Profound Medical Corp

TSX:PRN

Earnings Call Transcript 2021-Q3

[Operator]

Welcome to the Profound Medical Third Quarter 2021 Financial Results Conference Call. My name is Hilda, and I will be your operator for today. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Mr. Stephen Kilmer, Investor Relations. You may begin.

[Stephen Kilmer, Investor Relations]

Thank you. 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. For the benefit of those who are new to the Profound story, I would like to also 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 functional abilities. TULSA-PRO is CE marked, Health Canada approved and 510(k) cleared by the FDA. We are also commercializing Sonalleve, an innovative, therapeutic platform that is CE marked 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 obtained FDA approval under a Humanitarian Device Exemption for the treatment of osteoid osteoma. While we do not expect this FDA HDE approval to have a material impact on revenues in the near term, it is a significant milestone for our company, and we are making preparations for its U.S. commercial launch later in 2021. On the call today representing the company are Dr. Arun Menawat, Profound's Chief Executive Officer; and Aaron Davidson, the company's Senior Vice President of Corporate Development. With that said, I'll now turn the call over to Aaron.

[Aaron Davidson, Senior Vice President of Corporate Development]

Good afternoon, everyone, and welcome to our third quarter 2021 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'd like to provide a brief update on our third quarter 2021 financial results. As a reminder, we have changed our presentation currency from the Canadian to the U.S. dollar. To streamline things, all of the numbers we will refer to have been rounded so they are approximate. For the 3-month period ended September 30, 2021, and the company recorded revenue of $2.5 million, up 13% from $2.2 million in the third quarter of 2020. Total operating expenses in the 2021 third quarter, which consists of R&D, G&A and selling and distribution expenses, were $8.6 million, an increase of 30% compared with approximately $6.6 million in the third quarter of 2020. Breaking that down further, expenditures for R&D increased 14% on a year-over-year basis to $4 million. This was primarily driven by increased costs associated with new and existing clinical trials, increased spending on MRI utilization, consultants to assist with clinical trial initiatives, travel restrictions being lifted, additional lab rentals in Germany, options awarded to employees and additional headcount. G&A expenses increased by 35% to $2.5 million due to options awarded to employees, increased insurance costs and an overall increase to general expenses as offices continued to reopen from COVID-19 restrictions. Finally, selling and distribution expenses increased by 72% to approximately $2 million. Overall, the company recorded a third quarter 2021 net loss of $6 million or $0.29 per common share compared with a net loss of $6.1 million or $0.33 per common share for the same 3-month period in 2020. As at September 30, 2021, Profound had cash of USD 72.2 million. With that, I'll now turn the call over to Arun.

[Arun Swarup Menawat, Chairman & CEO]

Thanks, Aaron. As many of you know, most of the med tech sector faced additional headwinds from COVID-19 Delta variant resurgence in the third quarter. Unfortunately, the pace of new U.S. TULSA-PRO system installations as well as revenues generated in international markets like China and Japan continued to be negatively impacted by the pandemic. TULSA-PRO procedure volumes in the United States, however, grew 20% sequentially over the second quarter of 2021. This isn't a blip, but rather a developing trend as procedure volumes grew by the same percentage in Q2 compared with Q1. On our last 2 calls, I focused my remarks on explaining why the disruptions from COVID hadn't translated into our being any less bullish on our business in the mid and long terms. Today, I would like to reiterate that by underscoring how the foundation we have been laying this year should translate into exciting 2022 and beyond. We believe the strong and steady increase in utilization we have seen throughout 2021 even in the face of COVID is a testament to the high quality of our installed base and the unrivaled variety of prostate disease patients that are being treated with our technology, and both bode well for the future. With respect to building a high-quality U.S. installed base, we have been targeting 3 major types of end users: early adopters, independent imaging center companies and opinion-leading teaching hospitals. Our early-adopter TULSA-PRO sites have continued to treat a growing number and an increasing variety of patients. With respect to the imaging center companies, we have already signed multicenter agreements with 2 industry leaders, RadNet and Akumin, and hope to sign additional agreements in the future. Finally, as I highlighted in our last call, we also have agreements with renowned institutions like UCLA, Stanford, Johns Hopkins, Yale Cancer Center, WellSpan advanced prostate cancer center, Mayo Jacksonville and Mayo Rochester, MGH Cancer Center, UT Southwestern, Memorial Hermann and Methodist San Antonio. We expect that list will continue to grow as we move forward. Recurring revenue in Q3 was generated from a total of 16 sites. We already have sufficient contracts in hand to install a total of more than 30 sites in the United States and expect to have more by year-end. Initially, the typical time from the signing of a sales contract to the site being operational was generally around 3 months. During this COVID period, however, we have been experiencing delays due to a variety of factors, including a lack of labor at hospitals, parts shortages from our MR partners and hospital administrations' desire to delay deployment of new technology during uncertain times. These delays have increased the average time from contract to installation to 5.2 months. As a result, we now expect that the U.S. installed base will be approximately 20 by year-end as compared to our previous estimate of 25. While not what we had hoped, there are actually 2 good news stories buried in this headline. First, we believe we are only about 2 months behind at this point such that we now anticipate achieving the 25-site goal by end of February. Second, we are cautiously optimistic that the delays will begin to diminish by year-end, and, in the meantime, the team will continue to focus on optimizing the onboarding process with the goal of achieving installation times of even less than 3 months once the pandemic impact is behind us. While the pace of installation is likely to be -- ebb and flow somewhat even without COVID challenges, the available market for TULSA-PRO is as large if not larger than what we first envisioned due to its flexibility to treat and unrivaled variety of patients. Based on a utilization analysis that we shared on our last call, TULSA was used in all grades of cancers ranging from low-risk to the highest-risk patients in the first half of 2021. Importantly, the percentages of patients treated in those risk categories roughly corresponded with what we see in the real world with respect to patient population distribution. Recently, one of the major universities even treated a patient with metastatic cancer, first ablating the patient's prostate with TULSA and following that up with radiation therapy to kill lymph nodes and other remaining cancer outside the prostate. Based upon the patient population that is being treated with TULSA, we believe TULSA can treat more than 80% of prostate cancer patients. In addition, publications continue to show that patients treated with TULSA continue to show superior outcomes that include minimal side effects such as urinary incontinence or severe erectile dysfunction. Interim results of a European trial named FARP, which was conducted at Oslo University Hospital, were presented at the AUA in September. Oslo University is widely considered to be one of the most credible sites in Europe. So this interim analysis garnered quite a bit of attention with urologists. This is a single-site level 1 study where they compared whole gland robotic prostatectomy, or RP for short, to focal therapy using either HIFU or TULSA. Their interim results were poor for robotic prostatectomy with more than 75% of those patients reporting urinary incontinence or erectile dysfunction of various degrees. The trial design only used HIFU or TULSA for the focal therapy arm. So as you can imagine, the reported results for focal therapy were significantly superior to RP, and, accordingly, Oslo is recommending focal therapy for a certain subset of patients where localized therapy is possible. Since we joined relatively late in the study, the full results of TULSA won't be reported until next summer. But even without published data in this trial, there is rather telling indication of how TULSA performed. Instead of returning the TULSA-PRO system after completing patient recruitment, the site purchased it from us for commercial use as they informed us that TULSA was clearly the technology of choice as a wide variety of patients could be treated with it and that it was the easiest technology to use. To summarize, while we look forward to the full data, which will include the TULSA results, we believe there are already 2 key takeaways from this study. First, the FARP study was the first direct comparison between HIFU and TULSA, and the investigators voted with their pocketbook in favor of TULSA. Second, FARP's robotic radical prostectomy (sic) [ prostatectomy ] arm is similar to that in our planned Level 1 CAPTAIN trial. Accordingly, if the RP outcomes in CAPTAIN match what was seen in FARP, we believe there is potential to demonstrate clear superiority even though the CAPTAIN trial has been designed with a non-inferiority endpoint. That provides a good segue to updating you on our reimbursement strategy. We continue to view coding and, ultimately, payment coverage as a 3-year-plus process. In the short to medium terms, we are operating in a cash pay and C-Code environment, and we think we can continue to grow well there for the next couple of years. As I mentioned in our last call, based upon feedback from the relevant societies, including the American Urological Society (sic) [ American Urological Association ] and the American College of Radiology, we continue to believe that the clinical publications on the TULSA procedure, including those we anticipate later this year, will likely be sufficient to meet the requirement for our CPT1 application by end of this year. If the adoption of TULSA usage continues to increase as we anticipate, we may get the support that we need to file in 2022. In the meantime, we expect to initiate patient recruitment in the CAPTAIN trial before end of this year. In this study, 201 prostate cancer patients will be randomized 2:1 to receive the TULSA procedure or RP. The primary endpoints will include safety and efficacy, including measurements of side effects and non-inferior, progression-free survival over time. So as you can see, our strategy is to run CAPTAIN in parallel with the filing of the CPT1 application. Our rationale is that even though CAPTAIN is not a requirement to obtain the CPT1 code, the trial may support coverage by insurance payers and will also provide additional clinical data to support significant adoption. To summarize, our team has continued to execute well. We are building a high-quality installed base with users, including an attractive mix of early adopters, large imaging center companies and some of the country's most prestigious teaching hospitals. We continue to see broader TULSA adoption both in terms of procedure volumes and types of patients treated. Our utilization data points to TULSA becoming a mainstream treatment in the U.S., providing us with a large market opportunity. And finally, we are progressing TULSA-PRO's reimbursement strategy by conducting additional studies to apply for a specific CPT code and, ultimately, a reimbursement determination. This ends our prepared remarks for today. With that, we're happy to take any questions you might have. Operator?

[Operator]

[Operator Instructions] The first question comes from Anthony Petrone from Jefferies.

[Zachary Ross Weiner, Equity Associate]

This is Zach on for Anthony. First one, can you provide an update on the TACT trial?

[Arun Swarup Menawat, Chairman & CEO]

Sure, Zach. The TACT trial is pretty much near completion. I think we do have a few patients left. And I think they -- we are looking to close that either by end of this year or maybe another month or 2 after that. And I guess you're probably also thinking about the 3-year data. I think we did announce the 3-year data on the TACT trial, and there was nothing...

[Zachary Ross Weiner, Equity Associate]

Yes. Yes.

[Arun Swarup Menawat, Chairman & CEO]

Yes, there was nothing unusual in that trial. If anything, the number of patients that are -- have Grade 2 erectile dysfunction continues to reduce to low double digits at this point. There is that one patient which had incontinence continues to improve. So there is -- basically, on all the side effects, it continued to show improvement with time, and there's no severe erectile dysfunction. And in terms of repeat -- requiring secondary procedures, there is nothing unusual, I think, where both double-digit patients that are requiring secondary procedures at this stage typically would be in mid-double digits. So we think that the predictability that if you're kind of cancer free at -- and the 12 months, the likelihood of getting it in the future continues to decline. So I think the data -- the clinical data on TACT 2 or TACT in general continues to be on track with what we reported previously.

[Aaron Davidson, Senior Vice President of Corporate Development]

Arun, you said that, that data was presented, I believe, at AUA. Where can people find a publication or the results?

[Arun Swarup Menawat, Chairman & CEO]

So it is published. So it's a presentation at the moment.

[Aaron Davidson, Senior Vice President of Corporate Development]

An abstract.

[Arun Swarup Menawat, Chairman & CEO]

It's an abstract. So I think, Zach, we can make that available to you, I'm sure. If you'll connect with me off-line, we can make that available to you. There's actually a presentation...

[Zachary Ross Weiner, Equity Associate]

Okay, great. And then...

[Arun Swarup Menawat, Chairman & CEO]

By Dr. [ Klaus ]. We can make that presentation available to you.

[Zachary Ross Weiner, Equity Associate]

Okay, great. And then on the 20 -- on the installed base expectation for 20 by year-end and 25 early in next year, is that 25 the -- was there any dropout when the installs got pushed out? Or is that the same 25 that was expected by year-end 2021?

[Arun Swarup Menawat, Chairman & CEO]

Yes. Yes, Zach, so there is no dropout whatsoever. There is no site that -- where we've installed a system that is not using it or -- every site is looking to increase. That is why you're seeing that our utilization -- even though the number of sites did not increase significantly, the utilization continues to increase. And we -- the contracts that I talked about in the prepared remarks, they are very -- like every site is defined. There are time frames that are defined for these sites. There's still some uncertainty because of delivery issues from our MR partners and so on, but the -- there's no site that has canceled the contract. We -- I mean, I mentioned 30. By the time we finish this year, we'll be more than that, in fact.

[Zachary Ross Weiner, Equity Associate]

Got it. That's helpful. And then one last question just on procedures. We're hearing through the 3Q earnings season staffing shortages are impacting procedure volumes across med tech. You guys, obviously, are performing well on the procedure volume side. But curious if staffing -- if that procedure volume number would have been even higher had it not been for staffing shortages. If you guys are seeing any impact on that front.

[Arun Swarup Menawat, Chairman & CEO]

Yes. Sure. No, Zach, I think -- I know everybody is tired of hearing about COVID. So are we. And as I mentioned in the prepared remarks, we grew 20% sequentially from Q1 to Q2 and 20% from Q2 to Q3. And if you annualize the numbers, that is about 80% growth over last year. We -- there's no doubt in my mind that if there was no COVID, we would be growing in triple digits. There's absolutely no doubt in my mind about that. And so yes, I think the staffing shortage issue in particular that you asked, we're seeing that at large hospitals. We don't necessarily see those issues at imaging centers, but we do see that at large hospitals. Thank you, Zach.

[Operator]

Our next question comes from Rahul Sarugaser from Raymond James.

[Rahul Sarugaser]

So recognizing, of course, that we're all quite tired of hearing about COVID and so not to beat that dead horse then, do you have a sense now as we are entering Q4 and hopefully entering into Q2 what you're seeing on the ground in the hospitals in terms of their capacity to accommodate your teams for installations? And then just sort of a follow-up to that question is, could you maybe speak to your team's capacity to install this backlog throughout 2022 such that it's likely more than the 5 per quarter that you had previously indicated was your capacity?

[Arun Swarup Menawat, Chairman & CEO]

Yes. Rahul, you're right in that sense that we're all tired of COVID. With respect to the capacity, we have enough people in the company to be able to install at a pretty rapid pace right now. As you can imagine, this is a very high priority. And as you can imagine, quite frankly, our sales team exceeded their goal in terms of new contracts. And so installing and get going. And we also know already from our installed base that once the sites get the product, it may take them a little bit slower, they'll take -- maybe they'll a little bit faster, but every one of them will use the product. And so we are absolutely anxious to get there, and it is a high priority. So number one, it is not an issue, and we have the capacity to do it. And number two is we'll not let be an issue, I can assure you of that. We have enough people, and we will get the devices installed. The bottleneck really is at the hospital level. The first question you asked was related to are we seeing a change in the hospitals. And I have to be honest, we are not seeing a big change yet. We are tracking, for example, like everybody else, the number of patients who are COVID-related patients at these hospitals. And we are certainly seeing a significant drop. And we're watching the warm belt, which is where we are, and that is where, generally the COVID issues have been the most severe. We're not seeing a significant change at the moment, and part of it is related to labor shortages, part of it is related to parts shortages. And I think that it's still going to take some time to resolve. But I think we -- our best guess at the moment is that we should be able to -- based on the feedback we are receiving, we should be able to get to 25 by end of February.

[Rahul Sarugaser]

Great. And then moving on to reimbursements. You sort of were speaking about the CAPTAIN trial and reimbursement in tandem, and so please forgive me if I missed this.

[Arun Swarup Menawat, Chairman & CEO]

Yes. Yes.

[Rahul Sarugaser]

You had previously indicated that you would have everything in place sort of by end of this year to be able to get your application in next year. So could you maybe elaborate a little bit in terms of the time lines we should expect when things are being submitted and when we should expect to hear responses from CMS?

[Arun Swarup Menawat, Chairman & CEO]

Yes, absolutely. So Rahul, the reimbursement process is a complicated process. And what we did is we sort of looked at -- we modularized it, basically. We looked at different things that need to be done to get to the finish line. And the finish line is basically not only getting the CPT1 but also convincing insurance companies that they should cover, which means they should actually pay for the procedure. And so by separating them, we think it's a smart strategy because it reduces the total time. It's -- it'll still take 3 years or so, but we think it's a smart strategy to be able to do this in parallel. So let me come back to the original statement, so I can remove any confusions. So by end of this year, we will have everything that we need to qualify to file for the CPT1 application next year in terms of publication and -- clinical publications, which typically tends to be the biggest bottleneck right? And that's what I've been saying, and we will absolutely meet that objective. The reason we are doing another clinical trial in parallel is not for the purchase of filing for the CPT1 application but for the purpose of providing extra very high-quality data, which would be Level 1 data, that would make it much easier for insurance companies to then do -- using the competitive study, be able to say, hey, we should pay for this procedure. So it's really planning for the longer-term future why we have started where we're starting the study now rather than later on. That's the goal. And the Level 1 study, the CAPTAIN study, we have received very positive feedback from our urology community because they are not only seeing that as a way that, hey, this company, this -- if they get the CPT code, then coverage will be a lot easier, having those data. But they also look at it and say, this is a pretty credible study design. It will help them make decisions about using our technology and ultimately drive recommendations from the society. So I think they look at us and they say, hey, this company really is trying to do the right thing from the clinical perspective also. So those are the broad objectives. But as I said, we will definitely meet the objective of meeting the clinical requirements so that we can start filing the CPT1 application and file for it in 2022.

[Rahul Sarugaser]

Perfect. And if you just indulge one more question from me, please.

[Arun Swarup Menawat, Chairman & CEO]

Sure.

[Rahul Sarugaser]

You talked about the FARP study and time line readout for TULSA likely next summer, recognizing that in that study, we did see superiority of HIFU over RP and that we've separately seen superiority of TULSA over HIFU. So I think there's probably pretty good confidence there. So as far as time lines on the CAPTAIN study go beyond, of course, the pre-readout or the portending that we'll see from the FARP study next summer, what do you see as initial data readouts on CAPTAIN? And can you maybe elaborate a little bit in terms of the time line we should be looking for on the data readouts for CAPTAIN? And that will be it.

[Arun Swarup Menawat, Chairman & CEO]

Sure. Sure. Absolutely, Rahul. So I think that the study design has 201 patients, and we will be in low single digits in terms of patients treated by end of this year. That's our goal. So we'll probably have 2 or 3 patients. And if I look at time line, the best way to look at it is to compare the recruitment rates it -- for TACT and see how will that compare. And we kind of started in TACT with about 5 patients a month, and ultimately, we were treating about 10 patients a month. So if I look at it from that perspective, I think sometime in 2023, we should be able to complete recruitment. And once we have finished recruitment, we should be able to -- just like TACT is presented at AUA, we should be able to start presenting at AUA every year. And data such as PSA, data such as immediate information on incontinence and so on should begin to come out. Now I -- again, you know very well these are multisite Level 1 studies, so the investigators and the lead investigators will ultimately make the decisions on when to publish the actual information. But we should be able to -- my best guess would be that sometime in 2023, we should be able to start sharing the information. In the meantime, Rahul, we will definitely talk about the recruitment rates as we go so you'll begin to have much better idea of when we'll begin to start reporting.

[Operator]

Our next question comes from Josh Jennings from Cowen.

[Neil Chatterji, Vice President]

This is Neil on for Josh. I think several of my questions already got answered. So why don't I just maybe shift focus to -- just in terms of the sales funnel and how that's tracking? Could you -- do you have any updates in terms of the imaging center channel and kind of your expectations from the -- your partnerships with Akumin and RadNet?

[Arun Swarup Menawat, Chairman & CEO]

Sure, Neil. The RadNet site that we have is fully operational, and they are continuing to increase the number of patients. RadNet has identified the other 2 sites. At this point, they are looking to add MRIs, so I think there is some construction that will need to take place. But I think that our best estimate is sometime mid-2022, those sites are likely to be operational. Again, these are not commitments at the moment. I think these are the best estimates given the uncertain environment. But we're pretty much on track with the -- increasing those, the RadNet sites, next year. For Akumin, our expectation was that we should have our first site operational this year. I think we will -- we certainly have the site identified. Everything is on track. We should be able to get there if not -- certainly in the first -- in the -- by end of February, as I mentioned before, we should be able to get that first site operational. And we have -- we've been in dialogue with them in picking additional sites. And as you know, they have acquired oncology -- a company with oncology. So we are going to sort of look at some additional sites rather than the original sites to see if it actually makes sense to be able to use some of those sites where they can take advantage of the C-code and so on. So I think there is -- that dialogue is continuing. The interest level in general by imaging center companies is quite good. We are talking with additional imaging center companies, and -- which is why in the prepared remarks I mentioned we may have more agreements like this. So it's a kind of a paradigm shift also for these imaging center companies. In some ways, the early adopters was the easiest one because they know how to get patients, they know the whole process is in place, and we're simply replacing a technology. And they -- by design, they are -- they have been able to get up and running, and they're really challenged to put technology to its limits. And the hospitals are also in that -- in some ways, relatively easier in the sense that they have access to anesthesia, they have urologists. They understand the operational details of bringing new technology. For imaging center companies, it's been a bit of a paradigm shift because they're used to high-volume, low-margin diagnostic business. And they are not -- they're -- it's a big change for them. So they are -- when RadNet got started, they're -- they sort of understand this is a low-volume, high-margin business. And -- but I think long term, it looks like very, very attractive for us.

[Neil Chatterji, Vice President]

Got it. And I think you may have been alluding to this already, but just in terms of the -- I think Akumin had recently acquired the Alliance business. I was just kind of curious, it sounds like you're already -- that's already impacting the dialogue. Maybe just if you'll talk about what kind of impact that can have on the partnership.

[Arun Swarup Menawat, Chairman & CEO]

Yes, Neil, I think from our perspective, and I've been -- I have to preface that it's all -- these are all relatively new things. But from our perspective, it's a positive move, right, because oncology and prostate cancer, and then they are going to manage hospital sites. Hospital sites can use C-code. There is already an infrastructure in place to be able to treat complicated patients like this. They will have the staffing to do that. So I think from our perspective, this is a positive development, and we are really looking forward to increasing that relationship in the oncology side.

[Operator]

Our next question comes from Frank Takkinen from Lake Street Capital.

[Frank James Takkinen, Senior Research Analyst]

I wanted to run back to the installs a little bit more. I heard many different things, staffing shortages, training, all those types of things. But maybe just bring us a layer deeper into what are the main things holding up the installs from actually becoming active. Or asked slightly differently, what are you specifically counting on getting resolved to get to the 25 number by February?

[Arun Swarup Menawat, Chairman & CEO]

Frank, I appreciate your question very much. I wish I could tell you that there's just one issue that is holding things up. Unfortunately, that is not the case. It is a little bit case-by-case basis. There are hospitals where they're not even able to -- because of staffing shortage, they're not even able to operate all of their operating rooms, and I'm sure it's not the first time you've heard this. A number of companies have talked about that, that staffing shortage is an issue. And the staffing shortage sort of translates for us in administration saying, look, I'm having a hard time keeping my current operating rooms running. I don't really want to start something new at this stage. If I can delay it by a few weeks, I would like to do that. I think there are certain delays in modems and imaging and parts from our MR partners that need to be there in order for us to be able to communicate with the existing MR units. And so there are a series of these little things, and these are why it's very frustrating for companies like ours right now. But I would say the number that we are relying on, which I mentioned in the prepared remarks, is -- as you know, we analyze and measure everything. And our original goal, which you could -- if you go back in our analyst calls, you'll be able to hear that. Our goal originally was from the time we get a contract signed to 3 months, we want to be operational. At this point, given these -- all these small things, we are at 5.2 months. And so that is where you can see the numbers add up, why we're saying end of February. It's based upon real data that we have seen in terms of delays. And I think that certainly, our hope and expectation is that there won't be new delays, that things are starting to normalize. Even though it is early, we haven't seen a whole lot of normalization yet. But I think that as they do normalize, that we should not see an increase in that installation time. So I know I may not have answered your question in a very specific way, but this is about as specific as I think I can give you at the moment.

[Frank James Takkinen, Senior Research Analyst]

All right. that's helpful. Maybe speak to utilization. I don't think I heard you reference it this quarter, but speak to what kind of utilization rates you're getting out of your earliest users as well as the 2 couple or the 2 new activations that occurred in this quarter as well.

[Arun Swarup Menawat, Chairman & CEO]

Yes. I mean there is no significant news on that. I think that the sites that are more than a year old, we are very confident that they will hit the number of 100 new -- 100 procedures per site. That number is very much intact. I think that we are beginning to see -- very early but beginning to see more than one urologist per site at a couple of our sites now. And I think as that begins to happen, again, there also, we should feel pretty confident about getting to the 100 procedure run rate. And I think the -- at the hospital, big-name sites, our original goal was to be at about 40 procedures per year. I think that's a solid number -- continues to be a solid number. And I think some of the newer sites are more commercial sites, and I -- we are quite excited about some of these sites. We haven't necessarily publicly announced because they're not installed yet. But I think some of those sites, we think, could be somewhere in between these big-name hospitals and the early adopters. So they may go beyond 40 in the first year. So I think from a utilization perspective, we are -- I feel pretty good overall.

[Frank James Takkinen, Senior Research Analyst]

Okay. That's helpful. And the last one from me. I just wanted to circle back to Neil's questions on the Akumin acquisition of alliance. Maybe just level set us on what this does to the Akumin installed base and, more specifically, what of that installed base looks like directly applicable opportunity to Profound.

[Arun Swarup Menawat, Chairman & CEO]

Sure. So I think that what we were, in fact, negotiating -- we were under a confidential agreement, so we -- I was certainly aware of the fact that there was something -- I did not know exactly what it was, but certainly that there is dialogue. But -- and so I think when we originally talked about 10 sites -- and by the way, those sites are not included in the 30 number that I said to you before because they're not fully defined. The 30 number is defined sites. The thing that is interesting about this acquisition for Akumin is that it broadens them beyond an imaging service provider. And imaging service provider is, as I mentioned before, a high-volume, low-margin business that really, management there is just focusing on how many -- how -- what's my utilization per device versus in the oncology centers that they will be managing, the synergy is actually even stronger because now, as I mentioned before, they have the infrastructure in place already, and they have the ability to use C-code. So they don't need to necessarily build up a cash practice, which we can help them do that, but I think it becomes an easier startup. And so I think in the mid to long haul, it -- we see that as a major positive. Now we haven't quite defined which 10 sites. Or can it be more than that? Can it be less than that? We haven't quite defined those yet. But I think at the level of strategy, we see that as a positive for both companies.

[Operator]

We have a question from Scott McAuley from Paradigm Capital.

[Scott McAuley, Analyst of Healthcare and Biotechnology]

I just wanted to maybe put a finer point on the kind of contract backlog. As you mentioned, you had kind of signed contracts for more than 30 sites. So that's kind of net new sites that are signed but have not been installed? And as kind of you just mentioned, just to reiterate, that does not include the kind of Akumin sites as part of that multisite agreement. So that 30-plus is actually 40-plus if you include those. Is that correct?

[Arun Swarup Menawat, Chairman & CEO]

So it includes one site from Akumin because it's defined.

[Scott McAuley, Analyst of Healthcare and Biotechnology]

Got it.

[Arun Swarup Menawat, Chairman & CEO]

But the total number that I was defining is the total number of contracts that we have signed in this year, our total. That includes the existing sites also.

[Scott McAuley, Analyst of Healthcare and Biotechnology]

I see. So the 30 includes sites that have been installed so far this year?

[Arun Swarup Menawat, Chairman & CEO]

Have been -- yes. That's right.

[Scott McAuley, Analyst of Healthcare and Biotechnology]

So it's not kind of total net -- potential net new sites moving forward?

[Arun Swarup Menawat, Chairman & CEO]

That's right. So our goal for the number of contracts or number of sites for this year was in that range of 25, as we have talked about before. But on that particular metrics, our sales team has actually exceeded their goal in a difficult year. So I think that's the point that I wanted to make, is from the perspective of what the Profound team can do, we're executing really well. And if there was no COVID, we would have exceeded that 25 goal, in fact.

[Scott McAuley, Analyst of Healthcare and Biotechnology]

Definitely. No, that's great. Just on the kind of procedure volumes and how that relates to the revenue you saw in the quarter, you highlighted that 20%-plus kind of increase in procedure volumes. But looking at kind of that recurring revenue line that you're starting to report, looks about equivalent to last quarter. And I know that's not just the per procedure payments. There's the leases and other things, I believe, in there.

[Arun Swarup Menawat, Chairman & CEO]

Yes. Yes.

[Scott McAuley, Analyst of Healthcare and Biotechnology]

But just can you talk about that disconnect between that increase in procedure volumes and kind of that maintained level of revenue?

[Arun Swarup Menawat, Chairman & CEO]

Yes. No, I think that is exactly as you said. That is, in the numbers -- the absolute numbers being small is where -- why there is a certain lease that comes in one quarter and doesn't in the next quarter because those are yearly things. But if I look at the number of patients you -- that were treated and the revenue from that patient, it is 25% higher. And I recognize we don't want to be that granular because those things can get to -- there's never-ending granularity there, but our price point is sticking to the numbers that we've talked about, in that 7,500 to 8,000 -- in 8,000-plus range in most cases. But there is no dilution on pricing. There's no dilution on anything else. I think that you're seeing is really the service and some of the shortage. Particularly from the international market, recurring revenue is the global number there. So I think that's what you're seeing.

[Scott McAuley, Analyst of Healthcare and Biotechnology]

Definitely. No, that's great. And lastly for me, just on -- you touched on utilization. But in terms of kind of BPH versus cancer patients, are you seeing any trends there? Kind of highlighting the recent IPO of PROCEPT and kind of their technology that's focused only on BPH...

[Arun Swarup Menawat, Chairman & CEO]

On BPH.

[Scott McAuley, Analyst of Healthcare and Biotechnology]

Any comments around that?

[Arun Swarup Menawat, Chairman & CEO]

Sure. Scott, a large majority -- most of our patients are prostate cancer patients today. And in fact, not every site is treating for BPH either. There are a few sites in U.S. that are treating for BPH, but they are focused on very large prospects. You may have heard about one that was done recently. That was like 277 CC, I think, in one shot they treated. So our market really is prostate cancer first and the extreme -- I call them extreme prostate. And the one area that we think is going to be very important to our business, where we will not compete with -- or we -- not -- we actually don't compete with PROCEPT in particular is the area where, as we have talked before, there are over 2 million patients in the United States who have been diagnosed with early-stage prostate cancer, and they are on active surveillance. And this patient population also had a high percentage of BPH. And if you look at the 510(k) clearance for PROCEPT, it explicitly says that it is not approved for patients who have cancer. It is a -- for BPH only. And so that market where patients who have BPH and also have our early-stage cancer, we provide them with [ two-for ] in the sense that we can take care of the BPH, but we can also take care of the early-stage cancer so that they can be completely done with both of these. And we are likely to put a trial design for this and do an additional clinical trial, particularly for that subset of population. And I think that will allow us to really broaden the scope of our BPH application for TULSA also. I think sometime in the first half of next year, that's one of the things that we are working on, on doing. But we're excited to see the PROCEPT come out. I think overall, they have already covered the CPT1 part. They're already ahead of us in that sense. And we are starting our process in that area. We will stay with cash and C-code for right now. But I think in the long term, it's good to see another company with imaging and an incision-free-type procedure going -- using anesthesia and so on. So the component technologies, it's sort of sister technology coming in. It's kind of good to see that actually.

[Operator]

Thank you. And now I would like to turn the call back to Mr. Arun Menawat for final remarks.

[Arun Swarup Menawat, Chairman & CEO]

Thank you so much. And I guess our next call will be the year-end call, and we really look forward to connecting with you again at that time. Thank you.

[Operator]

Thank you. Ladies and gentlemen, this concludes today's conference. We thank you for participating. You may now disconnect.