Excited to announce our next presenting company here, Profound Medical. Without further ado, I'll pass to Arun.
Thank you so much. Thank you so much for joining us this morning. This is most certainly my favorite conference. I say that at every conference I go to, though, so please don't take that against me. I'm really delighted to present the update on our company. I've been there about 10 years, and we've built it really one step at a time, and it continues to be an amazing company, and I feel very strongly about the future of our company. Again, please review all of our documents if you're making any investment decisions. We actually have two products. The TULSA is our primary product, which is prostate related. We do have a second product called Sonalleve. The reason I mention it is because the whole area of incision-free therapy is starting to emerge, and a number of companies are starting to do these things.
We are spending 99% of our energy on TULSA, but we do have a second product so that ultimately we will become a more of a platform and look at broadening our proposition as well. The unmet need for prostate cancer is pretty obvious. Robotic prostatectomy is the main standard today, and it is well known that the side effects from this therapy are pretty significant and life altering for patients. Many patients, in fact, will commit suicide after this type of treatment, which is obviously not a good thing. Our treatment is quite unique. We actually use an MRI to treat the patients. We insert a catheter in the center of the prostate, and the MR images come from the MR.
We have a fantastic AI-based technology that allows the physician to delineate all of the tissue, the nerve bundles, the sphincter muscles, the boundaries of the prostate, and they simply then now accept this, and the second button they press, it automatically treats. Think about this. You are literally not cutting the patient. You are sitting comfortably in a conference room, and you can treat any variety of shape by gently heating the tissue and killing the tissue. Right after that, when the patient wakes up, they go home. It is as game changing as it gets.
Because of the fact that it's as game changing as it gets, we have really built it with clinical data economics, as well as now we're working on workflows, and we've been working with MR companies to continue to develop more and more interventional MRs, and I think the time has come for the surgery to change to something like this. We have well over 70 publications, and not only that these publications cover the main treatment today, which is whole gland therapy, but we are also able to treat partial glands, we're able to treat large prostates, we're able to treat patients who fail radiation treatment, and so on. When I say to you, this is the most versatile technology, it's backed up by really strong clinical data, and that is one way you bring game changing technologies to the market.
This is actually one of my favorite picture. It's a relatively new picture. If you look at the first image to my right and your left, and I know a lot of people, first, they look at Dr. Klotz's belly, so don't look at his belly. The thing that is really, I'd like to draw your attention to is his left hand. He's got an apple in his left hand, and his right hand, he's got a mouse. If you look at the bigger picture, the next picture on the right, he is treating a TULSA patient while he's eating an apple with a mouse. This really is the future of surgery, right? This is not a joke. This really is the future of surgery. People talk about, well, robotics is this big, great thing. Robotics is over 20 years old.
It has effectively run its course. Every technology runs its course. It does require incision, and you do see a lot of people, and most of the time, you see that surgeon sitting in a corner, but the reality is a lot of people are involved in doing that procedure. If you look at the difference between the latest Intuitive robot, which is DV5 versus DV4, all kinds of new features, but the bottom line is it saves maybe about five minutes in surgery. Right? Versus this procedure is not only incision-free, better for the patient, and you can clearly see better for the physician, it is actually about 75% of the time of a robotic surgery. Faster, cheaper, better. This is a patient, and we have lots of these pictures, 24 hours after the procedure, and you can see the difference. Because patients go home.
Typically, they go home within an hour after the procedure. Let me talk about how do we commercialize? How do we take such a big proposition and bring it to market? We're a small company out of Canada. We don't have the resources of some of the bigger companies. How do we accomplish that? The first thing that we are working on is that you can see that on this left side, you have whole gland treatment. On the other side, we also have a lot of competition. You have quite a few of companies that they call it focal therapy. The idea of focal therapy is very sound, and the idea is that, hey, instead of killing the whole prostate, can I just kill the cancerous tissue? When I kill just the cancerous tissue, there you go.
I can now save all those nerve bundles and so on. The problem with this idea is a fundamental problem. The fundamental problem is you're not killing the stem cells that are in that prostate, and about 50% of the time that cancer will come back. Many times people get very comfortable, and then they end up getting metastatic before they rediscover it. It is an interesting idea, but prostate cancer is a multifocal disease. If it shows up in one area, it's going to show up in multiple places, which is why the standard is killing the whole gland. The idea that we have is this, we can deliver both. We can deliver the whole gland, and we can deliver the partial gland. We are really in a third category. We're not a focal therapy, and we're not a whole gland only.
We're in that third category, which is really image-guided precision imaging and precision treatment, and the flexibility to treat the whole variety of patient population. The other topic that has become really popular in the last six months is the energy source. You can use X-ray as energy, you can use steam, you can use other types of focused ultrasound, you can use water blade cutting, and all kinds of technologies. The point that I make is this, our energy source is the safest energy source of all of these. Body temperature is typically about 37.5 degrees. We heat tissue to 57 degrees because, with the MR, we have full control of the temperature. We can measure, we do measure the temperature of the tissue in real time. The idea is that we're only heating tissue to kill temperature.
This is the temperature at which it instantly dies. Now, the amount of energy that we use, because that's the primary issue here, the amount of energy that we use is 0.02 kcal/ cc. If you look at HIFU, you look at other types of energy sources, the amount of energy is 10-100 times higher. Now, you're scientists or physicians, you know that energy has to go somewhere, and that is where you see the side effects that come into play with some of these other technologies. If you're doing a cold cutting, a water blade cutting, well, you're not killing the DNA. We are actually killing the DNA of that tissue, which is why we have durability, right?
The other thing that we find is that because we're doing this soft kill, the prostate tissue that is dead gets reabsorbed by the body, and with the MRI data, we can show that it is actually shrinking the tissue over time. The prostates effectively disappear over time. Foundationally, this is really better technology compared to many that I've seen out in the market. Another thing is that we are an award-winning company with AI, and we've been in AI for the last five years, even before anybody heard of ChatGPT. The point being that we are deploying our AI to really improve clinical value.
We have a software we call Thermal Boost, and what it does is that in cases where there's a prostate and they think that there's some involvement of the tissue that is at the outer edge of the prostate or just outside of the prostate, they can supply extra energy. Press one button, you supply that extra energy with that, and you can go a couple of millimeters beyond the prostate, and it allows the physician to be very comfortable. Our Contouring Assistant is the latest version that we just introduced about 90 days ago. It's one click. It basically gives you a full design planning with it, and this is, again, we're very strong on clinical side, and so the data, we actually did the measurement with radiologists, among the best radiologists in the country, and we showed to the FDA that we are equivalent. Our AI is equivalent to the best radiologists in the country.
Frankly, it was better than most urologists in the country. Statistically, we were able to show that. The latest software we've introduced, we call Volume Reduction, which also then automatically works towards reducing the time of the procedure. It automatically delineates and shows what area you should not treat. Particularly, it's good for patients where it can be used for BPH. It automatically allows them to keep the nerve bundles and so on safe. We're continuing to evolve, and part of my message is that when you think about the future and everybody talks about AI and so on, the future really is about incision-free. If you're going to do more and more AI, you need technologies that are going to be driven by software, right?
That's how it's going to evolve, and I can see a number of things that we'll be doing in the future that will continue to evolve. When you think about robotics, every time I think about it, I say, "Well, just like someday we will have cars that will drive themselves, maybe the next thing for them is going to be robot is going to drive themselves." I'm not going to be that patient, but I'm happy to be this patient. In fact, I was this patient a few years ago. The next thing I wanted to share with you is that a number of investors talk about, "Okay, this sounds great. What about the MR? You guys are going out to these hospitals and you're trying to use these diagnostic MRs, and how is that going to play because MRs is an expensive tool and so on."
Two things. First one, which I'm very excited about, we have a relationship with Siemens. Siemens has now produced an interventional MR, and last week here in Toronto, they displayed it, and this is an MR that is 0.55 Tesla. It is about a third the weight and half the size and half the cost. You can wheel it in the corridors, you don't need to build facilities especially for it. It can go upstairs, downstairs, and it's so designed in a way that you don't even need an MR tech. You can literally train your office staff to run this MR. Cook has now created an iMRI division, so whole new division. If you go on their website, you'll be able to see an iMRI division.
The whole point is, just like diagnostic imaging grew up into a multi-billion dollar business, these MR companies are now taking the bet that interventional MR is here to stay. I call them the iPhone, and we are the king app. We are the app that is going to go and help drive the adoption of the interventional MR. This last big thing that people talk about, because we are using diagnostic MRs today in majority of our sites, but the interventional MR is here, and I anticipate a growth cycle, and I'm delighted that multi-billion dollar companies like Siemens and Cook are now partnering to make that happen. With all of this, we think that our proposition is pretty broad. We can treat the whole gland treatment, we can do those focal therapies.
With this new software, we can also treat patients who have BPH. All together, there's real value from a business point of view, and that value really is that, sorry, we want the physicians to be able to have really comfortable workflow. By comfortable workflow, what I mean is when they're doing robotic surgery today, they typically have a schedule. Every Tuesday I'm going to do robotic surgery. I'm going to typically have two or three cases. I'm going to do those. Everybody in the hospital knows that. The nursing staff knows it, the anesthesia office knows it, the scheduling people know it, and so on. If you have a broad proposition like we do now, we can get them to do that same thing. They can have a couple of BPH cases. They can have a very large prostate.
They can have a partial gland, put it all together, they can start to schedule. I think that is going to be the next big thing that we need to solve, is get them into a consistent schedule, and that will help drive adoption of a game-changing technology like this. One more quick thing that I wanted to go through. Recently, we announced our CAPTAIN early data. CAPTAIN is the first time that a full level one head-to-head study against robotic surgery has been done. This is the first of its kind. We recruited over 210 patients, actually. It was originally designed to be at 201 patients. The data is, quite frankly, quite amazing. In the interest of time, I'm going to skip to a couple of very interesting pages. This is about the safety.
The first thing about this is that you look at is the number of days that a person needs to get back to full work, paid work. You can see two things. One is, TULSA is about half the time, 10 days versus 19 days. The other thing, as scientists, when you think about this, it's the consistency, right? I talk about precision of the MRI. You see that value here. If you look at the standard deviation or the breadth, you're looking at 4-15 days, versus when you look at robotic surgery, you're looking at up to 30 days and up to 45 days in some cases. That variability, we have reduced it. It shows up. That precision matters. It shows up in data.
That consistency, by the way, also helps us with the ability to schedule patients and so on as well, right? The other thing that you see is really critical is hospitalization. Over 6% of the patients needed additional hospitalization, and many of them were in ICU units for a while, versus in case of TULSA, zero. That's a big difference. I think having this type of data helps us drive the adoption of a game-changing technology. With respect to the primary endpoint, which is the combination of erectile dysfunction and incontinence, the study is already showing we're going to meet the endpoint. The P values are well below 0.05 already. That trend should continue. There's no reason for that trend not to continue, and so we're pretty excited. The incontinence has actually already reached the statistical significance. The ED has not, but that is only six months. It's usually measured up to three years, and there's no reason to believe we won't continue to get better trends on this.
I'm going to skip some of these pages in the interest of time. Let's talk about the business side. As I said, we can treat the wide variety of cancer patients, and we can now, with this new software, treat BPH patients also. If you just look at a subset of patient population that we think we can treat, about 300,000 patients are diagnosed, we can treat about 200,000. On the BPH side, it's about 12 million patients, which is why every company in the world is excited about going into BPH. The market that we choose to focus on is the one where the alternative is surgery, because that's where we want to play, and just that alone is about 400,000 patients.
All together, it's about 600,000 patient population. For simplicity purpose, even though we do charge capital upfront these days, so our business model is about $500,000 capital upfront and $5,500 per patient in the disposables. If you amortize the capital, we think $8,000 per patient is a good way to think about it, and you can see this is a multi-billion dollar opportunity for us. That is why we are excited about it, and you can see we have done it quite methodically. We have all the clinical data we need. We have top hospitals who are using it. We have continued to have a very good increase. Every quarter for the last four or five years, the number of patients we're treating is increasing. All this culminated into, in fact, very good reimbursement for us.
If you look at the latest reimbursement, this is as of January this year. The TULSA line is the gray column. You can see hospital payment is $13,479 or $13,500 approximately. If you go across and look under RARP, which is robotic surgery, you can see it's $10,800-something. There is a material benefit financially to the hospital. In our case, there is no hospital stay, and in the case of robotics, there is hospital stay. The costs are higher versus the reimbursement is in fact better for us. We think that has happened because of all of the clinical work that we did and so on. I think that message is finally resonating with the hospitals where they can see that this is not about knocking down anybody.
I mean, robotics is still the very sophisticated technology, and there's a tremendous demand t hey're growing in double digits after several years. The point is that there are certain set of population where hospitals actually lose money when the robot is used, and Medicare prostate cancer patients are among those. When we are able to go to the hospital and we can say, "Listen, if you just move those patients, you can actually make money doing this, whereas you can use a robot for a number of other things that you're using where you can make money on those patients," it actually becomes a compelling economic message for them as well. That's a summary of the data. As I said, we have the leading hospitals covered. We are getting adoption at a pretty good pace now. Our revenues in 2024 were about CAD 10 million.
Our revenues in 2025 were about CAD 16 million. This year we're on track to grow again in high double-digit numbers. We're starting to get to that phase where the revenues are coming together. Our margins are generally in about 70%+ range. Our costs are generally we're burning maybe about CAD 20 million - CAD 25 million range at the most. We think that we can project a profitability at some point when we can achieve about 200 sites doing about 50 cases per year. We think that could get us to about revenue run rate of about CAD 80 million. At that point, we think we can more than break even, in fact, which in the med tech industry, considering some of the companies that are growing up in the U.S., is actually a very good target. Most companies don't get their profitability until they get to over CAD 300 million revenue.
We feel pretty good about that. We feel pretty good about the fact that we invested in our own manufacturing early on, which is giving us the high gross margin business. We are particularly very excited about the fact that the interventional MR is now coming, and I think a number of hospitals are signing up for that. We are looking to start marketing in the fourth quarter this year. We are in the FDA for that particular combination, and we think that by end of this year, we should be able to get clearance to be able to start marketing it for that purpose. The Sonalleve is just a very interesting technology. What's unique here is that we have over 10 sites outside of the United States, and we have treated over 4,000 patients.
Same idea, temperature measurement, don't heat to boiling or charring the tissue, and we have phenomenal data on these patients, and we can do a wide variety of things. We're going to stay focused on TULSA for right now, but over time, we do plan to bring this technology to market. That's my formal presentation for you. Thank you.
Happy to take any questions.
Yes, sir.
Thank you for the presentation. It's very exciting technology. To my understanding, it's a razor and razor blade model similar to Intuitive Surgical.
That's right. Yes.
From the CAPTAIN study, it clearly has a better clinical effect. I'm curious about, you said 70% margin.
Yes.
How much of that is recurring and how much of that is from installing systems?
Yeah. Very good question. With respect to margin, frankly, we are in 70%+ on both sides. Our cost of goods, as I was saying before, majority of our intellectual property, intellectual knowledge is in the software. The hardware is relatively straightforward. Margins, frankly, even in our hardware, is over 70%.
That's awesome. A follow-up to that is, what about the utilization rate?
Yeah. The utilization rate has quite a bit of variability at the moment. We have sites where they're using the product for more than 100 cases per year. We have sites where they have now started using Medicare patients, and they are getting phenomenal patient population. A couple of sites, they're at 150 patient run rate. We also have sites that we started early on, and they were really opinion leaders, and they were doing it for research. We do have sites that are using it once a month also. There's a big variability, but I think now that the insurance companies are starting to look at us seriously, we think we'll have major insurance company coverages by end of this year. We think even those sites that are not using it effectively will start using it.
Our projections are that at least 50 cases per year is very reasonable, per site, over time. We think that we probably can do better than that over time, but at least that is a good place to go. We know that these sites that we have today are good reference sites that are using it. We have sites that are doing four cases per day easily today. Yes, sir.
The opportunity in BPH seems to be twice as big as far as 400,000.
Yes
versus 200,000. You talked about 70, frankly, white papers. How many of the white papers are towards BPH versus more prostate surgery for cancer?
Yeah.
Step one.
Yeah. First of all, great question. They're not white papers. They're fully published, peer-reviewed journal papers. Second thing is that in pretty much all the publications, we do measure urine flow in these patients. So even though majority of these studies were cancer studies, we do know the outcomes with respect to urination rates. So it's a kind of a two for one in that sense. Now, having said that, I do agree with your point, that we do need to do a bigger clinical trial for BPH to get a very high adoption, and we are in the process of putting things together for that. We do plan to do a clinical trial that will be explicitly for BPH also. I expect right now, this year, certainly most of our revenues will come from cancer, but BPH will be the next.
Okay. Is currently BPH surgery or surgery for BPH, either covered by insurance companies and/or Medicare and Medicaid?
Correct. At the moment, our procedure is covered by Medicare, and about 25% of the patients are Medicare patients. We are getting very good response when insurance companies deny coverage, and we are able to go to independent societies and be able to reverse those decisions. We do think that by end of this year, majority of these big companies will start covering us, and that is certainly in the U.S., it's a business, and that is certainly a bottleneck that we are working on today. We feel pretty good, particularly with this CAPTAIN data. I think the majority of these big companies will start covering us over time.
Any other questions? Nope. Awesome.
Yeah, surely.
You talked about your method can be used for people who have failed, if you wish, or not been successful with radiation.
Yeah.
Would you end up saying that's 10,000 cases per year, or please put a number on it?
Yeah. Exactly, you're right. It's about 10,000 cases per year for those type of people. We are emerging as the best technology for that group of patients. My message to that patients is, "Don't even go to radiation, just go to TULSA right away." I think that's a better way to go in the future for them. Yeah, you're right, about 10,000 is the right place. We have not only radiation, but we also have a lot of focal therapy failures. People who failed those focal therapies, they come to TULSA ultimately also.
Thank you so much.
Perfect. Thanks.