About EDAP TMS

EDAP TMS S.A. develops and markets robotic high intensity focused ultrasound (HIFU) devices, advanced choices for the treatment of localized prostate cancer. The company's HIFU devices are also used for patients who failed a radiotherapy treatment. In addition, the company is developing a HIFU platform for the treatment of various types of tumors, including rectal endometriosis, liver and pancreatic cancer. The company also produces and commercializes medical equipment for the treatment of urinary tract stones using ESWL (Extracorporeal ShockWave Lithotripsy) and distributes other types of urology devices in certain countries. Divisions The company operates through three divisions: HIFU, ESWL (including lithotripsy activities) and Distribution. Through these three divisions, the company develops, produces, markets and distributes minimally invasive medical devices, mainly for urological diseases. The HIFU division includes sales of Focal One, Ablatherm and related consumables and services; the ESWL division includes revenues generated by the existing Sonolith range of lithotripters; and the Distribution division includes the sale of complementary products, such as lasers, micro-ultrasound systems and other products from third parties. The company's global strategy is to expand its HIFU activities in the U.S. and accelerate HIFU adoption through its HIFU division. The company also focuses on the development of HIFU in other medical conditions beyond prostate cancer. The company is leveraging its Distribution and ESWL divisions to help optimizing its global development while rolling out its HIFU strategy. The company's three divisions operate in Europe, the Americas, Asia and the rest of the world. HIFU division The HIFU division engages in the development, manufacturing and marketing of robotic medical devices based on HIFU technology for the minimally invasive treatment of urological and other clinical indications. The company's HIFU business is cyclical and generally linked to lengthy hospital decisions and investment processes. Hence, the company's quarterly revenues are often impacted and fluctuate according to these parameters, generally resulting in a higher purchasing activity in the last quarter of the year. The HIFU division develops, manufactures and markets robotic devices for the minimally invasive ablation of certain types of localized tumors using HIFU technology. HIFU technology uses a high-intensity convergent ultrasound beam generated by high power transducers to produce heat. HIFU technology is intended to allow the surgeon to destroy a well-defined area of diseased tissue without damaging surrounding tissue and organs, thereby eliminating the need for incisions, transfusions and general anesthesia and associated complications. The HIFU division markets the Focal One high-end device, a HIFU fully robotic device for prostate tissue ablation dedicated to the focal therapy of localized prostate cancer at stage T1-T2, thereby destroying targeted cancer cells only. The robotic features of the company's HIFU devices make the treatment procedure safer for the patient and less operator dependent. The Focal One HIFU device can be used for patients who are not candidates for surgery or who have failed a radiotherapy treatment. In addition to selling HIFU devices, the HIFU division records revenues driven from HIFU treatments performance (HIFU Treatment Driven Revenues), which include net sales of disposables, leases, revenue-per-procedure (RPP) and treatment related services. The company offers a HIFU mobile treatment option, which provides access to its HIFU devices without requiring hospitals and clinics to make an up-front investment in the equipment. Instead, hospitals and clinics perform treatments using these devices and remunerate the company on a RPP basis (i.e., on the basis of the number of individual treatments provided). With this model, once the treatment is established in the medical community, a permanent installation may become more attractive, leading to the sale of the device in some of the larger locations. In addition, the HIFU division generates revenues from net sales of maintenance services associated to the company's installed HIFU devices, including Focal One, Ablatherm and Ablatherm fusion devices. As of December 31, 2022, the HIFU division had an active installed base of 85 Focal One machines, including 34 in the U.S. Business Strategy The HIFU division's business strategy is to capitalize on its expertise in HIFU and its position in urology to achieve long-term growth as a leader in the development, manufacturing, marketing and distribution of minimally invasive medical devices for urological and other indications, using HIFU technology, while preserving patient quality of life. The minimally invasive treatments using HIFU could provide an alternative to current invasive therapies. The key elements of the HIFU division's strategy are to provide minimally invasive solutions to treat localized prostate cancer using HIFU; and achieve long-term growth by expanding HIFU applications beyond prostate cancer. The company's strategy is also to accelerate HIFU adoption in the U.S. that the technology has a CPT Code and an established level 6 reimbursement. Products Cell destruction by HIFU is accomplished by a combination of thermal and cavitation effects caused by focused application of piezoelectric-generated high-intensity ultrasound; and HIFU procedures are performed under general or spinal anesthesia. The company commercializes the Focal One, a HIFU fully robotic device dedicated to the focal therapy of prostate cancer by the ablation of prostate tissue. Focal One combines the three essential components to efficiently perform a focal treatment of localized prostate cancer: high-quality imaging to localize tumors with the use of magnetic resonance imaging (MRI) combined with real-time ultrasound, high precision of HIFU treatment focused on identified targeted cancer areas, and immediate feedback on treatment efficacy utilizing Contrast-Enhanced Ultrasound Imaging. Focal One provides an effective and accurate ablative treatment of localized tumors with the capacities of being flexible and repeatable, while preserving patient quality of life. The company also maintains and services installed bases of the prior generation of HIFU devices, such as: Ablatherm, an ultrasound guided robotic HIFU device for ablation of prostate tissue and is used in the treatment of organ-confined prostate cancer. It consists of a treatment module, including a HIFU endorectal probe, a control table with a computer and a computer screen, and a diagnostic ultrasound device connected to the treatment module. After insertion of an endorectal probe, the physician visualizes the prostate using ultrasound imaging and defines the area to be treated. The computer automatically calculates the optimum treatment distribution of lesions. During the treatment, the probe automatically moves and fires HIFU beams at each predefined lesion until the entire targeted area has been treated. At the same time, the physician is able to control and visualize the treatment in real time due to the integrated imaging system. Ablatherm Fusion, an evolution of Ablatherm, and incorporates the company's proprietary fusion software, which merges MRI and ultrasound images providing physicians with increased accuracy during planning and treatment. Patents and Intellectual Property As of December 31, 2022, the HIFU division's patent portfolio contained 30 granted owned or co-owned patents consisting of six patents in the United States, ten patents in the European Union, seven patents in Japan and seven patents in China. These patents belong to ten groups of patents covering technologies related to therapeutic ultrasound principles, systems and associated software. Additional owned or co-owned patent applications covering certain other aspects of the company's HIFU technology, including two international patent applications under the Patent Cooperation Treaty, two patent applications in the United States, five patent applications in the European Union, two patent applications in Japan and two patent applications in China, are pending before the relevant patent offices. The company's ongoing research and development objectives are to maintain its leadership position in the treatment of prostate cancer and to extend the HIFU technology to new applications and minimally invasive systems. These research projects are conducted in cooperation with the French National Institute for Health and Medical Research (INSERM), which collaboration gives rise in some cases to the filing of patent applications, followed by the registration of co-owned patents, if granted. The company has entered into license agreements with INSERM related to certain patents co-owned with INSERM whereby it commits to pay an amount of royalties to INSERM based on a fixed rate of the net revenues generated from the sales of HIFU devices using such co-owned patents. Under these agreements, which last for the life of each such co-owned patent, the company has the exclusive right to the commercial use of these co-owned patents, including the right to out-license such commercial rights. The company has an option to obtain an exclusive license from INSERM relating to other patents co-owned with INSERM. Regulations Ablatherm devices previously placed on the market are maintained for use according to applicable regulation and any new placement of HIFU devices, in Europe or in territory covered by CE Marking, is being addressed with a Focal One new generation device. Based on clinical study results, the company obtained a CE Marking for Focal One in June 2013, which allowed it to market the Focal One in the European Union and in worldwide territories where CE Marking is required. The company's notified body has recently expanded its Focal One CE certificate until May 2024. In November 2015, the company received 510(k) clearance from the FDA to market Ablatherm Integrated Imaging HIFU in the U.S. for the ablation of prostate tissue and in October 2017, the company was granted a 510(k) clearance for its Ablatherm Fusion device. The company has initiated discussions with the Japanese authorities (PMDA) on the best process to apply to obtain Japanese approval for its Focal One device. The Ablatherm is cleared for distribution in Canada, Egypt, Russia, and Taiwan. The Focal One device is cleared for distribution in Saudi Arabia, Argentina, Brazil, Canada, South Korea, Costa Rica, Egypt, Singapore, the United Arab Emirates, Ecuador, Israel, Malaysia, Mexico, the U.K, Russia, Switzerland, and Uruguay. Clinical Developments In July 2017, the company, together with its academic, scientific and clinical partners, initiated a collaborative project (the PERFUSE project) under the French National Investment Program for the Future. In 2020, the company initiated a second Phase II multi-center clinical study in France to investigate further the use of Focal One HIFU in the treatment of certain types of deep endometriosis situated in the low rectum. A total of 60 women were enrolled in the study at four major hospitals in France and assessed over a six-month follow-up period. The company's intended end-point was to evaluate the safety and efficacy of HIFU for this pathology. In 2021, the company initiated a long-term follow-up study, including all of the 80 patients treated by HIFU for their deep endometriosis in the Phase I and II studies. During this study, the company will evaluate the quality of life and the symptoms level of the patients up to five years after their HIFU treatment. As of December 31, 2022, 47 patients have accepted to be included in the follow-up study. In late 2022, the company received approval from the French authorities to initiate a Phase III randomized, controlled clinical trial evaluating Focal One HIFU as a potential treatment for rectal deep infiltrating endometriosis. This study is a level 1 multi-center, double blind, randomized, controlled clinical trial. HIFU treatment will be compared to simulated surgery. The study will enroll 60 patients across nine centers in France, with 30 patients randomized to each group. The primary efficacy endpoint is acute pelvic pain evolution three months post procedure. At the conclusion of the study, patients in the simulated surgery group will be offered HIFU treatment. Sales and Distribution of Products The HIFU division markets and sells its products through the company's own direct marketing and sales organization, as well as through selected third-party distributors and agents in several countries. Using the company's direct subsidiaries or representative offices network, the HIFU division maintains direct marketing and sales forces in France, the United States, Germany, Malaysia, and South Korea, which represent its largest HIFU markets. Additionally, the HIFU division markets and sells its products through the company's distribution platform in the rest of Europe, the Middle East, and Southeast Asia. The HIFU division's customers are located worldwide and have historically been principally public and private hospitals and urology clinics. The HIFU division's marketing efforts include the organization of information and training programs for urologists, mainly in key European countries and in the United States where HIFU awareness is growing, comprehensive media and web programs to educate patients on the availability of HIFU technology to treat localized prostate cancer and strong participation in focused dedicated urological events. The company's dedicated web sites www.hifu-prostate.com and www.focalone.com for patients and physicians is visited regularly. ESWL division The ESWL lithotripsy division is engaged in the manufacturing, marketing and servicing of the company's installed base of Sonolith range of lithotripters. The company's ESWL business is quite cyclical and generally linked to lengthy hospital decision and investment processes and their activities. Hence the company's quarterly revenues are often impacted and fluctuate according to these parameters, generally resulting in a possible higher selling activity in the last quarter of the year (year ended December 31, 2022). ESWL The ESWL division's business is producing and marketing certain medical devices, known as lithotripters, for the treatment of urinary tract stones by means of ESWL technology. ESWL uses extracorporeal shockwaves, which can be focused at urinary stones within the human body to fragment the stones, thereby permitting their natural elimination and preventing the need for incisions, transfusions, general anesthesia, and the potential for related complications. The ESWL division markets one model of lithotripter: the Sonolith i-move. The company stopped manufacturing the Sonolith i-sys lithotripter in 2020. In addition, as part of the strategic shift it recently implemented, the company decided to discontinue its research and development (R&D) investments in lithotripsy, including the launch of its Endo-Up platform and to focus on the marketing and servicing of its Sonolith range of lithotripters. As of December 31, 2022, the ESWL division maintained or otherwise serviced 522 Sonolith lithotripters. Business Strategy The business strategy for the ESWL division is to capitalize on its expertise in ESWL and its position in urology to maintain the company's lithotripsy sale and service activity as it intends to maintain this cash generating activity. The ESWL division manufactures its own lithotripsy device, the Sonolith i-move, via EDAP TMS France SAS (EDAP TMS France), its wholly owned subsidiary. Products The ESWL division offers the Sonolith i-move extracorporeal shockwave lithotripter to small and mid-size hospitals. The ESWL division also sells disposable parts for lithotripters and electrodes of the Sonolith line, which need to be replaced approximately every ten treatments. The Sonolith i-move relies on the electroconductive technology for shockwave generation. The electroconductive technology, which is derived from the electrohydraulic technology on which the first ESWL lithotripters were based, permits improved focusing of the shockwave, reduces the variability in the shockwave pressure and allows a better transfer of energy to the calculus. The ESWL division's customers are located worldwide and have historically been principally large hospitals, urology clinics and research institutions. To increase its penetration of the market segment of smaller hospitals and outpatient clinics, the ESWL division developed the Sonolith i-move, a compact electroconductive lithotripter designed for smaller clinics. The Sonolith i-move offers a wide range of configurations to suit various budgets and various local market needs. The company's Sonolith range has also been very successful thanks to its innovative Visio-Track ultrasound stone localization: a unique three-dimensional virtual system that uses infrared stereovision proprietary technology to guide the treatment robotically. Patents and Intellectual Property As of December 31, 2022, the ESWL division's patent portfolio contained six granted owned and co-owned patents consisting of one granted patent in the United States, four granted patents in the European Union, and one granted patent in Japan. These patents belong to four groups of patents covering technologies relating to ESWL systems and associated software capabilities. The ESWL division's patents cover both piezoelectric and electroconductive technologies associated to ESWL generator, localization systems and device design. The ESWL division's ongoing R&D objectives in ESWL are to further increase the clinical efficacy, the cost-effectiveness and the ease of use of its products to make them accessible to wider patient and user populations. Regulatory Status The Sonolith i-move is cleared and available for commercial distribution in the European Union, Argentina, Saudi Arabia, Colombia, South Korea, Singapore, Costa Rica, Ecuador, Mexico, the United States, Indonesia, Japan, Malaysia, Myanmar, the United Kingdom, Russia, Serbia, Switzerland and Taiwan. The ESWL division continues to provide disposables, replacement parts and services for the installed base of Sonolith Praktis, Sonolith Visio and Sonolith i-sys even though it has discontinued the manufacture of these machines. Competition The ESWL division's major competitors in developed countries are Wolf, Storz Medical and Dornier Medtech. Sales and Distribution of Products The ESWL division markets, sells and services its products through the company's direct sales and service platform in France, Germany, the United States, Japan, South Korea, Malaysia and in the United Arab Emirates through the company's representative office in Dubai. The ESWL division also markets its products through agents and third-party distributors in several other countries. The ESWL division's customers are located worldwide and have historically been mainly public and private hospitals and urology clinics. The ESWL division's marketing efforts include the organization of training programs for urologists worldwide. Distribution division The Distribution division engages in the marketing, distribution and servicing of products complementary to the company's global activity, such as lasers, micro-ultrasound systems and other medical products from third parties. Business Strategy The Distribution division's business strategy is to generate revenues from the marketing and distribution of medical devices for the minimally invasive diagnosis or treatment of urological disorders and other various clinical indications. These products include but are not limited to micro-ultrasound devices, such as the ExactVu product and lasers. The Distribution division also generates revenues from the leasing of devices, as well as from the sale of disposables, spare parts and maintenance contracts for equipment sold under the Distribution division. The company has engaged in exclusive distribution agreements with third parties to distribute and service their products in certain territories, under specific conditions. The Distribution division strategy is also to distribute products that bring synergies and complementarity to the company's existing home grown technologies. In May 2020, the company signed an exclusive worldwide distribution agreement with Exact Imaging, a developer of high resolution micro-ultrasound imaging technologies. Under the terms of the agreement, the company will market Exact Imaging's micro-ultrasound diagnostic devices alongside its Focal One. In that respect, ExactVu micro-ultrasound complements its Focal One HIFU technology. ExactVu offers all of the steps and procedures that need to be done prior to a treatment for prostate cancer. By distributing the two technologies, the company offers the urologist a complete solution for focal prostate cancer management, with full autonomy and capabilities from diagnostic to treatment. This type of complete care is also extremely attractive to patients with prostate cancer as it represents a non-invasive way of managing their disease by using diagnostics to eliminate unnecessary biopsy procedures and allows for a very precise non- invasive HIFU ablation of the suspicious and diagnosed region of the prostate. Products The Distribution division distributes Lumenis Holmium lasers (HoLEP) marketed by Boston Scientific under an exclusive agreement limited to the French territory. HoLEP Moses Lumenis laser is a groundbreaking, patent-protected pulse delivery technology that remarkably improves energy transmission, resulting in more efficient lithotripsy and BPH treatments compared to the regular Holmium pulse1. The Distribution division also exclusively markets lasers manufactured by Italian company Quanta System Spa in Japan, in certain countries in South-East Asia. Distribution agreements are under renewal in Japan. The Distribution division also exclusively markets Quanta lasers in certain Middle East territories, including Kuwait, Oman, Saudi Arabia, Jordan and Bahrain. The Distribution division also distributes the ExactVu device, produced by the Canadian company Exact Imaging, under a worldwide and exclusive agreement. ExactVu is an ultrasound-based imaging system that can operate and be used the same way as a standard ultrasound, but it also has the unique capability of operating at a very high frequency of 29MHz. Similar to MRI, it allows urologists to visualize and locate suspicious regions within the prostate and target biopsies in real time. Exact Imaging's technology also includes a solution called FusionVu. Where an MRI is required, FusionVu allows for the quick import, alignment and targeting of MRI-identified lesions. After the MRI image is imported via FusionVu, ExactVu's 70 micron real-time resolution, allows physicians to very precisely targeting lesions. The Distribution division, through the company's Japanese subsidiary, exclusively distributes some urology products of the American company Laborie Medical Technologies (Laborie) in Japan, that includes Urodynamic equipment, Uroflow, and a range of disposable products. Laborie is the world leader of Urodynamic systems and disposables which are used by urologists and gynecologists to diagnose lower urinary tract functions. The company's Japanese subsidiary also distributes x-ray imaging systems for the diagnosis of musculoskeletal pathologies and orthopedic surgical care in Japan on behalf of French company EOS Imaging and also exclusively distributes urology accessories on behalf of Monaco's company Rocamed in Japan. Manufacturing The company manufactures its own products through its operational subsidiary EDAP TMS France. Trademarks The registered trademarks of the company in the United States include EDAP, Ablatherm, Ablasonic, Ablapak, and Focal.One. Research and Development For the year ended December 31, 2022, the company's research and development expenses were €4.9 million. Government Regulation The company and its products are regulated in the United States by the FDA under a number of statutes, including the Federal Food, Drug and Cosmetic Act (FDC Act). Pursuant to the FDC Act, the FDA regulates the preclinical and clinical testing, manufacturing, labeling, distribution, sale, marketing, advertising and promotion of medical devices in the United States. The company's lithotripsy range of Sonolith i-move products is classified by the FDA as Class II devices. The company's Ablatherm and Focal One HIFU devices are also classified as Class II. The FDC Act also regulates quality and manufacturing procedures by requiring the company to demonstrate and maintain compliance with current Quality System Regulations (QSR). The company's manufacturing facilities are in compliance with the requirements of the QSR. The company's Japanese subsidiary has obtained a license as the Marketing Authorization Holder, as well as specific marketing approvals to import and market its products in Japan. The company's Japanese subsidiary is also operating as Designated Marketing Authorization Holder on behalf of some companies to market their products in the Japanese Territory. History EDAP TMS S.A. was founded in 1979. The company was incorporated in 1979 under the laws of the Republic of France.