to justify. And that was one of the reasons why I think you will see, and we've put the first one in place in public domain, where we've created a relationship with Siemens, where we can, in fact, combine the MRI with TULSA and be able to provide the whole solution for these practices going forward. We think as time goes on, you know, we'll work with the other MR companies to give the practices a choice of which MRI they want to use.
Okay. Then it comes the question of, you know, degree of difficulty, sort of training level as you move to more clinicians at the larger sites and other clinicians potentially at outpatient sites.
Yes. So the, in terms of the actual procedure and the difficulty in training, if you break it apart, you know, the catheter that they put in, the ultrasound catheter, like, that's second nature to them. They do that every day. And the diameter and the shape and the size are the same as what the normal cystoscope is. So there's really no real training required for that. The procedure itself, they sit in the control room, and everything is on the screen for them. And so the part that is new is the treatment planning part, where they literally draw the boundaries of the prostate that they want to kill... Not very hard, but we have been working on our own AI initiative for the last three years. We've submitted it to the FDA.
The studies that we did to support it have met the endpoint. And so what we are expecting is that sometime in June this year, that we hope that FDA will agree with our assessment, and we'll get clearance for that. And so basically, what will happen is that training will become fairly straightforward. They click a button, and a recommended design shows up, and that recommended design is based upon successfully treated patients that we've done so far, and we'll just be a database that will just continue to add to it. And so it not only gives them confidence that, "Hey, this is based upon experience," but it will be much easier for them to make that change. And then the treatment part is, quite frankly, autonomous robotics. So they are watching the screen.
It has its own, you know, safety supports, so on. But if they see, hey, there's one pixel they wanted to kill, and it didn't kill properly, they can quickly go back and do that. So that is pretty natural to them. And the other thing is that it's so visual that at the end of the procedure, they see the dark prostate. That immediately tells them that it's dead. They can see it. And so even though it is very different, and we do spend a lot of time on patient selection, we spend a lot of time on educating on all this, but really, to be honest, the procedure itself, like, I can teach you in 30 minutes.
Well, not me, probably, but somebody.
Yeah, it's very automated.
It might take a lot, yeah, weeks. But no, that's helpful. So level of difficulty, familiarity with the, you know, with the sort of catheter, all these things are positive for sort of adoption.
I think they are. I think that the change that is, I would say, has been the tough part for us, has been on... That they need to start thinking about TULSA from the time they're diagnosing the patient. Because for the first time, you know, we think about robotics as the big, high tech, technology in the market. But the reality is, you're either removing the whole prostate or you're not. So all of that sophistication is about the, from the urologist's point of view, they're basically, "Oh, he's got cancer, I'm gonna remove the prostate." Versus in our case, they actually have far more control. They can kill the whole prostate, they can kill part of the prostate, they can look at the size of the prostate, they can make determination.
If it's a hybrid patient, they can treat it for BPH and cancer and still leave vital parts. There are some patients where they want to keep their ejaculatory ducts, they can save those. So there are lots of decisions that they can make because of this control that they don't have to think about today. So I think one of the things we've had to do is help them recognize that they now have this new capability, so they should be thinking about it. They should be talking with the patient upfront that, "Hey, I can do this for you today, which I couldn't have done before." And so that is one of the change that I think is unique, and it's quite frankly, a bit of a welcome change once they get it.
The second change is, you know, instead of I'm going to the operating room and I have a fixed time every week, now, because we're in the early stage, they don't have a fixed day to go to the MR suite. They usually have to call ahead to book the MR suite and so on. And the finance department has to understand that they can actually make more money doing our procedure than doing a diagnostic procedure. So I think that change has been the bigger change for us.
Interesting. Okay. So, you know, so changing the sort of treatment algorithm and, and communication, patient communication algorithm between the clinician and the patient. And then, you know, another thing about this is I think we've had sort of a parade of, you know, BPH and cancer-oriented, you know, prostate solutions all of which involve catheter. But, is this... You know, do you anticipate this is going to be, you know, you understand the difference between marketing a robotic surgery platform and marketing another catheter? Maybe talk a little bit about your plans there.
Absolutely. So, Matt, Well, I think you're right, there are a number of these technologies, right? So the way I look at it is that there are two big, current standards. One of them is robotic prostatectomy, the other one is radiation. And the other key point is that, as you said before, there is a very clear unmet need. So over the last 30, 40 years, there have been a number of companies that have tried to come up with a different way to solve the, that unmet need. So that's very clear, right? So you have a number of sort of smaller players that have been around for a long time, but none of them actually have been able to really drive mainstream adoption, and I'm very cognizant of that, obviously.
So part of the thing is that these smaller, like, catheters or technologies that are primarily for BPH, and so on, they are applicable to a very small subset of patient population, which is typically not whole-gland therapy. And so the urology community strongly believes that whole gland is the way to treat for durability purposes. And so we're really the one technology where they can treat the whole gland, and they can treat partial gland. And that's one of the things we've really focused on early on. And so when we publish our even quarterly reports, we talk about what's the percentage of patients that are treating whole gland. And so on that basis, we have determined that we think we can treat up to 80% of the patient, right?
And that is why one of the things you keep hearing is, from these big opinion-leading sites, that "Hey, you guys are going to be one of the three big options." And we're happy at this point. For the next couple of years, I'm happy with that.
Sure.
We'll get to the eye of that curve over time.
Okay.
So that's kind of how I look at this. And the way... The reason I'm comfortable is that every quarter we publish this, 60% of the patients we treat are whole gland. About half of the patients we treat are between very high-grade cancer or very low-grade cancer, about the other half is mid-grade cancer. So we're the only new technology that has consistently shown that you can treat that wide variety of patients. And I think your point is right, that's a very big deal in terms of driving adoption. The surgeons, if they can use this one tool to do majority of the cases, that's what they're gonna do.
Sure. And then, of course, one of the big drivers of robotic prostatectomy was, you know, the sort of feared side effects of non-robotic surgery, if you will. So how do you anticipate that your procedure is gonna get positioned against that sort of side effect profile, you know, patient experience?
Yes. So, Matt, that, quite frankly, has been the biggest positive surprise for us. And, you know, as I talk about this all the time, and you probably already know, I was one of the early patients for TULSA. And it really is true. You go into that MRI, you come out, and you wake up, and there's no pain. And literally, from the time I woke up to the time I was in the cab, going leaving, was five minutes. And there is no pain. I worked that same evening and all day the next day. So the patient response to this procedure is tremendous. The caliber and the number of emails that we get from patients, I've actually never seen that before. So I think that the patients have really liked it.
We see that on the internet, in social media all the time, very positive comments. But we also have very strong clinical data already with respect to the fact that virtually no patient has what we call severe ED. There are about 20% patients who will have minor ED, where they need a drug to be treating, which at that age, people like doing that anyway. We have maybe 1% who will have incontinence. And again, even that, as people get more experienced, we think that will subside, even that. So I think from the side effect perspective, we have a very clear advantage over anybody.
Okay.
And I think the last thing I wanted to share with you is, we felt so confident about this, that we're the only company and the first one to actually sponsor a full competitive level one trial, and it's called CAPTAIN. It's going on. It's recruiting quite well. We fully expect we'll finish end of this year. It's 201 patients, 2-to-1 randomized against radical prostatectomy. So once that starts to happen, you can clearly see that it will almost become, you know, a requirement for the surgeons to recommend or at least present TULSA as an option to the patients. That's what we're looking for, ultimately, society guidelines, pilot study.
That's Radical Prostatectomy, robotic prostatectomy, or that's either/or?
So technically, it is robotic prostatectomy. But in the journals, they call it Radical Prostatectomy.
Sure.
Yeah.
Performed with a robot.
It's all robotic.
Yeah. Got it. Well, which you'd expect.
Yeah.
Now, that's exciting. And, you know, expect, you say follow up by the end of the year or present by the end of the year?
We will finish treatment by end of the year. We will start having interim results by early next year. The results will go on for 10 years, a pretty comprehensive study. But the part of this is that the early results, I mean, we will be able to extrapolate because we already have multiple trials that have shown that if you can see outcomes at 6 months or 12 months, you can extrapolate those results to 5 years. So a lot of the physicians are saying: I see the 5-year data, I'm fine with it, but I need this study to be able to make this as part of my regular repertoire, and I don't necessarily need to wait 5 years for it because I'll be able to extrapolate. So, for example, you know, when we talk about Radical Prostatectomy or robotic prostatectomy, if you cut the nerve bundles and they're gone, they're not coming back. So you don't need to wait five years to know they're not coming back.
Right.
Versus in our case, usually there is a little bit of a lull period for a month or two, but it comes back within six months. So if we can show that it's come back, they will be able to extrapolate that, yeah.
Okay. So first data set, maybe back half or end of 2025 or something like that.
2025, we should be able to have quite a bit of data.
Great! Good stuff... So maybe just, you know, we only have a couple minutes left, but, just in a word, you know, your cash position, burn rate, that sort of thing to support some of the commercial activities you talked about.
Absolutely. So, you know, I felt very strongly that we needed to raise some money late last year because to prepare for the growth in 2025, I wanted to build a sales team, and we're pleased to have new investors. We were able to raise enough money that now I have a fantastic VP of sales, came from Novadaq. And I have a fantastic chief commercial officer with Abbey, also came from Novadaq. And, and they have hired regional sales managers, and we have about a total group of about 20 people. So relatively new group, but doing very well, and that's what one of the key things I wanted to accomplish with that financing. So we are in decent place. We have, you know, over CAD 40-CAD 45 million. We have CAD 45.4 million end of January.
As of the end of January. I think we have a very clear pathway of where we're going. Our inflection points are, you know, the AI technology, hopefully in June, approval, which, you know, we'll talk more about the economic value of that. Today, we're talking more about the training and the clinical aspects of it. We'll talk about the economic aspects at that point. Then end of July, proposed payment amounts, which hopefully will become--which will become permanent at the end of October. Then we are focused primarily on driving additional sites this year to prepare. So we think end of this year, you know, at least 75 sites would be good, and then 25 CAPTAIN will start to recruit. As I said, quite disciplined approach, but it's, that's what you need to do for a game-changing technology. I think we have a pretty clear pathway to driving adoption.
Awesome. Well, that's exciting, and thanks so much for taking the time.
Thank you so much, Matt.
All right.