EDAP TMS (EDAP) Q2 FY24 Earnings call transcript Aug 28, 2024
EDAP TMS, a leading provider of minimally invasive, image-guided treatments for cancer and urological diseases, recently reported strong second-quarter financial results. The company achieved a revenue growth of 10.6% year-over-year, totaling EUR 15.8 million (USD 15.8 million). This growth was driven by a 63% increase in U.S. Focal One HIFU procedure growth, which is a testament to the increasing acceptance of the technology among top cancer centers.
Key Highlights and Trends
The company's growth is particularly noteworthy due to its strategic placements in key institutions such as the City of Hope National Medical Center in Los Angeles and Robert Wood Johnson University Hospital in New Jersey. These placements underscore the confidence of these leading medical institutions in the Focal One technology platform. Moreover, the first placement of Focal One in a VA health care system marks a significant milestone in expanding access to the technology for a larger patient base.
Investor Insights
During the earnings call, investors and analysts expressed concerns about the gross margin and the capital expenditure environment in hospital customers. The company attributed the lower gross margin to a shift in product mix and the need to transfer vendors. However, they are confident that the new vendor will improve margins going forward. Regarding capital expenditures, the company noted that longer approval cycles in hospitals are delaying sales, especially in the back half of the year.
Looking Ahead
EDAP TMS is poised for continued growth, particularly in the areas of endometriosis treatment and benign prostatic hyperplasia (BPH). The company is conducting a Phase III study evaluating robotic HIFU therapy for deep infiltrating endometriosis, with promising results so far. The study is expected to provide further insights into the safety and efficacy of the treatment, potentially paving the way for expanded use of HIFU for endometriosis.
In the realm of BPH, the company recently received approval to initiate a Phase I/II clinical trial investigating Focal One HIFU in the treatment of BPH. This marks a significant step towards expanding the use of Focal One beyond prostate cancer, tapping into the large and growing market opportunity.
Conclusion
EDAP TMS's strong second-quarter performance, strategic placements, and expansion plans highlight its commitment to innovation and growth. The company's focus on clinical development and regulatory approvals, especially in the areas of endometriosis and BPH, positions it well for continued success. As EDAP TMS navigates the challenges and opportunities in the healthcare sector, it remains a company to watch for investors and stakeholders alike.