Profound Medical Corp. (NASDAQ:PROF) Q4 2020 Earnings Conference Call March 2, 2021 4:30 PM ET

Company Participants

Stephen Kilmer - IR
Arun Menawat - CEO
Aaron Davidson - CFO and SVP, Corporate Development

Conference Call Participants

Anthony Petron - Jefferies
Rahul Sarugaser - Raymond James
Frank Takkinen - Lake Street Capital
Ben Haynor - Alliance Global
Michael Bunyaner - TLF Capital

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Profound Medical Fourth Quarter and Full Year 2020 Financial Results Conference Call. [Operator Instructions] And please be advised that today’s conference is being recorded.

Now I would like to turn the conference over to your speaker today Stephen Kilmer with Investor Relations.

Stephen Kilmer

Thank you. Good afternoon everyone. Let me start by pointing out that this conference call will include forward-looking statements regarding Profound and its business, which may include, but is not limited to, expectations regarding the efficacy of Profound’s technology in the treatment of prostate cancer, BPH, uterine fibroids and palliative pain and osteoid osteoma.

Often, but not always, forward-looking statements can be identified by the use of words such as plans, as expected, expects, scheduled, intends, contemplates, anticipates, believes, proposes or variations including negative variations of such words and phrases or states that certain actions, events or results may, could, would, might, will, be taken, occur or be achieved. Such statements are based on the current expectations of management.

The forward-looking events and circumstances discussed in this conference call may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company, including risks regarding the medical device industry, economic factors, the equity markets generally and risks associated with growth and competition.

Although Profound has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed, except as required by applicable securities laws. Forward-looking statements speak only as of the date on which they are made, and 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 Profound story I would 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 trans-urethral ultrasound and closed-loop temperature feedback control. The technology is designed to provide customizable and predictable radiation-free ablation of a surgeon-defined prostate volume while actively protecting the urethra and rectum to help preserve the patient's natural functional abilities.

TULSA-PRO is CE marked, Healthcare Canada approved and 510-K cleared by the FDA. We are also commercializing Sonalleve an innovative therapeutic platform that is CE marked for the treatment of uterine fibroids and powder pain treatment of bone mesothesis. Sonalleve has also been approved by the China National Medical Products Administration for the non-invasive treatment of uterine fibroids and has recently obtained FDA approval under a humanitarian device exemption for the treatment of osteoid osteoma.

While we do not expect this FDA HDE approval to have a material impact on revenues in the near term it is a significant milestone for our company and we are making preparations for its U.S. commercial launch later in 2021.

On the call today representing the company are Dr. Arun Menawat, Profound’s Chief Executive Officer; and Aaron Davidson, the company’s Chief Financial Officer and Senior Vice President of Corporate Development.

With that said I will now turn the call over to Aaron.

Aaron Davidson

Good afternoon everyone and welcome to our fourth quarter and full year 2020 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 and for those of you who are shareholders we appreciate your continued support.

I will turn the call over to Arun in a moment for an update on our commercial activities. However, before I do I'd like to provide a brief update on our fourth quarter 2020 financial results. One major change you probably noticed from our press release today is that we have changed our presentation currency from the Canadian dollar to the U.S. dollar. We believe this will result in more relevant and reliable information for those looking at our financial statements and will more accurately reflect the results of our operations especially given our focus on U.S. commercial activities.

To streamline things all of the numbers I will refer to have been rounded and are therefore approximate. For the three-month period ended December 31, 2020, the company recorded revenue of $2.9 million, an increase of 36% year-over-year and 29% sequentially over the third quarter. When we announced our preliminary unaudited revenue estimate in early January 2021 ahead of the JP Morgan conference, we hadn't yet made the switch to U.S. dollar reporting. So for clarity this translates to actual revenue of 3.8 million Canadian dollars versus the 3.7 million Canadian dollar estimate at the time.

Total operating expenses which consist of R&D, G&A and selling and distribution expenses were $6.1 million in the fourth quarter of 2020, an increase of 14% compared with approximately $5.3 million in the fourth quarter of 2019.

Breaking that down further on a year-over-year basis expenditures for R&D increased 4% to $2.5 million. This was primarily driven by higher spending for the setup and administrative costs of new clinical trials, options awarded to employees, additional head count and overall increase to general expenses partially offset by decreases in material costs consulting fees and travel expenses.

G&A expenses decreased by 6% to $1.8 million due to lower consulting fees and travel, software, bad debt expense and depreciation which were partially offset by increases in salaries and benefits and share based compensation.

Finally, selling and distribution expenses increased by 79% to approximately $1.7 million. As noted in our press release selling and distribution expenses have historically been lower than R&D expense. However, we expect selling and distribution expenses to exceed R&D expenses in the future as we continue to invest in the commercialization of TULSA-PRO in the United States.

Overall the company recorded a fourth quarter 2020 net loss of $7.5 million or $0.38 per common share compared with a net loss of $3.9 million or $0.33 per common share for the same three month period in 2019. As at December 31, 2020, profound had cash of $83.9 million.

I'd like to close by saying that while our performance in the fourth quarter again speaks to the strength of our technology and our business model, we continue to remain cautious in the near term mainly due to COVID-19 headwinds the impact of which are unpredictable.

With that I will now turn the call over to Arun.

Arun Menawat

Thanks Aaron. Year-end 2020 marks the 12-month mark of the introduction of TULSA in the United States and in spite of the delays due to COVID. I'm pleased to report that we successfully executed against our strategic priorities in 2020. The most important of those was to start laying the groundwork to drive significant adoption of TULSA-PRO in the U.S. and there were two major pillars of that I would like to focus my marks on today.

First was to start building a high quality U.S. installed base. In that regard our U.S. market entry strategy for TULSA-PRO targets three types of end users. One, early adopters which includes neurologists specializing in cutting-edge alternative prostate disease treatment. Two, independent imaging center companies such as RadNet and three, opinion leading teaching hospitals each of these are unique and play different roles in supporting long-term adoption.

The first two early adopter TULSA-PRO sites have been treating a great number and an increasing variety of patients. The experience at these centers mirrors what we observed during our European launch where surgeons initially used TULSA-PRO to treat intermediate risk patients. Then started to also treat low and high risk patients and then those with PPH. The result of that addressable patient population expansion has been higher early utilization than we had expected.

At the beginning of 2020, we estimated that after the first 6 to 12 months of being operational the average run rate would be 40 procedures per year eventually growing to 100 procedures or more after that. Today these centers have exceeded those targets by about 50% achieving an average run rate of 60 procedures per year.

With respect to the second group, the imaging centers, I'm pleased to report that RadNet is now actively treating patients using TULSA after initially experiencing delays related to COVID-19. Midway through the year, we increasingly focused on the third group establishing TULSA centers at top tier hospitals. The early results of those efforts has been outstanding with the list of prestigious institutions offering the TULSA procedure already including the Mayo Clinic, UT Southwestern Medical Center, Wellspan Advanced Prostate Cancer Center and most recently Yale Cancer Center.

While we have always expected teaching hospitals to be relatively lower volume at first and we are seeing these institutions being particularly impacted by COVID-19, they remain best positioned to help drive long-term adoption by training the next generation of urologists, presenting at medical conferences, publishing papers in relevant journals and participating in additional trials designed to support TULSA-PRO to potentially qualify for a CPT 1 code. This leads me to the second pillar of our TULSA-PRO adoption strategy which is clearly reimbursement.

At the beginning of 2020, we announced that we had submitted an application for a healthcare common procedure coding system C code from the centers for Medicare and Medicaid services or CMS for the TULSA-PRO procedure. Subsequent to that we had an opportunity to meet with CMS and a number of hospitals. The feedback from those discussions as well as from our consultants was that an existing code could possibly apply to TULSA for that reason, we asked CMS to set our application aside and allow the hospitals to decide if they would like to use that existing code.

While we're not able to provide great amount of detail on the numbers of patients or reimbursement levels we can say that we're hearing from the hospitals that have submitted for reimbursement using the existing code that they are being paid. While that is clearly a positive, I would like to reiterate as I have on previous calls that we view reimbursement and coverage as a three-year plus process and the usage of the C code is the first step of that process.

In the longer term, we expect to conduct additional clinical trials that are mostly designed to expand the body of clinical publications and enable TULSA-PRO to qualify for a specific CPT-1 code and ultimately for payment coverage. The first of those is TACT 2 an extension of the TACT pivotal trial by another 35 patients to achieve a total number of patients treated to 150. That study is on track to be fully enrolled in the second half of this year.

As we have discussed before, by the end of 2021, we believe that we should have the requisite publications to qualify to apply for a specific CPT-1 code. For a coverage determination, however, we will need level 1 studies which we also expect to start recruiting before the end of the year.

So to summarize, I would like to echo Aaron's comments that there remains significant uncertainty with respect to the TULSA procedures adoption rate in the very near term due mainly to COVID-19. However, we're energized going into 2021 and remain on track to achieve our long-term adoption goals for TULSA-PRO. In addition we're looking forward to launching Sonalleve in the United States later in the year.

This ends our prepared remarks for today. With that we're happy to take any questions you might have. Operator?

Question-and-Answer Session

Operator

Thank you. And we will now be conducting the question and answer session. [Operator Instructions] Our first question is from Anthony Petron with Jefferies. Your question please.

Anthony Petron

Thank you and hope everyone's doing well. Arun maybe to press a little bit on the prepared comments on backlog and not necessarily focusing on procedures but rather installation cycles. Can you give us a sense of the average installation cycle pre-COVID for a new site and kind of where that sits today just in terms of kind of the hurdles that you have to get passed in getting a system fully installed and up and running? And when you classify actually the installation cycle as the bigger headwind related to COVID relative to purely on the procedure side and then I will have a couple of follow-ups. Thanks sure.

Arun Menawat

I'm happy to, so let me describe it by each of the pillars that we talk about, each of the three different types of institutions that we focus on. The biggest impact in terms of the delays was really in the hospitals and as I mentioned in our prepared remarks going into the second half that was a priority for us because we want to get the opinion leaders to get going on this product. So there were a couple of hospitals where we actually had contracts, but the hospital administration simply did not allow even our people to go in to install the system. There were a couple of hospitals where we did install the system but then in January for example, they were informed that they could not do new technology procedures and it sort of got delayed because of that.

So I kind of look at this as a one-time thing and I do think that there is some impact in the early part of this quarter, but the reality is all of these hospitals are now back up and we have installed and they are starting to treat. So to answer your general question though, from the time we get a contract, a typical startup is somewhere between 75 to 90 days for us at the moment. I think over the long haul, I anticipate it will be somewhere between 45 to 60 days but at the moment it's somewhere between 75 to 90 days. Is that answering your question?

Anthony Petron

Absolutely. That's very helpful and I guess to hear you correctly you bucketed the two sort of situations which is contracts in hand, but the company was not allowed to proceed with the TULSA install and then systems that were installed, but procedures were not allowed. I just want to be clear that all of those are now installed or is there a certain portion within the first bucket where you still have to finalize the installation of TULSA?

Arun Menawat

No. The agreements we did last year and maybe very early this year they're now installed and hospitals are now going. As of March we've anticipate full operation in place. So I think that part is hopefully, there is no third wave and that part is now behind us.

Anthony Petron

And then the last one for me and I will hop back in is a little bit more information on the C code hospitals that were installed last year are actually being reimbursed with that C code. Can you remind Arun just of the level of reimbursement that's being received under the C code and whether or not that is sort of universal across the install base of TULSA at the moment does it vary by region across the country? Thanks.

Arun Menawat

Sure. So what we publicly talked about is in general numbers. The APC code associated with that C code generally pays in the overall between 11,000 to 12,500 and that range depends upon what type of institution is applying. So certain institutions in lower cost areas or smaller institutions will get the lower end of it. Certain other institutions that are teaching institutions will get the higher end of it. And I think that generally the hospitals are reporting that they are comfortable with the payments that they are receiving. So as I said, I couldn't give you a specific hospital or specific number but I think general feedback is that hospitals are getting paid the amount they expected to get paid.

Anthony Petron

That's helpful. I will hop back in. Thank you.

Arun Menawat

Thank you.

Operator

Thank you. Our next question comes from Rahul Sarugaser with Raymond James. Your question please.

Rahul Sarugaser

Good afternoon Arun and Aaron. Thanks so much for taking my question. So my first question really is, Arun when you're referring to all of the existing contracts having been installed, in previous calls you'd refer to the pipeline being quite strong and that you're continuing to sign contracts. So I just want to clarify is that the case where all of the existing contracts that have been signed have been installed or are there more contracts being signed that would be kind of sort of create this bolus of additional installations that will need to happen as the hospital constraints start to release?

Arun Menawat

So can I jump in first?

Aaron Davidson

Yes go ahead

Arun Menawat

We have contracts signed where there are devices not installed and devices not treating patients still. It's a timing point that what I was referring to is the agreements that we had last year are installed. Not all of them might be public in on our website or anything but are there but we do have new contracts that we've signed this year which are not installed.

Rahul Sarugaser

Perfect. Thank you. That's an important clarification. And then so now talking about those additional contracts that are currently being signed, have been signed and the hospital constraints that you talked about are you starting to see now that these hospital constraints are starting to be lifted or do you expect that to be happening sort of into Q2 and as this bonus of installations becomes kind of comes to bear is your team size prepared to kind of handle that large number of installations in sort of the back half of this year?

Arun Menawat

Sure. Well so I think to the extent that we can all predict what's going on with COVID, I think that what we are seeing is hospitals are starting to come back to normality to some extent and I would say the other side in terms of the caution is that we have installed the systems, but getting up to speed in terms of the volume is still going to take some time because they have to start getting patients, establish typically patients, it takes about four to six weeks for the patients from the time they schedule the patient to when they actually treat. So I think there's still some uncertainty but I think generally things are heading in the right direction in terms of activity.

To your second question as we've talked about our pipeline is good. We are adding resources in our company at a pretty aggressive pace and we have an outstanding team and they are traveling in spite of all the restrictions. They are quarantining as necessary and so on. So yes, I think the short answer to your question is yes I do think we will be prepared as the install base grows and as the utilization grows.

Rahul Sarugaser

Sure. Thank you. And just one more quick question about the C code. So you mentioned that there are some of the hospitals that are being reimbursed and you followed up with sort of the 11,000 to 12,000 figure and recognizing that you want to be judicious in your projections around it. So maybe you can just clarify how many different sort of CMS contractor jurisdictions are being currently reimbursed or being submitted to and being reimbursed and then there's a quick sort of follow-up to that has that started to translate to any sort of any private pay reimbursement or is that too early to tell?

Arun Menawat

Rahul, I would say it's too early to, I mean there are only a few hospitals so I would say maybe probably two or three different zones are involved at the moment. So it's kind of early on that. On the private pay, I think again the number of patients is relatively small and so it's hard to predict the future. But I think our general impression is that certain private patients are also being paid. Maybe the amount they're being paid is highly variable depending upon what type of insurance they have, but the general feedback we have from hospitals that they are getting payments.

Rahul Sarugaser

Great. Thank you very much and I'll hop back in the queue.

Operator

Thank you. Our next question comes from Josh Jennings from Cowen. Your question please.

Unidentified Analyst

Great. Thanks this is actually Neil on for Josh. I guess first off I just wanted to ask about the international regions that are in place for TULSA-PRO. So I know Japan is one country where you've seen subtraction. Could you talk about the progress that you're seeing there. And then secondly just with TULSA-PRO placements in Europe if you could talk about the opportunity there and if that's a meaningful opportunity or if investors should continue to just focus on mostly on the U.S. opportunity?

Arun Menawat

Neil those are two very good questions. So first of all in Japan we do anticipate that it is outside of the U.S. It is going to be an important market for us and we do continue to see traction, but we do need to get regulatory clearance in Japan and we anticipate applying for it in 2021. It's hard to predict exactly when we get it. But in the meantime we are getting new orders from Japan that are based upon their policy of importing technology through direct import policy. So we are an innovative technology as they recognize and they're using the direct import concept to do so.

So we're not able to advertise in Japan at all at the moment but it is word of mouth that is working and it's also giving us some confidence that they once we get the regulatory approval that it's a market that we do want to pay attention to and as we go through it in Japan we will keep you certainly informed on that.

With respect to Europe that's also very good question actually because what generally happens is what's happening with us is we got our CE mark early. We started to learn about our technology. We started treating patients and that education helped us when we came to the United States in 2020 and now again it happens typically is now that there is some traction at the leading hospitals in the United States, the Europe is starting to pay attention to us also to say, hey this technology is something we want to evaluate as well.

So we are starting to see more interest whether it translates into higher numbers it's hard to say at the moment, but it is certainly translating into additional clinical trials that are funded by Europeans for us and so I think from that perspective I do think long-term Europe will become interesting also and for certainly in 2021, you will see additional clinical publications coming out of Europe that will help us globally. So I kind of think U.S. is by far our number one priority. Japan is going to continue to become important to us as we go forward and I think Europe will be next as well.

Unidentified Analyst

Great and then if I could just add in one follow-up question here. There was a recent study published in JAMA just on prostate cancer screening with MRI. The results of that study seemed that say indicate there's potential to increase the use of MRI for prostate cancer diagnosis. So could that prove to potentially become or provide a tailwind for TULSA-PRO adoption I guess particularly with the imaging centers?

Arun Menawat

Yes. So I mean that's also a really good question. So there's quite a bit of activity and one of the reasons why people used to ask us this question early on is having an MRI a problem for you will you be able to find time on MRI and what we're really finding is that there is a sort of a workflow that the MR companies are looking at, that leading hospitals are looking at to see if they can use the MRI for diagnostics. As I've kind of talked about it a little bit before also but the clinical workflow from MR based diagnosis to MR based biopsy to TULSA as MR based treatment and then post follow-up will be MR based also because nobody really wants to do biopsies unless they really have to do it.

Now chances of us replacing biopsy in the very near term is probably low, but I completely agree with the concept that there is a lot of work going on at MR companies on continuing to improve the imaging technology for diagnostics. You might be familiar with the concept of PI-RADS which has been more of a academic concept where academicians have been using that to stage the patients. I think you will see the PI-RADS concept get more and more adopted in the diagnostic world and I think that will lead to a much more uniform workflow.

So I haven't said anything actually what you've said but I'm just putting more color into this that having multiple companies, diagnostic companies and with our technology providing treatment with MR I think it's in sync with what we see as a trend.

Unidentified Analyst

Great. Thank you.

Operator

Thank you. Our next question comes from Frank Takkinen with Lake Street Capital. Your question please.

Frank Takkinen

Hi Arun, Aaron thanks for taking my questions. Two for you today. Starting with just asking a little bit more directly I think you guys ended around rather are at around eight active sites in the United States. Previously you guys have helped us out a little bit just providing some broader goal posts to think about installs on a go forward basis. So hoping you guys could help us out as much as you can understanding there is a lot of uncertainty with the environment just trying to get a little better understanding for your expectations on installs in this year and then even if you could kind of think on a longer term basis that would probably be helpful as well.

Arun Menawat

Sure. Yes, I mean I think Frank you're right and we're in that eight to ten range of installs. I think we're a little bit cautious in the sense that as I mentioned before there has been certainly during the months of January, February there have been some delays in the startups. So we're sort of embedding what's really functional and what's not functional versus install versus not installed. But having said that I think these are very-very short-term things and we're more about the long-term. So I think we're generally likely to see these installed becoming functional sites pretty quickly.

With respect to the pipeline I think that that we continue to see that we have a very good pipeline of imaging centers that are interested in adding TULSA to their portfolio. We're continuing to see that the imaging centers that signed up with us last year want to increase their number of sites that they want to go with. We're seeing additional early adopters. We have a pipeline of additional early adopters in our list and we certainly see a number of leading hospitals continuing to be very interested and we are in dialogue with more so in this. Certainly the rest of this year you will see again opinion leading sites adopting this technology and I think that I won't give you specific numbers but I just feel obviously we want to be very cautious and so on but I do think that when I look at adoption of game-changing technologies, the fact that leading hospitals are also leading adoption of a game-changing technology, which is a little bit unusual is certainly one of the source of confidence that we have going forward.

Frank Takkinen

That's helpful and then this is the second one on the utilization front. I appreciate your comments on the outperformance versus original expectations by about 50% on the utilization in the first 6 to 12 months. Maybe talk about the second number a little bit of getting to that over 100 procedures on a longer term basis? Do you feel that that's still a realistic expectation or do you think given the confidence in the utilization of the early days you could see outperformance to that second number?

Arun Menawat

Frank, I would say that 100 is still a very good target for us. I do want to sort of provide a little more color in the sense that the reason why we saw this increase is that generally as the clinicians began to learn about the technology more they felt that they could use it in a broader set of patient population. So in terms of the fact that this speaks to the fact that we could be applicable to a larger population and thereby the opportunity is bigger than what we started out with I think that certainly we feel pretty good about and I think you will see case studies and publications that will begin to show that broader potential of this technology in this year, later this year, but I would say at the moment we still think using 100 as a target is pretty good.

I think in Europe certainly we are seeing that the top commercial sites are getting to be beyond 100 in the long haul it's possible but I also think that to be honest I think 100 is more of an average. I think we will probably have some sites that don't get there and we'll probably have a few sites that will be a little bit higher than that.

Frank Takkinen

Great. Thanks for taking the questions.

Arun Menawat

Thank you Frank.

Operator

Thank you. [Operator Instructions] Our next question is from Ben Haynor with Alliance Global. Your question please.

Ben Haynor

Good afternoon gentlemen. Thanks for taking the questions. First off for me just on the commentary about sales and marketing expense exceeding R&D. Is that kind of more of a function of, well I know it's a function of selling expense going up but how much of a function of that is potential decline in R&D just recognizing that you're going to start the level one studies by the end of the year?

Arun Menawat

That's Aaron question Ben.

Aaron Davidson

There's definitely some mapping and flowing here Ben but sales and marketing we've definitely been working on growing the team fairly aggressively to be able to manage the funnel. From an R&D standpoint there's definitely that's where I'm getting at the ebbing and flowing. There is also things like we had a very good year. So we accrued for bonuses in the fourth quarter which spreads across all areas that is not a repeating cost for instance in Q1. We accrue at some lower rate throughout the year but so there is some also some sort of one-time cost in there in the Q4 that made it higher.

Ben Haynor

Okay. That's fair and then you mentioned managing the funnel who are kind of the accounts or the account types that the newly added personnel are going to be calling upon most frequently ? I mean is it some hospitals? Is it imaging centers, who's really getting the focus?

Aaron Davidson

All. It's all of the above. Yes. It's imaging centers, its hospital, executives, its physicians, urologists, interventional radiologists, radiologists it's all people.

Ben Haynor

Okay and do you have a headcount that you expect to get to or anything you can share on that front?

Aaron Davidson

We haven't disclosed that yet at this point.

Ben Haynor

Okay. So stay tuned. Got it. And then just thinking about Sonalleve you got the humanitarian exemption. Have you already started having conversation with the folks that could be kind of the initial installs in the U.S. and what are those sites look like and what sort of splash are you planning to make when you do launch it? I imagine with just the humanitarian device exemption probably not a big one, but I figured I'd better ask the question.

Arun Menawat

Yes. No Ben I think it's a good question. With respect to that I think we have so far spent most of our time on what is the right strategy and what are the target hospitals. Knowing that at the moment it is a capital strategy and knowing that that's a bit of a difficult thing during the COVID era. I would say don't expect any sales views on that in the first half but yes we do, we have a target set of hospitals. These will be mostly pediatric hospitals and hopefully there they have finance available through their charity organization so on which you might be a little bit different.

So we are starting to engage with these few specialized hospitals. You may have seen on our website there is an interview from national children regarding this that was just put in just a few days ago. So you're right we're starting to get there. I think it's a compelling application. Let's see how it goes.

Ben Haynor

Okay. Well good. Thanks for the color guys and I'll leave it at that.

Arun Menawat

Thank you Ben.

Operator

Thank you. And our last question comes from Michael Bunyaner with TLF Capital. Your question please.

Michael Bunyaner

Good afternoon gentlemen and Arun congratulations to you and the team.

Arun Menawat

Thank you Michael.

Michael Bunyaner

For success during an impossible year. You received well you've announced an agreement with G healthcare in December of last year.

Arun Menawat

Yes.

Michael Bunyaner

Could you just share the importance of this especially in light of the studies that you hope to see published later this year as it relates to the installed base, as it relates to market share and as it relates to the adoption?

Arun Menawat

Yes. Absolutely Michael, let me start by that concept that you had talked about is that I do think that MR is going to continue to be an important aspect of prostate management from diagnostics to treatment to post-treatment. So there is a lot of attention that the MR companies are putting at it. I think the fact that we can fill this one big gap that existed in this workflow I think puts us in a very interesting position. So from that perspective we're obviously delighted that all three of the big MR companies are working with us. Obviously that's an important point for us.

Second is that at the high level the MR companies have their own specializations and the GEE for example, tend to have specialization more in the imaging centers whereas humans tend to have more specialization in the some of the teaching hospitals and so on. So I think having that flexibility allows us to cater to the needs of our customers rather than forcing them to use an MR that we're compatible with only.

So it makes a much easier story for us or a conversation for us to talk about and again at the high level GEE is the largest MR company in the United States and so having access to that install base is really important to us. So now given that we're at that early stage it was something that we urgently needed to have an install base today not really because generally even the large hospitals will have two of the three suppliers and we have been able to manage so far but I think that as we go forward particularly long term it will be an important, a very important agreement for us.

Michael Bunyaner

Did I understand correctly that they're essentially sharing for the costs for the development and the software development and all of the testing?

Arun Menawat

I mean, our agreements are sort of win-win-based agreements and so the things that we need to do in terms of developing our software we're doing the things that they need to do in terms of their development they are doing. So I think that is pretty consistent with the agreements we have in general.

Michael Bunyaner

Well congratulations. It speaks for itself the largest installed base and a very difficult company to work with is your partner now. So thank you so much. Best of luck for this year.

Arun Menawat

Thank you so much Michael.

Operator

Thank you and with that ladies and gentlemen we conclude our Q&A session for today. I would like to turn the call back to Arun Menawat for his final remarks.

Arun Menawat

Thank you so much. Thank you for being so supportive. I think Michael's point is right it was a difficult year of our startup and we are certainly energized with what we accomplished last year and we're really looking forward to 2021 and updating you on Q1, 2021 with U.S. dollars. I guess I would like to add one more quick point that in case you may or may not have noticed it, the TACT clinical trial in fact in the month of March is now fully published in the journal in the print journal and the TULSA is in fact on the cover of the journal. Thank you so much.

Operator

And ladies and gentlemen this concludes today's conference call. Thank you for participating and you may now disconnect.