PROCEPT BioRobotics Corporation Common Stock 2026 Global Healthcare Conference

We're super glad to be here. Here's our safe harbor statement, and I'll just say I think as industry safe harbor statements go, I think ours is best in class. Feel free to copy it and all of our financial things. I'll just talk a little bit about what the opportunity is around BPH. There's about 400,000 people that get surgical therapy right now for BPH. When you look at our penetration of that, a year ago, we were about 10% penetrated. We're a little better than that now, but still a huge opportunity just to penetrate into the existing market of the existing patients that are getting therapy today. It's a significantly undertreated disease, and I think the things that happen to patients while they remain untreated are underappreciated. It can damage long-term bladder health.

It can lead to retention, incontinence, if it's not treated. I think part of the problem is the treatments that exist today are just not that attractive to many of the men with BPH, and so they tend to delay therapy for as long as they can. If you look at the funnel above the 400,000, there's about 8 million men a year who have BPH and are treated with medication. It's a large number of people that know that they have BPH. They're unhappy with how things are going, and so they're taking medication to try to manage it. Importantly, 1.1 million men each year stop taking their medication.

They either stop taking their medication because they're no longer effective, or they don't like the complications, or maybe they've read some of the latest data that's come out that suggests there's an association between the dual medication therapy and dementia. There's a lot of reasons why people don't want to be on their medication. That's the next group of patients. If you go up funnel about that, there's about 40 million people who are living with BPH, and they're probably the people that are less symptomatic. It's a progressive disease. The prostate continues to enlarge over time. These 40 million people will continually move down and continue to fill that funnel. We have a big near-term opportunity, which is converting existing surgery, but then there's even a larger opportunity with getting patients off the sideline. Our technology itself is unique.

It represents a best-in-class therapy for this. When I talk about best-in-class therapy, what I really mean is the things that matter most to patients. There's about four things that when we do patient-centric research, always rise to the top. The first thing is men want complete relief of their symptoms. They want maximum symptom relief. The number two thing is they want to maintain their urinary function. Number three is they want to maintain their sexual function. Number four is they do not want to have a second procedure. When you put all those four things together, you have to look at what the other therapies are that are available. There's a radical prostatectomy, which is a very successful one-and-done procedure. The problem with it is it does not preserve sexual function. It does not preserve urinary function.

If you look at incontinence rates after a radical prostatectomy, it's about 25%-30% of men have incontinence. If you look at the ED rates, the overwhelming majority of men have severe ED following a radical prostatectomy. So it's a one and done, but it doesn't take care of the rest of it. If you look at some of the other non-resective therapies, they do not provide complete relief, even though they might preserve urinary and sexual function. But they are procedures that oftentimes require retreatment within one to three years. So it's another procedure. It's another transurethral approach. This is something that I think is really important to patients. When we say men only want to have a one-and-done procedure, it is a large French device going through the urethra.

I think when you're talking about devices that are in that 20 to 24 French range, the number of times a man would like a 24 French device through his urethra is probably zero to one time. This is why getting one procedure that is totally curative of your problem is so important to men. When we look at the PROCEPT technology for Aquablation, we have very low incontinence rates, about as close to zero as you can get with a medical procedure. We are able to preserve sexual function, and our durability is right in line with TURP, which is the gold standard procedure. So we can offer all of these things, and we do that by utilizing a water jet. We don't do cutting with traditional knives that create scar tissue. We don't use heat. We don't use radiation. We don't use steam. We just use water jet technology that's able to cut the tissue using the high-intensity water jet.

We use AI to map the prostate so that we know exactly where the prostate is. The physician can alter the lines, alter the cutting lines where he wants the water jet to go. But once he designs the procedure or augments the procedure after our AI, it is simply a matter of standing on a foot pedal and watching the water jet do its work. They typically will do two passes with the water jet. They come in at the end with a loop and do a bladder neck cauterization just to make sure that there's no bleeding complications, and the procedure's over. So it's fast, it's reliable, it's repeatable, and it delivers best-in-class outcomes, and this is what we need to establish as the standard of care for BPH.

From a business side, we've seen a significant increase in our top-line growth. Revenues continue to grow over time. Our range this year is $390 million to $410 million. If you look at gross margins, we've continually seen improvement in our gross margins. We've put a lot of effort in the past year to reducing discounting, reducing discounts, reducing anything that would adversely affect our ASP. We've seen significant growth of our average selling prices for both our system placements and our consumables as well. That's been a big thing. Our EBITDA loss continues to fall, and we expect to be EBITDA positive by the end of this year in Q4. That's what we've been focused on and what we're driving, and that's how we got to where we are.

Yeah. I would say nine months ago, I was on a call, and there were so many questions that people had about the company. There were questions about. We did sort of an inventory reset. We decided there was too much inventory in the field, and we had eliminated some discounting practices, and people were very focused on that. Is the inventory issues behind you? At Q4 of last year, our system sale price was about $425,000. People were like, "That would seem like it was coming down. Does that indicate a weakness in capital demand? Is this just sort of a weakness in the whole company thesis?" Handpiece pricing, I think for the first three quarters of last year, we were about $3,200. There were a lot of questions about that sustainability. There's certainly procedure growth. There were questions about why do people not upgrade their legacy systems.

People have their legacy AquaBeam systems. You're selling greenfield HYDROS, but we're not seeing a lot of upgrades. Is that just kind of an indication that people buy the system, and then they're not that excited about it? All those things. If you look at where we are today, we eliminated all those discounting practices, both on the capital and on the consumable side. Our pricing went from $3,200 for handpieces. I think we've been over $3,500 for the first half of the year, which is a significant improvement in ASP. It wasn't done through a price increase. We didn't jam all of our customers with a big price increase. We just eliminated end of quarter discounting and bulk purchasing and all those things. I think there were people that worried there was. We had a reset in Q4 of last year on field inventory.

But if you look at this year, we expect to be at the one-to-one ratio for the full year with procedures matching handpiece sales. I think that that's behind us. Our system pricing, we've delivered on our robot placements. We've been above consensus for the first half of the year. In Q2, our system pricing was $495,000. So a significant increase in that. We wanted to be purposeful about starting a replacement program, and we wanted to work with our customers and be good partners. So we developed a trade-in allowance where if people wanted to upgrade their system, they could trade in their legacy system and get an upgrade. The response to that has been really positive. We thought we would do between 8 to 10 of those this year.