Lake Street Capital Markets senior research analyst, Ben Haynor, issued a research note today on Profound Medical (NASDAQ:PROF; TSX:PRN), reiterating his ‘buy’ rating and $11 target price on the company’s stock, highlighting that his analysis of CMS’s proposed CY2026 reimbursement rates for the Physician Fee Schedule (PFS) and Outpatient Prospective Payment System (OPPS) suggests TULSA has become significantly more attractive in benign prostatic hyperplasia (BPH) relative to other therapy options, and the bump to reimbursement to the office-based lab (and imaging center) setting should make TULSA-PRO integration with the Siemens MAGNETOM Free.Max interventional MRI (iMRI) via Profound’s future TULSA+ program highly compelling.
The table below details the CMS’s proposed reimbursement levels for 2026.
“Naturally, these are not final rates and could well be adjusted, although we think substantial adjustments are less likely,” writes Mr. Haynor.
“We think there are two takeaways worth highlighting. First, even though TULSA reimbursement for BPH (which is the same as for prostate cancer) was compelling already, relative cuts to other modalities have made it still more compelling. Broadly speaking, the physician fees for 55XXX CPT codes associated with TULSA and prostate cancer saw modest cuts, 90-day RVUs (including follow-ups in TULSA’s case) down ~$50 from last year’s levels, and now sit in the ~$700-$1,100 range, with TULSA sitting at ~$900-$1,000. However, BPH codes (52XXX) saw substantial cuts, down 17%-28%, or ~$150-$200 to ~$550. This includes Procept BioRobotics’ [NASDAQ:PRCT] Aquablation code (presently assigned 52XX1), which company management has stated physicians are typically now receiving $700-$800 under TURP mapping. While about half of the physicians performing Aquablation are salaried employees of the hospitals, and, thus, presumably less swayed by fees, the other half could well be. Now that Profound has launched the TULSA-AI Volume Reduction module (as of mid-June), designed to reduce a BPH procedure time to 60-90 minutes, we believe performing TULSA at a $900+ physician fee for an hour (or a little more) of one’s time becomes quite attractive versus Aquablation at ~$550 for an hour of one’s time. In addition, TULSA having APC level 7 reimbursement (+$660 y/y) at $13.7K for a hospital versus $9.8K for Aquablation at level 6 (+$518 y/y), and $5.5K for TURP, Greenlight laser, and HoLEP (all level 5, +$434 y/y), makes TULSA more attractive for the hospital, and the story is little different for ASCs. Succinctly, we expect interest in TULSA for BPH will increase massively,” he added.
“Second, TULSA is projected to see a $950 boost for non-facility locations (office-based labs, imaging centers, physician offices, etc.) to ~$10K. We estimate this could add $10K+ in monthly profit to practices that elect to install a Siemens MAGNETOM Free.Max iMRI ($13K/month lease) integrated with TULSA, which is slated to be available in the near future. Traditionally, non-facility locations have seen a greater degree of cooperation, and we expect that will be no different in urology. In fact, we have witnessed this firsthand at multiple past physician events we have attended where the economics of Free.Max + TULSA have been presented – quite a few phones came out of pockets to grab a money shot of those slides. If the proposed reimbursement holds, we would expect a substantial pipeline to develop for this offering,” he continued.
Profound is commercializing TULSA-PRO, a technology that combines real-time MRI, AI-enhanced planning, robotically driven transurethral ultrasound, and closed-loop temperature feedback control. The TULSA procedure, performed using the TULSA-PRO system, 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 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 precision to preserve patients’ urinary continence and sexual function, while killing the targeted prostate tissue via precise sound absorption technology that gently heats it to 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. TULSA-PRO is CE marked, Health Canada approved, and 510(k) cleared by the FDA.
