After market close today, Stifel upgraded Profound Medical (NASDAQ:PROF; TSX:PRN) to “buy” from “hold” and raised its price target to $12 from $9 in response to the U.S. Centers for Medicare and Medicaid Services (CMS) proposing reimbursement for the company’s Transurethral Ultrasound Ablation (“TULSA”) procedure to treat prostate disease.
Profound announced last week that CMS issued proposed rules establishing, for the first time, a Category 1 CPT code for the TULSA procedure, effective January 1, 2025.
The TULSA procedure has the potential of becoming a mainstream treatment modality across the entire prostate disease spectrum; ranging from low-, intermediate-, or high-risk prostate cancer; to hybrid patients suffering from both prostate cancer and benign prostatic hyperplasia (“BPH”); to men with BPH only; and also, to patients requiring salvage therapy for radio-recurrent localized prostate cancer. TULSA employs real-time MR guidance for pixel-by-pixel precision to preserve prostate disease patients’ urinary continence and sexual function while killing the targeted prostate tissue via a precise sound absorption technology that gently heats it to kill temperature (55-57°C). TULSA is an incision- and radiation-free “one-and-done” procedure performed in a single session that takes a few hours. Virtually all prostate shapes and sizes can be safely, effectively, and efficiently treated with TULSA. There is no bleeding associated with the procedure; no hospital stay is required; and most TULSA patients report quick recovery to their normal routine.
“As always, adequate reimbursement is essential for early-stage medical technology companies in order to “nurture” and drive forward physician adoption. Looking ahead, as defined in our late 2023 initiation, PROF still does have significant operational, commercial, and clinical work ahead to build TULSA treatment market share. But, CMS reimbursement is the first of several critical milestones that should help push the company’s commercial uptake trajectory in a more substantially positive direction,” writes analyst Rick Wise.
Mr. Wise added, “With the most-meaningful TULSA adoption hurdle (reimbursement) soon-to-be removed, the PROF story focus now can now shift towards commercial execution and driving TULSA physician utilization.”
