Business Overview and History PROCEPT BioRobotics Corporation is a medical technology company that has gained significant momentum in the surgical robotics space, with a particular focus on transforming the treatment of benign prostatic hyperplasia (BPH) and emerging as a contender in the prostate cancer arena. The company's journey has been marked by strategic innovations, robust clinical evidence, and a steadfast commitment to advancing patient care through its cutting-edge robotic solutions.
PROCEPT BioRobotics was founded in 2007 and is headquartered in San Jose, California. The company's early years were focused on developing its core technology and obtaining regulatory approvals, facing typical challenges of a medical device startup such as securing funding, building out manufacturing capabilities, and navigating the complex regulatory environment. Despite these initial hurdles, PROCEPT made important strides in driving adoption of its AquaBeam technology by establishing strong relationships with key opinion leaders in the urology community and collaborating with major urological societies globally.
The company's flagship product, the AquaBeam Robotic System, received FDA clearance in December 2017 for the treatment of BPH. The AquaBeam system employs a heat-free waterjet technology and automated robotics to provide a minimally invasive, personalized, and effective solution for BPH patients. This marked a critical period for the company as it worked to establish its AquaBeam Robotic System as a viable treatment option.
In August 2024, the company achieved a significant milestone with the FDA 510(k) clearance of its next-generation HYDROS Robotic System. HYDROS incorporates advanced features, such as the FirstAssist AI technology, which combines ultrasound imaging and planning software to assist surgeons in identifying key anatomical landmarks and enabling precise targeting of the treatment area. The HYDROS system also boasts an integrated ultrasound system and a single-use digital cystoscope, streamlining the procedural workflow and enhancing the overall user experience. This new platform incorporated several advancements over the original AquaBeam system, including enhanced imaging and treatment planning capabilities, as well as improvements to the overall user experience.
PROCEPT BioRobotics has built a robust clinical evidence base supporting the safety, efficacy, and durability of its Aquablation therapy. The company's pivotal WATER study, which was the only FDA pivotal trial randomized against the historical standard of care, TURP, demonstrated superior safety and non-inferior efficacy of Aquablation therapy across prostate sizes between 30 ml and 80 ml. Additionally, the WATER II study, which evaluated Aquablation in larger prostate sizes (80 ml to 150 ml), showed strong safety and efficacy outcomes.
Beyond BPH, PROCEPT BioRobotics has made significant strides in exploring the potential of Aquablation therapy for the treatment of prostate cancer. In 2024, the company successfully demonstrated that Aquablation therapy does not spread cancer cells during the resection process, paving the way for the removal of the contraindication for treating BPH patients with an active prostate cancer diagnosis. Furthermore, the company received FDA Investigational Device Exemption (IDE) approval to initiate the WATER IV PCa trial, a global, multicenter, prospective, randomized clinical study comparing the safety and efficacy of Aquablation therapy to radical prostatectomy in men with localized prostate cancer.
Financial Performance PROCEPT BioRobotics has experienced robust revenue growth in recent years, with total revenue reaching $224.5 million in the fiscal year 2024, representing a 65% increase compared to the prior year. The company's strong performance was driven by both increased system sales and higher utilization of its disposable handpieces, as well as continued international expansion.
Gross margin has been on an upward trajectory, reaching 61% in fiscal year 2024, compared to 52% in the previous year. This improvement can be attributed to the company's ability to leverage its existing overhead at higher revenue levels, as well as the increased average selling prices across its product portfolio.
While the company has reported net losses in recent years, it has demonstrated a clear path towards profitability. In fiscal year 2024, the net loss was $91.4 million, a significant improvement from the $105.9 million net loss in the prior year. The company's focus on managing operating expenses, with a 30% year-over-year increase in operating expenses compared to a 65% revenue growth, has been a key driver of this progress.
For the most recent quarter (Q4 2024), PROCEPT reported revenue of $68.2 million, representing a 57% year-over-year growth. This growth was driven by increased robotic system sales and procedures, both at higher average selling prices. The net loss for the quarter was $18.9 million.
In terms of geographic performance, the company generates the majority of its revenue from the United States. In Q4 2024, US revenue was $60.4 million, up 50% year-over-year. International revenue was $7.8 million, up 137% year-over-year, primarily driven by strong momentum in the United Kingdom. For the full year 2024, international revenue grew 102% year-over-year to $24 million, representing approximately 11% of total revenue.
Liquidity As of December 31, 2024, PROCEPT BioRobotics had a strong liquidity position, with $333.7 million in cash, cash equivalents, and restricted cash. This robust balance sheet provides the company with the financial flexibility to continue investing in its research and development efforts, as well as the expansion of its commercial infrastructure to support the growing adoption of its products.
The company's debt-to-equity ratio stood at 0.20 as of December 31, 2024. PROCEPT has a $52 million term loan facility with Canadian Imperial Bank of Commerce, maturing in October 2027. The loan bears interest at SOFR plus 2.25% and has an initial 36-month interest-only period.
PROCEPT's current ratio was 9.07 and quick ratio was 8.01 as of December 31, 2024, indicating a strong short-term liquidity position.
Competitive Landscape and Risks PROCEPT BioRobotics operates in a highly competitive medical device industry, facing challenges from larger, well-established companies as well as smaller, innovative players. The company's primary competitors in the BPH treatment space include manufacturers of devices for the TURP procedure and laser-based therapies.
One of the key risks facing the company is the ability to maintain and expand third-party payor coverage and reimbursement for its products. Changes in healthcare policies, regulations, and reimbursement levels could adversely impact the company's financial performance and limit patient access to its technologies.
Additionally, PROCEPT BioRobotics is subject to the regulatory oversight of the FDA and other governing bodies, both in the United States and internationally. Failure to obtain or maintain the necessary regulatory approvals, or any changes in the regulatory landscape, could significantly impact the company's ability to commercialize its products.
Outlook and Conclusion PROCEPT BioRobotics has demonstrated remarkable progress in establishing its Aquablation therapy as a leading solution for the treatment of BPH. The introduction of the HYDROS Robotic System, coupled with the company's strong clinical evidence and growing user adoption, positions PROCEPT BioRobotics as a contender to become the standard of care in the BPH surgical market.
The company's expansion into the prostate cancer arena, with the initiation of the WATER IV PCa trial, represents a significant opportunity to further diversify its product pipeline and capitalize on an underserved market. As PROCEPT BioRobotics continues to execute on its strategic initiatives, investors will be closely monitoring the company's ability to maintain its growth trajectory, achieve profitability, and solidify its position as a leading innovator in the surgical robotics space.
For the full year 2025, PROCEPT expects total revenue of approximately $320 million, representing 43% growth compared to 2024. The company anticipates selling approximately 210 new robotic systems in the US, with capital pricing in the range of $430,000 to $440,000 per system. In terms of handpiece sales, PROCEPT expects to sell approximately 52,500 units in the US, representing 63% unit growth compared to 2024, with an average selling price of approximately $3,200.
International revenue for 2025 is projected to be approximately $32.5 million, representing 36% growth. The company expects full year 2025 gross margins to be approximately 64.5%, a 400 basis point improvement over 2024. Operating expenses for 2025 are anticipated to be approximately $300 million, representing 28% growth over 2024. PROCEPT forecasts a full year 2025 adjusted EBITDA loss of approximately $35 million.
For the first quarter of 2025, PROCEPT is forecasting total revenue of $65.5 million.
The BPH market in the US is estimated to be a $20+ billion total addressable market opportunity. The company believes the global incidence of BPH among men over 50 is similar to the US, representing a significant incremental market opportunity outside the US. With its innovative technology, strong clinical evidence, and expanding market presence, PROCEPT BioRobotics is well-positioned to capitalize on this substantial market opportunity and drive long-term growth in the surgical robotics industry.