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Profound Medical Corp. (PROF 0.73%)
Q2 2022 Earnings Call
Aug 04, 2022, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Welcome to the Profound Medical second quarter 2022 financial results conference call. My name is Darryl, and I'll be your operator for today's call. [Operator instructions] I will now turn the call over to Stephen Kilmer, investor relations. Stephen, you may begin.

Steve Kilmer -- Investor Relations

Thank you, Darryl. 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.

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For the benefit of those who are new to the Profound 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 diseased 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 ablation of a surgeon defined prostate volume while actively protecting the urethra and rectum to help preserve the patient's natural function mobilities.

TULSA-PRO is CE marked, Health Canada approved and 510 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 deploy a capital and consumable sales and service model separately as the situation warrants that. We are also commercializing Sonalleve, an innovative therapeutic platform with a CE mark for the treatment of uterine fibroids and palliative pain treatment of bone metastases.

Sonalleve 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 our humanitarian device exemption for the treatment of osteoid osteoma. The business model for Sonalleve systems is currently a one-time sale of 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.

Rashed Dewan -- Chief Financial Officer

Good afternoon, everyone, and welcome to our second quarter 2022 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 second quarter 2022 financial results. To streamline things, all of the numbers we will refer to have been rounded, so they are approximate. For the three-month period ended June 30, 2022, the company recorded revenue of $2 million, with $1.16 million coming from recurring revenue and $864,000 from the one-time sale of capital equipment. This represented revenue growth of 48% sequentially over the previous quarter, driven by a 14% increase in recurring revenue and the first time North American sale of Sonalleve systems.

Q2 2022 revenues decreased $600,000 from the same period in 2021 due primarily to lower one-time sales of the capital equipment in international markets. Total operating expenses in the 2022 second quarter, which consists of R&D, G&A and selling and distribution expenses were $8.7 million, an increase of 15%, compared with $7.6 million in the second quarter of 2021. Breaking that down further, expenditures for R&D increased 8% on a year-over-year basis to $3.7 million. G&A increased by 7% to $2.6 million and selling and distribution expenses increased by 39% to $2.4 million, primarily due to a higher foreign exchange gain.

Net finance income for the 2022 second quarter was $1.9 million. This compared to a net finance cost of $602,000 in the same three-month period of 2021. Overall, the company recorded a second quarter 2022 net loss of $5.9 million or $0.28 per common share, compared with a net loss of $7 million or $0.35 per common share for the same three months period in 2021. As at June 30, 2022, Profound had cash of $53.2 million.

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

Arun Menawat -- Chief Executive Officer

Thank you, Rashed. As you know, our primary focus for the past several quarters has been on the U.S. commercialization of our next-generation prostate disease treatment technology, TULSA-PRO. While that focus continues, we have not forgotten about Sonalleve and its potential importance to our future as a company over the longer term.

Like TULSA, Sonalleve combines real-time magnetic resonance imaging and thermometry with thermal ultrasound to enable precise and incision-free ablation of diseased tissue. The major difference between the two therapeutic platforms is how the ultrasound energy is applied to the diseased tissue is different. Sonalleve brings high-intensity focused ultrasound, or MR-HIFU, where a small area is ablated with real-time MR visualization versus TULSA, where the thermal ultrasound is delivered directionally like a blade in a sweeping pattern contacting a large volume of tissue in minimal time. Profound is the only company that has both technology capabilities.

One of the reasons we use the directional blade ultrasound in TULSA is because in the prostate application, it ablates at about 10 times faster than HIFU technology. Up until recently, we have been exclusively commercializing Sonalleve in all U.S. markets for the treatment of uterine fibroids and palliative pain treatment of bone metastasis. In late 2020, we received FDA approval under a Humanitarian Device Exemption, or HDE, for the treatment of osteoid osteoma.

Osteoid osteoma is a noncancerous bone tumor that occurs most often in the femur and tibia of young children and adolescents. And osteoid osteoma causes a dull aching pain that is moderate in intensity, but can worsen and become severe, especially at night. CT-guided RFA is currently the most commonly used osteoid osteoma treatment, but it is invasive and exposes young patients to radiation. Sonalleve offers these patients a treatment that can be performed safely with clinical improvement, but without any incisions, needles or ionizing radiation exposure.

While the osteoid osteoma market is small, I'm pleased to tell you that the capital sales that we recorded in Q2 represent the sale of two Sonalleve systems to two of the most prestigious pediatric healthcare centers in North America, the National Children's Hospital in Washington, D.C. and the Hospital for Sick Children in Toronto. These were the first sales of the platform in the United States and Canada, respectively. Not only will these institutions use the systems to treat osteoid osteoma, but they will also further conduct clinical studies for other applications where severe unmet need arises in young patients, including treatment of cancer.

And now let's talk about TULSA. As you may recall, the TULSA systematic review paper that was published online in March by the Journal of Endourology provided Level 2A evidence, the highest available in support of TULSA, demonstrating that TULSA is safe and effective for treating primary prostate cancer, recurrent prostate cancer and locally advanced prostate cancer, as well as for the simultaneous treatment of prostate cancer and the lower urinary -- sorry, urinary tract symptoms normally caused by BPH. This publication also completed the clinical requirements for us to qualify to file a CPT Category 1 application, which we did in mid-June. We are cautiously approaching the upcoming CPT editorial panel meeting in September.

Our caution emanates from the fact that history has shown some CPT applications for new game-changing technologies like TULSA have taken an extra year before the AMA advanced them further. That said, we are pleased that one of the unique aspects of the TULSA application is that it is cosponsored and filed with support from multiple societies. In any case, we're very pleased to see that CMS has recently proposed a 5% increase in the reimbursement for C9734, the temporary code that is currently being used by hospitals for TULSA. The new proposed national payment is $13,274.

This will be finalized by the end of September. We believe that the proposed payment is sufficient to help further advance adoption of TULSA in the near to midterm in the United States. To maximize the incredible opportunities we see ahead for both TULSA and Sonalleve, it's vital that we continue to foster the growing interest physicians and patients have shown in our ablative technologies through the generation of additional post-market clinical data, participation in relevant medical congresses and execution of our own professional marketing initiatives. With respect to clinical data, our sponsored CAPTAIN trial, which is the first Level 1 study ever conducted comparing emerging technologies head-to-head with Radical Prostatectomy in men with prostate cancer continues to progress well.

To date, seven sites have been activated and currently recruiting patients. We have increased the number of target sites from eight to 12 in the U.S. as there is strong interest in participation. We do have two sites in Canada.

And again, due to interest, we may add one or two sites in Europe. We still expect that a vast majority of patients in the study will be U.S. patients. Turning to medical meetings and marketing initiatives they have had an exciting few months.

For example, TULSA-PRO was front and center at the American Urological Association's 2022 Annual Meeting in May. Of note, Dr. Ken Goldberg from UT Southwestern Medical Center performed a semi-live TULSA procedure during one of the plenary sessions. The AUA designated this activity as AMA PRA Category 1 credit, which requires that a physician-led content review committee determine the education to be valid, fair, balanced, scientifically vigorous and free of commercial bias.

Also during an earlier plenary session, Dr. Scott Eggener from the University of Chicago, included the TULSA procedure, and TACT pivotal study follow-up data in his presentation. In addition, Turku University Hospital's Mikael Anttinen gave a moderated poster presentation, which included updated results from a phase 1/2 clinical study evaluating the use of TULSA for treating patients suffering from BPH. The study reported six-month improvement in patient quality of life, LUTS, sexual function and uroflowmetry with all men discontinuing their BPH medication.

Finally, in advance of daily product demonstrations, we unveiled our TULSA-PRO software release 2.11, included two new features. The first, the multiparametric MRI vision is designed to help physicians more confidently delineate targeted prostate tissue between malignant or benign and guide sparing, as well as to identify and avoid intraprostatic calcifications. This feature can be helpful, particularly in defining margins if they are performing subtotal prostate ablation or more commonly known as focal therapy. The second is an optimized bladder suppression algorithm, which was developed in response to most U.S.-based physicians having moved from supra-pubic catheterization in favor of urethral or Foley catheters.

In the view of AUA, both TULSA and Sonalleve enjoyed high profiles at the Society of Interventional Radiology meeting in June. Among the many presentations mentioned one or two of the technology platforms, Dr. Steve Raman from UCLA presented three-year follow-up data from TACT; Dr. Busch did a presentation on his initial experience with TULSA; and in the presentation titled HIFU pediatric applications, current and future applications, Dr.

Karun Sharma from the Children's National Hospital reviewed osteoid osteoma treatment data and discussed plans for an upcoming trial of Sonalleve designed to examine its use in treating pediatric patients for hyperthermia prior to radiation treatment. Finally, we hosted our inaugural PRO-Talk Live event in Chicago a few weekends ago. These types of events, which we used very effectively in my previous company are designed to bring together both experience and potential physician users for a day of face-to-face presentations and discussions. Quite simply, education by existing users is a great way to sell to future users, and TULSA is an ideal product for that strategy.

Since this was the first PRO-Talk Live, we purposely kept it relatively small, with approximately 40 physicians participating, about 12 of whom were existing users, and the rest potential users. Based on the extremely positive feedback we have received from the first event, we're planning on hosting additional larger meetings as we go forward. To summarize, awareness and adoption of our unique ablative technology continues to grow. We sold our first Sonalleve system in the U.S.

and Canada during the first quarter -- during the second quarter. As expected, we filed our CPT Category 1 application for TULSA in June. Enrollment in the capital -- in the CAPTAIN trial comparing TULSA to RP is progressing. Now let me briefly touch on the dreaded word, COVID-19.

The kinds of activities and the results that I described to you today are what it always takes to bring adoption of a new game-changing technology to market. But for about two years, when we could not do many of them because of the pandemic, it affected our introduction of TULSA to the market. While lingering effects, particularly with respect to supply chain remain, we're learning how to overcome them and reduce the time frame from installation to effective use. POC training, significant podium presentations at society meetings and filing a society sponsor CPT applications are all important aspects of driving adoption for TULSA.

Now I'm finally thrilled with the progress. We focused our Q2 sales efforts in starting the new sites that were installed in Q1. But we remain comfortable that we will achieve a total of 35 TULSA sites in the U.S. before the end of 2022 and that the number of patients treated quarter over quarter will continue to increase and the pace of adoption will continue to accelerate into 2023.

This ends our prepared remarks for today. With that, Rashed and I are happy to take any questions you might have. Operator?

Questions & Answers:


Operator

[Operator instructions] And our first question comes from Frank Takkinen. Go ahead, Frank.

Frank Takkinen -- Lake Street Capital Markets -- Analyst

Hey, Arun. Hey, Rashed. Thanks for taking my questions. Congrats on all the solid operational progress.

Apologies for starting off with a little bit of a naive question, I think I may have missed it, but did you guys call out the number of placements that occurred in the quarter and where that stands? I heard the 35 guide, but was just curious where that's standing at right now.

Arun Menawat -- Chief Executive Officer

Frank, thank you first of all. We did have additional contracts but we did not place additional systems because, as I mentioned in the prepared remarks, we're really focused on getting the new sites running. But we, as I said in the prepared remarks, are pretty comfortable that we will have at least 35 sites operational by end of this year.

Frank Takkinen -- Lake Street Capital Markets -- Analyst

OK. That's good color. Appreciate that. And then maybe just one more on Profound on the reimbursement -- sorry, on TULSA, on the reimbursement process.

Noticed it was a two-code application for imaging, as well as treatment. Can you maybe just talk through some of the intricacies to that process? And who can use which codes, urologists versus radiation, oncologists and how this could impact the commercialization of the product over time?

Arun Menawat -- Chief Executive Officer

Yeah, absolutely, Frank. I'm happy to provide quite a bit of color on this. So we're working very closely with societies on this. And that one of the feedback that we received was that this could be a procedure that could be done jointly with a radiologist and a urologist.

And so based upon those recommendations, we divided these applications into two subsets where we're seeking one code that is more about the imaging aspects of the treatment, which could then be used by a radiologist. And the second part, which is more about insertion of the catheters and the treatment planning and the assessment of the treatment, and that is more of a urology activity. And so that could be used by the urologist. And the way the societies have put this together, both of those codes can be used individually by one of the specialties, or if one specialty is -- physician is using -- doing the whole thing, that physician could use both codes.

So it gives a lot of flexibility to how the technology can get adopted because in large hospitals, in some cases, we're hearing that two physicians are using this together, and they really like the fact that they can do that, and they will have the flexibility to continue to do that. And in smaller hospitals where there are single physicians doing the whole thing, more likely a urologists doing it, then they will be able to use both codes. So I think that that's certainly part of the color. It is a very comprehensive plan that is going on.

There's a lot of analysis going on with the AMA at the moment. So we're going through it. It's a game-changing technology. We're optimistic overall.

Obviously, we're thrilled with the caliber of advice we're getting from independent societies. So let's see how it goes, and we'll continue to do it. But I think the other part of the color to be honest, we were really, really thrilled with the fact that while most reimbursements continue to go down, and we saw that for other urology procedures, particularly prostate cancer procedures, many have come down. But the ablative treatment like ours, the C9734, which was already well -- the target payment was already pretty good, has actually gone up 5% if it finally meets the final editing and gets finalized by the end of September.

And HIFU, which is also ablative procedure went up. So I think that the fact that the CMS and other societies are recognizing the value of ablative technologies, we're quite thrilled with that. I think we can drive adoption with the C code very well going forward.

Frank Takkinen -- Lake Street Capital Markets -- Analyst

OK. Really helpful. Maybe if I can just sneak one more. Given all the extra commentary on Sonalleve this quarter, could you maybe just try and frame up how we should be thinking about capital placements in the back half of the year and on a go-forward basis?

Arun Menawat -- Chief Executive Officer

Yes. Again, Frank, very good questions. So again, our -- 99% of our priority is TULSA. That's what we're driving.

We're pleasantly surprised with the attention that Sonalleve received at the interventional radiology meeting in Boston in June this year. We are obviously thrilled with the two -- the sales of two devices in this quarter. I think that my suggestion in terms of going forward is quite frankly conservative. I would not assume that we would sell more devices in U.S.

this year for these applications. I think that there is a lot of interest, but they're going to have to budget them and so on. And I think these two sites will provide references to a number of pediatric sites in the United States that will hopefully convert into sales in 2023. So that's part of our thinking process.

The capital model that we do apply, particularly for Sonalleve, in the international markets, I think it's still coming back very slowly. And China, in particular, is really, really still not quite there. So I would still be cautious on this. But I think strategically, I think we're thrilled with it and I do think it bodes well for the mid- to longer term.

Frank Takkinen -- Lake Street Capital Markets -- Analyst

OK. Perfect. I'll stop there. Thanks for taking my questions.

Arun Menawat -- Chief Executive Officer

Thank you, Frank.

Operator

And our next question comes from Zach Weiner. Go ahead, Zach.

Zach Weiner -- Jefferies -- Analyst

Hey, guys. Thanks for taking the question. I just wanted to confirm one thing and then one more broader question. Just the commentary on placements through the second half of the year, where is the expectation there? And then what's the thought on COVID headwinds and maybe impacting those placements? And I have a couple of follow-ups.

Arun Menawat -- Chief Executive Officer

Sure, Zach, you're -- I'm assuming you're talking particularly about TULSA in the United States and adoption?

Zach Weiner -- Jefferies -- Analyst

Yes. Yeah. Sorry about that. Yeah.

Arun Menawat -- Chief Executive Officer

Yeah. No, I think that -- as I mentioned in the prepared remarks, I'm really thrilled with the fact that now that the society meetings are going on, the publications are coming out, the amount of attention on TULSA is now significantly better than what we had over the last two years. And the reason it is so critical is that that is where and how you build awareness. So I think the awareness level of TULSA is significantly higher today than it was even a year ago.

And so I think what you will continue to see is we will continue to install more sites. We're debottlenecking all of the reasons why it has taken longer. We are pretty confident about 35 sites this year. We're pretty confident that the usage will continue to increase.

It has been increasing in double digits quarter over quarter. I think the pace of increase is going to continue to also increase perhaps by end of this year, and you will start to see that. So I think on the TULSA side, we are -- it's more like things are on track, the awareness is going up, patients continue to give us positive feedback, you'll continue to see more publications, you'll continue to see more and more usage and adoption continuing to go up, you will continue to see additional sites going up. I think the pace is decent at the moment, but I think you will continue to see improvement in the pace of adoption over time also.

Rashed Dewan -- Chief Financial Officer

And I think, Zach, like another point that we've made in the prepared remark is after a long time, we have had our first PRO-Talk Live recently, and that's where we brought in like 40 physicians, right? So now that COVID is subsided to a certain extent, you'll see that those activities are going to pick up where we can get more engaged with our physician base and at the same time, make more physicians aware of the technology and we can educate them and start guiding them toward our technology.

Arun Menawat -- Chief Executive Officer

Exactly. And we're happy to provide you a lot of color on these things. We've had good sites. As you know, the quality of our sites in the U.S.

is very high. But a number of users, some of them are using it for mostly for the current failures. Some of them were using for focal therapy. Some of them are using for whole gland.

And when we brought the users together, they could see how others are using it more broadly and so on. So I think these activities would lead to higher usage even at existing sites over time. So that's why we're kind of excited that we're finally able to cross-benchmark, cross-fertilize the knowledge across our users. And many, many nonusers were there, and we got very good feedback that these guys are now ready to move forward with their own adoption of TULSA.

Zach Weiner -- Jefferies -- Analyst

Thanks. And if I could just sneak one more in. Your comments on sort of the inflationary pressures that are facing broader med tech space. Just curious what you guys are seeing internally? Thanks.

Arun Menawat -- Chief Executive Officer

In the broader med tech, to be honest, I don't have much comments, Zach. I think that we have a very one-track mind. We're very focused on our technologies. And we're kind of small at the moment.

So some of those macro things are not as critical to us. I think the biggest thing as we've already described, was the lack of contact, lack of ability to cross-fertilize people. That is what we're thrilled about. I think I would continue to say when we visit customers, we do not walk out of those meetings with them saying they don't see the value or they don't think that they should do it.

They should wait more and so on. Generally speaking, urology community is ready to adopt this technology.

Zach Weiner -- Jefferies -- Analyst

Yeah, thanks for taking my question.

Arun Menawat -- Chief Executive Officer

Thank you, Zach.

Operator

[Operator instructions] And our next question comes from Rahul Sarugaser from Raymond James. Go ahead, Rahul.

Rahul Sarugaser -- Raymond James -- Analyst

Good afternoon, Arun. Good afternoon, Rashed. Thanks so much for taking our question. So my first question is, clearly, this is an important quarter for essentially consolidation, consolidation of awareness, the reimbursement, the AUA, etc., etc.

And so when we look at the current installed base of around 25 and as you guided to around 35 by the end of the year, probably the most important lever that we then need to essentially -- we'll be looking at will be the utilization rate per device. And so Arun, I believe you had alluded to that increasing. Could you please give us a little bit more color in terms of how you're seeing utilization per device currently? How do you see it trending going forward, given the current CPT -- current C-code environment and then the evolving CPT code environment, and then wrap that all up with the challenges that hospitals are currently having, particularly with nursing and potentially limiting their ability to adopt new technologies?

Arun Menawat -- Chief Executive Officer

Yes. Rahul, I'm very happy to provide more color on this. And I think these are very important questions. So again, let me kind of share a little bit more detailed views here.

If you recall, when we introduced the product into the market, we talked about three unique channels. We said we're going to go after the early adopters, we're going to go after imaging centers, and we'll go after teaching sites because those teaching sites were not necessarily going to be high-volume sites, but they were going to provide the kind of podium presentations that we are starting to see now, and they will provide the support that they need for the CPT application, right? So I think those goals are being achieved. And they're not just about the same-store sales at the moment. But I think that in addition to achieving those goals, now with being able to have the face-to-face and the cross-fertilization as I described, what we are starting to see is that even the teaching hospitals are saying, OK, well, this site has treated a number of patients who've done -- of this unique type of cancer.

And another site has done another unique type, or a lot of our sites are cash pay. And how do you present the product through the cash pay customer? A number of sites have different ways of follow-ups. And so I think what we saw from the Pro-Talk Live and number of meetings of the society conferences is that they're now talking to each other, and they're all talking about how do we learn from each other rather than just from our own experience. So I do expect that same-store sales will be increasing over time.

So generally speaking, I think that you will see in our recurring revenue numbers, not only from the increased number of sites, but also from increased usage per site. And I would still, again, as you guys know me well enough, cautious enough to be able to say don't expect it to happen in one quarter, but I do think that the trend is there already. The conversations that we're having with the universities clearly are telling us that there is a strong desire to continue to increase the usage. And so I think the pace of adoption will increase quarter over quarter, I think.

And it will -- it may be a bit linear at the moment, but I do think that you will see acceleration in that linear to more exponential.

Rahul Sarugaser -- Raymond James -- Analyst

Terrific. Thanks, Arun. That's really helpful color, particularly on your strategy and how it's playing through with the podium presentations on the CPT code. So now following on from your final comment about these things playing through to increased utilization, which, of course, then translates to revenue.

I guess maybe we're looking at 2022 as this reconsolidation year, building awareness, etc., getting your pieces together for reimbursement. So now looking forward to 2023, as you put all of these important pieces -- as you are currently putting these important pieces together, again, reimbursement and this awareness and a relatively well-established installed base teaching hospitals, how should we be thinking about sort of revenue ramp in 2023 particularly given also the cash position of around $53 million right now, the burn of around $7 million in the quarter. Could you give us some color in terms of how you're -- that -- the projections on revenue in 2023 relative to your cash and how you look to potentially maybe fill in any gaps, maybe debt or otherwise?

Arun Menawat -- Chief Executive Officer

Yeah. Well, to be honest, I don't have enough visibility to give you guidance for next year yet. I do think that by year-end conversations into 2023, that we may have enough visibility to be able to provide a lot more forward visibility into the revenues and so on for 2023. But I think this is -- really, Q2 is really the first solid or normal quarter, right? And I do understand that we need to get there and we will, as soon as we can, just like we feel pretty confident about 35, and as soon as we feel confident enough to share it with you, we will do that.

So I think that certainly is in the works and hopefully, as soon as we feel pretty comfortable, we'll do that. With respect to the cash position and so on, I still feel we are in very good shape. I don't expect that our burn is going to increase. I think that our gross margins are in a decent place.

I think as the revenues continue to increase, I think you will also see an increase in gross margin because, as you know, manufacturing is all about volume. As the volumes kick in, costs come down and our overhead costs will also remain fairly constant. So I think that it's -- we're in that cusp at the moment. And I think that again slowly but surely, we will see progress on all of these metrics.

And I wish I could tell you more where we are at the moment, but I would just rather wait until we have the data to show you.

Rahul Sarugaser -- Raymond James -- Analyst

OK. Perfect. Thanks. Thanks, Arun.

And if you don't mind me asking one more question now that -- I'm asking more -- I'll ask one more optimistic one. So given the -- your color around the CPT application, you alluded to multiple societies supporting the application and sort of your relative optimism around the application, could you give us any more color there potentially around the societies? Anything else that provides for your optimism because, of course, this is one of the most important catalysts in this year.

Arun Menawat -- Chief Executive Officer

Sure. Again, I'm happy to provide more color. I think that there are two aspects to this that are both critical. Number one, I am really, really proud of our team.

I think that -- like critical data came in on time. How our commercial team connected with societies and help them learn and get up to speed on our technology, on our clinical data. And I think our team has done as good as it can get. So that part, that is in our control, I feel we're very good about it.

I cannot give you the names of the societies and more color than this because we did sign confidentially agreements with them and thereby, we -- obviously, we abide by those agreements. But to the extent that I can tell you, these are multiple societies that have -- that we work very closely with to get to these decisions about looking for two codes versus one code and framing the application, getting them to help us with it. All that has been done very well. Now as you know me well enough, I look at data for everything.

And one of the pieces of data that is staring me in the face strongly is that game-changing technologies like these go through significant scrutiny by the AMA. And more often than not, it takes longer than a year to get through them. So I don't want to ignore that reality, and we want to work with the AMA, help them as well but I don't want to get ahead of reality either. And part of the reason is, and I think the more important part of the message is the fact that our C code is being paid today.

And it has actually gone up 5%. If it continues and it becomes final rules, it will go up 5%. So we're in pretty good shape to drive adoption. It is not like lots of companies where until they get to that CPT they can't go -- they cannot go anywhere.

In our case, patients are willing to pay, sites are interested in adopting it, our C-code is working, it is paid, it has gone up. We're in good shape. We're in good shape with that. So that's the color.

Rahul Sarugaser -- Raymond James -- Analyst

Great. Well, thank you very much, Arun and Rashed. And congratulations to your team for their yeoman's work.

Arun Menawat -- Chief Executive Officer

Thank you.

Operator

[Operator instructions] And we don't have any questions at this time. I'll turn it back to Arun for closing comments.

Arun Menawat -- Chief Executive Officer

Thank you so much. And again, thank you for your interest in Profound and we look forward to our third quarter meeting. Thank you again.

Rashed Dewan -- Chief Financial Officer

Thanks a lot.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Steve Kilmer -- Investor Relations

Rashed Dewan -- Chief Financial Officer

Arun Menawat -- Chief Executive Officer

Frank Takkinen -- Lake Street Capital Markets -- Analyst

Zach Weiner -- Jefferies -- Analyst

Rahul Sarugaser -- Raymond James -- Analyst

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