Latest / Vanguards of Healthcare by Bloomberg Intelligence / FocalTherics Incorporates Therapeutic Ultrasound Across an Expanding List of Pathologies

Transcript

FocalTherics Incorporates Therapeutic Ultrasound Across an Expanding List of Pathologies · Vanguards of Healthcare by Bloomberg Intelligence

• 0:20
  Speaker 1: Welcome to another episode of the Vanguards of Healthcare series.
• 0:23
  Speaker 1: My name is Matt Henriksen, the Medical Technology Analyst at
• 0:26
  Speaker 1: Bloomberg Intelligence, which is the in-house equity research platform of
• 0:29
  Speaker 1: Bloomberg LPs. We are pleased to have with us today
• 0:32
  Speaker 1: the team from Focal Therix, including CEO Ryan Rhodes and
• 0:36
  Speaker 1: CFO Ken Mobeck. Focal Therix is a medical device company
• 0:40
  Speaker 1: that is developing therapeutic ultrasound technology with its Focal One system.
• 0:45
  Speaker 1: You can dive deeper into the company and its financials
• 0:48
  Speaker 1: by typing in FOCL Equity Go on your Bloomberg terminal.
• 0:53
  Speaker 1: Ryan and Ken, thank you for joining us today.
• 0:55
  Speaker 2: Thank you for having us, Matt.
• 0:56
  Speaker 3: Thank you, Matt.
• 0:57
  Speaker 1: We had you on two years ago, a lot of
• 1:00
  Speaker 1: good conversations about the technology itself. Since then, and most recently,
• 1:07
  Speaker 1: you guys had your 2026 Analyst Day. You provided some
• 1:11
  Speaker 1: 2028 goals and financial outlooks. But let's just start with
• 1:17
  Speaker 1: an overview of the company itself, what the technology does,
• 1:23
  Speaker 1: and how that, for the listeners... can be the base
• 1:27
  Speaker 1: for kind of this inflection point.
• 1:30
  Speaker 2: Yeah, so at Focal Therix, you know, our background is
• 1:33
  Speaker 2: in the history of sound-based therapy. It dates back a
• 1:36
  Speaker 2: number of years. We were a company focused in extracorporeal
• 1:41
  Speaker 2: shockwave lithotripsy, using sound to break up kidney stones. Fast forward,
• 1:46
  Speaker 2: today we are defined as a company building, defining, and
• 1:52
  Speaker 2: leading the category of focal therapy. We're really a pure
• 1:55
  Speaker 2: play company. in robotics, developing and building focal therapy for
• 2:01
  Speaker 2: the treatment of both benign and cancerous disease. And we
• 2:05
  Speaker 2: use our technology, Focal One Robotic HIFU, to spare the
• 2:11
  Speaker 2: organ and preserve organ function. So we target the diseased
• 2:15
  Speaker 2: area and we treat it accordingly. So as a company,
• 2:20
  Speaker 2: our rebranding and our name, Focal, meaning to target, Therix
• 2:23
  Speaker 2: is short for therapeutics, to treat and heal, As part
• 2:27
  Speaker 2: of our rebranding effort, which we announced right at the
• 2:31
  Speaker 2: front of our investor day in New York on June 1st.
• 2:34
  Speaker 2: So we're really excited. I think it better aligns our
• 2:37
  Speaker 2: brand and what we're known for as a market leader
• 2:41
  Speaker 2: in this category. Yeah.
• 2:43
  Speaker 1: And, you know, your background is you've been with other
• 2:47
  Speaker 1: notable robotic companies, specifically Intuitive Surgical. What attracted you to
• 2:53
  Speaker 1: Focal Therix when you joined as the CEO? And kind
• 2:57
  Speaker 1: of then, what were some of the skill sets you
• 3:00
  Speaker 1: got from those larger companies as you kind of built,
• 3:03
  Speaker 1: you're building this smaller cap company?
• 3:07
  Speaker 2: So my background extends 30 plus years in med device
• 3:11
  Speaker 2: and prominently about 20 years or so in robotics. What
• 3:16
  Speaker 2: I learned, and certainly when I was at Intuitive Surgical
• 3:19
  Speaker 2: for nearly 14 years, is that if you can solve
• 3:22
  Speaker 2: a problem, in the case of robotics in that era,
• 3:25
  Speaker 2: was you converting open surgery to minimally invasive surgery, thus
• 3:31
  Speaker 2: reducing the morbidity classically assigned or known for open surgery.
• 3:37
  Speaker 2: So what was interesting in that timeframe is I joined
• 3:41
  Speaker 2: the company trying to figure out if we had a
• 3:44
  Speaker 2: business in urology. Urology ultimately became the killer app and
• 3:48
  Speaker 2: really got the company to profitability in calendar year 2004.
• 3:52
  Speaker 2: So Going up an adoption curve and not to sound
• 3:57
  Speaker 2: classic here, but Jeffrey Moore's crossing the chasm. I feel
• 4:01
  Speaker 2: the company did everything from the early innovators, innovators, early adopters,
• 4:08
  Speaker 2: the early majority, late majority and laggards. If you follow
• 4:11
  Speaker 2: the adoption curve, we absolutely executed on that at Intuitive.
• 4:16
  Speaker 2: And so I feel like we're embarking on the same
• 4:18
  Speaker 2: journey here. However, what we're doing today is different. And
• 4:24
  Speaker 2: what I mean is, instead of treating a patient with
• 4:28
  Speaker 2: surgery or doing it a different way, but still doing surgery,
• 4:32
  Speaker 2: we're able to treat in a very different way, incorporating robotics,
• 4:37
  Speaker 2: targeted HIFU or high-intensity focused ultrasound, and treat the diseased tissue,
• 4:44
  Speaker 2: but leave the healthy tissue behind for that patient. So,
• 4:48
  Speaker 2: I think that the commercial efforts that we were involved
• 4:51
  Speaker 2: in or I was involved in back then are starting
• 4:54
  Speaker 2: to play out in a similar pattern here because we're
• 4:58
  Speaker 2: really in the exciting early part of the adoption lifecycle.
• 5:02
  Speaker 2: And I think, you know, again, we've got honestly right product,
• 5:06
  Speaker 2: you know, right market and right timing as a company
• 5:10
  Speaker 2: to capitalize on this.
• 5:13
  Speaker 1: And so, you know, you talked about the adoption curve
• 5:17
  Speaker 1: in urology for intuitive. And just the adoption gives a
• 5:22
  Speaker 1: shift in treatment, which is interesting. And so when we're
• 5:26
  Speaker 1: looking at prostate cancer, what is the current treatment paradigm
• 5:31
  Speaker 1: for the disease state? Because my understanding is that a
• 5:35
  Speaker 1: lot of the times you just have to sit there
• 5:37
  Speaker 1: and wait before you can be treated. So I guess
• 5:40
  Speaker 1: my first question is, Why is that the case? And
• 5:43
  Speaker 1: second off, then, is how can HIFU or focal one
• 5:48
  Speaker 1: create that shift in treatment?
• 5:51
  Speaker 2: Yeah, that's a great question. We're in a new era
• 5:55
  Speaker 2: of treating this disease. And again, as we know, prostate
• 6:00
  Speaker 2: cancer is the most common cancer diagnosed in men. Approximately
• 6:05
  Speaker 2: 300,000 newly diagnosed cases will occur this year just in
• 6:09
  Speaker 2: the U.S., You know, one out of eight men will
• 6:12
  Speaker 2: be diagnosed with prostate cancer. And the disease state in
• 6:16
  Speaker 2: totality will double in the next 14 years. So it
• 6:20
  Speaker 2: is a prevalent cancer, common cancer, but a growing cancer
• 6:24
  Speaker 2: in terms of more men being diagnosed with prostate cancer.
• 6:30
  Speaker 2: So I think where we're at today is exciting because
• 6:34
  Speaker 2: I saw the remnants of this when I left Intuita Surgical.
• 6:37
  Speaker 2: We were just entering into the fusion biopsy era. And
• 6:41
  Speaker 2: what that means is we were historically archaic in our
• 6:46
  Speaker 2: approach to performing the prostate cancer biopsy. Simply a template
• 6:50
  Speaker 2: would be placed over the prostate gland, four rows by
• 6:54
  Speaker 2: three rows of needles placed, and we'd only sample approximately 4%
• 6:58
  Speaker 2: of the prostate. And with that lack of fidelity and precision,
• 7:03
  Speaker 2: we were missing commonly 35%, plus percent of cancer, significant
• 7:08
  Speaker 2: cancers that may be found in the gland. Why that's
• 7:11
  Speaker 2: important is that that led to the use of overtreatment
• 7:15
  Speaker 2: with radical therapy, both surgery and radiation. And now the
• 7:21
  Speaker 2: protocol has moved in a very different direction. And now
• 7:25
  Speaker 2: we would image the prostate first with an MRI. We
• 7:28
  Speaker 2: would find the diseased areas or suspect areas and And
• 7:33
  Speaker 2: then we would then purposely biopsy into those defined areas
• 7:37
  Speaker 2: and then lay a template on top of that. And
• 7:40
  Speaker 2: why that's important is it allows us to perform the
• 7:44
  Speaker 2: biopsy in a more precise manner, leveraging all the advances
• 7:48
  Speaker 2: in imaging that we have today, and thus better risk
• 7:52
  Speaker 2: stratify the patient. And so today, if you had a
• 7:55
  Speaker 2: low-grade disease, Gleason 3 plus 3, let's say, you would
• 7:59
  Speaker 2: commonly be prescribed active surveillance. If you had a more
• 8:04
  Speaker 2: aggressive cancer, Gleason 4 plus 3 or 4 plus 4,
• 8:08
  Speaker 2: you may be a candidate certainly for radical treatments. But
• 8:11
  Speaker 2: what if you fall into this large intermediate risk category,
• 8:16
  Speaker 2: Gleason 3 plus 4, unilateral disease? What are you going
• 8:20
  Speaker 2: to do for that patient? Active surveillance or active monitoring
• 8:25
  Speaker 2: is not suitable for that typical patient. And aggressive therapy,
• 8:30
  Speaker 2: as we know, has side effects. Those side effects include
• 8:34
  Speaker 2: loss of erectile function, loss of urinary control. And so today,
• 8:39
  Speaker 2: what's exciting is we have this new emergence of the
• 8:42
  Speaker 2: category of focal therapy. We can see better than we
• 8:47
  Speaker 2: can in history, you know, with new advances in imaging
• 8:51
  Speaker 2: and more advances coming, including things like PSMA PET, AI,
• 8:56
  Speaker 2: interpreted imaging, etc., And we can see now where the
• 9:00
  Speaker 2: cancer is, the borders of the cancer, and simply go
• 9:03
  Speaker 2: in and target and ablate those areas, leaving thus the
• 9:07
  Speaker 2: healthy tissue behind. And by doing that, we reduce the
• 9:11
  Speaker 2: morbidity of the overall treatment and provide a better outcome
• 9:14
  Speaker 2: to the patient. Preservation of sexual function, preservation of urinary continence.
• 9:21
  Speaker 2: And we know that the treatment is efficacious and reproducible.
• 9:26
  Speaker 1: Yeah. And so actually let's dive deeper into the PSMA
• 9:30
  Speaker 1: PET scans, which if I got to correct, it's prostate
• 9:34
  Speaker 1: specific membrane antigen PET scan. How is the emergence of
• 9:39
  Speaker 1: that going to help with the diagnosing prostate cancer further?
• 9:45
  Speaker 1: And that seems like then that kind of goes into
• 9:47
  Speaker 1: one of the parts of the focal one system that
• 9:52
  Speaker 1: kind of goes under the radar. You talk about the
• 9:53
  Speaker 1: robotic arm. But it's really the high fusion image guiding
• 9:59
  Speaker 1: treatment planning. that seems to be almost as important, if
• 10:02
  Speaker 1: not more important. So how do those two combine to
• 10:05
  Speaker 1: kind of really get to that next level of kind
• 10:08
  Speaker 1: of diagnosis and treatment?
• 10:10
  Speaker 2: Yeah, so high fusion, which is a proprietary technology built
• 10:14
  Speaker 2: into the Focal One platform, allows us to bring disparate
• 10:17
  Speaker 2: imaging from any source directly into the machine. And then
• 10:22
  Speaker 2: the physician can set up their treatment plan based on
• 10:26
  Speaker 2: that imaging, including prostate cancer biopsy imaging. And so this
• 10:32
  Speaker 2: new era of advanced imaging to include PSMA PET, which
• 10:36
  Speaker 2: is an enhanced opportunity to image better, further, and with
• 10:40
  Speaker 2: more clarity in the MRI suite. We can see cancer
• 10:45
  Speaker 2: today in such a better light, call it, and the
• 10:48
  Speaker 2: borders around those tumors, and we can identify the index lesion,
• 10:53
  Speaker 2: which is really important when you treat the disease. So
• 10:56
  Speaker 2: by bringing those images directly into the machine, we can
• 10:59
  Speaker 2: thus simply set up a treatment plan and fuse that
• 11:03
  Speaker 2: image with a real-time ultrasound image. And that will guide
• 11:08
  Speaker 2: the treatment planning and, of course, the robotic therapeutic side
• 11:12
  Speaker 2: of the treatment where the robot delivers the HIFU energy
• 11:16
  Speaker 2: prescribed pulses with high precision. What's interesting in this story
• 11:22
  Speaker 2: is that we've evolved here, but if you look at
• 11:25
  Speaker 2: breast cancer in women, it would be archaic to think
• 11:29
  Speaker 2: today that you would put multiple biopsy needles in a
• 11:32
  Speaker 2: woman's breast. Commonly XY-coordinated stereotactic imaging allows to see into
• 11:39
  Speaker 2: the breast and find that tumor. What we've We've now
• 11:42
  Speaker 2: evolved here finally in urology and finally in prostate cancer
• 11:46
  Speaker 2: for men to take the improvements in imaging and apply
• 11:50
  Speaker 2: them accordingly. And all of this is leading into the growth,
• 11:54
  Speaker 2: the exciting growth and direction that we are driving in
• 11:58
  Speaker 2: this large emerging category of focal therapy.
• 12:02
  Speaker 1: Yeah, and So you're right, though, because it seems there's
• 12:06
  Speaker 1: two sides that seem so archaic with this process so
• 12:10
  Speaker 1: far is one, the imaging that you were saying, like
• 12:12
  Speaker 1: the actual probes that are going in versus, you know,
• 12:15
  Speaker 1: having a PET scan and having this technology readily available.
• 12:18
  Speaker 1: The other one just seems is that active surveillance. It
• 12:21
  Speaker 1: seems like it's one of the few cancers where current
• 12:25
  Speaker 1: treatment guidelines are saying you have to wait versus other
• 12:29
  Speaker 1: cancers where it's you want to treat it as soon
• 12:32
  Speaker 1: as possible before it progresses to a stage three or
• 12:35
  Speaker 1: a stage four. Is that, I mean, do you guys
• 12:39
  Speaker 1: pull your hair out thinking that like, why are we,
• 12:43
  Speaker 1: why is it so archaic still? And maybe this turns
• 12:46
  Speaker 1: into the part of the conversation where it's, what is,
• 12:49
  Speaker 1: what does it take for the surgeons or the, you know,
• 12:52
  Speaker 1: you know, AUA to be able to come out and say, okay,
• 12:55
  Speaker 1: we need to change how we look at the treatment
• 12:57
  Speaker 1: of prostate cancer.
• 12:58
  Speaker 2: Yeah, so these are really good discussion points because, you know,
• 13:01
  Speaker 2: remember to remind everyone prostate cancer is a heterogeneous cancer.
• 13:06
  Speaker 2: It's not one cancer. It's millions of cancers. And the
• 13:10
  Speaker 2: goal at time of diagnosis is to figure out what
• 13:13
  Speaker 2: is the epidemiology and makeup of your particular cancer. Is
• 13:18
  Speaker 2: it a low-grade cancer? Is it an aggressive form of
• 13:21
  Speaker 2: prostate cancer that could grow rapidly? Or is it, say,
• 13:25
  Speaker 2: favorable intermediate risk? Today, if you had low-grade cancer, it
• 13:31
  Speaker 2: would be common to be prescribed active surveillance or active monitoring.
• 13:36
  Speaker 2: It is a protocol. It's not a treatment. But because
• 13:39
  Speaker 2: you're going to present typically with no symptoms, if it
• 13:42
  Speaker 2: is a small indolent cancer, why not just monitor that
• 13:46
  Speaker 2: cancer and not treat it yet if you need to,
• 13:49
  Speaker 2: or not treat it at all if it never grows? However,
• 13:52
  Speaker 2: if you've got an aggressive form of prostate cancer, You
• 13:56
  Speaker 2: might require immediate treatment with options like surgery or radiation.
• 14:00
  Speaker 2: And that might be the proper course of action for
• 14:05
  Speaker 2: that particular patient. And active surveillance is really grown in utilization,
• 14:11
  Speaker 2: and it's been really a good thing for men. And
• 14:14
  Speaker 2: I say that because it moved us away from the
• 14:18
  Speaker 2: era of overtreatment. We lived in this— era of overtreatment
• 14:24
  Speaker 2: where men with low-grade cancers were getting aggressive treatment, radical treatments,
• 14:30
  Speaker 2: radical prostatectomy, multiple fractionated uses of radiation therapy. And the
• 14:37
  Speaker 2: problem with that is that there is a recurrence rate
• 14:41
  Speaker 2: risk with any treatment. But importantly, that these patients who
• 14:46
  Speaker 2: had low-grade cancers were getting treated with higher morbidity treatments,
• 14:50
  Speaker 2: aggressive treatments, and of course, left impotent and with loss
• 14:53
  Speaker 2: of urinary function. And so now today, we can better
• 14:57
  Speaker 2: risk stratify patients. And then we have a solution in
• 15:01
  Speaker 2: the middle today. In our case, focal one robotic HIFU
• 15:06
  Speaker 2: that can address a large audience of these patients at
• 15:09
  Speaker 2: time of diagnosis. Gotcha.
• 15:12
  Speaker 1: Okay. That makes sense then, because previously there was only
• 15:15
  Speaker 1: either extreme treatments or no treatments. And so that makes
• 15:20
  Speaker 1: a lot of sense. And so Let's just go into the,
• 15:22
  Speaker 1: you know, the focal, the high intensity focused ultrasound from
• 15:27
  Speaker 1: focal one, for example, because that is the treatment option.
• 15:30
  Speaker 1: I remember a couple of years ago when you were
• 15:32
  Speaker 1: on the episode, you talked about it was almost two wavelengths.
• 15:36
  Speaker 1: And when they intersect, that's where the energy comes to
• 15:41
  Speaker 1: destroy the tissue, the cancerous tissue. Is there a way to.
• 15:48
  Speaker 1: Describe that? Like, how does that actually work? Because I
• 15:53
  Speaker 1: was able to explain it kind of quickly in layman's terms,
• 15:56
  Speaker 1: but there has to be more to the technology than
• 15:58
  Speaker 1: just two waves intersect in the middle and gets to
• 16:02
  Speaker 1: the tissue.
• 16:04
  Speaker 2: Yeah. So the way to look at it is ultrasound
• 16:07
  Speaker 2: has been around for many years as an imaging source.
• 16:11
  Speaker 2: And we use, you know, low intensity ultrasound to image
• 16:15
  Speaker 2: and even diagnose today. And that's important because that is
• 16:20
  Speaker 2: commonly used obviously to perform the prostate cancer biopsy if
• 16:25
  Speaker 2: you take high intensity focused ultrasound that means we concentrate
• 16:30
  Speaker 2: uh the sound in a way in a very prescriptive
• 16:33
  Speaker 2: way at a prescribed distance and we concentrate those sound
• 16:37
  Speaker 2: waves we can we can generate uh controlled heat in
• 16:42
  Speaker 2: a certain space or at a certain target distance and
• 16:46
  Speaker 2: so um One of the analogies we use sometimes is
• 16:48
  Speaker 2: the magnifying glass with the sun. Being a child, you
• 16:53
  Speaker 2: might remember where you hold the magnifying glass from a
• 16:57
  Speaker 2: certain distance, you feel nothing. But if you concentrate those
• 17:00
  Speaker 2: rays of the sun on your hand or on a
• 17:03
  Speaker 2: piece of paper, you're going to notice there is heat generated.
• 17:06
  Speaker 2: We can use sound in a very similar way. And
• 17:10
  Speaker 2: you combine that with, say, technology like we've developed with
• 17:15
  Speaker 2: Focal 1. We have a five-axis robotic positioning system, but
• 17:19
  Speaker 2: also electronic beam steering that is proprietary to our platform.
• 17:25
  Speaker 2: And you look at all these things and then the
• 17:28
  Speaker 2: advances in high fusion and imaging, it really sets the
• 17:32
  Speaker 2: company up and our technology up nicely to address a
• 17:35
  Speaker 2: large audience of patients and give them a better option than, say,
• 17:40
  Speaker 2: radical treatments as described. Yeah.
• 17:43
  Speaker 1: And so, you know, some of the treatment options where we,
• 17:46
  Speaker 1: you know, we've combined the ultrasound, we've combined the imaging
• 17:50
  Speaker 1: to kind of create this, the focal one platform. There's
• 17:53
  Speaker 1: been multiple studies done. We talked in depth about the
• 17:56
  Speaker 1: HIFI study, which was combined, comparing HIFU with radical prostatectomy.
• 18:03
  Speaker 1: Since then, there's been a lineup of other studies. You know, HIFI-2,
• 18:08
  Speaker 1: you have the CGRD study, and then you have two
• 18:11
  Speaker 1: randomized control studies, FARP and HIFUSA, or HIFUSA. How do
• 18:19
  Speaker 1: you pronounce that acronym?
• 18:20
  Speaker 2: HIFUSA. HIFUSA.
• 18:21
  Speaker 1: Okay. You know, it's tough to choose which is your
• 18:24
  Speaker 1: favorite child, but out of those kind of follow-up studies
• 18:28
  Speaker 1: after HIFI, Which one did you come away and say, okay,
• 18:32
  Speaker 1: this should catch the attention of the urologists out there?
• 18:38
  Speaker 2: Well, they're all, I think, important studies. And, you know,
• 18:42
  Speaker 2: HiFi was the largest prospective study of its kind, you know,
• 18:45
  Speaker 2: and was published in December of 2024. And we know
• 18:50
  Speaker 2: that that study, which, by the way, is on HiFiStudy.com
• 18:54
  Speaker 2: as a website, is was over 3,200 patients, 46 centers,
• 18:59
  Speaker 2: 80 urologists. And it proved that HIFU and our technology
• 19:04
  Speaker 2: used exclusively in that study was not inferior to the
• 19:08
  Speaker 2: gold standard treatment, radical prostatectomy. And that is really important
• 19:13
  Speaker 2: because surgery has been around, albeit over a hundred years.
• 19:18
  Speaker 2: And even today done robotically, a radical prostatectomy is a
• 19:23
  Speaker 2: radical prostatectomy. It is a big surgery. You're cutting through
• 19:27
  Speaker 2: the dorsal venous complex, the levator muscles, the prostatic apex,
• 19:32
  Speaker 2: and a lot of other key anatomical boundaries. So there
• 19:35
  Speaker 2: is morbidity, as we know, associated with surgery. But that
• 19:39
  Speaker 2: study was an important study because it proved that we
• 19:43
  Speaker 2: were not inferior in cancer control outcomes. And we had
• 19:46
  Speaker 2: to prove that. We will win all day on the
• 19:49
  Speaker 2: functional complex. So, you know, again, preserving sexual function in
• 19:53
  Speaker 2: urinary continence. The other studies that are out there, HIFI-2
• 19:59
  Speaker 2: was published, and that involved 531 patients who failed primary
• 20:04
  Speaker 2: radiation therapy And with use of HIFU as a salvage treatment, 71%
• 20:11
  Speaker 2: of those patients were able to avoid androgen deprivation therapy
• 20:18
  Speaker 2: or hormone therapy at 30 months. And so that is
• 20:22
  Speaker 2: important because if you think about it, radiation failure is
• 20:26
  Speaker 2: cited in the literature anywhere from 15% to 30%. If
• 20:30
  Speaker 2: you fail radiation therapy, you may not have very good
• 20:33
  Speaker 2: options left. Hormone deprivation therapy means we're going to chemically
• 20:37
  Speaker 2: castrate you, turn off your testosterone to lower your PSA.
• 20:41
  Speaker 2: Surgery can be used, but it's a salvage surgery on
• 20:44
  Speaker 2: a radiated pelvis and a radiated prostate gland. So HIFI-2,
• 20:49
  Speaker 2: I think, is a notable study. FARP has not, Focal
• 20:53
  Speaker 2: Ablation Versus Radical Prostatectomy, is a randomized control trial. We're
• 20:58
  Speaker 2: hoping to see that published this year. That's important because
• 21:02
  Speaker 2: it really activates mirrors the endpoints that were presented and
• 21:07
  Speaker 2: met in the HIFI study. But this, again, was a
• 21:11
  Speaker 2: comparative arm of focal ablation versus radical prostatectomy. And then
• 21:16
  Speaker 2: the HIFUSA study, real quick, is a phase three randomized
• 21:19
  Speaker 2: trial comparing HIFU versus active surveillance. And the question is,
• 21:25
  Speaker 2: can HIFU delay or reduce the need for radical treatments,
• 21:29
  Speaker 2: such as surgery or radiation, with patients with grade group
• 21:34
  Speaker 2: one disease. So that's going to be a very important study.
• 21:38
  Speaker 2: It'll come out next year. And it looks at everything
• 21:42
  Speaker 2: from SHIM scores to urinary symptom scores to the patient's
• 21:46
  Speaker 2: anxiety score of not getting a treatment. And so these
• 21:51
  Speaker 2: are all important studies and certainly more to come from
• 21:55
  Speaker 2: individual academic centers that we're excited about.
• 21:57
  Speaker 1: Now, does that last one, Hyphusa, go... to kind of
• 22:00
  Speaker 1: what I was talking about earlier about why is the
• 22:03
  Speaker 1: disease not being treated earlier in earlier stages? Is that
• 22:08
  Speaker 1: potentially that inflection point where you can start treating it
• 22:12
  Speaker 1: at a stage one because you don't need to wait
• 22:16
  Speaker 1: to get to a stage four because you don't need
• 22:18
  Speaker 1: to no longer risk the morbidities of urinary incontinence or
• 22:24
  Speaker 1: erectile dysfunction? Is that the how you are hoping that
• 22:30
  Speaker 1: it plays out?
• 22:32
  Speaker 2: Yeah, I would say so. I would say that if
• 22:34
  Speaker 2: you had a low-grade cancer today, and as a man,
• 22:37
  Speaker 2: and we're men here, diagnosed with cancer, I think our
• 22:41
  Speaker 2: immediate thought is, how should we be treating it? And
• 22:44
  Speaker 2: so by not treating it, going on active monitoring or
• 22:47
  Speaker 2: active surveillance, there is some anxiety, there's some questions in
• 22:51
  Speaker 2: your mind, and you have to be compliant on the protocol. Here,
• 22:58
  Speaker 2: For patients who want to be treated with something, we
• 23:01
  Speaker 2: now have an option for them, whereas years ago, they
• 23:05
  Speaker 2: may jump all the way over to radical treatments. And
• 23:09
  Speaker 2: I think the opportunity here is it gives you more
• 23:12
  Speaker 2: runway to be on a monitoring protocol. And as noted,
• 23:18
  Speaker 2: when the results come out, I think they're going to
• 23:20
  Speaker 2: show favorability to and supportive use of HIFU under certain
• 23:25
  Speaker 2: conditions amongst a subset of patients. So I think it's
• 23:29
  Speaker 2: an important study, one that a lot of doctors have
• 23:31
  Speaker 2: been asking about.
• 23:32
  Speaker 1: Well, yeah, no, it's like I said, this breadth of
• 23:36
  Speaker 1: clinical data for prostate cancer seems like a good base
• 23:42
  Speaker 1: for how you can be able to expand that adoption.
• 23:45
  Speaker 1: But I also know that prostate cancer isn't the only
• 23:48
  Speaker 1: condition that focal one is looking to treat. Kind of
• 23:53
  Speaker 1: a similar vein would be BPH, benign prostate hypoplasia. How
• 24:02
  Speaker 1: does the technology be able to treat that? Is it
• 24:06
  Speaker 1: a similar mechanism of combining the imaging with the ultrasound waves,
• 24:16
  Speaker 1: but just for the benign cases?
• 24:17
  Speaker 2: Or is there something....
• 24:21
  Speaker 1: Additional that needs to be used to develop focal one
• 24:24
  Speaker 1: to treat that condition?
• 24:27
  Speaker 2: Yeah. So when we got into BPH, really, it was
• 24:30
  Speaker 2: a natural progression. We're already treating disease in the prostate gland.
• 24:34
  Speaker 2: And in fact, when we were treating prostate cancer patients,
• 24:38
  Speaker 2: one of the outcomes was a lot of patients post-treatment
• 24:41
  Speaker 2: were saying that they were urinating better. And so that
• 24:44
  Speaker 2: would make sense because we're creating a necrotic effect inside
• 24:48
  Speaker 2: the prostate gland, thus relaxing the pressure on the prostatic urethra.
• 24:53
  Speaker 2: So the opportunity here, I think, is exciting because we
• 24:58
  Speaker 2: are placing more systems globally and our efforts are underway
• 25:03
  Speaker 2: already with multiple studies, which I'll comment on. But if
• 25:07
  Speaker 2: we can see, you know, the prostatic urethra and we
• 25:10
  Speaker 2: can lay down an ablation zone outside of the urethra,
• 25:15
  Speaker 2: we can create a that can be delivered in an
• 25:19
  Speaker 2: outpatient setting in a short amount of time and probably
• 25:23
  Speaker 2: have very few, very infrequent complications. And, you know, it's
• 25:30
  Speaker 2: common that a subset of men, 30% of men, are
• 25:35
  Speaker 2: seeking BPH treatments, are on antiplatelet or anticoagulant therapy. Oh, interesting.
• 25:42
  Speaker 1: So it probably just amplifies the potential bleeding risk.
• 25:46
  Speaker 2: That's right. And so here we could offer a treatment
• 25:49
  Speaker 2: that requires or involves no loss of blood, and they
• 25:53
  Speaker 2: wouldn't have to come off drug therapy or blood thinners.
• 25:59
  Speaker 2: But also, it's a treatment that would allow you to
• 26:03
  Speaker 2: preserve the prostatic urethra. So we don't enter the urethra.
• 26:08
  Speaker 2: We work outside the urethra, kind of like taking your
• 26:12
  Speaker 2: foot off the garden hose. You're relaxing that pressure. So
• 26:16
  Speaker 2: we're excited about this. Now, we've got three studies underway,
• 26:20
  Speaker 2: one here in New York that we're recruiting for at
• 26:23
  Speaker 2: Mount Sinai Medical Center. We've got a study in Latin
• 26:28
  Speaker 2: America or South America in Chile that We're following up
• 26:31
  Speaker 2: on that subset of patients. And then we have a
• 26:33
  Speaker 2: combined phase one, two study in Europe going on. And
• 26:37
  Speaker 2: all of these things are happening simultaneously. Our goal is
• 26:40
  Speaker 2: to have a data readout here by the end of
• 26:42
  Speaker 2: the year and then launch into a pivotal study, you know,
• 26:47
  Speaker 2: the beginning of next year with an FDA submission later
• 26:51
  Speaker 2: next year. Now, I do want to point out today
• 26:54
  Speaker 2: we actually have reimbursement for HIFU to treat BPH. Okay.
• 26:58
  Speaker 2: It's a Category 3 CPT code. It pays at APC
• 27:02
  Speaker 2: level 6. And we have language on our FDA clearance
• 27:07
  Speaker 2: that's inclusive of ablation of prostate tissue. So we think
• 27:11
  Speaker 2: the pathway for us getting an on-label clearance from the
• 27:16
  Speaker 2: FDA is relatively straightforward because we're coming from cancer, a
• 27:22
  Speaker 2: direction of cancer to benign disease.
• 27:24
  Speaker 1: Yeah. I don't even... I'm struggling to think of a
• 27:30
  Speaker 1: similar case where it seems like you have everything lined
• 27:34
  Speaker 1: up except for the on-label approval. Because like you said,
• 27:39
  Speaker 1: you have the approval for destroying the tissue. That Category
• 27:43
  Speaker 1: 3 reimbursement, is that a Category 3 reimbursement for other
• 27:47
  Speaker 1: BPH treatments as well? Or is that specifically for HIFU?
• 27:50
  Speaker 2: It's specific to use of HIFU.
• 27:52
  Speaker 1: Okay. Once again, it just seems like that... Normally you
• 27:55
  Speaker 1: think of like the FDA approval, then you get reimbursement,
• 27:58
  Speaker 1: but it does seem like you've got more of the
• 28:01
  Speaker 1: ducks in a row ahead of approval than some of
• 28:04
  Speaker 1: the other companies do. Let me just ask for the,
• 28:08
  Speaker 1: you talked about the launch of the Pivotal sometime next year, potentially.
• 28:12
  Speaker 1: Is that going to be also a comparative study to
• 28:18
  Speaker 1: other treatment options out there or because it's a benign condition,
• 28:24
  Speaker 1: You don't need to have that strict of a design
• 28:29
  Speaker 1: for your clinical trial.
• 28:30
  Speaker 2: And that's a good question. In its final context, I
• 28:35
  Speaker 2: can't really answer that yet. I would say most commonly
• 28:39
  Speaker 2: we're going to be looking at safety profile of the treatment,
• 28:42
  Speaker 2: durability of the treatment. You're going to look at the
• 28:45
  Speaker 2: common measurements like the international prostate symptom score and other
• 28:52
  Speaker 2: urinary measurements that define flow and flow rate and everything else. So, yeah,
• 29:01
  Speaker 2: I really can't prescribe yet what we're going to be
• 29:04
  Speaker 2: doing in that study. We'll have enough data to get
• 29:08
  Speaker 2: in front of the FDA to really make a decision
• 29:11
  Speaker 2: as to what they would like to see. And of course,
• 29:16
  Speaker 2: you know, we've already been treating patients and we think,
• 29:19
  Speaker 2: you know, the fact that we have the technology today
• 29:21
  Speaker 2: that can do more than one treatment and it sets
• 29:25
  Speaker 2: up very well. It's a short duration treatment time and
• 29:28
  Speaker 2: can be reproduced and doctors can learn. It gives us
• 29:34
  Speaker 2: an opportunity to, you know, show the value and expanded
• 29:37
  Speaker 2: utility of what focal one can do and terms of
• 29:40
  Speaker 2: addressing more disease and addressing more patients globally.
• 29:44
  Speaker 1: Yeah, I feel like I've been saying inflection point a
• 29:46
  Speaker 1: lot because I think with this technology, there is a
• 29:48
  Speaker 1: lot of inflection points there. But because it's a capital
• 29:51
  Speaker 1: equipment that has to be initially invested by the hospital,
• 29:54
  Speaker 1: the ASC, Are there centers that are waiting for multiple
• 30:00
  Speaker 1: indications before they invest into the focal one? Or are
• 30:05
  Speaker 1: you starting to see some investing in it because they
• 30:07
  Speaker 1: know that these other indications.
• 30:10
  Speaker 2: Are in the horizon? That's a very good point. So
• 30:14
  Speaker 2: a couple of things I can point to is in
• 30:16
  Speaker 2: our first quarter this year, three of our outside U.S.
• 30:19
  Speaker 2: sales came from providing an additional treatment on the same machine.
• 30:26
  Speaker 2: In this case, it was endometriosis. But you bring up
• 30:30
  Speaker 2: a valid point. I think today when we talk to hospitals,
• 30:35
  Speaker 2: we sell a clinically necessary strategic revenue-enhancing service line in
• 30:42
  Speaker 2: the number one diagnosed cancer in men that brings immediate
• 30:45
  Speaker 2: and tangible economic reward. Now, I know that's a mouthful,
• 30:49
  Speaker 2: but that gets the attention of the C-suite in the hospital.
• 30:52
  Speaker 1: Yeah, it might be a mouthful, but it gets right
• 30:55
  Speaker 1: to the point.
• 30:56
  Speaker 2: Yes. And so there's enough there. And the value of
• 30:59
  Speaker 2: the prostate cancer patient is really anchors your kind of
• 31:02
  Speaker 2: whole men's health initiative within a hospital as a provider.
• 31:06
  Speaker 2: So we've had a success already with prostate cancer. I
• 31:11
  Speaker 2: think it's very important to think about the other indications
• 31:15
  Speaker 2: and their additive. And so, you know, we have brought
• 31:20
  Speaker 2: it up in conversation. I think customers look at us
• 31:23
  Speaker 2: as a company as, not only the value that we
• 31:27
  Speaker 2: can bring to them as a customer, but I think
• 31:31
  Speaker 2: more importantly, too, that we're investing in the technology. We're
• 31:35
  Speaker 2: committed to growing the technology and staying in front of
• 31:38
  Speaker 2: the market and being additive to new complementary technologies within
• 31:44
  Speaker 2: the Focal One ecosystem. Okay.
• 31:47
  Speaker 1: Yeah, I think that's, I mean, like I said, I
• 31:49
  Speaker 1: think your elevator pitch right there You said it was
• 31:53
  Speaker 1: a mouthful, but it got right to the point of
• 31:55
  Speaker 1: what you're doing with this technology. You highlighted endometriosis as
• 32:00
  Speaker 1: an indication that some of the European hospitals are utilizing.
• 32:04
  Speaker 1: And so let's jump into that European launch so far.
• 32:07
  Speaker 1: And I think let's just start off with what exactly
• 32:10
  Speaker 1: is endometriosis?
• 32:12
  Speaker 2: So endometriosis is a condition women experience where the endometrial cells,
• 32:17
  Speaker 2: the inner cells of the uterus, populate and and produce
• 32:24
  Speaker 2: themselves outside of the uterus. And in these situations, they
• 32:29
  Speaker 2: may appear in the peritoneum space. They may appear in
• 32:32
  Speaker 2: the bladder. They can go in multiple directions. Because the
• 32:37
  Speaker 2: rectum is right up in proximity to the uterus, it's
• 32:41
  Speaker 2: a common area for, in advanced stages of endometriosis, for
• 32:45
  Speaker 2: these endometrial implants to present. And of course, With endometriosis,
• 32:51
  Speaker 2: whether it's grade 1, 2, 3, or grade 4 in
• 32:54
  Speaker 2: our case, it creates pain for women tied in directly
• 33:00
  Speaker 2: or indirectly with their menstrual cycle. And so, you know,
• 33:04
  Speaker 2: there are multiple ways to treat the disease. But I
• 33:08
  Speaker 2: think in the direction that we are going as a company,
• 33:12
  Speaker 2: we're really focused in stage 4 endometriosis. Okay. And you have.
• 33:18
  Speaker 1: in the outside of the U S the limited European launch,
• 33:21
  Speaker 1: it sounds like you already have some hospitals already acquiring
• 33:25
  Speaker 1: that indication. What, what is the plans for the rest
• 33:28
  Speaker 1: of the year to expand that limited launch and then
• 33:30
  Speaker 1: transition that into a full launch?
• 33:33
  Speaker 2: So today we've got 11 centers, um, that are in
• 33:37
  Speaker 2: CE mark countries that have now entered the focal one
• 33:41
  Speaker 2: endometriosis training pathway. And so they're moving through that pathway. Um,
• 33:47
  Speaker 2: Some are in Europe, some are in the UK, one
• 33:50
  Speaker 2: site in Eastern Europe, one site in Latin America, etc.
• 33:55
  Speaker 2: So what's exciting there is that, you know, there's no
• 33:59
  Speaker 2: lack of interest, but we have a controlled launch and
• 34:02
  Speaker 2: we want to be very prescriptive as we roll this out.
• 34:07
  Speaker 2: And so we're working through a number of things in
• 34:10
  Speaker 2: the training pathway, training protocols. There's an imaging component to this,
• 34:15
  Speaker 2: similar as there is for prostate cancer. where an MRI
• 34:18
  Speaker 2: image will define where the location is of the endometrial
• 34:24
  Speaker 2: implants and the ones to be concerned with. And then,
• 34:28
  Speaker 2: of course, we use the same machine, the same technology,
• 34:31
  Speaker 2: Focal One, to go in and ablate these implants on
• 34:35
  Speaker 2: the rectal wall. And something I think it's important to
• 34:39
  Speaker 2: bring up is in stage four endometriosis, women don't have
• 34:44
  Speaker 2: very many options. It's typically a surgical resection or partial
• 34:49
  Speaker 2: resection of the rectum, which, when you think about it,
• 34:53
  Speaker 2: is a big surgery for something benign in nature.
• 34:56
  Speaker 1: Right.
• 34:57
  Speaker 2: And so here, if we can use the advances in imaging,
• 35:00
  Speaker 2: as we spoke about earlier, and see these implants in
• 35:04
  Speaker 2: real time, target them, we can treat these patients, these women,
• 35:08
  Speaker 2: and they'll avoid surgery and avoid the complications of surgery,
• 35:12
  Speaker 2: be able to preserve uterine function. and return to normal
• 35:17
  Speaker 2: daily activities.
• 35:19
  Speaker 1: And so, you know, you have these 11 centers that
• 35:22
  Speaker 1: are going through the training of endometriosis in CE-marked countries.
• 35:26
  Speaker 1: What are the steps for U.S.
• 35:29
  Speaker 2: Approval? So on the U.S. side, we were awarded a
• 35:33
  Speaker 2: breakthrough device designation by the FDA, and we've been waiting
• 35:38
  Speaker 2: for the result of the randomized control trials. And so
• 35:43
  Speaker 2: if you remember in this trial that we did in France,
• 35:47
  Speaker 2: once women were unblinded to treatment, they had a right
• 35:52
  Speaker 2: to access the treatment per protocol. So 84% of those
• 35:56
  Speaker 2: women decided to get a focal one procedure. Now, they
• 35:59
  Speaker 2: thought they had technically gotten treated, and that's part of
• 36:03
  Speaker 2: the blinding process. But once unblinded, they were offered the treatment.
• 36:07
  Speaker 2: We then kicked off a study to follow up that
• 36:11
  Speaker 2: subset of women. out a number of months, six months,
• 36:15
  Speaker 2: 12 months, and beyond. We're now done with that follow-up,
• 36:19
  Speaker 2: and the manuscript is actually being developed right now for
• 36:22
  Speaker 2: submission to a major top-tier journal, scientific journal. So that
• 36:27
  Speaker 2: data set will be very important to get back in
• 36:29
  Speaker 2: front of the FDA, and that'll shape where we go
• 36:31
  Speaker 2: next in pursuing a clearance in the U.S.
• 36:35
  Speaker 1: Okay. All right. Interesting. And the other thing, too, that
• 36:39
  Speaker 1: caught my attention during the investor day is your development
• 36:46
  Speaker 1: plans for histotripsy, which is interesting because we started the
• 36:49
  Speaker 1: conversation today on lithotripsy, then we went into the high-intensity
• 36:54
  Speaker 1: focused ultrasound, and now it seems like we're going full
• 36:57
  Speaker 1: circle back to histotripsy. So let me just start with asking,
• 37:01
  Speaker 1: how is histotripsy going to be different from the high-intensity
• 37:06
  Speaker 1: focused ultrasound?
• 37:08
  Speaker 2: So the way to think of sound, and we go
• 37:11
  Speaker 2: back in our history, and you mentioned lithotripsy. Basic lithotripsy
• 37:17
  Speaker 2: is really using sound to create pressure. We can use
• 37:22
  Speaker 2: sound waves and empower them in a certain prescribed manner
• 37:26
  Speaker 2: to create pressure. We developed technology to break up kidney
• 37:29
  Speaker 2: stones within the kidney without doing surgery. We then developed HIFU,
• 37:33
  Speaker 2: which is using sound waves to develop heat. in a
• 37:37
  Speaker 2: very prescribed manner at a prescribed distance. Histotripsy is using
• 37:42
  Speaker 2: sound to create a mechanical reaction to tissue. So it's
• 37:47
  Speaker 2: a natural progression for us and our DNA as a
• 37:51
  Speaker 2: sound-based therapy company to move in this direction. And so
• 37:55
  Speaker 2: we've been working on histotripsy now for a period of time.
• 37:59
  Speaker 2: We have a dedicated team. We filed some very important
• 38:03
  Speaker 2: notable patents right around June 1st at our investor day,
• 38:07
  Speaker 2: and we announced some of that during the investor day.
• 38:11
  Speaker 2: And so for us, our thinking is that HIFU is
• 38:14
  Speaker 2: very valuable as a therapeutic treatment, but histotripsy may have
• 38:19
  Speaker 2: some added value. We can develop a platform that can
• 38:23
  Speaker 2: do HIFU or histotripsy or combine the two on a
• 38:28
  Speaker 2: single platform. And we're already into endoluminal treatments today or
• 38:33
  Speaker 2: natural orifice approach to treating disease. We come transrectal. And
• 38:38
  Speaker 2: so that requires no incision, no bleeding, no complications related
• 38:43
  Speaker 2: to surgery, no use of radiation or anything like that.
• 38:47
  Speaker 2: So we're excited about this because it would allow us,
• 38:50
  Speaker 2: I believe, to broaden the application of our platform, but
• 38:54
  Speaker 2: also treat a wider range of pathology and disease. And
• 39:00
  Speaker 2: so we're very excited about it. And we've been more
• 39:06
  Speaker 2: outward in how we've socialized that to the investment community
• 39:09
  Speaker 2: just because of other technologies that have been referenced out
• 39:11
  Speaker 2: in the market. Yeah.
• 39:13
  Speaker 1: And I think that goes back to then the June
• 39:15
  Speaker 1: 1st investor day you had. I mean, now we're seeing
• 39:17
  Speaker 1: a step function here from prostate cancer, BPH, endometriosis, adding
• 39:22
  Speaker 1: the histotripsy technology. So, you know, as we kind of
• 39:25
  Speaker 1: summarize all those steps together, how do you see this
• 39:29
  Speaker 1: all playing? out in your vision and the strategy for
• 39:32
  Speaker 1: FocalTherics over the next few years?
• 39:35
  Speaker 2: So a couple of things, I mean, based on our
• 39:38
  Speaker 2: discussion today, you know, FocalOne Robotic Haifu is a leading
• 39:42
  Speaker 2: platform in focal therapy and it's a multi-indication platform. So
• 39:48
  Speaker 2: we can do more on a single platform than, say,
• 39:51
  Speaker 2: compared to other technologies. We incorporate robotics, advanced imaging. We
• 39:57
  Speaker 2: have deep history in the development of HIFU and HIFU-related
• 40:00
  Speaker 2: technologies that are proprietary to our platform. And so the
• 40:05
  Speaker 2: way I look at it, if you look outward, we're
• 40:08
  Speaker 2: in men's health with prostate cancer, working on BPH. We're
• 40:13
  Speaker 2: already activating on endometriosis in women's health. That's outside the U.S. So,
• 40:19
  Speaker 2: you know, our business model is, you know, scale the business,
• 40:24
  Speaker 2: place more systems, do more procedures, and really, you know,
• 40:29
  Speaker 2: define ourself as the market leader driving the category of
• 40:33
  Speaker 2: focal therapy and robotic focal therapy. Interesting.
• 40:37
  Speaker 1: And then, yeah, you talk about scaling the business. And so, Ken,
• 40:40
  Speaker 1: let's jump into some of those financials here. You know,
• 40:44
  Speaker 1: when you talk about some of the 2028 financial outlook goals,
• 40:48
  Speaker 1: you know, there's 40%, um, revenue growth per year. There's, um,
• 40:54
  Speaker 1: you know, in the path to break even operating income
• 40:57
  Speaker 1: and positive EBITDA. What's, how comfortable do you feel about
• 41:01
  Speaker 1: getting to those metrics? And then when you're thinking about
• 41:04
  Speaker 1: break even operating income, is that just simply a result
• 41:10
  Speaker 1: of that revenue growth or is there other efficiencies that
• 41:12
  Speaker 1: you see that you need to make investments in?
• 41:15
  Speaker 2: Sure. Um, Great question.
• 41:18
  Speaker 3: So, you know, when you look at our business over time, our,
• 41:21
  Speaker 3: you know, our whole goal the last couple of years
• 41:23
  Speaker 3: is how do we unlock the value of Haifu? If
• 41:26
  Speaker 3: you look back on our business a couple of years ago, 65%
• 41:30
  Speaker 3: of our business was in our non-core businesses, our ESWL
• 41:34
  Speaker 3: and distribution, and 35% of our business was in Haifu.
• 41:38
  Speaker 3: And if you fast forward now to 2026 and the
• 41:42
  Speaker 3: guidance we gave for the company, It's flipped. 65% of
• 41:46
  Speaker 3: our business is now HIFU and 35% is our non-core,
• 41:51
  Speaker 3: which as we announced on June 1st and we implemented
• 41:55
  Speaker 3: in our Q2 results, those are now part of discontinued operations.
• 41:59
  Speaker 3: So by doing that on the P & L, we
• 42:01
  Speaker 3: really feel we can unlock the value of HIFU. Revenue growth, 40%
• 42:07
  Speaker 3: year over year. Gross margins now over 50%. And we're
• 42:12
  Speaker 3: going to continue to do that in a couple different areas. First,
• 42:16
  Speaker 3: we're going to continue to drive revenue, okay? Good, strong,
• 42:19
  Speaker 3: disciplined pricing. Our procedure volumes are going to be increasing
• 42:23
  Speaker 3: over time. And as a result of that, we're also
• 42:26
  Speaker 3: going to be focusing on the margin elements, right? When
• 42:29
  Speaker 3: we sell procedures, right, and we do procedures, those are
• 42:33
  Speaker 3: high margin businesses. So we're going to continue to see
• 42:36
  Speaker 3: that evolve, okay? We're also going to continue to focus
• 42:39
  Speaker 3: on on cost reductions with our material in the factory.
• 42:43
  Speaker 3: And then also as we drive more throughput, we're going
• 42:47
  Speaker 3: to see a lot of absorption. So when you look
• 42:49
  Speaker 3: at those critical areas, that's where we feel strongly our
• 42:54
  Speaker 3: margins will continue to accelerate to those targets of 60%.
• 42:58
  Speaker 3: And we feel very good right now. We will be
• 43:01
  Speaker 3: at operating profit breakeven in 2028 and then being operating
• 43:06
  Speaker 3: profit positive in 2029. And because we've been executing on
• 43:11
  Speaker 3: everything we said we were going to do, you know,
• 43:13
  Speaker 3: as a reminder, on January 1st, we became a domestic issuer. We,
• 43:20
  Speaker 3: as Brian mentioned earlier, on June 1st, we announced our
• 43:23
  Speaker 3: new brand name, new ticker symbol. We continued to execute
• 43:29
  Speaker 3: on our first half results. We were able to put
• 43:32
  Speaker 3: everything in discontinued operations. And that allowed us to go
• 43:35
  Speaker 3: out and do the equity raise. here last month, where
• 43:39
  Speaker 3: now we've really strengthened our balance sheet, putting a little
• 43:43
  Speaker 3: over $ 40 million of incremental cash on our balance sheet
• 43:47
  Speaker 3: going forward.
• 43:48
  Speaker 1: Yeah, it's interesting. I noticed the first 10K that was
• 43:51
  Speaker 1: published on your SEC filings instead of the 20F, which
• 43:54
  Speaker 1: was that transition to that American base. I'm just out
• 43:57
  Speaker 1: of curiosity, too. I mean, you're hearing a lot of
• 44:00
  Speaker 1: other robotic companies, you know, soft tissue, knees, hips. You know,
• 44:07
  Speaker 1: they're talking about that transition more to the leasing or
• 44:09
  Speaker 1: the value-based models instead of an outright purchase given, you know,
• 44:14
  Speaker 1: the high costs, upfront costs of these robots. Is that
• 44:18
  Speaker 1: something that you're seeing as well in the prostate side?
• 44:21
  Speaker 1: Or is it a different kind of business model because,
• 44:24
  Speaker 1: you know, just because it's a different business model?
• 44:26
  Speaker 2: Yeah.
• 44:27
  Speaker 3: In our business, we're very cash sales centric.
• 44:32
  Speaker 2: Okay.
• 44:32
  Speaker 3: There's immediate value for the hospital, the doctor. So we
• 44:37
  Speaker 3: don't see a lot of that. We do do some
• 44:39
  Speaker 3: bridge-to-buys where the hospital might be coming on a new
• 44:44
  Speaker 3: operating year, and so they might need to wait a
• 44:47
  Speaker 3: few months to purchase. So we will do a bridge-to-buy
• 44:50
  Speaker 3: where they'll do an operating lease for several months, and
• 44:54
  Speaker 3: then they will convert over to a CAS.
• 44:56
  Speaker 1: Interesting. Okay. And then as we kind of close out,
• 44:59
  Speaker 1: we're here in September. September is Prostate Cancer Awareness Month.
• 45:03
  Speaker 1: As leaders in the space, I mean, what is your
• 45:06
  Speaker 1: message to the patients and survivors of prostate cancer? And
• 45:10
  Speaker 1: then what is the hope of treating this disease in
• 45:15
  Speaker 1: the future?
• 45:16
  Speaker 2: Yeah, I think it's an exciting era that we're in now.
• 45:19
  Speaker 2: And we talked about the progression of how we can
• 45:22
  Speaker 2: better risk stratify patients and thus provide incremental or better treatments.
• 45:27
  Speaker 2: And so really this month is about the patient. And,
• 45:31
  Speaker 2: you know, the way I think about it is patients,
• 45:35
  Speaker 2: that is men, you know, be vigilant on getting your
• 45:40
  Speaker 2: PSA test. Be focused on what your options are. There
• 45:45
  Speaker 2: are new options that have emerged here in our case,
• 45:49
  Speaker 2: focal one robotic HIFU. But, you know, there's a large
• 45:53
  Speaker 2: audience of patients out there that, you know, are still
• 45:57
  Speaker 2: trying to decide what treatment may be best for them
• 45:59
  Speaker 2: and this, that, and the other. I think the most
• 46:01
  Speaker 2: important thing is be curious, be aware, and there's lots
• 46:07
  Speaker 2: of resources out there. You know, we as a company
• 46:10
  Speaker 2: are highly committed to this month. And prostate cancer should
• 46:14
  Speaker 2: never be celebrated only as a month. It's a disease
• 46:17
  Speaker 2: that affects men around the world each and every day.
• 46:20
  Speaker 2: And so for this month, we're excited. We do things
• 46:23
  Speaker 2: every year to galvanize further around what we're doing in
• 46:27
  Speaker 2: prostate cancer. We have 14 patient education events going on
• 46:31
  Speaker 2: this month. We're going to be running three TV segments
• 46:36
  Speaker 2: that will be airing throughout this month, one in Manchester,
• 46:39
  Speaker 2: New Hampshire, one in Orlando, Florida, and one in Temple, Texas.
• 46:44
  Speaker 2: We have a number of educational activities that are focused
• 46:48
  Speaker 2: on our website, which is myfocaltherapy.com. And any listener out
• 46:54
  Speaker 2: there who may have prostate cancer or a friend or
• 46:57
  Speaker 2: relative or somebody they know, I would just say seek
• 47:01
  Speaker 2: out your options today. And there are better treatments out
• 47:04
  Speaker 2: there that are efficacious in treating the disease but leave
• 47:09
  Speaker 2: you with a better quality of life outcome.
• 47:11
  Speaker 1: Yeah, it's definitely something that I'll take to heart as
• 47:14
  Speaker 1: I have my annual physical coming up in the next
• 47:16
  Speaker 1: couple months. And thank you to our producers, Adidius Amani
• 47:20
  Speaker 1: and Mariam Thawele, for all the behind-the-scenes work. And to
• 47:23
  Speaker 1: our listeners for tuning in today. We hope you join
• 47:25
  Speaker 1: us for the future episodes. And if you'd like to
• 47:27
  Speaker 1: stay up to date, you can click the subscribe button
• 47:29
  Speaker 1: on Spotify or your favorite streaming platform.
• 47:31
  Speaker 2: Take care.
• 48:03
  Speaker 1: Thank you.