Okay. All right. Good afternoon. My name is Michael Sarcone. I'm an analyst on the U.S. Medical Supplies and Devices team, and this is day two of the Jefferies 2025 New York Healthcare Conference. This is a session with EDAP Focal One. And with us from the company, we've got Ryan Rhodes, CEO, Ken Mobeck, CFO, and John Francis, who heads the IR function. Ryan Rhodes is going to give a presentation, some prepared commentary, and then we'll open it up for more of a fireside discussion. With that, Ryan, it's all yours.
Thank you, Michael. Again, I'm Ryan Rhodes, CEO of EDAP Focal One. EDAP Focal One, we are a global leader in therapeutic ultrasound for both the treatment of cancer and benign disease. If you look across our investment thesis, we have a strong growth opportunity. First, we have a large and growing market opportunity specific to urology and prostate cancer. We solve an important unmet clinical need both in cancer but also in men's health. We have proven compelling clinical evidence. We have increasing demand from both patients and physicians for our technologies and treatments. We also leverage current advances across imaging, AI, and robotics. We have strong hospital and physician reimbursement. We have a growing worldwide install base, and we're ideally positioned for expanded new indications to include BPH, endometriosis, and other. We have a strong presence globally: 350+ Focal One robotic HIFU clinical sites and growing.
We serve a market through multiple office locations and subsidiaries to include the U.S., Germany, France, Switzerland, South Korea, Japan, and Malaysia. We are well-positioned to support our customers for future growth. We have a large growing market opportunity both in urology and prostate cancer, and it really starts with the discussion around prostate cancer. Prostate cancer is the most common diagnosed cancer amongst men, and it is the second lethal cancer that kills men each year, second to lung cancer. As noted, 3.3 million men are walking around living with their disease. There will be over 313,000 newly diagnosed cases this year in 2025, and sad to say, over 35,000 deaths. If we take that TAM and expand it to global markets, you can see it is a very large market opportunity: nearly 1.5 million new cases diagnosed annually across multiple geographies.
What's really also important to understand is the journey for the prostate cancer patient. Prostate cancer is a heterogeneous cancer. It's millions of cancers, and it's all about risk-stratifying that patient to the right type of treatment. If that patient is diagnosed with low-risk disease, they may be recommended no treatment. That would be active surveillance or sometimes referred to as watchful waiting. If they're diagnosed with high-risk disease, they may be prescribed radical treatments to include surgery or radiation. What do you do for the large audience of patients that fall into the categories of intermediate risk? That's where Focal One can serve a large patient population. Equally, we know that patients can fail radiation therapy. In the literature, it's somewhere between 15% and 30%. Men will have a recurrent cancer after primary radiation therapy and don't have a lot of good options.
Radiation, again, is not necessarily a great option, or going on androgen deprivation therapy, or hormone castration, or even salvage surgery. Focal One is an ideal offering here and is actually written into the NCCN and AUA guidelines as a salvage treatment. When you look at the market potential across these domains, we're talking about 100,000+ patients that can be served with Focal One robotic HIFU. If you take that same walkdown on methodology and apply it to the global market, you can see 470,000+ patients could be served and treated with Focal One robotic HIFU across the multiple geographies. This slide is important to understand because we are moving today from what we call the traditional market. That is, active surveillance, radiation, or surgery. We're moving from that market to the emerging market.
The emerging market, as shown in the middle, is the growth of focal therapy driven by HIFU. That market to the far right will be sizable. What I mean is it can be as large as either of the standalone markets of surgery or radiation. A large market opportunity is developing. We know it is developing because of this data. This is CMS data reported from calendar years 2022 and 2023. As you see, this is government data that is published annually. If you look here, surgery is declining: robotic prostatectomy, brachytherapy, radiation is declining, and cryoablation is declining. HIFU is the domain treatment that is growing. We will have data this year, and we will share that data. Rest assured that HIFU will continue on this growth path.
The market is shifting now, and we are a leading provider of technology to create that shift. We have strong supporting clinical evidence. What you need to really understand is how physicians think about treating prostate cancer patients. It's really about the trifecta outcomes. It's these three things: killing cancer or providing adequate cancer control, maintaining that patient's urinary continence, and preserving that patient's sexual function. Scoring across all three of these individual domains is really important for that patient. You can do great with cancer control but fail the patient on maintaining continence or sexual function. We're benchmarked against these trifecta outcomes, and it's exciting to see that there's growing evidence and existing evidence today in 1,000 peer-reviewed publications supporting HIFU in the treatment of prostate cancer.
One of the best studies of late is the HIFI study published in European Urology in December of 2024. What's important to understand about this study: it was not funded by the company. It was funded by the French government at a cost of nearly $25 million to look at efficacy-based outcomes to award reimbursement. It's the largest study ever conducted comparing a focal therapy HIFU against a gold standard treatment, surgery. The study is prospective, comparative, was performed across 46 centers, and involved 3,328 patients. It was exclusive to our technology, EDAP's technology, of which 90% of those patients were treated with Focal One. If you look at the outcomes, again, benchmarked against the trifecta outcomes, we were comparably better than surgery but equivalent statistically on a statistical basis. We met the endpoint, the primary endpoint, of providing adequate cancer control.
If you turn your attention to the other two domains, HIFU showed to be superior in the functional equation. We were better for those patients in maintaining urinary control and preserving that patient's sexual function. So HIFI demonstrates optimal trifecta outcomes. We have a great website out there, hifistudy.com. Please visit it. Here's a QR code that you can access, but great data, easy to understand, showing the data. Another landmark study is FARP, which stands for Focal Ablation versus Radical Prostatectomy. This is a level one randomized control trial. What's important to understand, this has three years' follow-up. Again, it was a non-inferiority clinical trial mirroring some of the exact same outcomes we saw with the HIFI study. In terms of oncologic control, at three years, it showed to be the equivalency in oncologic control.
Again, the patients did far better being treated with HIFU than surgery on the functional equation. So superior functional outcomes. Another key data point is 25% of the patients crossed over to focal ablation, meaning that once they were selected or randomized for surgery, they refused surgery. It reinforces the fact that patients are looking for efficacious treatments that are non-invasive, that deliver high-quality functional outcomes. This was presented at the AUA meeting recently in May and April, in Las Vegas, and will be published very soon here, we hope, by the end of the year. When we look at patient and physician demand, it's really important to understand each of these stakeholders. Why patients are seeking Focal One HIFU? It's a non-invasive procedure. It involves no cutting, no blood loss, no surgery, no radiation.
It has a higher potential, as demonstrated with the data I showed, to preserve sexual function and urinary control. It's a short, same-day outpatient procedure, and it allows that patient rapid return to normal activities. When you look at the physician, why are physicians adopting Focal One robotic HIFU? It avoids the downsides of unnecessary radical treatments. It reduces the management of morbidity and complications and their associated burden to the patient and those costs. It allows for a higher potential for increased patient satisfaction. It does leverage advances in imaging to personalize the treatment and will also provide a precise robotic delivery of sparing that organ with applied focal therapy. One of the great case studies that supports this is a system in Tennessee in Chattanooga, Erlanger Health . They purchased their Focal One system and launched it.
Their catchment area is that small circle in the middle of the slide. At 18 months, they showed that they were able to increase by 37% patients from outside their catchment market. Patients were coming from the tri-state area. If you know Chattanooga and Tennessee, it borders Georgia and Alabama. This is, again, just showing you patients are willing to move and seek out centers offering Focal One robotic HIFU. We talk about physician reimbursement and hospital reimbursement. It is strong and in place today. Per CMS, we are awarded today category six reimbursement, which was a 90% increase in 2023 and has increased since then, including 5%, over 5% this year in January. If you look at the data across the payments, CPT code 55880, this is an average payment.
It's adjusted based on point of care, based on the wage labor index. Here in New York, it's arguably $13,000-$14,000. As noted, it went up in January of this year. What is also important to understand is we can do these treatments in a standard operating room. We do not require, as compared to MRI-type treatments, to access an expensive specialized MRI suite. We are less staff-intensive. This procedure can be performed with one urologist, one nurse, and one anesthesiologist, and it has optimal workflow, wheels in, wheels out. Our average running treatment times in the machine are somewhere between 40 and 60 minutes. We have the shortest treatment time available in this product category. When you look at the physician payment, CPT code 55880, it awards the physician 17.73 work RVUs. The payment is very strong.
Also, not captured here, as compared to surgery, there's a secondary billable event for the physician in hospital at 10 months. That is a reimage of the prostate and a confirmational biopsy. There is favorable reimbursement both at the facility level, hospital level, as well as the physician. Focal One is best-in-class technology, and it's predicated on leveraging image-guided treatment planning and then taking that planning to deliver precise robotic ablation. Our core technologies include advanced imaging, HIFU or high-intensity focused ultrasound, robotics, artificial intelligence, AI, and the new ability to provide remote connectivity, which we think is a huge differentiator, again, for our technology. It is the most advanced platform of its kind in the market today. We're agnostic to imaging.
We can bring in imaging from various sources: MRI, PSMA PET, Unfold AI, OnQ Prostate, ExactVu Micro-Ultrasound, Koelis, 3D biopsy maps, and DynaCAD for urology, which is Philips, directly into the machine. We do not care where that imaging comes from, but we can set it up directly into the machine. We have a five-axis robotic positioning system that moves in micro-movements to adjust the treatment in real time to deliver a precise ablation. Our dynamic focusing probe is very unique to our system. We can ablate increments of 5 mm of tissue around various structures and delineate accordingly in a very short amount of time, again, back to our treatment times being the shortest. We have an integrated flexible workstation that can be moved and stored around the operating room. The Focal One i is our newest, exciting launch of this platform.
We previewed this in April of this year. It has expanded capabilities and changes made both on hardware and software, but those capabilities include HIFUsion, our proprietary fusion platform built into Focal One, the ability to deliver streamlined treatment workflows. We have onboard video libraries that can be brought up in real time through the machine. We have the ability to stream recording and also provide remote proctoring and telecollaboration. Why this is exciting, as you noted, in March of this year, or the end of March and April, we put out a press release regarding the world's first Focal One robotic HIFU transcontinental teletreatment. It was actually a teletreatment and a telecollaboration. Dr. Ruben Oliveras here in Cleveland Clinic, Ohio, was able to treat a patient all the way across the globe, 7,000 mi away at Cleveland Clinic, Abu Dhabi.
He was able to connect to the machine in real time based on that workstation in his office. This shows, again, the ability for our technology to scale and broaden its applications. We're really excited about this, and we'll probably see more activity in telecollaboration and teletreatment in the near future. Turning our attention to BPH and endometriosis new indications. As we know, we talked about prostate cancer. It's a large addressable market, but there are large addressable markets associated both with BPH in men and treating rectal endometriosis in women. We know when you look at BPH, it's a large market, 94 million global cases diagnosed in 2019. Nearly 15 million men are walking around with symptoms of both BPH and symptoms affecting their lower urinary tract. 600,000 U.S. men, age 65 or older, will be newly diagnosed annually.
We believe with Focal One, our approach, we have the potential to provide a non-invasive option that can safely treat a subset of BPH patients and reduce symptoms but avoid the side effects of standard surgical treatments. Where are we? We're right now recruiting in a phase one-two study to look at treatment parameters. That is dosing and location and ablation zones and all the corresponding clinical parameters. While we're doing that, we're also working on leveraging those parameters into a U.S. study. We're writing the protocols now, working with a hospital and soon-to-be hospitals in the U.S. These are working in tandem. We're really excited about this, and I think it's a natural progression for us to go from prostate cancer, certainly in the direction of treating BPH.
When we turn our attention to endometriosis, this is a large disease state that affects many women, not only in the U.S., but around the world. Over 6.5 million women in the U.S. have some form of endometriosis. We know that 1.3 million cases of deep infiltrating endometriosis exist in the U.S., which affects 11% of women. Women who have stage four endometriosis do not have very many good options. It is typically surgery, a partial rectal resection, a serosal stripping procedure. It requires surgery, typically. We believe we have a non-invasive approach leveraging our current Focal One platform that can safely ablate endometrial implants. We are excited to announce in March, we received CE Mark, so we can now promote this in CE Mark countries.
We're in a limited launch now with a very select small group of centers in Europe, and we'll be excited to see the future of this and provide more updates at a near future date. We have a growing install base. As a company, and if you think of markets, look at the market we're in today, New York, New Jersey. It is the largest metropolitan statistical area in the U.S., and we now have penetrated the market with 11 Focal One systems. We've done this in a fairly short amount of time. This is exciting because we have academic centers and community hospitals buying our technology. If you turn our attention to the greater map across the U.S., you can see here we're placing more systems in major markets. We're now in academic centers, leading cancer centers, community hospitals. We're in HMOs like Kaiser.
We're in large IDNs like HCA, and we continue to sell more systems. Some hospitals now have more than one Focal One system. We are excited about this. That message around the MSA, that New York, New Jersey, we believe we can replicate that across the U.S. We are already showing that. The top four MSAs are New York, New Jersey, L.A., Chicago, Dallas, Texas, followed by Fort Worth, Texas, and then now you are down to Atlanta. We are penetrating these markets today. If you look at our rankings, we are in seven out of the 10 best U.S. News World Report ranked hospitals today with Focal One. We are in 19 out of 35, over half of the SUO fellowship programs in the U.S., and we are in 48% of the National Comprehensive Cancer Participating Network hospitals. We are in some of the top centers that treat cancer patients.
Last, we're positioned for growth. In closing, we have a large addressable market both in men's and women's health. We have a growing install base of leading tier one academic and community hospitals adopting our technology. We have differentiated non-invasive robotic HIFU technology, which solves an unmet need to include indications in prostate cancer and indications we're working on on BPH and endometriosis and other. We have strong and growing clinical evidence with favorable reimbursement in place today, and we have a proven management team from industry-leading med tech companies. Thank you.
All right. Thanks a lot for the presentation, Ryan. Very insightful. I guess just to start, not too long ago, you announced pretty big strategic changes at EDAP Focal One, so I was hoping maybe you can give us some background and tell us what's going on with the evolution of the company.
Yeah. So, you know, our company historically, we've been grounded in providing technology and treatments for kidney stone disease, extracorporeal shockwave lithotripsy or lithotripsy. And we've had a legacy business in that market, but we made a conscious decision to look at the future of that and tend to create an obsolescence plan and stop selling that product in the near future. That is already in progress. Part of this is really about focusing on HIFU and this great opportunity we have. Equally, we've been a distribution company. That's another area that we've seen a decreased level of activity. I think it's fair to say that we have a golden opportunity here to be the defined market leader in delivering HIFU therapy across potentially multiple procedures.
To focus on that, you know, we're looking outward in terms of, you know, ways we can monetize and effectively look at our product portfolio. We've been open about our communication really to redirect our entire focus in the direction of HIFU therapy and wind down some of these other areas of our business. That way, we can really unlock the value and we can grow quicker in the market.
Got it. Very helpful background. I did want to transition to HIFU. One of the biggest conferences of the year, AUA, just took place a few weeks ago. You highlighted some of the FORB study data, the three-year outcomes. I was hoping you can give us some color on what the doctor reception was to that data and kind of what the tone of the conversations were at the AUA conference.
Yeah. AUA was a great meeting for us this year. As you know, we previewed the Focal One i, so we had a new platform to show our customers. I think the data is highly compelling. You know, the FARP data was presented, not published yet, but it was presented at the AUA meeting this past month. It was very well received because I think a lot of people have asked, you know, when are we going to see a randomized controlled trial? When are we going to see level one evidence? This is exciting because it is a hard study to do. The treatments are very different. You have a radical treatment and you have a non-invasive treatment, but the non-invasive treatment is showing equivalent cancer control. We are able to kill cancer and manage that cancer effectively as compared to surgery.
We, again, look favorable in the domain of functional outcomes, going back to the trifecta outcomes, preserving sexual function, preserving urinary control, reducing the morbidity. Though that study was presented and very well embraced, a lot of doctors are talking about the FARP clinical trial, which will hopefully be published here within the next six months. They're also reflecting on the data from the HIFI study, which was published in December. If you take these two distinctly different studies that had similar data endpoints, it's proving what we need to prove across the domain of outcomes based on the trifecta. What we're not capturing, which is equally important, is the level of morbidity that may be associated with more radical treatments like surgery because there are more complications associated with surgery than there are with HIFU therapy. I think it's, again, great evidence.
We can leverage the evidence. It's good for the payer community. It's good for other doctors who have been thinking about adopting HIFU, and now we've got that evidence in front of us and we can leverage that.
Very helpful. And, you know, do you think this is enough evidence, and I know this takes time, but maybe to impact guidelines?
Great question. I think the discussion is bubbling up quickly around guidelines because, as we know, typically in the U.S., guidelines lag standard of care. Now having that data in front of us, I think it presents a very strong argument that there needs to be guideline changes. Guidelines tend to change slowly, but this could accelerate future guideline change, and we hope it does. The other is a lot of the top cancer hospitals in the U.S. are now using our technology, Focal One, and they're tracking their data, they're tracking their outcomes. We will see a lot more data coming out, whether it's in an abstract format at a regional meeting or a large cancer meeting.
We're going to start seeing a lot more data coming out in the near future, and it will likely reinforce what we've already learned from both the HIFU study and the FARP study. So we're excited, and we think that this can play a pivotal role in reshaping guidelines.
That sounds very exciting. A little less than two minutes left. I do want to loop Ken in here. So EDAP, Focal One, you're domiciled in France. You do the vast majority of your manufacturing there. Can you just give us an overview of how you expect the tariff situation to impact the business?
Sure. As you mentioned, we do manufacture 100% of our product in France, and a lot of the subassemblies are procured within European Union countries, about 90%. I think that's one advantage that we will have on tariffs. However, we do sell a lot of our product here in the U.S., as you saw from our map. Currently, we are, you know, planning on a 10% impact on the tariffs on all goods coming into the U.S. It's something we're going to continue to monitor. As we know at the administration, we're learning new things every day, every week, so we're just continuing to monitor it. We are fortunate that we do have most of the manufacturing in France, procurement in France, and all manufacturing in France, and that's going to help minimize the cost.
Got it. Very helpful. I did want to touch on, Ryan, you mentioned Focal One i debuted at the AUA conference. I was hoping you could, A, comment on, you know, what you're seeing in the capital equipment environment today and also layer in, you know, if the tone of those conversations have changed around any excitement around Focal One i.
Yeah, great question. Focal One i was very well received. You know, we showed it at two major scientific meetings, EAU in Madrid this year and then, of course, Las Vegas at AUA. Hospitals are excited. You know, it's an advancement in the platform with more capability, as we've shown. I think today in the capital equipment market, you must differentiate on strategic value and clinical value. It's both. You know, you've got to bring patient value, absolutely. Also when hospitals look at making investments, is this strategic to their clinical thinking? I'd say the answer is yes. We're anchored in cancer, a number one prevalent cancer in men. I think hospitals today, you know, when you think about it, we provide a clinically necessary strategic revenue-enhancing service line with strong economic reward in the number one diagnosed cancer in men.
That would lead us to believe hospitals will need to invest in this technology. They will need to offer this to their patients. They'll be behind if they don't over time because this is a growing market and we have the ability to be the market leader.
Great. We are at time. Ryan, Ken, John, thank you very much for taking the time to chat with us today. For anyone who's been viewing, thank you for your interest.
Thank you.
Thank you.