Profound Medical Corp. (NASDAQ:PROF) Q4 2023 Earnings Call Transcript

Arun Menawat: Sure. So I think Rahul, that’s a great question, because one of the things that we have been working towards is to build a great sales team. So over the last four months or so, we have – we built the infrastructure, number one. So we have – obviously, we have a fantastic VP of Sales with Adam, and we have regional managers, so that the regions have focus with a manager. We have four regions, and then underneath each of those, we have about – our plan is to be about five with each. So we’ll have about 16 to 20 people in each of those regions. We have about four or five open positions at the moment. And I think the expectation is that the ratio of the hunter versus farmer is about 50/50. So that we will – the farmers are driving the usage and the hunters are looking at new agreements. So – and then we think that this structure is a scalable model and so we will start to scale as the revenues ramp in each region.

Rahul Sarugaser: Great. That’s really helpful color. Thanks, Arun. So my second question is, direct on the Siemens collaboration. Are you able to share any more color on what you’re hearing from current and prospective ASC and LUGPA customers about their needs? Specifically, how such a one stop solution may keys or shorten the sales cycle, both for these ASCs, but also potentially for hospitals.

Arun Menawat: Yes. So Rahul, it starts with what we are calling the modern treatment pathway. And the AUA guidelines are now basically saying that MR should be done to properly diagnose the patient. And there are clinical publications, and these publications are basically saying that if a cancerous lesion is visible on the MR, it should be treated. And so there is a shift in the sense that historically, we’ve looked at the Gleason scores to determine whether or not it’s an early stage and should we wait before we treat these patients and/or if it’s a Gleason scores nine or higher, that we should perform radical procedures on these patients. The idea that there’s a lot of clinical data that is supporting is that perhaps we should even screen patients with MR, and most certainly diagnose the patients with MR.

And then if the lesion is visible on the MR, then the patient should be treated. And obviously, it’s a natural progression for them to say, well, if I’m screening and diagnosing with MR, and if I’m particularly looking at lesions that are MR visible, then why would I not treat with TULSA, which uses the same real time MR. So if you put all this together, that’s one pathway that is emerging at the moment. The second thing that is going on is that the MR technology is evolving also. So the new MRs that are coming out are generally considered minimal helium or helium free. And helium is a big return because it forces a lot of maintenance costs on MRs. And so now the new ones that are coming out, particularly one that we’ve signed on for with Siemens is effectively helium free or minimum helium.

It’s a closed loop helium system. And with the software technology and the latest hardware technology, they can actually go to a lower magnetic strength Tesla is how they measure it, lower magnetic strength. And so the bottom line to all this is the new MRs can give you diagnostic quality images, but they weigh, for example, a third of the weight of a regular MR. We internally talk about is like, it’s less than 8,000 pounds, which is like you can use a Ford F-250 to throw these devices. And you don’t need the kind of foundation, they don’t need to be separated from the hospital or an ASC. So if you put all of this together, what you’re seeing is that an ASC or even a LUGPA hospital practice can then own the whole thing. They can own an MR that is of this new generation, and they can do screening, diagnosis, they can own the whole patient pathway.

And you can imagine how game changing, how big this has the potential to be. And so this is the beginning, this first relationship we’ve done with Siemens is this the beginning of that idea, that they can own the patient from the beginning, they can do all of this. They will send the images to the radiologist to do the diagnostic part, but they can make money on the facility payments on all of these procedures. So we think that there is control of the patient. There’s smoothing of the workflow. We think that there is an economic model here that’s pretty compelling. And so that’s what this is all about. And I think as we indicated in the prepared remarks, we think this is the first of more of such things and we’ll be talking with you in the public domain about when we expect the first of such site that can perform all of these procedures and be able to provide this new modern treatment pathway.

I know this is a little long winded, but I hope it is helpful.

Rahul Sarugaser: That’s very helpful. Thanks, for your remarks we’ll be watching that very closely. And if you don’t mind indulging just one last important question. So one of the main questions we get is on what the amount of reimbursement will be. So you’ve already provided a lot of color on the products with the RUX [ph].

Arun Menawat: Yes.

Rahul Sarugaser: And so, yes, given that reimbursement of robotic surgeries in the $17,000 range, based on what you’re hearing from the old sites, is there a range of reimbursement that you might be able to say that you’re confident that TULSA should secure?