PROCEPT BioRobotics (PRCT) 2024 Wells Fargo Healthcare Conference summary

HYDROS system launch and features

• HYDROS, the next-generation robotic system, introduces AI Assist for assisted planning, improving surgical outcomes by reducing variability in treatment planning.

• Workflow is streamlined, making setup easier and reducing reliance on specialist staff, addressing prior inefficiencies.

• Enhanced imaging with improved ultrasound and a digital cystoscope simplifies the physician experience.

• HYDROS is designed for mass market adoption, making it more accessible and appealing to a broader range of hospitals and surgeons.

• The system is expected to accelerate patient flow and increase surgeon adoption within hospitals.

Commercial strategy and financial outlook

• Initial HYDROS commercialization focuses on greenfield opportunities, with reps not incentivized to sell replacements in Q3 and Q4.

• Average selling price (ASP) for HYDROS is guided at $380,000 for the back half of the year, with potential upside in 2025.

• Margins are expected to remain stable, as HYDROS costs are comparable to AquaBeam, and higher ASPs are anticipated.

• ROI for hospitals is expected to remain attractive, with potential for increased throughput and multisystem orders.

• Some sales disruption is expected in Q3 due to rep training, but the transition should be complete by the end of 2024.

Market expansion and adoption

• Near-term strategy remains focused on cannibalizing TURP and GreenLight procedures, with only 10% market share in resective surgery as of 2024.

• HYDROS is expected to make the system more appealing to low and medium-volume hospitals, expanding the addressable market.

• The company is piloting entry into the ASC setting, aiming for market expansion rather than shifting existing hospital procedures.

• Same-day discharge rates are increasing, with 20-30% of patients discharged the same day, and some surgeons achieving over 90%.

• Utilization growth is a key focus, with significant room to increase procedures per system and expand within existing accounts.