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01/10 20:13
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The company's financial performance shows declining revenue, gross profit, and margins, indicating challenges in maintaining profitability. Despite the optimism around FDA approval and market potential, the lack of a concrete timeline for regulatory approvals and the unclear management responses in the Q&A create uncertainty. The ongoing net losses and limited cash position add to financial strain. These factors, combined with supply chain and sales variability, suggest a negative market reaction, likely in the -2% to -8% range, especially given the lack of market cap information for a more precise prediction.
Revenue $2.1 million for the 9 months ended September 30, 2025, compared to $2.4 million for the same period in 2024, a decrease of $316,000. The decrease was due to a drop in sales in Japan, other territories in Asia, and North America, partially offset by an increase in sales in Latin America.
Gross Profit $626,000 for the 9 months ended September 30, 2025, compared to $1,034,000 in the prior year period, resulting in a gross margin of 30% versus 43% in 2024. The decline was attributed to fluctuations in quarterly revenue as commercial activities ramp up in the U.S. and globally.
Operating Expenses $11.5 million for the 9 months ended September 30, 2025, compared to $12.2 million a year ago, reflecting efforts to optimize spending without sacrificing commercial or regulatory execution.
Net Loss $10.8 million or $0.18 per share for the 9 months ended September 30, 2025, relatively the same as $10 million or $0.22 per share for the same period last year.
Cash, Cash Equivalents, and Short-term Deposits $10 million as of September 30, 2025, compared to $7.6 million as of December 31, 2024. The increase was due to a rights offering in July 2025, which raised $10 million in gross proceeds, and additional net proceeds of $5.87 million from sales of ordinary shares, bringing the cash balance to $11.8 million as of October 31, 2025.
FDA Marketing Authorization: ProSense cryoablation system received FDA marketing authorization for treating low-risk breast cancer in women aged 70 and older, addressing a significant market of approximately 200,000 patients annually in the U.S.
Global Approvals: ProSense was recently approved in Switzerland and is already approved in Brazil for breast cancer and other indications.
Next-Generation System: Regulatory approval for the next-generation cryoablation system was received in Israel for breast cancer and other indications.
U.S. Market Expansion: ProSense is gaining traction in the U.S. with over 20 commercial sites and plans to expand to 30 clinical sites for a post-market study.
International Market Expansion: ProSense is approved in Brazil with a $6.6 million distribution agreement over five years and is gaining interest in Europe and Asia, including plans for regulatory submission in Japan in 2026.
Revenue and Gross Profit: Revenue for the first 9 months of 2025 was $2.1 million, with a gross profit of $626,000 and a gross margin of 30%, down from 43% in 2024.
Operating Expenses: Operating expenses decreased to $11.5 million for the first 9 months of 2025, reflecting optimized spending.
Cash Position: Cash balance as of October 31, 2025, was $11.8 million, supported by a $10 million rights offering and $5.87 million from share sales.
Barriers to Entry: FDA marketing authorization creates significant barriers for competitors, as no other company is conducting similar breast cryoablation studies in the U.S.
Clinical Validation: 13 independent studies presented and published, reinforcing the safety and effectiveness of ProSense.
Global Marketing Initiatives: ProSense featured in leading medical conferences and training programs globally to drive adoption and expertise.
Revenue Fluctuations: Revenue decreased to $2.1 million for the first 9 months of 2025 compared to $2.4 million in the same period in 2024, with a notable decline in sales in Japan, other territories in Asia, and North America. This highlights potential challenges in maintaining consistent revenue streams across key markets.
Gross Profit Decline: Gross profit dropped to $626,000 in 2025 from $1,034,000 in 2024, with gross margins falling from 43% to 30%. This indicates challenges in maintaining profitability as the company scales its commercial operations.
Operating Loss: The company reported a net loss of $10.8 million for the first 9 months of 2025, similar to the $10 million loss in 2024, reflecting ongoing financial strain despite efforts to optimize spending.
Market Entry Barriers: While the FDA marketing authorization for ProSense creates a competitive advantage, the requirement for 5 years of follow-up data and specific system features for competitors may limit market competition but also poses a risk if the company fails to capitalize on this window of opportunity.
Regulatory and Clinical Execution Risks: The company is awaiting FDA approval for its post-market study design and is dependent on regulatory applications in Japan and other markets. Delays or failures in these processes could hinder market expansion and revenue growth.
Supply Chain and Sales Variability: The company expects fluctuations in quarterly revenue as it ramps up commercial activities in the U.S. and globally, indicating potential challenges in achieving stable sales growth.
Cash Position and Financial Sustainability: Although the company raised $10 million in a rights offering and $5.87 million through share sales, its cash position of $11.8 million as of October 2025 may not be sufficient for long-term sustainability given ongoing losses and expansion plans.
FDA Marketing Authorization Impact: The FDA's marketing authorization for the ProSense cryoablation system is expected to drive meaningful growth and support broader access for patients. The company anticipates increased adoption and utilization of ProSense in the U.S. market.
Market Expansion: ProSense is expected to be the only cryoablation system cleared in the U.S. for breast cancer in the foreseeable future due to significant barriers to entry for competitors. The company plans to expand the number of commercial sites in the U.S. and conduct a post-market study involving 30 clinical sites.
Revenue and Gross Profit Variability: Revenue and gross profits are expected to vary quarter-to-quarter as the company focuses on building commercial scale sales.
Global Market Interest: The FDA decision has spurred global interest, with ProSense already approved in markets like Switzerland and Brazil. Terumo Corporation plans to submit a regulatory application for ProSense in Japan in the first half of 2026.
Reimbursement Improvements: ProSense currently benefits from a CPT 3 code covering approximately $3,800 in costs, which is expected to increase to just over $4,000 in early January 2026, enhancing patient access.
Strategic Growth Plans: The company aims to target a patient population of about 200,000 women annually in the U.S., expand clinical evidence, improve reimbursements, and enter new markets to drive and accelerate growth.
The selected topic was not discussed during the call.
The company's financial performance shows declining revenue, gross profit, and margins, indicating challenges in maintaining profitability. Despite the optimism around FDA approval and market potential, the lack of a concrete timeline for regulatory approvals and the unclear management responses in the Q&A create uncertainty. The ongoing net losses and limited cash position add to financial strain. These factors, combined with supply chain and sales variability, suggest a negative market reaction, likely in the -2% to -8% range, especially given the lack of market cap information for a more precise prediction.
The earnings call reveals several concerns: declining revenue and gross margin, increased net loss, and dependency on FDA approval for U.S. market growth. The Q&A highlighted uncertainties around the post-market study budget and lack of specific sales projections for Europe and Japan. While there is interest in ProSense and potential reimbursement, the financial metrics and market adoption risks overshadow these positives, suggesting a negative sentiment.
The earnings call presents several challenges: ongoing financial losses, dependency on FDA approval for revenue growth, and competitive pressures. Despite some positive developments like increased sales in North America and Europe, the decline in Asia and supply chain issues are concerning. The Q&A revealed uncertainties in regulatory timelines and management's unclear responses. The unsecured loan and share sales indicate financial strain. These factors, coupled with the lack of immediate revenue change expectation, suggest a negative sentiment, likely leading to a stock price decline in the next two weeks.
The earnings call reflects a mixed to negative sentiment. Despite some positive developments like sales growth in North America and Europe, the overall financial performance is weak with declining revenue, gross profit, and margins. The uncertainty around FDA approval and the need for a post-market study pose significant risks. Additionally, the issuance of new shares and reliance on loans indicate financial strain. The Q&A session highlights management's inability to provide clear guidance, further contributing to negative sentiment. These factors suggest a likely negative stock price movement in the short term.
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