What happened
Shares of Procept Biorobotics (PRCT -0.38%) were down more than 21% as of 12:48 p.m. ET Thursday after the healthcare company released first-quarter earnings before the trading day opened. The stock is now down more than 31% so far this year.
So what
Procept makes the AquaBeam Robotic System, which is designed to be used in performing minimally invasive urology surgeries. The company's first-quarter results were positive, for the most part. Revenue rose 72% year over year to $24.4 million. The Aquabeam's handpiece and consumables revenue was $11.8 million, up 165% over the same period last year. The company also boosted its guidance to say it expected $128 million in revenue this year, up 71% from 2022.
However, its losses grew and its cash position shrank. The company reported a net loss of $28.5 million compared to its loss of $17.2 million in the first quarter of 2021. The company ended the quarter with $181 million in cash and equivalents on the books. At Procept's current burn rate, that would only fund operations into early 2024.
Now what
Thursday morning's double-digit percentage share price drop seems a bit of an overreaction considering the company is growing revenue at a steady clip and increasing revenue at a faster rate than its net income is falling. It's not surprising that its bottom-line losses grew as Procept is engaged in the effort of marketing a product that is increasingly gaining coverage from major insurers. The company will likely have to raise more money, of course, but given its growth rate, that shouldn't be difficult.
There are plenty of tailwinds for the AquaBeam. According to National Library of Medicine data, benign prostatic hyperplasia (enlarged prostate) affects 50% to 60% of men in their 60s and 80% to 90% of men 70 and older. And the United Nations forecasts that the number of people 65 and older worldwide will more than double by 2050. In other words, the target market for the types of surgeries that Procept's systems facilitate is large and growing.