Profound Medical Corp. (PRN) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Profound Medical First Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Stephen Kilmer, Investor Relations. Please go ahead.

Thank you. Good afternoon, everyone. Let me start by pointing out that this conference call will include forward-looking statements within the meaning of applicable securities laws in the United States and Canada. All forward-looking statements are based on Profound's current beliefs, assumptions and expectations and relate to, among other things, expectations regarding the efficacy of the company's treatment technologies, results of future clinical trials, the ability to obtain coding and/or reimbursement from third-party payers, anticipated financial performance, business prospects, strategies, regulatory developments, market acceptance and future commitments. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. No forward-looking statement can be guaranteed. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this conference call. Profound undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law. For the benefit of those who are new to the repo story, I would also like to take a moment to summarize our business. Profound develops and markets customizable incision-free therapies for the ablation of disease tissue. We are currently commercializing TULSA-PRO, a technology that combines real-time MRI robotically driven transurethral ultrasound and closed-loop temperature feedback control. The technology is designed to provide customizable and predictable radiation-free inflation of a surgeon defied prostate volume while actively protecting the urethra and rectum to help preserve the patient's natural functional ability. TULSA-PRO is CE marked, Health Canada approved and 510(k) cleared by the FDA. In the U.S., we employ a pure recurring revenue model for TULSA-PRO, whereby we charge customers on a per procedure basis for TULSA-PRO consumables, lease of medical devices and services associated with extended warranties. Outside of the United States, we primarily deployed a capital and consumable sales and service model separately as the situation warranted. We are also commercializing Sonalleve, an innovative therapeutic platform that is being marked for the treatment of uterine fibroids and polite pain treatment of bone metastases. Sallie has also been approved by the China National Medical Products Administration for the noninvasive treatment of uterine fibroids and has recently obtained FDA approval under a humanitarian device exemption for the treatment of osteoid osteoma. The business model for Sonali systems is currently a onetime sale of the capital equipment. On the call today representing the company are Dr. Arun Menawat, Profound's Chief Executive Officer; and Rashed Dewan, the company's Chief Financial Officer. With that said, I'll now turn the call over to Rashed.

Good afternoon, everyone, and welcome to our first quarter 2023 conference call. On behalf of the management team and everyone at profound, I would like to thank you for your ongoing interest in our company. For those of you who are shareholders, we appreciate your continued interest and support. I will turn the call over to Arun in a moment for an update on our commercial activities. However, before I do, I would like to provide a brief update on our first quarter 2020 financial results. To streamline them, all of the numbers we'll refer to have been rounded, so they are approximate. For the 3-month period ended March 31, 2023, the company recorded revenue of $1.9 million, representing an increase of 36% from $1.4 million in the same period of 2022. We Recurring revenue increased 43% to $1.5 million, while the onetime sale of capital equipment increased 16% to $400,000. Total operating expenses in the 2023 first quarter, which consists of R&D, G&A and selling and distribution expenses were $8.1 million, an increase of 4% compared with $7.7 million in the first quarter of 2022. Breaking that down farther. Expenditures for R&D were $3.8 million, an increase of 21% compared to the first quarter of 2022. G&A expenses decreased by 10% to $2.1 million and selling and distribution expenses decreased by 4% to $2.1 million. Net finance income for the 2023 first quarter was $145,000 compared with net final cost of $892,000 in the same 3-month period of 2022. Overall, the company recorded a first quarter 2023 net loss of $6.8 million or $0.32 per common share compared with a net loss of $10.5 million or $0.40 per common share for the same 3 months here in 2022. As at March 31, 2020, Profound had cash of $43 million. With that, I will now turn the call over to Arun.

Thank you, Rashed. Beginning with our financial performance, our recurring revenue continued its upward trend, increasing 43% to $1.5 million compared to Q1 2022. In the quarter, our focus was on getting our new sites operational. And while we did not add any new sites, our pipeline remains strong. Based on this, we expect to see an increase in the number of sites as the year progresses with the achievement of 50 systems in the United States by the end of 2023 remaining very possible. We're also confident that we will continue to see an increase in recurring revenue going forward, while capital sales from all U.S. markets will remain lumpy. As I've indicated before, our main focus now is driving adoption of Tulsa in the United States. I would now like to turn to the very well-attended AUA 2023 Annual Meeting that took place from April 28 to May 1 in Chicago. Although robotic prostatectomy and radiation are seen as the current mainstream technologies it was very clear at the meeting that urologists are starting to view our new ablative therapy, Tulsa, as a potential alternative or a third major option. We performed live demonstrations to show how Tulsa employs real-time MRI imaging and thermometry as well as directional ultrasound from inside the prostate, Jet-ley heating tissue to kill temperature without causing unnecessary cell charring or boiling that can result from other types of ablative therapies. Many urologists explicitly indicated that they're ready to lead the implementation of Tulsa at their sites and that based on our demonstration, they clearly understand the clinical value of our gentle and fast ablation technology as well as its customization capabilities. They also indicated that they are more comfortable using MR even without a radiologist. Tulsa is of particular interest because of its ability to treat a large variety of patients, including a grand or sub-grant or focal and can thereby become a mainstream technology. As an example of the increasing interest Dr. Doran, the lead offer of the Tulsa Level 2A review article was specifically recognized by the Journal of Endo-urology on April 30 for his aster-ship as it was the most downloaded article over the last 12 months, further illustrating the medical community's interest in Tulsa. Tulsa was the subject of 4 posters at the AUA meeting scientific program, one of which covered the pivotal TACTT trials 4-year follow-up data that was first shared in September. The second poster covered a real-world outcome study of 180 men with recurrent prostate cancer and a subgroup with BPH. The largest single cohort presented to date. The results demonstrated that lesion targeted Tulsa is associated with promising midterm oncological outcomes and a minimal functional side effect profile with the flexibility to treat localized prostate cancer in primary salvage or recurrent settings of DPH through a patient-tailored whole-gland or lesion targeted approach. The third poster assessed 1-year complication in 206 patients, where 131 received treatment from Pocolabrasion, either Tulsa or Hisco and 75 received treatment with robotic-assisted nephroscopic prostatectomy or RALP. This landmark study is one of the first to establish a head-to-head comparison between radical prostatectomy and minimally invasive therapies as well as the first store of Level 1 evidence that includes Tulsa. The study showed that Tulsa has lower complications compared to RLP and no Grade 4 complications like the 2 seen with RLP or if the final poster assessed the safety and efficacy of Tulsa in men with BPH. Outcomes for the 27 feet in the study demonstrated that early system relief at 3 months was durable to 24 months. At 12 months, international prostate symptoms, quality of life, urinary system and urology scores improved despite 23 of the 27 men, discontinuing symptom management medication. These presentations reiterated Tulsa's safety, efficacy, durability and flexibility, which we believe will further drive Tulsa towards becoming a mainstream treatment for a broad spectrum of patients with prostate disease. In that regard, if you haven't already done so, I encourage you to look at the current investor presentation on our website and Slide 16 entitled Tulsa utilization trends, commercially treated patients, in particular. This is about just theoretical and more. We're seeing it in the data from patients that have been treated in the commercial setting. While that slide includes all commercial patients since FDA clearance of a Sapporo, let me provide some metrics from just those treated so far in 2023. With respect to indication, approximately 72% were treated for prostate cancer, 23% were hybrid patients suffering from both cancer and BPH and 5% were solace. We're seeing a trend that Helson is increasingly becoming used in patients who are on active surveillance or diagnosed with low-grade cancer, but also have symptoms of BPH. We believe that Tulsa is the only minimally invasive option for such patients. For cancer grade, approximately 13% were grade group 1, 58% for grade Group 2, 19% were grade Group 3 and 10% for grade Group 4 and 5. In terms of ablation, around 56% were Homeland, 26% were greater than 50% but less than 100% of the blend and 18% were focal CP, again, demonstrating the versatility of our technology. For prostate size, approximately 2% or less than 20 cc, 39% were between 20 to 40 were between 40 to 60 cc, 23% or between 60 to 100 ccs and 2% were over 100 cc. Going forward, these are some of utilization metrics that we will be reporting on a quarterly basis. This real-world data demonstrates Tulsa's unique flexibility, which we believe translates into an unrivaled TAM for us. Turning to our reimbursement strategy. I'm pleased to share that our CPT Category 1 application for Tulsa, which was sponsored by the Society of Interventional Radiology, or SIR, and strongly supported by American Urological Association as well as by several users who added positive comments to the application was considered by the AMA CPT editorial panel on May 4. We're very satisfied with the discussion that took place and remain optimistic about the panel's decision and eagerly await the publication of the meeting minutes on or before June 2. The CPT application that was filed requests 3 codes. The first code is for a procedure performed by a specialist such as a urologist without assistance from another specialist. The other 2 codes are for epicure performed by 2 physicians, such as a urologist and a radiologist. We believe having multiple codes gives our physician users the flexibility to either do the whole procedure or collaborate and get reimbursed for their part of the service. The next step of the CPT application process involves the relative value scale update committee or rock. Sending questionnaires to Telsa users to determine the physician work relative value units or RVUs associated with this ASA procedure. Both the SIR and the AUA will be very involved in this process, which, along with reviewers by the Center of Medicare and Medicaid Services, or CMS, will ultimately determine the Tulsa procedure payment amount. The proposed recommendations are expected to be published in the Federal Register in August 2024 finalized in October 2024 and come into effect as of January 2025. I -- by that time, assuming our CPT application is approved and the preliminary result of the Level 1 CAPTAIN trial are positive, we anticipate a large installed base of 75 or more sites across the United States. With this major milestone now on the horizon, we're working to build a larger national sales team to close on our strong pipeline of prospects. In the meantime, we will stay focused on the CAPTAIN trial, which is the first ever level 1 prospective fandomized clinical trial comparing the clinical outcomes of Tulsa with Radical Prostatectomy. Recruitment continues to progress as planned, such that we expect to report preliminary results and particularly functional side effects, such as ED and uterine fibroids in Q1 2025. To summarize, neurologists are looking for superior technology to treat prostate disease, and we believe that Tulsa's ability to treat such a wide range of patients safely and effectively will solidify as a mainstream treatment. We are very encouraged file the discussion at the AMA editorial panel meeting that took place last week and looked forward to the publication of the panel's final decision regarding our CPT Category I code application in the coming weeks. Assuming the permanent code is approved, we believe that this, combined with initial data from our ongoing Captain clinical trial will be a significant catalyst for Tulsa adoption in the United States beginning in the first quarter of 2025. At the start of that quarter, we expect to have 75 or more U.S. Tulsa sites up and running. This ends our prepared remarks for today. With that, Rice and I are happy to take any questions you might have. Up here.

[Operator Instructions] Our first question comes from the line of Rahul Sarugaser from Raymond James.

So my first question is that the CBD code that was considered by the AMA, assuming it is granted, would it be applicable to BPH as well as sort of specifically given the broadening utility of Tulsa you talked about around.

Yes. Good question, actually. So the way our application on written, they are for ablation of prostate tissue. So they do not specify whether the ablation is for cancer or for BPH reasons. That is for the physician or the surgeon to decide and so our bid we have received so far from our legal experts who specialize in reimbursement is that these codes are very likely to apply for both types of diseases. Now we will work with the insurance companies and so on we go. But most cert, the codes at the moment, we believe that these codes do not have to be revised.

Great. That's very helpful. And then a follow-on question from that is you previously indicated that the every C code and is looking to expand to ambulatory centers. Could you perhaps give us an update on that, what the process is like and any sort of time lines associated with it?

Yes, Sarugaser. I didn't cover that in the prepared remarks, that we have separate from this CPT activity, we have applied directly with CMS to expand the use of the C-code at ASCs. But as you know, there are over 5,000 of those in the United States, many of them already have MR and based upon the clinical data and the commercial data that we submitted to the CMS, it clearly shows that it is a daytime procedure. And because there is no incision in this procedure, the risk of needing a hospital and emergency is very low and so the meeting did take place in March. From our perspective, did go well. The CMS will publish their proposed remarks by end of July or early August this year and finalized them by October this year and if indeed they accept that our recommendation, that will actually become applicable as of January 2024. So the idea is that we are majority of our patients today are cash patients, but I think that we could be transitioning to using the C code more effectively as of January 2024 and then by 2025 is the accepted the application, then that the permanent code would become effective. So I think that's sort of the series of events that we're looking forward to.

Great. That's very helpful and good to understand the sequence of reimbursement. And if you indulge just one last question. Of course, there is the balance between increasing utilization as well as increasing the installed base. You talked about no new deployments this quarter. However, recurring revenue has gone up by my back of the envelope is about 15% -- so could you give us a sense for the rate of increase quarter-over-quarter? And how we should be thinking about that recurring revenue escalating, particularly given your guidance that you expect it to continue growing?

Yes. Yes. I think that if you remember from Q4 to Q1, the number side increased. And I think what you're seeing is increased usage. So definitely, the number of patients being treated is increasing and I think that going forward, the recurring revenue will increase due to 2 factors. One is that as the sites can -- the newer science as they gain more and more experience, they will use the device more. Just like we saw a couple of years ago when we started the size that our 2 years or longer are certainly using the device more today. So I think you will see an increase partly because the sites will get more experience and they will increase utilization. But we do expect that we will have additional sites coming on in the stream. We did sign, for example, at least 4 new contracts. We always had some existing contracts so that we will be placing more systems in Q3, Q4 time frame, and that will increase the utilization as well. So I think the combination of the 2 is the reason why I remain fairly comfortable that we will -- you will continue to see increase in usage and recurring revenue even in the 2023 year.

Great. That's all for me today, and we'll certainly be looking forward to that AMA decision on June 2.

Our next question comes from the line of Michael Sarcone from Jefferies.

So do you think you could just give a little more color on the Tulsa system funnel and how you think installations could trend through the course of 2023. I think for Roe, you just mentioned placing some more systems in 3Q and 4Q, but I would love to just get some more color on how you view the cadence through the year to get to that 50 systems that is still possible.

Yes. Michael, I mean we have a number of contracts. As I said, even in Q1, we signed additional for at least 4 additional contracts. I think we will continue to find those contracts. But I would say part of the reason we've been pretty comfortable with the number is that, as I mentioned, the AUA this year was particularly very well attended and we walked away with leads that are in triple digits and so I think that given that new leads is a very large number, given that we already have a pretty good line of sight of what -- where those 50 systems are going to be installed, which includes a number of existing contracts, and we're just basically in the process of putting them in. That's kind of where the confidence is coming from. I think, Michael, the main theme, I guess, is that an ablative therapy as an alternative to existing therapies is now here to stay and our technology is the most versatile of all of those. And as I mentioned in the prepared remarks, certain types of cases such as those hybrid cases where they have low-grade cancer in their own active surveillance, and they also have BPH. Those patients really have very limited sizing and so I think in this quarter, we saw an increase in the usage in that category or subset outpatient. And so I think it's -- the trend is starting to sort of flow in our direction that certain types of patients will get treated more and more with the technology, more and more sites are going to have an ablative option. I think that is opening and I think the existing contracts and the pipeline is what's giving us the confidence, Michael.

Got it. That's helpful and that makes sense. And congrats, triple-digit leads, that's pretty impressive. And I guess just one more for me. I think last quarter, you mentioned one of the initiatives you have is kind of teaching existing sites, how to optimize reimbursement and coding and I think you might have mentioned 12 or 13 teaching sites that we're now appropriately using your temporary C-code to get reimbursement. Do you have any updates on how things there are trending?

I think that what I said last time still holds. At the AUA, there were a couple of sites that indicated, in fact, that their administration has basically given them green light to treat particularly Medicare patients that were C-code can be used. So I would say that statement still holds and the reimbursement itself seems to be sufficient that that the sites or administration doesn't feel that they are in any difficulty with the amount that they're receiving and there were, as I said, starting to see some of these administration giving green light to their urologists to treat the Medicare patients with the C-code. So overall, I think, study movement.

Our next question comes from the line of Ben Haynor from Alliance Global Partners.

Just a couple of few for me. On the CPT code application that applying for 3 codes and kind of having the mix between the urologist, a single specialist do it and then performing with assistance of another specialist. what's your expectation in terms of how often each of those codes as they've been applied for might be used, presuming that you ultimately get all of them.

Yes. Ben, that's a great question actually. One of the things that at the AUA, we heard repeated was that the urologists are increasingly comfortable and really want to take charge of doing Tulsa all by themselves. They don't feel they need the reality anymore, particularly those who have done maybe 20 to 30 cases are thinking that they're pretty comfortable with being able to read the images and they are very clear in terms of what their role is versus what is the role of the realist in terms of diagnosing the patients and when you're diagnosing the patient, you're looking at the cellular structure versus when you're treating the patient, you're looking at the boundaries of the prostate. You're looking at the vital organs, where is the urethra, -- where is the -- where are the nerve bundles, where the jacket, how do you save those and how where is the cancer compared to those. So they are really addressing entirely different set of questions in the treatment process as compared to the diagnostician, who is really looking at whether or not there is cancer or if there's cancer grade of cancer it is, they're less concerned about where it's located. So number one, I think that the urologists are really, really very big change and so on that basis, our thinking is that as this product goes more and more into community hospitals and suburban hospitals and so on outside of teaching facilities, our expectation is that urologists will do this procedure all by themselves and in that case, they will use that code of for themselves. Now in teaching sites, what we have seen so far, is that they love collaborating because their models, they are different. They are typically on salaries. The hospital actually likes that collaboration these days and so there, we've sort of divided that up. And so I think that's the best expectation that we have is that in those teaching hospitals, they will be able to use both codes and collaborate and do unique cases and so on by doing so, whereas in the community or suburban hospitals or private practices, I think urologists will do the whole thing in the future.

Okay. So it kind of depends on sort of the type of post facility...

Exactly the type of Yes, the type of facility. I think you've probably seen that I know I've seen that in my past in other environments when there's a new technology, they will bring a second specialty to help them with certain unique aspects and I think having these separate codes makes it easier for them to invite the second specialty to do that. And I think, if anything, it will help during the early phase of the Tulsa development.

Okay. So I mean it makes sense why they would do it the way that they do it and hopefully, you get all of them. So there isn't any one that feels left out and secondly for me, look at -- obviously, you had a great -- a lot of great data at the AUA that got presented. I noticed the Alta-Clinic real-world data, at least for the side effects, it looks better than CAC does in a lot of ways. Is that mainly just attributable to not doing the whole brand? Or is there more to it there?

There is a lot more to it than and this is the constant theme and this is why I'm beginning to feel fairly comfortable that this technology should go into the mainstream? Because when we did the tax time we were governed by the FDA requirement to do all brand therapy versus in the real world, we are seeing constantly that they're making the decision on what's best for the patient and in some cases, they have -- they are doing whole brand, which is over 50% of the time and then they're doing between 50% to 100% in some cases, and there's been truly focal cat, which is a very small portion of the end small percentage of patients and I think that flexibility is the reason why you're seeing actually better outcomes in commercial settings as compared to the clinical trial because those were all wholegrain therapies and when you get to that whole ran you end up risk in a higher risk situation where with these partial brands, you can save a lot of functions even more carefully. So -- and I mean part of why I feel really good about this. If you think about radical prostatectomy, the only choice that that surgeon has is to remove the whole rent versus with Tulsa, they have the choice of killing the whole gram or killing the product partial brand, whichever is best for the patient. So I fully expect that over time, that theme will become stronger and I think that's what the patients want. And I think that's what's resonating with the urologist community.

Okay. Got it and then last thing for me. I know at a recent conference, you kind of mentioned how doctors are going to the families after procedure and saying, look, I'm taking care of the cancer because I could put on the imaging, so I'm real confident that I got it. Is that something that most docs are going to the families right away on? Or do they have to do a handful of cases before they're comfortable in saying he I'm real confident I got it? Or what's the right way to the behavior change that happens there and how quickly does it occur?

Yes. And then that's another very important point, actually. They do that right away. The One of the things that we have not talked about. -- is the fact that at the end of the procedure, they cause they're dealing with the MRI, they learn exactly what tissue they have killed because they can see it on the image, and they can make a print out of that image. So any testing that no longer has blood flowing will show up and parks. And it is not only that they immediately know the quality of the work they've done. The other part of this is that in case they did miss and they see like, hey, I need to kill another layer of cells because I missed it, they can actually do that before they wake up the patient. So that feature is starting to also become really important to them that gives them confidence to say, okay, I know I have done this or, hey, I left something and I'm going to fix it before I make up the patient and they can then easily go to the family and say, here, the image here before the procedure, you can see this large prostate and here is dark prostate and they can actually start projecting the rate with which that prostate will start to shrink and how the fluctuation will -- if it's both hybrid like PPH plus cancer, how they will start to actually gain their urinary symptoms back pretty quickly and certainly, they would do an image leader to confirm the cancer, but they certainly would give the patient pretty good confidence and I think that's a driving factor for patient.

Yes. I mean...

It makes sense to say would do that at some color there, like I mean what we was talking about, UCLA prostatectomy has a very robust reporting tool that we don't talk about. But once the precision is done, the physician can actually out of very good before that can be decisions that shows what was done and what the outcome...

Our next question comes from the line of Joshua Jennings from TD Cowen.

I wanted to follow up on the last one of your last answers around and just about the building of patient demand. I mean I think we're getting closer and closer to early '25. We will have captain data under your belt, you'll have reimbursement in place and there'll be a lot of advantages for Tulsa pro-treatment. But you'll be going up against peakiest oncology and prostatic robotic prostatectomy. But patient demand could be an exit factor in terms of allowing you to capture a bunch of share. Maybe can you share with us where do you -- are your center seeing a lot of just patient direct patient inquiries reward of mouth? And how does your team plan to build I guess this patient demand aspect of -- as we head out towards the 2025 period.

Yes. Yes, Josh, you're absolutely right. We are very, very aware of the market that we are playing in and we do -- we have a very strong direct to marketing strategy that is playing out very well. In fact, about what we are hearing from many sites that at least 1/3 of the patients that they see ask for Tulsa mining already and I think as we get to the official word on the CPT and so on, we think that, that course will certainly become louder because there are certainly most patients who are able to pay the $30,000 plus they are doing it. But I think there are a number of patients who are basically waiting for the insurance or the CMS, the Medicare plans to kick in. So I do think that patient education is a large part of how we plan to gain adoption. The other side of this, I think there are 2 other factors that I think are also equally important, if not more important and those factors are that we're also giving the urologists a tool that they don't have today. It is not like having one type of robot and another type of robot that they can buy. It's still a robot and it still will do whole rent removal. But in our case, we're giving them a choice that if the patient does not need a whole land that they can actually treat partial grand also. In fact, they can make that decision on the fly, they typically do, in fact, make that decision on the fly of how much of the prostate and which part of the postpaid should they be taking out. So I think that flexibility has no competition, quite frankly and as I mentioned in the prepared remarks, they're well over 1 million patients that are on active surveillance in the United States. So these are patients who have been diagnosed with low-grade prostate cancer. They are not being treated because of the side effects of the current treatments, but those patients also have BPH and that patient population as I have very limited choices today. None of them are good and so I think it's a combination of the flexibility and being able to treat certain subset of patients. I think even if we just get that, I think we will be 1 of the 3 mainstream technologies. So I hope that addresses your question.

Absolutely, Absolutely and one just one follow-up. Sorry, if you've spoken about this already on this call. But just thinking about the TAC data, the CAPTAIN trial data, just overall efficacy of TULSA-PRO and how Boost could improve efficacy on the margin. Is that something we should be thinking about and are commissions thinking of that as well?

Yes. Most secondly, we did not talk about it today because we had talked about it in the last quarter. But the thermal boost capability that allows them to make sure that the margins are clean. Basically, that's the bottom line. The margins are clean by doing so and that itself gives them assurance and again, because they're using the MRI, they can actually see that as they're performing the procedure versus if you're doing robotic surgery, it is well accepted that 20% margins are not clean, but the physicians don't know that when they're doing a procedure. Unless they take sample of the margin and they send it to the lab and it takes over 45 minutes to get the results. So in our case, if the respect that the margins are involved, ThermalBoost is a great way to do it. Now in Europe, where ThermalBoost is available and has been for about a year already. what we find is that about half of the cases being done in Europe are actually using the thermal Moose capability of our product. So it is -- we already know it is being -- it is very useful. We already know that it will be -- give the urologist a lot of confidence. And we already know from the data that were presented at the AUA that because of these capabilities that the commercial patient clinical outcomes are actually superior to that of Tac. So we are in FDA process. I think that we will get it done by end of this year, this thermal boost as well as the AI capabilities that we announced in the last quarter and I think those in the '24/'25 time frame will also help with adoption curves.