Ooh, sorry. Hi, everyone. My name is Brandon Vasquez. I am the analyst here at William Blair that covers PROCEPT BioRobotics. I am required to tell you and inform you to go to our website at williamblair.com for a complete list of disclosures and conflicts of interest. With that said, happy to have President and CEO Reza Zadno with us. He's going to run us through a company presentation before we go to our breakout. With that, I'll turn it over to Reza.
Yeah, thanks, Brandon. Good morning, everyone. Very excited to be here and talk about our company. Reza Zadno, President and CEO at PROCEPT. We are a surgical robotic company with the vision to become a global leader in urology. This slide's advanced. Oh, OK. Yeah, please review our safe harbor statement, use of non-GAAP financial information. BPH is enlargement of prostate that presses on urethra and ultimately results in various symptoms, urinary symptoms. It's the number one reason men see a urologist. It's a significant men's health issue in the U.S. and international. One in two men above the age of between 50 and 60 suffer from this condition. In fact, this incident increases for men between 60 and 70 and 70 and 80. 99% of men with BPH complain about the impact of this disease on their quality of life.
In the United States, there are 40 million men suffering from BPH, and I will get more into detail of that population. The population of men above 65 years old is anticipated to increase double by 2030, I'm sorry, by 2060. That would increase the number of men with BPH. This is a large market, significant unmet clinical need. Twelve million of those 40 million are under medical management. As you can see, the vast majority of them start with medication. 6.7 million men are using medication. 3.8 million washable waiters, in fact, they sit on the sidelines. 1.1 million have failed to medication. In 2019, about 400,000 procedures were conducted. 300,000 of them, roughly, were resective, and 100,000 of them were non-resective.
The reason, one of the biggest reasons that the vast majority of men sit on the sidelines and avoid surgical is the side effects of these current treatments. I will get into more detail about that. Aquablation was designed to address this unmet clinical need, which is a treatment that can be used on all prostate sizes and all prostate shapes. As you can see, prostate comes in sizes anywhere from below 30 g all the way above 150 g and different shapes. Current treatment, whether it is resective or non-resective, works for either small prostate or large prostate. There is no treatment that would work for all prostate sizes. Patients prioritize if they are interested in efficacy. They select a resective procedure. The disadvantage of a resective procedure is the side effects, incontinence, and sexual dysfunction.
If they want to prioritize sexual function and safety, they go for a non-resective procedure. What Aquablation was designed is to be a procedure that works on all these prostate sizes and shapes and provides safety and efficacy. The information on safety for resective procedures, this is published data on resective procedures. As you can see, for smaller prostate, TURP and PVP are conducted for prostate below 80 g. These side effects, incontinence, erectile dysfunction. For small prostate, incontinence in the 2% range, erectile dysfunction in the high single digits, and ejaculatory dysfunction way above 50%. For larger prostate, these ejaculatory dysfunction numbers are even larger for these larger prostates. Incontinence for these larger prostates with current treatment is anywhere between 8%-33%.
In contrast to that, in the randomized study, I will get in more detail, when in WATER, Aquablation was compared to TURP, incontinence and erectile dysfunction were 0% for small prostate. Similar numbers were obtained when this was used on larger prostate. In the WATER II study, and open WATER, which was for prostate anywhere between 27 g - 252 g, similar results were obtained for these larger prostates. Multiple factors position Aquablation therapy to become the BPH standard of care. That starts with the technology, which is an automated water jet, not using heat. This is to avoid unnecessary damage to surrounding tissue and visualization with ultrasound. The safety and efficacy is supported by compelling clinical data. I will get into FDA trial results. There is market access reimbursement. I will talk about it.
Full Medicare coverage for patients and many private payers covering 95% of the target patients have access to this therapy. The combination of well-defined customer base and experienced salesforce enables us to increase adoption and utilization of our system. Last quarter, we announced more than 540 installed bases in the United States. Within a few years of launch of our first-generation AquaBeam, we launched HYDROS Robotic System, which is the next-generation system for Aquablation therapy with AI-powered treatment planning, advanced image guidance, robotic resection, and a streamlined workflow, which allows the setup time and start of the procedure faster than the first-generation AquaBeam. This was launched at the end of last third quarter of last year. The safety and efficacy of Aquablation have been studied in multiple clinical studies.
The first one was WATER, which was 181 patients, a randomized study between an FDA randomized study first and only against TURP in the U.S. That showed superior safety outcomes on all prostate sizes. Even with a subset of sizes above 50 g, it showed better even efficacy, which TURP is a standard of care for efficacy in the resective market. Even in some subset of those sizes, there were better efficacy results. For larger prostate, between 80 and 150 g, it was a single-arm, multicenter study and showed similar outcomes for larger prostate. Recently, in a WATER III that was presented at EAU, this was a randomized study for prostate between 80 G and 180 g. This was a study comparing Aquablation against enucleation. It showed similar symptom relief, efficacy in enucleation, but 0% transfusion and significantly lower side effects than enucleation.
As you can see, this technology, anywhere from 30 g to 180 g, the safety and efficacy supported by these clinical studies. These have resulted in multiple publications. Thanks to the robotic execution, this is a very predictable and consistent outcome it provides to the patients. Because of this predictability and consistency, many hospitals are standardizing the procedure. In this graph, what we are showing is the resection time of TURP. That was during the FDA trial, the graph on top. These are some of the top TURP surgeons who have done thousands of TURPs. As you can imagine, there is a high scatter for the time of the resection for TURP versus in the FDA trial against TURP, 14 out of 17 of those surgeons. That was the first time they were using Aquablation. Yet, you see how consistent their results were.
In the WATER II, which was the prostate between 80 g and 150 g, the majority of these doctors had less than one procedure of Aquablation when they started this procedure. Because of this consistency, this makes the practice more efficient and more predictable when they perform Aquablation therapy. These outcomes are seen across all prostate sizes. This is not just for small prostate or large prostate. These are actual prostates that were treated with Aquablation since January 2021 until the end of last quarter. As you can see, it is a bell curve that simulates what actual men's prostate sizes are. As you can see, the top of the bell curve is 60 g-80 g, and the majority of them, 70%, are below 100 g. This is not done just for large prostates or small prostates.
They are using them across all ranges of prostate sizes and shapes. Aquablation is covered on Medicare, full Medicare coverage with almost all private payers, including United, Aetna, Cigna, Anthem, Humana, and many more. That allows about 95% of eligible patients to have access to this treatment. Just information, about 50% of the hospital-based resective procedures are Medicare patients. On the coding, the water jet resection recently was approved to move to category one. And the facility payment for Aquablation is just over $200. Changing gears to prostate cancer, we are very excited about the opportunity of using Aquablation for the treatment of prostate cancer. This is a massive opportunity, unmet clinical need. There are more than 3 million men in the United States with prostate cancer. The incidence is about 300,000 cases per year. The vast majority of these patients sit on the sidelines.
The reason for that is the side effects, incontinence, and sexual dysfunction, erectile dysfunction. They forgo treatment because of these side effects. To break down those 300,000 new cases, about 210,000 of them are focal localized disease, and the balance, the non-localized. When you look at those localized, you break them down, about half of them are intermediate risk. The risk of prostate cancer is divided into grade group one, two, three, and above. Half of them are intermediate risk, and the other half of 25%, 25% in low risk and high risk. This is a massive opportunity. The unmet clinical need here is a technology that provides treatment for these patients, but without the side effects of incontinence and sexual function. We have been actively investing in prostate cancer clinical research.
We started our journey for cancer, prostate cancer, first to show that we are not spreading cancer. That was the first question that we had to answer. We started that a few years ago and ran clinical studies outside the U.S. and submitted all of that to the FDA. Because when we received FDA approval in 2017, cancer was a contraindication in patients who had BPH. When we submitted that data, the FDA removed cancer contraindication. We started the first two studies, PRCD-001 and PRCD-002. PRCD-001 are for grade group one, two, and three. These are patients who have BPH and cancer. PRCD-002, that the enrollment is complete, is 22 patients. These are grade group one and two. These are patients with prostate cancer that may or may not have BPH. At AUA, there was a surgeon panel discussion on Investor Day.
The purpose of that was to show that, one, when we treat, when we cut a prostate that has cancer, we do not spread. There were cancer specialists who talked about that. That was the first information that was shared in that meeting. The second one was we can reach cancer lesions in the peripheral zone. That was also shown. The third one was cancer is a focal disease. It is not a focal disease. It is a diffuse disease, a multifocal. That is why you need to remove as much of the prostate as you can without having the side effects of damaging the ejaculatory ducts. The fourth one was the cavity that we create for cancer is very different. It is much larger because you need to remove the maximum part of the prostate without those side effects. The study that we started is WATER IV.
That's the first and only FDA randomized study against the prostatectomy that has started the 280 patients, three to one randomization on grade group one, two, and three. That enrollment has started since January. On the financial, this is the recap of what we presented in the first quarter, $69.2 million, which was a growth of 55% year over year. At the end of the first quarter, we had 43 new U.S. systems that brought us to about 547 U.S. installed bases. We are very happy on the international side. We made good progress with $8.9 million revenue. That was more than 100% year over year growth. The majority of that is from the U.K. and Japan. We are very happy with the progress that we are making on the international front.
We have been on a very fast revenue growth with the guidance of $323 million for 2025, 63%-64.5% in operating expense and adjusted EBITDA that we are presenting there. With that, I want to thank you for listening to our story. Thank you.
Great. Thank you, Reza. We have a couple of minutes here, so maybe I'll throw just some high-level questions to you before we go out to the breakout session. As you guys continue, you have a lot of great data, but part of what you want to do here is standardize. I think you've talked about this in the past before. You want to standardize to robotics, right, to Hydro and to AquaBeam. Talk to us a little bit about what that means from a commercial perspective.
I know you have some, like Sham, that came from Intuitive Surgical, and you have that experience in standardizing to a platform. How do you achieve that now that you have the clinical data and the systems out there to do it?
Definitely, everything starts with the clinical data that we have presented. Once hospitals purchase our system and they see that they can predict with the graph I showed, the resection time, when they see that these procedures are predictable, whether it was AquaBeam or our new system, Hydro's, the predictability and clinical outcomes, definitely clinical outcomes are very important to the surgeon.
For the practice that they can stack these cases and know how many cases per day they can do, and they do not need to have a specialist for large prostate, a specialist for enucleation, or the same surgeon, any surgeon can do any prostate. This makes the practice more surgeon. And the younger urologists who come on board, and there was a, in fact, I read the interview that you had done with a surgeon, they are very interested in newer technologies, robotics. The combination of efficiency, clinical outcome allows this to, and many accounts have standardized this because they do not need to know which doctor is today for which or what prostate size. These are, and with Hydro's, the setup time has become much easier because it is integrated. The footprint is smaller.
All the initial connections of the ultrasound to the robot, those are already there. The setup time is easier, makes the launch easier with HYDROS. These are all the factors that allow this, we believe, to gradually become, we are still early in that journey, but we are seeing that, in fact, when we talk to our accounts, many of them tell us that their BPH volumes have increased in the last two years.
As you think about some of these accounts that have standardized, again, as background in this opening presentation first, what procedures are you mostly taking market share from, and why do you see them often switching from those procedures specifically?
TURP still is the, I would say, standard of care in resective procedure.
When we ask the question from surgeons if they did not do Aquablation, what they would have done, the majority of them say they would have done a TURP or GreenLight. That is the one that we hear where it comes from. Of course, it is hard to say patients who are on the sidelines because all of these patients, whether they want to do Aquablation or TURP or other, they were on medication. They were all on medication. Yes, there are patients who come in and ask for Aquablation. The awareness is increasing amongst patients, but the majority of them are from TURP and GreenLight. For a larger prostate, of course, there is only enucleation and prostatectomy. For a larger prostate, it is obvious. It is prostatectomy and enucleation.
You have a lot of good clinical data. You have reimbursement.
You seem to check a lot of the boxes. What are the biggest hurdles that you guys are focused on on a daily basis to get that incremental procedure growth and the incremental urologists trained? Just talk to us about what is left in terms of an execution standpoint now that the technology and the data is there.
Yeah. From the initial launch of this product, for us, it was very important to focus on, definitely, we have to place the robot, but surgeon retention was very important. It was not just about increasing the procedures. Surgeon retention, clinical outcomes, and net promoter score were very important to us. Those are the factors we have been focusing on initially rather than increasing. We are very happy with the progress we have made with the more than 30,000 cases in the U.S. last year. There has been rapid growth.
Initially, when you go in a high-volume center, in a high-volume center, there could be up to 12 surgeons -14 surgeons. Initially, you start with the top two or three surgeons who do the majority of those. Let's call it 200+ cases a year. You start with those. With time, you expand into these other surgeons who do less than two or one per month, whether it is Aquablation or other procedures. Also, as we improve, when the reimbursement came, there was limitation. Although FDA, there was no limitation on prostate size, some of the payers had limitations on the way you measure prostate on the patient on retention or for large prostate. As those obstacles are removed, this utilization will increase and the focus on these other surgeons in an account.
Since you were touching on kind of like the reimbursement side there a little bit, 95% of lives covered, but a question I often get is, what are the milestones here as you transition from a category three code to a category one code? Just what are the steps from here for us to keep an eye out over the next six-plus months, something like that?
Yeah. Initially, like any other procedure, when you come in, you have a temporary code. The good news is when we ran the FDA trial, the total time of the procedure at the time was measured during the procedure. It was equivalent to TURP. During the category three, it was paid similar to TURP, similar to other resective procedures.
The advantage of moving to category one is some payers still, you need to get pre-authorization because by definition, it's a temporary code. Moving to category one brings the advantage of this is a permanent code. This pre-authorization goes away. The second point to make is moving from category three to category one has no implication on the facility payment. The facility payment is separate, and that was, as I mentioned, it's just over $9,200. We expect the payment for the physicians to be in line with other resective procedures, and that will be coming out in July.
Okay. We get the proposed in July. That will be finalized later in the year. I believe it's usually around November. CMS loves to drop it on our holiday, so we can have a talk about it at the beginning.
That becomes effective from January of 2026.
We do not expect this to be meaningfully different than other resective procedures. They are looking at all these resective procedures at the same time.
Okay. Maybe the last one here in this setting before we go to the breakout session. At a high level, the logic makes a lot of sense. As we know in medicine, just because it logically high level makes sense, that does not always mean it is right. What are the things that you think need to be left to or need to be proven still within this space to start to convince the mass urologists that this is a good option, if not one of the best options for these prostate cancer patients?
I think clinical data. I think clinical data. That is why we had to do these feasibility studies so that we were comfortable with the protocol.
We have, similar to BPH, we always lead with clinicals, these randomized studies, whether we did BPH and here, and partnering with specialists. I mean, at AUI, you saw some of them, the KOLs in prostate cancer treatment. We believe as we generate clinical data, as we show that this is possible to resect in the peripheral zone and hopefully have a similar safety profile because it is the same anatomy, same doctor, same procedure. It is just the treatment planning is different. We believe if we can replicate the safety profile of our BPH patient in cancer and show efficacy because this will be definitely removing way more tissue than focal therapy would do, but not as big as what prostatectomy does. The advantage of prostatectomy is you have these other side effects.
I believe if we can replicate this, our goal is to expand this market to those patients who are sitting on the sidelines to have an option that they can use our treatment.
All right. Great. I'll finish this a couple of minutes early. Maybe some of us can reach or beat the rush to the elevator. We'll meet upstairs in room Jenny A for a breakout with PROCEPT. Thanks, everyone.
Thank you.